V R Infraspace Ltd Management Discussions

1 . Overview

V R Infraspace Limited continues to stand as one of the most trusted, respected, and recognized names in Vadodaras real estate sector. With over a decade of experience and a proven track record, the Company has developed a strong presence across residential and commercial verticals. We are known for our unwavering commitment to quality, transparency, customer-centricity, and timely execution - values that have become the cornerstone of our identity and success.

Our journey has been built on a vision to redefine the urban landscape of Vadodara by creating sustainable and future-ready infrastructure. Guided by the foresight of our visionary directors, we have consistently embraced innovation and operational excellence in every project we undertake. Over the years, this has earned us the confidence of customers, partners, and key stakeholders, enabling us to deliver projects that enhance both quality of life and urban development.

Expansion of Business Capabilities and Geographic Reach

FY 2024 25 was a pivotal year in the evolution of V R Infraspace Limited. In addition to consolidating our core real estate operations, the Company achieved significant milestones in diversifying its infrastructure capabilities and expanding its operational footprint across multiple states:

1 . Public Works Certification - Government of Madhya Pradesh

The Public Works Department (PWD) of the Government of Madhya Pradesh granted V R Infraspace Limited a Contractor Registration Certificate, authorizing the Company to undertake civil construction works for various government construction departments, semi-government institutions, public sector undertakings, and corporations across the state. This significantly enhances our credentials in public infrastructure projects.

2. A- Class Contractor Registration - Government of Gujarat

The Office of the Executive Engineer, EE MIPN, Ankleshwar, issued a certificate of registration recognizing V R Infraspace Limited as an Approved Contractor (Class A). This registration permits us to execute works under the Roads and Buildings Department, Irrigation Department, and Public Health Engineering Department within the state of Gujarat, further strengthening our civil infrastructure capabilities.

3. Subcontracted Work Orders - Panchmahal, Gujarat

The Company secured subcontracted work orders from Integrity Infrabuild for the construction of Box Culverts in Morva and Halol regions of Panchmahal District, Gujarat. These contracts mark our expanding footprint in infrastructure development outside our core real estate vertical.

4. Major Infrastructure Project - Tamil Nadu (Dindigul)

A notable highlight of the year was receiving a subcontract from Kevadiya Construction for the execution of a prestigious government project - “Dindigul City Municipal Corporation Providing Underground Sewerage System in Left Out and Uncovered Areas,” valued at approximately Rs. 114.23 Crores. To efficiently manage this large-scale project, the Company has established a branch office in Tamil Nadu, signifying our entry into the southern infrastructure development space.

5. Road Resurfacing Project - Songadh Taluka, Gujarat

In May 2025, V R Infraspace Limited received another subcontract from Integrity Infrabuild for the resurfacing of various roads in Songadh Taluka, Gujarat. This project further strengthens our profile in state-level road infrastructure development.

6. Special Category Contractor Registration - Devbhumi Dwarka, Gujarat

In July 2025, the Office of the Executive Engineer, Roads and Buildings Division, Devbhumi Dwarka, issued a certificate registering V R Infraspace Limited as an Approved Contractor in Special Category-II (Road) class. This prestigious recognition enables us to participate in higher-value tenders for the Roads & Buildings Department of Gujarat Government, enhancing our eligibility and competitive positioning in public infrastructure bids.

7. RERA Registration for Commercial Project - “V R Capital”

In August 2025, V R Infraspace received formal Gujarat RERA (GujRERA) registration for our upcoming commercial project, “V R Capital”. This milestone represents our continued commitment to regulatory compliance and transparency, and marks the beginning of a major commercial development within our expanding project pipeline.

2. Industry Trends

The Indian real estate sector continued its growth trajectory in FY 2024 25, fueled by robust demand, supportive policy measures, and improving macroeconomic indicators. The sector remains on track to reach a market size of $1 trillion by 2030, with its GDP contribution expected to grow from 7% to 13% by 2025.

Key national trends observed during the year:

Increase in urbanization and demand for mid-income and affordable housing.

Expansion in commercial and industrial real estate, including warehousing and logistics.

Acceleration of digital transformation, including AI in property management, virtual site visits, and blockchain in land records.

Government focus on infrastructure through PM Gati Shakti, housing schemes, and urban mobility projects like metros and ring roads.

Vadodara maintained its momentum as a growing real estate hub due to:

Strategic location between Ahmedabad and Mumbai.

Infrastructural upgrades, including progress in the metro rail project and development of smart townships. Greater emphasis on redevelopment and mixed-use developments.

Surge in smart and sustainable homes, supported by RERA regulations.

Digital platforms, AI-enabled listings, and 3D visualization tools transformed the homebuying experience in Vadodara. The demand remains high for projects near industrial corridors, educational institutions, and Special Investment Regions (SIRs).

3. 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 Capital

4. Financial Performance Review

Analysis of consolidated financial statements for FY 2024-25 is provided below:

1. Key financial ratio analysis

A comparative table showing synopsis of FY 2024-25 versus FY 2023-24 of Key Financial Ratio is provided below:

Ratio	Calculation	2025	2024	Remarks
Debtors Turnover	Net Sales Average Debtors	2.27	2.31	The Trade Receivables Turnover Ratio changed due to variation in credit sales and the level of outstanding receivables. The increase in receivable levels relative to sales has slightly impacted the efficiency of collections as compared to the previous year.
Inventory Turnover	Sales Inventory/ Avg. Inventory	0.48	0.54	The change in the Inventory Turnover Ratio is mainly due to variation in the average inventory held. During the year, slower sales movement increased the average inventory holding period, thereby reducing the turnover ratio compared to the previous year.
Interest Coverage Ratio	EBIT Interest Expense	3.16	11.39	Increase in ratio is due to Increase in Loan as well as Interest as compared to previous Year.
Current Ratio	Current Assets Current Liabilities	2.34	1.95	The change in the Current Ratio is mainly on account of variation in current assets and current liabilities. During the year, there was an increase in short-term borrowings and trade payables, whereas current assets such as receivables and cash balances did not increase in the same proportion. This led to a marginal decline in the ratio.
Debt Equity Ratio	Total Debt Total Shareholders Equity	0.47	0.16	The change in the Debt-Equity Ratio is primarily due to repayment and closure of certain loans during the year. The repayment has reduced the overall debt component, while the equity base remained relatively stable. Consequently, the ratio shows improvement as compared to the previous year.
Operating Profit Margin (%)	EBITDA Revenue from Operations	20.04%	20.36%	The Change in Ratio is due to Increase in Revenue from Operation and on account of that increase in Earnings.
PBT Margin (%)	Profit Before Tax	12.86%	18.00%	The Change in Ratio is due to Increase in
Net Profit Margin (%)	Total Revenue Profit After Tax Total Revenue	9.11%	12.82%	Revenue from Operation and on account of that increase in Earnings The change in Net Profit Margin is due to a proportionately higher increase in expenses compared to the growth in sales during the current year. Although total revenue increased significantly, higher cost of goods sold and operating expenses resulted in reduced profitability percentage as compared to the previous year
Return on Net Worth	Net Income (PAT) Average Shareholders Equity	0.08	0.11	The decline in Return on Net Worth is due to a significant increase in average shareholders equity during arising from capital infusion in FY 23-24, whereas the increase in profit after tax has not been proportionate. As a result, the overall return on equity has reduced compared to the previous year
Cash and Bank Balances/ Net Worth	Cash and Bank Balance including Mutual Funds and Fixed Deposits Total Shareholders Equity	0.11	0.61	The decline in the Cash and Bank Balances to Net Worth Ratio is primarily due to significant utilization of cash, fixed deposits, and investments during FY 2024-25 for business, as compared to the previous year when higher balances were maintained. Although the over all net worth has increased, the reduction in liquid balances has resulted in a lower ratio.

2. Balance sheet analysis

A comparative table showing synopsis of FY 2024-25 versus FY 2023-24 of Balance Sheet is provided below:

Particulars	As at March 31, 2025	As at March 31, 2024	INCREASE/ (DECREASE)	% INCREASE/ (DECREASE)
ASSETS
Non-current assets	83.61	50.41	33.2	66%
Current assets	10,094.67	8932.51	1162.16	13%
Total	10,178.28	8982.92	1195.36	13%
EQUITY AND LIABILITIES
Equity	3629.28	3454.38	174.9	5%
Minority Interest	494.18	392.80	101.38	26%
Non-current liabilities	1734.33	560.93	1173.4	209%
Current liabilities	4320.49	4574.81	-254.32	-6%
Total	10,178.28	8982.92	1195.36	13%

2.1Non-current assets

Particulars	As at March 31, 2025	As at March 31, 2024	INCREASE/ (DECREASE)	% INCREASE/ (DECREASE)
Property, plant and equipment	21.60	5.28	16.32	309%
Capital work in progress	-	-	-	-
Investment properties	-	-	-	-
Intangible assets	0.26	0.11	0.15	136%
Financial assets	-	-	-	-
Deferred tax assets (net)	0.12	0.23	-0.11	-48%
Other non-current assets	57.89	44.79	13.1	29%
Non-current Investments	2.50	-	-	-
Long term Loans and Advances	1.24	-	-	-
Total	83.61	50.41	33.2	66%

2.2Current asset

Particulars	As at March 31, 2025	As at March 31, 2024	INCREASE/ (DECREASE)	% INCREASE/ (DECREASE)
Inventories	7390.63	5914.07	1476.56	25%
Financial assets			0
(i) Investments			0
(a) Investments in mutual fund			0
(b) Investments-others	43.00	52.15	-9.15	-18%
(ii) Trade receivables	2093.33	699.83	1393.5	199%
(iii) Cash and bank balances	423.67	2101.89	-1678.22	-80%
(iv) Loans	57.76	52.29	5.47	10%
(v) Other financial assets			0
Current tax assets (net)			0
Other current assets	86.28	112.28	-26	-23%
Total	10,094.67	8932.51	1162.16	13%

2.3Non-current liabilities

Particulars	As at March 31, 2025	As at March 31, 2024	INCREASE/ (DECREASE)	% INCREASE/ (DECREASE)
Financial liabilities			0
(i) Borrowings	1719.97	549.47	1170.5	213%
(ii) Trade payables			0
(iii) Others			0
Provisions	14.36	11.46	2.9	25%
Deferred tax liabilities (net)			0
Other non-current Liab (Minority Interest)	494.18	392.80	101.38	26%
Total	2228.51	953.73	1274.78	134%

2.4Current liabilities

Particulars	As at March 31, 2025	As at March 31, 2024	INCREASE/ (DECREASE)	% INCREASE/ (DECREASE)
Financial liabilities
(I) Borrowings			0	-6%
(ii) Trade payables	4080.52	4336.72	-256.2
(iii) Others			0
Other current liabilities			0
(i) Advance from customers			0
(ii) Others	120.09	189.74	-69.65	-37%
Provisions	119.88	48.36	71.52	148%
Current tax liabilities (net)			0
Total	4320.49	4574.81	-254.32	-6%

3. Profit and loss analysis

A comparative table showing synopsis of FY 2024-25 versus FY 2023-24 of statement of Profit and Loss is provided below:

Particulars	As at March 31, 2025	As at March 31, 2024	INCREASE/ (DECREASE)	% INCREASE/ (DECREASE)
Revenue from Operations	3,165.55	1900.39	1265.16	67%
Other Income	133.85	6.47	127.38	1969%
Total Revenue	3,299.40	1906.86	1392.54	73%
Expenses	2,657.80	1544.45	1113.35	72%
Depreciation and Amortisation expense	3.95	1.51	2.44	162%
Finance Costs	209.91	42.4	167.51	395%
Total Expenses	2,871.66	1588.36	1283.3	81%
Prior Period Item	3.31		3.31
Extraordinary Item	0	-18.61	18.61	-100%
Profit before tax	424.43	344.5	79.93	23%
Tax Expenses	123.72	99.16	24.56	25%
Profit after tax	300.71	245.34	55.37	23%
Add: Share in profit/(loss) (net) of associate companies	1.3	19.27	-17.97	-93%
Less: Minority interest in (Profit)/losses	302.01	25.3	276.71	1094%
Profit/(Loss) for the period (after Minority interest adjustment)	201.25	239.31	-38.06	-16%
Basic and diluted EPS (Rs.)	2.27	3.58	-1.31	-37%

3.1Revenue from operations

Particulars	As at March 31, 2025	As at March 31, 2024	INCREASE/ (DECREASE)	% INCREASE/ (DECREASE)
Revenue from Operations	3,165.55	1900.38	1265.17	67%
Other operating revenue		-
Other Income	133.85	13.87	119.98	865%
Total	3,299.40	1,914.25	1385.15	72%
3.2Expenses
Particulars	As at March 31, 2025	As at March 31, 2024	INCREASE/ (DECREASE)	% INCREASE/ (DECREASE)
Operating costs	1,562.72	(597.74)	2160.46	-361%
Employee benefits expense	120.19	74.00	46.19	62%
Other expenses	1,188.75	2,112.10	-923.35	-44%
Total	2,871.66	1588.36	1283.3	81%

4. Cash flow analysis

A comparative table of FY FY 2024-25 versus FY 2023-24 of Cash Flow is provided below:

	For the Year Ended
Consolidated Cash Flow	March 31, 2025	March 31, 2024
Opening cash and cash equivalents	2,101.90	80.27
Net cash inflow/(outflow) from operating activities	(2,713.47)	-296.66
Net cash inflow/(outflow) from investing activities	100.68	-384.69
Net cash inflow/(outflow) from financing activities	934.57	2702.97
Closing cash and cash equivalents	423.67	2101.89
Closing cash and cash equivalents including fixed deposits with banks, having remaining maturity of less than 12 months	423.67	2101.89
Closing cash and cash equivalents including fixed deposits with banks, having remaining maturity of more than 12 months classified under non-current financial assets	-	-

5. Market Analysis

The demand in Vadodaras real estate sector remained strong across affordable, mid-range, and commercial segments. High traction was noted in:

Peripheral growth zones with upcoming infrastructure

Commercial space leasing by IT and logistics firms

Investor demand for pre-launch inventory

Industrial corridors and SIRs have further driven housing demand for workforce accommodation and corporate facilities.

6. Risks and Challenges

- Market Sentiment Volatility due to global economic uncertainty

- Construction Cost Escalation driven by commodity prices

- Regulatory Delays in approvals and compliances

- Interest Rate Sensitivity affecting buyer affordability

- Competition Pressure from new market entrants

- Liquidity Risks inherent in the capital-intensive nature of real estate

- Project Execution Risk, especially in large-scale mixed-use developments

7. Risks and Concerns

1. Real Estate Pricing Volatility

Market-driven fluctuations in property prices both in sales and rentals pose a direct risk to revenue realization. Prices are influenced by factors such as project location, economic sentiment, competitive landscape, and design value. V R Infraspace adopts a value-driven pricing strategy, ensures phased project launches, and maintains diversified offerings to withstand pricing pressure across market cycles.

2. Demand Uncertainty and Booking Trends

Customer preferences, delays in approvals, and economic conditions can impact the volume and pace of bookings. Early-phase sales are particularly vulnerable to buyer sentiment and regulatory timelines. The Company emphasizes pre-launch marketing, product customization, and trust-building with phased sales models to sustain healthy booking levels throughout the project lifecycle.

3. Execution and Delivery Dependencies

Timely project execution is essential for revenue recognition and brand reliability. Execution risks arise from:

Labour shortages

Escalation in raw material costs

Delays in regulatory approvals

Logistics disruptions (especially for imported materials)

V R Infraspace works with reputed contractors, adopts realistic timelines, and ensures robust vendor management.

Imported material timelines are managed through proactive planning and documentation.

4. Revenue Risks from Leased Assets

Where projects involve leased retail or commercial spaces, rental income is subject to fluctuations based on:

Economic slowdown

Tenant turnover

Design relevance and location appeal

The Company ensures strategic positioning of commercial properties in high-footfall zones, targets first-mover retailers, and maintains premium ambiance to support consistent lease inflow.

5. Strategic Land Acquisition Challenges

Land acquisition involves significant capital and legal diligence. Risks include:

Overvaluation

Legal/title disputes

Unfavourable negotiation outcomes

V R Infraspace follows a structured acquisition process, conducting comprehensive due diligence before committing.

MOUs and staged investments are used to protect capital in exploratory phases.

6. Capital Requirements and Funding Constraints

Real estate development requires substantial upfront funding for land, development, and operations. High-interest costs or limited access to finance can constrain growth and delay execution.

The Company maintains a strong internal accrual strategy, minimizes debt dependence, and prioritizes financial prudence. With a low debt-equity ratio, the business remains resilient to interest rate volatility.

7. Future Outlook

With sustained demand and infrastructure support, we are optimistic about growth in FY 2025 26 and beyond. Our strategy includes:

Launch of V R Capital

Expansion into Tier II peripheries of Vadodara

Incorporation of ESG principles into all new projects

Adoption of smart technology and construction methods

Strengthening digital customer touchpoints

We are committed to delivering superior value to stakeholders through strategic execution and customer-centric design.

8. Conclusion

Backed by a robust financial position, a growing project portfolio, and deep market insights, V R Infraspace Limited is well poised to capitalize on the immense potential of Vadodaras real estate market. We reaffirm our commitment to building sustainable, high-quality spaces that elevate urban living and drive long-term value.

CAUTIONARY STATEMENT

This management discussion and analysis contain forward looking statements that reflects your Companys current views with respect to future events and financial performance. The actual results may differ materially from those anticipated in the forward-looking statements as a result of many factors.