Valor Estate Ltd Management Discussions

1. Operating Environment: Global, India and Real Estate.

The global economy in 2024 steadied rather than soared. Output grew at roughly 3.3%, a touch faster than in 2023, as tighter monetary policy tempered the price pressures and calmer commodity markets took some heat out of inflation. Global inflation, which had peaked above 8% in 2022, eased toward the mid-4s, but the disinflation is incomplete.

Early-2025 tariff salvos by the United States—and tit-for-tat responses—reintroduced policy uncertainty, muddying trade flows and investor nerves. The IMF warns that persistent protectionism could trim growth and complicate central banks paths back to their targets. Risks remain skewed to the downside: a break in the disinflation trend, a policy misstep, or renewed energy/ food shocks could unsettle risk assets and trigger capital outflows and FX swings, particularly in emerging markets already burdened by high public debt and firm valuations.

India held its footing firmly amid this cross-current. Growth hovered in the mid-6% range, driven by domestic demand and public investment, while monetary policy remained cautious. Headline inflation moderated even as core inflation proved sticky, and liquidity conditions remained orderly. The Reserve Bank of India projects the CPI near 4.8% in FY2024-25, easing to ~4.2% in FY2025-26 if the weather cooperates—an outlook broadly consistent with multilateral assessments. Property markets mirrored the macro. Residential demand remained robust, with sales across the top eight cities exceeding ~350,000 units in 2024, the strongest in years. Institutional capital deepened through listed REITs and other channels, while offices shifted toward higher-quality space, and the hospitality sector maintained healthy yields.

Mumbais MMR continued to set the pace. Sales outstripped launches, and inventory overhang tightened to about 14 months as connectivity upgrades—from the Trans-Harbour Link and Coastal Road to new metro lines—reshaped commutes and catchments; the Navi Mumbai airport is expected to add a further nudge. Financing is available but fussier. Developers with phased, cash-generative projects in infrastructure-linked micro-markets are being rewarded; land banking and long-dated promises are less so. The base case is slow-grind disinflation, modest global growth, and episodic volatility—an environment that prizes execution over bravado.

2. Competitive Landscape

Residential. Indias housing market in H1 2025 experienced a slight (~2%) YoY decline in total volumes across the top eight cities; however, the mix shifted towards higher-end properties, with approximately 49% of sales priced above Rs. 1 crore. In MMR, property registrations for H1 2025 approached decade highs, supported by improved infrastructure, steady interest rates, and aspirational upgrades. Luxury sales (Rs. 10+ crore) in Mumbai increased YoY This suggests that premium housing remains a resilient profit segment if product-market fit and execution are ensured.

Office. Office leasing in H1 2025 grew significantly (~41% YoY), driven by demand from global capability centres and diverse occupiers. This supports joint venture office developments, although rental cash flows tend to be back-ended, materialising after project completion and stabilisation.

3. Business model and strategy

Our focus has been always on the Mumbai Metropolitan Region, where demand is deepest and infrastructure is changing macro patterns. The portfolio turns on two engines. First, residential for sale: projects are launched only once key consents are in place; collections are tied to milestones; and construction is governed to minimise cost drift and schedule slippage. Second, commercial annuity through partnerships: in assets such as the Andheri office complex—a multi-tower development of approximately two million square feet with Prestige—we prefer economic participation over control, limiting stand-alone capital expenditure strain but accepting that cash yields arrive later.

The hospitality demerger sharpened this focus. With Advent Hotels operating as a separate platform in the near future, hotel assets and cash flows sit in a vehicle designed for them, improving transparency for shareholders who judge Valor as a developer. It also permits bespoke financing at the hotel level and lowers the risk of perceived cross-subsidy to the property business.

Partnerships are a pragmatic capacity multiplier rather than a flourish. The Andheri project offers a credible annuity pathway, contingent on delivery and leasing. The Aerocity Joint venture (BHGCPL) demonstrates that the groups can work together effectively in hospitality. The rationale is straightforward: partnerships economise on equity, bring design, procurement, and leasing expertise, and share approval, demand, and cost risks. The trade-off is timing—most of the economics accrue after the occupancy certificate and stabilisation, not before.

3. Operating review

We advanced our operating plan with steady execution, disciplined capital use, and practical partnerships across a focused set of Mumbai Metropolitan Region opportunities, and we did so with an operating rule that remains the backbone of our approach: finish what we start, sell what we build, collect what we sell, and keep leverage measured; that sequence— repeated consistently—allowed us to move material projects forward, convert progress into cash, and position the portfolio for the next stage of delivery.

In Worli, through Worli Urban Development Project LLP, in which we hold a 50% economic interest alongside Prestige, we shifted from preparation to execution: the site is largely vacated and construction of transit camps is underway. The 18-acre plan, designed by Skidmore, Owings & Merrill, combines premium housing with a 550-key hotel, serviced apartments, retail and club facilities in a transit-oriented layout, and our near-term priorities are specific and practical—complete rehabilitation assets to the agreed standard, sequence approvals alongside engineering and procurement, phase launches only when construction milestones and collection triggers are in place, and keep stakeholder communication clear and timely so that execution risk, not hope, drives the timetable.

In parallel, we continued to monetise land where doing so strengthens our balance sheet and preserves long-term optionality: at Mira Road we leased 186 acres of vacant, owned land to Larsen & Toubro Limited and Apco Infratech Private Limited for casting yards and associated works supporting BMCs Mumbai Coastal Road North project, on a three-year term with a two-year extension; land-filling is progressing as stipulated, rental cash flows are arriving on schedule, and the arrangement serves a critical city need while keeping our strategic choices on the land intact—an example of low-risk income that helps fund construction, reduces reliance on working-capital lines, and aligns our interests with Mumbais infrastructure build-out.

In Malad East we advanced a scaled housing commitment with clear economics and social utility: under our agreement with BMC we will construct and hand over about 13,374 affordable tenements on land we have conveyed; approvals are in process, and consideration will be received in Transferable Development Rights and Credit Notes—established instruments in Mumbai that convert engineering progress into monetisable paper, provided execution and documentation remain aligned; our approach is to lock in the approval sequence before mobilising major EPC packages, so that site progress maps to TDR/ Credit Note recognition and, ultimately, to cash realisation in a way that is predictable for both lenders and shareholders.

Our associate exposure remained purposeful and light on our own capital: Godrej Avenue Eleven (formerly One Mahalaxmi), developed by our associate Godrej Residency Private Limited, progressed both towers and launched Tower B; the project carries RERA registration through December 31, 2028, and reported sales of roughly 3.5 lakh square feet with bookings of Rs. 110,600 lakh; for us, the benefit is participation in a prime micro-market without balance-sheet stretch, with governance and reporting via equity accounting that keeps recognition disciplined; the work on site is clear—maintain construction cadence, convert bookings into collections, preserve quality thresholds that support pricing—and we continue to coordinate with the associates team on reporting that links build progress to sales velocity and collections..

At the premium end of the market, "X BKC" (Ten BKC)—our five-acre, 15-wing flagship residential venture with Adani GoodHomes—received occupancy certificates for five wings during the year and remains on track for completion by mid- 2025; our share encompasses 358 units, of which 269 are sold; total sales value is Rs. 162,154 lakh, with Rs. 96,154 lakh received; at this stage, priorities are straightforward: deliver the remaining wings to schedule, convert demand into timely handovers, and maintain disciplined collections, because credibility and cash both peak at possession; our construction governance remains focused on cost variance control, vendor performance, and sequencing of fapade, MEP and finishing trades to minimise rework and compress the path to OC/handovers.

Hospitality operations contributed ahead of platform separation and illustrated the usefulness of diversified cash flows while we deliver residential inventory: Grand Hyatt Goa, a 27-acre freehold waterfront hotel, posted revenue from operations of Rs. 40,667 lakh and sustained strong yield performance; Hilton International at Sahar (171 keys) contributed Rs. 9,852 lakh with steady operating traction; and in Delhis Aerocity we continued to advance a large, integrated hospitality-and-offices complex—189 keys at St. Regis and 590 keys at Marriott Marquis, paired with roughly 200,000 square feet of conferencing and approximately 6.15 lakh square feet of leaseable office and F&B space under the Prestige Trade Centre—within a total built-up area of about 3.6 million square feet; our economic interest in this joint venture dates to September 2023, and the work ahead centres on structural topping, core services, fapade installation, and a pre-leasing effort that matches tenant requirements to space preparation so that stabilisation curves are sensible; the Advent Hotels demerger took effect, placing hotel assets and cash flows within a dedicated platform; for shareholders who assess us primarily as a developer, this separation improves transparency and makes comparisons cleaner; for the hospitality business, it enables financing structures that better reflect its cash-flow profile; for the group, it sharpens capital allocation and reduces the perception of cross-subsidy between businesses with different investment cycles.

Beyond the named assets, we have strengthened the forward pipeline through partnerships that bring capital efficiency, execution bandwidth and risk-sharing: with RC Group we formed a joint venture to pursue development rights over roughly 18 acres at Bandra; the scheme is centred on the rehabilitation of about 5,500 families at Dyaneshwar Nagar Project Code Name Riverwalk under the SRA framework and contemplates a mixed-use plan with residential and commercial components and a proposed approximately 1,000-key hotel; the SPV has applied to the SRA for its letter of intent; our immediate focus is on approvals, design development and the sequencing that allows us to balance rehabilitation timelines with market-facing phases; in Bandra West, we commenced transit-camp construction on MHADA land as a precursor to a joint development with L&T Realty, subject to conditions precedent; the framework anticipates a five-year execution horizon with revenue share calibrated to risk transfer and execution responsibilities; current work is concentrated on closing CPs, freezing design, and running the approval process in the correct order so that the build programme and sales programme can be matched without friction.

Across the portfolio we use joint ventures where they make us better owners and better operators: they conserve equity at the project level, bring design, procurement, leasing or hospitality expertise from partners who run those systems at scale, and share approval, demand and cost risks; the trade-off—cash inflows are skewed to post-OC and stabilisation—fits our risk appetite and, in our view, results in more durable returns; this is the same logic that informs our preference for inventory that turns over quickly rather than land that appreciates without cash generation; when we do hold land, we look to interim uses, such as the Mira Road lease, that create income while preserving long-term value.

Our operating discipline is consistent because it is simple. Launches follow permits rather than forecasts; collections follow milestones rather than marketing calendars; construction governance seeks to limit variance in cost and schedule by locking in critical-path trades and enforcing vendor accountability; and inventory is managed for velocity rather than accumulation so that the balance sheet remains flexible. We match commitments to funding visibility and keep promise cycles short enough to meet; in a selective market, buyers and lenders reward reliability over projection, and we therefore hold ourselves to a standard that prefers verifiable progress to aspirational statements. The citys infrastructure build-out reinforces this approach. Connectivity upgrades—Atal Setu (MTHL), the Coastal Road (South) and new metro corridors—continue to shorten commutes and widen catchments; that changes where and how buyers choose to live and work; our plan is to place product along these corridors and schedule releases to observed demand, rather than trying to anticipate markets that have not yet formed.

On capital and risk, our priorities remained straightforward: protect liquidity, maintain measured leverage, align borrowing with asset visibility, and keep contingency allowances adequate for the size and stage of work; where risk can be shared sensibly with partners, we share it; where phasing reduces execution risk without impairing value, we phase; where simplification reduces cost and error, we simplify; our experience is that fewer moving parts per project increases the probability that each moving part does its job, and that reliability, in turn, lowers our cost of capital and improves customer confidence; with the overarching aim to convert site progress into sales and collections, convert collections into balance-sheet strength, and repeat that cycle in a way that is straightforward to understand and to judge; in our business, reliability compounds, and that is what we seek to deliver.

4. Financial review

We recognise residential revenue under Ind-AS when we construct and deliver homes, with all receipts first passing through the mandated RERA escrows. This maintains strict cash discipline and aligns revenue recognition with delivery. Commercial annuities from our office joint ventures will be recorded only after completion, leasing, and stabilisation—when rent revenue begins. For legacy assets, we employ a conservative capitalisation and provisioning approach. We prioritise cash conversion over accounting optics and will continue to adopt policies that favour durability rather than presentation.

Promoters currently hold about 47.37% of the company (as of March 2025), which we see as a reasonable balance between alignment and market float. Any future equity actions will be evaluated against a straightforward criterion: does it enhance long-term per-share value after accounting for dilution, the cost of capital, and the impact on ratingsRs. If the answer is no, we will pass. If yes, we will provide explanations before proceeding.

In terms of accounting and disclosure, we are adopting good practices from leading peers: high pre-sales velocity, strict control of net debt, and visibility of embedded margins. We will provide a more detailed report on unit economics, construction cash needs, cost sensitivities, approvals, and project-level cash flow projections. Our aim is to deliver simple, clear reporting that allows shareholders to understand the key drivers of our business, maintaining consistency with the spirit of Schedule V.

For the year, non-current assets grew by 7.86%, driven by project capitalisation and other long-term items. Current assets fell by 21.95%, and total assets declined by 6.72%. Shareholders funds decreased by 2.24%. Both non-current and current liabilities declined by 16.09% and 8.51%, respectively. In the profit and loss account, revenue from operations rose by 216.97% due to increased project activity. Other income normalised from last years high base (-96.16%), leading to a total revenue decline of 26.61%. Expenses increased by 342.56%, consistent with execution and period costs. We reported a loss before tax of Rs. 19,077.86 lakh (approximately Rs. 190.78 crore) and a loss after tax of Rs. 11,803.11 lakh (around Rs. 118.03 crore). These results reflect the mix and timing of projects progressing through construction, as well as the lag before commercial annuities commence.

Our capital strategy remains straightforward. We seek greater flexibility to deleverage when appropriate and aim for growth that does not overstrain the balance sheet. This directs us towards asset-light structures—such as JDA, JV, and development- management models—that share risks, temper upfront equity requirements, and reduce working capital demands. We will continue our conservative disclosure, prudent funding, and prioritise cash conversion over presentation as our measure of progress.

A. Consolidated Balance Sheet (Rs in lakhs

B. Statement of Profit and Loss

(Rs. in lakhs)

Your Company remains focused on building leverage headroom and preserving liquidity discipline. During the year, selective projects were progressed under joint development, and management intends to continue an asset-light approach—via Joint Development Agreements (JDAs), Joint Ventures (JVs), and the Development Management model (DM) —to moderate upfront capital, broaden execution capacity, and improve risk-sharing, while maintaining conservative accounting and disclosure.

5. Capital allocation & risk management

Our priorities are straightforward. We finish what we start, and we only launch when plans are fully funded and permissions are executable. We de-risk legacy positions by settling, monetising or restructuring when that adds value per share. We invest selectively in premium residential plots where the title is clear. We earn office annuity through joint ventures so that recurring income grows without loading our balance sheet. And we keep liquidity sufficient to cover 12-18 months of construction needs.

Banking and liquidity discipline remain central. In the absence of large working-capital lines, we sequence spend to collections and partner contributions. Cash buffers are sized for legal and approval contingencies. Where it makes economic sense, we hedge interest-rate exposure on project debt; where it does not, we keep duration short and covenants simple.

We track our risks and the corresponding actions associated with them. Execution risk from prior-cycle projects is carried deliberately, with measured spend and clear exit logic. Cash-flow timing is understood; the annuity from JV offices begins only after OC and lease-up. There is no rental inflow assumed for FY2025-26. Legal and title processes for the Mira land and core-city redevelopment are managed with conservative provisioning and timetable buffers. Competition in MMR is intense; we rely on pricing discipline and a product that is clearly specified and delivered on time. Organisation depth is being rebuilt prudently through targeted lateral hires and external advisors to avoid single-point dependencies. Reputation follows actions: after the rebrand, the best investment in the brand is on-time delivery and transparent updates.

6. Brand, organisation, and culture

The rebranding to Valor Estate (effective March 2024) signals a cleaner, forward-facing identity. Internally, change is being managed without fanfare: precise project governance, standardised dashboards, and a culture of saying less, doing more. Bench strength is accreted in approvals, procurement, project controls, treasury, and secretarial/compliance, with clear role accountabilities. We value measured, fact-based communication over promotion, consistent with shareholder-owner orientation. Human Capital is the backbone of our Company, which drives the core growth strategy. We are dedicated to developing and advancing the skills of our team while providing a safe, inclusive, and equitable work environment. Our workplace culture promotes creativity, agility, innovation and meritocracy. We respect and are committed to upholding the human rights of all our stakeholders including employees, subsidiaries, suppliers and other partners.

We had 1,091 employees as on March 31, 2025 as compared to 1,117 employees for FY 24 which is mainly on account of manpower employed in Hospitality assets, these assets are under de-merger process to be listed as a new listed entity.

8. Regulatory compliance

SEBI LODR Regulation 34 (Annual Report). This Managements Discussion and Analysis (MD&A) forms part of the annual report as required. For top 1,000 market cap entities, BRSR is mandatory, and a BRSR-Core assessment/assurance has been introduced in line with industry standards to improve consistency. Valor will align format, KPI coverage, and—where applicable—value-chain disclosures in line with the latest SEBI circulars and industry standards.

Schedule V (LODR). We adopt enhanced MD&A content (strategy window within competitive limits), governance specifics, and cross-references to policies and committee reports.

Companies Act, 2013 (Section 134) & Companies (Accounts) Rules, 2014. The Boards Report will include mandated items, the Directors Responsibility Statement, and subsidiary/JV reporting, with hyperlinks to relevant policy documents.

RERA/MahaRERA. Project-wise quarterly updates, CA/engineer/architect certifications (Form-3 et al.), and escrow governance remain integral. Project communications will mirror RERA disclosures to avoid asymmetry.

9. Risks

a. Market cycle & competition: A premium-heavy demand mix is supportive, but competitive launches and marketing intensity in MMR can compress absorption if pricing strays. Mitigation: price-point discipline; differentiated design; prudent launch sizing.

b. Approvals & title: City-core and salt-belt parcels have longer, more complex approval chains. Mitigation: tier-one counsel, step-gated investments, conservative timelines.

c. Execution & contractors: Labour, input cost, and in-city logistics must be tightly planned. Mitigation: framework contracts; performance securities; modular construction where feasible.

d. Funding & banking limits: Reliance on project-finance/customer advances requires consistent sales velocity. Mitigation: pre-launch interest build-up; escrow discipline; staggered capex.

e. Legal matters: Legacy claims and third-party disputes entail timing uncertainty. Mitigation: settlement frameworks, provisioning buffers, disclosure cadence.

f. Organisational depth: Focused lateral hiring and advisor ecosystems reduce key-person risk. Mitigation: succession mapping; SOPs; project controls.

10. Outlook and priorities

• Execution first: finish-rate and possession schedules above everything else.

• Cash discipline: maintain 12-18 months construction liquidity; tight working-capital turns.

• Selective growth: consent-clear residential launches aligned to premium demand; prudent pre-sales targets—no numeric guidance.

• Annuity progress: continue Andheri office build-out; leasing to be paced with market; economics to accrue post OC & stabilisation—not an immediate cash story.

• Legacy closure: resolve/monetise assets where economic; reduce noise.

• Governance & disclosure: enhance project-wise scorecards; align with SEBI LODR, BRSR-Core, Companies Act, RERA.

11. Cautionary statement

This Managements Discussion and Analysis (MD&A) contain qualitative statements of intent. These are not forecasts or assurances. Actual outcomes depend on approvals, market conditions, financing availability, counterparties, and legal processes. The Company assumes no obligation to update statements herein except as required by law and regulation.

ANNEXURE

Key Financial Ratios (Consolidated)

In accordance with SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the details of significant changes (change of 25% or more as compared to the immediately previous financial year) are given below: