It gives us an immense pleasure to address you and share our thoughts with you.
Global economic growth decelerated significantly in 2019 as weakness in internationaltrade and investments affected both advanced economies especially in the Euro Area andthe developing world.
This deceleration which started in the second half of 2018 also became morebroad-based affecting manufacturing and to a lesser extent services. According tothe IMF global output growth for 2019 is estimated at 2.9 per cent which is the lowestgrowth recorded since 2009 in the immediate aftermath of the global financialcrisis. India also witnessed considerable deceleration in economic growth in 2019-20.
According to the provisional estimates released by the Central Statistics Office (CSO)on 29th May 2020 growth in India's Gross Domestic Product (GDP) for 2019-20 is estimatedat 4.2 per cent compared to 6.1 per cent in the previous year. This deceleration wasdriven by a slowdown in industry and services growth even as agriculture grew from 2.4per cent in 2018-19 to 4.0 per cent in 2019-20.
From the real estate industry's perspective it is important to note that growth in theconstruction sector which accounts for around 8 per cent of GDP grew at 1.3per cent in 2019-20 compared to 6.1 per cent in 2018-19
Considering the severe impact on economic activity due to the Covid-19 crisis IMFprojects that the global economy will contract sharply by (-) 3 per cent in 2020 assumingthe pandemic fades in the second half of the year.
On an encouraging note India is among the few economies projected to end the year witha positive growth of 1.9 per cent. If it were to happen this would in fact be the highestgrowth among the G20 economies. Even as there is significant uncertainty around theduration and intensity of the pandemic and its impact on India's economic performance in2020-21 there are a few bright spots like agriculture where bumper harvests are forecast.
A significant factor would be that inflationary pressures are likely to be in checkwith collapse in crude prices and softening of food prices allowing room for furtherfiscal and monetary policy interventions.
Although the year started off with encouraging demand-supply balance and relativelyhealthy enquiries the market for residential development was affected considerably duringthe course of the year by the slowdown. Prices came under pressure and there was a visibletrend towards smaller apartments and ticket sizes both in launches and absorption and mostof the demand is coming from end users in certain micro-markets in Mumbai.
While the Company and its associates offer a bouquet of residential and commercialspaces the affordable housing segment in particular has seen more stable demandallowing the Company to consolidate its presence in the segment. Accordingly the Companyconsiders Mumbai as primary markets where it seeks to expand its presence in this segment.
The Company has undertaken a massive exercise in cost cutting and pruning excess manpower. these efforts are yielding effective results. COVID as been a major factor indeterring the Company in meeting its fiscal goals. The effect of COVID and its assessmentin the functioning of the Company have been dealt with elsewhere in this annual report.
We take this opportunity in expressing appreciation to all those associated with theCompany during this very difficult period. We do hope that when we address the next timewe will do so in a more congenial atmosphere.
|Yours truly || |
|Chetan R Shah ||Mayur R Shah |
|Chairman and Managing Director ||Vice Chairman |