Max Heights Infrastructure Ltd Management Discussions

Max Heights Infrastructure Limited (referred to as Max or the Company) is a burgeoning Real Estate Company that operates under the management control of experienced promoters with a wealth of knowledge in the Real Estate Sector. However, the Company faces numerous internal and external challenges that contribute to a complex and demanding operating environment.

Max Heights Infrastructure Limited has been established with the aim of providing high-quality real estate solutions to its customers. The Company specializes in developing residential, commercial, and mixed-use properties that cater to the evolving needs of its clients. With a commitment to excellence and a customer-centric approach, Max Heights Infrastructure Limited has gained a reputation for delivering projects that embody innovation, sustainability, and contemporary design.

In the dynamic landscape of the real estate industry, Max Heights Infrastructure Limited confronts various internal challenges that impact its operations. These challenges include managing the internal processes efficiently, maintaining a talented workforce, ensuring effective communication within the organization, and adapting to the changing market trends. The Company recognizes the importance of addressing these internal challenges to streamline its operations and maximize its performance.

Furthermore, Max Heights Infrastructure Limited also faces external factors that significantly influence its business environment. These external challenges consist of regulatory changes, market fluctuations, economic conditions, and competitive pressures. The Company must navigate through these complexities by staying updated with regulatory requirements, implementing robust risk management strategies, and continuously innovating to stay ahead of the competition.

Regulatory changes pose a notable external challenge for Max Heights Infrastructure Limited. The real estate sector is subject to a myriad of laws, regulations, and compliance requirements that govern land acquisition, construction permits, environmental considerations, and sales transactions. The Company must ensure strict adherence to these regulations to avoid legal complications and maintain its reputation as a trustworthy and law-abiding entity.

Market fluctuations also present a significant external challenge for Max Heights Infrastructure Limited. The real estate industry is in uenced by factors such as interest rates, in ation, market demand, and consumer preferences. These variables can impact the Companys sales, pricing strategy, and overall pro tability. Max Heights Infrastructure Limited must adopt a exible approach to adjust its business strategies according to market conditions and proactively identify

opportunities for growth.

Moreover, economic conditions play a crucial role in shaping the operating environment for Max Heights Infrastructure Limited. Economic factors, such as GDP growth, employment rates, and disposable income, can influence the purchasing power and demand for real estate properties. During economic downturns, the Company may experience a slowdown in sales and face challenges in project nancing. To mitigate these risks, Max Heights Infrastructure Limited must maintain a robust financial position, diversify its revenue streams, and explore strategic partnerships to withstand economic fluctuations.

Additionally, competitive pressures in the real estate industry pose a constant challenge for Max Heights Infrastructure Limited. The sector is characterized by intense competition, with numerous players vying for market share. The Company must differentiate itself by offering unique value propositions, maintaining a strong brand image, and delivering superior customer experiences. Continuous market research and analysis are essential to identify emerging trends, consumer preferences, and competitor strategies, allowing Max Heights Infrastructure Limited to adapt and stay ahead in the competitive landscape.

To address these challenges and succeed in the complex operating environment, Max Heights Infrastructure Limited employs a multi-faceted approach. The Company emphasizes the importance of efficient internal processes and has implemented robust systems and procedures to streamline its operations. This includes leveraging technology solutions for project management, customer relationship management, and financial controls. By optimizing internal processes, Max Heights Infrastructure Limited aims to enhance productivity, reduce costs, and improve overall organizational ef ciency.

Furthermore, the Company recognizes the significance of human capital and invests in recruiting, training, and retaining top talent. By fostering a culture of continuous learning and providing opportunities for professional growth, Max Heights Infrastructure Limited ensures that its workforce is equipped with the skills and knowledge to tackle challenges effectively. Strong leadership, effective communication channels

The Financial Statements have been prepared in compliance with the requirements of the Companies Act, 2013, Regulation 33 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) and the Indian Accounting Standards (Ind-AS) in India. Our Management accepts responsibility for the integrity and objectivity of these Financial Statements, as well as for the various estimates and judgments used therein. The estimates and judgments relating to the Financial Statements have been made on a prudent and reasonable basis, so that these Financial Statements reflect in a true and fair manner the form and substance of transactions and reasonably present our state of affairs, profits and cash flows for the Financial Year 2023-24.

I. ECONOMIC OVERVIEW

Global Economy

Despite the monetary headwinds and continued economic uncertainty around the world, there is a widespread view that in ation is moderating and interest rates may have peaked, and greater clarity on monetary policy since the turn of the year has brought a measure of relief. However, industry leaders across all three regions acknowledge that the geopolitical backdrop to investment is fraught with uncertainty (particularly in this year of elections) and may yet override the more stable monetary situation.

Indian Economy

Indian economy remained resilient with robust 7.6% growth rate of GDP in FY 2023-24

over and above 7% growth rate in FY 2022-23.

Double-digit growth rate of Construction sector (10.7%), followed by a good growth rate

of Manufacturing sector (8.5%) have boosted the GDP growth in FY 2023-24.

On the back of double-digit growth in Manufacturing sector (11.6%) sector, followed by a

good growth rate of Construction sector (9.5%), Real GDP grew by 8.4% in Q3 of FY

2023-24.

II. INDUSTRY GROWTH AND ANALYSIS

The Real Estate Industry In India Market size is estimated at USD 0.33 trillion in 2024, and is expected to reach USD 1.04 trillion by 2029, growing at a CAGR of 25.60% during the forecast period (2024-2029).

· Indias real estate market was affected by the COVID-19 pandemic. The residential sector was the worst hit as strict lockdown measures across major cities impacted housing sales as home registrations were suspended and home loan disbursement was slow. However, the sector recovered due to an increase in house sales, new project launches, and increasing demand for new office and commercial spaces, etc.

· The growth of this sector is well complemented by the growth in the corporate environment and the demand for office space as well as urban and semi-urban accommodation. The construction industry ranks third among the 14 major sectors in terms of direct, indirect, and induced effects in all sectors of the economy.

· In India, the real estate sector is the second-highest employment generator after agriculture. It is also expected that this sector will incur more non-resident Indian (NRI) investment, both in the short and long term. Bengaluru is expected to be the most favored property investment destination for NRIs, followed by Ahmedabad, Pune, Chennai, Goa, Delhi, and Dehradun. Retail, hospitality, and commercial real estate are also growing significantly, providing the much-needed infrastructure for Indias growing needs.

· According to industry reports, real estate demand for data centers is expected to increase by 15-18 million sq. ft. by 2025. Demand for residential properties has surged due to increased urbanization and rising household income. India is among the top 10 price-appreciating housing markets internationally.

India Real Estate Market Trend

Increasing Demand for Affordable Housing

· The high demand for affordable housing dominates the housing market. The current shortage of housing in urban areas is estimated to be 10 million units by the India Brand Equity Foundation. An additional 25 million units of affordable housing are required by 2030 to meet the growth in the countrys urban population.

· The real estate industry has benefited from the push for policy that has resulted in legislation like the Real Estate Regulatory Authority (RERA), the introduction of Real Estate Investment Trusts (REITs), and housing initiatives like PMAY (Pradhan-Mantri Awas Yojana) and SWAMIH (Special Window for Completion of Construction of Affordable and Mid-Income Housing Projects).

· In 2023, a target of 45,70,082 houses in the West Bengal state of India was allocated by the Ministry of Rural Development. Even though there is a big demand for housing in the country, residential launches have been on a comparatively high level over the past few years. In the financial year 2023-24, the total number of completed houses in urban areas of India under the Pradhan Mantri Awas Yojana (PMAY, The Prime Ministers Housing Plan) reached 1,58,37,128.

· Housing affordability in India was 3.3 in the financial year 2023, as compared to 3.2 in 2022, according to industry experts. As reported by the Reserve Bank of India, in the financial year 2022, banks in India advanced around INR 2 trillion (USD 24.44 billion) in housing loans, almost reaching pre-COVID levels. This reflected renewed homebuyer sentiment, as an increasing number of Indians have been investing in buying residential property, which continues to this day.

Office Real Estate Witnessing Lucrative Growth

· The Indian office real estate market has driven the growth of the commercial real estate sector in the past decades. Once dominated by information technology, office spaces are being increasingly leased by other sectors such as BFSI (banking, financial services, and insurance), engineering, manufacturing, e-commerce, and co-working sectors. The sector has demonstrated consistently low vacancy and high absorption rates.

· The Indian city of Bengaluru was estimated to have the highest net absorption among grade-A office spaces in the Asia-Paci c region. In the first quarter of 2022, the central business district (CBD) was the most expensive area for renting office space in Bengaluru, with a rental rate of INR 144 (USD 1.76) per square foot per month, according to industry experts.

· Commercial real estate investments have increased as a result of the Real Estate Regulation & Development Act (RERA) and Real Estate Investment Trusts (REITs). REIT owns, manages, and funds income-producing real estate. Office properties have emerged as the most popular sector for investment among high-net-worth individuals (HNI) in India and international PE investors, who together represent the majority of all equity investments in Indian real estate. Investors of all stripes are drawn to this industry by the high rental rates and better pro ts. Smaller homes and larger families contributed to the countrys increase in ex and co-working spaces.

· According to industry experts in the first quarter of 2022, the Bandra-Kurla complex was the most expensive area for renting office space in the Indian city of Mumbai, with a rental rate of around INR 276 (USD 3.36) per square foot per month. Navi Mumbai offered office space at the lowest rate of around INR 67 (USD 0.82) per square foot per month among all sub-markets of Mumbai. The average rent for Mumbai office market space was around INR 138(USD 1.68) per square foot per month.

III. DYNAMICS OF REAL ESTATE IN INDIA

Indias real estate sector has shown remarkable resilience and growth potential in recent years, driven by both market forces and government policies. The sector is expected to become a trillion-dollar market by 2030, with a focus on investment and innovation. Affordability initiatives have catalysed the expansion of the residential segment, ensuring that housing solutions are accessible to a wider demographic. Simultaneously, in the commercial realm, the exible office model has emerged as a transformative force, adapting to the changing preferences of consumers. Cities such as Mumbai, Pune, Hyderabad and NCR serve as the pulsating hubs driving demand in both residential and commercial segments. These urban landscapes encapsulate the con uence of economic activity, cultural richness and a burgeoning population, making them epicentres of real estate growth.

Moreover, the infusion of technology and sustainability principles has rede ned the contours of Indias real estate. From smart homes that integrate cutting-edge technology to data-driven insights guiding decision-making processes, the sector has been increasingly investing in technology. Sustainability has increasingly emerged as a focal point, in uencing construction practices and designs with a focus on energy ef ciency.

This dual commitment to technology and sustainability underscores a forward-looking

approach, aligning the sector with global standards and fostering innovation.

The report, titled Navigating the Dynamics of Real Estate in India, provides an in-depth exploration of these themes, offering stakeholders valuable insights into the multifaceted landscape that de nes the current state and future trajectory of the sector.

IV. INDUSTRY STRUCTURE AND DEVELOPMENT

The real estate sector is one of the most globally recognized sectors. It comprises of four sub-sectors - housing, retail, hospitality, and commercial. The growth of this sector is well complemented by the growth in the corporate environment and the demand for office space as well as urban and semi-urban accommodation. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy.

In India, the real estate sector is the second-highest employment generator, after the

agriculture sector. It was also expected that this sector will incur more non-resident

Indian (NRI) investment, both in the short term and the long term. Bengaluru was expected to be the most favoured property investment destination for NRIs, followed by Ahmedabad, Pune, Chennai, Goa, Delhi and Dehradun.

MARKET SIZE

By 2040, the real estate market will grow to Rs. 65,000 crore (US$ 9.30 billion) from Rs. 12,000 crore (US$ 1.72 billion) in 2019. Real estate sector in India is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021 and contribute 13% to the countrys GDP by 2025. Retail, hospitality, and commercial real estate are also growing significantly, providing the much-needed infrastructure for Indias growing needs.

Indias real estate sector is expected to expand to US$ 5.8 trillion by 2047, contributing

15.5% to the GDP from an existing share of 7.3%.

In FY 2023, Indias residential property market witnessed with the value of home sales reaching an all-time high of Rs. 3.47 lakh crore (US$ 42 billion), marking a robust 48% year-on-year increase. The volume of sales also exhibited a strong growth trajectory, with a 36% rise to 379,095 units sold.

Indian real estate developers operating in the countrys major urban centres are poised to achieve a significant feat in 2023, with the completion of approximately 558,000 homes.

In 2023, demand for residential properties surged in the top 8 Indian cities, driven by mid-income, premium, and luxury segments despite challenges like high mortgage rates and property prices.

Indias physical retail landscape is poised for a substantial boost, with nearly 41 million sq. ft of retail developments set to be operational between 2024 and 2028 across the top 7 cities, encompassing projects in various stages from construction to planning.

For the first time, gross leasing in Indias top seven markets surpassed the 60 million sq. ft mark, reaching an impressive total of 62.98 million sq. ft, marking a substantial 26.4% increase compared to the previous year. Notably, the December quarter emerged as the busiest quarter on record, with gross leasing hitting 20.94 million sq. ft.

Banking, financial services, and insurance (BFSI) rms held the highest share in leasing activity at 22% during 2023, with technology companies following closely at 21%. Engineering and manufacturing (E&M) companies accounted for 15%, and exible space operators held 14%, showcasing their notable contributions.

According to Savills India, real estate demand for data centres is expected to increase

by 15-18 million sq. ft. by 2025.

In 2023, office absorption in the top seven cities stood at 41.97 million Sq. ft. and Gross

Leasing Volume is at 62.98 million sq. ft.

Fresh real estate launches across Indias top seven cities grabbed a 41% share in the first quarter of 2023 (January-March), marking an increase from the 26% recorded in the same period four years ago. Out of approximately 1.14 lakh units sold across the top seven cities in the first quarter of 2023, over 41% were fresh launches.

According to the Economic Times Housing Finance Summit, about three houses are built per 1,000 people per year compared with the required construction rate of ve houses per 1,000 population. The current shortage of housing in urban areas is estimated to be ~10 million units. An additional 25 million units of affordable housing are required by 2030 to meet the growth in the countrys urban population.

GOVERNMENT INITIATIVES

Government of India along with the governments of respective States has taken several initiatives to encourage development in the sector. The Smart City Project, with a plan to build 100 smart cities, is a prime opportunity for real estate companies. Below are some of the other major Government initiatives:

· In the 2024-25 interim Budget, Finance Minister Nirmala Sitharaman announced a boost for Indias affordable housing sector by adding 2 crores more houses to the agship scheme PMAY-U.

· In the Union Budget 2023-24, the Finance Ministry announced a commitment of Rs. 79,000 crore (US$ 9.64 billion) for PM Awas Yojana, which represents a 66% increase compared to last year.

· In October 2021, the RBI announced to keep benchmark interest rate unchanged at 4%, giving a major boost to the real estate sector in the country. The low home loan interest rates regime was expected to drive the housing demand and increase sales by 35-40% in the festive season in 2021.

· Under Union Budget 2021-22, tax deduction up to Rs. 1.5 lakh (US$ 2,069.89) on interest on housing loan, and tax holiday for affordable housing projects have been extended until the end of scal 2021-22.

· The Atmanirbhar Bharat 3.0 package announced by Finance Minister Ms. Nirmala Sitharaman in November 2020 included income tax relief measures for real estate developers and homebuyers for primary purchase/sale of residential units of value up to Rs. 2 crore (US$ 271,450.60) from November 12, 2020, to June 30, 2021).

· In order to revive around 1,600 stalled housing projects across top cities in the country, the Union Cabinet approved the setting up of Rs. 25,000 crore (US$ 3.58 billion) alternative investment fund (AIF).

· Government created an Affordable Housing Fund (AHF) in the National

Housing Bank (NHB) with an initial corpus of Rs. 10,000 crore (US$ 1.43 billion) using priority sector lending short fall of banks/ financial institutions for micro

financing of the HFCs.

· As of December 31, 2022, India had formally approved 425 SEZs, and as of January 2023, 270 SEZs are operational. Most special economic zones (SEZs) are in the IT/ BPM sector.

ROAD AHEAD

The Securities and Exchange Board of India (SEBI) has given its approval for the Real Estate Investment Trust (REIT) platform, which will allow all kind of investors to invest in the Indian real estate market. It would create an opportunity worth Rs. 1.25 trillion (US$ 19.65 billion) in the Indian market in the coming years. Responding to an increasingly well-informed consumer base and bearing in mind the aspect of globalization, Indian real estate developers have shifted gears and accepted fresh challenges. The most marked change has been the shift from family-owned businesses to that of professionally managed ones. Real estate developers, in meeting the growing need for managing multiple projects across cities, are also investing in centralized processes to source material and organize manpower and hiring qualified professionals in areas like project management, architecture and engineering.

The residential sector was expected to grow significantly, with the central government aiming to build 20 million affordable houses in urban areas across the country by 2022, under the ambitious Pradhan Mantri Awas Yojana (PMAY) scheme of the Union Ministry of Housing and Urban Affairs. Expected growth in the number of housing units in urban areas will increase the demand for commercial and retail office space.

The current shortage of housing in urban areas was estimated to be ~10 million units. An additional 25 million units of affordable housing are required by 2030 to meet the growth in the countrys urban population.

The growing flow of FDI in Indian real estate is encouraging increased transparency. Developers, in order to attract funding, have revamped their accounting and management systems to meet due diligence standards. Indian real estate was expected to attract a substantial amount of FDI with US$ 8 billion capital infusion by FY22.

References: Media Reports, Press releases, Knight Frank India, VCEdge, JLL

Research, CREDAI-JL, Union Budget 2021-22, Union Budget 2023-24

III. INDUSTRY STRUCTURE

Structure of the Real Estate Industry:

The real estate industry in India comprises various stakeholders involved in the development, sale, purchase, and management of properties. These stakeholders include developers, builders, construction companies, real estate agents, brokers, financial institutions, investors, and buyers.

Developers and Builders:

Developers are the key players in the real estate industry. They acquire land, obtain necessary permissions and approvals, and undertake construction projects to develop residential, commercial, and mixed-use properties. Builders are responsible for executing the construction work as per the design and specifications provided by the developers.

Developers and builders can be classified into different categories based on their scale of operations. Large-scale developers undertake mega projects and are often publicly listed companies. They have the resources, expertise, and track record to execute projects of significant magnitude. On the other hand, small and medium-sized developers focus on niche segments or specific geographic areas. They may specialize in affordable housing, luxury projects, or commercial properties.

Real Estate Agents and Brokers: Real estate agents and brokers act as intermediaries between buyers and sellers. They help buyers in nding suitable properties and negotiate transactions on their behalf. These professionals earn a commission based on the value of the property transaction.

Real estate agents and brokers play a crucial role in connecting buyers and sellers in the real estate market. They provide market insights, facilitate property visits, assist in price negotiations, and help in the documentation process. Some agents specialize in specific segments, such as residential, commercial, or industrial properties, while others offer comprehensive services across multiple property types.

Financial Institutions: Banks, housing nance companies, and non-banking financial companies (NBFCs) play a vital role in the real estate sector. They provide loans and financial assistance to developers, builders, and buyers for property development, construction, and purchase.

Financial institutions offer various financing options, including home loans, construction loans, and loans against property. They evaluate the creditworthiness of borrowers, assess the project feasibility, and provide funds based on the value of the property and the repayment capacity of the borrower. The availability and cost of nance impact the affordability and demand for real estate properties.

Regulatory Authorities: The real estate sector in India is regulated by various authorities at the central and state levels. The key regulatory authority is the Real Estate Regulatory Authority (RERA), established in 2016. RERA aims to protect the interests of buyers, promote transparency, and regulate the real estate industry through registration of projects, disclosure of information, and resolution of disputes.

RERA mandates developers to register their projects with the regulatory authority, provide detailed project information, adhere to timelines, and maintain a separate escrow account for each project to ensure that the funds collected from buyers are utilized for that specific project. The authority also provides a platform for grievance redressal and dispute resolution between buyers and developers.

Apart from RERA, other regulatory bodies such as the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), and Competition Commission of India (CCI) also have roles in overseeing specific aspects of the real estate industry, such as nancing, real estate investment trusts (REITs), and competition regulations.

Industry Associations: Industry associations such as the Confederation of Real Estate Developers Associations of India (CREDAI) and the National Real Estate Development Council (NAREDCO) represent the interests of developers, builders, and other stakeholders. These associations work towards policy advocacy, promoting industry best practices, and addressing industry-related.

Industry associations play a significant role in shaping the policy framework and in uencing government decisions related to the real estate sector. They collaborate with regulatory authorities, government bodies, and other stakeholders to address industry-specific issues, provide training and skill development programs, and establish

standards and codes of conduct for the industry.

VI. OPPORTUNITES AND THREATS

Positive Indicators and Opportunities:

The real estate sector in India is witnessing a wave of optimism fueled by robust market growth and government initiatives. Reports indicate a steady upward trend, with stable interest rates and escalating property prices driving demand, particularly in the residential segment. The governments Housing for All initiative exempli es its commitment to accessibility and stability, aiming to address the housing de cit while stimulating economic activity through construction projects. Moreover, sustainability measures like the Green Rating for Integrated Habitat Assessment (GRIHA) signify a shift towards eco-friendly practices, aligning the industry with global trends and consumer preferences.

Challenges and Considerations:

While the outlook appears promising, the real estate sector faces a myriad of challenges that demand careful consideration. Effective policy implementation is paramount, as the success of governmental initiatives hinges on streamlined processes and transparency. Affordability remains a significant concern, despite commendable efforts like the Pradhan Mantri Awas Yojana (PMAY) targeting low and middle-income segments. Addressing the affordability gap requires attention to land acquisition complexities and infrastructure development in affordable housing projects. Moreover, maintaining market balance, especially in the luxury segment, necessitates vigilant monitoring to prevent potential corrections and market imbalances.

Speci c Policy Examples and Impact:

Several policy measures are reshaping the real estate landscape and in uencing market dynamics in 2024. The proposed increase in rebate on home loan interest rates aims to make homeownership more accessible, stimulating demand and market growth. Additionally, the governments focus on Tier II and III cities through initiatives like the Smart Cities Mission opens up new avenues for real estate development beyond traditional metros. Digitalisation efforts, such as centralised digital property registration platforms, promise enhanced transparency and ef ciency in transactions, paving the way for a more streamlined market. Moreover, the industrys push for granting industry status to real estate reflects the need for broader recognition and potential benefits like easier access to credit and tax breaks.

Market Size and Growth Projections:

Looking ahead, market projections for 2024 indicate a robust trajectory, with experts predicting significant growth in new residential launches. Affordable housing initiatives like PMAY continue to play a pivotal role in addressing housing needs, contributing to increased housing supply for low-income groups. Foreign Direct Investment (FDI) emerges as a catalyst for economic growth, with the potential in ux of foreign capital positioning India as an attractive destination for global real estate investment. Employment statistics further underscore the sectors socio-economic impact, with over 80 million people currently employed in the real estate and construction sector, reflecting its significant role in job creation and overall development.

SWOT ANALYSIS

Strengths

Discover the inherent strengths that position Real Estate Agency Services as pillars of

success in the dynamic real estate market.

· Expertise and Industry Knowledge: Real estate agents possess specialized knowledge, enabling them to provide clients with valuable insights and navigate complex transactions.

o Example: Offering niche expertise in luxury properties or specific neighborhoods enhances the agencys credibility and attracts clients seeking specialized services.</p>

· Established Network and Relationships: Successful real estate agencies have a well-established network of industry connections, including mortgage brokers, inspectors, and legal professionals.

o Example: Leveraging an extensive network ensures smooth transactions and

can lead to exclusive property listings, giving the agency a competitive edge.

· Effective Marketing Strategies: The ability to craft and execute effective marketing strategies helps real estate agencies showcase properties and attract potential buyers or tenants.

o Example: Utilizing digital marketing channels, such as social media and

targeted online advertising, maximizes property exposure and generates leads.

· Local Market Insights: Real estate agents possess valuable local market insights, enabling them to advise clients on property values, neighborhood trends, and investment opportunities.

o Example: Regularly providing clients with market reports and trend analyses demonstrates the agencys commitment to keeping clients informed and making informed decisions.

Weaknesses

Identifying weaknesses is essential for real estate agencies to address challenges and

continually improve their services.

· Dependency on Market Conditions: Real estate agencies are highly dependent on market conditions, and economic downturns can impact property demand and sales.

o Example: Diversifying services, such as property management or rental

assistance, can provide a steady income stream during market fluctuations.

· Intensive Competition: The real estate sector is highly competitive, and

agencies may struggle to differentiate themselves from numerous competitors.

o Example: Developing a unique selling proposition, such as specialized

expertise in a particular property type or market segment, distinguishes the agency in a crowded eld.

· Reliance on Commission-Based Model: The commission-based model can

create income variability and financial instability during periods of slow sales.

o Example: Exploring alternative revenue streams, such as consulting services or

educational workshops, helps offset potential income fluctuations.

· Vulnerability to Economic Trends: Economic uncertainties and interest rate fluctuations can impact homebuyers purchasing power and overall market stability.

o Example: Offering exible financing options or collaborating with mortgage brokers to secure favorable rates can mitigate the impact of economic uncertainties.

Opportunities

Identifying and capitalizing on opportunities positions real estate agencies for sustained

success in a dynamic market.

· Digital Transformation: Embracing technological advancements, such as virtual tours and online platforms, enhances property marketing and client engagement.

o Example: Investing in virtual reality property tours or utilizing advanced CRM

systems improves the agencys digital presence and attracts tech-savvy clients.

· Specialized Niche Markets: Identifying and catering to specialized niche markets, such as eco-friendly properties or smart homes, taps into emerging trends.

o Example: Developing expertise in sustainable properties or energy-ef cient homes positions the agency as a go-to resource for environmentally conscious clients.

· Global Expansion Opportunities: Expanding services to international markets or collaborating with global real estate networks opens avenues for increased business.

o Example: Forming partnerships with international real estate agencies or offering multilingual services attracts a diverse clientele and broadens the agencys reach.

· Strategic Partnerships: Collaborating with complementary businesses, such

as home staging companies or interior designers, enhances service offerings.

o Example: Establishing partnerships with local businesses provides additional

value to clients and creates a holistic approach to property transactions.

Threats

Anticipating and mitigating threats is vital for real estate agencies to sustain success and

adapt to changing market conditions.

· Legal and Regulatory Changes: Evolving housing regulations and legal requirements may pose challenges and require adjustments to business practices.

o Example: Staying abreast of legislative changes, conducting regular compliance audits, and seeking legal counsel ensure adherence to updated regulations.

· Economic Downturns and Recessions: Economic downturns can impact housing demand, leading to reduced property transactions and commission income.

o Example: Implementing cost-effective marketing strategies during economic downturns or offering incentives, such as reduced commission rates, can maintain client engagement.

· Technological Disruptions: Rapid technological advancements may render

certain traditional real estate practices obsolete.

o Example: Embracing proptech innovations, such as blockchain for secure transactions or AI for predictive analytics, ensures the agency remains at the forefront of industry trends.

· Changing Consumer Preferences: Shifts in consumer preferences, such as a preference for online transactions, may require real estate agencies to adapt their service delivery.

o Example: Integrating online platforms for property transactions and enhancing digital communication channels caters to the evolving preferences of modern consumers.

VII. RESIDENTIAL REAL ESTATE

Residential Real Estate in India Market Analysis

The India Residential Real Estate Market size is estimated at USD 227.26 billion in 2024, and is expected to reach USD 687.27 billion by 2029, growing at a CAGR of 24.77% during the forecast period (2024-2029).

There is a massive demand for affordable housing in many parts of the country, propelled by rapid urbanization. Apart from it, there is a significant increase in demand for luxury and big housing spaces due to the need for better lifestyles.

· One of Indias most powerful economic foundations is real estate. Rapid urbanization, changing consumer behaviour, regulatory reforms, and the pandemics impact are all driving this pillars evolution. The real estate industry has begun to recover after the pandemic. The year 2021 was a watershed moment in Indias residential real estate sector. The strong momentum in the housing market is expected to continue in 2022-2023, with sales likely to reach pre-pandemic levels.

· Implementing initiatives that generate demand and encourage people to buy real estate propels the market forward. Ready-to-move-in apartments have been in high demand among buyers in the residential category. In these circumstances, however, educating customers better and managing expectations is critical. The trends that have been observed are revolutionary. In India, the real estate industry is undergoing a technological transformation. Throughout the industry, several cutting-edge strategies and solutions are being implemented. The markets growth trajectory has accelerated due to these new developments.

· One of the most well-known developments in home automation exempli es an excellent combination of technology and real estate. These venues have a huge potential to attract a diverse range of investment opportunities and forward-thinking individuals. Due to long wait times and increasing project failures, under-construction properties gradually lose their allure. As a result, ready-to-move-in homes are gaining popularity. To align with this viewpoint, many builders have adopted the business strategy of building first and selling later. This popular European and American home concept makes inroads into Indias real estate market.

· With the requirement that Real Estate Investment Trusts (REITs) have 80% of their underlying assets operational and income-generating, such properties have become a more viable investment option than traditional options. It is a low-risk method of diversifying ones investment portfolio. Even though the pandemic has strained rental cash ow, a strong and upward-trending long-term picture is anticipated. Property ownership is becoming more popular. Although this has aided in the formation of positive consumer sentiment toward residential real estate, the governments and banking industrys support got things going. The convergence of these two elements improved demand and supply metrics. After spending a significant amount of time working indoors, many homeowners have realized the utility of larger homes.

Residential Real Estate in India Market Trends

This section covers the major market trends shaping the India Residential Real Estate

Market according to our research experts:

Increasing Demand for Big Residential Spaces Driving the Market

· Despite biting in ation and higher interest rates, the real estate market has gradually recovered from COVID-19 lockdowns. According to a new report by industry experts, sales of residential properties in Indias top cities increased by

24% in the July-September quarter of 2022 compared to the same period in 2021. According to the report, total sales in the third quarter of 2022 were 1,08,817 units, up from 87,747 units in the same quarter of 2021. This report includes Bengaluru, Chennai, Hyderabad, Kolkata, Thane, Mumbai, Navi Mumbai, Pune, and Delhi-NCR as Tier-1 cities.

· The need for a lifestyle upgrade among homebuyers, low-interest rates, comparatively low prices, and the pandemics renewed need for home ownership have been the primary drivers of sales growth. Developers strategically responded to the demand momentum and shift in sentiment by launching 160,806 units in H1 2022, 56% more than in the same period in 2021. Mumbais 44,200 home unit sales volume accounted for 28% of total sales among the top eight markets. Regarding annual percentage growth, home sales in the NCR increased 154% yearly to 29,101 units. NCR had the second-highest share of sales among the countrys top eight real estate markets.

· Low-interest rates, the best affordability levels, healthy wage growth, and a waning pandemic with less risk of further disruptions have created a favorable environment for homebuyers who have rediscovered the need for new and better housing. While financial stress remains a significant factor for developers across markets, healthy and sustained homebuyer activity should pave the way for gradual price increases, allowing them to weather increases in critical input costs such as cement and steel.

Central and State Governments Pushing Toward Affordable Housing Driving the Market

· The Indian real estate sector is expected to reach USD 1 trillion by 2030, with affordable housing playing a key role in this growth. With a population growing at a rate of 2.1% per year on average and the low purchasing power of a significant portion of our population, meeting the 40 million urban housing demands once seemed like a distant dream. However, things have changed in the last few years, with the government making several important announcements (some examples) to promote affordable housing. It has emerged as one of the most dynamic segments of the Indian real estate market.

· The technology used to build houses at a faster pace was innovative under the Pradhan Mantri Awas Yojana-Urban (PMAY-U), which was launched to address urban housing shortages, including slum dwellers, by ensuring a pucca house to eligible urban households, particularly the Light House projects in six States as part of the Global Housing Technology Challenge - India (GHTC -India) initiative. The initiative ushered in a new era in Indian construction technology, giving impetus to the Make in India initiative. LHPs will pave the way for a new ecosystem in which globally proven technologies will be used for cost-effective, environmentally friendly, and faster construction. The benefits of these LHPs are numerous, primarily durability, climate resilience, and affordability.

· However, there is still a significant supply shortage in this segment, with more people looking to buy in urban areas where the emphasis has been on high-value properties. While not many nanciers were willing to nance customers looking for affordable housing a few years ago, most of the industrys big names are now entering affordable housing to make it a viable business model. They are entering the affordable housing sector to address the markets current demand-supply imbalance. Many such projects have emerged in Tier II and III cities, fueling growth in those towns and cities.

VI. OUTLOOK

The management has a positive outlook towards the future as they plan to undertake various land development and construction projects. Their focus is on the development of residential projects such as townships, villas, penthouses, studio apartments, and also the development of commercial complexes.

In the residential sector, the management aims to cater to the increasing demand for housing and create vibrant communities. They envision the development of well-planned townships that offer a range of housing options to suit different needs and preferences. This includes the construction of villas, penthouses, studio apartments, and other types of residential units. By providing diverse housing choices, the management aims to address the requirements of different segments of the population.

Additionally, the management recognizes the importance of commercial development in driving economic growth. They plan to focus on constructing commercial complexes that offer modern office spaces, retail outlets, and other amenities. These complexes will provide a conducive environment for businesses to thrive and contribute to the overall

development of the region.

By undertaking these land development and construction projects, the management aims to create quality infrastructure and contribute to the growth of the real estate sector. They anticipate that these projects will not only meet the growing demand for residential and commercial spaces but also stimulate economic activity and generate employment opportunities.

Overall, the management is optimistic about the prospects of their projects and looks forward to making a positive impact on the real estate landscape by delivering high-quality developments that meet the needs and aspirations of individuals and businesses alike. etc.

VII. RISKS & CONCERNS

As an infrastructure company, there are several risks and concerns that the company needs to address in order to ensure its smooth operations and sustainable growth. These risks include credit risk, market risk (including liquidity and interest rate risk), operational risk, legal risk, and risks associated with investment management and the operating environment.

Credit risk is a concern for the company, as it involves the potential for non-payment or delayed payment by clients or counterparties. The company closely monitors credit risks and implements measures to assess and manage them effectively.

Market risk, which includes liquidity risk and interest rate risk, poses challenges to the companys financial stability. Fluctuations in market conditions and interest rates can impact the companys pro tability and cash ow. The company actively monitors market risks and takes appropriate measures to mitigate them.

Operational risk is another significant concern for the company. It includes risks associated with internal processes, technology systems, human resources, and regulatory compliance. The company emphasizes strong operational controls and risk management practices to minimize operational risks and ensure operational ef ciency.

Legal risk is inherent in the companys operations and activities. The company relies on its legal department and external advisers to identify and address legal risks, including compliance with applicable laws, regulations, and contractual obligations.

In addition to these general risks, the company is exposed to specific risks related to its investments and the overall operating environment. It closely monitors government policies and measures that may impact its business operations, and takes necessary actions to mitigate any associated risks.

Overall, the company recognizes the importance of understanding, measuring, and monitoring the various risks it faces. It has established policies and procedures to mitigate these risks as far as reasonably and practically possible, ensuring the companys resilience and adherence to best risk management practices.

VIII. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Maxheights is a system-driven company. Our effective internal control system plays a crucial role in our efficient daily operations. The Company follows a systematic method of financial reporting of various transactions, ef ciency of operations, safeguarding of assets and compliance with applicable statute and regulations. Our structured audit system is an on-going process. It forms abasis for reviewing the adequacy of internal control systems.

Our internal control is aptly designed, ensuring reliability of financial and other records

necessary for the preparation of financial information and other related data.

Our exhaustive budgetary monitoring control system helps evaluate the performance. This evaluation is done with reference to budgeted performance by the management review committee daily. The discrepancies, if any, with actual performance and the budgets are methodically analysed regularly. The Audit Review Committee, then suggests possible remedial actions.

The internal audit is carried by the internal team and Internal Auditors of the Company. The reports, thereby prepared, are reviewed in the Audit Committee meetings. Corrective measures to strengthen the internal controls are suggested and taken in consideration. Further, the suggestions by Internal Audit Committee are reviewed and considered by Audit Committees. This is done on a quarterly basis. The motto here is improvement of internal controls and systems within the Company.

The Board then reviews the Internal Audit Committees suggestions. Post reviewing, the Board approves appropriate suggestions and the resultant reports are reviewed by the Audit Committee and the Board members together.

IX. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO

OPERATIONAL PERFORMANCE

Operations & Financial Review (Standalone)

Particulars	For the Financial Year Ended
	31.03.2024	31.03.2023
Revenue	2,220.53	603.98
Revenue from Operations (net)	69.23	0.15
Other income	2,289.76	604.13
Total Revenue
Expenditure
Purchase of stock-in-trade	328.13	155.09
Changes in inventories of finished goods, work-in-	1,782.08	242.02
progress and stock-in-trade
Employee benefits expense	37.92	36.60
Finance costs	38.46	82.26
Depreciation and amortisation expense	23.33	14.86
Other Expenses	37.31	49.52
Total Expenses	2,247.22	580.35
Pro t / (Loss) before exceptional and extraordinary items and Tax	42.54	23.78
Exceptional items	-	-
Pro t / (Loss) before extraordinary items and tax	42.54	23.78
Extraordinary items	-	-
Pro t / (Loss) before Tax	42.54	23.78
Tax expense
Current tax	11.32	2.14
Earlier years tax	-	-
Deferred tax	0.41	0.73
Total Tax Expense	11.73	2.87
Pro t / (Loss) from continuingoperations	30.81	20.91
Pro t / (Loss) for the year	30.81	20.91
Earnings per equity share
Basic	0.20	0.13
Diluted	0.20	0.13

The silent features of the financial performance are:

· The total revenue has increase from Rs. 604.13 Lakhs to 2,289.76 Lakhs.

· The expenses of the company has increased from 580.35 Lakhs to 2,247.22

Lakhs.

· The company has earned a profit of Rs. 42.54 Lakhs during the year 2023-24.

· Segment-wise or product-wise performance-as detailed in Boards Report.

VI. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES OR INDUSTRIAL

RELATIONS FRONT INCLUDING NUMBER OF PEOPLE EMPLOYED

Max recognizes that human resources are the foundation of its business success. The company places a strong emphasis on attracting and retaining top talent, as it understands that skilled and motivated employees are crucial for achieving its goals.

To nurture and maximize the potential of its workforce, Max invests in personal development initiatives. The company regularly conducts training programs that cover both technical and managerial skills. These initiatives aim to enhance the capabilities of employees, enabling them to perform their roles effectively and contribute to the growth and success of the organization.

Technical training equips employees with the necessary knowledge and skills related to their specific job roles. It ensures that they stay updated with the latest industry trends, advancements, and best practices. This training helps employees excel in their respective elds and deliver high-quality work.

Managerial training focuses on developing leadership skills, decision-making abilities, problem-solving techniques, and other essential competencies needed for effective management. This training empowers employees to take on leadership roles, manage teams, and drive organizational growth.

By investing in personal development initiatives, Max demonstrates its commitment to the growth and well-being of its employees. These initiatives not only enhance employee skills but also foster a culture of continuous learning and improvement within the organization. They contribute to creating a motivated and engaged workforce that is

capable of adapting to evolving business challenges and driving innovation.

Overall, Max recognizes that the development of its human resources is vital for sustaining its competitive edge and achieving long-term success in the dynamic business environment.

VII. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:

Particulars	FY 2023-24	FY 2022-23	% change
Debtors Turnover	677.47	49.10	628.37
Inventory Turnover	0.76	0.10	0.66
Interest Coverage	2.71	1.47	1.24
Ratio
Current Ratio	21.59	16.85	4.74
Debt Equity Ratio	0.04	0.29	0.25
Operating Pro t
Margin
Net Pro t Margin	1.94	4.05	2.11
Return on Net Worth	2.45	2.54	0.09

The Return on Net Worth (RONW) for Maxheights, an infrastructure business, experienced a significant change in the financial years 2022-23 and 2023-24. In 2022-23, the RONW was 2.54%, while in 2023-24, it decreased to 2.45%. This represents a substantial change of 0.09% in RONW.

The decrease in RONW can be analyzed by considering various factors. One possible reason for the decline is a decrease in the net profit earned by Maxheights during the financial year. This could be due to factors such as increased expenses, decreased revenue, or operational challenges faced by the company.

Another factor contributing to the change in RONW could be an increase in the net worth of Maxheights. If the net worth increased significantly while the net profit remained relatively stable, it would result in a lower RONW. This could occur if the company made substantial investments, acquisitions, or raised additional capital during the financial year, thereby increasing its net worth without a corresponding increase in net pro t.

It is crucial for Maxheights to thoroughly analyze the reasons behind the decrease in RONW and take appropriate actions to address any underlying issues. This may involve implementing cost control measures, improving operational ef ciency, exploring new business opportunities, or reevaluating financial strategies.

The change in RONW highlights the need for Maxheights to focus on enhancing pro tability and optimizing the utilization of its net worth. By addressing the factors that led to the decrease in RONW, the company can strive to improve its financial performance and strengthen its position in the infrastructure business.

Cautionary Statement

This Management Discussion and Analysis contains forward-looking statements regarding the Companys objectives, projections, estimates, and expectations. These statements are subject to various risks and uncertainties, and actual results may differ significantly or materially from those expressed or implied in such statements.

The Company cautions that there are important factors and developments that could affect its operations and financial performance. These factors include, but are not limited to, the potential downward trend in the real estate sector, significant changes in the political and economic environment in India or key financial markets abroad, changes in tax laws, potential litigation, labor relations issues, fluctuations in exchange rates, and fluctuations in interest rates and other costs.

The Company advises readers to carefully consider these factors and to not unduly rely on forward-looking statements. These statements are based on current expectations, assumptions, and projections, and the Company disclaims any obligation to update or revise any forward-looking statements based on new information, future events, or other factors.

Investors and stakeholders should be aware that actual results may differ from the forward-looking statements and should exercise caution and judgment when making investment decisions based on such statements.

By Order of Board of Directors
For Max Heights Infrastructure Limited
SD/-	SD/-
Naveen Narang	Mansi Narang
Managing Director and CFO	Director
DIN: 00095708	DIN: 07089546
	st
Max Heights Infrastructure Limited	Date: 21	June, 2024
Regd. Off.: SD-65, Pitampura, New Delhi-110034	Place: Delhi
CIN:L67120DL1981PLC179487
E-Mail ID: maxinfra1981@gmail.com, cs@maxheights.com