Tivoli Construction Ltd Management Discussions

Macroeconomic Review:

India has made a significant economic advancement in the fiscal year 2024-2025, concluding with a year-over-year GDP growth of 6.5%. This remarkable performance is attributed to robust domestic demand and ongoing government initiatives aimed at reform and capital expenditure, despite the prevailing global uncertainties. The outlook remains optimistic, bolstered by indications of a resurgence in the rural economy, substantial growth in manufacturing, healthy bank balance sheets, increasing credit growth, and a surge in exports within the services and high-value manufacturing sectors. There is a strong belief that Indias intrinsic potential will enable it to surpass global growth rates. The growth trajectory is anticipated to persist, with the International Monetary Fund projecting an annual GDP growth rate of 6.5% for both the fiscal year 2024-2025 and the subsequent fiscal year 2025-2026. While specific inflation data for FY 2024-2025 is not explicitly detailed, it is acknowledged that services inflation presents challenges to the normalization of monetary policy.

GDP Growth for FY 2024-2025: Indias economy is projected to grow at a rate of 6.5%, fueled by robust increases in private consumption and capital formation.

Private Consumption Spending: The growth in private consumption has been bolstered by rising domestic demand, with Private Final Consumption Expenditure (PFCE) reflecting an increase of 7.2%.

Exports: India has set an ambitious goal to elevate its exports to $2 trillion over the next six years, focusing on high-value manufactured goods such as pharmaceuticals, chemicals, engineering products, and electronics, which are expected to achieve record export levels.

Indias Contribution to Global Growth: By 2035, India is anticipated to account for 20% of total global economic growth. GDP Growth Projections: Forecasts indicate that Indias GDP will grow by 6.5% in 2025 and 6.7% in 2026, underpinned by robust domestic demand.

Economic Size: Over the past decade, Indias economy has experienced substantial growth, tripling in size.

Key Growth Drivers: The nation is expected to undergo significant transformation driven by digital transformation, increased activity in tier 2 cities, and strategic investments associated with the China+1 strategy.

Indias Construction and Infrastructure Sector

According to the most recent reports for the fiscal year 2024-2025:

Growth Projections for the Construction and Infrastructure Sector: The construction industry in India is anticipated to experience a growth rate of 7.1% in 2025. This growth is primarily attributed to significant public and private investments in energy, industrial, and railway projects. Forecast for Infrastructure Investment: Infrastructure investment in India is expected to increase from 5.3% of GDP in FY2024 to 6.5% by FY2029. This translates to a compound annual growth rate (CAGR) of 15.3%, resulting in a cumulative expenditure of $1.45 trillion over the next five years. Capital Investment Allocation for Infrastructure: In the Interim Budget for 2024-25, the capital investment allocation for infrastructure has been raised by 11.1% to ^11.11 lakh crore ($133.86 billion), representing 3.4% of GDP.

Logistics Market Outlook: The logistics market in India is projected to be valued at $317.26 billion in 2024, with an expected increase to $484.43 billion by 2029, demonstrating a CAGR of 8.8%.

Key Growth Drivers Government Initiatives: The governments commitment to enhancing infrastructure and the expanding housing market are pivotal in driving growth.

Rapid Urbanization: This factor is significantly propelling the market, with the government allocating 3.3% of GDP to infrastructure in FY2024.

Foreign Direct Investments: There has been a notable increase in foreign direct investments (FDI) within the construction development and infrastructure sectors, further stimulating growth.

Opportunities and Threats

As India prepares for an acceleration in policy reforms, our Company is optimistic that the demand for real estate will continue to be strong in the medium to long term. Our established brand reputation, contemporary architectural designs, meticulously planned projects in prime locations, robust balance sheet, and consistent financial performance?despite challenging market conditions?position us as the preferred choice for both customers and shareholders. We are strategically poised to further enhance our development potential through the acquisition of new land parcels.

Outlook

Indias imperative for high growth in 2025 and beyond will be significantly propelled by substantial advancements in key sectors, with infrastructure development serving as a critical catalyst for progress. Infrastructure is essential in positioning India towards its goal of becoming a US$26 trillion economy. Strategic investments in the construction and enhancement of physical infrastructure, particularly in alignment with initiatives aimed at improving the ease of doing business, are crucial for enhancing efficiency and managing costs effectively.

The governments commitment to developing future-ready infrastructure is evident through a series of recently launched initiatives. The US$1.3 trillion National Master Plan for Infrastructure, known as Gati Shakti, is at the forefront of driving systemic and effective reforms within the sector, demonstrating considerable progress to date. Additionally, providing infrastructure support to the nations manufacturers remains a top priority, as it will significantly enhance the movement of goods and exports, thereby making freight delivery more efficient and cost-effective.

The infrastructure sector is a pivotal driver of the Indian economy, playing a crucial role in advancing the nations overall development. It receives focused attention from the government, which is dedicated to initiating policies that ensure the timely creation of world- class infrastructure across the country. This sector encompasses a wide range of components, including power, bridges, dams, roads, and urban infrastructure development. Essentially, the infrastructure sector serves as a catalyst for Indias economic growth, facilitating the expansion of related sectors such as townships, housing, built-up infrastructure, and construction development projects.

To achieve Indias objective of reaching a US$5 trillion economy by 2026-2030?an updated target timeframe based on current projections?focused infrastructure development is imperative. The government has introduced the National Infrastructure Pipeline (NIP) alongside other initiatives such as Make in India and the Production-Linked Incentive (PLI) scheme to stimulate growth within the infrastructure sector.

Historically, over 80% of the nations infrastructure spending has been allocated to transportation, electricity, water, and irrigation. While these sectors continue to be a primary focus, the government is expanding its attention to additional sectors in response to the evolving environmental and demographic landscape of India. There is a pressing need for enhanced and improved delivery across the entire infrastructure spectrum, encompassing housing provision, water and sanitation services, and digital and transportation demands. This comprehensive approach will ensure sustained economic growth, elevate the quality of life, and enhance competitiveness across various sectors.

Recent Government Initiatives and Investments in Infrastructure

Based on the latest data for 2025-2026, here are the four government initiatives and investments in the infrastructure sector:

• Capital Expenditure Allocation: ?11.21 lakh crore ($135 billion) for FY2026, which is at its highest-ever, representing about 4.3% of GDP.

• Allocation for Ministry of Road Transport and Highways: ?2.9 trillion ($34.5 billion).

• Allocation for Ministry of Railways: ?2.6 trillion ($30.9 billion).

• Infrastructure Investment Plan: India plans to spend $1.723 trillion (approximately ?143 trillion) on infrastructure between FY24 and FY30, focusing on power, roads, and industries like renewable energy and electric vehicles.

Key Highlights for 2025-2026

• Construction Industry Growth: Indias construction industry is expected to grow by 7.1% in 2025, driven by public and private investments in energy, industrial, and railway projects.

• Growth Projection for FY2026: The construction sector is expected to grow by 7-7.5% according to ICRA

• Boost to Infrastructure: The government has increased capital expenditure allocation to ^11.11 lakh crore ($133.86 billion) for FY2025, which is 3.4% of GDP.

• Sustainable Transport: Road Transport Minister Nitin Gadkari emphasizes building pollution-free and cost-effective public transport networks, with plans for flash charging buses and mass rapid transport systems.

• Logistics Cost Reduction: Gadkari aims to reduce Indias logistics cost from 10% to 9% by December, making Indian goods more competitive globally.

• Delhi-Mumbai Expressway: A 1,386 km, eight-lane highway expected to be completed by October 2025, reducing travel time by nearly 50%.

• Khavda Renewable Energy Park: Indias largest solar park, spanning over 72,600 hectares in Gujarat.

• Mumbai-Ahmedabad Bullet Train: A high-speed rail project progressing despite previous delays .

Real Estate in India

The Indian real estate sector has experienced substantial growth recently, driven by increased demand for both office and residential spaces. Private equity investments in Indias real estate sector reached US$ 4.5 billion in 2025, a notable increase from US$ 4.2 billion in 2024. By 2040, the real estate market is projected to expand to Rs. 70,000 crore (US$ 10 billion) from Rs. 12,000 crore (US$ 1.72 billion) in 2019. It is anticipated that the real estate sector in India will achieve a market size of US$ 1.2 trillion by 2030, up from US$ 200 billion in 2021, contributing 13.5% to the nations GDP by 2025. The retail, hospitality, and commercial real estate segments are also experiencing significant growth, providing essential infrastructure to meet Indias increasing demands. By 2047, the Indian real estate sector is expected to expand to US$ 6 trillion, contributing 16% to GDP, an increase from the current share of 7.3%.

In FY24, Indias residential property market reached a historic milestone, with home sales valued at Rs. 4 lakh crore (US$ 48 billion), reflecting a robust year-on-year growth of 50%. The volume of sales demonstrated a strong upward trajectory, with a 38% increase resulting in 400,000 units sold. Indian real estate developers in major urban centers are on track to achieve remarkable success in 2025, as demand for residential properties surged in the top eight Indian cities. The physical retail landscape in India is set for significant enhancement, with nearly 45 million sq. ft of retail developments anticipated to become operational between 2025 and 2029. For the first time, gross leasing in Indias top seven markets exceeded 65 million sq. ft, reaching an impressive total of 65.5 million sq. ft, with technology companies dominating leasing activity.

According to Savills India, the demand for data centers in the real estate sector is expected to rise by 18-20 million sq. ft. by 2026. In 2025, office absorption in the top seven cities was recorded at 45 million sq. ft. Moreover, fresh real estate launches across these cities accounted for 43% of the market share in the first quarter of 2025, with over 43% of approximately 1.2 lakh units sold.

Risks and Concerns

The industry is influenced by various factors, including rising costs of cement and steel, increased energy expenses, and higher labor and transportation costs attributable to fluctuations in fuel prices. These elements may contribute to inflationary pressures. The Company recognizes that robust corporate governance is essential for fulfilling the expectations and aspirations of its shareholders. A significant risk to the Company arises from government policies and decisions, volatility in raw material prices, fluctuations in exchange rates, and variations in industry demand.

Internal Control Systems and their adequacy

The Company has an adequate system of internal controls to ensure accuracy of accounting records, compliance with the applicable laws & regulations. In a developing and dynamic economy such as India, regulatory environment keeps on progressing to keep pace with the global dynamics in the fields of environment, taxation, competition, governance, etc. Noncompliance of applicable regulations may lead to imposition of penalties, suspension of operations, among others apart from reputational damage. This may also hinder the pace of innovation, upgradation, transformation within the organisation. To mitigate the same, the Company keeps a strict vigil and regularly tracks the regulatory environment and takes necessary actions. Wherever required, it amends/ upgrades its operational practices and incurs capex to ensure compliance.

Financial Performance with respect to Operational Performance:

During the year under review, the Company has incurred a loss of Rs.10,24,054 as compared to the profit of the previous of Rs.2,66,079

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including:

a. Debtors Turnover : NIL

b. Inventory Turnover : NIL

c. Interest Coverage Ratio : NIL

d. Current Ratio:

e. Debt Equity Ratio : NIL

f. Operating Profit Margin (%) :NIL

g. Net Profit Margin (%) or sector-specific equivalent ratios, as applicable :Not Applicable

h. details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof: Not Applicable

Cautionary Statement: The statements in this management discussion and analysis describing the outlook may be “forward looking statement” within the meaning of applicable laws and regulations. Actual result might differ substantially or materially from those expected due to the developments that could affect the Companys operations. The factors like significant change in political and economic environment, tax laws, litigation, technology, fluctuations in material cost etc. may deviate the outlook and result.

Annual Declaration under Regulation 34(3) read with Part D of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

DECLARATION

As required under Regulation 34(3) read with Part D of Schedule Il of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, We hereby declare that all the Board members and senior executives of the Company have complied with Code of Ethics of the Company the year ended 31^st March , 2025.

TIVOLI CONSTRUCTION LIMITED	Sd/-
Sd/-	Rakesh Desai
Anita Raheja	Director
Director	DIN: 00152982
DIN: 00306794
Place: Mumbai
Date : 06th September, 2025