Suraj Estate Developers Ltd Management Discussions

GLOBAL ECONOMIC OUTLOOK

The global economy remained resilient during 2025-26 despite operating in an environment marked by geopolitical conflicts, policy uncertainty and renewed inflationary pressures. While easing inflation at the start of the year had strengthened expectations of monetary easing, the escalation of tensions in the Middle East disrupted energy markets, reigniting inflation concerns and prompting central banks to adopt a more cautious approach. Against this backdrop, global growth remained moderate, supported by resilient labour markets, steady consumer demand and sustained investments in digital technologies and Artificial Intelligence (AI).

Key global macroeconomic developments during the year included:

• Moderation in global growth: The IMF revised its 2026 global growth forecast to 3.0% in its July 2026 update, from 3.1% projected in April, reflecting the impact of geopolitical tensions, higher oil prices and increased uncertainty.

• Resurgence of inflationary pressures: Rising crude oil and energy prices following the Middle East conflict interrupted the global disinflation trend, leading several central banks to delay interest rate cuts and maintain a data-dependent monetary stance.

• Divergent regional growth: The United States continued to demonstrate resilience, supported by strong consumer spending and technology investments, while Europes recovery remained constrained by elevated energy costs. China faced persistent weakness in its property sector and domestic demand, whereas emerging economies, particularly India, continued to outperform global growth.

• Supply chain and trade realignment: Companies accelerated diversification of manufacturing and sourcing strategies through friend-shoring and regionalisation, strengthening supply chain resilience and creating new investment opportunities across emerging markets.

• AI-led investment cycle: Artificial Intelligence emerged as a major structural growth driver, with significant investments flowing into AI infrastructure, cloud computing, semiconductors and digital capabilities, supporting productivity gains and long-term economic competitiveness.

While near-term risks remain linked to geopolitical developments, commodity price volatility and trade fragmentation, continued investments in digital transformation, advanced manufacturing and resilient supply chains are expected to support global economic activity over the medium term. These structural shifts are also reshaping investment flows, creating new opportunities for emerging economies with strong domestic fundamentals and reform-led growth strategies.

INDIAN ECONOMY

India reinforced its position as the worlds fastest-growing major economy during 2025-26, recording a real GDP growth of 7.7% despite a challenging global backdrop marked by geopolitical tensions, trade uncertainties and volatile commodity prices. Growth remained broad- based, supported by resilient domestic consumption, sustained public capital expenditure, a gradual revival in private investments and continued strength in the services sector. Backed by prudent macroeconomic management, structural reforms and rapid digitalisation, India continued to demonstrate its ability to sustain growth while maintaining macroeconomic stability.

Key developments shaping Indias economic landscape during the year:

• Broad-based economic expansion: India achieved 7.7% GDP growth, driven by robust domestic demand and healthy performance across key sectors. Services remained the largest contributor to economic activity, while manufacturing witnessed renewed momentum supported by policy interventions, improving capacity utilisation and rising industrial investments. Agriculture also remained resilient, aided by favourable monsoons and higher crop production, strengthening rural incomes and consumption.

• Consumption remained the primary growth engine:

Private Final Consumption Expenditure (PFCE) continued to anchor economic growth, supported by rising disposable incomes, easing inflation, healthy employment levels and sustained urban demand. Rural consumption also improved on the back of higher agricultural output, government support measures and increased rural infrastructure spending, leading to a more balanced consumption recovery.

• Investment cycle gained momentum: Gross Fixed Capital Formation (GFCF) remained robust as sustained government investments in roads, railways, airports, ports, urban infrastructure and digital connectivity created multiplier effects across the economy. Higher capacity utilisation, improving corporate balance sheets and easing financing conditions also encouraged a gradual revival in private capital expenditure.

• Manufacturing and industrial growth strengthened:

Government initiatives such as the Production Linked Incentive (PLI) Scheme, Make in India and the National Manufacturing Mission continued to attract investments across electronics, semiconductors, renewable energy, defence, automotive and advanced manufacturing. Supply chain diversification by global corporations further strengthened Indias position as an alternative manufacturing destination.

• Digital economy continued to transform growth:

Indias Digital Public Infrastructure (DPI), including Aadhaar, UPI and the Account Aggregator framework, continued to deepen financial inclusion and improve the efficiency of service delivery. Strong growth in digital payments, GST collections and formalisation of businesses reflected the increasing maturity of the countrys digital economy while supporting higher tax compliance and transparency.

• Macroeconomic stability remained a key strength:

India maintained relatively stable inflation, a well- capitalised banking system, comfortable foreign exchange reserves and continued fiscal consolidation despite global volatility. Healthy credit growth, improving asset quality and strong corporate balance sheets enhanced financial system resilience and supported investment activity.

• Policy reforms sustained long-term competitiveness:

The Union Budget 2026-27 reaffirmed the Governments commitment to infrastructure creation, employment generation, MSME development, manufacturing competitiveness and ease of doing business. Continued emphasis on logistics efficiency, clean energy, innovation and skill development is expected to strengthen Indias long-term productivity and investment attractiveness.

• Global investors remained positive on India: Amid increasing geopolitical fragmentation and supply chain diversification, India continued to emerge as a preferred destination for global capital. Its large domestic market, favourable demographics, policy stability and expanding manufacturing ecosystem strengthened investor confidence and positioned the country to benefit from the ongoing reconfiguration of global value chains.

Looking ahead, Indias growth outlook remains supported by strong domestic fundamentals, rising infrastructure investments, accelerating manufacturing, digital transformation and a favourable demographic profile. While external risks - including geopolitical tensions, commodity price volatility and global trade fragmentation may influence the pace of growth, the countrys reform- oriented policy framework, resilient financial system and expanding investment pipeline position it well to sustain long-term economic expansion and strengthen its role in the global economy.

INDIAN REAL ESTATE SECTOR

Indias real estate sector has matured into a structured, institutionally-participated contributor to economic and urban development. Once largely informal, the industry today contributes meaningfully to gross domestic product, is among the largest generators of direct and indirect employment, and increasingly accesses organised capital through listed developers, real estate investment trusts and alternative investment funds. As of 2026, the sectors contribution is expected to reach USD 1 Tn in market size by 2030, accounting for approximately 15% of the GDP This trajectory reflects favourable demographics, sustained urbanisation, rising household incomes and deep structural shifts across asset classes.

(Source: CII Indian Real Estate 2030 Report)

Residential real estate remained the sectors growth engine during FY 2026, with demand concentrated in the premium and value-luxury segments. Sales across Indias top eight cities stood at 171,471 units in H1 2026, against a full-year 2025 figure of 3,48,207 units, while new launches reached 1,87,350 units in the first half of 2026. Volumes moderated in the affordable categories, even as value growth remained robust, marking a continuing shift in the composition of the market towards larger, better-specified homes. Prices held firm across Mumbai, Bengaluru, Pune and Hyderabad, with unsold inventory in the premium segment remaining at historically low levels in core city locations.

(Source: Knight Frank India Real Estate Office and Residential Market H1 2026)

Indias commercial real estate market recorded another exceptionally strong period. Gross office leasing across the top eight cities reached 48.0 Mn sq. ft. in HI 2026, following a strong calendar 2025 of 86.4 Mn sq. ft., anchored by absorption from global capability centres, banking and financial services occupiers and technology-led enterprises, with domestic occupiers accounting for a rising share of demand. The pan-India vacancy rate declined further to 14.6% in FY 2026, signalling a tightening of supply in prime submarkets and high utilisation of existing inventory.

(Source: Knight Frank India Real Estate Office and Residential Market H1 2026)

Key Trends

Redevelopment Becomes a Core Growth Avenue

With vacant land in major Indian cities all but exhausted, redevelopment has emerged as the principal mechanism of urban renewal. Policy support, attractive project economics and rising end-user demand for modern living standards in familiar neighbourhoods have drawn a widening set of participants, from large listed developers to established local builders, into the segment. The trend is reinforced by ageing housing stock across urban cores, where low-rise, underutilised structures are progressively being replaced by high- density developments.

A significant development during 2025-26 was the Government of Maharashtras stated intent to introduce a dedicated framework for the redevelopment of buildings held under the Pagdi system, a legacy rent-control structure that has historically constrained redevelopment through legal, consent-related and financial complexity. Approximately 19,000 Pagdi buildings exist across Mumbai, of which more than 13,000 are understood to represent stalled redevelopment cases, largely in the central regions of the city and many between 60 and 80 years old. While the policy framework was still evolving as at the date of this report, greater clarity has the potential to progressively unlock high-value land parcels in the land-scarce micro-markets of South-Central Mumbai. This is a development of direct strategic relevance to the Company, given its established execution capability under Regulation 33(7) of the Development Control and Promotion Regulations (DCPR).

Luxury and Value-Luxury Housing on the Rise

The premiumisation of Indian housing continued through the year. Higher disposable incomes, non-resident Indian inflows and post-pandemic lifestyle preferences have sustained demand for larger layouts, superior specifications and amenity-rich developments. The premium and luxury segments accounted for 54% of FY 2026 sales. Alongside the outright luxury segment, a distinct value-luxury category has consolidated into compact one- and two-bedroom homes in prime, well-connected locations at ticket sizes accessible to a materially larger buyer pool. This category, in which the Company is now concentrating the substantial majority of its new residential inventory, has demonstrated the most consistent absorption velocity through the cycle.

Resilient Commercial Real Estate

Indias commercial real estate sector is in a phase 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

Leasing activity through H1 2026 was characterised by strong pre-commitments ahead of completion, resulting in lower vacancy and improved occupancy across prime assets. Rental growth was steady in established business districts, while capital values continued to outpace rents, reinforcing a balanced market environment and sustaining institutional interest on the strength of stable income visibility and long-term capital appreciation.

Growth of Alternate Commercial Asset Classes

Several newer asset classes continue to reshape the contours of Indias commercial real estate landscape:

• Data Centres: driven by digitalisation, artificial intelligence adoption and data localisation norms, national data centre capacity is projected to grow to 2.1 GW by 2028, requiring massive real estate development and attracting heavy investment.

• Logistics Parks and Warehousing: warehousing has consolidated as a core infrastructure asset class, with policies such as PM Gati Shakti and the National Logistics Policy accelerating private investment in logistics clusters, Grade A warehouses and multimodal parks.

• Co-working and Flex Workspaces: flexible formats continued to expand, accounting for approximately 24% of total office leasing across major cities in HI 2026, supported by hybrid work models, cost efficiency and rising adoption by large corporates rather than start-ups alone.

(Sources: Knight Frank India Real Estate Office and Residential Market HI 2026; CII Indian Real Estate 2030 Report)

Digitalisation and Sustainability as Core Enablers

Sustainability and digitalisation have moved from differentiators to baseline expectations. Energy-efficient design, green certification and environmentally responsible material selection are now integral to project planning and execution, while the growing application of PropTech, including artificial intelligence, the Internet of Things and data analytics, is redefining how assets are designed, marketed, sold and managed. The green building market is expected to contribute USD 39 Bn by 2025 to 2026, with 61% of Grade A office space in India now green-certified. For developers, the operational consequence is greater transparency, tighter cost control and improved customer experience across the ownership lifecycle.

Emergence of Tier II and III Growth Hubs

Momentum in real estate continues to broaden beyond the metropolitan markets. Tier II and Tier III cities are emerging as growth hubs on the strength of improved connectivity, public infrastructure investment and decentralised employment creation, while metropolitan peripheries are attracting mixed-use developments and townships catering to demand for integrated, affordable urban living. This broadening of the market does not dilute the scarcity value of core city locations, and it reinforces the differentiated position of developers operating in land-constrained central precincts.

(Sources: CII Indian Real Estate 2030 Report; Knight Frank India Real Estate Investment 2026)

GOVERNMENT INITIATIVES FUELLING GROWTH PMAY Urban 2.0: Pradhan Mantri Awas Yojana Urban 2.0 continued implementation through H1 2026, addressing the housing needs of one Crores additional urban poor and middle-class families. The programme advances the Housing for All objective through energy-efficient, sustainable housing, supported by public-private partnerships and direct subsidies across the economically weaker section, lower income group and middle-income group categories.

SWAMIH Fund 2.0: SWAMIH Fund 2.0, with an additional infusion of 15,000 Crores, continued to address stalled developments and is expected to unlock housing units by reviving mid-income and affordable housing projects constrained by liquidity. Beyond the units directly financed, the fund improves buyer confidence and reactivates dormant capital tied to incomplete assets.

Urban Challenge Fund: The 1 Lakhs Crores Urban Challenge Fund supports land access, integrated transit systems, public amenities and smart city interventions, encouraging participation through public-private partnership models and institutional finance. For Mumbai, transit and coastal infrastructure funded through such mechanisms has a direct and measurable effect on micro-market desirability and achievable realisations.

Tax Reforms: The policy ecosystem has been made progressively more conducive through direct tax measures. The threshold for tax deducted at source on rental income was raised from 2.4 Lakhs to 6 Lakhs annually, reducing compliance friction and incentivising the formal rental housing market. Personal income tax reforms, including effective nil taxation up to 12 Lakhs, have strengthened disposable incomes and demand for mid-income and value- luxury homes. The new Income Tax Act, 2025 to 2026, which consolidates and simplifies direct tax administration, is intended to reduce interpretive litigation over time.

Indirect Tax Rationalisation: The rationalisation of Goods and Services Tax rates simplified the rate structure and reduced the tax incidence on several core construction inputs, including cement. For developers, the benefit is twofold: a moderation in construction cost inflation and an improvement in end-customer affordability in the affordable and mid-income categories where a concessional rate applies. Specific rate references and effective dates are aligned against the relevant GST Council notifications.

Capex-Linked State Support and Regulatory Simplification:

Efforts to accelerate state-level infrastructure spending include 1.5 Lakhs Crores of long-term, interest-free loans to states for capital expenditure across urban development, transport and logistics. In parallel, digitisation of land records, registration and approval processes continues to improve transparency and reduce transaction timelines. A national framework to attract global capability centres to Tier II cities, by improving ease of doing business and access to skilled talent, is also under development.

Maharashtra-Specific Policy Developments: Two state- level developments were of particular relevance to the Company during the year. First, the proposed framework for the redevelopment of Pagdi-tenanted buildings, discussed above, which addresses the single largest structural constraint on redevelopment in South and Central Mumbai. Second, the annual revision of the Ready Reckoner rates, which influences stamp duty incidence, premium computations and development charges, supported transparent valuations. Municipal Corporation of Greater Mumbai premium and Floor Space Index policy changes during the year continued to enhance redevelopment viability.

(Sources: NITI Aayog Comprehensive Framework; CII Indian Real Estate 2030 Report)

INDIAN COMMERCIAL REAL ESTATE MARKET

Indias commercial real estate market continues to strengthen its position as one of the worlds most attractive office destinations, supported by sustained economic growth, expanding Global Capability Centres (GCCs), robust corporate investments and a deep technology talent pool. Despite geopolitical uncertainties and evolving workplace strategies, occupier demand remains resilient as both domestic and multinational enterprises continue to expand their office footprints. At the same time, increasing preference for high-quality, sustainable and future-ready workspaces is reinforcing demand for institutional Grade A assets across the countrys leading commercial markets.

Key Market Trends

• Office Leasing Continues to Demonstrate Strong Momentum

Indias office market continues to witness healthy leasing activity, supported by sustained occupier confidence and corporate expansion. During the six months ended 30^th June, 2026, office absorption reached a record 45.5 Mn sq. ft., while new office completions totalled 32.0 Mn sq. ft., reflecting continued developer confidence and robust demand for institutional-quality office assets. Office absorption also increased 9.6% year-on-year, highlighting the markets sustained growth trajectory.

• GCC Expansion and Flexible Workspaces are Reshaping Demand

Global Capability Centres continue to be the single largest demand driver, accounting for 42% of total leasing activity, as global organisations expand their strategic operations in India. Flexible workspace operators contributed approximately 27% of leasing activity, reflecting the growing adoption of agile workplace strategies and core + flex occupancy models. Technology companies remain the largest occupier segment, while BFSI, Research & Analytics, Engineering & Manufacturing, Infrastructure and Life Sciences continue to diversify the demand base.

• Leading Office Markets Continue to Drive Growth

Indias major office markets continue to anchor commercial real estate activity. Bengaluru, Pune and Delhi-NCR together accounted for 58% of office leasing activity, while Bengaluru, Pune and Ahmedabad contributed 73% of new office supply during Q2 2026. These markets continue to benefit from strong employment generation, expanding corporate ecosystems, world-class infrastructure and sustained investments from domestic as well as global occupiers.

• Premium Grade A Assets Continue to Strengthen Market Fundamentals

Occupiers are increasingly prioritising high-quality, investment-grade office assets that offer superior sustainability credentials, operational efficiency and employee experience. Healthy leasing activity, coupled with disciplined supply additions, continues to support rental growth across several major office micro-markets while maintaining healthy vacancy levels. This reflects a structural preference for premium Grade A developments and reinforces the growing institutionalisation of Indias commercial real estate market.

Outlook

Indias commercial office market is expected to remain on a favourable long-term growth trajectory, supported by healthy occupier demand, stable market fundamentals and continued portfolio expansion by both domestic and multinational enterprises. Technology companies are expected to remain the primary demand drivers, complemented by BFSI and Engineering & Manufacturing, while emerging sectors such as Research & Analytics, Automotive And Life Sciences are likely to contribute incremental demand. The continued expansion of GCCs, supported by Indias leadership in AI, machine learning and cloud technologies, together with the increasing adoption of flexible workplace strategies, is expected to sustain leasing momentum and further strengthen Indias position as a leading global commercial real estate market.

INDIAN RESIDENTIAL REAL ESTATE MARKET

Indias residential real estate market continued to mature during 2025-26, transitioning from the rapid post-pandemic recovery phase to one characterised by balanced demand, disciplined supply and improving product quality. Despite geopolitical uncertainties and evolving macroeconomic conditions, homebuyer sentiment remained resilient, supported by urbanisation, rising incomes and sustained employment generation across key economic centres. Developers increasingly adopted a measured approach to project launches, introducing approximately 1,38,800 residential units during the six months ended 30^th June, 2026, closely aligned with market demand and maintaining healthier inventory levels.

Key Market Trends

• Premiumisation Continues to Reshape Demand

The residential market is witnessing a sustained shift towards premium and high-end housing as homebuyers increasingly prioritise larger homes, superior amenities, integrated communities and trusted developers. This trend is reflected in the growing share of high-end projects, which accounted for 32% of residential sales during Q2 2026, while 35% of apartment launches during the six months ended 30^th June, 2026, were concentrated in the high-end segment. Mid-segment housing continues to remain an important contributor, indicating broad-based demand across buyer categories.

• Developers are Prioritising Supply Discipline

Rather than pursuing aggressive expansion, developers are increasingly adopting calibrated launch strategies, including phased and tower-wise project releases, to better align supply with market absorption. During the six months ended 30^th June, 2026, the market recorded approximately 127,300 residential sales alongside 138,800 new unit launches, reflecting a measured approach that supports pricing discipline and healthier market fundamentals.

• Metropolitan Markets Continue to Lead Residential Activity

Indias major metropolitan centres continue to account for the majority of residential activity, driven by expanding employment opportunities, infrastructure investments and sustained urban migration. Mumbai, Pune and Bengaluru together contributed 63% of residential sales, while Mumbai, Bengaluru and Pune accounted for 67% of new launches during Q2 2026, reinforcing their position as the countrys primary residential growth markets.

• Value, Quality and Developer Credibility are Becoming Key Purchase Drivers

Homebuyers are becoming increasingly discerning in their purchasing decisions, placing greater emphasis on project location, construction quality, lifestyle offerings and the developers execution track record. Purchasing decisions are also being shaped by macroeconomic stability, inflation expectations and employment outlook, encouraging developers to differentiate through product quality, timely delivery and customer trust.

Outlook

Indias residential market is expected to remain on a stable and sustainable growth trajectory, supported by disciplined inventory management, phased project launches and a balanced demand-supply environment. As homebuyers become increasingly value conscious, developers with strong brands, proven execution capabilities and well- located projects are expected to remain best positioned to capture demand. The sectors continued emphasis on quality, premiumisation and prudent supply is expected to reinforce long-term market stability.

MUMBAI REAL ESTATE MARKET

Mumbai continues to strengthen its position as Indias most dynamic real estate market, supported by its status as the countrys financial capital, a diversified economic base and sustained infrastructure investments. The citys structural demand drivers, including limited developable land, expanding employment opportunities and continuous urban transformation, continue to support long-term growth across both residential and commercial real estate. At the same time, improving connectivity and increasing institutional participation are reshaping development patterns across the Mumbai Metropolitan Region (MMR), creating opportunities beyond traditional business and residential districts.

Key Market Trends

Infrastructure is Reshaping the Citys Growth Landscape

Infrastructure continues to redefine how Mumbai grows, unlocking new development corridors and enhancing the attractiveness of emerging locations across the MMR.

Key developments include:

• Expansion of the metro rail network, improving east- west and north-south connectivity.

• Operationalisation of the Mumbai Trans Harbour Link and progress on the Coastal Road, significantly enhancing regional accessibility.

• The upcoming Navi Mumbai International Airport, creating new commercial and residential growth hubs.

• Transit-Oriented Development (TOD), encouraging higher-density, mixed-use developments around key transport corridors.

• Improved connectivity supporting the emergence of Navi Mumbai, Thane and the eastern suburbs as important real estate destinations.

Commercial Real Estate Continues to Demonstrate Resilience

Mumbai remains one of Indias strongest office markets, supported by sustained demand from financial services, technology companies, consulting firms and Global Capability Centres (GCCs).

Market highlights:

• Gross office leasing reached a record 10.7 Mn sq. ft. during the six months ended 30^th June, 2026.

• Vacancy remained healthy at 8.9%, despite continued additions to Grade A office stock.

• BFSI continued to be the largest occupier segment, reaffirming Mumbais position as Indias financial services hub.

• Premium Grade A assets continued to command strong occupier interest, supporting rental resilience across key business districts.

Residential Demand Continues to Evolve

Residential demand remains resilient, driven by improving affordability across peripheral markets, better connectivity and changing lifestyle aspirations.

Key trends include:

• Residential launches reached 41,341 units during the six months ended 30^th June, 2026, reflecting sustained developer confidence.

• Demand continues to shift towards larger homes, integrated developments and lifestyle-oriented communities.

• Infrastructure-led growth is expanding residential activity across Navi Mumbai, Thane and other emerging micro-markets.

• Premium housing continues to outperform, while midincome housing remains the largest contributor to new supply.

Premiumisation and Institutionalisation Continue to Shape the Market

The market continues to evolve beyond volume-led growth towards higher-quality, investment-grade developments.

This transformation is characterised by:

• Increasing preference for premium residential and commercial assets.

• Growing adoption of sustainable and green-certified developments.

• Rising participation from institutional investors and organised developers.

• Greater focus on integrated developments offering superior infrastructure, amenities and long-term value creation.

Outlook

Mumbais real estate market remains well positioned for long-term growth. Infrastructure expansion, sustained economic activity, improving connectivity and limited land availability are expected to continue supporting demand for high-quality residential and commercial developments. As the market becomes increasingly institutional, transit- oriented and quality-driven, Mumbai is expected to remain one of Indias most attractive real estate investment destinations.

MUMBAIS REDEVELOPMENT MARKET

Redevelopment is increasingly defining Mumbais next phase of urban growth. Unlike most cities, where expansion is driven by greenfield developments, Mumbais future supply is being created through the renewal of its existing urban fabric. Ageing building stock, limited land availability and growing demand for modern developments are accelerating the transition towards redevelopment-led growth, making it one of the citys most significant long-term opportunities.

Key Market Trends

Redevelopment is Becoming the Primary Source of Future Supply

As greenfield opportunities become increasingly limited, redevelopment is emerging as Mumbais preferred development model.

The shift is being driven by:

• Scarcity of developable land across established urban locations.

• Growing stock of ageing residential buildings requiring renewal.

• Rising demand for modern developments in well- established neighbourhoods.

• Better utilisation of land through higher-density and mixed-use developments.

• Increasing focus on urban renewal instead of peripheral expansion.

Multiple Redevelopment Opportunities Continue to Emerge

Mumbais redevelopment opportunity extends across several property categories, creating a deep and diversified development pipeline.

Key opportunity segments include:

• Redevelopment of ageing co-operative housing societies.

• Pagdi properties across South and Central Mumbai.

• Cessed buildings requiring structural renewal.

• Older mixed-use and commercial buildings suitable for modern redevelopment.

• Cluster redevelopment projects that enable comprehensive precinct-level transformation.

Policy Reforms are Strengthening the Ecosystem

Supportive regulations continue to improve redevelopment viability while encouraging more efficient land utilisation.

Important policy enablers include:

• Development Control and Promotion Regulations (DCPR).

• Enhanced FSI and Metro FSI provisions.

• Transit-Oriented Development (TOD) policies.

• Continued participation of agencies such as MHADA in facilitating redevelopment.

• Regulatory measures aimed at accelerating urban renewal and improving project feasibility.

Infrastructure is Expanding Redevelopment Corridors

Infrastructure development is extending redevelopment opportunities beyond traditional city precincts and improving the viability of projects across the metropolitan region.

This is resulting in:

• Redevelopment activity around metro corridors and major transport nodes.

• Higher-density development supported by improved connectivity.

• Greater integration of residential, commercial and retail developments.

• Creation of better-planned, transit-oriented urban neighbourhoods.

Execution Capability is Becoming a Key Competitive Advantage

Redevelopment projects demand significantly higher execution capabilities than conventional developments owing to their complexity and stakeholder-intensive nature.

Successful execution increasingly depends on:

• Strong relationships with housing societies and residents.

• Efficient management of approvals and regulatory processes.

• Financial strength to undertake long-gestation projects.

• Timely rehabilitation and project delivery.

• Adoption of modern construction technologies and sustainable building practices.

Outlook

Redevelopment is expected to remain the cornerstone of Mumbais future real estate growth. Supported by favourable policy measures, improving infrastructure and increasing participation from organised developers, redevelopment is poised to play a central role in renewing the citys ageing building stock, optimising scarce urban land and creating future-ready residential and mixed-use developments. As the ecosystem continues to mature, redevelopment is likely to remain one of the most compelling long-term opportunities within Mumbais real estate sector.

COMPANY OVERVIEW

Suraj Estate Developers Limited (also referred to as Suraj Estate or the Company) is a leading real estate developer specialising in residential, commercial and redevelopment projects across South-Central Mumbai. Established in 1986, the Company has built a strong presence across Mahim, Dadar, Prabhadevi, Shivaji Park and Parel, while strategically expanding into Bandra and Santacruz (East). Its focused geographic strategy, deep understanding of local market dynamics and execution-led approach have enabled it to establish a differentiated position in one of Indias most supply-constrained real estate markets.

Over nearly four decades, the Company has developed significant expertise in redevelopment under the Development Control and Promotion Regulations (DCPR), particularly Regulation 33(7), successfully rehabilitating over 1,011 tenants while transforming ageing properties into premium residential and commercial developments. This specialised capability remains a key differentiator, enabling the Company to unlock complex redevelopment opportunities that require extensive stakeholder management and regulatory expertise.

2025-26 marked an important milestone in the Companys growth journey with the expansion of its development platform beyond residential projects through the launch of its first Grade A commercial development, Suraj One Business Bay. During the year, Suraj Estate was also honoured with the Euromoney Real Estate Award for Indias Best Residential Developer, recognising its execution capabilities, customer confidence and long-standing commitment to quality.

Since inception, the Company has successfully completed 45 projects, developing over 16.09 Lakhs sq. ft. of saleable area across South-Central Mumbai, including the completion of Nirvana, Louisandra and Ave Maria during 2025-26. As at 31^st March, 2026, the Company had:

• 13 ongoing projects, with 5.66 Lakhs sq. ft. sold at an average realisation of approximately 45,775 per sq. ft.;

• an upcoming development pipeline comprising approximately 12.12 Lakhs sq. ft. of saleable carpet area;

• an estimated development pipeline with Gross Development Value (GDV) of over 7,500 Crores, supported by strategic redevelopment opportunities and land acquisitions; and

• balance receivables of approximately 2,105 Crores, providing strong visibility over future cash flows.

OPERATIONAL HIGHLIGHTS OF 2025-26

2025-26 was a defining year for Suraj Estate as the Company resumed its launch cycle, diversified into the commercial office segment and expanded its future development pipeline through strategic acquisitions and redevelopment-led value creation. During the year, the Company launched three projects with a cumulative estimated GDV of approximately 1,600 Crores, strengthened its commercial portfolio and continued to build long-term development visibility across its core markets.

Project Launches

• Suraj Aureva, Prabhadevi: The Company launched Suraj Aureva, a 21-storey value-luxury residential tower offering 1,2 and 3 BHK residences ranging from 450 sq. ft. to 800 sq. ft. (RERA carpet area), with prices starting from 2.47 Crores. The project comprises a saleable area of 0.24 Lakhs sq. ft. and an estimated GDV of 120 Crores. Approximately 39% of the inventory was sold at launch, reflecting healthy demand in the value- luxury segment.

• Suraj Park View 1, Shivaji Park: Suraj Park View 1 is an upscale value-luxury residential development combining heritage character, sea-facing views and contemporary design. The project offers 0.53 Lakhs sq. ft. of saleable area with an estimated GDV of 250 Crores, achieving approximately 42% sales during launch. Its strategic location and connectivity to Dadar Metro, BKC, the Coastal Road and the Bandra-Worli Sea Link contributed to strong customer response.

• Suraj One Business Bay, Mahim: The Companys first large-format Grade A commercial development, Suraj One Business Bay, marks Suraj Estates entry into Mumbais premium office market. Developed on a combined land parcel of approximately 3,000 sq. m., the project offers 2.09 Lakhs sq. ft. of saleable area with an estimated GDV of 1,200 Crores. Designed with premium specifications including double-height entrance and e-deck levels, extensive podium parking and efficient office layouts, the project recorded sales of approximately 40,000 sq. ft. within 45 days of launch, translating into sales value of around 200 Crores.

Business Development

During 2025-26, the Company continued to strengthen its long-term development pipeline through strategic acquisitions and redevelopment opportunities across South-Central Mumbai.

• Marinagar, Mahim: Secured approximately 2 Lakhs sq.

ft. of additional carpet area under Metro FSI provisions, creating incremental GDV potential of approximately 800 Crores.

• Lower Parel: Acquired a 644 sq. m. land parcel for 6.44 Crores, which will be amalgamated with the adjoining Ambavat Bhawan and RK Mansion redevelopment, creating a combined project with an estimated GDV of 130 Crores.

• Bandra: Acquired two additional land parcels measuring 1,760 sq. m. and 906 sq. m. as part of the Companys cluster aggregation strategy in the Mount Mary precinct.

• Prabhadevi (Sayani Road): Completed the acquisition of 100% shareholding in Hally Pacific Private Limited for approximately 30.40 Crores, securing a strategically located land parcel with an estimated GDV potential of 200 Crores.

• Mahim Commercial Expansion: Signed a binding MoU for the acquisition of development rights over a land parcel contiguous to Suraj One Business Bay. Following amalgamation, the project is expected to generate an additional 1.5 Lakhs sq. ft. of saleable carpet area with incremental GDV potential of approximately 800 Crores, taking the combined GDV potential of the project to over 2,000 Crores.

Construction and Delivery

Construction progressed steadily across the Companys portfolio during the year, with Nirvana, Louisandra and Ave Maria completed during 2025-26.

At Palette, the RERA completion timeline was revised, with the consent of all customers, owing to delays in the delivery of imported high-speed elevators. The equipment has since reached the site, apartments have been handed over for interior fit-outs and the occupation certificate is expected within the revised timeline.

Construction at Ocean Star continued in line with its approved RERA schedule. Across the portfolio, the Company maintained its disciplined approach of aligning project execution with phased launches and customer collections, supporting efficient capital deployment and timely delivery.

COMPETITIVE STRENGTHS

• Leadership in South-Central Mumbai Redevelopment

Suraj Estate has built a differentiated platform focused exclusively on South-Central Mumbai, combining deep local market knowledge with specialised redevelopment capabilities. Its longstanding presence across established micro-markets provides access to attractive redevelopment opportunities in locations characterised by limited land availability and strong end-user demand.

• Proven Redevelopment and Execution Capabilities

The Company has developed extensive expertise in executing complex redevelopment projects under DCPR 33(7), successfully rehabilitating more than 1,011 tenants while managing regulatory approvals, stakeholder engagement and project execution. This capability has enabled Suraj Estate to consistently unlock high-value urban land parcels while mitigating execution risks.

• Diversified Development Portfolio

Suraj Estate serves a broad customer base through a balanced portfolio spanning value-luxury, luxury and Grade A commercial developments. The addition of Suraj One Business Bay has expanded the Companys platform into commercial real estate, creating an additional avenue for long-term growth alongside its established residential business.

• Disciplined Land Acquisition and Portfolio Expansion

The Company follows a calibrated land acquisition strategy centred on redevelopment and cluster aggregation. By acquiring adjoining parcels around existing developments, it enhances planning flexibility, development potential and project economics while maintaining capital discipline.

• Strong Development Visibility

With 13 ongoing projects, an upcoming pipeline of over 12 Lakhs sq. ft. of saleable carpet area and an estimated development potential exceeding 7,500 Crores, Suraj Estate has established a robust platform for sustainable growth. Its phased launch strategy and healthy receivables provide strong visibility over future execution and cash flows.

• Experienced Leadership

The Companys experienced Board and management team bring together deep expertise across real estate development, finance, legal and project execution. Their disciplined approach to business development, governance and execution continues to support Suraj Estates long-term value creation strategy.

FINANCIAL PERFORMANCE

2025-26 was a year of strong operational execution for Suraj Estate, marked by record pre-sales, successful project launches and continued expansion of its development pipeline. While accounting revenue reflected the stage of construction across the ongoing portfolio in accordance with applicable revenue recognition principles, the Company significantly strengthened its long-term revenue visibility through robust customer bookings, strategic land acquisitions and disciplined project execution.

Total income for 2025-26 stood at 561 Crores, compared with 553.2 Crores in 2024-25. EBITDA increased to 223 Crores from 206.7 Crores, with the EBITDA margin improving to 39.7% from 37.4% in the previous year. The improvement in operating profitability was driven by stronger operating leverage across the portfolio and the absence of the one-time litigation settlement charge recognised in 2024-25. Profit after tax stood at 90.3 Crores, compared with 100.2 Crores in 2024-25. The decline in profit after tax was primarily attributable to higher finance costs associated with strategic land acquisitions, business development initiatives and investments made to strengthen the Companys longterm project pipeline.

Operationally, the Company delivered its strongest performance to date. Sales bookings (pre-sales) increased 23% year-on-year to 615 Crores, exceeding the guidance of 600 Crores communicated during the year. Sales area increased 42% to 1,31,167 sq. ft., while collections grew 9% to 421 Crores, reflecting sustained customer demand and healthy execution across the portfolio. Average realisation stood at approximately 45,775 per sq. ft. from the ongoing projects. The moderation in average realisation compared with 2024-25 was primarily due to a higher contribution from value-luxury projects, whereas the previous year benefited from a larger share of premium developments such as Palette and Ocean Star.

The Company continued to invest in expanding its future development platform through strategic land acquisitions and redevelopment opportunities. As at 31^st March, 2026, net debt stood at approximately 579.9 Crores, reflecting capital deployed towards strengthening the development pipeline and supporting future launches. These investments are supported by balance receivables of approximately 2,105 Crores from sold and unsold inventory across ongoing projects, providing healthy visibility over future cash flows. Net debt remained below 0.5 times the Companys equity base during the year, reflecting a disciplined approach to capital allocation.

KEY FINANCIAL AND OPERATIONAL INDICATORS

Particulars	2025-26	2024-25
Total Income ( Crores)	561.0	553.2
EBITDA ( Crores)	223.0	206.7
EBITDA Margin (%)	39.7	37.4
Profit After Tax ( Crores)	90.3	100.2
PAT Margin (%)	16.1	18.2
Net Worth ( Crores)	993.1	902.7
Gross Debt ( Crores)	641.96	456.3
Cash and Cash Equivalents ( Crores)	40.1	14.0

KEY FINANCIAL RATIOS (CONSOLIDATED)

Pursuant to Schedule V (Part B) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Companys key financial ratios are presented below. Explanations are provided where the movement exceeds 25%.

Financial Ratio	2025-26	2024-25	% Change	Explanation
Current Ratio	4.45	3.48	27.96%	Current ratio has been increased on account of reduction in current liability and increase in current assets
Debt Equity Ratio	0.65	0.51	27.89%	Debt equity ratio has increased due to increase in borrowings during the year
Debt Service Coverage Ratio	0.57	0.69	(18.60%)	Debt service coverage ratio increased mainly on account of higher repayment of borrowings during the year vis-a-vis previous year
Return on Equity	0.09	0.11	(18.03%)	Return on equity ratio has decreased on account of a reduction in profits
Inventory Turnover Ratio	0.31	0.36	(14.18%)	NA
Trade Receivable Turnover Ratio	5.84	6.20	(5.85%)	NA
Trade Payable Turnover Ratio	8.12	11.71	(30.67%)	Trade payable turnover ratio has decreased due to a reduction in operating & project expenses
Net Capital Turnover Ratio	0.72	0.91	(20.32%)	NA
Net Profit Ratio	0.16	0.18	(10.93%)	NA
Return on Capital Employed	0.13	0.15	(13.33%)	NA
Return on Capital Investment	0.11	0.12	(3.68%)	NA

OUTLOOK AND EXECUTION PRIORITIES FOR 2026-27

Suraj Estate enters 2026-27 with its strongest development pipeline to date, supported by a balanced portfolio of residential and commercial developments, a robust redevelopment pipeline and healthy demand across its core South-Central Mumbai markets. The Companys priorities remain focused on disciplined execution, calibrated expansion and long-term value creation.

• Scale the Commercial Platform

Following the acquisition of the adjoining development parcel, Suraj One Business Bay now has a combined Gross Development Value potential of over 2,000 Crores. The Company intends to build on this platform by evaluating additional Grade A commercial opportunities within South-Central Mumbai, while maintaining a disciplined approach to capital deployment.

• Accelerate Residential Launches

The Company plans to replenish residential inventory through redevelopment-led projects secured over the past year. Recently appointed society redevelopments and strategic land acquisitions are expected to support a healthy residential launch pipeline in the coming years.

• Progress Strategic Land Aggregation

Suraj Estate will continue expanding its cluster development strategy by acquiring contiguous parcels around existing projects, particularly in Bandra and Mahim. This approach enhances planning flexibility, increases development potential and improves longterm project economics.

• Maintain Financial Discipline

Management expects EBITDA margins to remain in the 35% to 40% range over the medium term, supported by a balanced mix of redevelopment projects and commercial developments. The Company also expects leverage to progressively normalise as collections from ongoing projects strengthen and newly launched developments advance through construction.

• Deliver Sustainable Growth

With an upcoming development pipeline of approximately 12.12 Lakhs sq. ft. and an estimated Gross Development Value exceeding 7,500 Crores, Suraj Estate is well positioned to capitalise on long-term redevelopment opportunities across South-Central Mumbai. Its focused market presence, redevelopment expertise and disciplined capital allocation provide a strong foundation for sustainable growth and longterm stakeholder value creation.

RISK MANAGEMENT

Operating in Mumbais highly competitive and regulation-intensive real estate sector exposes Suraj Estate to a range of strategic, operational, financial and compliance-related risks.

The Company has established a structured risk management framework that enables early identification, assessment and mitigation of emerging risks while supporting disciplined decision-making across the project lifecycle. The Board of Directors, supported by its Committees and senior management, periodically reviews the Companys risk profile to ensure that appropriate mitigation measures remain effective and aligned with the evolving business environment.

RISK MANAGEMENT MATRIX

Risk Category	Potential Impact	Mitigation Strategy
Market Competition and Customer Demand	Intense competition from organised developers, changing customer preferences and economic uncertainty could affect sales velocity, pricing and market share across residential and commercial developments.	• Maintains a focused presence in South-Central Mumbai with deep local market expertise.
		• Offers a balanced portfolio across value-luxury, luxury and commercial developments.
		• Leverages strong brand recall, customer referrals and disciplined project execution to sustain demand.
Redevelopment and Land Acquisition	Delays in securing society approvals, tenant consent or land aggregation could affect project launches and execution timelines.	• Draws on nearly four decades of redevelopment experience and successful rehabilitation of over 1,011 tenants.
		• Maintains dedicated teams for stakeholder engagement, legal documentation and project feasibility.
		• Continues to expand its redevelopment pipeline through cluster acquisitions and strategic land aggregation.
Regulatory and Approval Risk	Delays in statutory approvals, changes in development regulations, RERA requirements or environmental clearances may impact project schedules and costs.	• Engages proactively with regulatory authorities from the planning stage.
		• Maintains dedicated legal and regulatory teams to monitor compliance.
		• Incorporates regulatory timelines and contingencies into project planning.
Capital Management and Liquidity	Higher borrowing costs, increased leverage or delays in collections may affect profitability and financial flexibility.	• Maintains disciplined capital allocation and phased project launches.
		• Aligns land acquisitions with long-term cash flow visibility.
		• Closely monitors debt levels, collections and receivables while maintaining access to diversified funding sources.
Construction Execution and Supply Chain	Escalation in construction costs, contractor availability and delays in procuring specialised equipment may impact project timelines and profitability.	• Enters into long-term contracts with defined pricing mechanisms.
		• Procures long-lead materials and imported equipment well in advance.
		• Continuously monitors project execution through structured review mechanisms and transparent stakeholder communication.
Portfolio Diversification	Expansion into commercial real estate introduces exposure to office demand cycles, commercial buyer sentiment and larger project sizes.	• Maintains a balanced development portfolio across residential and commercial assets.
		• Adopts a strata-sale model to accelerate monetisation and reduce leasing risk.
		• Continues to evaluate commercial opportunities selectively within established micro-markets.
Macroeconomic Environment	Changes in interest rates, inflation, financing conditions and overall economic activity may influence customer affordability, financing costs and investment decisions.	• Focuses on established micro-markets characterised by resilient end-user demand.
		• Adopts phased launches and disciplined pricing strategies aligned with market conditions.
		• Maintains prudent financial management to preserve operational flexibility.
Human Capital	Competition for experienced professionals may affect execution capabilities across redevelopment, project management and commercial development.	• Invests in capability building, succession planning and internal talent development.
		• Strengthens specialist teams across engineering, legal, design, sales and project execution.
		• Fosters a performance-driven and collaborative work culture focused on long-term growth.

HUMAN RESOURCES

Suraj Estate believes that its people are central to the successful execution of its redevelopment-led business model. The Companys multidisciplinary workforce brings together expertise across engineering, architecture, legal, project management, customer engagement, finance and sales, enabling it to execute complex redevelopment projects while maintaining high standards of quality, compliance and customer service.

As at 31^st March, 2026, the company employed 180 people at Group level across its corporate office and project locations. During the year, the organisation continued to strengthen capabilities in redevelopment execution, commercial real estate, project planning and stakeholder management to support its expanding development portfolio.

Given the specialised nature of redevelopment projects, the Company places strong emphasis on building technical expertise and functional excellence through continuous learning and on-the-job development. Employees are equipped to manage complex regulatory processes, society and tenant engagement, project execution and evolving customer expectations across residential and commercial developments.

Suraj Estate fosters a performance-oriented and entrepreneurial work culture that encourages accountability, collaboration and continuous improvement. Merit-based career progression, cross-functional exposure and leadership development remain integral to the Companys talent philosophy, helping build a motivated workforce capable of supporting long-term business growth.

The Company also remains committed to providing a safe, inclusive and engaging workplace, where employees are empowered to contribute meaningfully while upholding the highest standards of ethics, integrity and professionalism.

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. It is 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.