Suraj Estate Developers Ltd Management Discussions

GLOBAL ECONOMIC OVERVIEW

The global economy grew by 3.3% in 2024, as per the International Monetary Fund (IMF), supported by strong domestic demand and stable financial conditions across several regions. Yet, 2025 has brought renewed uncertainty amid rising trade protectionism, elevated geopolitical risks, and structural macroeconomic challenges. A key inflection point came in April 2025 when leading economies imposed broad-based tariffs. Retaliatory actions followed, disrupting trade flows, shaking investor sentiment, and increasing bond yields and capital costs.

Outlook

Against this backdrop, global GDP growth is projected to moderate to 2.8% in 2025, with a slight recovery to 3.0% in 2026. Inflation remains more persistent than anticipated. Headline inflation is expected to average 4.3% in 2025, driven by higher energy, input, and logistics costs. Core inflation, particularly in the services sector, continues to challenge central banks and delay monetary easing cycles in many economies.

GDP Growth Trends (%)

(Source: IMF World Economic Outlook, April 2025)

While near-term risks remain high, long-term structural shifts continue to shape global growth. These include ageing populations in developed economies, rising labour participation among women and older workers, and the growing influence of sustainable consumption patterns. Simultaneously, urbanisation, infrastructure development, and the reconfiguration of global supply chains are reshaping regional economic dynamics, especially in large emerging markets.

For real estate, the external environment brings a balance of restraint and promise. On one hand, tighter global liquidity and elevated construction costs could affect capital deployment and project economics. On the other, continued urban densification, demand for high-quality housing, and the rising preference for integrated mixed-use developments provide a strong runway for value creation.

(Source: IMF World Economic Outlook, April 2025)

INDIAN ECONOMIC OVERVIEW

Indias economy grew by 6.5% in 2024?€“25, holding firm against performance reflects the strength of Indias domestic macroeconomic foundation and the effectiveness of its calibrated policy response to global trade disruptions, inflationary pressures, and financial market volatility.

A key pillar of this resilience is robust domestic consumption, with rural demand playing a critical role in cushioning against external shocks. This internal stability, coupled with deepening structural reforms, widespread digital adoption, and continued infrastructure investments, reinforces the countrys long-term growth fundamentals.

(Source: https://www.pib.gov.in/PressReleasePage. aspx?PRID=2106921)

The Union Budget 2025?€“26 has played a transformative role in strengthening disposable incomes, particularly for the middle-income and salaried segments. Key measures include raising the basic tax exemption limit to 4 Lakhs and waiving taxes entirely for individuals earning up to

12 Lakhs annually. These reforms are expected to support household consumption, with ripple effects on discretionary spending, including housing demand.

(Source: https://www.pib.gov.in/PressReleasePage. aspx?PRID=2098406)

At the same time, the government has maintained its commitment to infrastructure-led growth. Capital expenditure has been raised to 11.21 Lakh Crores, surpassing last years outlay. Consequently, key areas such as roads, railways, energy, and urban mobility are seeing significant development. The investments are also expected to catalyse private sector participation, generate employment, and spur demand in core urban markets. (Source: https://www.ey.com/en_in/technical/alerts-hub/2025/02/budget-2025-infrastructure-sector) Indias services exports continue to be a key driver of the countrys economic growth. In 2024?€“25, total services exports stood at USD 387.5 Bn, marking a robust 13.6% increase over the previous years USD 341.1 Bn. This growth trajectory reflects a decade-long surge from USD 152 Bn in 2013?€“14, underscoring Indias growing global competitiveness in knowledge-driven sectors. Momentum in financial services, hospitality, healthcare, and public administration has been buoyed by improving consumer sentiment and domestic tourism. Although global headwinds have affected the IT sector, it remains a vital driver of job creation and economic stability.

(Source: https://www.pib.gov.in/PressNoteDetails. aspx?NoteId=154840&ModuleId=3 https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2022323) Urbanisation remains a long-term structural tailwind for the Indian economy. By 2036, nearly 40% of the population is expected to reside in urban areas, up from 31% in 2011. This rapid migration is creating sustained demand for housing, commercial real estate, and contributing to infrastructure development. It is also unlocking new opportunities for business innovation and regional development, as cities evolve into hubs of productivity, consumption, and employment.

Outlook

India is expected to maintain a real GDP growth of 6.5% through 2025 26, reaffirming its position among the fastest-growing major economies. This trajectory stems from rising private consumption, an expanding middle class, improving income levels, and sustained policy support for industrialisation and infrastructure creation. Initiatives such as Make in India and the Production-Linked Incentive (PLI) scheme continue to support manufacturing-led growth. Meanwhile, broadening transport and digital networks are deepening economic integration.

External uncertainties such as a slowdown in key export markets could pose risks to specific sectors. However,

Indias macroeconomic fundamentals remain sound.

Prudent policy management, fiscal discipline, and a strong focus on domestic capacity building has placed the nation in a strong position to manage global volatility, drive inclusion and long-term economic growth.

(Source: https://www.ubs.com/global/en/investment-bank/ insights-and-data/2024/indias-outlook-2025-2026-story. html)

INDIAN REAL ESTATE SECTOR

Indias real estate sector has evolved into a structured, high-impact contributor to the nations economic and urban development. Once informal, the industry now contributes meaningfully to GDP, job creation, and long-term infrastructure growth. As of 2025, the sector is valued at USD 0.66 Tn and is expected to reach USD 1.04 Tn by 2030, recording a compound annual growth rate (CAGR) of 9.88% during the forecast period (2025-2030). This trajectory reflects favourable demographics, urbanisation and deep structural shifts across asset classes.

Residential real estate continues to catalyse the sectors growth engine, especially in the premium and luxury segments. Higher disposable incomes, NRI inflows, and post-pandemic lifestyle shifts are driving this growth. Cities like Mumbai, Bengaluru, and Hyderabad are witnessing a rise in high-ticket sales, with prices and absorption levels holding firm. Concurrently, Tier II and III cities are as high-potential markets, driven by infrastructure upgrades and decentralised job creation.

Indias commercial real estate sector is witnessing a steady rebound, led by strong demand for Grade A offices and mixed-use developments. Net office to surpass 50 Mn sq. ft. by 2025-26, driven by the growth of global capability centres, flex-space operators, and domestic corporates. With a 7?€“9% CAGR expected by 2026-27, this trend marks a structural shift in the real estate cycle. Suraj Estate is making a strategic foray into commercial real estate with a marquee development in Mahim, backed by a total GDV of 1,200 Crore. The project will offer approximately 200,000 square feet of saleable carpet area.

The increasing demand for flexible configurations, from smaller units to full-floor plates, is opening multiple avenues for value creation in urban commercial zones.

Sustainability and digitalisation are witnessing strong traction across both residential and commercial formats.

Green certifications, energy-efficient materials, and PropTech integration are increasing transparency, efficiency, and user experience. Together, these trends are reshaping real estate development and operations, bringing the sector in line with shifting global and domestic priorities. With India entering a new phase of urban evolution, real estate is well-positioned for sustained, inclusive growth across segments, regions, and price points.

(Source: https://www.mordorintelligence.com/industry-reports/real-estate-industry-in-india)

Key Trends

Redevelopment Becomes a Core Growth Avenue

With the availability of vacant land diminishing in major Indian cities, redevelopment has emerged as a critical lever for urban renewal. A growing number of developers across the spectrum from large listed players to local builders, are entering this space, driven by policy support, attractive project economics, and rising end-user demand for tractionmodern living standards in familiar neighbourhoods. This trend is further reinforced by ageing housing stock across urban cores, where low-rise structures are increasingly being replaced by high-density and high-rise developments. As cities continue to densify and infrastructure upgrades improve connectivity, redevelopment is expected to be a structural driver of housing supply in the coming years.

Luxury and Premium Housing on the Rise

A defining trend in 2024 25 has been the surge in premium and luxury housing demand. Higher disposable incomes, increased NRI investments, and shifting post-pandemic lifestyle preferences are fuelling this demand. Homebuyers are prioritising spacious layouts and amenities that reflect a more aspirational way of living. Cities like Mumbai, Bengaluru, Pune, and Hyderabad have witnessed a marked rise in both sales and property prices. Bengaluru, for instance, recorded a 9% increase in residential prices. This uptick reflects stronger consumer sentiment, and a clear tilt towards integrated communities and future-ready housing that aligns with evolving urban aspirations.

Resilient Commercial Real Estate

Indias commercial real estate sector is undergoing a period of sustained growth and diversification, driven by rising occupier demand, tightening vacancy, and the emergence of new asset classes and ownership formats.

Leasing Momentum and Occupancy Trends top eight cities is Gross office projected to surpass 90 Mn sq. ft. in 2025, setting a new record for annual leasing activity (Cushman & Wakefield,

August 2025). This robust performance is anchored by strong absorption from Global Capability Centres (GCCs),

BFSI firms, and technology-driven enterprises. Vacancy levels across top markets have steadily declined, with the pan-India average dropping to 15.7% in 2024?€“25, signalling a supply tightening in prime locations and reflecting the high utilisation of existing inventory.

Outright Sale Scarcity and Investment Innovation

While leasing dominates the segment, Grade A commercial space available for outright sale remains highly constrained, especially in central business districts and emerging commercial hubs. This scarcity has led to the emergence of alternative investment and ownership models, including:

?€? Fractional ownership platforms, which allow multiple investors to co-own high-value assets through digital platforms with ticket sizes as low as 25?€“ 50 lakhs

?€? Real Estate Investment Trusts (REITs), which provide liquid exposure to income-generating commercial portfolios have gained significant institutional and retail investors Fractional and post-strata ownership formats are gaining traction, enabling investors to access high-value commercial assets at lower entry points. Tech-enabled platforms have made these models more transparent and liquid, appealing to HNIs, family offices, and retail investors, seeking income-generating assets.

Growth of Alternate Commercial Asset Classes

In parallel, several new asset classes are reshaping the contours of Indias commercial real estate landscape:

?€? Data Centres: Driven by digitalisation, AI adoption, and regulatory data localisation norms, the countrys data centre capacity is projected to grow from ~880 MW in 2023 to over 4,500 MW by 2030, requiring 55+ Mn sq. ft. of real estate and attracting over USD 20?€“25 Bn in investment (Source: Economic Times, May 2025).

?€? Logistics Parks and Warehousing: The warehousing sector has become a core infrastructure asset class. Policies such as Gati Shakti and the National Logistics Policy are accelerating private sector investment in logistics clusters, Grade A warehouses, and multimodal parks (Source: JLL, Warehousing Trends 2024)

?€? Co-working and Flex Workspaces: Flexible office formats continue to expand, accounting for 20?€“22% of total office leasing in 2025-26 across major cities. This growth is driven by hybrid work models, cost-efficiency, and increasing adoption by large corporates, not just start-ups (Source: JLL India, Q2 2025 Office Report).

Digitalisation and Sustainability as Core Enablers

Sustainability and digitalisation have emerged as defining structural drivers of transformation. Energy-efficient designs, green certifications, and environmentally responsible materials are now integral to project planning and execution. In parallel, the growing use of PropTech, including AI, IoT, and data analytics, is redefining how real estate assets are designed, marketed, and managed. From improving tenant experiences to optimising asset performance, technology is enabling greater operational efficiency and transparency.

Emergence of Tier II and III Growth Hubs

The momentum in real estate is steadily shifting beyond metros. Tier II and III cities are emerging as growth hubs, supported by better connectivity, public infrastructure investments, and decentralised job creation. The peripheries of major cities are also gaining prominence, with mixed-use developments and townships catering to rising demand for integrated and affordable urban living.

(Source: https://www.credaily.com/briefs/office-demand-growth-continues-amid-economic-uncertainty/ https://www.cushmanwakefield.com/en/india/insights/ indian-real-estate-2030 https://www.credaily.com/briefs/office-demand-growth-continues-amid-economic-uncertainty/)

GOVERNMENT INITIATIVES FUELLING GROWTH PMAY Urban 2.0: Reinforcing Housing for All

Government policy has played a catalytic role in shaping the sectors recent momentum. A key initiative under the Union Budget 2024?€“25 is the rollout of Pradhan Mantri Awas Yojana Urban 2.0 (PMAY), which aims to meet the housing needs of one crore urban poor and middle-class families. The programme has a budgetary allocation of 10 Lakh Crores (USD 120.16 Bn). It advances the Housing for All vision by promoting energy-efficient, sustainable housing.

Support is extended through public-private partnerships and direct subsidies for EWS, LIG, and MIG segments.

SWAMIH Fund 2.0: Unlocking Stalled Projects

To address the challenge absorption led by Global Capability of stalled developments, the government launched SWAMIH Fund 2.0 with an infusion of 15,000 cr. This successor fund is expected to unlock approximately 1 Lakh housing units by reviving mid-income and affordable housing projects that have faced liquidity constraints. This move restores buyer confidence and reactivates large sums of dormant capital tied to incomplete assets.

Urban Challenge Fund: Strengthening Infrastructure

Urban infrastructure development has been further energised through the creation of a 1 Lakh Cr Urban Challenge Fund, of which 10,000 Crores is allocated for 2025?€“26. The fund supports land access, integrated transit systems, public amenities, and smart city interventions, encouraging participation through PPP models and institutional finance.

Tax Reforms: Improving Affordability and Compliance

The policy ecosystem has also been made more conducive through tax reforms aimed at enhancing affordability and investor confidence. The threshold for TDS on rental income has been raised from 2.4 Lakhs to 6 Lakhs annually, thereby reducing compliance burdens and incentivising the rental housing market. Additionally, personal income tax reforms, including a zero-tax slab up to 12 Lakhs, are expected to boost disposable incomes and strengthen demand for mid-income homes.

Capex-Linked State Support and Regulatory Simplification

Efforts to boost state-level infrastructure spending include

1.5 Lakh Crores in long-term, interest-free loans to accelerate capital expenditure across urban development, transport, and logistics. Parallelly, the proposed new Income Tax Bill aims to streamline administration and reduce litigation. A national framework is also underway to attract Global Capability Centres to Tier II cities by increasing business ease and access to skilled talent.

(Sources: https://www.mordorintelligence.com/industry-reports/real-estate-industry-in-india https://www.grantthornton.in/globalassets/1.-member-firms/india/assets/pdfs/realty-bytes/realty_bytes_ may_2025.pdf https://www.cbre.co.in/insights/articles/mapping-the-evolution-of-indian-real-estate-a-glimpse-into-the-75-year-journey)

INDIAN COMMERCIAL REAL ESTATE MARKET

Indias commercial real estate market was valued at USD 49.3 Bn in 2025 and is projected to reach USD 123.3 Bn by 2030, at a 20.1% CAGR. Growth is being driven by strong

Centres Grade A office

(GCCs), rapid expansion of e-commerce warehousing, and rising institutional inflows through REITs. Tier-2 cities are emerging as new corridors of growth, supported by expressways, airports, and metro projects that are drawing both occupiers and developers. Regulatory reforms such as the Registration Bill 2025 and the broadening of the REIT framework are set to improve liquidity, transparency, and participation. While high borrowing costs, land-acquisition hurdles, and construction inflation remain challenging, the long-term outlook is supported by resilient demand, portfolio rebalancing towards income-yielding assets, and the deepening of Indias position as a global services and logistics hub.

Outlook The mid-segment housing category,

The sector is poised for durable expansion, supported by Global Capability Centres (GCC) growth, Tier-II city infrastructure development, and a widening REIT base. Developers are repositioning portfolios towards income-yielding assets, while regulatory digitisation is expected to improve transparency and accelerate transactions. Despite headwinds from high borrowing costs and construction inflation, structural demand drivers remain strong.

(Source: https://www.mordorintelligence.com/industry-reports/commercial-real-estate-market-in-india)

INDIAN RESIDENTIAL REAL ESTATE MARKET

Indias residential real estate market is poised for sustained growth, with its size estimated at USD 399.11 Bn in 2025. The sector is further projected to reach USD 639.28 Bn by 2030, clocking a CAGR of 9.88% during the forecast period (2025-2030). This momentum is being driven by technology-sector employment, government-backed housing incentives, and a clear shift in consumer preferences towards larger, more spacious homes in suburban locations.

Supportive policies such as PMAY-U and the SWAMIH Fund have revived stalled projects and expedited approvals, improving supply-side liquidity and boosting buyer confidence. in Bengaluru and Hyderabad, is witnessing strong absorption driven by hybrid work models and sustained IT hiring. Simultaneously, NRI interest in Mumbais luxury real estate market has surged, with buyers capitalising on the depreciated rupee to invest in premium properties.

Simultaneously, the shift towards urban nuclear families has accelerated demand for 2?€“3 BHK apartments, contributing to a robust housing market. Sales across Indias top eight cities climbed to a 12-year high of 350,613 units in 2024-25, demonstrating strong uptake of mid-size residential units.

Developers are responding with compact, efficient layouts, while easier mortgage availability continues to support affordability. Together, these structural and demographic trends ensure that the residential market remains a resilient and attractive investment segment.

(Source: https://www.mordorintelligence.com/industry-reports/residential-real-estate-market-in-india)

Indian Residential Real Estate Market: Drivers Impact Analysis

Driver	(~) % Impact on CAGR Forecast	Geographic Relevance	Impact Timeline
Surging demand from IT/ITeS workforce concentrations in	+2.1	South India and spillover	Medium term
Bengaluru and Hyderabad is driving mid-segment sales		cities	(2\u20134 years)
Expedited approvals under PMAY-U and SWAMIH Fund are	+1.8	National; early gains in	Short term
accelerating stalled affordable housing projects		NCR, MMR, and Bengaluru	( 2 years)
Rapid household nuclearisation in urban India is increasing	+1.5	National, Tier I and II cities	Long term
unit absorption per 1,000 people			( 4 years)
NRIs are increasingly investing in premium metro homes,	+1.2	Mumbai, Delhi-NCR,	Medium term
using rupee depreciation to their advantage		Bengaluru, Chennai	(2\u20134 years)
Transparency through RERA is boosting consumer	+0.9	National; higher impact in	Medium term
confidence and accelerating sales on digital platforms		RERA-compliant states	(2\u20134 years)
The hybrid work model is boosting peripheral suburban	+0.7%	Metro peripheries and	Long term
projects offering larger configurations		Tier II cities	( 4 years)

(Source: https://www.mordorintelligence.com/industry-reports/residential-real-estate-market-in-india)

Outlook

Indias residential real estate sector is anticipated to sustain its growth through 2025-26. This momentum is underpinned by robust end-user demand, stable interest rates, and continued policy support. Both sales volumes and new launches are likely to hold firm, even amid potential macroeconomic fluctuations.

While regional disparities in pricing and inventory absorption may persist, the premium and luxury housing segments, especially properties priced above 2 Crores, are expected to perform strongly. These segments are being driven by buyers seeking larger living spaces, integrated community amenities, and proximity to critical infrastructure. Developers who focus on quality, execution, and unique value are well-positioned to tap into shift towards aspirational and lifestyle-oriented housing.

(Source: https://www.mordorintelligence.com/industry-reports/residential-real-estate-market-in-india)

Mumbais Real Estate Market

Mumbai remains among Indias most resilient and strategically important real estate markets. This strength is fuelled by steady end-user demand, limited supply, and continued infrastructure upgrades. Although property registrations saw a slight year-on-year dip, the market is showing signs of stabilisation, with high-value transactions sustaining momentum across key micro-markets.

Knight Frank India reported over 1,35,000 property transactions in Mumbai during 2024?€“25, the highest in more than a decade. Monthly volumes fluctuated due to seasonal trends and base effects. Yet, overall demand held strong, led by premium and luxury properties. Notably, stamp duty collections remained strong, with total revenues surpassing

11,000 crore for 2024-25 indicating sustained value per transaction even when volumes moderated. January 2025 saw the highest property registrations for that month in over ten years. The spike was propelled by an increase in higher-value property sales. This consistent demand despite macro uncertainties highlights the citys status as a high-value, end-user-driven market.

Buyer preferences are shifting towards premium and larger homes, with higher demand for properties above 2 Crores and a relative decline in the sub- 50 Lakh segment. This trend reflects a move towards more spacious, lifestyle-oriented housing. At the same time, central suburbs have continued to expand their market share, underscoring evolving demand dynamics across micro-markets. This gain was driven by improved infrastructure and liveability. Western suburbs, while still dominant, saw a marginal dip in share from 57% to 53% in 2024-25. Collectively, these two regions contributed 86% of the citys total registrations. Several structural trends are expected to shape Mumbais real estate market in 2025:

?€? Premiumisation in Core City Pockets

Homebuyers in South Mumbai and select Western suburbs are prioritising larger layouts, enhanced

This is specifications, fuelling demand for premium and value-luxury homes, especially in redeveloped locations with strong social infrastructure and urban connectivity.

?€? Affordability Driving Growth in Emerging Suburbs

In peripheral and extended suburbs like Virar, Badlapur, and parts of Navi Mumbai and Thane, demand continues to be anchored in the affordable and mid-income segments. Government incentives such as PMAY, reduced GST for affordable housing, and improved rail and metro connectivity are enabling access to homeownership for first-time buyers in these markets.

?€? Sustainability Becomes a Norm

Green building certifications, energy-efficient materials, and water-saving infrastructure are now standard across new launches. Buyers across all price segments are increasingly evaluating environmental credentials as part of their decision-making.

?€? Technology-Enabled Homebuying and Living

Digital site tours, online documentation, app-based facility management, and smart home automation have gained widespread acceptance. These technologies are enhancing transparency, convenience, and buyer confidence across segments.

?€? Integrated Living on the Rise

Mixed-use developments combining residential, retail, and recreational components are gaining popularity across city centres and upcoming townships. These formats cater to the growing preference for walk-to-work convenience and lifestyle-centric living.

Outlook

Mumbais real estate market is poised to remain strong through 2025-26, backed by stable demand, rising interest in premium housing, and continued infrastructure investments. For Suraj Estate, with its strategic focus on South Central Mumbai and expertise in high-barrier, redevelopment-driven projects, the evolving market presents a significant opportunity. The Companys customer-centric approach, product differentiation, and disciplined execution position it well to capture value in a city undergoing both transformation and consolidation.

(Sources: https://www.hindustantimes.com/real-estate/ real-estate-2025-outlook-5-most-sought-after-areas-for-buying-an-apartment-in-the-mumbai-metropolitan-region-101735804916522.html https://www.hindustantimes.com/real-estate/mumbai-real-estate-market-property-registrations-up-10-3-yoy-surpass-15-000-mark-101743411373664.html https://silagroup.co.in/mumbais-real-estate-landscape-major-trends-to-watch/)

MUMBAIS REDEVELOPMENT MARKET

Mumbais urban transformation is being increasingly driven by redevelopment, not merely as a repair solution but as a strategic lever to address the citys ageing infrastructure, constrained land availability, and evolving lifestyle aspirations. The opportunity spans multiple redevelopment models, with two core segments leading the way.

First is the redevelopment of Pagdi-tenanted, Cessed buildings under Section 33(7) of the Development Control and Promotion Regulation (DCPR). These properties are often decades old, occupied by tenants paying minimal rent, and are structurally dilapidated. Currently, Mumbai has an estimated 19,000 such buildings, primarily in South and South-Central Mumbai, representing a vast opportunity to unlock underutilised land in prime locations.

The second major category is co-operative housing society (CHS) redevelopment, governed by Section 33(7)B. These are relatively newer but ageing societies where homeowners themselves initiate the redevelopment process to improve their living standards. An estimated 25,000 Co-operative Housing Society (CHS) buildings across Mumbai are considered ready or eligible for redevelopment, indicating the scale of opportunity in this segment as well.

Policy frameworks such as DCR 33(7), 33(7)B, and Metro FSI incentives are accelerating activity across both categories by offering enhanced buildable potential and streamlined approval mechanisms. Simultaneously, public bodies like Maharashtra Housing and Area Development Authority (MHADA) are increasingly partnering with private developers to achieve better outcomes through hybrid public-private models that balance commercial viability with social impact. Redevelopment is also being reshaped by the adoption of modern construction technologies such as Building Information Modelling (BIM), precast systems, and lean execution practices, leading to faster project timelines and superior build quality.

Developers with expertise in tenant negotiation, legal clearances, and society engagement are best positioned to lead in this space. Suraj Estate, with decades of on-ground experience, operates across both segments, Pagdi properties under 33(7) and society redevelopment under 33(7)B, enabling it to unlock complex land parcels and deliver modern, high-quality urban living at scale.

Opportunities Driving Redevelopment

Land Scarcity Solution

With little vacant land left in core city areas, redevelopment enables optimal utilisation of existing plots by replacing low-rise, underutilised structures with high-rises. This approach increases housing stock and allows residents to continue living in familiar neighbourhoods.

Living Standards Upgrade

Many of Mumbais older buildings lack basic infrastructure. Redeveloped homes come equipped with modern amenities such as fire safety systems, elevators, parking, and energy-efficient designs, significantly elevating residents quality of life.

Investor and Developer Incentives

Redevelopment has emerged as a high-potential segment, attracting strong interest from both developers and investors. High-value projects in prime city locations offer compelling returns, driven by growing demand for modern, safe, and amenity-rich housing. Government support has further enhanced project viability through a combination of reduced premiums, streamlined approvals, and provisions for up to 3 FSI under DCPR 33(7) for eligible buildings. These policy enablers, combined with pent-up demand in older urban precincts, position redevelopment as a structurally attractive avenue for long-term value creation.

Emergence of the Suburbs

Redevelopment activity is expanding beyond South Mumbai into suburbs like Borivali, Kandivali, and Mulund. These areas are witnessing a spike in registrations, contributing over 55% of Mumbais total registrations in 2024-25, driven by metro connectivity, affordability, and newer infrastructure.

Policy Support

The Municipal Corporation of Greater Mumbai (MCGM) allows buildings over 30 years old or officially labelled as unsafe to be redeveloped. With thousands of such structures citywide, the policy framework supports ongoing urban renewal efforts.

Increased Focus on Transit-Oriented Development

Mumbais growing metro network is driving a new phase of transit-oriented development (TOD). Higher Floor Space Index (FSI) incentives near metro hubs are enabling greater development scope. This is fuelling dense, mixed-use projects that blend residential, commercial, and retail spaces around key transit points. The move towards TOD is improving last-mile connectivity while encouraging walkable, sustainable, and efficient urban living.

Challenges Hindering Redevelopment

Approval Bottlenecks

Despite progress, the redevelopment process remains tangled in complex multi-agency clearances. Project timelines are often delayed due to fragmented permissions and shifting regulatory interpretations.

Stakeholder Alignment

Negotiations with tenants over relocation, compensation, and handover dates often spark conflict. Any misalignment can stall projects for years.

Escalating Costs

Rising land prices, construction material inflation, and regulatory fees have increased project costs. This compresses developer margins and reduces affordability for mid-income buyers.

Infrastructure Stress

New high-rises strain outdated civic systems such as water, drainage, roads, which were originally built for lower density. Without simultaneous public upgrades, redevelopment risks exacerbating urban stress.

Policy Uncertainty

Shifts in political leadership often lead to changing policies or approval backlogs, undermining investor confidence and making long-term planning difficult.

Enablers of Effective Redevelopment

Streamlined Approvals

A single-window clearance mechanism is critical to speed up redevelopment timelines and mitigate compliance-related risk.

Community-Centric Approach

Transparent communication, fair relocation terms, and community engagement are essential to secure stakeholder buy-in.

Focus on Sustainability

Green building standards, water management systems, and energy efficiency must be integral to redevelopment projects to future-proof the city.

Integrated Urban Planning

Redevelopment must align with larger urban planning goals, including infrastructure expansion and social equity, to create truly liveable neighbourhoods.

(Sources: https://constructiontimes.co.in/Redevelopment-in-Mumbai:-Opportunities-and-Challenges-in-2025 https://www.hindustantimes.com/real-estate/over-25-000-buildings-in-mumbai-metropolitan-region-eligible-for-redevelopment-with-rs-30-000-cr-value-credaimchi-101746721850624.html)

COMPANY OVERVIEW

Suraj Estate Developers Limited (also referred to as Suraj Estate or the Company) is a leading real estate developer. It specialises in residential and commercial developments.

Established in 1986, the Company has a strong presence in South-Central Mumbai, especially across prime micro-markets including Mahim, Dadar, Prabhadevi, and Parel. Currently, it is expanding into Bandra and Santacruz (East). The Company is widely recognised for its deep expertise in redevelopment projects, particularly under DCPR 33(7). In this domain, Suraj Estate has built a strong track record in tenant rehabilitation and project execution.

Since inception, the Company has successfully completed 42 projects, developing over 10.46 Lakh sq. ft. of saleable area in South-Central Mumbai. As of 31 st March, 2025, Suraj Estate has:

?€? 13 ongoing projects with a developable area of 20.34 Lakh sq. ft. and saleable carpet area of 6.12 Lakh sq. ft.

?€? 19 upcoming projects with an estimated carpet area of ~10.20 Lakh sq. ft.

?€? A combined portfolio GDV of over 6,000 Crores, backed by strategic land reserves and a calibrated, phased launch strategy.

During 2024-25, the Company raised 343 Crores through preferential equity and warrants. The funds are being utilised for commercial land acquisition on Tulsi Pipe Road, working capital needs, and regulatory payments. Following the acquisition of an adjoining land parcel, the GDV of the planned commercial project rose sharply from 475 Crores to 1,200 Crores.

With over 19,600 cessed buildings in South-Central Mumbai earmarked for redevelopment, Suraj Estate is well-positioned to capitalise on its profound local expertise, execution capabilities, and capital-efficient business model in a high-demand, supply-constrained market.

Competitive Strengths

?€? Established Brand in South-Central Mumbai

Suraj Estate holds a leading position in South-Central Mumbai with deep market knowledge, consistent on-ground delivery, and strong brand recall. Its ability to secure pre-sales during construction reflects customer trust and market visibility.

?€? Redevelopment Expertise with Tenant Settlement

With a legacy spanning 38 years, the Company has deep expertise in executing complex redevelopment projects under both DCPR 33(7) (Pagdi-tenanted buildings) and 33(7B) (co-operative housing societies). It has successfully redeveloped homes for over 1,011 tenants at no cost, access to higher FSI, unlocking high-value land parcels, and ensuring efficient project execution. This capability in managing tenant and society negotiations remains a core strength, significantly de-risking project timelines. In addition to redevelopment, the Company also undertakes vacant land development, further diversifying its project portfolio across Mumbais land-constrained market.

?€? Balanced Portfolio Across Value Luxury, Luxury and Commercial Segments

Suraj Estate caters to both mid-income and premium buyers. Its offerings range from compact 1-BHKs to spacious 4-BHK luxury residences and boutique commercial assets across Mumbais prime zones.

?€? Focused Marketing and High Customer Engagement

The Companys proactive sales strategy and transparent customer communication drive strong demand and retention. It has built a community-led brand that thrives on digital engagement, referrals, and experiential campaigns.

Robust Pipeline with Capital Efficiency

Suraj Estate plans to launch projects worth around

2,000 Crores of GDV in 2025-26, including a

1,200 Crores commercial asset and other residential developments totalling 800 Crores. These initiatives reflect its disciplineddue to better project mix and lower financecapital use and focus on asset growth.

?€? Experienced Leadership and Execution Track Record

Suraj Estates Board and management team bring decades of experience across real estate, finance, and law, supporting the Companys commitment to quality, compliance, and stakeholder value creation.

FINANCIAL PERFORMANCE

In 2024?€“25, Suraj Estate sustained its growth momentum, building on the strong performance of the previous year. Total income rose to 553.2 Crores, reflecting a 33.1% year-over-year increase over 415.7 Crores in 2023?€“24. This momentum was supported by higher pre-sales, faster project execution and recognisation of revenues.

EBITDAreached206.72Croresin2024-25,downby13%from

236.4 Crores in the previous year, with the EBITDA margin at 37.4%. EBITDA impacted due to one time hit of

45 Crores towards settlement of litigation with one of our Joint Development Agreement (JDA) partners. This highlights operational efficiency despite higher input and legal settlement costs during the year. after Tax (PAT) for the year wasProfit 100.14 Crores, marking a 48.4% increase over 67.5 Crores in 2023?€“24. The PAT margin was 18.24%, demonstrating improved profitability.

The Companys net worth increased to 386.51 Crores, driven by internal accruals and equity infusion through preferential allotments. Gross debt increases by 30.7 Crores, attributable to capital deployment in ongoing projects and the initiation of upcoming developments.

Particulars	2024\u201325	2023\u201324
Total Revenue ( Crores)	553.2	415.7
EBITDA ( Crores)	206.7	236.4
EBITDA Margin (%)	37.7	57.4
PAT ( Crores)	100.2	67.5
PAT Margin (%)	18.2	16.4
Net Worth ( Crores)	902.7	516.2
Gross Debt ( Crores)	456.3	425.6
Cash and Cash Equivalents ( Crores)	14.04	5

Key Financial Ratios (Consolidated)

Financial ratios	As at 31 st March 2025	As at 31 st March 2024	% change from Reason for significant variance in above 31 st March 2024 ratio (> 25%) to 31 st March 2025
(a) Current Ratio	3.48	2.36	47.13% Current ratio increased on account of
			increase in current assets during the year.
(b) Debt Equity Ratio	0.51	0.82	(38.69%) Net Debt Equity Ratio has improved due to
			increase in total equity on account of issue
			of additional shares during the year and
			reduction in borrowings.

Financial ratios	As at 31 st March 2025	As at 31 st March 2024	% change from Reason for significant variance in above 31 st March 2024 ratio (> 25%) to 31 st March 2025
(c) Debt Service Coverage Ratio	0.69	0.39	77.75% Debt service coverage ratio increased mainly on account of lower repayment of borrowings during the year vis a vis previous year and also increase in profit for the year.
(d) Return on Equity Ratio	0.11	0.13	(15.14%) N.A.
(e) Inventory Turnover Ratio	0.36	0.19	85.91% Increased on account of increase in average inventory for the year.
(f) Trade Receivable Turnover Ratio	6.20	4.32	43.48 Increase on account of lower trade receivables during the year and increase in revenue for the year.
(g) Trade Payable Turnover Ratio	11.71	7.06	65.94 On account of increase in construction cost incurred during the year.
(h) Net Capital Turnover Ratio	0.91	0.99	(8.42) N.A.
(i) Net Profit Ratio	0.18	0.16	11.40 N.A.
(j) Return on Capital Employed	0.15	0.25	(40.20) Reduced on account of increase in share capital/ equity during the year.
(k) Return on Capital Investment	0.12	0.18	(35.96) Reduced on account of increase in share capital/ equity during the year.

Risk Management

Operating in the complex and competitive real estate market of South-Central Mumbai exposes Suraj Estate to a range of internal and external risks. These risks may affect operational efficiency, financial performance, and stakeholder value. To address this, the Company takes a proactive stance on identifying, assessing, and mitigating risks. This approach ensures resilience and adaptability across business cycles. The table below outlines the key risk categories along with mitigation strategies.

Risk Category	Potential Impact	Mitigation Strategy
Competitive Environment	Suraj Estate faces competition from both large and mid-sized real estate developers in Mumbai. Peers often leverage aggressive pricing, distinctive amenities,	\u2022 Targets strategic micro-markets in South-Central Mumbai, utilising deep expertise and strong brand equity.
	or quicker execution to draw potential customers. These factors can strain the Company\u2019s ability to retain market share,	\u2022 Differentiates through a proven track record in tenant settlements under DCR 33(7), prime locations, and redevelopment proficiency.
	particularly in the value-luxury and luxury segments.	\u2022 Sustains long-term buyer trust through customer- focussed design and consistent, on-time delivery.

Risk Category	Potential Impact	Mitigation Strategy
Macroeconomic and Market- Related	Volatility in interest rates, inflation, \u2022 and foreign currency movements can increase the cost of financing and project development. Broader economic slowdowns or shifts in buyer sentiment may dampen sales velocity, particularly for premium products. Additionally,	Suraj operates predominantly in the value-luxury housing segment, which has demonstrated resilience even during economic uncertainty. In upcoming projects, over 70% of sales were contributed by this segment, reflecting strong end-user demand and price stability.
	\u2022 supply-demand mismatches can affect pricing and inventory turnover.	The Company maintains a conservative capital structure and exercises disciplined cost control to manage development outflows.
	\u2022	Project launches are carefully timed in line with prevailing market conditions, with flexible configuration and pricing strategies that optimise sales momentum while protecting margins.
Customer Demand-Related	Real estate purchases hinge on disposable \u2022 income levels, employment trends, credit availability, and lifestyle preferences. A dip	Uses advanced CRM tools to track buyer trends and respond in real time.
	\u2022 in buyer confidence or affordability can	Aligns product mix with evolving customer expectations, prioritising quality, transparency, and timely execution.
	lead to postponement or cancellation of purchases, with direct consequences on \u2022 pre-sales, cash flows, and margins. The effect is more pronounced in the mid and premium residential categories. \u2022	Builds trust through consistent delivery, reducing cancellations and fostering repeat and referral business.
		With over four decades of experience in the SCM market, Suraj has a distinct edge in launching and uniquely positioning projects to match demand across diverse micro-markets such as Dadar, Mahim, Prabhadevi, and beyond.
	\u2022	Uses advanced CRM tools to track buyer trends and respond in real time.
	\u2022	Builds trust through consistent delivery, reducing cancellations and fostering repeat and referral business.
Regulatory and Policy-Related	Regulatory uncertainty remains a \u2022 persistent challenge. Revisions to RERA provisions, stamp duty rates, tax structures, environmental norms, or	Tracks and interprets new guidelines and engages with authorities at every stage through a dedicated regulatory affairs team.
	\u2022 development control regulations may inflate costs or affect project viability. Frequent policy shifts and opaque \u2022 frameworks can stall approvals, heighten	Includes legal and regulatory due diligence in early- stage project feasibility assessments. Anticipates policy shifts through continuous industry engagement
	compliance burdens, and strain execution \u2022 timelines.	Updates internal systems regularly to align with changing compliance norms

Risk Category	Potential Impact	Mitigation Strategy
Project Approval- Related	Obtaining timely approvals from \u2022 commencement certificates to RERA registration and occupancy certificates is critical to maintaining construction	Implements robust project planning frameworks, beginning with detailed pre-construction documentation and early regulatory engagement.
	\u2022 schedules and launching new projects. Any delay can lead to increased holding costs, missed market windows, and \u2022 contractual penalties in joint development agreements.	Builds buffer timelines and contingency plans into every project schedule. Uses prior experience in complex redevelopment to ensure smoother coordination with statutory bodies and stakeholders.

HUMAN RESOURCES

Suraj Estate draws strength from a committed and capable workforce that fuels its growth and competitive edge. The Company employed 178 employees as of 31 st March, 2025. Everyone is aligned with shared goals, core values, and cultural ethos. Surajs presence in the redevelopment segments requires strong on-ground execution, stakeholder engagement, and regulatory expertise. These capabilities are strengthened through a combination of targeted hiring, focused training, and continuous knowledge sharing. Site engineers, legal teams, sales professionals, and project managers are regularly equipped to handle complex approvals, tenant negotiations, and customer expectations.

The organisation promotes a culture of meritocracy, where individuals are empowered to grow based on performance, initiative, and reliability. Many team members have progressed through internal mobility, reflecting the Companys long-term approach to talent development. Suraj Estate believes that clarity of purpose, agility in decision-making, and dignity in execution are the foundations of effective human capital. This belief drives consistent investment in people, strengthening the Companys ability to scale and lead in Mumbais real estate landscape.

INTERNAL CONTROL SYSTEMS

Suraj Estate has built a solid internal control framework to ensure the integrity of operations and safeguard against irregularities and potential fraud. The system is structured to be both efficient and responsive to the evolving needs of the business. Internal and statutory auditors conduct periodic assessments to evaluate its adequacy and effectiveness.

Their findings are reviewed by the Audit Committee, which advises Management on necessary improvements, and corrective measures and enhancements required. This process ensures that internal controls remain aligned with the Companys operational objectives and governance standards.

CAUTIONARY STATEMENT

The Management Discussion and Analysis report may include forward-looking statements detailing the Companys objectives, projections, estimates, and expectations, subject to relevant securities laws and regulations. Its important to note that actual results might substantially vary from both the expressed and implied statements. Several factors, such as economic conditions influencing demand/supply and pricing dynamics in domestic and international markets where the Company operates, changes in government regulations, tax laws, and other statutes, as well as unforeseen elements, could significantly impact the Companys operations.