Presales surge masks profit pressure; margin recovery key test

Presales INR700 Cr vs INR306 Cr prior Q1; 129% growth confirmed

Delivered revenue 526.7 Cr, 40.7% YoY growth; call figure close

EBITDA growth 70%, margin expansion to 13% confirmed by delivered OPM 11.6%

Q1 margin 13%, well below FY27 target; raised from prior 16-18% band

Revenue +40.7% but PAT -18.6% YoY; interest cost INR47 Cr Q1 eroded profitability

Confirmed 0.7x, below 1.0x target; liquidity INR271 Cr adequate

16-18% (prior) → 17-19% (now). Call reaffirmed commitment; Q1 delivered 13% but blamed early-stage project costs, claimed recovery in Q2+.

64% of Q1 presales from 8 JDA projects (vs owned land 36%). Capital-efficient model now dominant; de-risks land-buy risk.

Gross debt ₹1,095 Cr (Q1 FY27) vs ₹380 Cr (Q1 FY26); 189% increase. Funds JDA/project expansion. Interest cost INR47 Cr Q1 expected to reach ₹100-120 Cr full year; profit pressure.

Management refused to quantify FY27 PAT guidance; only EBITDA + revenue guided. Signals uncertainty on profit delivery amid cost/interest headwinds; previously implied profit growth from prior calls.

FII+DII holdings ↓ from 22% (Q1 FY26) to 8% (Q1 FY27). Management blamed post-demerger size limits; retail/family offices filled gap. Limits capital-raising flexibility.

Focus on Q4 project execution; demand robust, market conditions favorable, no significant demand shift seen. Cost pressures (global) temporary. Govt stable, pro-growth. Plenty of buffers in cost estimates over 5-6 yr project cycles.

D/E 0.7x, well below 1.0x internal target. AIFs exploring SPV-level involvement. Equity last resort. Cost of debt down to 9.6%, rating strong, cash-flow focus with manufacturing mindset. No near-term leverage risk.

Launch ~18 months out (Jan 2028). Ticket size ₹6-20 Cr (Address/Invictus, not TenX). 1.7M sqft, ₹8.5k Cr GDV. Pricing/inventory TBD at launch.

On track for 2 launches in FY27: Mahim-1 Q3 (Nov-Dec 2026), Mahim-2 Q4 (Feb-Mar 2027). Approvals on track. Monsoon delays minor.

SPV incorporation for pipeline deals. No announcement yet. Multiple SPVs kept ready for projects. Wait for deal signed announcement.

2 projects this year: Mahim-1 (₹2.5k Cr GDV), Mahim-2 (₹2.1k Cr). 6 JDAs total launched by FY27 end (out of 8). Remaining 2 (Parel, Kandivali) recent, approvals pending.

JDA: 10-15% upfront land deposit, bulk to approvals/construction. Capital ₹300-350 Cr per ₹2k Cr GDV deal. Owned land 25-26% margin; JDA 20% target (early stage, scales in FY28+). ROCE >20% due to capital efficiency; blended 17-19% EBITDA FY27.

Cost of debt 9.6% stable. Absolute interest Q1 ₹47 Cr; full year ₹100-120 Cr expected (with gross debt ₹1,095 Cr). Debt will grow for another 1-2 years due to expansion, then moderate as projects mature.

Focused on MMR for foreseeable future. Pune studied for 2 years; no deals met return hurdles. Competitor influx into Maharashtra; no need to exit home turf.

100% development control mandatory. Partners become passive. Step-in rights on rehab/approvals if partner delays. Protects brand promise & execution risk.

Gross debt ₹1,095 Cr, 9.6% cost of debt → ~₹100 Cr base estimate + dues-to-govt interest (8-9%, lower than bank loans). Full-year target ₹100-120 Cr; no exact disclosure yet.

Demand remains strong. Home Fest annual event (3 years running), monsoon footfall driver, not distress. Q1 exceeded projections. No softness observed in any project.

No PAT guidance given. EBITDA & revenue guided (20%+ growth, 17-19% margin). Growth needs debt (lower cost than equity dilution). Math: EBITDA +20%, interest ₹100-120 Cr → PAT calculation deferred. Shareholder to do math themselves.

Post-demerger, size constraints forced DII exits (not performance). Family offices & retail filled gap. Market cap ₹3k→₹4k+ Cr; renewed interest emerging. New IR head (Sumeet Sabharwal) hired for dedicated outreach to institutions. Addressing concern.

Dues-to-govt = govt installments on approval costs. Cost 8-9%, lower than bank rates. Attracts because keeps ROCE high. Full composition disclosure promised, not yet in hand.

Q1 delivered +40.7% YoY; 2x guidance minimum already. ₹52k Cr GDV pipeline provides 7-8 yr visibility. Management very confident reaffirmed.

Q1 delivered 13%; 400-600 bps below target. Management claims early-stage project upfront costs compress margins; recovery expected Q2-Q4 as projects mature and construction crosses revenue thresholds.

JDA projects currently below 20% (early stage, price ramp-up expected). By FY28, expected to hit 20%. Thane land already mature at 25-26%. Portfolio-blended 17-19% feasible if mix normalizes.

Parel (₹8.5k Cr) peak capital ₹350-500 Cr (phased launch). Asset-light model (10-15% land deposit) vs land-buy (thousands of Cr upfront). Capital-efficient.

Revenue +40.7% but PAT −18.6% YoY. Interest cost ₹47 Cr Q1, FY27 target ₹100-120 Cr. JDA projects at launch phase have suppressed margins; recovery unproven. Management lacks PAT guidance—signals uncertainty.

Debt jumped ₹380 Cr (FY26 Q1) → ₹1,095 Cr (FY27 Q1). Management expects 1-2 more years of elevated debt. D/E 0.7x is healthy but trajectory high. If presales/collections slow, debt service pressure rises.

Parel launch ~18 months (Jan 2028), Mahim-1 Q3 (monsoon season), Mahim-2 Q4. Delays would compress FY27/28 presales and push margin recovery. Monsoon already cited as minor concern.

FII/DII exited due to post-demerger size constraints (not performance). Retail/family offices filled gap. If major capital raise needed (for JDA funding), limited institutional demand could dilute equity valuation.

400-600 bps gap between Q1 margin and full-year target. Management blames early-stage projects; expects normalization in Q2+ as construction crosses revenue thresholds. No detailed bridge provided; risk of shortfall if project costs remain sticky.