India remained the fastest-growing major economy in FY26 despite heightened global trade tensions, driven by robust domestic demand even as net exports detracted from growth on accelerating imports. Private consumption grew 7.7% YoY on rising disposable income, Union Budget FY26 tax cuts and GST rationalisation; per capita Net National Income rose to ?2,19,575 from ?2,05,324 in FY25. Investment growth strengthened on both private capex and continued government capital expenditure.
On the supply side, manufacturing (IIP) averaged ~4.9% growth over April 2025–January 2026 versus 4.3% a year earlier, peaking at 7.8% in December 2025 – the highest in over two years – while services benefited from strong urban demand in retail, hospitality, transport and real estate, alongside buoyant financial and professional services exports. The World Banks April 2026 India Development Update identifies real estate services as a key contributor to services-sector growth.
For the luxury and ultra-luxury housing market, where HNI/UHNI buyers are closely linked to wealth creation, capital markets and business income, this broad-based growth strengthened the demand backdrop for high-quality residential assets in established markets such as Delhi-NCR and Gurugram – a diversified, employment-generating economy underpinning the income growth and urban job creation that feed housing demand across the spectrum, including luxury segments.
Headline CPI inflation averaged 1.9% (April 2025–February 2026) versus 4.7% a year earlier, driven mainly by falling food prices; the RBI cut the repo rate by a cumulative 125 bps to 5.25%. Easier monetary conditions improved homebuyer sentiment, affordability perceptions and credit conditions, aiding demand across premium and luxury residential segments.
The general government deficit narrowed to 7.4% of GDP (FY25: 7.7%) as higher non-tax revenue offset personal income tax and GST changes; public debt-to-GDP edged up to 84.5% (from 84.1%), mainly on softer nominal GDP growth following the rebasing of national accounts. The Rupee averaged 88.3/USD (FY25: ~85), reflecting net FPI outflows amid global volatility; following the onset of the geopolitical conflict, equities fell ~13% between end-February and March 31, 2026, with ~USD 12 billion of FPI outflows in March, and the Rupee touched an all-time low of ~95/USD. Forex reserves stood at USD 698 billion at end-March 2026. For ultra-luxury developers, INR depreciation cuts both ways – raising the cost of imported construction materials and fittings, while making Indian assets more attractively priced for NRI buyers transacting in stronger currencies.
FIGURE 2.5: Private consumption and investment were the main drivers of growth
| Component | FY24/25 | FY25/26 |
| GDP | 7.1 | 7.6 |
| Private consumption | 5.8 | 7.7 |
| Government consumption | 6.5 | 6.6 |
| Investment | 6.4 | 7.1 |
| Exports | 6.6 | 6.5 |
| Imports | 5.3 | 6.4 |
FIGURE 2.3: Industrial activity rose with an expansion in manufacturing
| Component | FY23/24 | FY24/25 | FY25/26 |
| Mining | 0.2 | 0.8 | 0.3 |
| Manufacturing | 6.6 | 4.9 | 6.2 |
| Utilities | 0.9 | 0.3 | 0.1 |
| Construction | 3.1 | 2.3 | 2.2 |
| Industry | 10.8 | 8.3 | 8.8 |
FIGURE 2.4: Services activity remained robust
| Component | FY23/24 | FY24/25 | FY25/26 |
| Trade, logistics, communications | 2.7 | 1.8 | 2.7 |
| Business services | 2.7 | 4.8 | 4.9 |
| Public administration and others | 1.7 | 1.2 | 1.4 |
| Services | 7.1 | 7.8 | 9.0 |
Outlook – Navigating Headwinds, Preserving Momentum
Headwinds from the US-Israel-Iran conflict are expected to soften growth: FY27 GDP growth is projected at 6.6% (down from a pre-conflict 7.2%) on higher energy prices and uncertainty, recovering to 7.2% in FY28 assuming normalisation. Higher oil and gas prices are expected to add ~90 bps to inflation, partly offsetting the GST-cut boost to consumption; investment growth is likely to moderate on elevated uncertainty even as government capex continues; and the fiscal deficit is projected to rise marginally to 7.6% of GDP in FY27 before declining over the medium term. Gulf economies account for nearly 38% of Indias remittances, and NRI buyers from the Gulf are a meaningful ultra-luxury demand segment – any labour-market disruption there is a downside risk to both remittances and this demand segment.
A prolonged conflict disrupting shipping or energy infrastructure is the key downside risk; India can absorb temporary shocks, but reliance on regional energy imports leaves the external balance, inflation and fiscal position vulnerable to a sustained one. Recently concluded and ongoing Free Trade Agreements should aid trade diversification and resilience.
| Metric | Value |
| FY27 GDP Growth | 6.6% (Revised down from 7.2%) |
| FY27 Fiscal Deficit | 7.6% General Government |
Source: World Bank Group (India Development Update – April 2026)
https://thedocs.worldbank.org/en/doc/4262e1e15b463ecb360cec4ad78cf062-0310012026/original/April-2026-India-Development-Update.pdf
https://www.indiabudget.gov.in/economicsurvey/doc/stat/tab1.1.pdf
Implications for the Real Estate Sector: Despite near-term energy-driven headwinds, Indias structural fundamentals remain supportive of ultra-luxury housing demand, positioning developers such as the Company to capture growth across a deep, resilient and expanding addressable market in its key geographies.
Indian Residential Real Estate Sector
Indias residential market continued its structural shift toward premium-led demand. 3,48,247 units were sold across the top eight cities in 2025, broadly sustaining recent years elevated volumes. For the first time, the ?1 crore-plus segment recorded 1,75,091 sales – up 14% YoY and 50% of total transactions, from nearly 13% in 2022 – while the sub-?50 lakh segment fell 17% YoY to 73,694 units (down from 37% of sales in 2022 to 21% now) and the ?50 lakh-?1 crore segment fell 8% to 99,422 units.
Weighted-average prices rose across all major markets, led by NCR (+19% YoY – the strongest of any major market, on premium and luxury launches in Gurugram, Noida and Greater Noida), Hyderabad (+13% on GCC and technology-sector demand), Bengaluru (+12%) and Mumbai (+7%). RBI preliminary data show the All-India House Price Index up 3.58% YoY in Q3 FY26.
| Market | Price Appreciation, 2025 |
| NCR | +19% YoY — strongest among major markets |
| Hyderabad | +13% YoY — GCC/tech-led demand |
| Bengaluru | +12% YoY |
| Mumbai | +7% YoY |
Market health remained broadly stable despite launches outpacing sales in several markets: unsold inventory across the top eight cities stood at 5,19,846 units at end-Q1 2026, with the quarters-to-sell (QTS) ratio steady at ~6.0 (from 5.9 a year earlier). Inventory in the ?2-5 crore segment rose 46% YoY and warrants monitoring, though QTS there remains a manageable 4.4 quarters.
Indias ultra-wealthy population is expanding fast: individuals with net worth above USD 30 million rose 63% between 2021 and 2026 (from ~12,000 to ~20,000, making India the sixth-largest UHNWI population globally – 2.8% of the world total, up from just over 2% – with a further 27% rise forecast by 2031 to over 25,000. Domestic capitals role has deepened in parallel: the domestic share of private-equity real estate investment reached ~26% in 2025, up from ~11% pre-pandemic, signalling growing institutional confidence in Indias property market.
Indias luxury markets gained global recognition in 2025: per Knight Franks Prime International Residential Index (PIRI 100, Wealth Report 2026), Bengaluru, Mumbai and Delhi broke into the top 20 fastest-growing luxury markets worldwide for the first time.
Implications for TARC: The moderation in Q1 2026 reflects a normalisation of broader residential activity rather than a reversal of the premiumisation trend. While overall sales softened, demand remained resilient in the premium and ultra-luxury segments where TARC is positioned through projects such as Kailasa and Ishva, supported by its upcoming development pipeline. With fully paid land, projects concentrated in supply-constrained Delhi and Gurugram micro-markets, and an execution-led luxury brand, the Company is well placed to benefit as demand increasingly favours established developers with differentiated products and proven delivery capabilities.
| Metric | Detail |
| 8th | Bengaluru – PIRI 100, Up from 40th, +9.4% YoY |
| 10th | Mumbai – PIRI 100, Up from 21st, Record $2m+ sales |
| 17th | Delhi – PIRI 100, Up from 18th, Prices +6.9% YoY |
| 96m? | USD 1m Buys in Mumbai, Down from 99 m? in 2024 |
[IMAGE – architectural sketch of high-rise building]
Prime prices in all three cities rose faster than the Rupee depreciated, signalling genuine appreciation in intrinsic value driven by domestic wealth creation, limited prime supply and sustained end-user and investor demand in upper-ticket segments.
Outlook – Continued Growth in Luxury Demand
The market entered 2026 in consolidation after a strong run. However, upper-ticket categories held up well: sales above ?1 crore grew 11% YoY, led by ?1-2 crore (+10%, 29% of total), with ?2-5 crore and ?10-20 crore up 17% and 12% and ?20-50 crore up 80% off a smaller base, even as sub-?1 crore categories fell 12-23%. Disciplined supply continues to underpin premium pricing. 1,494 homes priced ?10 crore and above were sold in CY25 — a record — up from 155 in CY23 and 519 in CY24, with market value rising sixfold to ?24,120 crore over the same period; ultra-luxury now accounts for 24% of Gurugrams residential market by value. This growth complements Delhis scarcity-driven segment, widening the regions HNI/UHNWI buyer pool.
Gurugram is the fastest-growing luxury market in NCR: 1,494 homes priced ?10 crore and above were sold in CY25 — a record — up from 155 in CY23 and 519 in CY24, with market value rising sixfold to ?24,120 crore over the same period; ultra-luxury now accounts for 24% of Gurugrams residential market by value. This growth complements Delhis scarcity-driven segment, widening the regions HNI/UHNWI buyer pool.
Delhis strength rests on limited land availability, mature infrastructure and the enduring appeal of established addresses — Lutyens Delhi, Golf Links, Jor Bagh, Greater Kailash, Defence Colony and Vasant Vihar.
This scarcity-driven resilience held through FY26: South Delhi luxury floor prices rose up to 32% YoY in Q1 2026, with Category B colonies such as Defence Colony and Greater Kailash outperforming established Category A addresses — corroborated globally by Delhis 17th-place PIRI 100 ranking and 6.9% prime price growth.
Outlook
A more measured 2026 is expected after 2025s rapid acceleration. Delhis outlook remains anchored in that scarcity and increasingly discerning demand around location, construction quality and delivery track record; Gurugrams growth rests on infrastructure-led expansion, rising HNI/UHNWI participation and continued wealth creation. The region also recorded the highest office-rent growth of any major city (+15% YoY in Q1 2026), pointing to institutional demand that underpins buyers purchasing power.
Sources:
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About The Company
TARC Limited is a design-led luxury real estate developer building differentiated, experiential residential developments across Delhi and Gurugram, anchored in curated living, design excellence, execution discipline and strategically located, owned land parcels in high-value Delhi and Gurugram markets. Its owned land bank, brand-led approach and focus on quality construction position it to benefit from the structural premiumisation of residential demand in the capital region.
Business Performance
FY26 marked a key inflection point: revenue recognition and customer handovers commenced at TARC Tripundra — a project launched in FY2023 and delivered within timeline, now a benchmark boutique luxury development in the Capital — strengthening both profitability and financial visibility. The Company sustained healthy sales momentum across TARC Kailasa and TARC Ishva, aided by curated product design, premium locations and experience-led selling that continued to build brand recall among discerning buyers in Delhi and Gurugram.
Operational focus centred on cash-flow visibility, disciplined execution and capital efficiency, while design finalisation progressed on the next phase of the growth pipeline, positioning the Company for calibrated near-term expansion. Overall, FY26 reinforced TARCs transition toward an execution-driven, cash-flow-oriented and brand-led platform, with clear visibility into growth across its existing and upcoming portfolio.
Financial Performance with Key Ratios
Key financial ratios in FY26 reflected the Companys project execution cycle and the timing of revenue recognition, both inherent to real estate. The Current Ratio improved to 1.51x on stronger liquidity, and the Debt-Equity Ratio declined to 0.78x as part of the Companys ongoing deleveraging; the remaining ratios continued to be shaped by the Companys earnings profile and stay sensitive to execution and revenue-recognition timing, as detailed below.
| Particulars | FY26 | FY25 | Change | Reason for Change |
| Debtors Turnover (In times) | 0.19 | 0.04 | 436.40% | Due to decrease in trade receivable. |
| Inventory Turnover | 0.05 | 0.02 | 84.92% | Due to increase in inventory on account of cost allocated to project and also commencement of Ishva Project. |
| Debt Coverage Ratio | -0.19 | 0.01 | -2000.00% | Due to Incremental loss in current year |
| Current Ratio (In times) | 1.51 | 1.16 | 30.24% | Due to decrease in current assets and decrease in current liabilities in current year. |
| Debt Equity Ratio | 0.78 | 0.98 | -20.60% | Due to Incremental losses in current year, however there has been a decline in overall debt. |
| Operating Profit Margin (in %) | -462.80% | -660% | -29.92% | Due to Incremental losses in current year as compared to profit in previous financial year. |
| Net Profit Margin (in %) | -364.33% | -98% | 273.27% | Due to Incremental losses in current year as compared to profit in previous financial year. |
| Return on Net Worth (in %) | -14.06% | -8.02% | 75.31% | Due to Incremental losses incurred by the company during the current year. |
Opportunities
A Pipeline of Similar Scale to the Entire Existing Portfolio
TARC has a pipeline under finalisation with GDV comparable to its entire existing portfolio – TARC V (1 million sq ft, 7 acres), TARC VI (0.5 million sq ft, 3 acres) and TARC VII (1 million sq ft, 7 acres) – all on owned, fully paid land with approvals in place and design finalisation underway. The Company has indicated that JDA, JV and new investment activity will commence as the balance sheet moves toward becoming cash positive.
A Structural Premiumisation of the Delhi-NCR Market
The market context has shifted structurally in TARCs favour – Gurugrams ?10 crore-plus segment grew nearly tenfold in two years (155 to 1,494 units), NCR led all major cities in price appreciation (+19% YoY), and Delhi ranked 17th globally on Knight Franks PIRI 100. Each quarter of sustained premiumisation deepens TARCs market positioning and expands its addressable buyer pool.
Threats
A Discerning Buyer Profile
Ultra-luxury buyers increasingly prioritise construction quality, delivery track record, location and developer credibility over marketing. TARC has built goodwill through its experience centres and the successful Tripundra handover, but any delay or quality shortfall at Kailasa or Ishva – both still under execution – would be consequential, given how long brand reputation takes to build.
Rising Competitive Intensity
TARCs success in the luxury segment has attracted major national developers into the NCR market, several with significantly larger balance sheets and wider brand recognition. TARC must continue to differentiate on design depth, product curation and experiential selling – areas where it holds a genuine edge.
Internal Control
TARC continued strengthening its internal control framework in FY26 in line with the scale and complexity of premium real estate operations, maintaining well-defined policies and standard operating procedures and using integrated IT systems to enable real-time monitoring and data-driven decision-making across project execution, sales and financial management. An independent audit firm conducted periodic internal audits assessing policy adherence and regulatory compliance, with findings reported to the Audit Committee, which provided active oversight through the year. The internal control environment in FY26 was considered adequate and effective, supporting disciplined growth and stakeholder confidence.
[IMAGE – two high-rise towers at dusk with entrance gate]
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Human Resources at TARC in FY26
TARCs human capital strategy remained aligned with its transition from a land-acquisition-led business to an execution-intensive, delivery-focused organisation. As of March 31, 2026, the workforce stood at 412, up from 360 a year earlier, with hiring concentrated in project management, design, sales, CRM and hospitality. The Company continued investing in training on safety, compliance and customer relationship management, and strengthened its leadership bench with senior additions in Q1 FY2027. Compensation remained merit-based and benchmarked against industry standards, and the Company considers industrial relations during the year to have been cordial across all levels of the organisation.
Information Technology at TARC in FY26
Technology remained central to project execution, sales, customer engagement and financial control. The Company used Farvision ERP to track construction progress, budgets and vendor management, while sales and CRM systems supported lead management and digital sales journeys alongside in-person engagement at its galleries and experience centres. TARC continued investing in cybersecurity — data backup protocols, access controls and periodic audits — and plans further investment in digital customer-experience tools and analytics as its construction pipeline expands.
Risk Management
TARCs owned land, locked-in cash flows, reducing debt costs and validated luxury brand are stronger than the near-term income statement suggests. The risks below are real, but each is clearly identified, mitigated and monitored.
| Risk | Mitigating Measures |
Execution & Delivery Risk: With Kailasa (?4,400 crore GDV, 417 units) and Ishva (?3,600 crore GDV, 518 units) in active construction and revenue recognition from FY30, sustained delays would push out the revenue inflection point and strain delivery credibility. |
Strong in-house project management with global construction partners, evidenced by Tripundras on-time 2025 Occupation Certificate, underpins delivery on the larger, more complex Kailasa and Ishva builds. |
Collections & Cashflow Risk: The FY27–28 debt-reduction plan depends on collections from presold inventory; payment delays, cancellations or HNI liquidity disruption would extend the timeline to become cash positive. |
An end-user-dominated buyer base with structured payment plans limits speculative cancellations, supported by 65% collection growth in FY26. |
Market & Pricing Risk: The model — high GDV, luxury product, HNI buyer base — depends on the Delhi-NCR market sustaining current prices; a prolonged macro shock could suppress demand above ?5 crore. |
Fully paid land removes any pressure to force distress sales, letting the Company time launches to market conditions rather than debt obligations. |
Regulatory & Approval Risk: Development in Delhi and Gurugram is subject to complex, multi-layered regulation — RERA, local authorities, environmental clearances and changing development norms. |
A navigational track record, including a January 2026 RERA extension for Ishva, supports timely approvals across the TARC V, VI and VII pipeline. |
Reputational & Brand Risk: Brand reputation is TARCs most valuable and most fragile asset; any quality shortfall, customer dispute, or gap between the sales-gallery experience and delivered product could cause outsized damage. |
Sustained investment in experience centres, design-led development and brand collaborations positions TARC as a lifestyle brand, with quality consistency treated as a zero-defect objective given its vocal, interconnected buyer base. |
CAUTIONARY STATEMENT
THIS DOCUMENT CONTAINS FORWARD-LOOKING STATEMENTS REGARDING TARC LIMITEDS EXPECTED FINANCIAL AND OPERATIONAL PERFORMANCE, BASED ON CURRENT ASSUMPTIONS AND SUBJECT TO INHERENT RISKS AND UNCERTAINTIES. FACTORS SUCH AS GLOBAL ECONOMIC CONDITIONS, COMPETITIVE PRESSURES, RAW MATERIAL COST FLUCTUATIONS AND REGULATORY CHANGES MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED. STAKEHOLDERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE STATEMENTS, AS THEY REFLECT PROJECTIONS THAT MAY NOT FULLY MATERIALISE.
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