zodiac ventures ltd share price Management discussions

1. Global Economy

It has been a reasonably normal year after past few years of the Covid-19 pandemic induced challenges but the global economy continues to face headwinds of rising inflation and tapered growth. Stronger-than- expected private consumption and investment amid tight labour markets and greater-than anticipated fiscal support helped the major economies.

For emerging markets and developing economies, growth is projected to rise modestly. Growth in emerging and developing countries in Asia are expected to rise faster after the deeper than-expected slowdown in the previous year.

There are numerous downside risks to weigh on outlook like stalling recovery in China, escalation of war in Ukraine, sudden repricing in financial markets, and geopolitical fragmentation. Also, high post-pandemic debt burden will pose to be an ongoing challenge for many countries over the next few years.

The upside though can come through pent-up demand boost fueled by excess private savings from pandemic fiscal support and in many cases, still-tight labour markets and solid wage growth; or through faster disinflation as easing in labour market pressures in some advanced economies due to falling vacancies could cool wage inflation.

2. Indian Economy

The Indian economy continues to remain fairly resilient in the last year despite the global headwinds. Rising borrowing costs and slower income growth will weigh on private consumption growth. Despite this, India will remain one of the fastest growing economies in a challenging global environment.

Indias GDP grew due to steadfast domestic demand, governments unwavering focus on infrastructure spending and low base effect. Volatile commodity prices have impacted profitability, particularly of MSMEs, while export-oriented sectors face headwinds from a slowdown in their major markets. The headwinds of higher input cost and challenging global environment will continue this year.

3. Real Estate Sector

The post-pandemic picture for real estate sector is a paradigm shift from before. The pandemic has reinstated the importance of home ownership and the attitude of customers towards residential properties has seen a substantial shift. Preference for larger sized apartments, inclination towards reputed developers and a rising demand for townships projects are just some of the emerging trends.

While the residential segment witnessed strong performance, commercial office sector continues to remain sluggish with demand not yet reaching the pre-pandemic levels. Retail real estate sector though, is back to full swing with consumption recovering beyond pre-pandemic levels and should continue the momentum.

4. Residential Real Estate Market

The residential market has sustained the momentum seen in the previous year. The robust performance of the sector during last year signifies the strength of the underlying demand for property. The demand is driven by healthy economic recovery post pandemic, healthy affordability compared to historic levels and other favourable macroeconomic factors.

The industry though faced headwinds of steep rise in raw material costs, consumer inflation and a sharp increase in borrowing costs. Heightened savings during the lockdowns, relatively little income disruption in the mid and high-income categories and a comparatively strong economic growth outlook have sustained demand in the Indian residential market. Residential demand in the country has not only remained resilient but surged in the past year. The requirement for work from home setups has also emerged as a factor influencing homebuyer preferences.

5. Customer Experience

We keep our customers at the forefront in policy-making decisions including designing and changing needs and preferences of customers in evolving environment. This enables us to build trust, create happy experiences and provide them with the best-in-class products. By understanding our customers needs, we aim to make the customers home-buying experience a simple and joyous one, thereby enhancing brand advocacy.

6. Opportunities

Your Company has turned its focus towards measured growth through the initiation of two new residential redevelopment projects at prime locations in Vile Parle (East), Mumbai, namely Anjaneshwar Co-operative Housing Society Ltd. and Guruchhaya Co-operative Housing Society Ltd. Going forward into the financial year 2023-24, your Company intends to focus on the redevelopment model with a view to gain a substantial foothold in the redevelopment sector. Your Company is also looking to diversify into new business avenues and has been granted approval from the Ministry of Food Processing Industries, Government of India for setting up Agro Processing Clusters, also known as Food Park, at Raigad, Maharashtra.

7. Challenges

The management of your Company is confident of creating and exploiting the opportunities it is faced with, keeping in mind any unfavorable changes in the government policies and the regulatory environment that can adversely impact the performance of the sector. Retrospective policy changes and regulatory bottlenecks may impact profitability and affect the attractiveness of the sector and companies operating within the sector.

8. Internal Control Systems:

The Company has an adequate Internal Control System commensurate with size and nature of its business to safeguard all assets and to ensure their efficient productivity. The Company has continued to keep focus on processes and controls. The Company has a suitable internal control system for the business processes, operations, financial reporting, compliance with applicable laws and regulations. Wherever deemed necessary, internal control systems are also reassessed and corrective action is taken, if required.

9. Financial operational performance:

Despite a repressed economic development, your Company performed reasonably well.

10. Cautionary Statement:

Statements in this Report, particularly those which relate to Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectations, may constitute ‘forward looking statements within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied.