Shriram Properties Ltd

Where vision meets impact

DEAR FELLOW SHAREHOLDERS,

I proudly present our third Annual Report as a listed company to our shareholders. Since IPO, the journey has been extraordinary for us at Shriram Properties (SPL), driven by our strategic vision and exceptional execution. Our performance is a testament to our commitment towards delivering on our promises. As we enter our 25^th year of operations, we stand with a deep sense of pride and gratitude as well as excitement over what lies ahead for us, together.

India's resilient economy and promising real estate future

Despite global macroeconomic headwinds, the Indian economy remained buoyant during the financial year. In fact, the Indian economy surged with a remarkable growth rate of 8.2% in FY24, making it the fastest-growing major economy worldwide. The Reserve Bank of India maintains its GDP growth forecast at 7.2% for FY25, reaffirming our belief in the country's prospects.

Driven by a robust economy, India's real estate sector has demonstrated strong performance and promising potential. It is now one of the top employment generators after agriculture, contributing 18% to total employment. The Government of India's ‘Housing for All' initiative continues to play a pivotal role, and underscores the Government's commitment to promoting inclusive urban development.

The year under review was a transformative year for the residential property market, characterised by substantial sales and volume growth, enhanced market transparency, and remarkable decline in inventory overhang across key markets. Despite challenges, the sector's resilience and adaptability position it for continued expansion and investment attractiveness in the years ahead.

Year of remarkable achievements

I am pleased to inform you that we have sustained the growth momentum witnessed in recent times, making it a successful year for the Company. I can proudly say it was a record-breaking year for Shriram Properties on several fronts. We registered our highest-ever sale volume of 4.6 msf and highest-ever sales value of I2,36,228 lakhs in FY24. It was also an exceptional year for us in terms of execution and delivery. We successfully delivered over 3,000 units to our customers, setting a new record for the Company. We completed 8 projects with an aggregate development area of around 3.8 msf, which enabled the surge in customer handovers and registrations, eventually leading to significant revenue recognition during the year.

On the financial front, we recorded highest-ever revenue of I98,735 lakhs, an increase of 21% year-on-year. Our revenues were driven by projects like Shriram Liberty Square and Shriram Chirping Woods T5 in Bengaluru, Shriram Park 63 and Shriram Shankari in Chennai, and Shriram Grand One in Kolkata.

Our EBITDA margins remained healthy at 23%, consistent with guidance, while our net profit surged to I7,542 lakhs in FY24, compared to I6,825 lakhs in FY23. Our return on capital remained strong at 11%, and is on the right path to stabilising at even higher levels in the foreseeable future.

Strategy for growth

Our growth strategy remains robust and focused on (i) transforming and repositioning the new brand identity launched recently; (ii) enhancing focus on the mid-market and mid-premium segments of the residential real estate markets; (iii) accelerating growth. Traditionally, we focused on affordable and mid-market segments, with the latter accounting for 67% of our completed portfolio and also 67% of ongoing projects. The mid-segments of the residential markets have shown strong resilience and growth in recent years, driven by urbanisation, changing customer preference, work-from-home influence and favourable interest rates. This segment represents a rapidly growing population, especially in urban areas and infact, mid-segments accounted for nearly 60% of housing demand in India during 2023. The share of mid-segments is even higher in our core markets of Bengaluru and Chennai at 74% and 75% of demand in 2023, compared to 60% and 52% respectively pre-COVID¹. The change in market trends offer significant potential for growth for large established brands like Shriram and hence renewed emphasis on this promising segment going forward.

We have recently embarked on a new brand identity, which is not just a symbol for us but a promise of our dedication to excellence and innovation. Our new identity aims to transform the perception of Shriram among customers, elevate our brand image and delight our customers even better in the future. Also, as we enter

25^th year of operations and having scaled up and grown as a mature organisation, we are asserting our standalone identity, while continuing to benefit from the visionary oversight of our parent – The Shriram Group. Our focus will remain on leveraging the strong operating platform that is robust, resilient, scalable and time-tested. Our strong professional management and robust project pipeline will support our growth over the next 3-5 years. The proposed entry into new markets of Pune is integral to this strategy. We have positioned ourselves for sustained growth and profitability by minimising capital investment and maximising returns. Our success is built on the foundation of enduring and collaborative relationships with marquee investors, landowners, and financial institutions.

Building a sustainable future

At SPL, we recognise the crucial role of environmental, social, and governance (ESG) principles in shaping our business practices. Our commitment to sustainability, social responsibility, and ethical governance is paramount as we continue to build and deliver homes. We are conscious of the environmental impact of our residential projects, which is why we strive to minimise our carbon footprint through innovative measures. These include incorporating energy-efficient designs, implementing waste reduction measures, and adhering to green building standards.

Our residents trust us to provide safe and secure living environments. We go beyond compliance to actively enhance our positive impact. This approach means integrating sustainable technologies across our supply chain, creating deeper community connections, and reinforcing robust governance practices to exceed expectations.

While we have made commendable strides, there is always room for improvement. We are resolutely committed to advancing our ESG efforts, continuously striving for excellence in every aspect of our operations.

Way forward

As we embark on our 25^th year of operations, we are not merely reflecting on the illustrious journey and honouring the past but are also embracing the future.

We take immense pride in our accomplishments thus far but remain resolutely forward-focused. The evolving industry landscape offers unprecedented opportunities for expansion, allowing us to build on the firm foundation we have meticulously built over the years.

Our vision for the future is deeply rooted in our commitment to constructing homes that resonate with every homeowner. We aspire to be among the largest residential real estate market players in India, and more importantly, aspiring to be one of the most valued, most trusted, and most preferred mid-market and mid-premium real estate brand in India during the coming decade. In the end, on behalf of the Board of Directors, I extend my heartfelt thanks to every member of the SPL team. Their dedication and hard work are the driving forces behind our impressive performance. I also want to thank all our stakeholders for their continued support throughout our journey. We look forward to the continued growth and success of our Company in the future.

Regards,

M Murali

Chairman and Managing Director