Macrotech Developers Ltd

STAKEHOLDERS,

As we reflect on the financial year 2024, I am filled with immense pride and gratitude for the journey we have embarked upon together. In the current environment, wherein the world is marked with a host of uncertainties, India's economic resilience has stood out. Despite the significant interest rate hikes in FY23 and continued global geopolitical concerns in FY24, the Indian economy remained resilient. The foundation of India's economic resilience has been strengthened in recent times by its prudent fiscal policies, evidenced by controlled fiscal deficits, current account deficit management and inflation containment. Moderate inflation and stable business environment will attract significant private investment thus unleashing the true potential of the Indian economy.

India's GDP growth estimates have seen consistent upgrades by most of the global agencies. Business and consumer sentiments have remained upbeat as seen in various high-frequency indicators such as record GST collection, sustained growth in forex reserves, rising capacity utilizations and other such data points. With the success of various PLI schemes and significant infrastructure push,

India's growth is now driven by the twin engines of services and infrastructure, with manufacturing also gradually scaling up. Employees across most sectors remain optimistic about their job prospects, which bolsters consumer confidence and contributes to a robust housing market in a structural uptrend. Moreover, with the results of general elections, there is an expectation of continuity in policy implementation further supporting private investment and growth in the economy.

STRUCTURAL HOUSING BOOM - RIDING THE ‘ONCE IN A COUNTRY'S LIFETIME' OPPORTUNITY

It is heartening to note that India's likely transition in this decade from being a low income economy to a mid-income economy is now widely acknowledged by global think tanks and policy makers. This transition, akin to those witnessed in major economies such as the USA and China, is significantly led by the housing sector. With India reaching an inflection point in income levels, there is a significant surge in demand for quality housing which is expected to continue growing. The growth in housing absorption in FY24, inspite of the headwind of persistence of the significant increase in mortgage rates which took place in FY23, is evidence of the resilient nature of India's housing growth outlook.

Estimates suggest that as per capita incomes doubles to US$ 5,000 by the end of the decade, the aggregate demand (2021-2030) could be close to 100 million units against the current annual primary supply of ~600,000 units (FY24). India's housing demand stems from structural factors: robust job creation, growing incomes, good affordability, and growing desire for high quality living spaces. These drivers, increasingly recognised by industry participants, suggest a prolonged housing growth cycle, much longer than the typical 5-7 year housing cycle. Furthermore, when the mortgage rate cycle reverses, coupled with government's intent to support entry level home buyers, the industry could enjoy even stronger growth tailwinds.

This favourable environment, coupled with the continuing supply side consolidation in favour of the better governed and better capitalized players presents a prime opportunity for a brand like Lodha to thrive, leveraging its brand reputation, execution capability and management depth.

The pre-sales soared to an all-time high of over J145 Bn, presenting a remarkable 20% increase from the previous year.

LOW RISK, PREDICTABLE GROWTH

I am delighted to share that the past fiscal year marked another milestone for our Company, achieving record-breaking results across the board. The pre-sales soared to an all-time high of over H 145 Bn, presenting a remarkable 20% increase from the previous year. We successfully sold 8,741 homes covering an area of 11.1 Mn square feet and handed over 8,144 homes, delighting our customers. Our diverse pre-sales across segments, locations, and cities highlight the sustainability and predictability of our growth trajectory, a rarity in the real estate industry. Furthermore, our strong pre-sales performance translated into record collections of H 112.6 Bn during the year, resulting in impressive Operating cash flow of H 57.2 Bn. We added 10 new projects with a combined GDV of H 203 Bn, once again setting a new record in project additions.

During the year, Our Company also successfully concluded a Qualified Institutional Placement (QIP) and raised H ~33 Bn of fresh capital.

Our ability to generate strong operating cash flow which supports both growth investment and debt moderation is unique in the Indian housing industry. We remain committed to deliver growth while being prudent on our capital structure. I am pleased to note that on the back of the strong cash flow generation and fresh capital raised, our Company has also achieved its objective of bringing the net debt below 0.5x of equity. Hereon, our Company intends to maintain net debt below the said ceiling of 0.5x of equity, significantly de-risking our business.

SIGNIFICANT GROWTH OPPORTUNITIES AHEAD

Our strategy to expand into under-represented micro-markets of MMR and Pune has seen commendable progress. Our Company achieved nearly 9x

On the back of the strong cash flow generation and fresh capital raised, net debt reduced to H30.1 Bn, with Net D/E well below ceiling of 0.5x.

growth in Pune from about

H 2 Bn of pre-sales in FY21 to nearly H 18 Bn of pre-sales in FY24. Similarly, from not being present at all in the Eastern suburbs of MMR in FY21, our Company grew its pre-sales to H ~20 Bn in FY24. The year also marked the successful launch of two projects in the city of Bengaluru where the Company has been in ‘pilot phase' for the last two years focusing on building its brand, strengthening its local capabilities and understanding the consumer. The Company achieved pre-sales of H~12 Bn from Bengaluru – a strong performance in its first year of operations. This has set the foundation for accelerating growth in Bengaluru in years to come.

Over the next three years, we plan to focus on delivering our target growth primarily from our existing cities of operations i.e. MMR, Pune and Bengaluru. We will also look at entering one or two cities in ‘pilot phase' over this period. We clearly see that our Company is now set on a path to consistently deliver 20% pre-sales growth with improving profitability and ~20% ROE. In the near term, our focus will be to achieve pre-sales of H 175 Bn in FY 25 and add new projects with aggregate GDV of H 210 Bn, yet keep our net debt well below our ceiling of 0.5x equity.

EMERGING AS A TRULY SUSTAINABLE ENTERPRISE

Our purpose is to leverage our capabilities to enhance India's economic strength and whole heartedly contribute to its transformation into a developed nation by 2047. With the ‘Do Good, Do Well' philosophy, the Company firmly believes that sustainable growth is imperative, interweaving progress with responsibility, ensuring that every step taken is with consideration for the well-being of our society and the environment.

The environmental sustainability strategy of the Company is anchored on resilience and decarbonisation and significant strides have been taken towards a low-carbon transition over the past year. In December 2023, our Company proudly became the first real estate company in India to have its overall net-zero targets validated by the Science-Based Targets initiative (SBTi).

Near-term objectives include reducing absolute scope 1 and 2 greenhouse gas (GHG) emissions by 97.9% by FY28 and reducing scope 3 GHG emissions by 51.6% per square meter of developed area by FY30, both based on a FY 22 baseline. In the long-term, we have committed to achieve net-zero across Scope 1, 2 and 3 emissions by FY 50. I am pleased to share that, starting March 2024, we have achieved carbon neutrality in our operations (Scope 1 & 2), marking a significant milestone in our journey towards achieving net-zero by FY 50.

The Lodha Net Zero Urban Accelerator released its report "Building India's Dymaxion" during the inaugural RMI-Lodha sustainability conclave, uniting visionaries dedicated to reshaping India's built environment. Furthermore, our strategic partnerships have been instrumental in advancing our sustainable development goals. This year, we entered into two separate Memoranda of Understanding (MoUs): one with IIT Delhi for piloting the new LC3 concrete at commercial scale and another with Third Derivative, the start-up incubation arm of RMI, to foster innovation in the Built Environment. These partnerships exemplify our commitment to innovation and sustainability. Our green certified portfolio exceeded 50 Mn Sq ft, earning us the prestigious "Green Champion Award" from Indian Green Building Council. Our culture emphasizes the importance of not only taking care of ourselves and our families but also of society and

Over the next three years, we plan to focus on delivering our target growth primarily from our existing cities of operations i.e. MMR, Pune and Bengaluru. We will also look at entering one or two cities in ‘pilot phase' over this period.

the nation. We have embarked on a journey to do well in our business and are committed to applying our intellect, work force, and growth to do good that contributes positively to India.

In line with that thought, we are breaking stereotypes both within and beyond the real estate industry by cultivating more inclusive work environments. Our flagship Lodha Unnati initiative is championed at the Company, industry and community level. We have established an all-women construction management team to drive emergence of women work force in the formal work environment. At the community level, we are targeting a challenging goal to have ~2,000 women placed in formal jobs within a 30 minute commute from their homes across Mumbai this year.

Our commitment to nation-building and nurturing the potential of young minds through the Lodha Genius Programme in partnership with Ashoka University also had a promising start and continues to expand its reach and impact. From 800 applicant base from 13 states last year we moved to ~3,000 applicants from 27 states this year. Our intake increased from 144 students to 232 students. Last year, we had 20 faculty members from prestigious institutions such as Stanford, Yale, and IIT Delhi and affiliations or partnerships with corporations such as Ziess and Google. This number has grown to 30 this year with the addition of institutions such as Chennai Mathematical Institute, Apple, HP etc.

These initiatives, among others, have enabled our Company to

We have established an all-women construction management team and the Women in Construction Network to drive emergence of women work force in formal work environment.

consistently rank at the top tier of global sustainability benchmarks. We are proud to have been included in esteemed indices such as the Dow Jones Sustainability Index and FTSE4Good Index, reflecting our exceptional performance in related sustainability assessments. Additionally, being recognized as a Global Sector Leader in residential development by the Global Real Estate Sustainability Benchmark (GRESB) reaffirms our dedication to driving sustainable practices across our industry. Together, we are shaping a brighter, more sustainable future for India and beyond.

In line with our dividend policy, I am pleased to share that our Company has decided to reward shareholders with H 2.25/ share of dividend against H 1/share paid last year which is a significant growth to the previous year. This showcases the operating and financial strength of our Company which enables it to reward its shareholders while having significant growth as well as a very conservative leverage.

I would like to thank our 4,500+ associates who have contributed significantly in creating this extraordinary Company. They have worked tirelessly to bring smiles to our home owners by superior product and service delivery thus enhancing the trust in brand Lodha. I would like to thank my fellow board members for their valuable guidance and support.

Above all, I would like to thank you, our shareholders, for your continued support as well as confidence in your Company and I look forward to meeting you at our annual shareholders' meeting.