diff --git a/plugins/inventory/ntnx_prism_vm_inventory.py b/plugins/inventory/ntnx_prism_vm_inventory.py
index 43c0ba216..5151d739d 100644
--- a/plugins/inventory/ntnx_prism_vm_inventory.py
+++ b/plugins/inventory/ntnx_prism_vm_inventory.py
@@ -63,12 +63,14 @@
                 - name: VALIDATE_CERTS
     notes: "null"
     requirements: "null"
+    extends_documentation_fragment:
+        - constructed
 """
 
 import json  # noqa: E402
 import tempfile  # noqa: E402
 
-from ansible.plugins.inventory import BaseInventoryPlugin  # noqa: E402
+from ansible.plugins.inventory import BaseInventoryPlugin, Constructable  # noqa: E402
 
 from ..module_utils.prism import vms  # noqa: E402
 
@@ -89,7 +91,7 @@ def jsonify(self, data):
         return json.dumps(data)
 
 
-class InventoryModule(BaseInventoryPlugin):
+class InventoryModule(BaseInventoryPlugin, Constructable):
     """Nutanix VM dynamic invetory module for ansible"""
 
     NAME = "nutanix.ncp.ntnx_prism_vm_inventory"
@@ -117,6 +119,8 @@ def parse(self, inventory, loader, path, cache=True):
         self.nutanix_port = self.get_option("nutanix_port")
         self.data = self.get_option("data")
         self.validate_certs = self.get_option("validate_certs")
+        # Determines if composed variables or groups using nonexistent variables is an error
+        strict = self.get_option('strict')
 
         module = Mock_Module(
             self.nutanix_hostname,
@@ -172,3 +176,12 @@ def parse(self, inventory, loader, path, cache=True):
 
             for key, value in entity["status"]["resources"].items():
                 self.inventory.set_variable(vm_name, key, value)
+
+            # Add variables created by the user's Jinja2 expressions to the host
+            self._set_composite_vars(self.get_option('compose'), entity["status"]["resources"], vm_name, strict=strict)
+
+            # The following two methods combine the provided variables dictionary with the latest host variables
+            # Using these methods after _set_composite_vars() allows groups to be created with the composed variables
+            self._add_host_to_composed_groups(self.get_option('groups'), entity["status"]["resources"], vm_name, strict=strict)
+            self._add_host_to_keyed_groups(self.get_option('keyed_groups'), entity["status"]["resources"], vm_name, strict=strict)
+