Aditya Birla Real Estate Limited (500040) Earnings Call Transcript & Summary

Ladies and gentlemen, good morning, and welcome to the Aditya Birla Real Estate Limited Q1 FY '26 Post Results Conference Call hosted by Antique Stockbroking Limited. [Operator Instructions] Please note that this conference is being recorded. I will now hand the conference over to Mr. Biplab Debbarma Antique Stockbroking Limited for opening remarks. Thank you, and over to you.

Thank you, Ryan. Good morning, everyone, and welcome to the Q1 FY '26 Earnings Call of Aditya Birla Real Estate hosted by Antique Stock Broking. Please note certain statements made during this call may be forward-looking in nature and are subject to risks and uncertainties. Actual results may vary materially. Today, we have with us the management of the company represented by Mr. R. K. Dalmia, Managing Director, Aditya Birla Real Estate; Mr. K.T. Jithendran, Managing Director and CEO, Birla Estates; Mr. Snehal Shah, CFO, Aditya Birla Real Estate; and Mr. Keyur Shah, CFO, Birla Estates. Without further ado, let me hand over the call to Mr. Dalmia, over to you, sir.

Thank you. Good morning, everyone, and welcome to the earnings conference call for the first quarter of financial year 2026. As many of you know at Aditya Birla real Estate we are in the midst of a strategic transformation, shaping the company into one of the India's most focused and future ready real estate platforms. Financial '25 was a landmark year in this journey. And we have entered financial year '26 with same level of discipline and long-term ambitions. During the first quarter of financial year 2026, our primary focus was on execution, consolidation and preparing for a robust launch pipeline in the quarters ahead. We began this year with the backdrop of a resilient Indian economy. With strong macroeconomic fundamentals and stable GDP growth projections, the long-term structural demand for quality real estate remain unequivocally strong. It is within this promising context that we are executing our refined strategy with a focus towards the real estate business. And therefore, we are in the process of divesting our paper deal. India's residential real sector is in the phase of steady growth driven by execution excellence, product differentiation and brand trust. The market has seen a good traction with adoption of exceeding new supply by 8.3% in financial year '25. The luxury segment continued to outperform, fueled by discerning domestic audience and growing interest from NRIs. Mumbai Metropolitan region, MMR, Pune, Bengaluru and NCR continue to remain the key market contributing to 50% of units sold in financial year 2025. And this was a quarter without any new projects launches for the company. Our efforts were concentrated on driving sales momentum in our existing portfolio and ensuring strong construction progress across all sites. Consequently, our booking value for the quarter stood at INR 423 crores, which grew by 61% year-on-year. The area sold for the quarter grew by 327% year-on-year to 0.3 million square feet. Our collection for the quarter grew by 12% year-on-year at INR 545 crores. This performance reflects the sustained interest in our marquee projects and underlying strength of Birla Estates brand even in a period of plant consolidation ahead of our next growth phase. One of the most notable developments during the quarter for our company was that Birla Estate concluded a USD 50 million or around INR 420 crores investment from International Finance Corporation, IFC, a member of World Bank Group. The investment has been made in Manjri project in Pune, having approximately 3.13 million square feet saleable area and in the Thane project with approximate 6.43 million square feet saleable area. This partnership shows a strong vote of confidence from one of the largest and highly respected global investors. The partnership also boost our ESG credential and support sustainable inclusive development. Accordingly -- additionally, on ESG front, we achieved the Bureau of Energy Efficiency certification for both Birla Aurora and Birla Centurion, recognizing our efforts to create energy-efficient, environmentally conscious development and set a new benchmark in sustainable real estate. On the marketing front, we increased our investment in strengthening our brand and fostering a deeper connection with our customers. We raised our IPL association by becoming the principal sponsor of the Royal Challenger Bengaluru, which significantly boosted brand visibility and making Birla Estate one of the most reckoned real estate brand during the season. Looking ahead, our growth trajectory is clear and well defined. Our total portfolio now has a gross development value potential of around INR 70,000 crores, providing us a multiyear growth visibility. For the remainder of financial year '26, we have a robust launch pipeline with an estimated gross development value of over INR 13,900 crores. This included much anticipated projects such as next phase of our mark in Birla Niyaara Project, Worli; new phases at Birla Navya in Gurugram and our new developments in high-growth corridors like Thane and Boisar in MMR. With that, we can now open the floor for question. Thank you.

[Operator Instructions] The first question comes from the line of Karan Khanna from AMBIT Capital.

My first question to you, K.T., if you can talk a bit about the luxury housing market in Mumbai, particularly because we have seen some signs of slowdown in the MMR luxury market. And if you can also talk a bit about the Niyaara project, where we've seen INR 360 crores of sales in the fourth quarter and this quarter, that's down to about INR 60 crores. How are you thinking about sales velocity for the balance INR 2,300 crores of inventory that you have in Phase 1 and 2? And more importantly, how should one think about the launch of Niyaara Phase 3 later this year?

Yes. So, Worli, as a luxury market continues to be very strong. We are very bullish on this market. It's true that there has been more launches, more projects have got launched here. But I think it will be too premature to judge the demand in the market unless there is a clear launch which has happened. As far as we are concerned, we had a strong quarter last year. And this quarter, we had a few cancellations, otherwise, I think still there was about 5 or 6 units which were sold over the quarter. Actually, quarter 1 is a little early for the momentum to pick up. But we are very confident the number of walk-ins, the number of demands, the number of strong leads that we still have, the price which is holding, the demand for the product, et cetera, I think we are very confident that we will have a strong response over the year. And we are very excited and looking forward to the new phase launch, which will most probably happen in the last phase of quarter 3 or early quarter 4.

Sure. This is helpful, K.T. My second question, if we look at the launch pipeline for FY '26 and beyond, that's there in Slide 17 of the investor presentation. For the 9 launches that are slated for later this year, can you give some timelines in terms of what could be the launch distribution across the 3 quarters of FY '26?

Yes. So most of the launches are -- and in fact, almost all launches are kind of pitched up in Q3 and Q4 since we had a very strong launch quarter in Q4, we will be planning all these launches as per our planned calendar. It was stated to be in Q3-Q4. The good news is that for Manjri, we have already got the RERA. Our launch preparations have started. But unless you're completely ready in terms of going into the market, we will take our time. We have enough time. So either it will be in the last quarter of Q2, but most probably in the first phase of Q3. All the others, I can assure you, we are going well as per the track, and we are pretty confident of launching all this in various months of Q3 and Q4.

Sure. Thirdly, in Slide 27 of the investor presentation where you've spoken about the estimated surplus potential from the launch projects, which stands at about INR 7,300 crores and you previously mentioned that the surplus potential from launched and pipeline projects would be closer to INR 22,000 crores. Two questions here, one, do you still expect to realize about INR 15,000 crores in surplus from the pipeline projects? And two, what would be the total surplus cash flow that would accrue to Birla Estates?

Yes. I'll ask Keyur to answer this question.

So Karan, basically, we have estimated the collections from already the inventory which is sold, that is over INR 11,000 crores, which is the sold inventory. From the unsold inventory, we will collect around INR 6,000 crores. So that is how we have estimated the collections. And after reducing all the costs pertaining to the completion of the entire project, we estimate INR 7,300 crores of surplus potential that's how we have considered it.

Sure, but this is the Birla's share in the...

Yes.

And lastly in terms of BD, what's the progress here? Are you on track to achieve the INR 15,000 crores BD target that you had mentioned earlier?

Yes. So BD, we have guided -- I mean, last year, as you know, we did about INR 25,000 crores. We have a very strong pipeline in all our regions -- our targeted regions. But this whole process, as you know, it takes its own time to make sure that we do the right deals, with the right returns, in the right market, right location, right pricing. So very confident of doing somewhere around that. I can't assure you it will be INR 15,000 or INR 10,000 or INR 20,000 but that' what we are targeting, and we are well on course of achieving that.

We take the next question from the line of Akash Gupta from Nomura.

My first question is with response to -- with respect to the Sector 150 Noida Project and IHP JDA Project, what is the status of those 2 projects as well as the Thane approvals. Where are we for these 3 projects?

Yes. So as far as Noida 150 is concerned we haven't made much progress, and I'm not very hopeful. We're not really counting on that. Which was your second question?

The status of the IHP JDA project, Mathura Road and as well as the Thane approvals with respect to the Thane project?

IHP is also going slow, unfortunately. We are hoping that there will be some progress. It's really not happened, but pretty hopeful that this will come around. So we have not taken it in our target for launch this year. And Thane is going okay. Thane, we are gearing up for the launch.

Okay. So even Thane, we should expect it in the third quarter?

Yes, yes, Q3.

Okay. And my second question, sir, if you can give us some visibility with respect to the third tower in Niyaara, any visibility on what type of configurations are we looking at and what type of price points we are looking at?

Akash, we are planning to do this launch in Q4 or late Q3. So we are still in the process of firming up the pricing and the configuration. So at the right time, we'll let you know.

The next question comes from the line of Dixit Doshi from Whitestone Financial Advisors Private Limited.

My first question is regarding the Niyaara only. So I think net-net, you said that we had some cancellation. But -- so net-net, we are maybe around 99 or 100 flat. So obviously, the market looks slightly slow, but you are much more confident. So do you have any number in mind that, let's say, 120, 125, 130 this much x number of flat will be sold and then only we will plan for the third phase.

Ladies and gentlemen, we have lost the line of the management. Please stay connected while I rejoin the management. Mr. Doshi, we have the management reconnected. If you can please repeat your question for the management.

Yes. So my question was that the market looks slow in the Worli, but you are quite confident of launch. So my question is that do you have any number in mind where, let's say, 120, 130, x number of units will be sold in Tower 2, then only we will plan for Tower 3?

We have already achieved that number, Dixit. We have crossed -- I mean, we were planning about 2/3 and then we shall move ahead. So we are around that. So we are now fully gearing up for launching the new phase.

Okay. And my second question is, in earlier calls, you have mentioned that the cost is around INR 25,000 in Worli. So is it also for the Tower 1 also because...

All inclusive. Average cost for the entire over the next 5, 7 years, that's what -- it includes all towers. It's an average cost. Yes.

It's an average cost, including all towers. Okay.

We take the next question from the line of Amit Srivastava from B&K Securities.

Sir, my question is on our launch pipeline basically. So if we look at for the FY '26, we have a very strong pipeline of INR 14,000 crores, which is going to be launched over the next 2, 3 quarters. But if we look at for the future, we have a strong GDV of INR 42,000 crores going ahead, but larger part of this is concentrated in Worli and Thane, around INR 25,000 crores, which will be launched over the phase manner in multiple years. And considering that the new projects which we will sign in the next couple of quarters, that will take around 1 year time to launch. So are we getting sort of launch pipeline in FY '27 to maintain the INR 14, 000 crores, INR 15,000 crores of launch for that year?

Yes, so to keep the momentum of growth going, we will, of course, keep looking for addition of new projects, but at -- not the cost of financial discipline and returns and the brand equity, et cetera. So we realize that to keep the momentum growing, we need to add new projects in all locations, and we are mindful of that, and we are working towards that. Amit, did that...

Yes. So basically, so we are confident that we can launch similar kind of numbers in FY '26.

Yes. We need to add projects. We are working towards that only that we have been careful that we add the right projects and we take the right risk and maintain financial discipline.

Sure, sir. And in terms of the project specific, sir, in Bangalore, sir, we have a GDV of INR 3,000 crores. We sold around INR 800 crores plus. This quarter, we have not seen much traction in that. So have we not launched any new tower? Or what was the project specific update, if you can give? And any progress on our Century Bazaar development plan?

So as far as Birla Evara is concerned, we had launched an inventory of INR 1,594 crores or thereabouts, and we have sold about INR 900 crores. So I think we can still have enough room to move ahead. There has been a slight slowdown in the first quarter in terms of [indiscernible] picking up and all the noises around the IT industry, et cetera. But I think the real momentum will pick up when the festival season starts and the product is very good as the product comes up. So we'll take stock of that, whether we want to launch the next few buildings that is there depending on demand consumption of the current phase. But happy note that we have sold more than 50% of the inventory. And yes, so the rest of the inventory, we will time it accordingly.

And on Century Bazaar, sir?

Century [ Bhavan ], yes, that's planning in progress. Still several options we are considering. So the key thing is to time it with the overall market supply and also don't want to clash it with Birla Niyaara. So that work is going on. We are in no hurry to launch that.

Okay. Sir, the next question is basically on a very good strategic alliance, which we have done with IFC and Mitsubishi. So just wanted your thoughts on a long-term perspective, how these are going to play in our development or scale of our company ? Is this a scalable partnerships or is it project specific? And how we are going to prioritize in future projects because we have a Mitsubishi, which is itself is a large and still we got IFC. So we have shown these projects to Mitsubishi also and then accordingly, it has gone to IFC, how it's working out?

Yes. So we have been pretty -- this thing fortunate to have such a good partners. Both are very, very high-profile partners, Mitsubishi globally is not only in terms of financial strength, but also in terms of real estate know-how. And IFC, of course, equally strong, financially strong, sustainability, huge focus in that and very high in terms of feasibility of projects, checking in all the right risk requirements, et cetera. So our projects have stood very high in their profile. And I think there were also -- of course, IFCs, we just signed it last quarter, but Mitsubishi, we are going great. We're -- they're looking forward to many more such profitable ventures. And I think it's a very good strategy that where we are not doing JDAs and you think there is too much concentration of capital and we could perhaps divest it and do a proper risk management -- risk management strategy for Birla Estate going forward, maintain stronger financial discipline and also learn a lot from how to do large-scale business and focus on execution, et cetera, safety, faster construction technologies. So it's a very win-win, good partnership that we have evolved, and we are looking forward to building it further.

Okay. Great, sir. And last, just a clarification on our Paper business, sir, when can we expect completion of deal?

Paper? Yes. So I think that's on track.

Paper unit is on track. We expect to complete this process by the end of calendar year 2025.

The next question comes from the line of Puneet from HSBC.

My first question is if you can elaborate a bit more on what value is Mitsubishi bringing to the JV? And also, if there is a plan to do similar sort of setup in Worli as well because you guys will have land bank, which is just adjacent to each other. Any thoughts there?

Yes. So Mitsubishi, of course, as I mentioned, the value is immense. We told you when they came into the project after we have worked on this Sarjapur land quite a bit. We have worked on the risk and they have given us an adequate and quite profitable premium there. And also, we are getting a 6% DM fee and over and above that promote, which is also very lucrative. More important than just the financial part, we are more interested in the strategic partnership that we are looking at them and the kind of the knowledge and experience and know-how they bring into real estate. They were almost 70, 80 years global real estate company, [ $70 ] billion or thereabouts globally big. So very sophisticated ways of working, processes, et cetera. What really work with us is our transparency processes, fair play, the legacy of the brand, et cetera. So the value systems matched and therefore, they were also very happy among several developers in India they chose us to go ahead with. As regards to Worli is concerned, no, we are not really looking at a partnership for the residential portfolio. We really don't need it. We are well established in Worli and the capital investment is not much. So I think we are not really looking forward to partner with them in the residential part of the Worli portfolio. While we are thinking also about developing the commercial portfolio, there, it could be a worthwhile exploration process or whether they would be interested. And we are exploring amongst several other large institutions. Mitsubishi is also a candidate for that.

Understood. That's very helpful. And secondly, on the IFC JV, will that limit you to do projects on the affordable nature? Are you free to do upper mid-income, mid-income as demand the grows?

Yes. As you know, none of our projects are affordable in that sense. Our projects are all very aspirational, high or mid-income or premium. So really, I think there's absolutely no such limitations.

Understood. And thirdly, if you can also talk a bit about any new cities that you're planning to enter at this point of time?

Right now, as we see, given our management bandwidth, focus required, complexities of approvals in various cities, real estate essentially being a very regional play. The RERA also differs from region to region. I think we are very happy to establish ourselves, consolidate, expand ourselves in the 4 cities we have chosen. They continue to be the most sought after 4 top cities. I think there's a lot of work for us to do here and establish ourselves. So that call of moving into a few -- or expanding into more cities is a little further away. We always be looking and we are watching out, we're looking out any cities which showing strong long-term potential. And I'm sure there will subsidies will come up, and we are keeping a close watch on all of that. But at the moment, we are focused on growing ourselves and expanding ourselves in the 4 cities that we have chosen.

Okay. That's helpful. And lastly for Keyur, there is this rental income, INR 275 million, which declined both Y-on-Y and Q-on-Q. How should one think about it?

So both our properties are fully occupied. There's one of the tenants who is -- for renewal was underway. So that will get normalized at the full year-end.

No worries as the income is increasing and we are at 100% occupancy. So absolutely no worries there, Puneet.

Yes, which is why I was surprised to see a decline here. I thought it should have been pretty stable number.

Momentary transitionary stage where once we are in the process of renewing a rent. So there will be maybe a month or 2 of rent-free period, et cetera. But I mean long term, it's only growing, yes.

Okay. And on the cancellation for Worli, which you talked about, what kind of amount do you end up forfeiting?

Forfeiting?

Yes, if somebody cancels...

Yes. As per the regional cost, we abide by the RERA loss, whatever 10%, net loss. Whatever the loss that is there as per RERA, we follow the RERA rules clearly. And also as a long customer, we take a look at it, what kind of reasons are there for canceling. It's very serious. So we look -- take a view from our long-term customer centricity point of view.

We take the next question from the line of Dhananjay Mishra from Sunidhi Securities.

So most of our launches will be coming in Q3 or later part of Q4. So we have unsold inventory of close to INR 6,000 crores. So what kind of sales booking we are looking at in Q2 and overall FY '26?

So I hesitate to kind of give any forward-looking guidance on this part. So we will do our best and all markets are looking stable. But as you know, Dhananjay, bulk of the real spikes come from -- during launches, that's where the whole excitement is. The bulk of the growth prospects will come in Q3, Q4 when the launches happen. And we will be really looking for our numbers to the -- bulk of it will come from the launches. So it should be similar. I mean, what we are doing currently or steady or maybe better than this as we expect Q2 should be -- if there is a pickup, momentum, et cetera, depending on the overall market sentiments. But the real punch will come from the launches.

Okay. But Q2 should be much better than Q1 and overall FY '26 will be some growth on number of FY '25, right? That is the right side again, sir?

I have -- as in the past, told you that we are not really giving you a guidance here towards to short term, too much impacted by short-term events, uncertainties, interest rate fluctuations, international news, et cetera. So it's really -- and of course, the entire approval system is subject to severe shocks and uncertainties. So really, I wouldn't like to do the injustice of guiding the team into something which is not very certain. So that's why we have taken a long-term view of giving you a long-term 3-year horizon where we are more sure of giving a more certain guidance. So I really don't want to kind of take you into any other direction. So we are focused on giving a long-term growth and long-term guidance to you.

We take the next question from the line of Biplab Debbarma from Antique Stockbroking Limited.

So my first question is on IFC deal. So on the recently announced private equity deal involving IFC, sir, it appears that the transaction has been done close to our acquisition cost. I mean, [indiscernible] is around INR 600 crores and Manjri around INR 300 crores. And if you see 44% to IFC for INR 420 crores translated into some INR 950-odd crores. So it looks like we are doing the deal close to acquisition cost. So what was the -- I mean given that we are on the verge of receiving proceeds from the Paper business divestment, what was the urgency or liquidity need to close this P-deal? And what is the strategic rationale? I mean, why did you actually do this deal? And have you received the fund from IFC already? Or is it still in the process? So this is my first question, sir.

So Biplab, before I hand over to Keyur to give you all the details of the deal on a strategic level, I just want to express to you that if you carefully look at these 2 deals, both the Thane deal and the Manjri deal, you would very clearly appreciate that we have not paid the full value of the land. These are both deferred land acquisitions. So we have not really paid the value of the land. In fact, we have paid only a part of it. And that is true for both these particular projects. Having said that, there is also a premium that we have taken in terms of warehousing interest in both these projects. So it's not at the acquisition cost. It is a higher cost than that. But the larger and broader came is that whenever there is a kind of an acquisition, which we had -- where concentration of capital is because of the outright is more than what we would look at. So I think it's a very effective financial risk management strategy that we get a partner -- a strategic partner through sharing the risk. And you must understand that all of these are equity in nature. They are not any structured debt or debt -- or equity in the form of a debt or something like this is pure equity. And the upside and downside, both are very shared proportionately. And these are not -- this requirement for capital and capital will keep coming and going. We may have a paper, discounting of paper may go, may get some capital, we may go raise capital from many other renowned sources, et cetera. But I think it's a good long-term strategy to have global partners who will also help us give a second opinion on the kind of acquisitions we are making. Capital always made -- capital always available and that those people who understand and willing to take the risk. And we should -- to make these partnerships, I think forge this partnerships really when we actually don't need them. When we actually need and we go to people that's not the right thing to get the right valuation. So I think it's not that I looked at my 12 months or 6-month requirement and said, oh, there is a shortage of capital, so let's run to somebody. These are all long-term calls taken over the next 5, 10 years, how should we grow the business, good times, bad times, et cetera. So that's how we sort this out at the strategic level. Keyur, you can add.

Just to add, Biplab, these transactions with both Mitsubishi and IFC take 12 to 18 months or more to conclude. So at that time, when we were initiating the discussions, there was no divestment of paper on the table. And now we have demonstrated that we have global partners who are putting their balance sheet money for 15, 20 years, and we also kind of get access to their way of working. And IFC has categorized this under the green category for this particular investment. And we want to be at the cutting edge in ESG. That's one of our mandates and charters because that's going to be the future. Also, we earn DM fees and promote on all the transactions. So in a way, it's a win-win for us. So that's the reason why we decided to go ahead with this. And going forward, whenever we need to access capital, these partners are readily available to put capital with us because all the heavy lifting has already been done. And now we have a platform in place, which can be quickly replicated.

So, Biplab, it's a double-engine strategy. We also -- capital -- it just opens up another capital avenue. Capital is never adequate. We always -- there are opportunities we need capital and also it's risk management. So both -- it works to us both ways very well.

So basically, this is not just a short-term divestment for liquidity needs. It's basically a strategy -- long-term strategy.

You got it. You got it.

Understood. Understood. And my second question is on the upcoming launch of Tower 3 Niyaara. So just trying to understand what would be your target customer segment? I mean, obviously HNIs, but I mean, are we focusing on NRIs? At kind of -- how much do you think like 10%, 20% would be sold to NRIs? I know you will say by the year, but HNIs from Indian -- other Indian cities or specific offshore geographies like Gulf, U.K., North America. I'm asking this question given that significant competing supply are there in the Worli market, all by leading developers and you may be aware of them, many of them are listed also. So just trying to understand how do you intend to position Niyaara? And how do you intend to differentiate? And who -- what would be the target audience? Because it's very important for us, for Birla Estates and then Niyaara Third Tower do as well as Tower 1 and Tower 2 did? Yes, sir. That's my second question.

Yes. So Biplab, if you may allow me, Niyaara has already created a very strong position in the market. Irrespective of time, over the last few years, it has firmly established itself as one of the most premium developments based on the design, based on the brand equity, based on the investment we have done in understanding our consumers and positioning it accordingly. And more importantly, on the size of the project, the plot size itself. I don't think, however, marquee developers are around with due respect all of them, they have the advantage of such a fantastic location and the size of the location. So that plays very heavily -- as a heavy advantage to us. So we are not really concerned about positioning or repositioning Niyaara. Niyaara is very firmly positioned primarily by these qualities, which I mentioned, which I think it's hard for anybody else to replicate because they don't have what we have. Having said that, from tower to tower, of course, there will be tweaking and amendments, et cetera, depending on the short term or the current market ups and down, demand supply gap, et cetera. So that we are carefully tuning it so that not primarily in the long term, I think everything will get sold. I mean the product is so good and so premiumly positioned, but largely from maximizing the offtake at the launch time. So with that, we are working in progress. Of course, it will be slightly different from Tower B, different from Tower A. We're trying to bring out something. It's too early for us to disclose it today. And this is a market, of course, like what has been in the past, will be heavily from the South Mumbai, coupled by the large Indian cities, the mofussil cities of Maharashtra and strong -- like it has happened in the past from the Middle East, Singapore, U.K., U.S., we have had a pretty strong 20-plus percent demand from all these sectors. So I think that demand will continue.

Okay. Great. And sir, that question, have we received the funds from IFC already that INR 420-odd crores?

Yes, we've received. The funds were received in July.

We take the next question from the line of [ Himanshu Javia ] an investor.

So I wanted to ask, there is a lot of redevelopment happening around the Mumbai, as you are aware. So what are your views 3 to 5 years down the line? Do you think the excessive supply of redevelopment will be affecting our long-term plans for the company in terms of supply I'm talking?

Yes, very valid. I think the way forward for the development of Mumbai will be substantially skewed towards redevelopment. Redevelopment has its pros and cons. But as you know, Mumbai, there is hardly any industrial land available. Most of that has got consumed. The last few are up for taking. So -- and buildings have got old, if you look at South Bombay and other major parts of Island City and even now the suburbs. So I think redevelopment is a very strong phenomenon, and it has to be addressed. And we also believe that we have a presence -- we should have a presence there, and we should create a niche there. We are working towards it. We have a dedicated team looking at the opportunities. And I think the biggest advantage we have as a brand is the trust because redevelopment largely works on trust, families, move out of their societies, out of their plots, trusting and giving it into the developer, hoping that the developer will get them back to their plot within a reasonable amount of time. So I think -- so we have a huge advantage there, and we are working towards creating a strong presence in that market, taking a strong market share. Of course, the ticket sizes will be small, but I think it can quickly scale up by the number of projects. So we consider that as an essential part of our future BD strategy for Mumbai.

And are we looking at some big redevelopment projects for the company?

We are, we are. We are very aggressively looking at adding some projects through that channel.

We take the next question from the line of Akash Gupta from Nomura.

So sir, my question was regarding to build up Punya. I think this year, we are planning to launch roughly INR 20 billion of GDV here. I think we already have the RERA approval for this one. So what is the reason for holding this project?

Akash, we had the RERA for the first phase. And after that, remember last year, we could launch only a small part of the inventory because of some changes in rules. We need another fire service floor above the 17th floor, et cetera. So we could launch only till 16 floors. Now we are gearing up, we need a new RERA. There are some 3 NOCs, et cetera, which all we have covered. We have got the environmental clearance also. We are waiting the RERA, and then we will launch a big tranche this year.

Got it. Got it. And sir, just wanted to understand on the cash flow situation. So how should we look at the year-end net debt for the company?

So Akash, from the way the cash flows are, we are expecting very strong cash flows from our -- collections. As we've always been saying, our outflows are lesser than our collections. So from an overall operating level, we will be cash surplus, including after the debt servicing, which is planned to be done. So we will be cash surplus from that perspective. Further the proceeds from the sale of business also will kind of help us from an overall cash flow position. So we are very, very comfortably placed from a cash flow position.

Okay. And sir, just wanted to understand like are we waiting for the proceeds from this ITC deal to come in and then we go for a lot of BDs? Is that how we should think about it?

Akash, Snehal here. That is not the case. We are not waiting for the -- we have sufficient scope to borrow additional money without impacting our debt equity ratio significantly. So that capability we have, as Keyur mentioned, first of all, there will be some cash surplus coming from the real estate business, which will be first use for the BD. And if there is any additional capital required, we are quite in a good position to borrow extra to meet that requirement. So it is not that we are seriously waiting for the paper deal. Paper deal, when it happens, it will only help us reduce our debt that's all.

We do have follow-up questions from the line of Himanshu Javia, an investor.

Yes, K.T. so I was looking at for the Prabhadevi project, Century Bazaar, I think. So I wanted your views on that. What is the long-term plan? Because as you know, the Oberoi 360 has done extremely well in terms of the premium project pricing and the project. So what are your plans for that particular project? Maybe...

I do apologize to interrupt you, Himanshu. We have lost the line of the management. Please stay connected while I rejoin the management. Thank you for your patience, Himanshu, we have the line of the management reconnected. Please proceed with your question.

K.T. , so I wanted your views on the Prabhadevi, Century Bazaar Project. As you know, the Oberoi 360 project has done extremely well. So what is our long-term plan for that particular project? Are we looking at the same kind of premium project because it's an extremely prime location for the company?

Yes. So we don't have any plans right now for that project. It's not in our short-term plans. We will look at it at the right time.

Okay. And the investor presentation is showing the Worli new plot is the one which we bought recently, right? And there's a small plot showing the Worli West project, which that's a small one.

Yes, that's about 3.5 acres.

It's not part of the diagram.

Yes. So that's an additional...

That's not part of Niyaara right. It's a separate one.

No, that's not part of Niyaara.

That is not part of the map that is there. It is not in the map that we have presented.

Okay. And what are the particular places where we are looking for the BDs in this financial year, particularly Mumbai, et cetera, or...

Mumbai is a very strong focus. NCR, both Noida, Bengaluru and Pune.

And K.T. your views on the NCR region because I'm reading some articles, a lot of supply coming in for NCR and the pricing also is looking very, very -- the prices have gone up very sharply in the last 3, 4 years. So your views on that.

So see, what I see is that the right location pricing, the pricing -- right pricing is very important. If you overprice in a location, then there's a good chance the project may not really take off, which has happened in, I think, for a few projects recently. So I think right pricing, right location, strong brand, absolutely the right design, I think understanding your consumer, all those factors, if you get it all right, I think there have been extremely successful launches, as you would have noticed in the last quarter with strong brands. So I think if you read the market right, I think there is enough and more opportunities. And we are pretty bullish.

We take the next question from the line of [ Rahil ] from Crown Capital.

Can you hear me?

Yes, we can.

Yes. So have you given any presales and collections guidance for this year, FY '26?

No, I think I have already mentioned we are not giving any guidance. We are more focused on the long term. Yes.

Can you hear us?

Rahil.

Sorry, your voice got. Yes, I can hear you.

We are not giving any annual guidance for this year because I didn't really -- it doesn't make sense given so many uncertainties and approvals, et cetera. We are rather happy giving you our long-term 3-year guidance, which we have guided you for an annual sales of INR 15,000 crores in no particular order. So it will be more back-ended. So that's the best I can sort of give a direction today.

This INR 15,000 crores by when? Sorry, your voice is dropping in between.

3 years -- in 3 years' time, for the next 3 years, yes -- annual sales.

And this -- got it. Got it. And the collections, which you've mentioned, the surplus in your presentation. So by when do you -- like what time line will they come in for the company?

Yes. So we have already started getting enough and more collect surpluses. It started from last year. We have amped it up this year, and it will continue to have more and more surplus as we go on. We're already at a surplus. It's pretty reasonably healthy surplus this year by the time we ended this year. And we expect that to keep growing, the gap year-on-year.

We take the next question from the line of [ Esha Shah ] from Nirzar Enterprises.

Am I audible?

Yes, yes, you are, Esha.

Okay. Sir, so my question is, how are we moving in terms of execution across all the projects? Like is it going as per our time line?

Yes. So I think the most key focus as a company we do is on getting projects on time with primary focus on safety, quality, time lines and within the budgeted. So far, I'm very happy and proud to say that all our projects are as per our time lines.

We take the next question from the line of Sujit Jain, from Bajaj Life Insurance.

[indiscernible] sales has been an issue, at least for this quarter for us. Others have also reported people like Oberoi, et cetera. And luxury segment, it looks like in terms of presales is under pressure. And when we hear commentary from housing finance companies also, yesterday, one of the largest has also spoken about soft real estate market. So in this scenario, how do you ensure that rather than reacting to a potential slowdown in sales, proactively, you kind of get your presales going?

So Sujit, if you would have noticed the trend, likely the real surge in sales happens during the launches and bulk of the inventory gets absorbed during the launches. So it's really hard to judge any kind of trends on a -- when there are no launches. Again, the markets and the -- speaking for ourselves, most of the markets that we are representing, there is hardly any offtake of housing finance. It's not much. It's less than 50% or much lower than that. Having said that, I think I wouldn't say our presales has been far below expectations. It's been more or less as we had expected. Because of the huge absorption in Q4, bulk of our inventories had got absorbed. So there was a lack of good inventory because there were no launches and because of very strong absorption of Q4, which is really -- we are left with very poor relatable inventory in Q1. So I wouldn't say that there is a reflection of the market at all. I think market is still going good for the right brand, as I mentioned in the past, with the right location, right pricing. If you get carried away and do overpricing, yes, then there is a risk of poor response. So I think we are very prepared and we are very positive of the market, the segments in which we are in. We look forward to a very resilient future real estate for the next 9 months. I think the festival season is also going to really pump-up demand. There's a lot of new launches coming at the right locations. And if you design the product right, price it right, I think there is no cause for worry. The overall macroeconomic demand supply positions are very strong, and we expect that to continue for a few more years.

I get that. But when I look at and you can correct me on these numbers. Niyaara you have Phase 2 and Phase 1 put together roughly INR 2,400 crores of inventory to be sold?

So if I look at, I'm looking at selling this inventory as per our strategy closer to possession. If you look at Tower 1, out of 414, we have already sold more than 400 apartments. So I'm not really pushing as you can imagine. So if we have sold more than 90%, and these are very leftover inventory. Yes. So we are not really looking at pushing or selling these things. So you have to contextualize in the right thing. As far as Niyaara 2 is concerned, we almost sold about 99 out of 148. And we're not really pushing it because the bulk of the inventory is gone, and there has been a huge uptake in Q4. We still sold a sizable one in Q1. We had a few cancellations because of some long-term pending issue for some of the customers. And there is so much demand coming in, so much inquiry coming, strong leads. So I'm not really, Sujit, worried about lack of demand. Demand is very much there.

Sure. Just on presales, while you're not guiding, as you said, is it safe to assume that you will exceed what you did in FY '25 and by a decent margin?

Yes. So that...

It is 2-way to be strong, like you said.

Exactly. So you are basically trying to put words in my mouth. So I can't say that. So I'll refrain from giving you any sort of guidance of that sort. I maintain my position that we are looking at a larger long-term view, INR 15,000 crores per annum is what we are looking at, and it's not going to be a straight line. Okay. So...

Directionally, would the presales be strong this year as well? That is what we are trying to look.

Yes, yes. Once the launches come up, I think it's going to be very strong. We have about INR 13,000 crores plus of launches coming. So very, very excited and looking towards that.

We do have follow-up questions from the line of Biplab Debbarma from Antique Stock Broking Limited.

Sir, 2 quick questions. One is on the Paper business divestment. I was under the impression that deal would be closed in this quarter I mean July-August. But now it looks the deal would be closed towards the end of calendar year 2025. So could you clarify if there is any risk or uncertainty around the deal not closing as planned?

No, there are no uncertainties and deal is on track, and we expect to complete by the end of this calendar year 2025.

Okay, sir. And second question is on the payment -- land payment -- land-related payments still pending for Manjri and Thane projects. How much we have paid or how much is still pending in Manjri and Thane both? How much we have to pay?

So now which is overdue, I can discuss that with you offline. In Thane, the payment has already been made. And with the IFC funding coming in, there's no further payment which we have to contribute to.

I mean land payment has been made but that will come from...

Yes, we don't need to contribute as in Birla Estates point of view. Our commitment is already fully made.

Ladies and gentlemen, there are no further questions from the participants. I now hand the conference over to the management for their closing comments.

Thank you all for participating in this earnings con call. If you have any further questions or would like to know more about the company, please reach out to our IR managers at Valorem Advisors. Thank you for your interest in our company. Thank you.

Thank you. On behalf of Antique Stockbroking Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.