About Eleganz Interiors Limited

Business Overview

Eleganz Interiors specializes in providing interior fit-out solutions for corporate and commercial spaces, including offices, R&D facilities, laboratories, airport lounges, flexible workspaces, and retail spaces across India. The company offers Design & Build (D&B) and General Contracting (GC) services, covering everything from conceptualization to execution and post-project support.

D&B services include design, shop drawings, material procurement, execution, final walkthrough, and project handover. GC services encompass civil, interior, mechanical, and electrical works, along with final refinements such as flooring, furniture installation, and quality inspection.

Projects are awarded through domestic and multinational tenders from corporations, project management consultants, and international property consultants. Over the last three financial years and six months ending September 30, 2024, the company has completed 200+ projects, covering more than 45 lakh sq. ft. As of December 31, 2024, the order book consists of 47 ongoing projects, with a total contract value of ₹43,486.33 lakh and approximately 40 lakh sq. ft. under development across 12 Indian cities.

The company serves clients across industries such as IT, manufacturing, BFSI, pharmaceuticals, FMCG, oil & gas, education, real estate, and renewable energy. As a founding member of the Indian Green Building Council (IGBC), it has obtained platinum and gold LEED certifications, reinforcing its commitment to sustainable and innovative design practices. As on December 30, 2024, the Company had 63 permanent employees and had engaged 380 persons on retainership basis. The Bankers to the Company are HDFC Bank Limited and Bank of Baroda

Industry Analysis

Overview of Interior Fit Out Services Construction Space
The interior fit-out services segment within the construction space refers to the final stage of development, where the internal spaces of buildings are customized and equipped according to the client’s requirements. This segment covers a wide range of activities, including space planning, electrical and mechanical installations, furnishing, and design elements, such as flooring, ceilings, and partitioning. The objective is to convert bare spaces, typically known as “shell and core,” into functional areas for commercial or residential use.

In commercial real estate, interior fit-out services are vital for transforming offices, retail stores, and hospitality spaces into operational environments that meet the specific needs of businesses. With the rise of flexible workspaces and global multinationals entering India, the demand for fit-out services has significantly increased. The sector is characterized by custom design solutions that emphasize modernity, sustainability, and functionality.

The Indian office fit-out market has seen remarkable growth, rising from Rs 154 billion in CY20 to Rs 277 billion in CY23, and is projected to reach Rs 805 billion by CY30F, with a CAGR of 16.5%. This expansion is closely tied to increasing office leasing activity and changing workplace needs.

India’s office leasing space has also grown substantially, from 39.4 million sq. ft. in CY20 to an expected 69.4 million sq. ft. in CY24. This rise in leasing activity is a significant driver for the fit-out market, as new and expanding businesses require tailored office spaces. The post-pandemic recovery, along with the shift toward hybrid work models, has led to companies investing in office environments that offer flexibility, collaboration spaces, and wellness features, further fueling the demand for fit-out services.

The IT, e-commerce, and BFSI sectors have been particularly active in leasing new office spaces, especially in Tier 1 and Tier 2 cities, leading to higher demand for modern, technology-driven office designs. The entry of multinational corporations setting up operations in India has also bolstered this demand.

Urbanization and government-backed infrastructure initiatives, such as Smart Cities, are further pushing the development of commercial real estate. The integration of smart office technologies like IoT and AI, along with the growing emphasis on sustainable and energy-efficient designs, has significantly influenced the fit out market’s growth. With robust leasing activity and evolving workspace trends, the office fit-out market is poised for sustained growth through CY30F.

Office market vacancy indicates the percentage of office space that remains unoccupied and available for lease. It serves as a key metric for assessing the health of the commercial real estate market, reflecting the balance between supply and demand. Vacancy rates increased significantly. The rise from 14.2% to 17.2% suggests growing unoccupied space, driven by economic uncertainty, increased remote working, and reduced office space needs during the pandemic. The vacancy rate remained steady, indicating a stabilization in the market as the initial impacts of the pandemic began to level out. A slight decline in vacancy rates suggests a gradual recovery, with improved leasing activity and a potential adjustment to new working patterns and market conditions. The data reveals that while vacancy rates rose during the pandemic, recent trends show a modest improvement, reflecting a stabilizing office market with potential signs of recovery.

Real estate sector in India
India's real estate sector has long been a cornerstone of the nation's economy, second only to agriculture, in terms of employment generation. Historically, the sector has undergone significant transformation, driven by urbanization, evolving consumer preferences, and regulatory reforms. Today, it is on the cusp of exponential growth, expected to reach a market size of Rs. 83 trillion by 2030, a testament to its pivotal role in India’s economic trajectory.

The real estate market is broadly categorized into housing, commercial, retail, and hospitality, with residential real estate accounting for a staggering 80% of the total market share. As India transitions from a primarily rural to a more urban-centric society, this segment has witnessed significant growth. Back in the 1990s, India saw a gradual rise in real estate demand as cities like Mumbai, Delhi, and Bangalore became economic powerhouses. Fast forward to 2023, luxury home sales priced at Rs. 4 crore and above surged by 75%, driven by an expanding affluent class and increased investments in premium properties.

Urbanization continues to be a key driver of the sector’s growth. In 1951, only 17.3% of India’s population resided in urban areas. Today, that number has increased to over 35%, with projections indicating an urban population of 542.7 million by 2025 and 675.5 million by 2035. This influx of people into cities has not only increased the demand for housing but also commercial and office spaces. For instance, cities like Bengaluru, Gurugram, and Pune have emerged as major hubs for IT and corporate activity, fueling the demand for commercial real estate.

Retail real estate, another vital component of the sector, is set for a major boom. From traditional brickand-mortar shops in bustling bazaars to sprawling malls in urban centers, retail spaces have evolved significantly over the years. By 2028, around 41 million sq. ft. of new retail developments will be operational in India’s top seven cities, signaling a robust future for the retail landscape.

Commercial Real Estate
The Indian real estate industry witnessed a slowdown in the years prior to COVID-19 due to the general slowdown in the economy. However, this had little impact on the demand for office space. The demand for office space grew by leaps and bounds for the better part of the past decade with the unavailability of good quality supply being the only impediment to higher growth. We estimate the demand for office space, particularly in metros, to have outpaced supply prior to 2020.

The commercial real estate sector in India plays a crucial role in the country's economic development, comprising office spaces, retail, industrial, and hospitality properties. This sector provides the physical infrastructure required for businesses to operate, expand, and contribute to economic growth. It has witnessed significant evolution, especially in major metropolitan cities like Bengaluru, Mumbai, Delhi NCR, and Hyderabad, where the demand for Grade A office spaces, business parks, and flexible workspaces is increasing. The growth of the commercial real estate sector was primarily fueled by Global Capability Centers (GCCs) and the growing demand for flexible office spaces, which together accounted for 55% of total leasing.

The office segment growth was aided by investors with a keen interest in the commercial space. Alongside, NRIs also started investing in this segment, given the lucrative returns. A comparison of investments in commercial with residential sectors shows that returns from commercial are higher than those from residential.

In India, commercial property gives the average rental yield of 8%-11%, while the rental yield from residential property is 1.5%-3%. This segment, which includes industrial, retail, and warehousing, is thus projected to do well on account of a rapid growth of the warehousing segment and a gradual pick up in the office segment.

The Indian commercial real estate market has witnessed significant expansion, growing from Rs 1,763 billion in CY17 to Rs 8,218 billion in CY23. It is projected to reach Rs 22,398 billion by CY30F, reflecting a CAGR of 15.4%. This growth is closely aligned with the overall Indian real estate market, which has increased from Rs 7,665 billion in CY17 to Rs 40,089 billion in CY23 and is expected to reach Rs 83,172 billion by CY30F, with a CAGR of 15.7%.

The share of commercial real estate in the total Indian real estate market declined from 23% in CY17 to 20.5% in CY23, primarily due to the COVID-19 pandemic and the widespread adoption of work-fromhome (WFH) policies. However, a shift is underway as many firms like Google, Deloitte, and Accenture hahave begun implementing return-to-office policies. In 2023, office leasing surged to 59.6 million sq. ft., and in the coming years, more companies are expected to adopt a hybrid or full work-from-office model.

The increase in commercial real estate’s share is driven by factors like the rise of IT, e-commerce, retail, and BFSI sectors, urbanization, government initiatives like “Smart Cities,” and strong leasing activity from multinational corporations and startups, boosting demand for modern office spaces across India.

Business Strengths

1. Experienced and Qualified Team
A skilled team of over 155 designers, architects, and engineers, including in-house and retainership professionals, ensures seamless execution of projects from design to handover. This expertise enables precise bidding and cost-effective service delivery while maintaining project specifications and quality.

2. Proven Track Record Across Industries
A strong history of delivering interior solutions to diverse sectors, including IT, manufacturing, BFSI, pharmaceuticals, FMCG, oil & gas, education, real estate, and renewable energy. Over the past three financial years and six months ending September 30, 2024, projects have ranged from 1,247 sq. ft. to 6,91,231 sq. ft., covering over 80 lakh sq. ft. across 253 projects, showcasing versatility and market adaptability.

3. Commitment to Quality and Sustainability
An ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018 certified organization with a focus on quality management and sustainable development. Quality control is integrated into every stage, from design to execution, ensuring superior project outcomes.

4. Presence in Key Economic Hubs
Operations span major financial and industrial centers, including Mumbai, Bengaluru, Hyderabad, Pune, NCR, Chennai, Ahmedabad, and Bhopal, with projects executed in tier-2 cities like Indore, Vadodara, and Goa. International expansion includes subsidiaries in Rwanda and Singapore, strengthening global reach.

5. Diversified and Strong Order Book
As of December 31, 2024, executing 47 projects—8 under D&B and 39 under GC services—with a total project value of ₹70,589.66 lakh and an unexecuted order value of ₹43,486.33 lakh. A mix of clients and industries reduces sector-specific risks and enhances financial stability.

6. In-House Woodwork Facility
A dedicated woodwork manufacturing unit in Mumbai, equipped with advanced imported machinery, ensures high-quality, customized fit-outs. This controlled production enhances efficiency, precision, and adherence to strict quality standards.

7. Experienced Leadership Team
Led by Managing Director Sameer Akshay Pakvasa, a second-generation entrepreneur with over two decades of experience in interior fit-out solutions. His expertise in business strategy and market dynamics has been instrumental in driving consistent growth and innovation

Business Strategies

1. Scaling Project Size and Qualification for Larger Contracts
Expanding capabilities in executing large-scale projects, with recent awards including a ₹15,972.15 lakh Design & Build project for a software division and an ₹18,808.45 lakh airport renovation under General Contracting. Past projects range from 1,247 Sq Ft to 6,91,231 Sq Ft, demonstrating expertise in handling diverse project sizes. Larger projects enhance competitive positioning, profitability, and operational efficiency.

2. Client-Centric Approach and Industry-Specific Solutions
Providing tailored fit-out solutions across industries, including IT, BFSI, healthcare, FMCG, oil & gas, real estate, and education. Large corporations require workspace designs aligned with industry trends, values, and employee needs. Maintaining deep market insight, adopting innovative design trends, and ensuring continuous client engagement help meet specific requirements and enhance competitive differentiation. A dedicated team of 155+ designers, architects, and engineers supports project execution.

3. Geographical Expansion and Market Penetration
Completed over 200 projects spanning 45 lakh Sq Ft across 17 cities in 10 states over the past three years. The ongoing project portfolio, covering 40 lakh Sq Ft across 12 cities, stands at ₹43,486.33 lakh as of December 31, 2024. Expansion strategy involves establishing branch offices in high-growth cities to strengthen regional presence, enhance client service, and tap into emerging economic hubs.

4. Talent Acquisition, Retention, and Skill Development
Effective project execution depends on skilled designers, architects, and engineers. With increasing competition for qualified professionals, emphasis is placed on continuous training in advanced systems, emerging design techniques, and industry best practices. Enhancing workforce capabilities ensures high-quality project delivery, cost efficiency, and timely completion.

5. Optimized Working Capital and Financial Efficiency
Strategic management of working capital ensures smooth operations, with financial support from HDFC Bank and Bank of Baroda through cash credit, bank guarantees, and letters of credit. Previous funding sources include unsecured loans, working capital loans, and private equity placements. Efficient cash flow management, timely receivables collection, and favorable supplier negotiations sustain financial strength and drive operational growth.

Business Risk Factors and Concerns

1. Dependence on Repeat Clients
A significant portion of revenue is derived from repeat clients for office refurbishments and new acquisitions. Any loss or reduction in repeat clientele could negatively impact business operations, financial health, and cash flow.

2. Outsourcing Risks
Certain operations, including transport, logistics, and specific manufacturing activities, are outsourced to third parties. Any failure or inefficiency on their part may disrupt business operations, affecting profitability and financial stability.

3. Material Costs and Supply Chain Volatility
The cost and availability of fit-out materials and raw materials such as wood, glass, fabrics, and MEP components significantly impact expenses. Supply disruptions or price fluctuations in these materials could adversely affect financial performance.

4. Geographical Concentration Risks
Despite a diversified presence, a substantial portion of ongoing projects is concentrated in Maharashtra, Karnataka, and Tamil Nadu. Any changes in regional policies, laws, or economic conditions could impact operations and financial stability.

5. Tender and E-Auction Dependency
A large share of revenue comes from tenders and e-auctions, which are highly competitive and uncertain. Failure to secure contracts due to stringent qualification criteria, pricing pressure, or changing market conditions may impact revenue growth and business sustainability.

Eleganz Interiors faces key risks including dependence on repeat clients, where any decline in returning customers could impact revenue. Outsourcing risks in logistics and manufacturing may disrupt operations if third parties fail to deliver. Material cost fluctuations and supply chain issues could affect profitability due to reliance on essential raw materials. Geographical concentration risks arise from a significant portion of projects being in Maharashtra, Karnataka, and Tamil Nadu, making the business vulnerable to regional policy changes. Lastly, reliance on tenders and e-auctions poses challenges, as failure to secure contracts due to competitive bidding and qualification criteria could limit growth.