Unitech Ltd Management Discussions

- FY 2025-26

A. Overview of the Indian Economy

1. India is one of the fastest growing economies of the world and is poised to continue on this path, with aspirations to reach high middle-income status by 2047, the centenary of Indian independence. It is also committed to ensuring that its continued growth path is equipped to deal with the challenges of climate change, and in line with its goal of achieving net-zero emissions by 2070.

2. After real GDP contracted in FY 2020-21 due to the COVID-19 pandemic, growth bounced back in FY 202122, supported by accommodative monetary and fiscal policies and wide vaccine coverage. Consequently, India emerged as one of the fastest growing economies in the world in 2022, despite significant challenges in the global environment - including renewed disruptions of supply lines following the rise in geopolitical tensions, the synchronized tightening of global monetary policies, and inflationary pressures.

3. According to National Statistical Office and Ministry of Statistics and Programme Implementation, real GDP growth for FY 2025-26 is estimated at 7.6%. Inflation remained broadly contained, enabling a reduction in the policy rate to 5.25%, while the Reserve Bank of India continues to monitor global volatility and commodity prices.

4. Future capital spending of the government in the economy is expected to be supported by factors such as tax buoyancy, the streamlined tax system with low rates, a thorough assessment and rationalization of the tariff structure, and the digitization of tax filing.

5. The contact-based services sector has demonstrated promise to boost growth by unleashing the pent-up demand. The sectors success is being captured by a number of HFIs (High-Frequency Indicators) that are performing well, indicating the beginnings of a comeback. India has emerged as the fastest-growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships. Indias appeal as a destination for investments has grown stronger and more sustainable because of the current period of global unpredictability and volatility.

B. Real Estate Industry Structure and Development

1. The real estate sector is one of the globally most recognized sectors. It comprises of four sub-sectors - housing, retail, hospitality, and commercial. The growth of this sector is well complemented by the growth in the corporate environment and the demand for office space as well as urban and semi-urban accommodation. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy. Further, the real estate industry in India is the second- largest employment generator after agriculture.

2. It is also expected that this sector will incur some NonResident Indian (NRI) investment, both in the short term and the long term. Bengaluru is expected to be the most favored property investment destination for NRIs, followed by Ahmedabad, Pune, Chennai, Goa, Delhi and Dehradun.

3. Indias real estate market is one of the most dynamic and fastest-growing in the world. While it has witnessed rapid growth in recent years, the unforeseen problems posed by the pandemic during the period 2020-22 brought about radical change in the sector, and ushered several challenges. However, it has made a fairly quick recovery in comparison to other real estate markets in the world, with demand gaining momentum.

4. The outlook for 2026 and beyond is promising with continued foreign direct investment (FDI) in construction and real estate expansion into Tier-2 and Tier-3 cities, luxury housing and branded residences seeing strong demand along with the integration of ESG frameworks into project planning and execution. With urban India evolving fast, the real estate developer has become a strategic player in shaping the future skyline.

5. The real estate industry in India is likely to emerge, on account of increased demand, technology, reforms, and investors confidence. Some of the reasons attributable to the same are given below:

(i) Urbanization in full swing

As more and more people are relocating to metropolitan regions in search of employment and better opportunities in India, this trend is anticipated to continue in the upcoming years.

(ii) Rapid growth of the middle class

Indias middle class is rapidly growing, with an increasing number of people having enough money to buy properties. As a result, housing demand is increasing, especially in the low and moderate-price categories.

(iii) Infrastructure push

Infrastructure development has been significantly funded by the government, which has made it simpler for people to live and work in cities. Due

to peoples increased willingness to purchase homes in locations with strong infrastructure, this is also increasing demand for real estate.

(iv) Foreign Investments

India is becoming a more popular real estate investment destination for foreign investors. This has been brought on by various factors, such as the nations robust economic growth, increasing disposable incomes, and a favorable investment environment.

(v) Government Support

To stimulate the real estate market, the government has offered various incentives, including tax reductions and subsidies for homebuyers. This has contributed to improving the ecosystem for real estate investment.

(vi) Integrated lifestyle

The idea of integrated living is quickly taking on in the residential sector as home buyers have begun to favor developments with state-of-the- art amenities, including office buildings, parks, schools, hospitals, and shopping centers with multiplexes. The demand for township living is increasing positively and is certain to continue further.

(vii) Real Estate as potential investment

Homeownership as a long-term investment strategy is more appealing than ever. There was a spike in second-home purchases in 2021. People began to understand the advantages of real estate investing and began to view it as a solid and safe form of investment.

C. Developments

1. Despite prevailing global economic uncertainty, the Indian real estate sector has demonstrated sustained momentum over the FY 2025-26, emerging as a key pillar of the nations economic revival. It continues attracting strong interest from domestic and international investors, driven by structural reforms, urbanization and evolving consumer aspirations.

2. Real estate sector in India is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021. Retail, hospitality, and commercial real estate are also growing significantly, providing the much- needed infrastructure for Indias growing needs.

3. The Indian real estate market is projected to experience a substantial increase, potentially reaching a value of US$ 5-7 trillion by the year 2047, with the possibility of surpassing US$ 10 trillion.

4. Indias luxury housing market witnessed a remarkable surge in H1 2025, with sales of 7,000 homes priced between Rs. 4-6 crore (US$ 466,091-699,137), marking an 85% YoY increase, according to a joint report by CBRE South Asia and Assocham.

5. Indias real estate market witnessed an unprecedented land acquisition spree in H1 2025 (January-June 2025), with 2,898 acres transacted across 76 deals, surpassing the 2,515 acres across 133 deals recorded in the whole of 2024, according to Anarocks report.

6. As of Q3 2025, Indias real estate sector recorded a historic 42 transactions worth Rs. 25,375 crore (US$ 2.9 billion), marking the highest quarterly deal volume on record and signaling strong institutional investment and market momentum.

7. Indias physical retail landscape is poised for a substantial boost, with nearly 41 million sq. ft of retail developments set to be operational between 2024 and 2028 across the top 7 cities, encompassing projects in various stages from construction to planning.

8. According to the Economic Times Housing Finance Summit, about three houses are built per 1,000 people per year compared with the required construction rate of five houses per 1,000 population. The current shortage of housing in urban areas is estimated to be ~10 million units. An additional 25 million units of affordable housing are required by 2030 to meet the growth in the countrys urban population.

D. Government Initiatives

Government of India, along with the governments of respective States, has taken several initiatives to encourage development in the sector. The Smart City Project, with a plan to build 100 smart cities, is a prime opportunity for real estate companies. Given below are some of the other major Government initiatives:

1. The Government has allowed FDI of up to 100% for townships and settlements development projects.

2. The Union Budget 2026-27 emphasizes infrastructure-led growth, with public capital expenditure increased in FY 27 (2026-27) to Rs.12.20 lakh crore (US$ 138.03 billion) from Rs.11.20 lakh crore (US$ 126.73 billion) in FY 26 (2025-26).

3. The National Real Estate Policy 2025 introduced a major reform with a unified single-window clearance system for real estate projects, aimed at streamlining approvals and reducing project delays by up to 40%. The policy also incentivizes green-certified developments with tax benefits and subsidies to promote sustainable construction.

4. The Indian government aims for 100% digitisation of land records by December 2025, reducing risks related to ownership disputes. New real estate laws mandate centralized digital property registration, RERA compliance, and real-time project updates, boosting investor confidence.

5. Maharashtra Housing Policy 2025 focuses on affordable housing with a target of constructing 35 lakh houses in five years, emphasizing EWS and low-income groups while mobilizing Rs. 70,000 crore (US$ 7.95 billion) investment. It supports redevelopment, slum transformation via PPP, and inclusive housing for vulnerable groups.

6. The Registration Bill 2025 closely related to land and property transactions, seeks to digitize and centralize land and property records, enabling online, paperless registration with Aadhaar-based verification. It aims to boost transparency, curb fraud, and make remote real estate transactions easier for both NRIs and domestic buyers.

7. The government has set up the SWAMIH Special Window Fund, with Rs. 15,000 crore (US$ 1.70 billion) allocated in Budget 2025 for its second phase. The fund focuses on completing stalled affordable and mid-income housing projects, offering relief to homebuyers and driving project completion through blended finance from government, banks, and private investors.

8. The Securities and Exchange Board of India (SEBI) proposed regulatory reforms in November 2025 to expand investment avenues for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs), including allowing greater participation from institutional investors, aimed at boosting capital inflows into real estate.

9. In order to revive around 1,600 stalled housing projects across top cities in the country, the Union Cabinet approved the setting up of a Rs. 25,000 crore (US$ 3.58 billion) alternative investment fund (AIF).

10. Government created an Affordable Housing Fund (AHF) in the National Housing Bank (NHB) with an initial corpus of Rs. 10,000 crore (US$ 1.43 billion) using priority sector lending short fall of banks/ financial institutions for micro financing of the HFCs.

E. Industry Review

In India, the real estate sector is the second-highest employment generator, after the agriculture sector. The real estate sector in India is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021. The emergence of nuclear families, rapid urbanization and rising household income are likely to remain the key drivers for growth in all spheres of real estate, including residential, commercial and retail. Rapid urbanization in the country is pushing the growth of real estate.

F. Opportunities and Challenges

1 . Opportunities

(i) Post-pandemic, there has been a steep rise in housing demand with renewed interest and perspective of the homebuyers toward real estate. The pandemic has nudged a lot of fence- sitters to convert into first-time home buyers and the existing ones to upgrade to larger homes thus resulting in rising housing demand across segments. Key influencing elements comprising rising population, wealth growth and rapid urbanization are the key contributors to this growth. Hybrid working models will also continue to further drive the demand for larger homes. Employers are expected to continue to offer flexibility to their employees in order to attract and retain talent.

(ii) The Indian real estate market is also shifting towards low-density formats like villas, townhouses, and plotted developments. Homebuyers increasingly seek sustainable living options that offer isolation in harmony with nature, distancing themselves from urban noise and pollution. Developers are responding to this trend with open space-focused projects, while HNIs and ultra-HNIs are also showing a strong preference for premium, low-density projects.

(iii) Technological integration is transforming the Indian real estate sector through AI and blockchain. It is also streamlining processes such as property transactions, legal verifications, and market analysis. Smart home features integrated with IoT are now standard, boosting energy efficiency and convenience. Digital tools are revolutionizing how properties are bought, sold, experienced, and managed, enhancing transparency and user engagement.

(iv) Home ownership gained traction, supported by government incentives and hybrid work trends. The demand for larger homes in suburban and Tier-2 cities rose sharply. Changing demographics, a growing middle class and younger population entering the workforce have further fuelled demand. Emotional factors, such as the desire for asset creation and intergenerational wealth factors, further reinforced the cultural and economic shift towards owning homes.

(v) Flexible living models are gaining ground, especially among younger professionals and migrant populations in urban centers. Coliving spaces and organized rental housing are expanding, driven by affordability pressures, lifestyle flexibility, and supportive policy frameworks like the Model Tenancy Act.

(vi) The commercial real estate market is on a steady growth path, driven by a resilient economy and rising demand from sectors like IT, finance, and manufacturing. Big cities like Bengaluru, Delhi NCR, and Mumbai lead the market, but Tier-2 cities are also growing. Companies now prefer modern, smart, and eco-friendly offices. The popularity of flexible workspace models continues, supporting hybrid work trends as more professionals return to offices. With decreasing vacancy rates and business optimism on the rise, the sector is set for continued expansion in FY 26.

(vii) The rise of dollar against Indian rupee along with favorable investment opportunities has also drawn the interest of NRIs towards Indian real estate.

(viii) Affordable housing continues to remain a significant opportunity for developers and key focus area of the government. This segment could see a meaningful uptick in demand with an expected economic recovery and rising income levels.

(ix) Increased role of RERAs set up in various states creates a very dependable purchase market with sidelining/ curbing of fly-by-night operators in the real estate sector.

2. Threats and Challenges

(i) Unforeseen global events, such as pandemics like Covid 19 recently, can significantly impact the real estate industry. Remote work, changes in consumer behavior, and economic uncertainties arising from health crises can disrupt property markets. Adapting swiftly to these changes, incorporating flexible designs, and ensuring project resilience are essential in such unpredictable times.

(ii) The real estate market is not immune to the unpredictable nature of global economies. Economic uncertainties, geopolitical tensions, and market fluctuations create an environment demanding foresight and adaptability. Strategies that once sufficed require constant reassessment, making agility a key attribute for navigating dynamic market trends.

(iii) Real estate sector is a regulated sector and any unfavorable changes in government policies and the regulatory environment can adversely impact the performance of the sector. There are substantial procedural delays with regard to land acquisition, land use, project launches and construction related approvals.

(iv) The time-taking nature of construction necessitates the need of funding for new small- scale developers. But developers have always faced difficulties in availing funds from banks and financial institutions. Decisions are framed on the basis of speculative cash flows. As a result, the financial institutions typically exercise great care and consume a lot of time while reviewing loan applications. Due to non-availability of funding and insufficient finance, many realtors actually fail to execute projects on time.

(v) The construction sector is also heavily dependent on manual labour. During the Coronavirus pandemic, the sector was badly hit due to labor availability issues, which severely affected the project completion timelines. This emphasizes the need for development of technologically less labor-intensive alternative methods of construction.

(vi) While technology offers numerous benefits, integrating new technologies, such as, artificial intelligence, blockchain, and virtual reality poses a considerable challenge for the real estate industry. This goes beyond mere adoption, requiring a fundamental shift in processes and a cultural change within organizations. Investment in training programs and technological infrastructure becomes imperative to leverage these advancements effectively.

(vii) Changing demographics, including an aging population and shifting lifestyle preferences among younger generations, present challenges. Adapting property designs and marketing strategies to cater to diverse needs becomes paramount. Innovations in housing design and amenities aligned with changing preferences are crucial for ensuring sustained relevance in a market shaped by evolving demographics.

(viii) The real estate sectors susceptibility to supply chain disruptions remains a significant hurdle. Any disturbance in the availability or cost of construction materials can lead to project delays and increased construction costs. Proactive risk management, diversified supply sources, and innovative solutions are essential for maintaining a resilient supply chain.

G. Unitech Specific

1. The Unitech Group has to be recognized as an exception in view of the peculiar facts and circumstances. The Group got into financial constraints and/or mismanagement, as has been alleged, sometime from 2013-2014 onwards, which resulted in non-delivery of sold units to the Homebuyers. This followed litigation at various fora and the promoters were lodged in jail in 2017. Finally, the Honble Supreme Court intervened, which led to supersession of the erstwhile management, replaced by an independent Board of Directors in January 2020. The new management has been facing a plethora of challenges on various fronts. However, it has been working under the guidance and supervision of the Honble Supreme Court.

2. Taking a leaf from the directions of the Honble Supreme Court, the new management has taken up the construction and completion of various residential and commercial projects as its first priority. It has made plans for commencement of construction on 74 residential and 10 commercial projects, completion of which would facilitate delivery of completed units to more than 17,000 homebuyers. The Honble Supreme Court, vide its order dated 18.05.2022, appointed Justice (Retd.) A. M. Sapre to be associated with every stage of tendering process to be carried out under his supervision. Based on the ground-work done by PMCs, it was estimated that about 130 to 135 Tenders would be required to be floated for completion of all the 74 residential and 10 commercial projects. Since, it was practically neither feasible nor advisable to float all the tenders in one go, the Management decided to float these 135 odd tenders in four to five Lots with each Lot comprising about 30-35 tenders.

As the Members are already aware, the Unitech Management after seeking the approval of the BoD and Justice (Retd.) A.M. Sapre in the month of December 2022, floated a total of 35 Tenders as part of Lot-1 on 02.01.2023. There was poor response from the contractor community as no bids were received against 18 Tenders. After the completion of Bid Management process and approval of BoD and Justice Sapre, a total of 15 Tenders were submitted to the Honble Supreme Court in April 2023, seeking approval for award of Contracts.

Further, after the approval of BoD and Justice (Retd.) A.M. Sapre, the Management floated a total of 51 Tenders as part of Lot-2 on its website on 08.05.2023 and 09.05.2023. After the completion of Bid Management Process for Lot-2 Tenders, a total of 34 Tenders were approved by the BoD and Justice Sapre on 18.08.2023, and the same were submitted in the Honble Supreme Court for seeking its approval for award of Contracts to the successful Bidders. The Honble Supreme Court permitted the Unitech Management to award contracts in respect of 49 (15+34) Tenders of Lot-1 & Lot-2 vide its orders dated 03.11.2023. In furtherance to the order ibid, the Management uploaded the list of 49 Tenders at the Companys website on 04.11.2023 and further issued Letters of Intent (LoIs) to all the 23 Contractors to whom 49 Tenders of 39 Projects were awarded to fulfill the requisite formalities for signing of the Contract Agreements.

Simultaneously, after seeking the approval of the BoD in its meeting held on 26.10.2023, the company floated 55 Tenders as part of Lot-3 on 07.11.2023/ 08.11.2023. After the completion of Bid Management Process for Lot-3 Tenders, a total of 38 Tenders were approved by BoD and Justice Sapre on 16.02.2024 and the same were submitted in the Honble Supreme Court for approval for award of Contracts to successful Bidders, which was allowed by the Honble Court vide its orders dated 26.04.2024. Similarly, the Management, after getting the approval of the BoD in its meeting held on 25.04.2024, floated 31 Tenders on 10.06.2024 as part of Lot-4. After the approval of the BoD on 13.11.2024, followed by the recommendation of Justice (Retd.) A.M. Sapre on 28.11.2024, 23 Tenders were awarded to successful L-1 bidders in December, 2024, pursuant to the order dated 04.12.2024 of the Honble Supreme Court. Also, 17 Tenders were floated as part on Lot-5 on 30.12.2024.

Out of these 17 Tenders, 10 Tenders were finalized/ approved to be awarded as part of Lot-5 in the meeting of the BoD held on 03.04.2025, subject to the approval by Justice (Retd.) A.M. Sapre and the Honble Supreme Court. Justice (Retd.) A.M. Sapre recommended the award of the aforesaid Tenders on 19.04.2025.

The Honble Supreme Court, vide its order dated 22.01.2026, granted its approval to award 10 Tenders of Lot-5 to successful L-1 bidders. The BoD in its meeting held on 28.05.2026 approved the floatation of 26 Tenders as part of Lot-6 Tenders, out of which 15 Tenders were being re-tendered and 11 fresh Tenders have been floated. With the floatation of these tenders, there remained around 17 Tenders for various works which were decided to be floated as part of Lot-7 Tenders, as per the decision of the Board of Directors, taken in its meeting held on 28.05.2026.

3. Separately, keeping in view that the works on various structures of buildings, left incomplete by the erstwhile management, had been lying stalled for a number of years, it was decided to get Health Safety Audit of all these buildings carried out from institutes of eminence. The Honble Supreme Court was also apprised about the same through Action Taken Report - III. Services of I IT Roorkee were availed for this purpose for all the under-construction buildings within NCR area, IIT Madras for the projects at Bangalore and Chennai, and Jadhavpur University for Kolkata based projects. In the process, the Heath Safety Audit and proof-checking of structure designs of a total of 179 buildings and 13 basements were carried out. While the buildings have been found largely safe, the experts have pointed out the need for carrying out Retrofitting works to address the deficiencies observed during these tests. Accordingly, a total of 28 Tenders were floated for the Retrofitting Works along with the general Lot-3 Tenders. Contracts have been awarded in case of 25 Tenders pursuant to the approval of the BoD, Justice Sapre and the Honble Supreme Court. Further Lot-4 Tenders, which comprised of 31 main and 07 Tenders for retrofitting works were floated on 10.06.2024. However, no retrofitting Tender was awarded as part of Lot-4.

Subsequently, Lot-5 Tenders comprising of 16 main and 01 Tender of retrofitting works were floated on 30.12.2024 and after completion of the Bid Management process, 10 Tenders (including 01 Retrofitting Tender of Cascades- Kolkata) of Lot-5 were approved by the BoD in its meeting held on 03.04.2025. subject to the approval by Justice (Retd.) A.M. Sapre and the Honble Supreme Court. Justice (Retd.) A.M. Sapre recommended the award of the aforesaid Tenders on 19.04.2025.

The Honble Supreme Court, vide its order dated 22.01.2026 granted its approval to award the 01 Tender for retrofitting works, out of 10 Tenders of Lot-5 to successful L-1 bidder.

4. Funds for completion of these projects are to be arranged from the balance receivables from the Homebuyers and proceeds from sale of unsold inventories.

H. Financial Performance (on Consolidated basis)

		(Rs. in Crore)
Particulars	FY 2025-26	FY 2024-25
Revenue from operations including other income	566.80	396.80
Profit/ (Loss) before Tax	(3018.11)	(3029.35)
Profit/ (Loss) after Tax	(3018.15)	(3178.17)

I. Internal Control Systems and their adequacy

The Board of Directors has been reviewing the sufficiency of existing internal control systems and assessing the need to bring better financial control measures, which are commensurate with the size of the business of the Company.

J. Human Resources and Industrial Relations

The Company believes in attracting, nurturing and retaining a qualitative workforce to accomplish its objectives. The Company provides professional and conducive environment at work place and maintains healthy relations with its employees. The total number of employees, including contractual employees, on the rolls of the Company as on 31.03.2026 was 198.

K. 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:

(i) Debtors Turnover

(ii) Inventory Turnover

(iii) Interest Coverage Ratio

(iv) Current Ratio

(v) Debt Equity Ratio

(vi) Operating Profit Margin (%)

(vii) Net Profit Margin (%) or sector-specific equivalent ratios, as applicable.

The Annual Report (Note No. 39 of Notes to the Standalone Financial Statements) has details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios as applicable, along with detailed explanations thereof, including (i) Debtors Turnover, (ii) Inventory Turnover, (iii) Interest Coverage Ratio, (iv) Current Ratio, (v) Debt Equity Ratio, (vi) Operating Profit Margin (%), and (vii) Net Profit Margin (%).

L. Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.

Details of changes in Return on Net Worth as compared to the immediately preceding financial year along with a detailed explanation thereof is also part of the Annual Report (Note No. 39 of Notes to the Standalone Financial Statements).

M. Outlook

FY 2025-26 has been an encouraging year for the real estate sector. Post-pandemic, developers have moved away from the traditional way of doing business and focused on end-user customer demand with a strong focus on innovation and digital transformation. We believe that FY 2026-27 will continue with the healthy sales momentum backed by solid structural foundation, sustained demand and relatively affordable albeit somewhat higher housing loan rates.

The governments push for digital transformation, financial inclusion and ease of doing business has created a favourable environment to attract foreign direct investment. This is further aided by the attractive production linked incentive (PLI) schemes aimed at boosting domestic manufacturing. The real estate sector is expected to maintain stable growth in FY 2026-27, backed by key drivers like urbanization, infrastructure push, capital market reforms, and digital adoption. Despite global challenges and affordability pressures, the sector is likely to progress toward more institutionalized, tech-enabled, and sustainable development.

N. Cautionary statement

Statement in this "Management Discussion and Analysis" describing the Companys objectives, projections, estimates and expectations may be a forward-looking statement within the meaning of applicable laws and regulations. Actuals might differ materially from those expressed or implied. Important Developments that could affect the Companys operations include any downtrends in the real estate sector, significant changes in political and economic environment in India or key financial markets in India and abroad, tax laws, litigations, labor relations, exchange rate fluctuations, interest and other costs, among others.