V R Infraspace Ltd Management Discussions

1. Overview

Our company, V R Infraspace Limited, has been the most trusted & highly recognized name in the real estate market in Vadodara. We have been serving the people of Vadodara with our best residential and commercial projects. It has been our perseverance to give our clients and customers the best we can. With a decade of experience dealing with commercial & residential properties of Vadodara, we have achieved the trust of our clients and strong knowledge for better project accomplishments in the future.

The journey of V R Infraspace Limited started a long time ago with the dream of our noteworthy directors. They ventured into the real estate world in Vadodara with immense self-belief and visioning opportunities for good work in Vadodara. Their simple dream to make better infrastructure facilities for every project has led to the invaluable legacy of V R Infraspace Limited. It was because of the collaborative vision of our directors that V R Infraspace Limited achieved heights of success. The final aim to keep customer satisfaction as the centre of all the project designs and amenities has been a key factor in our growth.

2. Industry Trends

The Real Estate sector in India encompasses varied verticals including but not limited to residential, commercial, retail, corporate parks, industrial, hospitality and community infrastructures such as schools, institutes, hospitals and government infrastructure.

The real estate market in India Growing Exponentially Year after Year. By Year 20230 it is projected to surpass the $1 Trillion in the market size, up from $200 Billion in 2020. This growth is driven by factors such as urbanization, increased disposable income, liberal credit policy and favourable government policies. Consequently, India remains the most preferred Destination in the World to Invest in the real estate sector, making it the third largest sector for FDI inflows. Currently,the industry contributes around 7% to Indias GDP whereas it is expected to contribute up to 13% to the countrys GDP by 2025. The real estate market in Vadodara is experiencing significant growth. The citys strategic location between Ahmedabad and Mumbai enhances its appeal for both residential and commercial investments. Vadodaras real estate growth is closely tied to continuous infrastructural development. The citys authorities are actively investing in expanding road networks, public transportation systems, and new townships. Notably, the upcoming metro rail project and improved connectivity to neighbouring cities are expected to enhance accessibility and drive demand for properties in well-connected areas. Technology is reshaping Vadodaras real estate market. Smart homes equipped with home automation systems, energy-efficient appliances, and advanced security solutions aregaining popularity. These smart features not only offer convenience but also align with the citys vision of sustainability and eco-friendly living.

Like many Indian cities, Vadodara is revitalizing its urban landscape through the redevelopment of old structures. This not only improves infrastructure but also preserves historical heritage. Redevelopment projects breathe new life into underutilized areas, transforming them into vibrant neighbourhoods. The implementation of the Real Estate Regulatory Authority (RERA) has positively influenced Vadodaras real estate market. RERA ensures transparency, accountability, and timely project completion, enhancing buyer confidence. Homebuyers are more willing to invest, knowing their interests are protected by this regulatory framework.

Vadodaras real estate sector is embracing digital technology. Online property portals, virtual property tours, and digital marketing campaigns make it easier for buyers and sellers to connect. Real estate agents and developers are leveraging technology to streamline processes and enhance customer experiences. Moreover, The Vadodara municipal corporation has launched various housing initiatives to cater to the growing population and middle-income families. These initiatives aim to provide quality housing options at reasonable prices.

In summary, Vadodaras real estate market presents exciting opportunities for investors, homebuyers, and developers. Whether youre interested in smart homes, sustainable projects, or affordable housing, Vadodara is a promising destination for real estate growth.

3. Financial Performance Review

Analysis of consolidated financial statements for FY 2023-24 is provided below:

1. Key financial ratio analysis

A comparative table showing synopsis of FY 2023-24 versus FY 2022-23 of Key Financial Ratio is provided below:

Ratio	Calculation	2024	2023	Remarks
Debtors Turnover	Net Sales	2.31	-	NA
	Average Debtors
Inventory Turnover	Sales	0.54	-	NA
	Inventory/Avg. Inventory
Interest Coverage Ratio	EBIT	11.39	4.85	Interest Expense has been reduced in Current Year as compared to previous Year.
	Interest Expense
Current Ratio	Current Assets	1.95	4.07	Decrease in Current Asset leads to lower Liquidity as compared to previous year.
	Current Liabilities
Debt Equity Ratio	Total Debt	0.16	0.83	Debt has been reduced as compared to Equity. Company is running on Own funding.
	Total Shareholders Equity
Operating Profit Margin (%)	EBITDA	20.36%	18.21%	There is increase in Revenue as compared to previous year.
	Revenue from Operations			An improvement in operating profit margin reflects better operational efficiency.
PBT Margin (%)	Profit Before Tax Total Revenue	18.00%	13.94%	There is increase in Revenue as compared to previous year.
				An improvement in profit reflects better operational efficiency.
Net Profit Margin (%)	Profit After Tax	12.82%	13.06%	Increase in Tax as there is higher Profit as compared to previous Year.
	Total Revenue
Return on Net Worth	Net Income (PAT)	0.11	-	NA
	Average Shareholders
	Equity
Cash and Bank Balances/ Net Worth	Cash and Bank Balance including Mutual Funds and Fixed Deposits	0.61	0.07	Increase in cash reserves relative to equity, indicating strong liquidity.
	Total Shareholders Equity

2. Balance sheet analysis

A comparative table showing synopsis of FY 2023-24 versus FY 2022-23 of Balance Sheet is provided below:

Consolidated Balance Sheet	As at March 31, 2024	As at March 31, 2023	INCREASE/ (DECREASE)	% INCREASE/ (DECREASE)
ASSETS
Non-current assets	50.41	39.30	+11.11	28.27
Current assets	8932.51	2814.98	+6117.53	217.32
Total	8982.92	2854.28	+6128.64	214.72
EQUITY AND LIABILITIES
Equity	3454.38	1175.07	+2279.31	193.97
Minority Interest	392.80	15.99	+376.81	2356.53
Non-current liabilities	560.93	971.87	-410.94	(42.28)
Current liabilities	4574.81	691.35	+3883.46	561.72
Total	8982.92	2854.28	+6128.64	214.72

2.1 Non-current assets

Particulars	As at March 31, 2024	As at March 31, 2023	INCREASE/ (DECREASE)	% INCREASE/ (DECREASE)
Property, plant and equipment	5.28	3.11	+2.17	69.77
Capital work in progress
Investment properties
Intangible assets	0.11	-	+0.11	-
Financial assets
Deferred tax assets (net)	0.23	1.70	-1.47	(86.47)
Other non-current assets	44.79	34.49	+10.3	29.86
Total	50.41	39.30	+11.11	28.27

2.2 Current asset

Particulars	As at March 31, 2024	As at March 31, 2023	INCREASE/ (DECREASE)	% INCREASE/ (DECREASE)
Inventories	5914.07	1119.91	+4794.16	428.08
Financial assets
(i) Investments
(a) Investments in mutual fund
(b) Investments-others	52.15	439.57	-387.42	(88.14)
(ii) Trade receivables	699.83	942.77	+242.94	25.77
(iii) Cash and bank balances	2101.89	80.27	+2021.62	2518.52
(iv) Loans	52.29	-	+52.29	-
(v) Other financial assets
Current tax assets (net)
Other current assets	112.28	232.47	-120.19	(51.70)
Total	8932.51	2814.98	+6117.53	217.32

2.3 Non-current liabilities

Particulars	As at March 31, 2024	As at March 31, 2023	INCREASE/ (DECREASE)	% INCREASE/ (DECREASE)
Financial liabilities
(i) Borrowings
(ii) Trade payables
(iii) Others	549.47	971.87	-422.4	(43.46)
Provisions	11.46	-	11.46	-
Deferred tax liabilities (net)
Other non-current Liabilities	392.80	15.99	+376.81	2356.53
Total	953.73	987.86	-34.13	(3.45)

2.4 Current liabilities

Particulars	As at March 31, 2024	As at March 31, 2023	INCREASE/ (DECREASE)	% INCREASE/ (DECREASE)
Financial liabilities
(i) Borrowings
(ii) Trade payables	4336.72	603.37	+3733.35	618.75
(iii) Others
Other current liabilities
(i) Advance from customers
(ii) Others	189.74	32.08	+157.66	491.46
Provisions	48.36	55.90	-7.54	(13.49)
Current tax liabilities (net)
Total	4574.81	691.35	+3883.46	561.72

3. Profit and loss analysis

A comparative table showing synopsis of FY 2023-24 versus FY 2022-23 of statement of Profit and Loss is provided below:

Consolidated Profit and Loss	March 31, 2024	March 31, 2023	INCREASE/ (DECREASE)	% INCREASE/ (DECREASE)
Revenue from Operations	1900.39	1836.80	+63.59	3.46
Other Income	6.47	45.09	-38.62	(85.65)
Total Revenue	1906.86	1881.89	+24.97	1.33
Expenses	1544.45	1544.99	-0.54	(0.03)
Depreciation and Amortisation expense	1.51	2.49	-0.98	(39.36)
Finance Costs	42.40	72.09	-29.69	(41.18)
Total Expenses	1588.36	1619.58	-31.22	(1.93)
Extraordinary Item	-18.61	-	-18.61	-
Profit before tax	344.50	262.31	+82.19	31.33
Tax Expenses	99.16	16.58	+82.58	498.06
Profit after tax	245.34	245.73	-0.39	(0.16)
Add: Share in profit/(loss) (net) of associate companies	19.27	-	+19.27	-
Less: Minority interest in (Profit)/losses	25.30	0.99	+24.31	2455.55
Profit/(Loss) for the period (after Minority interest adjustment)	239.31	244.74	-5.43	(2.22)
Basic and diluted EPS (Rs.)	3.58	3.78	-0.2	(5.29)

3.1. Revenue from operations

Particulars	March 31, 2024	March 31, 2023	INCREASE/ (DECREASE)	% INCREASE/ (DECREASE)
Revenue from Operations	1900.38	1836.80	+48.69	2.65
Other operating revenue	-	-	-	-
Other Income	6.47	45.09	-38.62	(85.65)
Total	1906.85	1881.89	+24.96	1.33

3.2. Expenses

	For the Year Ended
Particulars	March 31, 2024	March 31, 2023	INCREASE/ (DECREASE)	% INCREASE/ (DECREASE)
Operating costs	-555.34	1281.14	-1836.48	(143.34)
Employee benefits expense	62.55	80.92	-18.37	(22.70)
Other expenses	2081.15	257.52	+1823.63	708.15
Total	1588.36	1619.58	-31.22	(1.93)

4. Cash flow analysis

A comparative table of FY 2023-24 versus FY 2022-23 of Cash Flow is provided below:

Consolidated Cash Flow	For the Year Ended
	March 31, 2024	March 31, 2023
Opening cash and cash equivalents	80.27	65.55
Net cash inflow/(outflow) from operating activities	-296.66	163.67
Net cash inflow/(outflow) from investing activities	-384.69	-25.81
Net cash inflow/(outflow) from financing activities	2702.97	-123.14
Closing cash and cash equivalents	2101.89	80.27
Closing cash and cash equivalents including fixed deposits with banks, having remaining maturity of less than 12 months	2101.89	80.27
Closing cash and cash equivalents including fixed deposits with banks, having remaining maturity of more than 12 months classified under non-current financial assets	-	-

4. Ongoing Project

V R Vivanta (A project by our subsidiary company): A premium residential project offering 2 and 3 BHK apartments with state-of-the-art amenities.

Our Upcoming Project: V R

5. Market Analysis

The demand for residential properties in Vadodara is on rise, particularly in the affordable housing segment. Additionally, the commercial real estate sector is booming, with increased interest from IT and manufacturing companies. Also, the Special Investment Regions (SIRs) around Vadodara Increase the demand for commercial & residential properties for their corporate offices & human resources.

6. Risks and Challenges

Market Volatility: Like any market, Vadodaras real estate sector is subject to fluctuations. Economic downturns, changes in buyer sentiment, and shifts in demand can impact property prices. Factors such as geopolitical tensions and market fluctuations demand foresight and adaptability from industry professionals.

Regulatory Changes: Real estate regulations and policies can change unexpectedly. Compliance with new rules may require adjustments to ongoing projects or impact project timelines. Growing emphasis on environmental sustainability introduces challenges in the form of stricter regulations. Developers must adhere to eco-friendly practices and meet compliance requirements.

Infrastructure Development Delays: While Vadodara is expanding its infrastructure, delays in notable projects (such as metro lines or road networks) can affect property values in specific areas.

Liquidity Risk: Real estate investments are relatively illiquid. Selling a property quickly during a downturn can be challenging, especially during limited demand.

Interest Rate Fluctuations: Changes in interest rates can impact affordability for homebuyers. Higher interest rates may reduce demand, affecting property sales. Higher borrowing costs impact both homebuyers and developers.

Affordability vs. Construction Costs: Balancing affordability with rising construction and material costs is a persistent challenge. Developers need to find cost-effective solutions without compromising quality. Affordable housing initiatives can help address this gap and cater to a broader segment of buyers.

Construction Quality and Delays: Ensuring quality construction and timely project completion is crucial. Delays or subpar work can lead to dissatisfaction among buyers. Vadodaras ongoing infrastructure projects, such as the metro rail, are critical for the citys growth. However, delays in execution can impact property values in specific areas.

Developer Reputation: Choosing a reputable developer is essential. Some developers may face financial difficulties or fail to deliver as promised.

Legal and Title Issues: Verifying property titles, encumbrances, and legal clearances is vital. Any disputes or unresolved issues can create significant risks.

Market Oversupply: An oversupply of properties in such segments (like luxury apartments) can lead to price stagnation or depreciation.

External Factors: Natural disasters, political instability, or unforeseen events can impact the real estate market. Economic Factors: Economic downturns can affect buyer sentiment and demand for properties.

Competition: The entry of new players in the market increases competition, necessitating continuous innovation and quality improvement. Developers must differentiate their projects through unique features, quality, and branding.

7. Future Outlook

We are optimistic about the future, with plans to expand our portfolio by launching new projects in emerging areas of Vadodara. Our focus will remain on sustainable development and customer satisfaction while encompassing: Sustainable Practices: Balancing growth with environmental consciousness will be crucial. Developers will explore eco-friendly designs, green spaces, and energy-efficient solutions.

Transit-Oriented Development: With the metro rail coming, expect transit-oriented development around stations. Imagine living just a hop away from your daily commute!

Balanced Growth: Vadodara will strive for equilibrium economic development without compromising its cultural heritage.

Community-Centric Amenities: Parks, recreational spaces, and community centres will thrive. After all, a vibrant community makes a happy neighbourhood.

8. Conclusion

With a robust project pipeline and a strong financial position, V R Infraspace Limited is well-positioned to capitalize on the growth opportunities in Vadodaras real estate market. We remain dedicated to delivering value to our stakeholders and enhancing the quality of life for our customers.