Suratwwala Business Group Ltd Management Discussions

Global economic growth

In CY2024, the global economy grew at a steady 3.3%, reflecting a phase of relative stability despite subdued momentum. However, 2025 has brought a wave of heightened volatility, as major economies recalibrate their policy priorities against the backdrop of escalating geopolitical tensions and deep-rooted structural challenges. The most significant turning point came in April, when the US implemented sweeping tariffs, prompting retaliatory measures worldwide. These sudden shifts have fuelled global trade uncertainty, triggered sharp corrections in equity markets, and pushed bond yields higher, adding fresh layers of complexity to the global economic landscape.

(Source: https https://www.imf.org/en/Publications/WEO/Issues/2025/04/22/world-economic-outlook-april-2025) [*Emerging Market and Developing Economies] [**Projected]

On the inflation front, global inflation is set to ease, reaching 4.3% in 2025 and 3.6% in 2026, with advanced economies progressing faster than emerging markets. This downward trend is supported by cooling labour markets and lower energy prices. However, geopolitical conflicts like the Russia-Ukraine and Israel-Gaza wars may cause localised inflation spikes, particularly in energy and food. Divergent monetary policies across regions are also expected to influence capital flows, investments, and exchange rates, adding complexity to the global economic environment.

Global trade, while moderated by recent tari_ hikes and geopolitical complexities, is expected to grow at a modest 1.7% in 2025. Yet, global supply chains continue to evolve, displaying resilience through diversification, digital transformation, and forward-looking trade agreements. These trends signal a global marketplace that, while challenged, is steadily adapting, fuelled by innovation, strategic collaboration, and a shared commitment to long-term growth.

In terms of individual economies, the USA is expected to grow at 1.8% in 2025, following a strong 2.8% expansion in 2024. The European economy is projected to experience a gradual recovery, with euro area GDP growth forecasted to accelerate to 0.8% in CY 2025 and 1.2% in CY 2026, following a modest 0.9% expansion in CY 2024. This recovery is expected to be supported by monetary policy easing, continued implementation of Next-Generation EU spending, and a gradual recovery in external demand. Chinas growth is projected to decline to 4.6% in 2025 and 4.5% in 2026, reflecting weak consumer confidence, a sluggish labour market and persistent challenges in the real estate sector. India continues to be a bright spot, with growth projected at 6.2% in 2025 and 6.3% in 2026, propelled by robust private consumption, particularly in rural sectors.^*

Outlook

In todays rapidly shifting global landscape, businesses are navigating a complex mix of slowing growth, evolving policy priorities, and economic divergence. While global expansion is showing signs of moderation, the resilience of select economies, particularly in Asia which continues to unlock promising and focused opportunities. However, rising protectionism, trade disruptions, and geopolitical tensions are driving up costs and reshaping global supply chains. To navigate this uncertainty, clear policy direction, regional collaboration, and agile strategies will be essential to ensure stability and sustainable progress.

Indian economy overview

Indias economy demonstrated remarkable resilience in 2024–25, achieving a GDP growth of 6.4% despite global challenges such as trade disruptions, inflationary pressures, and market volatility. This steady performance was underpinned by strong domestic fundamentals—robust private consumption, improving rural demand, and a stable macroeconomic environment. The Reserve Bank of India, in its April 2025 bulletin, credited this strength to prudent fiscal management, a solid policy framework, and the vitality of internal growth drivers. While global uncertainties persist, Indias broad-based domestic demand continues to act as a reliable cushion against external shocks.

Indias current account deficit (CAD) widened to $11.5 billion in the third quarter (Q3) of FY25 from $10.4 billion in the year-ago quarter due to increase in merchandise trade deficit. However, CAD was unchanged at 1.1% in terms of percentage of GDP. However, on the positive side, CAD moderated from $16.7 billion (1.8% of GDP) in Q2 FY25 to $11.5 billion (1.1% of GDP). For Q4

FY25, the current account witnessed a surplus of $13.5 billion (1.3% of GDP) aided by a seasonal uptick in merchandise exports and the resulting moderation in the merchandise trade deficit, as well as healthy services surpluses. For the entire fiscal year (FY25), the CAD is in deficit of around $23.3 billion (0.6% of GDP).

Indias foreign exchange reserves have continued their upward trajectory, reaching $676.3 billion as of April 4, 2025, according to the Reserve Bank of India (RBI). This marks the highest level in five months and reflects gains for the fifth straight week. With this achievement, India has firmly positioned itself as the worlds fourth-largest holder of forex reserves, following China, Japan, and Switzerland. The journey of Indias forex reserves has been remarkable — rising from just $29.3 billion in March 1997 to an impressive $644.39 billion by December 2024. More than just a number, these reserves are a testament to Indias economic resilience and prudent financial management. In times of global uncertainty, they act as a vital bu_er, strengthening market confidence and supporting economic stability. They also play a critical role in bolstering the national currency, facilitating debt repayments, and promoting vibrant trade activities.^**_

Indias economic growth momentum remains strong, with the real Gross Value Added (GVA) projected to expand by 6.4% in FY25. The agriculture sector is set for a healthy rebound, expected to grow at 3.8%, reflecting resilience in farm output. The industrial sector is poised for 6.2% growth, supported by a surge in construction activities and steady expansion in electricity, gas, water supply, and other utilities. Meanwhile, the services sector continues to be a key driver of economic activity, projected to grow at 7.2%, fueled by strong performance in financial and real estate services, professional sectors, public administration, and defense. This balanced expansion across sectors underscores the economys robustness and adaptability in the face of evolving challenges.^***

Despite the overall positive outlook, certain challenges persisted, particularly in the manufacturing sector. Export growth in this segment faced a notable slowdown, largely due to subdued demand from key international markets. Additionally, the aggressive trade and industrial policies adopted by major trading nations further intensi_ed the pressure, creating a more competitive and restrictive global landscape for manufacturing exports.

Indias net direct tax collections for FY25 witnessed a robust 13.57% growth, rising to 22.26 lakh crore. This figure not only exceeded the initial budget estimates but fell just short of the revised target, largely due to lower-than-expected non-corporate tax receipts. Re_ecting the strength of this performance, tax buoyancy, which measures the growth in direct taxes relative to GDP growth, improved to 1.57, up from 1.54 in FY24. For context, the net direct tax collection in FY24 stood at 19.60 lakh crore, underlining the strong momentum carried into the new fiscal year.^****

Export scenario^*****

Indias total exports have touched an all-time high of US$824.9 billion in the Financial Year 2024–25, as per the latest data released by the Reserve Bank of India on services trade for March 2025. This marks a growth of 6.01% over the previous years export figure of US$778.1 billion, setting a new milestone in the countrys trade trajectory.

As demand for Indian products in the global market surges across categories, the countrys total exports reached about $778 billion in FY 2023-24, compared to $466 billion in FY 2013-14 - a whopping 67% growth. In 2023-24, merchandise exports stood at USD 437.10 billion, while services exports contributed USD 341.11 billion, demonstrating a well-balanced expansion. Key sectors like electronics, pharmaceuticals, engineering goods, iron ore, and textiles played a vital role in this surge. Strengthened by strategic policy measures, enhanced competitiveness, and broader market access, Indias export ecosystem is now more resilient and deeply integrated into the global economy.

The momentum has continued into FY 2024-25, with cumulative exports duringFinancialYear2024–25 at USD 824.9 billion, a 6.01% increase from USD 778.1 billion in the FY 2023-24._Strengthened by strategic policy measures, enhanced competitiveness, and broader market access, Indias export ecosystem is now more resilient and deeply integrated into the global economy.

Indias export growth

Indias share in world merchandise exports also improved from 1.66% to 1.81%, with the country advancing in rankings from 20th to 17th position. The feat was achieved as the government implemented several initiatives to sustain and accelerate export growth.

Union Budget FY 2025-26

The Union Budget 2025–26 set a robust course for Indias economic growth, placing a strong emphasis on agriculture,

MSMEs, investments, and exports as key drivers. Demonstrating a balance between fiscal discipline and development, the government targeted a fiscal deficit of 4.4% of GDP while earmarking 11.21 lakh crore (3.1% of GDP) for capital expenditure to fuel infrastructure expansion. Marking a notable shift, the February 2025 budget introduced significant personal income tax relief, making annual incomes up to 12 lakh tax-exempt from April 1, 2025. Economists anticipate this move could generate 1 lakh crore in tax savings and spark a consumption surge of 3–3.5 lakh crore, potentially raising nominal private final consumption expenditure (PFCE) by 1.5–2% over its current 200 lakh crore base.

Outlook

India is poised to sustain a robust 6.5% GDP growth in FY 2026, driven by favorable monsoons and stable commodity prices. This momentum is supported by a resilient manufacturing sector, moderated inflation, tax incentives, and strong urban consumption. Additionally, continued infrastructure expansion and economic reforms are reinforcing Indias ability to navigate global uncertainties.

Looking ahead, India is expected to maintain its potential real GDP growth of 6.5% YoY from FY26 to FY28, positioning itself as the worlds third-largest consumer market by 2026 and the third-largest economy by 2027, trailing only the United States and China. The countrys nominal GDP is projected to rise from USD 4 trillion in FY25E to over USD 6 trillion by FY30E.

This growth trajectory is likely to be fueled by a manufacturing and export push, increasing services exports, and accelerated digitalization, all contributing to higher productivity and efficiency gains. However, challenges persist, including the need to create productive employment for the expanding workforce, a less favorable global trade environment, and the impact of automation on jobs.^******

Overview of the Indian real estate Industry

Amid global economic uncertainty, the Indian real estate sector has maintained strong momentum, reinforcing its role as a vital driver of the countrys economic revival. Fuelled by structural reforms, rapid urbanisation, and shifting consumer aspirations, the sector continues to draw robust interest from both domestic and international investors.

In 2025, the Indian real estate industry, second only to agriculture in employment generation, underwent a significant transformation, shifting towards more sustainable and opportunity-rich growth. Valued at USD 332.85 billion in 2025, the sector is projected to nearly triple to USD 985.80 billion by 2030, growing at an impressive CAGR of 24.25%. This positions India as one of the worlds most attractive real estate investment destinations. The momentum is fuelled by rising residential demand, the need for modern office spaces, and the rapid expansion of hospitality and retail. Additionally, the growth of e-commerce and telecommunications is driving demand for warehousing and data centers, further broadening the industrys horizon.^******* Further, Indias real estate sector is on

an extraordinary growth trajectory, projected to soar to $5.8 trillion by 2047. Its contribution to the nations GDP is set to more than double, from the current 7.3% to a remarkable 15.5%, highlighting its pivotal role in shaping the countrys economic future.^********

Indias residential real estate market has seen a strong revival in the post-pandemic years. Between FY2019 and FY2025, residential sales across major cities jumped by nearly 77%, reflecting renewed buyer confidence. In FY2025, primary transactions, sales of under-construction homes by developers, made up 57% of total sales, while secondary transactions, or property resales, accounted for 43%, marking a noticeable rise from 38% in FY2019.

Rising value of the Indian real estate sector

Indias residential real estate market continued its upward trajectory in FY25, although performance varied across segments. The affordable housing segment showcased mixed reports. Growth in this segment remained muted due to fewer new launches and a growing developers focus on premium offerings. Yet, steady end-user demand supported inventory clearance despite a_ordability constraints. Meanwhile, luxury housing (priced above 1 crore) witnessed sustained growth from 2019 to 2025, fuelled by rising incomes, evolving lifestyles, and focused developer strategies.

The industrial and warehousing segment maintained its momentum, backed by robust demand from 3PL providers, e-commerce growth, the ‘Make in India initiative, and shifting logistics needs. Indias office space segment also bounced back strongly in FY25, with record leasing activity. Demand surged across Tier 1 and emerging Tier 2 cities, driven by GCCs, IT/ITES, e-commerce, and the rise of flexible workspaces, contributing to strong absorption levels and steady rental appreciation.

Key trends that are redefining the Indian real estate industry

Rise of low-density housing

The Indian real estate landscape is witnessing a clear shift toward low-density living, with growing demand for villas, townhouses, and plotted developments. Homebuyers are increasingly prioritizing sustainable lifestyles that offer privacy, serenity, and a closer connection to nature, away from the chaos and pollution of city life. In response, developers are designing projects that emphasize open spaces and green environments. This trend is also gaining strong traction among HNIs and ultra-HNIs, who are gravitating towards premium, spacious living options that align with their desire for exclusivity and well-being.

Technology integration

Technology is reshaping the Indian real estate landscape, with AI and blockchain driving greater efficiency and trust across the value chain, from property transactions and legal checks to market insights. Smart homes equipped with IoT features are becoming the norm, offering enhanced energy efficiency and everyday convenience. Digital platforms are revolutionising how properties are bought, sold, and managed, making the entire experience more transparent, engaging, and user-friendly.

Increased preference for homeownership

Homeownership continued to gain momentum, driven by supportive government incentives and the rise of hybrid work models. The growing preference for larger homes, particularly in suburban areas and Tier 2 cities, reflected evolving lifestyle needs. A rising middle class, shifting demographics, and a younger workforce entering the market further accelerated this demand. Beyond economics, emotional motivations, like the aspiration to build assets and create intergenerational wealth, have deeply reinforced the cultural shift toward owning a home.

Opportunities in REIT space

The REIT market in India has gained strong momentum, now accounting for over 9% of total office stock across the top eight cities, driven by robust institutional investments. This growth is fuelled by rapid urbanisation, improving infrastructure,andasupportiveregulatory environment. Investor-friendly measures like reduced minimum investment thresholds and the introduction of fractional ownership through SM REITs have made the segment more accessible. Increasing awareness among retail investors and the opening up of new participation channels are further enhancing liquidity and unlocking the true potential of this evolving asset class.

Emergence of rental housing and co-living

Flexible living models are rapidly gaining popularity, particularly among young professionals and migrant communities in urban areas. The rise of co-living spaces and organised rental housing reflects a shift towards a_ordability, convenience, and lifestyle flexibility. This trend is further supported by progressive policies such as the Model Tenancy Act, which are helping to shape a more structured and accessible rental housing ecosystem.

ESG and green real estate mainstreaming

Sustainability has become a core driver in real estate development today. Institutional investors are placing greater value on ESG-compliant projects, while end users are actively seeking spaces that promote wellness, energy efficiency, and green certifications. In response, developers are integrating sustainable design and smart infrastructure as essential elements of their new offerings, aligning with both market expectations and environmental responsibility.

STATUTORY REPORTS

Indias real estate sector is on the cusp of a transformative shift, driven by smart urbanisation, digital innovation, and a strong focus on sustainability. As the industry adapts to challenges like a_ordability and global uncertainties, it is steadily evolving towards future-ready developments, flexible living solutions, and increased investor engagement. This marks the beginning of a more resilient, tech-enabled, and sustainable real estate ecosystem poised for long-term growth.

Key factors that are expected to fuel growth of the Indian real estate sector

• Government policies have played a pivotal role in shaping the growth of Indias real estate sector. The launch of various schemes and initiatives has not only promoted affordable housing but also improved transparency and accountability, creating a more robust and investor-friendly environment for long-term development.

• Rapid technological advancements are transforming the real estate landscape, redefining the way properties are bought, sold, and managed, and in turn, fuelling the sectors continued growth.

• Foreign investment has also impacted the growth of Indias Real estate and contributed to the far-reaching development and growth of the real estate of India.

• With the development of smart cities and urban migration, the real estate market of India is booming as people migrate to urban cities for employment opportunities, increasing the demand for Real estate properties.

• While remote work saw a temporary surge, the demand for commercial real estate is on the rise, driven by the comfort, flexibility, and collaborative environment that office spaces offer. Businesses across sectors—ranging from IT and manufacturing to BFSI, startups, and boutique firms—are actively expanding their office presence. Multinational companies are also setting up data centers and large-scale offices, especially in Tier 1 cities.

• Commercial properties continue to outperform residential ones in terms of returns, offering an average yield of 8–10% compared to 3–4% from housing. Grade-A office spaces, in particular, are delivering robust rental income. With longer lease tenures of 5 to 10 years, they ensure consistent cash flow, along with the potential for significant capital appreciation over time, making them a preferred choice for long-term investors.

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Expanding Office Segment Fuelling Growth

Indias office real estate market is witnessing strong momentum, driven by a resilient economy and growing investor confidence despite global headwinds. Gross leasing reached a record 53.4 million sq. ft. between January and September 2024, led by demand from IT, BFSI, engineering, and manufacturing sectors. The country has also emerged as a global hub for GCCs, with over 1,700 centres and a market growing at over 11% CAGR—further propelling office space demand.

While traditional cities like Bengaluru, Delhi NCR, and Mumbai continue to dominate, tier-2 cities are gaining traction. Tenants are increasingly preferring grade-A, sustainable, tech-enabled office spaces with AI-driven management systems and smart infrastructure. Flexible workspaces and the ‘Core + Flex model remain popular as more employees return to offices, contributing to a steady drop in vacancy rates, now at a 14-quarter low of 17%. With 78% of Indian CEOs anticipating a full return to office over the next three years, commercial real estate is poised for continued growth in 2025 and beyond.

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AI and Blockchain reshaping real estate financing

Technological innovation is redefining not just how real estate is developed and managed, but also how it is financed. The integration of AI and blockchain is bringing a new era of transparency, efficiency, and inclusivity to the sector.

By 2025, AI is expected to boost operational efficiency in real estate by 25–30%, while blockchain is gaining ground for its ability to enable secure, transparent transactions. AI-driven analytics are powering dynamic pricing models, with real-time property valuations that better reflect market shifts, particularly significant in Indias residential segment, which is projected to witness a 20% increase in transaction volumes.

Blockchain is also transforming ownership structures. Through tokenized real estate, properties can be digitally divided and owned by multiple investors, opening the door to high-value assets for a broader range of participants. On the financing front, AI is fuelling smarter micro-lending platforms that assess borrower profiles in real time, making credit more accessible, especially for underserved groups. Meanwhile, blockchain-based smart contracts are streamlining the financing process, cutting down on time, paperwork, and costs, bringing the future of real estate financing closer to reality.

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Indian residential real estate industry

Indias residential real estate sector, a key pillar of the overall real estate industry, is estimated to have grown by 17% in FY25, propelled by robust economic growth, rapid urbanization, and supportive government policies. Demand has surged across major cities, with homebuyers showing a strong preference for premium and mid-segment properties. Developers are actively launching new projects to meet this rising demand, fuelling steady momentum in the housing market. Industry experts attribute this growth to a mix of low home loan interest rates, stable property prices, improved consumer confidence, and enhanced connectivity through metro expansions and urban infrastructure upgrades. With a growing middle class and higher disposable incomes, homeownership is increasingly viewed as both a necessity and a valuable investment.^********

As per a CRISIL Ratings report, housing sales across Indias major metro cities are projected to grow steadily by 5% to 7% in both FY25 and FY26. At the same time, average residential property prices are expected to increase consistently at a rate of 4% to 6%. Notably, between FY22 and FY25, Indias residential real estate sector recorded a robust CAGR of 26% in housing sales, nearly half of which was fuelled by rising property prices.

Indias residential real estate market continues to thrive, fuelled by steady income among mid- and high-income households, ongoing wealth creation, and strong economic momentum. According to Knight Frank, 177,371 residential units were sold across eight major cities in the second half of 2024, up 2.85% year-on-year. For the full year, sales reached 350,612 units, marking a 12-year high and a healthy 6.54% annual growth, underscoring the sectors resilience and growing consumer confidence.

Valued at around USD 227.26 billion in 2024, the Indian residential real estate sector is expected to grow to USD 687.27 by 2029, growing at a CAGR of 24.77%.

Rising demand reshaping Indias housing market

Indias housing market is witnessing unprecedented growth, driven by strong consumer demand and evolving lifestyle preferences. From January to September 2024, over 229,900 units were sold across the top seven cities, a 17% rise from 2023 and a remarkable 60% surge from 2019. The mid- and high-end segments now lead the market, with premium housing demand jumping to 16% in 2024, up from just 6% in 2019. Luxury and ultra-luxury homes are outpacing affordable segments in growth.

Buyers are increasingly drawn to integrated townships that offer community-centric living, modern amenities, and smart technologies like AI-powered security, automated systems, and green energy solutions. The growing trend of multigenerational living is also shaping housing choices, with families seeking flexible spaces for all age groups. With stable lending rates and sustained demand, this upward momentum is likely to continue in the near term.

Ready-to-move-in homes are increasingly becoming the preferred choice for Indian homebuyers, driven by growing concerns over project delays and unfinished developments. Inspired by housing trends in Europe and the U.S., Indian builders are now shifting their strategy, focusing on completing construction before putting homes on the market. This change reflects a deeper understanding of evolving buyer expectations, with demand leaning strongly toward immediate possession and reliability. The trend marks a significant shift in the real estate landscape, where trust, transparency, and timely delivery are reshaping how homes are built and sold.

Outlook

Looking ahead, demand is expected to remain strong in metro hubs like Mumbai, Delhi-NCR, Bengaluru, and Hyderabad, while affordable housing is gaining traction through government incentives aimed at first-time buyers. Developers are also shifting focus to smart, sustainable housing to match evolving buyer expectations. Despite inflationary headwinds and rising construction costs, the residential market continues to demonstrate resilience. The growing adoption of digital tools in property transactions is further driving transparency and efficiency. As investors and homebuyers seek secure, long-term assets, residential real estate remains a compelling choice in Indias expanding economic landscape.

Indian commercial real estate sector

The commercial real estate market in India is undergoing a significant transformation, driven by rapid urbanization, growing foreign investments, government-led infrastructure reforms, and evolving work patterns. From bustling metropolitan cities to emerging Tier-II locations, the sector is not only recovering from the pandemic-induced slowdown but also setting the stage for long-term, sustainable growth.

Indias retail and hospitality sectors are witnessing robust growth, fuelled by rising consumer spending, which reached USD 1.29 trillion in 2024. Retail leasing activity is booming, set to touch 6.5 to 7 million sq. ft. by year-end, driven by demand from fashion, food, and entertainment brands. Shopping malls are rapidly evolving into experience-led destinations, complete with family zones and community spaces that appeal to a wide demographic. As consumers increasingly seek immersive and interactive experiences, experiential retail is expected to be a defining trend in 2025.

Simultaneously, a surge in domestic tourism and business travel has pushed the hospitality sector to new highs. The branded hotel segment recorded a decade-best occupancy rate of 67.5% in 2024, reflecting strong demand. Investments in the sector totalled USD 93 million in the first half of the year and are projected to reach USD 413 million by year-end, a 22% rise over 2023. With rising urbanisation and growing disposable incomes, both sectors are well-positioned for continued expansion in 2025.

Indias infrastructure boom is another major growth engine. Government capital expenditure has more than doubled in just three years, from 5 lakh crore in FY22 to 11.11 lakh crore in FY25—focusing on roads, railways, and aviation. The results are visible: national highways have grown 1.6x, over 1,300 railway stations have been upgraded, and more than 84 airports are now operational. This development is fuelling real estate demand, especially in tier-2 and tier-3 cities, which are emerging as new growth hubs. Logistics and industrial real estate also saw a 25% YoY growth in H1 2024, while satellite townships near major infrastructure projects are gaining popularity. With continued capex momentum, the synergy between infrastructure and real estate will only grow stronger.

Meanwhile, new investment avenues are gaining traction. Non-traditional assets like data centres, co-living, and senior housing are becoming mainstream, reflecting shifting demographics and consumer needs. Indias data centre capacity is projected to grow 66% in the next two years, from 1,255 MW to 1,600 MW by the end of 2025. Enhanced regulatory measures, such as Small and Medium REITs and updated RERA guidelines, are also improving transparency and making the sector more attractive to institutional investors.

With real estate growing at a CAGR of over 9%, 2025 promises to be a defining year. As innovation, sustainability, and urbanisation reshape the sector, Indian real estate is poised to play a pivotal role in driving GDP growth and supporting the vision of Viksit Bharat.

Indias commercial real estate market, valued at USD 74.80 billion in 2024, is on a remarkable growth trajectory. Expected to reach USD 90.96 billion by 2025 and soar to USD 528.84 billion by 2034, the sector is projected to grow at an impressive CAGR of 21.6%, reflecting rising demand, urban expansion, and a rapidly evolving business landscape^********.

Office space revival and co-working boom

After a brief slowdown during the pandemic, Indias office space segment has rebounded strongly. In 2024, net absorption across the top seven cities crossed 40 million sq. ft., driven by robust demand from IT/ITeS, BFSI, startups, and global capability centers (GCCs). Todays occupiers are gravitating toward flexible, tech-enabled workspaces that foster collaboration, innovation, and sustainability.

The growing adoption of hybrid work models has fueled a surge in demand for co-working and managed office spaces. Companies like WeWork India, Smartworks, and Aw_s are rapidly expanding into both Tier-I and Tier-II cities. Co-working spaces now account for over 20% of total office leasing and are poised to grow further, offering businesses cost-e_ective and scalable workplace solutions.

Company overview

Suratwwala Business Group Limited (SBGL) is one of Punes growing regional real estate developers with a deep routed presence in the Pune region. Established in 2008, SBGL commenced its operations with residential projects in the Pune region. Currently under development and has a land-bank totalling 200 acres around Pune region.

SBGLs integrated approach spans the entire real estate value chain—from land identification and acquisition to approvals, design, planning, execution, and marketing. This comprehensive model, combined with a deep understanding of local demographics, has helped the Company establish a trusted brand and a proven track record in the Pune market.

SBGL continues to focus on creating mid-income and mass projects that align with the aspirations of its customers. The Companys strong post-sales engagement has further strengthened its brand goodwill, driving consistent customer referrals and reinforcing its sales network.

Backed by a skilled and experienced team of engineers, designers, architects, and long-standing partnerships with renowned urban planners, SBGL brings expertise and agility to every project. With its strong leadership, professional management, and improving financial performance, SBGL is well-positioned to grow sustainably and continue delivering value to its customers and stakeholders.

Our strengths

- Deep-rooted operations, established brand and strong customer goodwill in some of the growing micro-markets of India

- Robust pipeline of projects acquired through efficient sourcing of land

- Experienced and qualified promoters and senior management team

- Integrated project execution and management capabilities

- Broad-based pricing to offer wide-ranging choices to the prospective customers

- Disciplined capital allocation and strong balance sheet

Awards and recognitions

SBGL has been honoured with several awards over the years in recognition of being one of the most trusted builders and real estate developers and delivering quality apartments to its customers. A few of the awards bestowed upon us for our contribution to the real estate and construction industry are

• Credai Real Estate Award 2012

• ET Business Awards 2023

• Golden aim conference awards 2022 for excellence and leadership in real estate

• Times realty icon Maharashtra - 2021 Best Emerging Brand Pune

• Lokmat vishakarma the dream builders of Pune

• Times Real Estate Icons west India 2020

• Best Employer Award 2025 recent one being the first and its: Maharashtra state best employer brands awards 2025

Finance review

P&L analysis

Particulars	FY25 ( in lakh)	FY24 ( in lakh)	Growth (change in %)
Revenue from operations	3,224.01	7,197.72	-55.21%
Land development and construction cost	1,383.67	2,847.61	-51.41%
Employee Benefits Expense	136.40	103.68	31.55%
Interest cost	12.99	113.39	-88.54%
EBITDA	1,519.52	3,908.57	-61.12%
PBT	1,469.98	3,763.29	-60.94%
PAT	1,073.87	2,780.95	-61.39%
EPS (in )	0.62	1.60	-61.25%

Our revenues for the year stood at 3,224.01 lakh compared to 7,197.72 lakh in FY24. Revenue declined by -50.21% primarily due to weak market demand.

Our operational cost for the year stood at 1,383.67 lakh compared to 2,847.61 lakhs in FY24, a decrease of -51.41% largely owing to improved cost efficiency and optimized resource utilization.

Employee benefit expenses stood at 136.40 lakh in FY25 compared to 103.68 lakh in FY24. This increase of 31.55% was on account of annual increments and additions to the workforce to support operational requirements.

Our EBITDA in FY25 stood at 1,519.52 lakh compared to 3,908.57 lakh in FY24, a decrease of -61.12%. EBITDA margins decreased by 1,502 basis points (bps) from 54.38% in FY24 to 39.36% in the current year under review. The decrease in EBITDA margin was on account of lower revenue absorption over fixed costs and changes in the sales mix. Profit After Tax (PAT) decreased from 2,780.95 lakh in FY24 to 1,073.87 lakh in FY25. PAT was reflective of the EBITDA trend and was also impacted by lower operating leverage during the year.

Key financial ratios

Particulars	Year ended March 31, 2025	Year Ended March 31, 2024	% change	Reasons if % change is 25% or more
Current Ratio	2.55	2.15	18.99%	N/A
Debt-Equity Ratio	0.88	0.36	146.81%	Refer Note No. (i)
Debt Service Coverage Ratio	0.26	1.96	-86.91%	Refer Note No. (ii)
Return on Equity Ratio	0.16	0.48	-67.38%	Refer Note No. (iii)
Inventory turnover ratio	0.15	0.37	-58.56%	Refer Note No. (iv)
Trade Receivables turnover ratio	7.48	19.28	-61.21%	Refer Note No. (v)
Trade payables turnover ratio	3.94	3.86	2.18%	N/A
Net capital turnover ratio	0.43	1.43	-69.71%	Refer Note No. (vi)
Net profit ratio	0.33	0.39	-13.82%	N/A
Return on Capital employed	0.12	0.50	-76.69%	Refer Note No. (vii)
Return on Investment	0.15	0.48	-67.51%	Refer Note No. (viii)

(i) The increase in ratio is mainly on account of increase in WCTL & TL for acqusition of assets. (ii) Change due to increase in debts during the year.

(iii) The decrease in ratio due to decrease in corresponding profits for the year as compared to previous year. (iv) The decrease in ratio due to decrease in sales turnover & corresponding increase in average trade receivables. (v) Ratio decreased mainly due to decrease in sales turnover & corresponding increase in working capital. (vi) The decrease in ratio due to decrease in sales turnover & corresponding increase in average inventory.

(vii) Decreased in ratio is mainly on account of decrease in profits & corresponding increase in capital employed largely on account of borrowings during the year.

(viii) Decrease on Return on Investment is due to impact of market factors/ fair valuation adjustments

Analysis of Balance Sheet

Particulars	FY25 ( in lakh)	FY24 ( in lakh)	Growth (change in %)
Total equity	6,848.84	5,787.64	18.34%
Long-term borrowings	5,218.19	502.72	937.99%
Short-term borrowings	803.15	1,558.91	-48.48%
Total non-current assets	4,674.68	1,298.83	259.91%
Trade receivables	183.70	678.47	-37.89%
Cash and cash equivalents	103.79	550.08	-81.13%

As on 31^st March, 2025, the Companys Equity Capital stood at 1,734.16 lakh.

Total long-term borrowings of SBGL as of 31st March, 2025 stood at 5,218.19 lakh crore vis-?-vis 502.72 lakh as on 31st March, 2024. We repaid/availed debt worth 4,715.47 lakh during the year, which resulted in increase/decrease in interest cost by -88.54%% during the year from 113.39 lakh in FY24 to 12.99 lakh in FY25.

Our ESG focus

At SBGL, we remain deeply aware of our environmental responsibilities and are committed to advancing our ESG goals with sincerity and purpose. Over the years, weve steadily embraced sustainable practices that reduce our environmental footprint through the mindful use of fuel, electricity, water, and raw materials. Our efforts are firmly rooted in the belief that true progress lies in the balanced development of the environment, society, and governance.

Risk management

Given the nature of our business, we are often exposed to various risks owing to the changing marketing dynamics and volatile external environment. Risk management at our company has enabled us to protect and enhance the value of our stakeholders. We have designed our risk management strategy to deliver upon our short-and long-term objectives. A consistent and comprehensive risk management process has helped prepare an organisation better for future eventuality.

Here are the key risks and mitigation strategies adopted by SBGL:

Risk type	Risk impact	Mitigation measures
Industry risk	- Reduction property prices	y Growing economy, salary growth from the high paying services sector and growth in the numbers of HNIs and UHNIs, will continue to raise demand for luxury housing in India.
Slump in the real estate market may lead to a significant de- cline in property prices	- Impact on demand for proper- ties	y Over the last few years, government initiatives such as the establish- ment of special economic zones (SEZs), software technology parks (STP), and export-oriented units (EOU) is expected drive the growth of the Commercial Real Estate (CRE)
		y The Company has growing presence in the residential and commercial real estate segment
Economy risk	- Reduced sales owing to low purchasing power	y India emerged as one of the fastest growing economies in the world
		y India is expected to clock more than 6.5% GDP growth in FY26
Slump in the economic growth may result in slowdown across industries	- Lower demand for big ticker in- vestments
Policy risk	Decreased demand for properties	y Backed by adequate policy support from the government, the Indian residential real estate industry is currently in its upcycle period
Declining a_ordability because of an increase in loan interest rates, withdrawal of tax bene- fits and decrease in availability of home loans		y House loan interest rates are at record low, thereby boosting the pur- chasing power of the customers
Geography risk	- Reduced sales - Decline in profitability	y The Company has project presence in one of the growing micro mar- kets
Multiple projects in one area or projects in areas with timid demand may affect the perfor- mance of the company		y The Company follows the population matrix of the region to develop project, ensuring steady demand for the homes across different in- come groups
Cost escalation risk	Project cost exceeding the planned cost may lead to higher per sq. ft. cost and reduced sales	y Strong procurement team to efficiently source raw material at compet- itive price
Inability to control cost may lead to loss of reputation and customer		y Developed a network vendor providing raw material at various price points and of desired quality
		y Use SBGLs brand image for attracting good vendors
		y Enter into long-term contracts or project-based contracts with the ven- dors to mitigate price rise

Human Resources

At SBGL, our employees across our projects are core towards delivering on our shared mission, vision and growth of the organization. SBGLs unique caring culture has a combined focus on customer experience where listening and empathy are emphasized, with employee experience where people express themselves to find meaning and feel fulfilled, which results in achievement outcomes where ownership, meritocracy, & excellence are our guiding stars.

All employees play vital roles in delivering quality residential projects for our customers. Our diverse and integrated teams are the core factors which helped in sustained success of the company. We are an equal opportunity employer & strive to build diverse teams.

SBGL drives a high-performance culture through continuous learning & development interventions focused on organizational wide capability building and professional growth for our people. As of March 31, 2025, the Company total workforce stood at 40+.

Internal control systems and their adequacy

The Management has laid down internal financial controls to be followed by the Company. The Company has adopted policies and procedures for ensuring orderly and efficient conduct of the business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

The internal control system is commensurate with the nature of business, size and complexity of operations and has been designed to provide reasonable assurance on the achievement of objectives, effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable laws and regulations. The internal control framework is supplemented with an internal audit program that provides an independent view of the efficacy and effectiveness of the process and control environment and supports a continuous improvement program.

The Company has put in place function wise Standard Operating Procedures (SOPs) to help better manage project. It has in place internal controls covering all fields across all financial and operating functions. Further, the Company appointed independent auditors to conduct periodical audits to ensure adequacy of internal control systems, adherence to management policies, and compliance with the applicable laws and regulations. The key findings of the audit backed by a well thought out implementation plan are recommended or discussed with the senior management and also the Audit Committee. The Audit Committee of the Board reviews the adequacy and effectiveness of the internal control systems and suggests improvements for strengthening them.

Cautionary statement

Certain statements in the Management Discussion and Analysis section concerning future prospects may be forward-looking statements which involve several underlying identified / non-identified risks and uncertainties that could cause actual results to differ materially. Besides the foregoing changes in the macro-environment, unprecedented, unascertainable and constantly evolving risk(s), inter alia, to the Company and the environment in which it operates. The results of these assumptions made, relying on available internal and external information, are the basis for determining certain facts and figures stated in the report. Since the factors underlying these assumptions are subject to change over time, the estimates on which they are based are also subject to change accordingly. These forward-looking statements represent only the Companys current intentions, beliefs or expectations, and any forward-looking statement speaks only as of the date on which it was made. The Company assumes no obligation to revise or update any forward-looking statements, whether because of new information, future events, or otherwise.