Vipul Ltd Management Discussions

OUTLOOK & OVERVIEW OF THE ECONOMY

Indias economy in FY25 exemplifies its inherent resilience. The GDP growth rate reached more than 6% during the fiscal year 2025. In FY2024, the global economy displayed not able resilience despite uneven momentum across regions and sectors and grew around 3% as per International Monetary Funds (IMF) World Economic Outlook.

According to the Reserve Bank of India, the nations GDP is expected to grow by around 6.8% in FY26. The economy is anticipated to benefitfrom promising crop prospects and robust household consumption strengthened by tax relief measures in the Union Budget 2025-26. Fixed investment is projected to recover, supported by improved capacity utilization, strong corporate and financial balance sheets, and the governments persistent emphasis on capital expenditure.

According to the latest IMF report, India has overtaken Japan as the worlds 4th largest economy in 2025 and is on track to surpass Germany as the 3rd largest economy by 2028.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Indias real estate sector reflects the broader optimism surrounding the countrys economic future. According to the IMFs World Economic Outlook, April 2025, Indias GDP has more than doubled to ~$4.19 trillion, from $2 trillion in 2014, propelling the country from the tenth to the fifthlargest economy in the world and is on course to become the third largest by FY 30-31, growing at a sustained pace of around 6.7%. This growth trajectory is powered by a convergence of long-term drivers: expanding middle class, accelerating urbanization, increasing disposable income, rapid digital adoption, and continued structural reforms. Flagship government initiatives such as the Smart Cities Mission, Housing for All, and the Real Estate (Regulation and Development) Act (RERA), have enhanced transparency, improved regulatory oversight and strengthened investor confidence across the real estate value chain. Real estate is a key contributor to Indias GDP and employment generation. According to Knight Frank, the sector is expected to grow from $300 Billion in FY2024 to $650 Billion by CY2025, reaching $1Trillion by FY2030 and potentially $5.8 Trillion by FY2047.

FY 2024-25 was a challenging year for Indias real estate sector, with slowed sales growth due to elevated interest rates and global economic uncertainty. However, there was significantincrease in new launches, especially in tier-1 cities, with inventory levels remaining stable or even declining in these areas, indicating sustained demand. The residential segment performed well, supported by stable interest rates, a strong economy, and evolving consumer preferences, including a shift towards larger homes. The commercial office space sector showed a very slow recovery, reversing the impact of the remote work trend and global economic slowdown, though demand remained below pre-pandemic levels in some regions. Meanwhile, the retail real estate sector witnessed a revival, exceeding pre-pandemic consumption levels, as consumer spending rebounded and footfalls increased in malls and retail spaces.

In FY 2024-25, Indias residential real estate sector exhibited resilience. Property sales are not surged significantly, but reflecting a continued recovery. This robust performance can be underpinned by favorable affordability, a strong economic rebound, and positive macroeconomic conditions. However, challenges such as rising raw material costs, inflationary pressures, and increased borrowing expenses created headwinds for the sector. Despite these challenges, the residential market remained a key performer in the real estate landscape, supported by evolving consumer preferences and stable interest rates.

The lockdown periods led to heightened savings and minimal income disruptions among mid to high-income segments, bolstering sustained demand. Additionally, the real estate sector found relief in the RBIs decision to maintain the policy repo rate.

The real estate market experienced an unprecedented slowdown in FY 2025, surpassing expectations. This lead off in opportunities for both domestic and international investors, driving the economy to significant forward. Overall, the residential sector remains a focal point for growth, fueled by sustained demand and stable economic conditions.

Delhi- NCR

The shift toward premium housing remains a defining trend in NCRs residential market. Properties priced above Rs. 1 crore accounted for nearly 80% of total market demand, compared to other average properties. This growth is indicative of sustained demand for spacious homes with state-of-the-art amenities, driven by affluent homebuyers prioritising quality living spaces. Within this segment, the Rs. 1-2 crore and Rs. 2-5 crore bracket saw the most significant activity, supported by well-established developers offering projects in strategic locations. In contrast, the segments below Rs. 50 lakh continue to show a shrinking trend. In FY 2024, NCR maintained a steady performance with robust demand seen in the primary residential market. However, NCR was the market that saw sales dip marginally by 4% YoY to 57,654 residential units, albeit from a multi-year high base, and low inventory levels in the mid and-affordable categories, in the right locations.

Gurugram retained its dominance as the preferred micro market in NCR. The continuous development of the

Dwarka Expressway, along with the anticipated completion of key infrastructure projects, has significantly enhanced the areas connectivity and appeal. The Southern and Central Peripheral Roads continue to draw interest, fuelled by a mix of premium projects that cater to high-net-worth individuals. Noida and Greater Noida collectively contributed to one more micro market.

BUDGET 2025–26 TAKEAWAYS

The Union Budget 2025 26 reflects Indias commitment to climate action through several key initiatives. While it emphasises renewable energy and clean transportation, it also highlights the need for more comprehensive strategies in industrial decarbonisation and agricultural sustainability to achieve Indias long term climate objectives

Inclusive Development

Despite COVID-19 challenges, PMAY (Rural) is close to its three crore houses target, with plans for two crores more houses in five years. The PMAY scheme for affordable housing includes PMAY (Urban) and PMAY (Rural), with a total allocation of Rs. 80,671 crore, of which Rs. 54,500 crore is for PMAY (Rural). PM-SVANidhi successfully supported 68 lakh street vendors with credit. The government aims for holistic development, envisioning ‘Viksit Bharat by 2047.

Housing

The PM Awas Yojana announced plans for 2 crore houses in the future, but details about the urban wing were lacking. Additionally, a target of 1 crore houses for rooftop solarization was set, offering urban households 300 units of free electricity monthly. The Budget highlighted a new scheme for middle-class urban residents in rented housing, slums, chawls, or unauthorized colonies, allowing them to buy or build their own homes.

Urban Reforms

The ongoing municipal reforms featured an incentivization package and a fifty-year loan to states, with a focus on capital project utilization and urban planning reforms to boost municipal bond creditworthiness.

COMPANY STRENGTHS

Promoters and senior management continue to put efforts to focus on Project Planning and Execution for delivering present-day design and quality construction.

The Project management team comprises of experienced, highly qualified experts with vast experience in their functional areas. The team drives the organization through their contribution. The organizational framework has been designed to manage the design, engineering, procurement and execution of concurrent, multi-site projects keeping a focus on delivery of developments of International standards.

Your Company continues to capitalize on the market opportunities by leveraging its key strengths, these include:

1. Brand Reputation: Enjoys higher recall and influencesthe buying decision of the customer. Strong customer connects further results in higher premium realizations.

2. Execution: Possesses a successful track record of quality execution of projects with contemporary architecture.

3. Strong cash flows:Has built a business model that ensures continuous cash flows from their investment and development properties ensuring a steady cash flow even during the adverse business cycles.

4. opportunity: Follows conservative debt practice coupled with enough cash balance Significant which provides a significant leveraging opportunity for further expansions.

5. Outsourcing: Operates an outsourcing model of appointing globally renowned architects/contractors that allows scalability and emphasizes contemporary design and quality construction – a key factor of success.

6. Transparency: Follows a strong culture of corporate governance and ensures transparency and high levels of business ethics.

7. Highly qualified execution team: Employs experienced, management teams whoever see and execute all aspects of project development.

OPPORTUNITY:

The growth opportunity in the Real Estate Sector is far from over. It will continue to play out over the medium term. Large number of unorganized players have exited the market leaving more opportunities for the serious players.

As India awaits policy reforms to pick up speed, your Company firmly believes that the demand for Real Estate in a country like India should remain strong in the medium to long term. Your Companys well accepted brand, contemporary architecture, well designed projects in strategic locations, strong balance sheet and stable testing times make it a preferred choice for customers and shareholders. Your financial

Company is ideally placed to further strengthen its development potential by acquiring new land parcels.

HOUSING DEMAND

A combination of economic growth, increasing income levels, and the perception that housing prices are stabilising, which has led to a notable uptick in housing demand. Potential buyers, previously on the sidelines, are now entering the market as first-time homeowners while existing homeowners are looking for larger spaces. The shift towards remote and hybrid work models is influencingthe desire for more spacious living further arrangements. Employers offering flexiblework options continuesignificantfactor in this trend, as it be allows employees the freedom to live further from the office, thereby boosting demand for residential properties in various segments.

SECTOR CONSOLIDATION

The Indian real estate sector, characterized by its highly fragmented nature, has been undergoing a significant consolidation phase for several years. This consolidation has been accelerated by various factors, including the pandemic, which has effectively sidelined less robust participants. The current environment in the real estate industry poses challenges to the entry of new competitors. With the trend leaning towards a smaller number of dominant developers in each region, upcoming period of consolidation offers an attractive chance for current real estate firms to meet the increasing demand for housing.

DIGITAL REAL ESTATE SALES

Digital marketing has become a key strategy for real estate developers to boost sales and connect with customers. Since the pandemic, their marketing efforts have expanded beyond attracting new customers and building brand awareness to include creating personal connections digitally. Thanks to technology that allows property purchases online, developers have seen strong sales, even during lockdown periods. Theyre using digital tools to engage with potential buyers, present project details, offer virtual tours, and target Non-Resident Indians (NRIs) to increase sales. Advanced technologies like virtual reality, augmented reality, and AI-driven chatbots are increasingly employed to offer tailored services to potential clients. Moving forward, developers will need to keep up with technological advancements, as the share of real estate transactions conducted online is expected to grow.

THREAT

Even as the demand in the Real Estate Sector is increasing gradually, the squeezed financialscenario and NBFC issue has let to major liquidity challenges and increased borrowing costs.

Huge inventory pile up and delayed projects have affected the confidence of residential end use customers as well as the investor community.

REGULATORY HURDLES

The real estate industry is subject to extensive regulation, and any negative adjustments in governmental policies or the regulatory framework can negatively influence the sectors performance.Significantdelays in procedures related to acquiring land, determining land use, initiating projects, and obtaining construction approvals are common. Changes in policy applied retrospectively, along with regulatory obstacles,couldaffectprofitability and diminish the appeal of both the sector and the companies active within it.

MONETARY TIGHTENING AND FUNDING ISSUES

In recent years, the landscape of real estate financing has shown a marked divergence. Well- established developers with lower debt levels have continued to secure funding with relative ease, benefiting from the selective approach of lenders, while those financialstandings have encountered challenges in with weaker accessing capital. The performance of the real estate sector is intricately connected to the broader economic recovery and the prevailing monetary policies. The RBI has maintained an accommodative stance to bolster economic growth. However, it is anticipated that there will be a shift towards tighter monetary policies as efforts intensify to manage persistent inflation. The budding economic revival, coupled with potential increases in interest rates, may pose challenges for the real estate sector shortly. Higher housing loan costs and an escalation in financing costs for developers, who are already contending with margin pressures due to the rising prices of commodities, could have implications.

SHORTAGE OF MANPOWER & TECHNOLOGY

As the countrys second-largest employment provider, the real estate sector relies significantly on manual labor.

The pandemic severely impacted this sector due to labor shortages, disrupting project completion schedules. Consequently, theres a pressing need for the adoption of alternative construction methods that are less dependent on manuall labour and more on technology.

RISKS AND CONCERNS

Vipul s risk management approach focuses on mitigating the adverse impact of external risks on its business objectives. The framework comprises a combination of centrallyissued policies and divisionally-evolved procedures that are regularly reviewed for their alignment with sectoral dynamics and evolving trends.

The Company has a Risk Management Committee which is entrusted with the responsibility of establishing polices to monitor and evaluate the risk management systems of the Company.

The Company aims at continuous improvement of the processes which inter-alia include, reporting methodology of the legal matters, efficient engagement of high quality panel of third party lawyers, standardization of key documents and strengthening internal guidelines and processes on documentation, legal matters and their reporting.

The Company is exposed to a number of risks such as economic, regulatory, taxation and environmental risks as well as sectoral investment outlook. Some risks that may arise in the normal course of business and could impact their ability to address future developments, comprise credit risk, liquidity risk, counterparty risk, regulatory risk, commodity inflation risk and market risk. The Companys strategy of focusing on key products and geographical segments is exposed to economic and market conditions.

The Company continues to implement robust risk management policies that set-out the tolerance for risk management and the requisite mitigation plans.

INDUSTRY CYCLICALITY

The real estate market is inherently a cyclical market and is affected by macro economic conditions, changes in applicable governmental schemes, changes in supply and demand for projects, availability of consumer financing and illiquidity. Your Company has attempted to hedge against the inherent risks through a business model comprising owned projects, joint ventures, residential platforms, and development management through a pan-India presence. However, any futuresignificantdownturn in the industry and the overall investment climate may adversely impact business.

STATUTORY APPROVALS

TherealestatesectorinIndiaisheavilyregulatedbythecentral,stateandlocalgovernments.Realestatedevelopers are required to comply with a number of laws and regulations, including policies and procedures established and implementedbylocalauthoritiesinrelationtolandacquisition,transferofproperty,registrationanduseofland.These lawsoftenvaryfromstatetostate.SeveralofyourCompanysprojectsareinpreliminarystagesofplanningandanydelay in obtaining approvals could warrant revised scheduling of project timelines.

CLIMATE CHANGE-THREATS AND CHALLENGES FOR REAL ESTATE SECTOR

The sector faces some pertinent challenges on the front of climate change. These challenges or risks can be classified broadly into two categories, physical and transitional. The former is on account of acute and chronic physical effects of climate change such as damage to infrastructure at construction sites or building projects, damages to logistics routes, reduced efficiency of work force due to heat waves, etc. The latter i.e., transitional risks arise on account of transitioning to a low-carbon economy. Such risks can be broadly classified categories namely, reputational, market, technology and policy.

In addition no the risks, climate change also offers some opportunities for the real estate sector.

REDUCED WATER USAGE AND CONSUMPTION

Water is a critical component in the construction and use phase. Erratic and reduced precipitation compounded with unsustain able extraction of groundwatersignificantimpact construction activities and customer has preference. Incorporating rainwater harvesting, and encouraging the use of curing compound instead of water saves large volumes of water and reduces its procurement cost. Moreover, reduction in water usage also reduces wastewater treatment and corresponding energy usage.

LOCAL ENERGY GENERATION AND STORAGE

Real-estate firms can use their premises to generate and store energy. For example, property developers have been outfitting buildings with solar arrays and batteries, helping to stabilize energy grids and reduce the costs associated with clean energy.

GREEN BUILDINGS TO ATTRACT MORE CUSTOMERS

Developers and property managers can invest in developing green buildings or retrofitting older buildings to make them green to meet the growing appetite for sustainable workplaces and homes. Energy efficient solutions both in the design and use phase can help save large quantity of energy for customers. The efficiency measures help mitigate climate impacts

DIFFERENTIATED CAPITAL ATTRACTION

Given the volume of capital that has already been committed to achieving net zero, real-estate firms that are able to decarbonizes will have an advantage in attracting capital.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and verified by Statutory as well as Internal Auditors.

The Companys internal control system is commensurate with the nature, size and complexities of operations. The internal control system ensures compliance with all applicable laws, regulations and facilitates optimum utilisation of available resources and protects the interests of all stakeholders.

The Company has a robust and well embedded system of internal financial controls. This ensures that all assets are safeguarded and protected against loss from unauthorized use or disposition and all transactions are authorised, recorded and reported correctly. An extensive risk based programme of internal audit and management reviews provides assurance on the effectivenessofinternalfinancialcontrols, which are continuously monitored through management reviews, self-assessment, functional experts as well as by the Statutory/ Internal Auditors during the course of their audits.

The internal control is supplemented by extensive programme of internal audits, review by Audit Committee and

Board of the Company. The system financialand other records are reliable has been designed to ensure that and formaintainingaccountabilityofassets. for preparing financialand audit control All systems are also reviewed by the Audit Committee of the Board of Directors of the Company. observations, if any and follow up actions thereon are reported to the Audit Committee.Significant

Further to maintain its objectives and independence, the Internal Auditors reports to the Chairman of the Audit Committee.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

You Company continues to focus its business strategy on its core markets; reduce debt and improve the quality of debt; rationalize costs and capital expenditure. Your Company continues to focus on delivering and completing projects in a timely manner with complete focus on quality.

Here are some key facts for FY 2025 as compared to FY 2024: (Rs. in Lakhs)

Particular	Financial Year Ended 31.03.2025	Financial Year Ended 31.03.2024
Revenue from operations	8,126.58	17,006.22
Other Income	1,260.58	23,166.31
Total Income	9,387.43	40,172.53
Total Expenses	11,577.17	10,971.08
Profit/(Loss) before share of profit from Associates	(2,189.74)	29,201.45
Add: share of profits from Associates	-	-
Profit/(Loss) before Tax & exceptional item	(2,189.74)	29,201.45
Exceptional Item	-	-
Profit/(Loss) before Tax & after exceptional Item	(2,189.74)	29,201.45

 

Particular	Financial Year Ended 31.03.2025	Financial Year Ended 31.03.2024
Less: Tax Expense:
(i) Current Year	-	-
(ii) Deferred tax	-	4,452.68
Profit/(Loss) of the year	(2,189.74)	24,748.77
Other Comprehensive Income
A. (i) Items that will not be reclassified to Profit or loss	32.92	36.06
(ii) Income tax relating to items that will not be reclassified to profit or loss -		9.37
B. (i) Items that will be reclassified to profit or loss	-	-
(ii) Income tax relating to items that will be reclassified to profit or loss	-	-
Total Comprehensive Income	(2,156.82)	24,775.46

HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONS

Vipul firmly believes that its intellectual capital plays a fundamental role in sustaining profitablebusiness growth.

In keeping with this conviction, the Company continues to invest in dedicated programs for its people to nurture skill and build capabilities that will help them in addressing current and future business needs.

The focus of human resource function is not only to improve employee productivity, skill sets and knowledge but also to improve employee empowerment and welfare. All the process and policies of Human Resources function are tuned to support the overall business needs, people strategy and organization goals.

The above ensures that a pool of ably skilled workforce is available to the company to choose from. Before becoming a member of Vipul family, he or she goes through a stringent evaluation process that resonates well with Vipuls work culture.

We give high priority to the health and safety of our employees. An effective way of ensuring this is building a safety culture, where safety is the responsibility of each and every employee.

As on March 31, 2025, the total strength of your Companys employees stood at 56.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

In accordance with SEBI (Listing Obligations and Disclosure requirements 2018) (Amendment) Regulations2018, the Company is required to give detailsofsignificantchanges (Change of 25% or more as compared to the im -mediately previous financial year) in key sector specific financial

Sr. No.	Particulars		FY 2024-25	FY 2023-24	Change (%)	Explanations
1	Inventory Turnover		0.20	0.42	-52.77%	Decrease in sales during the year
2	Interest Coverage Ratio		0.03	15.39	-99.83%	Higher EBIDTA in previous year due to profit from sale of land/ other income
3	Debt-Equity Ratio		0.22	0.49	-54.58%	Significant amount of debts repaid
4	Operating Profit Margin (%)		19.97	81.99	-75.64%	Sale of land contributed to higher margin in previous year
5	Net Profit Margin (%)	-26.54		145.68	-118.22%	Loss in the current year as compared to huge profit in previous year
6	Trade Receivable Turnover	0.31		0.91	-65.79%	Decrease in sales during the year
7	Net Capital Turnover	0.31		0.78	-60.21%	Decrease in sales during the year
8	Return on net worth/equity	-5.87		108.01	-105.44%	Loss in the current year as compared to huge profitin previous year
9	Return on Capital Employed(%)	0.2		51.03	-99.62%	Earning before interest, Tax and depreciation is lower as compared to last year.

CAUTIONARY STATEMENT

Statements in this report on Management Discussions and Analysis describing the Companys objectives, estimates and expectations may be forward looking statements based on certain assumptions and expectations of future events. Actual results might differ substantially or materially from those expressed or implied. The Company assumes no responsibility nor is under any obligation to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent developments, information or events. This report should be read in conjunction with the financial statements included herein and the notes thereto.