To a large degree, all three key segments of the real estate
sector get influenced by the macroeconomic environment.
There have been a few indications lately; both at domestic
and global level that make the Company believe that
the economy has moved the worst phase of the current
economic slowdown. Globally, the stability of Euro region,
continued recovery in US and improvement in Japanese
growth outlook are expected to maintain the interest of
global companies and investors in India.
Since January 2012, RBI has already reduced CRR by 150
bps and repo rate by 125 bps. The banks are yet to pass the
complete benefits of these reductions to the end user and
generally the positive impact of such reductions become
evident only after a period. Additionally, the momentum
and direction of inflation appears to have moved down.
The declining inflation provides additional headroom to RBI
to reduce rates. Reduction in interest rates has much more
positive impact on the profitability of the real estate sector
as it helps to increase top-line through pick-up in demand
and also improves profit margin due to reduction of the
interest burden.
The speed of recovery is expected to be gradual and not
as robust as was in FY’10, immediately after the year 2008
financial crisis. In line with same, the Company expects
that the recovery in the first half of the FY’14 to be driven
by sentiments rather than any on-ground changes, while
it expects to see perceptible improvement in the real
economy in the second half of the FY’14.
Leveraging its strong understanding of the real estate market
backed by strong brand in each of its business segment,
well-established track record, proven design capabilities,
execution skill-set and large pool of highly satisfied customer
base, the Company is gradually expanding its footprints
outside Mumbai as well. The key focus markets are located
in southern and western India. The Company has moved
into the cities which are established or upcoming IT hubs
like Pune, Hyderabad and Bengaluru and in cities where
there is already an established second home market like
Alibaug, Lonavala and Nasik.
While in near future, the projects in south and central
Mumbai would continue to drive bulk of the revenues, the
Company expects projects outside Mumbai to gradually
increase their contribution to the overall revenues
and growth. The Management would also continue to
closely monitor the business environment and evaluate
opportunities for optimizing its land holdings to derive the
best potential.
