Victoria Enterprises Ltd Management Discussions

GLOBAL ECONOMY

The global economy grew at an estimated 3.2% in 2023, compared to 3.5% in 2022. Growth was constrained by persistent inflationary pressures, continued monetary tightening by central banks, and geopolitical uncertainties, particularly the Russia-Ukraine conflict and supply chain disruptions.

The United States and several large emerging markets recorded stronger-than-expected growth in the second half of 2023. However, momentum in the eurozone remained subdued due to weak consumer sentiment, high energy costs, and stress in interest rate-sensitive sectors.

Looking ahead to 2024-25, the global economy is expected to grow at around 3.1%-3.2%. Growth in the United States is likely to remain resilient, while the euro area continues to experience slower recovery. China is expected to rebound modestly following the lifting of pandemic restrictions, though challenges in its real estate sector and demographic shifts remain long-term headwinds.

INDIAN ECONOMY

Despite global headwinds, India remains one of the fastest-growing major economies. As per the First Advance Estimates (FAE) released by the National Statistical Office (NSO), real GDP growth for FY 2023 - 24 is estimated at 7.3%, driven by robust investment activity and healthy domestic demand.

For FY 2024-25, Indias growth is projected at 6.8%-7.0%. Household consumption is expected to strengthen due to easing inflation and steady rural recovery. Strong rabi sowing, a normal monsoon outlook, and sustained capital expenditure by both government and private players are expected to support momentum. India is on course to become the worlds third-largest economy in the coming years, supported by favorable demographics, reforms, and increasing global competitiveness.

REAL ESTATE SECTOR

The real estate sector continued its strong recovery in FY 2023-24, supported by rising demand in residential and commercial segments. Investments in the sector touched approximately USD 5.1 billion, with land acquisitions accounting for nearly 40%. Tier II and Tier III cities are emerging as significant growth drivers, supported by infrastructure development and increased investor interest.

Residential real estate witnessed record sales and new project launches, while commercial office spaces showed steady recovery with rising occupancies. Retail real estate surpassed pre-pandemic consumption levels, reflecting consumer confidence and structural growth in organized retail.

With continued government focus on infrastructure, stable interest rates, and increased affordability, the outlook for the Indian real estate sector remains positive in FY 2024-25.

INDUSTRY STRUCTURE AND DEVELOPMENT

Victoria Enterprises Limited is engaged in the business of real estate development, focusing on quality residential and commercial projects. The Company has been progressing on its ongoing projects, including Pittie Chambers and Pittie Paradise, while exploring opportunities for new acquisitions in Mumbai and other locations.

Real estate remains the second-largest employment generator in India after agriculture, supported by policy reforms such as RERA, GST rationalization, and incentives for affordable housing. The Company is positioned to benefit from these structural reforms and favorable industry dynamics.

OUTLOOK AND OPPORTUNITIES

Strong urbanization trends, rising income levels, and aspirational demand are expected to drive housing demand.

Expansion of IT/ITES and service industries into smaller cities will support growth in commercial real estate.

Integrated township and smart city projects are likely to create new business opportunities.

Changing consumer preferences for larger homes, hybrid working models, and improved infrastructure will support long-term demand.

THREATS AND CHALLENGES

The sector is highly regulated, and delays in land acquisition, project approvals, and compliance can affect profitability.

Rising input costs and interest rate fluctuations may put pressure on margins and housing affordability.

Developers with higher leverage may face challenges in raising funds due to selective lending by financial institutions.

Labor shortages and dependence on manual processes highlight the need for adopting technology-driven construction practices.

Geopolitical uncertainties, inflationary pressures, and potential monetary tightening by the RBI could impact demand in the short term.

SEGMENT-WISE PERFORMANCE

The Company operates in two segments: Real Estate Development and Entertainment. However, the Entertainment segment has remained inactive for the last five financial years and is therefore not considered a reportable segment. Segment reporting has been provided in the financial statements as per the applicable Accounting Standards.

The Companys operations are entirely within India, and accordingly there is no reportable geographical segment.

FINANCIAL AND OPERATIONAL PERFORMANCE

The details of the financial performance of the Company for FY 2024-25 are provided separately in the Directors Report and the audited financial statements.

INTERNAL CONTROL SYSTEMS AND ADEQUACY

The Company has adequate internal control systems commensurate with its size and nature of operations. Internal audit functions are carried out by an independent firm of Chartered Accountants, and findings are reviewed by the Audit Committee of the Board.

These systems ensure reliability of financial reporting, safeguarding of assets, adherence to statutory compliances, and operational efficiency.

HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company considers its human resources as a critical asset and competitive advantage. Continuous efforts are made to foster a culture of empowerment, innovation, and performance orientation.

Training and development initiatives are undertaken to upgrade skills and align employees with organizational goals. Industrial relations remained cordial during the year under review.

CAUTIONARY STATEMENT

Certain statements in this Management Discussion and Analysis may be "forward-looking statements" within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied due to economic conditions, government policies, market dynamics, and other incidental factors. The Company assumes no responsibility to publicly amend, modify, or revise any forward-looking statements based on subsequent developments, information, or events.