Sobha Ltd Management Discussions

MARKETS AND OPERATING ENVIRONMENT

MACROECONOMIC OVERVIEW

GDP REGISTERED A CAGR OF 5.7% BETWEEN FY 2012 AND FY 2023

The countrys gross domestic product ("GDP") increased at a compound annual growth rate ("CAGR") of 5.7% to ?161 trillion in FY 2023 from ?87 trillion in FY 2012. In FY 2022, the economy recovered from the pandemic-related stress as restrictions were eased and economic activity resumed, though inflation spiralled in the last quarter due to geopolitical pressures, with a GDP print of 9.8% vs -5.8% in FY 2021. In FY 2023, GDP rose 7.0% on strong growth momentum propelled by investments and private consumption. The share of investments in GDP rose to an 11-year high of 34% and that of private consumption to an 18-year high of 58.0%.

In FY 2024, real GDP is expected to grow by 7.6%. Even as the agricultural economy slowed sharply in FY 2024 following a weak monsoon, the surge in non-agricultural economy has more than offset it. The government-driven investment push, along with easing input cost pressures for industry, has also played a major role in shoring up growth. However, Services have been slowing with waning pent-up demand (post pandemic), with the exception of Financial, real est?te and professional services, which has powered ahead on the back of robust growth in banking and real estate. In FY 2025, CRISIL expects the countrys GDP to expand 6.8%, driven by the manufacturing sector, strong growth in investments and resilient domestic demand. However, it will be slower than FY 2024 due to slowing global growth, impact of rising interest rates, wanning of pent-up demand for services and increasing geopolitical uncertainty.

INDIAS PER CAPITA GDP HAS GROWN FASTER THAN THE GLOBAL AVERAGE

Global GDP per capita clocked a CAGR of 1.8% between 2012 and 2022, as per the IMF data. Meanwhile, Indias corresponding figure registered a CAGR of 5.2%.

Per capita GDP at current prices ($)	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023P	CAGR 2012 2022
India	1,434	1,438	1,560	1,590	1,714	1,958	1,974	2,050	1,913	2,238	2,392	2,612	5.2%
World	10,748	10,923	11,077	10,330	10,378	10,906	22,457	11,500	11,077	12,468	12,895	13.333	1.8%

CONSUMER DEMAND IN INDIA EXPECTED TO GROW AT HEALTHY PACE WITH RISING PER CAPITA INCOME

Indias per capita income, a broad indicator of living standards, rose from ?63,462 in FY 2012 to ?99,404 in FY 2023, logging 4.2% CAGR. Growth was led by better job opportunities, propped up by overall GDP growth. Moreover, population growth remained stable at approximately 1% CAGR. Furthermore, according to second advance estimates, per capita net national income (constant prices) is estimated to have increased to ?106,134; thereby registering a y-o-y growth of approximately 6.8%.

	FY12	FY13	FY14	FY15	FY16	FY17	FY18	FY19	FY20	FY21RE	FY22PE	FY23RE	FY24SAE
Per Capita Income (?)	63,462	65,538	68,572	72,805	77,659	83,003	87,586	92,133	94,270	86,054	94,054	99,404	106,143
On-year growth (%)		3.3	4.6	6.2	6.7	6.9	5.5	5.2	2.3	-8.7	9.3	5.7	6.8

CONSUMPTION EXPENDITURE TO BE DRIVEN BY DISCRETIONARY ITEMS

Basic items accounted for 42.1% of the total consumption expenditure of Indians in FY 2022, with discretionary items

accounting for the remainder 579%. The share of basic items increased in FY 2021 to 43.6% as the pandemic decreased the expenditure on discretionary items. As things started returning to normalcy, share of discretionary items increased in FY 2022. It is worth noting that the share of discretionary items in consumption increased to 59.6% in FY 2020 from 53.4% in FY 2012. The increased spending on discretionary items suggests rising disposable income of households.

DEMOGRAPHIC INDICATORS

GROWING POPULATION, INCREASING URBANISATION AND A YOUNG DEMOGRAPHIC PROFILE TO FURTHER STRENGTHEN INDIA S CONSUMER BASE

Indias population grew to approximately 1.2 billion according to Census 2011, at a CAGR of 1.9% between 2001 and 2011, and the country had approximately 246 million households.

As per United Nations Population Funds ("UNFPA"), State of World Population Report of 2023, Indias population by mid-year of 2023 is estimated to have surpassed China by around approximately 2.9 million.

Also, Indias urban population is expected to continue to rise on the back of economic growth. The urban population is projected to increase to nearly 40% by 2030 from ~31% of the total population in 2010, according to a UN report on urbanisation.

The fact that approximately 31% of the population in India is aged below 15 years indicates that a high proportion of the countrys population is expected to remain young in the coming years.

SECTOR OVERVIEW

RESIDENTIAL DEMAND IN SIX KEY CITIES CLOCKED 7.2% CAGR GROWTH BETWEEN FY 2019 AND FY 2023

Demand in the six key cities (NCR, MMR, Pune, Ahmedabad, Hyderabad and Bengaluru) was 182 million square feet (msf) in FY 2019 with respect to residential real estate. Demand dropped slightly by 2% in FY 2020 due to the onset of the pandemic before declining sharply by 38% in FY 2021 due to the full effects of COVID-19 pandemic. Demand bounced back sharply in FY2022 and FY2023 to 180 million square feet (msf) and 240 million square feet (msf) respectively from lower base of in FY 2021 (129 msf). Stabilization of income of the organised workforce, multi-year high affordability, higher preference of owned house (than rented), preference of larger homes and government incentives for affordable housing remained key growth drivers for recovery. FY 2023 witnessed an increased demand towards premium residential projects, reflected in growth of luxury home sales.

RESIDENTIAL DEMAND IN 6 KEY CITIES TO CLOCK CAGR 8-10% GROWTH BETWEEN FY 2023 AND FY 2025

FY 2023 to FY 2025 is expected to see CAGR 8% to 10% rise in demand supported by continued urbanization, steady income profiles, expected growth in employment generating sectors such as Information Technology, banking, financial Services & insurance ("BFSI"), financial sectors, and rising affluence and propensity to spend on real estate by mid-income buyers. The demand in first half of FY 2024 has been robust as middle- and high-income group are looking for bigger spaces with better amenities. The homebuyers need for security and personal space, and amenities within residential areas are supporting the demand for residential real estate in six key cities.

ANNUAL SUPPLY (NEW LAUNCHES) EXPECTED TO GROW AT 13% TO 15% CAGR BETWEEN FY 2023 AND FY 2025

Supply decreased to 75 msf in FY 2021 from 205 msf in FY 2019 due to projects getting deferred during the pandemic. In FY 2022 and FY 2023 higher number of new launches were witnessed, and many more projects are lined up over the next three FYs. This is expected to lead to annual supply (new launches) reaching 310-320 msf by FY 2025.

Inventory levels in six key cities registered a decline in FY 2022 and FY 2023 owing to pent-up demand created by the pandemic and is expected to recover due to launch of new supplies in these cities.

KEY GROWTH DRIVERS, TRENDS, AND CHALLENGES IN RESIDENTIAL REAL ESTATE SECTOR

GROWTH DRIVERS

Rise in urbanization to create demand for residential real est?te in urban India

Urbanisation provides an ?mpetus to housing demand in urban areas as migrants from rural areas require dwelling units. In 2020, about 35% of the Indian population lived in urban areas of the country and this share of urban population is expected to increase to about 40% by 2030. This trend in urbanization has pushed the demand for houses in urban areas.

People from rural areas move to cities for better job opportunities, education, avail better lifestyle etc. A family living in a rural area may migrate to an urban area as whole or only a few people (generally earning member or students) may migrate, while a part of the family continues to hold their native house. Urbanization has a twin impact on housing demand. On the one hand, it reduces the area per household, and on the other, there is a rise in the number of nuclear families, which leads to the formation of more households.

Nuclearisation (rise in nuclear families)

Nuclearisation refers to the formation of multiple single families out of one large joint family; each of these families live in separate houses while the ancestral house may be retained or partitioned to buy new houses. Nuclearisation in urban areas is primarily driven by the changing lifestyle of people, individualism, changing social/cultural attitudes and increased mobility of labor in search of better employment opportunities. These trends are expected to continue in future. With increasing nuclearisation, the Per Capita Floor Space Area ("PCFSA") required reduces since size of the family shrinks. As incomes increase, people shift to bigger houses and thus, there is addition in existing demand.

Affordability led by disposable income

Indias per capita income, a broad indicator of living standards, rose from ?63,462 in FY 2012 to ?99,404 in FY 2023, logging 4.2% CAGR. Going forward, the per capita income is expected to continue its growth trajectory. This will be an enabler for domestic consumption. Increasing disposable income, typically, has a positive correlation with demand for housing units as it increases the affordability.

Per capita NNI at constant prices

	FY12	FY13	FY14	FY15	FY16	FY17	FY18	FY19	FY20	FY21RE	FY22PE	FY23RE	FY24SAE
Per Capita NNI (?)	63,462	65,538	68,572	72,805	77,659	83,003	87,586	92,133	94,270	86,054	94,054	99,404	106,143
On-year growth (%)		3.3	4.6	6.2	6.7	6.9	5.5	5.2	2.3	-8.7	9.3	5.7	6.8

Infrastructure development across India is driving growth in the real est?te sector

The development of infrastructure plays a key role in enhanclng the demand for residential real est?te. Infrastructure development leads to increase in connectivity through railways, air, and road, reducing commute time. Well planned transportation infrastructure attracts investments and business, which further creates demand for commercial and residential real estate. Also, other infrastructure development, such as medical facilities, educational institutions, entertainment hubs, retail markets, business centers, schools, retail outlets etc., promote real estate prices as these infrastructure projects are the most preferred aspect for residential real estate buyers.

Focus on integrated lifestyle especially by millennial buyers

Nowadays, residential real estate buyers, especially millennials, have key preferences for their homes. These buyers look for work-life balance and seek residences that offer modern amenities, vibrant communities, and access to leisure and entertainment options. They prefer integrated townships with gated communities which offer a variety of amenities such as fitness centers, swimming pools, and recreational spaces. Due to this, developers today are focusing on offerings to cater these lifestyle-based preferences, resulting in real estate development projects for aspirations and dreams of millennial generation.

Technology is revolutionizing residential real estate in India

With the rise in technological advancements, various sectors have gone through transformations including the residential real estate sector. The fusion of technology in residential real estate sector is enhancing transparency, efficiency, and innovation in the industry across property search, financing, management etc.

• Property discovery: Technology enabled the easy discovery of properties in the diverse and vast residential real estate market in India with efficiency and user-friendly platforms. Online property listing platforms offer detailed information about different types of properties with high resolution images coupled with Virtual Reality ("VR") and Augmented Reality ("AR") features, which enhance the property viewing experience for buyers.

• Construction process: Technology has not only impacted the residential real estate industry for buyers, but also impacted the developers process of construction. Building Information Modelling (BIM) technology enables the developer to plan and visualize construction of projects, which helps in minimizing errors and optimizing resource allocation. Apart from BIM, drones help developers with site surveys, offering real time insights into construction stages and challenges.

• Online property transactions: Online platforms are changing the process of property transactions. These platforms enable digital property transfers, leading to dip in requirements of physical paperwork and in-person interactions.

• Customer data management: Through modern software tools and customer relationship management systems, real estate developers are able to collect and preserve customer data. These tools enable builders to analyze customer data for insights, such as customers preferences, buying behavior, feedback, etc. Through this data, developers can modify their sales strategy and improve overall customer experience.

OUTLOOK OF OUR MARKETS

A. REAL ESTATE

Sobha is the foremost backward integrated company in the real estate space. Since inception, the Company has taken pride in doing things in-house - to have absolute control over the quality and timely delivery of our products. The Company continues to be laser focussed on our product above anything else. To delight a homebuyer and exceed his/her expectations has been our constant endeavour, which has given us the recognition and reputation of delivering international quality homes in the market. Sobha is present in 11 cities across 6 states; in Bengaluru, Gurugram (NCR), Chennai, Thrissur, Kochi, Kozhikode, Coimbatore, Pune, Thiruvananthapuram, Hyderabad and GIFT City (Gujarat). While the Company is present in major cities in India, it is also constantly exploring new markets, such as Noida, Mumbai etc.

With Sobhas unique self-reliant model, strong brand name and unmatched execution capabilities, the Company continues to deliver all projects on time. The Company currently has ongoing real estate projects aggregating to 34.32 million square feet of developable area and 24.38 million square feet of saleable built-up area, and ongoing contractual projects aggregating to 4.05 million square feet under various stages of construction.

As on March 31, 2024, SOBHA has delivered overall 136.25 million square feet of developable area. Since its inception, the Company has completed real estate projects measuring 77.10 million square feet of developable area and 56.74 million square feet of super built-up area.

During the year, in Real Estate, the Company has completed construction activities to the extent of 6.76 million square feet of total developable area and 4.40 million square feet of super built-up area and launched 6 new projects across India.

BENGALURU

Bengaluru Urban registered a Gross District Domestic Product growth of 16.2% CAGR between FY 2012 and 2022 at current prices

Bengaluru Urban district has seen a rapid growth in population with an estimated population of approximately 12 million in FY 2023, an approximately 25% growth compared to 2011 figures. Bengaluru Urbans Gross District Domestic Product (GDDP) was ?6,985 billion at current prices in FY 2022, registering a CAGR of 16.2% between FY 2012 and FY 2022. Its per capita income (per capita net district domestic product) at current prices was ?621,131 as of FY 2022, registering a CAGR of 13.0% between FY 2012 and FY 2022. The district contributed approximately 36% of Karnataka states GSDP at current prices in FY 2022. Bengaluru Urban District tops in secondary and tertiary sectors due to high concentration of major industries and infrastructure facilities.

Residential demand in the Bengaluru region witnessed strong growth in FY 2022 and FY 2023 driven by timely completions of projects, development of various infrastructure projects

Residential real estate demand in Bengaluru was at 34 msf in FY 2019 and FY 2020 before plunging to 20 msf in FY 2021 due to the pandemic. It recovered to 31 msf in FY 2022, an increase of approximately 55%. In FY 2023, estimated housing demand in Bengaluru grew by 40-45% on-year to close to 45 msf. The continued growth momentum was due to stable income growth as well as interest rates still 50 bps lower than pre-pandemic period despite almost 120 bps rise

during the FY. Housing demand growth last FY was mostly driven by the Information Technology / Information Technology enabled Services ("ITeS") professionals and BFSI, largely supported by stable income growth throughout the pandemic, along with robust vaccination drive and stable hiring by key employers. Strong momentum in FY 2023 was also observed due to strengthening confidence, following timely completions of projects, exponential growth of startups and unicorns, development of various infrastructure projects and rising income levels.

Residential demand in the Bengaluru regi?n to clock 11-13% CAGR between FY 2023 and 2027

Going forward, between FYs 2023 and 2027, housing demand in the market is likely to grow at a healthy pace of 11-13% CAGR due to continued urbanization, healthy growth in IT / ITeS segment and a healthy income profile, etc. Furthermore, rapid expanding infrastructure development, viz. Metro Rail Phase 2B (Airport link), Peripheral Ring Road and Satellite Ring Road etc., will provide seamless connectivity to other parts of the city and shall act as a growth driver. While the mid-sized and luxury segments will do well despite rising interest rates and capital values, the affordable segment is likely to be laggard due to price sensitive consumer base. Furthermore, homebuyers are expected to upgrade to larger living spaces with better amenities, therefore, leading to higher growth in premium apartments.

Bengaluru-based Sobha Limited has its sales volume to the tune of 67% (approximate) coming from the Bengaluru market. During the year 2023-24, in the citys Sobha Dream Acres project, the Company completed the overall sales of the project in Q2 FY 2023-24. Construction of this project has been carried out using precast technology and the phases are under part construction and part handover stages.

Sobha Neopolis was launched in Q3 FY 2023-24, with 3.44 million square feet of saleable built-up area. It is a luxurious residential project located in the heart of Bengalurus most dense and well established technology hubs.

Sobha Crystal Meadows, a rowhouse project launched in Q4 FY 2023-24 with 1.25 million square feet of saleable built-up area, stands as a symbol of refinement and serenity in Sarjapur-Bellandur road, East Bengaluru.

Sobha Dream Acres, our marquee project spanning 81 acres, with saleable built-up area of 6.5 million square feet, comprises 6,262 units distributed across 27 phases and 58 wings. It was launched on January 31, 2015, and officially closed sales in Q2 FY 2023-24. The RERA completion date for the full project is September 30, 2026.

Presently, the Company has ongoing projects aggregating to 20.10 million square feet of total developable area and 14.57 million square feet of saleable built-up area, in Bengaluru

• Sobha Galera (Ongoing Project). A rowhouse project located in East Bengaluru spread over 4.08 acres. The project comprises 40 row houses with a total saleable area of 0.13 million square feet.

• Sobha Oakshire (Ongoing Project). A rowhouse project, comprises 80 row houses spread over 8.86 acres, comprising a saleable area of 0.28 million square feet.

• Sobha Insignia (Ongoing Project). A boutique super-luxury project in Bhoganahalli, South East Bengaluru, with 33 apartments and a saleable area of 0.08 million square feet.

• Sobha Sentosa (Ongoing Project). A luxury residential project located in South Bengaluru, with total saleable area of 0.65 million square feet.

• Sobha Victoria Park - Phase I and Phase II (Ongoing Project). A project spread over 6.5 acres in North Bengaluru with 0.59 million square feet of saleable area comprising row houses and apartments.

• Sobha Royal Crest (Ongoing Project). A luxury project with 3 and 4 BHK apartments, near Banshankari, West Bengaluru, with a saleable area of 0.65 million square feet.

• Sobha Windsor (Ongoing Project): A residential project with a saleable area of 1.25 million square feet.

• Sobha Brooklyn Towers (Ongoing Project): A residential project with a saleable area of 1.01 million square feet.

• Sobha Manhattan Towers (Ongoing Project): A residential project with a saleable area of 0.88 million square feet.

• Sobha Crystal Meadows (Ongoing Project): A luxury rowhouse project with a saleable area of 1.25 million square feet.

• Sobha City - Athena (Ongoing Project): A residential project with a saleable area of 0.12 million square feet

• Sobha Dream Acres (Ongoing Project): Our marquee residential project with a total saleable area of 0.83 million square feet.

• Sobha Dream Gardens (Ongoing Project): A residential project with a total saleable area of 1.04 million square feet.

• Sobha Lake Gardens (Ongoing Project): A residential project with a total saleable area of 0.42 million square feet.

• Sobha Lifestyle Legacy (Ongoing Project): A villa project with a total saleable area of 0.09 million square feet.

• Sobha Neopolis (Ongoing Project): A residential project with a total saleable area of 3.44 million square feet.

• Sobha Rajvilas (Ongoing Project): A residential project with a total saleable area of 0.18 million square feet.

• Sobha Royal Pavilion (Ongoing Project): A residential project with a total saleable area of 1.11 million square feet.

• The Company has three development management projects under Sobha Limited - 1. Sobha Sterling Infinia, 2. Chartered Windsong and 3. Chartered Woodpecker, with total saleable area of 0.57 million square feet.

All residential projects across regions had a steady sale overall.

DELHI - NCR

Key micro-markets in Gurugram

• Golf Course Extension

• Sohna Road

• Manesar

• Dwarka expressway

• DLF City / Golf Course Road

Residential demand in the NCR region witnessed strong growth momentum in FY 2023 led by pent-up demand created by the pandemic

The NCR residential real estate demand was in a deep slump since 2013 with low buyer sentiment, given the highest proportion of stalled projects, followed by demonetization, GST, RERA, liquidity crisis, etc. until 2019. Just when the market had stabilized, and the 2-3% recovery was in sight for FY 2021, it got hit by COVID-19 sending it into another slump. The market started witnessing strong growth momentum from second quarter of FY 2022 onwards, led by pent-up demand, improvement in affordability due to softer capital values, policy boost, discounts and incentives offered by developers, etc. An estimated improvement in income levels from the financial market performance is also likely to have propelled the demand. As a result, demand jumped from 27 msf in FY 2022 to 49 msf in FY 2023.

Residential demand in the NCR region to grow moderately with dominancy of mid and high-end segments

Demand in NCR is led by pockets in Gurugram and Noida. The trend of consumers shifting to branded players is also

clearly evident. Also, the demand is estimated to be propelled by the organized workforce from BFSI and financial markets as well as corporates. This demand is to be largely supported by continued urbanization, steady income profiles, expected growth in IT, BFSI, financial and manufacturing sectors and rising affluence and propensity to spend on real estate by the mid income buyers. As a result, residential real estate demand in NCR is expected to see CAGR 4-6% between FY 2023 and FY 2027 and reach 55-65 msf by FY 2027.

With demand revival, supply (new launches) is also expected to increase between FY 2024 and FY 2027

New launches have been muted over the last few years given developers focus on execution and offloading of high unsold as well as under-construction inventory. As demand revival is expected over FY 2024-2027, launches are also expected to increase between FY 2024-2027. While Gurugram has historically led in new project launches, Noida has picked up with branded developers launching projects in the Noida-Greater Noida Expressway micro-markets. Traction is led by the upcoming Jewar International Airport as well as the National Company Law Tribunal resolution in key cases. Affordable housing development is a long gestation, low margin-high volume business, and in current market conditions, developers are looking at quick execution and exit. Hence, share of affordable housing in launches is expected to come down.

Sobha started its operation in Gurugram with the launch of two projects - International City and Sobha City.

Sobha City had a sale of 0.49 million square feet over the year and completed the construction of B3, C3 and C4 towers with a total saleable built-up area of 0.55 million square feet (264 homes). We also successfully completed the sales of the entire project of Sobha City by Q3 FY 2023-24.

In total, the Company has two ongoing projects aggregating to 2.79 million square feet of total developable area and 1.84 million square feet of saleable built-up area, which will be developed and delivered in phases.

• Sobha City Gurugram (Ongoing Project): a luxury project with a saleable area of 1.76 million square feet.

• International City Gurugram (Ongoing Project): a villa project with a saleable area of 0.08 million square feet.

KOCHI

Kochi is a part of Ernakulum District, the highest revenue generating district in Kerala

Kochi is part of the Ernakulam District of the state of Kerala in southern India, and is the highest revenue yielding district in the state. Known as the commercial capital of Kerala, the estimated population of Kochi was 3.3 million in 2022 and covers an area of approximately 95 square kilometres.

Kochis rich cultural heritage has made it a popular tourist destination among both domestic and international travellers. Kochi stands out as Keralas most developed metropolis. The citys importance is a

result of its strong industrial base, advantageous location, and technological parks.

We launched Sobha Atlantis Phase 2 with a saleable built- up area of 0.44 million square feet in Q4 FY 2023-24. The project is on an alluring island amidst emerald waters and sprawling greens.

Presently, the Company has two ongoing projects, aggregating 3.95 million square feet of total developable area and 2.58 million square feet of super built-up area.

• Sobha Atlantis (Ongoing Project): Residential project with a saleable area of 0.89 million square feet.

• Marina One (Ongoing Project): Residential project with a saleable area of 1.69 million square feet.

THRISSUR

Thrissur is also known as the cultural capital of Kerala because of its cultural, spiritual and religious leanings throughout history. Sobha entered the Thrissur market with its landmark project Sobha City.

Thrissur saw the new launch of Sobha Metropolis Phase 3 with a total saleable built-up area of 0.39 million square feet during Q3 FY 2023-24. The Project was initially launched in January 2020 and since then, it has become a coveted address in the city.

Presently, the Company has three ongoing projects, Sobha Lake Edge, Sobha Silver Estate and Sobha Metropolis (Phase 1, 2 and 3) aggregating to 2.12 million square feet of total developable area and 1.46 million square feet of super built-up area.

• Sobha Metropolis (Ongoing Project): Residential project with a saleable area of 1.14 million square feet.

• Sobha Lake Edge (Ongoing Project): Residential development with a saleable area of 0.24 million square feet.

• Sobha Silver Estate (Ongoing Project): Villa project development with a saleable area of 0.08 million square feet.

THIRUVANANTHAPURAM

The Company ventured into the Thiruvananthapuram market in FY23. Keralas capital city is known for its calm beaches, backwaters and rich culture. Our earlier project, Sobha Meadows - Whispering Hill had a good contribution to the overall sales.

The Company launched another project during this year, Sobha Ridge - Whispering Hill, with a saleable built-up area of 0.23 million square feet.

Currently there are two ongoing projects with a developable area of 0.56 and super built-up area of 0.43 million square feet.

• Sobha Meadows - Whispering Hill (Ongoing Project). A luxury apartment project with a saleable area of 196,420 square feet, and a developable area of the project of 0.23 million square feet.

• Sobha Ridge - Whispering Hill (Ongoing Project). A luxury apartment project with a saleable area of 0.23 million square feet.

KOZHIKODE

Sobha has been operating in Kozhikode since 2013-14 with the first project, Sobha Bela Encosta, a super luxury villa development.

Presently, the Company has 1 ongoing project that aggregates to 0.11 million square feet of total developable area and 0.06 million square feet of super built-up area.

• Sobha Bela Encosta (Ongoing Project): A villa project with 22 villas with total saleable area of 0.06 million square feet.

CHENNAI

Amidst the robust real est?te market of India, Chennals resldentlai real est?te market is bustilng with actlvlty, showcaslng a substantlal 5 per cent surge in home sales. The ongoing metro expansi?n and various infrastructural developments position Chennai for substantial growth in the coming years. Looking ahead, 2024 is anticipated to be the year of resurgence for Chennais real estate.

The ongoing projects in Chennai are Sobha Arbor and Sobha Gardenia, aggregating to 0.48 million square feet of total developable area and 0.30 million square feet of super built-up area.

• Sobha Arbor (Ongoing Project). A luxury apartment project with 0.39 million square feet of developable area and 0.29 million square feet of saleable area.

• Sobha Gardenia and Sobha Gardenia Annexe (Completed Projects). A villa project spread across 6.85 acres with a saleable area of 0.35 million square feet.

COIMBATORE

The Manchester of South India has always extended a warm welcome to any new development in the city. The Company ventured into the Coimbatore market in 1998 with a plotted development and villa development.

• There is currently one ongoing project, Sobha West Hill, with 0.02 million square feet of super built-up area.

PUNE

The Company ventured into the Pune market in 2007-08 with Sobha Carnation, a super luxury multi-storied apartment.

The Company has one project in progress, Sobha Nesara, with a developable are of 0.94 million square feet and a total saleable built-up area of 0.64 million square feet.

GIFT CITY GUJARAT

GIFT City is Indias first operational smart city with the development of world-class infrastructure and sustainable master planning. The objective behind the set-up of GIFT City is that it aims to tap into Indias huge potential for providing financial services by offering world-class infrastructure and facilities to leading global financial institutions and companies. We successfully completed the sale of two out of three projects - Sobha Dream Heights and Sobha Avalon - where construction is underway.

During Q4 FY 2023-24, the Company launched Sobha Elysia in GIFT City with a total saleable built-up area of 1.24 million square feet.

Currently there are three ongoing projects - Sobha Dream Heights, Sobha Avalon and Sobha Elysia - with a developable area of 2.43 million square feet and a super built-up area of 1.83 million square feet.

• Sobha Dream Heights (Ongoing Project): with a developable area of 0.40 million square feet and saleable area of 0.26 million square feet.

• Sobha Avalon (Ongoing Project): with a developable area of 0.42 million square feet and saleable area of 0.32 million square feet.

• Sobha Elysia (Ongoing Project): with a developable area of 1.61 million square feet and saleable area of 1.25 million square feet.

HYDERABAD

The Company ventured into the Hyderabad market in FY 2022-23. Somajiguda is a commercial centre of Hyderabad located on either side of Raj Bhavan road.

SOBHA Waterfront is a luxury apartment with a developable area of 0.80 million square feet and super built-up area of 0.65 million square feet.

SALES PERFORMANCE

During the year, Sobha achieved 6.08 million square feet of new sales area, which is a worthy accomplishment during the tough operational environment. Total value, including joint development share, stood at ?66,441 million with an average price realization of ?10,922 per square feet. Sobhas share of sales value stood at ?54,150 million. This shows that customers trust Brand Sobha as their preferred choice of quality home.

Despite commercial products, Sobhas prime focus remains on residential business to generate positive cash flows through speedy delivery and revenue realisation and to ensure appropriate investment in the best available opportunities.

B. COMMERCIAL

Sobha has primarily focused on the residential real est?te category since its inception with sporadic presence in the commercial segment. Although the Company has created some landmark commercial projects like Thrissurs most iconic landmark the Sobha City Mall, our presence in the segment has been relatively limited. Now the Company has renewed its focus on commercial developments with several projects under progress in multiple cities.

As of March 2024, the Company has two commercial malls in this business vertical. The first is Sobha City Mall in Thrissur. It commenced its operations from December 2015, and has a total developable area of 0.43 million square feet with a total leasable area of 0.32 million square feet.

The second offering in this vertical is the 1 SOBHA mall in Bengaluru with a total developable area of 0.35 million square feet and a total leasable area of 0.28 million square feet. The launch of this mall signifies our entrance in the citys commercial shopping space. Located in the heart of Bengaluru, this commercial development is host to the topmost of brands from retail, F&B, entertainment and fashion industries.

C. CONTRACTUAL

In 2023-24, the Company completed 1.49 million square feet in the contractual vertical.

Overall, the Company has delivered 59.15 million square feet of contractual works and 4.05 million square feet of projects are under execution in two cities across India.

While SOBHA values a long-standing relationship with few of our select clients, which contributes to a major scope of our

total work done in this vertical, there is an emphasls on dlverslfylng the client base and reduclng Sobhas risk portfolio. The Company is actively involved in major contractual projects across India, helping us with geographical diversity and a multi- client approach. Our corporate clients include LuLu Group, Biocon, Dell, Bosch, Syngene, Taj Hotels, HCL, Wipro, Infosys, ITC Hotels, Huawei Technologies, Manipal group, GAR Corporation, etc.

SOBHAs ability and capacity to deliver high quality, custom-designed turnkey projects and the domain knowledge to address tough challenges has gained a loyal customer base for the contract division. In the contractual vertical, Sobha has a presence in 27 cities across 14 states.

RISKS

Our business and profitability are significantly dependent on the performance of the real est?te market in India and partlculariy in Bengaluru, Karnataka which contributed 66.12% and 63.45% of our total Sales in Fiscal 2024 and Fiscal 2023, respectively. Varying market conditions in this region may affect our ability to ensure sale of our projects and the pricing of units in such projects, which may adversely affect our results of operations and financial condition. The real estate market of this region may also be affected by various factors outside our control, including prevailing local and economic conditions, changes in the supply and demand for properties comparable to those we develop, changes in the applicable governmental regulations, demographic trends, employment and income levels and interest rates, regional natural disasters, water shortage crisis, among other factors. These factors may contribute to fluctuations in real estate prices, rate of sales and the availability of land in such region and could also adversely affect the demand for and valuation of our ongoing and forthcoming projects. Consequently, our business, results of operations and financial condition have been and will continue to be heavily dependent on the performance of and the prevailing conditions affecting the real estate market.

We face significant competition in our business from a large number of Indian real estate development companies who also operate in the same regional markets as us. The extent of the competition we face in a potential property market depends on a number of factors, such as the size and type of property development, contract value and potential margins, the complexity and location of the property development, facilities and supporting infrastructure services and the reputation of our competitors.

As part of our business plan to expand across high growth markets in prominent and growing cities in India, we face risks from some of our competitors, who are also engaged in real estate development. They may be better known in other markets, enjoy better relationships with landowners and international or domestic joint venture partners, may gain early access to information regarding attractive parcels of land and be better placed to acquire such land. Further, our competitors may commence operations in the vicinity of our Ongoing Projects and Forthcoming Projects and may offer their products at competitive prices, resulting in a decrease of sales of our projects.