Embassy Developments Limited (EMBDL) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q3 and 9M FY '26 Earnings Conference Call hosted by Embassy Developments Limited. [Operator Instructions] I now hand the conference over to Mr. Aditya Virwani, Promoter and Managing Director from Embassy Developments Limited. Thank you, and over to you, sir.

Good morning, everyone, and thank you for taking the time to join us today. It is a pleasure to welcome you to our first earnings call as Embassy Developments Limited. Joining me today are Sachin Shah, our CEO and Executive Director; Rajesh Kaimal, our CFO and Executive Director; and our Investor Relations Adviser, SGA. Our financial results and investor presentation have been uploaded on the stock exchanges and the company website, and we hope you've had the opportunity to review them. This is our first earnings call as a merged entity. And before we get into the quarter, I'd like to take a step back and share some context on the journey of the company and where we stand today. Calendar year 2025 was a landmark year for the company, marked by the successful completion of the merger between the erstwhile Indiabulls Real Estate Limited and the Embassy Group's development entity, NAM Estates Private Limited. Following approval by the Honorable NCLAT in January 2025, the merged platform was rebranded as Embassy Developments Limited or EDL. This merger was not simply about consolidation. It was a deliberate step to create a stronger, more resilient and future-ready listed real estate platform, one with institutional scale, deeper operating capabilities and broader access to high-quality markets. Through this consolidation, EDL now has a fully enabled presence across North and West India with established operating teams, active projects and on-ground executional capability. At the same time, it provides shareholders access to Embassy's home market of Bengaluru, India's largest commercial real estate market and one of the country's most resilient residential markets. The Embassy Group brings with it over 3 decades of experience and a proven track record of developing over 75 million square feet of salable space across commercial, residential, industrial and hospitality assets. The group has built its reputation on quality, trust and thoughtful development, and these values now form the foundation of Embassy Developments Limited. A critical part of this transformation has been the integration of the legacy Indiabulls project portfolio. Over the past several quarters, we have taken full ownership of these inherited assets and work systematically to bring them to completion. In the period leading up to and including FY '26, 6 previously delayed residential projects across MMR, NCR and Visakhapatnam reached handover stages, enabling more than 3,300 families to finally take possessions of their homes. For us, this was not just about completing projects. It was about restoring that confidence. We firmly believe that institutional credibility is built through delivery and through taking responsibility for inherited commitments. Today, Embassy Developments operates at meaningful scale with a presence across 8 cities, a portfolio of 40-plus projects and approximately 38 million square feet of residential and commercial development. This includes over 30 million square feet of residential development and 7.4 million square feet of commercial assets, supported by a land bank of over 3,100 acres. Our near-term strategy is clearly defined and deliberately sequenced. First, execution remains our top priority, completing ongoing projects with discipline and consistency. Second, we are focused on organic growth through new launches with plans to bring about an aggregating approximately INR 41,000 crores of GDV to the market over the next 3 years, entirely on fully paid up land already within the platform. And finally, we are keen to grow this portfolio beyond our existing land base. We remain highly selective, focusing only on high-margin, high conviction opportunities. By Q3 FY '26, we have secured RERA approval for 6 residential projects with a GDV of approximately INR 13,500 crores, along with a commercial project at Embassy East Business Park in Whitefield with a GDV of around INR 3,100 crores. We have recorded close to INR 2,000 crores of presales in the first 9 months of the year. And with the recent launches, approvals and existing unsold inventory, we remain confident of achieving our INR 5,000 crore FY '26 presales target. As the housing cycle continues to show momentum, we believe Embassy Development has a strong opportunity to grow market share and that the consolidation towards leading trusted brands will just continue. With the team and the product pipeline we have in place, we are excited to demonstrate what the Embassy brand can deliver at scale. I would like to briefly provide an update on ongoing insolvency proceeding. The case relates to facilities availed by Sinnar Thermal Power Limited in 2011 following a court-approved demerger under which the power business was separated from the erstwhile Indiabulls Group and certain historical corporate guarantee arrangements linked to equity infusion obligations. Following the demerger, STPL has been part of the Rattan India Group since 2011. Canara Bank has initiated proceedings against the company alleging liability for repayment of loans of INR 372 crores under an erstwhile corporate guarantee framework and filed a Section 7 application under the Insolvency and Bankruptcy Code 2016. Based on the management's assessment and legal advice, we believe the admission was not warranted on merits. The company has since obtained a stay from NCLT. The next hearing is scheduled for 19th of February, and we remain confident in the strength of our case. I would like to assure investors that our company has adequate financial capacity to address the matter, and we do not expect any impact on business continuity or long-term value creation. With that, I now hand over to Sachin, who will take you through the operational performance of the quarter. Rajesh will then walk you through the financials and after which, we will open the floor for questions. Thank you.

Thank you, Aditya, and welcome, shareholders. I will now take you through the operational progress of the business for the 9 months of FY '26, providing color on what we have achieved versus target, updates across our core markets and key milestones achieved during the period. We have launched 3 residential projects over the last 9 months, resulting in cumulative presales of approximately INR 2,000 crores and cumulative collections of roughly INR 1,100 crores. During the quarter ended December 31, 2025, the company recorded presales of INR 1,392 crores, representing a quarter-on-quarter growth of around 240%, and this was driven by recent launches and strong absorption in our core market of Bengaluru. Collections during Q3 FY 2026 were approximately INR 415 crores, reflecting a 15% quarter-on-quarter increase. Our key residential launches this financial year include Embassy Paradiso, a luxury plot in development within the master planned Embassy Springs in North Bengaluru. The project is fully sold out and achieved realizations of approximately INR 200 crores against an estimated GDV of INR 175 crores. This reflected a strong demand and pricing strength in premium product format for the Embassy developments. Embassy Greenshore launched in November 2025, also within Embassy Springs, it comprises of 878 units across 1.5 million square feet of salable area and recorded presales of approximately INR 804 crores within 5 days of launch, with over 480 units sold as of December 31, 2025. The response validated our product strategy focused on larger layouts, good planning and premium specifications at accessible price points. And lastly, Embassy Eden. Launched in December 2025, Embassy Eden is a premium villa development in North Bengaluru with 95 units and a GDV of INR 1,800 crores. The project has seen a remarkable demand with units worth INR 286 crores sold shortly after launch. Each project is progressing independently with approvals obtained construction planning to meet deadlines and disciplined capital deployment. We've also begun construction on Embassy East Business Park, where we plan to develop 2.7 million square feet in Phase 1. This actually represents a large-scale institutional-grade commercial assets that Embassy is best known for. As we move forward, we remain keen to increase the contribution of commercial assets to the EDL portfolio. We are on track for 4 new launches in Q4, 2 each in Bengaluru and Mumbai, including our marquee 1 million square feet 300-plus meter luxury tower in Worli called Embassy Citadel, which will result in total FY '26 GDV of launch projects exceeding INR 19,000 crores. Other upcoming projects this quarter include Embassy Verde Phase 2, for which RERA approvals have just been obtained. Embassy Sky Terraces is our development management project, a premium residential development in Hebbal, adjacent to the sold-out Embassy Lake Terraces in Bengaluru and Embassy Serenity, 111 unit managed residences in Alibaug for which RERA approval has just come in this month. Combined with the existing unsold inventory across ongoing projects, as Aditya also stated, we remain optimistic about achieving our FY '26 presales guidance of INR 5,000 crores. Collectively, these projects provide strong visibility on execution continuity between the launches beyond the launches already completed. Mumbai represents an important next phase of growth for Embassy Developments. We recently announced our entry into the Mumbai Metropolitan region with the Mumbai campaign in early Jan. Many of you would have seen billboards across the city. The 3 initial residential projects across Worli, Juhu and Alibaug represent a combined gross development value of over INR 12,000 crores and a planned investment of approximately INR 4,500 crores. These will be our first residential developments under the Embassy brand in Mumbai. Our approach to Mumbai has been deliberate and execution-led with an immense amount of attention being paid to design, a hallmark feature that customers in Bengaluru have known Embassy for. Mumbai is also being approached as a credibility-driven expansion than a volume-led market. During the period, we achieved several important regulatory and execution milestones, including the occupancy certificate for 239 apartments at Serene Amara, a senior living project in Bengaluru developed through a joint venture with Columbia Pacific Communities. A key area for focus for us is free cash flow generation and surplus visibility. Across launched, upcoming and planned projects, the company has an estimated project surplus of approximately INR 28,000 crores. It represents a net operational cash margin of 47% based on our management estimates. This surplus is distributed across OC and ongoing projects, new launches in FY '26 and planned launches in FY '27 and '28. This level of cash flow visibility underpins our ability to fund construction, service debt and pursue growth while maintaining balance sheet discipline. With that, now I'll hand over the call to Mr. Rajesh Kaimal, our CFO and Executive Director, who will take you through the financial performance, capital structure and liquidity position of the company. Thank you.

Thank you, Sachin. I'm pleased to walk you through our financial performance, liquidity position and fundraise, revenue and profitability. Total income for 9-month FY '26 is INR 1,495 crores and Q3 stood at INR 264 crores. Gross profit for 9 months FY '26 is INR 254 crores and EBITDA for the same period is negative INR 107 crores. This loss is due to higher cost of goods sold on 2 legacy Indiabulls real estate projects, Vizag and Thane Phase 1 and advanced CAM payments currently absorbed by the company, which we expect to taper over calendar year 2026. While the EBITDA impact is visible this quarter, our new launches are being executed at strong net surplus margins. And as the mix shifts towards new generation projects, we expect profitability to strengthen meaningfully. Collection and construction. For 9-month FY '26, our collections stood at INR 1,096 crores and Q3 collection stood at INR 414 crores, representing a strong 15% quarter-on-quarter growth. For 9 months FY '26, construction spend totals INR 868 crores, a clear reflection of our strong execution cadence and maintaining a healthy spend to collection ratio of 79%. Fundraise and liquidity. We have closed Q3 FY '26 with INR 670 crores in cash and bank balance. New institutional debt stood at approximately INR 3,000 crores, translating to a 0.29x net debt-to-equity ratio. There is an additional INR 1,058 crores of shareholder debt outstanding as on December 31, 2025. Net institutional funds raised through debt in the last 9 months of FY '26 is INR 880 crores, and our liquidity position remains comfortable, supporting both construction activity and upcoming launches. This funding approach reflects our strategy of raising capital in line with execution needs while preserving balance sheet flexibility and maintaining financial discipline. In summary, the quarter reflects strong operating momentum, disciplined capital allocation and a robust balance sheet. We remain focused on sustaining cash flows, supporting project execution and maintaining financial prudence as we scale this business. With that, we would be happy to take your questions.

[Operator Instructions] We take the first question from the line of Niteen S. Dharmawat from Aurum Capital.

Sir, what is the inventory of unsold projects and OC Received projects?

Sure. Aditya, do you want to take that?

Yes. So I would refer you to Slide 12 on our investor presentation. Our unsold inventory is roughly INR 4,500 crores and our sold receivables is INR 4,000 crores. And this is what we consider the first priority of the company is execute, unlock our receivables and sell existing inventory that the company already has.

Okay. And on one of the slides, you mentioned about the GDV value of INR 24,200 crores. So this is across all the projects or there are some projects outside this also?

So INR 24,000 crores would have been...

Yes, this is on Slide 22...

This is Slide 22.

You are referring to Slide 21. This is all the future pipeline of projects beyond FY '26.

Yes. So what is the GDV as of today?

So the total GDV in the company stands at INR 52,000 crores.

Sorry?

The total GDV in the company stands at INR 52,000 crores.

Got it. Okay. And my...

I'd like to add that we've not included our second phase of Embassy Knowledge Park in this number as well. And our land bank numbers are not in this GDV.

Okay. And what will be the approximate values of those?

The reason we didn't put them in there is because we're still working through what we develop and doing our planning on it. So over time, we will come with what these -- what our plan would be. And then based on that, we'll come up with a GDV number on those assets.

Okay. And what is the total debt at consol level? You mentioned about the gross institutional and net institutional debt. So I wanted to know specifically the debt at consol level?

So the institutional debt stood at INR 3,700 crores, and that's the institutional debt. Shareholder debt is approximately INR 1,100-odd crores. So we are looking at a gross total debt at about INR 4,700 crores to INR 4,800 crores.

Okay. And what is the plan to reduce the debt? How do we repay the amount? What is the time line that we are keeping in mind?

So most of these debts are project debts and there is -- from the collection, we will be paying this down over the next few years. While the shareholder debt is something that we are talking about, the 2 main shareholders, which is Blackstone and Embassy Property Developments are holding these debts. We are in discussion with Blackstone as to what best to do, whether to convert to equity or what to do with this debt is something that we are still contemplating.

Rajesh, I'd like to add over here if you refer to our Slide 11, even our next 3 years projects provide a net surplus of INR 21,000 crores, which we'll start seeing the cash flow for that over the next 2, 3 years, 4 years. And that itself would be sufficient to cover not only our cost of construction, but also then our debt repayment out here.

We take the next question from the line of Rusmik Oza from 9 Rays EquiResearch.

I have 3 questions. First is on the erstwhile projects of Indiabulls. If you can just give us some ballpark how much investments you have done to revive or the cost involved to revive erstwhile Indiabull projects now? And going forward, when do you see these projects, the collections could surpass the cost or probably you could generate positive EBITDA from these projects going forward? That's the first question.

You want to proceed with the...

Yes. So Sachin, I'll just take the construction spend. In the first 9 months, we have spent about INR 800 -- not INR 800 crores, roughly about INR 200-odd crores for the erstwhile projects of Indiabulls Real Estate and reviving them.

And Rajesh, maybe I can add some color to this as well qualitatively. So just to give you some sense, a lot of the projects were 85% to 90% complete but were not kind of at the finish line. So what we did was we stepped in over here and just finished the project. There wasn't a lot of construction spend that was necessarily to be done, but the project just had to be finished out here. So Sky Forest is a good example of that, Indiabulls Blue, Thane Phase 1, Vizag project, they were all kind of 85%, 90% done, and we spent, as Rajesh was indicating, INR 200 crores to kind of take them to OC stage. They've all received their OCs now. We've delivered these homes and handed over possessions and in fact, created RWAs and societies also in many of these projects. So that's really the tough work that's happened out here over the last 12 months in terms of getting it to this stage. And your second part of the question, which was will we see any upside out here? I think Panvel would be a very good example out here of a project that was stalled for a very long time. So this is Panvel Park. I think when we had stepped in, there were almost only 50 people at the site doing construction work. Today, there are more than 1,500 construction workers out there. And we are expecting our sales price, which originally was INR 9,000 to INR 10,000 to go up to roughly INR 14,000 to INR 15,000 out there. So yes, we do expect some amount of additional kind of surplus coming from the existing projects as well just because of us coming in and stepping in and rebranding these things.

Okay. Okay. Sir, my second question is regarding the land bank. If you can just give us an update on the 1,400-acre Nashik land bank near Sinnar and plans to actually monetize some parts of that 35 or 70 acres land in Panvel. I just wanted to understand in the next 3 years, what kind of cash flows can we generate from monetizing some of the land bank which we own erstwhile?

Right, sure. Maybe, Aditya, Rajesh, I can take this question. So as you know, we've got roughly 1,500 acres in Nashik, where we were sent a termination and eviction notice by MIDC. We challenged that in Mumbai High Court, which then referred us to Nashik District Court. And in Nashik District Court, we were successful in obtaining a stay against this eviction. While we are fighting with MIDC legally, we have also tried to -- we are working through talking to them and seeing how we can actually amicably sort this between us. So those talks have progressed over the last several months. They are continuing to progress. Our neighbor out here was Rattan Power India that built a power plant, and now that's been taken over by Mahagenco as well as NTPC. And so again, I think it's in the government's interest, it's in our interest to try to see if we can amicably settle this between us to then develop this 1,500-odd acres. One of the key factors on this 1,500 acres is also that it's SEZ land. We believe more than SEZ demand out there today, this -- demand for small industrial plots. And so our goal would be to solve with MIDC, get the debonding done with respect to the SEZ and then basically do a plotted kind of development out here for industrial plots where we're kind of selling wholesale to retail. We've not really sat and worked through kind of what this would yield us, but we do believe our cost in this project is roughly INR 70-odd crores. We believe the multiple on this will exceed far more than what we've invested, even though that's been invested over time. So we remain very positive about this 1,500 acres kind of yielding a good net surplus for us because it's plotted and because there is a demand out there for industrial plots. And with respect to Panvel, we looked at our Panvel portfolio, and we realized there are a bunch of land parcels that were not contiguous. While some of them, they had accumulated some amounts, but maybe stopped at a certain point. So we're taking a strategic decision out here where certain parcels that we just don't feel today would be valuable to kind of spend more money to aggregate. We sell those, which will be the noncore assets and we focus...

Ladies and gentlemen, we have lost the line of the management. Please stay connected while I reconnect the management. Ladies and gentlemen, we have the management line reconnected. Rusmik, if you could please repeat your question for the management.

I think Sachin was continuing with the land bank monetization of Panvel. I just wanted to get a sense on that. And if also in the next 2, 3 years, if we can get any ballpark kind of estimate that how much money can be realized from monetizing this land bank, it would be helpful.

So sorry, I got cut off somewhere. I think you heard my comments about Nashik, right?

Yes, that's right.

Yes. So look, Panvel, again, I think it's -- the land parcel that we feel that we can aggregate more and make contiguous parcel of land where we can do development is the one that we are keeping. And anything that we think is noncore, if it's noncontiguous, it's small amounts in a certain village, it doesn't have road connectivity. They have started aggregating these some time ago, but then it stopped doing it. Those will be kind of the noncore land parcels that we look to sell. This won't be a big amount over the next year or so. But I think, again, like Aditya was saying, our focus is -- we've already got a huge amount of land bank that's there today that we own, which we are converting into projects, which are launched projects, our planned projects, upcoming projects. That's really our first focus. Our second focus will be dealing with these land banks, besides Nashik.

And my third question relates to the commercial project in Whitefield East Business Park. It's INR 1,100 crore project. I think earlier in the presentation -- previous presentation, you all have spoken about tying up with Embassy REIT actually or probably building on own. Can you just throw some light on the time lines and how this is getting funded and how do...

Aditya, take this question.

Sure. So Embassy East Business Park is a project that we broke ground on in Q3. We are in excavation stage. The first phase is 2.7 million square feet, and this will represent exactly what Embassy is best known for, which is large-scale institutional commercial assets, these REITable assets. Yes, you are right. We had a thought about forward purchasing it with Embassy REIT. We have decided now to just build it out. And on completion, the management will take a call whether we feel we should exit this asset to the right buyer and REITs are very competitive buyers. Or should we hold this and build a little bit of annuity in this development company too. This decision has been pushed for much later given it takes 3 to 4 years to build this asset.

Okay. A follow-up question is you've spoken about building more commercial assets in this company. Can you give a little bit of understanding going forward, maybe 3 years down the line, 5 years down the line, what could be the ratio of residential versus commercial? And any plans to enter the commercial side in Bombay also? That's my last question.

Sure. So today, the company would represent roughly an 80-20 split between residential and commercial. And to be honest with you, given how deep the residential market is, I can see that 80-20 continuing for the foreseeable future, too, maybe 70-30, 30% to commercial. And we, as Embassy are just focused on trophy-like selective commercial assets. We don't feel you can build commercial anywhere and everywhere like you could have done once upon a time. We feel now so post-COVID and during this whole AI revolution, office has to be very selectively chosen. And if we find the right site, and we are looking at many sites, we will definitely double down and back our high conviction thesis and do more commercial. But right now, we feel Whitefield ticks that bucket of being the right asset, right location and right size as well to cater to these GCCs. So we're going to continue building that. And if the right opportunity comes in Mumbai, if it comes in Gurgaon, if it comes in Hyderabad, this is a development company that's going to be building those large-scale assets.

We take the next question from the line of Gaurav Khanna from CapGrow Capital Advisors.

First question is the cash balances are continuously reducing with the operational losses. And the second question is that you have given a guidance of INR 5,000 crores, but we have only reached INR 2,000 crores in the first 9 months.

Rajesh, can I have you please take that first question on the cash balance, reducing with the losses. I think that's the question he was asking. And then Aditya, can I have you take the guidance on how from INR 2,000 crores, we get to INR 5,000 crores by the end of the year?

Yes. See, on the losses, this is P&L loss. But if you see the cash balance, that is mostly money deployed in our projects for execution for a new project. What reflects the loss in the P&L is actually historical numbers, which has come for completion, OC and possession. So these are historical numbers, nothing to do with the cash balance. Our cash balance is pretty robust. What we are generating, collections, we have roughly INR 2,000 crores of cash collection -- sorry, INR 1,000 crores of cash collection in the first 9 months, and we see that increasing. So that's not a correct depiction loss vis-a-vis credit collection. Collection is pretty robust. Cash balance is pretty robust. And whatever you see a decrease in cash balance in the current quarter is mainly because of deployment in new projects.

And to answer your second question on how we reach our guidance of INR 5,000 crores, that this company was a little bit heavier on Q3, Q4 going into it. And Q1, Q2 has been muted, given that most of our launches have been Q3 and Q4. And now as per Q3, we have secured RERA approval on 90% of our projects, roughly launching -- by Q4, we would have launched INR 19,000-plus crores of GDV. And I think INR 12,000 crores of that will basically be in -- so we feel confident. We have a really marquee one in Worli, Embassy Citadel that's seeing a lot of good traction. We only got RERA approval on 30th of December, but Q4 has been a great quarter for Citadel. We also have one upcoming launch in Bangalore for Sky Terraces -- Embassy Sky Terraces. And then between the launches at Embassy Springs, we've seen much robust demand, frankly, not seeing a slowdown in the housing having -- pricing has also gone much higher than our earlier underwriting. So we still feel confident. It's 2 months away. We feel confident that we can hit this INR 5,000 crores number.

We take the next question from the line of Rohit Choudhary from Integrity Capital.

I have a question beyond the Canara Bank fiasco, do you see any other legacy issues that would come out to haunt us in the future? Have you done any evaluation on that front?

Yes. I think the great thing...

Sorry, go ahead, Aditya.

Sachin, maybe you can take it just by explaining what you and the management did in the interim of the merger process, and then I'll just add on to that.

Sure. So I think the key over here is while the merger got over last year in January, the 2 years before that, I stepped in to start cleaning up the company. And we spent a lot of time cleaning up the balance sheet, which has been completed, doing a change of guard of senior management instilling HR policies. We had an independent Board that was running and looking after the company while the merger was being completed. So a lot of the cleanup, including litigations and legal issues had been taken care of. This was a -- in our mind, it wasn't even a corporate guarantee. It was an obligation to fund, which had been fulfilled by the borrower itself. So it should not have come on to us. But it's something that did happen and it got us unaware. We actually believe that we have a pretty good understanding of the combined company, the erstwhile Indiabulls as well. And we don't expect really anything new. We do have certain kind of ongoing [ NSE ] kind of discussions going on with respect to certain past things. So there's nothing new that's out there today that we feel can again create surprises. And we feel we're in pretty good shape out here. So Aditya, with that, I'll hand it over to you to give your thoughts on this.

Yes, I think you answered it pretty well. So I feel we feel pretty comfortable about the way ahead and most of the legacy issues are behind us. It took a little bit of teething issues for us to get to this stage, and we intentionally didn't start our earnings call for those reasons, but we now feel really comfortable that the company is comfortably in third gear, moving into fourth gear. And we actually feel that the next year FY '27 is going to be a very exciting year for the company because we have so much pipeline of these launches that we have for FY '26 as well as a great pipeline for the next year 2, and we can now build on this story and catch up to where Embassy deserves to be.

I have one more follow-up question. Beyond 2030, so I see a lot of these projects getting executed over the next 3 to 4 years. What would be our strategy beyond 2030 to -- how we use our cash that comes in? Do we go for an asset-light model or an asset-heavy model, if you have any thoughts on that?

Yes. So maybe I can take that. Look, for the next 3 years, it's very clear that we have a lot of raw material to execute on. And whatever we do on the business development side is going to be very, very selective, especially at this time of the housing cycle where we see land prices inflated and we see a plateauing on selling price. And this is quite normal in any cycle that we've seen in the past, too. So in a sense, we are quite happy that we're not having surplus liquidity to go out there and buy land. We don't feel that's the right strategy as a company. But we're being very selective. We did one JV in Whitefield. It's a residential JV. We love those type of margins. We put in INR 50 crores as the deposit. We'll put in another INR 20 crores of working capital, and we can see INR 450-plus crores of surplus back to the company. So that is a high IRR deal that we like. We definitely want to do more of those, probably a little bit more asset-light in the early days. But as we go on and as we build enough surplus, we want to actually unlock our land bank. That's one. And two, we want to go high conviction, buy lands where we can have a higher margin, play bigger games, create city-style developments, create large-scale office type of developments. That's the eventual plan post 2030 is to do more ourselves. But I think up until then, we'll be more selective, more asset-light and focus on just making our brand known in these new markets in Mumbai. We have 2 small projects in NCR. We consider them a pilot into NCR. We're building out a team there. It seems like the most obvious market to go deeper into after Mumbai. But right now, we have a great halo effect in Bangalore. We want to build on that. We want to take that into Mumbai, go deep into Mumbai with the right projects. We don't want to be desperate for any redevelopments. We feel the margins were too thin. At the same time, we're very relevant. We're in pretty much most deals being relevant and seeing if there's a play there for us. But I think we're going to take it step by step and not rush into it, especially at this time of the housing cycle.

We take the next question from the line of Siddhartha Bhavin from Shagun Capital.

So most of my questions were already answered. I just have a few. On EBITDA level, we are not profitable. Is it because the pricing pressure of the market or any demand supply mismatch in the project locations or anything else?

Sure. Rajesh, would you want to take this and maybe I can add to it if needed?

So as I said, this -- the EBITDA margin that you are seeing in the P&L today, these are historical projects which have been completed OC Received that now started handing over to customers or some of them are OC Received, and we are doing the balance sellout. So this is not depictive of the projects that are ongoing now and what we have launched in the last 2 quarters. So I would say that all our current projects are good projects with high cash margins in excess of 45%, 47% to 60% kind of cash margins. We are seeing good robust sales in all our projects, especially Bombay and Bangalore. Sachin, if you want to add to that?

Yes. I think you said it correctly. I think what you're seeing today as our EBITDA is reflected from our revenue number of INR 1,386 crores for the 9 months. But when you kind of break down our cost of goods sold over there, the main bulk of it is coming from One Indiabulls Thane and Vizag and then completion of certain Golf City, Enigma, Indiabulls Blue projects. These projects have been in the pipeline for the last 10 years. They've just received their OC. So what's happened is the revenue was clocked several years ago in terms of the presales number, in terms of the price per square foot and the cost to complete because it dragged down for so long, went on for 10 years. And finally, when the OC comes in, it gets taken into our P&L. So I don't think our EBITDA is reflective of what the company is doing today, the net cash surplus margins that we're generating on the projects today and how we're looking at getting cash surplus in the system over the next kind of 2 or 3 years, which will then obviously help us grow the business even more. So I think there's a big difference in kind of what EBITDA is reflecting versus where the company is operationally today.

Okay, sir. Understood. And one more thing, what is the average ticket size of our residential projects and also the average ticket size of residential projects, specifically in Mumbai locations, what kind of ticket size you are looking for.

Look, I think that's a very tough question to answer because each -- it's a micro market-specific answer on what our price per square foot will be. What it will be in Thane will be very different than what will be in Worli versus what it will be in Alibaug. So I think it's really dependent on the project and the location. I think it's tough to average it out across projects. That might not be the right way of looking at it.

We take the next question from the line of Roshan from InnoVen Capital Fund.

I just wanted to ask 2 questions. First is when will the balance sheet show profitability? Because main investors look for profit like from the last 3 to 4 quarters, it's a loss. And second is, why was the revenue hit by 50% this quarter?

Rajesh, would you like to take this?

Yes. So because we are now closing out all the legacy projects, the balance sheet profit will take at least 4 to 6 quarters to show on the P&L. And as far as revenue is concerned, as I earlier said, we have limited number of projects. Most of our projects are OC Received now. And what we are doing -- booking now is the balance sales that we are clocking and we are recognizing the revenue and EBITDA. So some of these new projects, when it comes for OC is when you will see the revenue in the P&L going up, but you can progressively see presales and collection accelerating at a much faster pace as what you would see in the P&L.

Okay. And one more thing -- which Whitefield project, one of CEO had spoken about that INR 70 crores investment and a surplus of INR 400 crores, when will that come into the seat or when will the project be completed?

Yes, I'll take that. So we closed that JV in September, October of last year, and we're going to launch it in Q3 of this year -- of FY '27.

Okay. That's great. That's a good thing. I'm just looking for some profitability numbers soon.

So Roshan, just to reiterate, while profitability is in the P&L will be a little different, but the embedded EBITDA and profit in each of these projects will start -- has already started. So you can see the cash flow is something that will be relevant over here. You can see good collections, good presale, good collection and a good profit -- cash margin that we will be clocking every quarter starting from now. I think that will be a good benchmark for you to follow as compared to the P&L profit, revenue and profit.

And I guess, Roshan, if I could add to that, that the way to look at it is any Embassy project that we have brought in will -- once we get OCs on those projects, there will -- it will hit the top and bottom line. The erstwhile Indiabulls projects like Visakhapatnam, for example, or any of the old legacy projects because of the mismanagement is hurting and reflecting today. So what's reflecting today is actually the sins of the last few years, and it's going to take some time naturally. While Rajesh Kaimal had said 4, 6 quarters, it could even take a little bit longer as more OCs of the Embassy projects come in and take care of that number. So yes, unfortunately, headlines might not be great, but we are just focusing on presales, on collections, on just basic business principles and hoping that real estate investors who understand how accounting works will be able to see through this and understand. But frankly, there's not much that the management can do to remedy this in the short-term.

We take the next question from the line of Kevin Gandhi from CapGrow Capital Advisors.

Sir, I had a couple of questions. So basically, I actually missed out on the point of your commentary on the Nashik and the Panvel projects. So can you just please repeat what is the plans land parcels?

So look, Nashik is roughly 1,500-odd acres, and our plan is to figure out how to amicably reach a resolution with MIDC and the government to solve this, right? Can you hear me? Kevin, can you hear us?

I think -- we can hear you, Sachin, but I think Kevin's line is a little bad.

Yes, I can hear Kevin.

Kevin has left the question queue, sir. We'll move on to the next question, which is from the line of Amish Kanani from Knowise Investment Managers.

Congratulations on a successful integration of the company. And also congratulations on continuously updating the investors at least through the presentations that we have been seeing all these quarters. And also, again, congratulations on starting the conference so that we get clarity on the company's progress. I have 2 questions, sir. One, Worli project, we have seen through press release that we had received RERA. But it's such a large project and such a marquee maybe evaluation, maybe launch price of between INR 80,000 to INR 1 lakh. What is holding the launch, if at all? Or is it a soft launch and maybe we'll announce the collection in due course of time? So one specific to Worli, if you can give us some update of where are we and when will we launch or soft launch? And is this a typical MOU type of sales that Godrej Group does in Mumbai? And sir, on the -- we have a medium-term GDV and presales target versus presales and GDV target for this year. If you can give us some early indication, if possible, whether -- what kind of GDV or presales is possible in FY '27? Or should we kind of deduct the 3-year target minus this year's target and reduce something on FY '27?

Sure. Let me maybe take a cut at it, Aditya, you can step in. So look, I think with respect to the Bombay launch, we were just waiting for RERA approval, which came, as Aditya was saying on December 30 of last quarter. And so in January, we started our Mumbai campaign. You should be seeing our hoardings all across the city. And so Mumbai presales have started for the project. And in due course, we will come out with kind of what our numbers look like for this quarter with respect to Citadel sales. So I think that was your one question on Citadel. With respect to FY '27, we will be coming out with guidance in around the March time frame -- March or April time frame for the second year of our 3-year kind of guidance that we had. So give it some few months and maybe we will come out with guidance, but it's looking strong for FY '27. In FY '26, in terms of GDV, we've hit INR 19,000 crores across several projects. And we are still confident even though we've hit INR 2,000 crores of presales in the first 3 quarters, if you just look at our numbers, the first 6 months, we were at INR 600 crores. Then now we are at INR 2,000 crores, and we think we can get that INR 2,000 crores up to INR 5,000 crores by the end of March 31. So we're sticking to our guidance. We have a plan in place, and we are trying to execute on that over the next kind of 60-odd days or so. Yes.

Yes. And sir, on the debt side, how comfortable we are with this kind of debt? What kind of construction needs that you'll have? I understand you said the surplus that we'll be generating is enough to repay the debt. But the question is, one, what is the current cost of capital, if at all, what is the range of cost that we are facing? Because at least on paper, it's a company which is undergoing through a so-called bankruptcy process. I know we are fighting in the court. But one, cost of capital. And in that context, there was a reference that shareholder debt is also there, which we were wondering whether we should convert. So if you can give some color there, what are the current thoughts, if at all?

Sure. Rajesh, would you like to take this?

Yes. So yes, thank you for your compliment. And on the debt side, we have sufficient funds for executing our current launch projects. Some of the projects which are coming up for launch in the next financial year, we will be raising some construction finance for that particular -- those particular projects. The current cost of capital is a little high because we are in the cycle where we are launching projects, and we see that over the next 4 to 6 quarters, we'll bring down the cost of debt progressively. Today, the average cost of debt is around 14%. And some of the new construction finance that we are raising today is sub-9%. And that's the indication that in the principle term sheet that we have got from many of the lenders whom we are talking to is sub-9%. So some of these debts are historical in nature, and we will pay them down over the next few quarters. Bring down this -- our endeavor is to bring down this cost of capital from the current 14% to the 10% kind of range over the next year or so. It might take a little longer time, but it will progressively come down.

Sure. And sir, one last question on this. I hope our bankers understand the cases not so much -- it is more a hindrance and irritant on the whole thing, given the scale of operation of our company and surplus that we will generate. I hope bankers are not getting -- bankers are giving us a normal treatment. They're not scared the way maybe equity market investors are because of whatever reasons.

Absolutely, you're right. And we have engaged with the bankers right from December 12, the next wave of our NCLAT stay. We have engaged with our bankers on a regular basis. And happy to say that all the bankers understand this is a very bizarre kind of a judgment where the first corporate guarantor was discharged and 5 minutes later, we were included. They completely understand we have a strong legal case in our favor. And they have been very supportive of us. And they have -- and as you can see, none of them have called back their loans or even issued a letter to us. They've only taken clarifications from us, and they are very, very confident of us getting out. And we have not even received a kind of an adverse remark or a letter from any of our bankers today. We are, in fact, speaking to bankers on the next phase of capital raise for like, for example, Embassy East Business Park, which we have launched today, we are trying to raise construction finance from banks like Bank of Baroda, SBI. They're not even concerned about all these things. They know that we have a pretty strong case. Our balance sheet is very strong. And these are the banks who are talking to us that construction finance of 9%.

Rajesh, I will add even the rating agencies have not downgraded us. They've understood the situation. You met them. So I think people understand what's happened out there.

We take the next question from the line of Deepak Parswani from Small Investment.

Sir, just wanted to get your perspective on 2 things. Firstly, from the next 3-year perspective, we have given the presales and collection. If you can also get a broader sense in terms of the construction as well as the approval budget as well as the BD activity, which we are looking at from the next 3-year perspective, which can give us a sense in terms of the net cash flows? And second part of the question is, in terms of the launch pipeline, which we have indicated, I mean, significant one in the near-term appears to be the Embassy Citadel, which is in Worli itself. So if you can give a broader sense what -- I mean, how has been we are assessing the market? Because from the market perspective, in general, there are the other large developer has also come out with a significant project pipeline in this area. So what would be our sales strategy there? And how has been our assessment in terms of the sales response in this macro market?

So Aditya, do you want to take the first part of the question? I can -- or even the second part with respect to pricing strategy for Citadel.

Let me take the second question first. So look, yes, we know that there's a lot of supply in Worli. We have intentionally positioned ourselves quite differently. From a ticket size point of view, from a product itself, we are not a full floor plate. We are not -- and by the way, we are not launching at 1 lakh square foot. We're way more competitive than what's out there in the market. Also, our starting ticket sizes, our units started also 1,800 square feet. So I think this positions us quite uniquely because, yes, we are a luxury developer. Yes, the Mumbai homebuyer might take some time to understand the Embassy brand. And the early days, we will be a little bit more generous with our selling strategy. But as the show suite is ready, which is going to be ready in April, May, we will do a little bit of presales now that we have RERA from now until April, clock some numbers, some good numbers. And then we feel this brand can really get its premium and we can really showcase the product. So this is our strategy. We're very aware about the market and what's happening there. There are some developers who are asking a much higher price than what we are going out in the market. And I feel that's where we can be a little bit unique with our offering. Also on the cash margin for Citadel -- sorry, was your question on Citadel specifically or...

So if you can also give a broader sense for the cash flow profile from the next 3-year perspective, the way we have mentioned about the presales and collection, if you can also give a sense on the -- what would be our approval cost budget and construction cost budget? And what is the kind of new BD budget we are looking at from the next 3-year perspective?

Got it. So for all the FY '26 launches, we have secured all our approval funding from the debt that we raised from Kotak and enough money to working capital to even pass through RERA and the initial sales period. For FY '27, if you look at some of our projects that we have lined up for next year, a lot of them are also in Embassy Springs, which is an established township where we already have the DP, we have the master plan approvals. We are unlocking lands there where we don't need a whole lot of working capital to do so. The other one would be Embassy Knowledge Park, another large land where we've already secured building plan on. So we actually feel that we're in a unique situation where we don't need too much more approval money going forward. It was all done when we did this raise. And it for us was a one-and-done exercise where, yes, it's an inverted U curve chart in the sense debt will go up, has gone up slightly for us to execute this. Maybe a few projects will top up a little bit, but everyone will see the company graduate to a lower cost of capital and a much lower debt base as well over time. So I don't have an exact number for you, but feel comfortable that it's not a whole lot of money needed to launch even the future projects for next year.

I think our Slide 11 talks about the launches for the next years, what the cost to complete is and what the net surplus we expect to make from it in our investor deck.

We take the next question from the line of Varun Dujari from Vinayak Udyog.

Basically, I wanted to ask whether -- actually, I have been answered in my -- actually, the question has been raised earlier, but I would put it differently. Sir, when can we turn 11%, 12% ROE positive company till when we can turn ROE 11%, 12%?

Yes. I think -- look, it's an interesting question you're asking about return on equity. Look, I think, firstly, it's very important to note, look, this is a merger of 2 companies that have come together, where during the merger itself, there was reverse merger accounting that took place. There were assets that were fair market valued with respect to when the combination took place, right? And today, what you're seeing is actually a -- at least from a P&L perspective, you're seeing a PAT number that reflects projects that have been in the system for the last several years that have finally received its OC. I think we will have to wait for this next cycle of assets that we are developing today to be completed, reach OC, and that's when you'll start seeing kind of achieve probably even maybe a higher ROE, but it will be from this next set of projects that will take the next kind of 2, 3 years to kind of get finished, completed, developed, cash surplus to come out of it and then obviously, a PAT number to be reflected based on that as well. I think it's tough to project when exactly it will happen, but I think we're moving in the right direction out here with respect to completing the problems that we had in the company, in the merged entity, putting that behind us and then focusing on what we have today, which is our land bank, developing that and kind of growth out there over the next several years. Aditya and Rajesh, please feel free to add to this.

No, you covered it, Sachin well. I think that's -- I don't know, Gautam, if you have any further questions on this.

Sir would it be right to assume that for another 1.5 years, we shall be loss-making company at least from the profit loss account sense?

Yes, we will be PAT negative for the next 6-odd quarters. But cash flow will be -- but we'll be cash flow profitable. You can see that from the cash flow.

Okay. And sir, regarding the land parcel in the Panvel, where we have huge land parcel. So when do we plan to develop the project in the Panvel, sir, where we have a large land parcel.

Gautam, maybe I can take that. So yes, the company does have a significant amount of land in the whole Panvel, Raigad region, which is quite exciting. But if I have to be honest, from a timing point of view, we don't see this as a #1 priority. We see the #1 priority unlocking the existing receivables and selling the unsold inventory. We see priority #2, launching the projects that can be launched very quickly, which included Citadel, which includes all the Embassy Springs projects and all the pipeline that we have for FY '26 and '27. The lands that we have are lands that can be aggregated, completed because there might not be complete parcels today. They need conversions. These take a lot of time in real estate and something that's not very predictable. So we intentionally wanted to keep it out of the GDV because when the company has surplus money that we can address all of these lands with and when we can bake the cake a little bit more and have more predictable timing and sense planning on what the projects can do, that's when we'll bring this to the market. But frankly, it is a priority #3 for the company. It's not something that we are focusing a lot of our energy on. In fact, we are more keen on deals out there, third-party deals that we can do like the Whitefield one I explained where within 12 months, we should be able to launch. And that really, I feel is the heart of this business is how fast can you move from land to launch. And we are going to demonstrate that with the Whitefield launch. It will be the first new project. I think we will generate a huge IRR there. And those are the type of deals we want to do. And as and when the company generates surplus after paying construction, after deleveraging and we have further cash flow to deploy, then I feel it is the right time to address the land banks that we have, except for Nashik. Nashik is an outlier, large piece, 1,500 acres. That is something of top priority that the management is addressing immediately.

Aditya, aren't you worried? The promoters pledge is all about 50% and the daily -- I mean to say the pricing of the shares are under heavy pressure?

I'm not too worried, to be honest, Gautam, because from a promoter side, we have enough assets backing the loans that we have. We have quite a unique structure where we have 3 listed entities. We have our REIT, we have WeWork and we have the development company. And this is where we see the most value creation. So we feel comfortable that over time, the family can pay down its shareholding loan. And that is the idea of the family is to eventually over the next couple of years, get to a place where we pay down that shareholder loan.

Ladies and gentlemen, due to time constraint, we take that as the last question and conclude the question-and-answer session. I now hand over the conference to the management for their closing comments.

Thank you for your time and joining us today. We appreciate your continued interest in Embassy Developments Limited. Should you have any further questions or require additional information, please feel free to reach out to us or to SGA, our Investor Relations adviser. We'll be happy to assist you. Thank you all, and have a good day.

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