Lodha Developers Limited (LODHA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Lodha Developers Limited Q1 FY '27 Earnings Conference Call. [Operator Instructions] . I now hand the conference over to Mr. Chintan Parikh, Company Head of Investor Relations for opening remarks. Thank you, and over to you, sir.

Thank you, Leo. Welcome to Lodha Developers Q1 FY '27 Conference Call. Today, we have with us Mr. Abhishek Lodha, Managing Director; Mr. [indiscernible], Residences; Mr. Sushil Kumar Modi, Group Finance Director; Mr. Sanjay Chauhan, Chief Financial Officer. I would now like to ask -- invite Abhishek to make his opening remarks. Over to you, Abhishek.

Thank you, Chintan. Good afternoon, everyone, and thank you for joining us. I hope you're doing well. As we had laid out at the previous call from this quarter onwards, the primary lens through which we would like you to assess Lodha is accounted from profit after tax. The numbers that are audited that flow into book value and against which return on equity is actually concluded. Alongside this, I would also ask you to watch operating cash flow because profit and cash together are the true reflection of any business. Please note that accounted profit will not be a trend line quarter-on-quarter, under percentage of completion accounting, quarterly revenue is a function of 3 things that do not move in lockstep, receipt of minimum sale proceeds from our buyers, how much construction cost was incurred in each plant in that quarter and whether the land or annuity transactions have happened and closed within the quarter. None of these arrive evenly across 12 months. So there will be quarters that undershoot and quarters that overshoot. Our commitment of 20% PAT growth is an annual guidance, not a quarterly one. Please do not annualize any single quarter, and that includes this one, which sits firmly at the favorable end of that variance. In terms of the highlights of the performance in the quarter, revenue for the quarter was at INR 50 billion, up 43% year-on-year. The adjusted EBITDA was INR 21.5 billion, up 79% at a margin of 43% against 34.4% a year ago. PAT was at INR 13.7 billion, more than doubled the INR 6.8 billion of Q1 FY '26 at a PAT margin of 26.9% against 18.6% in the equivalent quarter a year ago, our best-ever quarter on revenue, on EBITDA and on PAT. I would like to highlight that land monetization is not an exceptional item for this company. It is a planned recurring pillar of our business. We now hold about 660 acres in our data center park. Of this, of the first phase of 370 acres, we intend -- we have already monetized about 130 acres and we intend to further monetize about 150 acres over the next 3 to 4 years, which itself will generate close to INR 10,000 crores of sales. Beyond this, we have an additional approximately 300 acres of optionality in our data center park. Further, through our land co, shaping and coming together, we intend to monetize land for noncompeting users, for example, back office in places where we have surplus land like Palava. Thus, overall, we expect land to be between INR 2,000 crores to INR 3,000 crores of sales every year for the next several years. Secondly, the residential engine is in very good shape. As we had laid out in the previous quarter, we expected the Middle East conflict to persist through this quarter -- through the Q1 and end by the end of Q1. And therefore, we had deliberately postponed launches for -- out of this quarter and these launches generally make up about 1/3 of presales. From Q2, our launches will and already have commenced, and we are on track to deliver for our presales growth on the residential side. In terms of our guidance for fiscal '27, that is 20% growth on last year's PAT of INR 34.3 billion, and hence, approximately INR 41 billion of PAT. Q1 has delivered 33% of that. We are ahead of the curve. We are not raising guidance on the strength of one quarter, but we will endeavor to outperform. Cash, the number I would like to also talk about collections for the quarter were INR 42.1 billion, up 46% Y-o-Y. That converted to INR 18.9 billion of operating cash flow. After investments, we still reduced net debt by INR 4.5 billion to now under INR 50 billion. Net debt to equity now stands at approximately 0.2x against our self-imposed of 0.5x. Net worth is just under INR 250 billion. Average cost of debt is stable at 7.8% amongst the lowest in the industry, supported by our AA rating and upgrades since 2021. Funding all of our growth from operations, while simultaneously deleveraging is, in my view, the genuine signal in this quarter, more so than any other number. Presales for the quarter were INR 46.3 billion, up 4% year-on-year. That is below our trend line, and I want to explain it properly rather than quickly. This was a decision, not an outcome. We launched almost nothing on the residential side in the first quarter, except for one new face in Mumbai of approximately 0.4 million square feet. In a normal quarter, new launches account for roughly about 1/3 of presales, and we effectively removed that 1/3 from this quarter. In terms of where the Middle East situation stands now, the conflict has not resolved by the end of June as we had assumed. Let me give you updated assessment rather than just assume that everything is normalized. The demand impact is quite moderate. Middle East NRI buyers represent about 4% [indiscernible] of our sales, roughly 1/3 of our total NRI business and sentiment there remains subdued. There is an offsetting dynamic we think that is not yet fully played out. Uncertainty abroad is and will pose NRI to want to secure a home base in India. We expect to also see the same pattern from U.S.-based for immigration-related reasons. Last year, about INR 350 billion flow from India into Dubai real estate. A material part of that will now stay in India. On the cost side, our supply chain is about 95% domestic, so availability has not been a problem. Energy-intensive input costs have risen. If this situation persist for a full year, we would expect project construction costs to rise by between 1% to 1.5%, which spread across 3- to 4-year build period. And as you know, price response is in project-level EBITDA impact of between 35 to 75 basis points. In context, our overall construction cost inflation since April 2022 has run at approximately 3% per annum, where this leaves us is that approach on increase certainty. But on the evidence in front of us today, the impact does not look materially negative to our fiscal '27 delivery. If Russia, Ukraine is any guide, this kind of volatility walks itself out over the medium term. And we will, of course, keep you updated if that assessment changes. In terms of the rest of the year, we reaffirm our INR 240 billion presales guidance for fiscal '27 and we expect H1 to be 40% to 42% of the full year, as we had mentioned in the start of the year itself. The balance of the year of the sales will happen in H2. For the full year, the launch calendar carries about 20-plus projects and phases totaling approximately INR 250 billion of GDV, including our first launch in NCR as well as continued growth in Bangalore and Pune. The Mulund-Airoli-Palava Freeway opening, which brings Airoli within a 20-minute drive and Mulund within 25 minutes as well as the Upper Thane connector to Viviana Mall should both be opening after the monsoon and hence, will be supportive of growth in sales in our large land holdings in those locations. In terms of the immediate outlook for quarter 2, we're off to a good start in July, and we expect presales to be INR 50 billion or more on the back of the planned calendar for this quarter. Now coming to data centers and NRI, significant development of the quarter was the entry of Digital Edge India, a joint venture between Digital Edge Singapore and National Infrastructure and Investment Fund into our Green Data Center Park at Palava joining AWS and STT. The transaction was concluded at approximately INR 420 million per acre, the previous transactions in calendar '25, was at INR 210 million per acre. So this is an almost doubling of value in just less than 12 months. Overall, the value of our land at Palava has risen more than 15x over the last 5 years, 3 independent global operators, AWS, STT and now Digital Edge data have reconfirmed that this location is amongst, if not the very best, for setting up Greenfield data centers in India perhaps in Asia, and that shows the long-term strength of what lies ahead of us on the data center side. As I had mentioned earlier, we hold approximately 660 acres of land in our DC park with approximately 3 gigs of power availability at about USD 0.06 to USD 0.08 per unit, 5 fiber optic routes, 5 transmission line and approval under the Maharashtra Green Integrated Data Center policy. Of this, about 130 acres has now been sold and we expect to monetize a further 150 acres over the next 3 to 4 years at an average of about INR 600 million per acre, generating approximately INR 90 billion of further sales just from Phase 1 of our land. This will fund the build-out of about 1 gigawatt of powered shell on approximately 90 acres, which will generate over INR 20 billion of rental income by fiscal '32. The balance land of approximately 300 acres gives us further optionality for both sales as well as build out on our balance sheet, and we will evaluate the same in due course. I want to underline the capital structure of how we are building out the data center business. Data center build is largely self-funded from bank sales inside the same park. It does not add to group leverage, and it does not compete with our DevCo for capital in any significant manner. On the broader annuity business, our exit run rate for June was approximately INR 3 billion. without any contribution from data centers. That target is over INR 30 billion by fiscal '32, of which about INR 20 billion plus will come from data centers, INR 6 billion from retail and offices and about INR 4 billion from warehouse. These numbers are basis the land that's already been acquired and where development activity is really progressing. We have not take into account any further incline, still expect to provide further upside to the overall rental scale of our business. The assets that are under development are largely performing ahead of underwriting. We invest in RentCo and midterm returns on equity, assuming appropriate leverage against the rental seats. At RentCo level, as I had mentioned earlier, of course, we intend to be effectively debt free over the next 2 to 3 years. Let me close the substantive part by restating what we are committing to. Our guidance of about 20% PAT growth over the medium term, taking us beyond INR 85 billion over the next 5 years, i.e., by fiscal '31. Our return on equity which is current -- was about 16% in fiscal '26, moving upwards any closer towards 20%, though it might not touch 20%. DevCo being net debt free in the next 2, 3 years as development opportunity -- as business development requirements paper against an unsold GDV of approximately INR 2 trillion enough to support growth for the foreseeable future. And net debt to equity always remains below our ceiling of 0.5x. We are at 0.2x today. Our capital allocation hierarchy, is clear and publicly stated the opportunities where there is brand fit and execution capacity, about 20% ROE in DevCo and above -- at about 15% in RentCo. A regular dividend at 15% to 20% of PAT thereafter debt reduction and thereafter, any surplus towards buyback or special dividends. Our market cap on the development business across the top 6 cities is just 3.5% in value terms. The runway is not our constraint. Our own discipline is. And this quarter is an illustration of just that, not an exception. One final point. We measure ourselves on 2 things: both equally valuable, profit after tax and our reputation with customers and employees. This quarter, we launched the Lodha Theoretical Physical Institute, India's first privately funded institution of its kind, headed by Professor Jainendra Jain. The first business of Indian origin to receive the gold price. And this quarter, we completed the initial gram with over 400 students in association with IISER Pune and Ashoka University in NCR. With that, I end my remarks and hand over back to Chintan. Thank you.

Thank you, Abhishek. I hand it over to Prashant for his remarks. Over to you, Prashant.

Hi, everyone. Good afternoon. As Abhishek indicated, we achieved the presales of INR 4,600 crores for the year -- for the third quarter. More heartening is that our profit for the quarter was best ever at INR 1,367 crores, more than doubling on a Y-o-Y basis. Let me first share my view on the industry. While this is the fifth year of the cycle, which started in 2021 post COVID, demand on the ground remains solid especially so for the bigger and the stronger brands. As you would have observed in every other consumer segment, even in housing consumers clearly are variating towards owning a better product and a better brand. Housing is no longer seen as just a bare necessity of shelter but a lifestyle enhancing investment decisions. This has led to a significant expansion in the premium and luxury segment in the industry. This quarter was no difference with the lion share of our sales of almost 60% coming from premium and luxury segments. We remain the trend setter in the luxury segment across multiple locations and not only in South Mumbai, thus continuing to gain market share on a continual basis. But the impact of this trend has further accentuated the importance of brand and confidence of the consumer on the organization ability to deliver on its purpose. A brand with strong execution focus and ability to struggle across multiple segments will do well in the long run. I also believe that at some point when the overall macro situation and inflation as well as interest rates are conducive, the mid-income segment will also start to do well. About the competition in the market, the competition in our market remains rational as it is largely led by consumer definitely towards the stronger and the trusted brands. There is a great desire of the consumers to buy a Lodha property, and you've seen that across the 2 geographies that we have come in, whether it's been in Pune, Bangalore or in MMR, where we have entered new geographies, we derive the consumers to buy a Lodha properties very high. The consolidation in the industry is, I think, the single biggest trend. By some estimates, the contribution of the branded player in MMR market is still sub-30%. It was less than 20% 5 years back, and it has moved to almost 30% by end of 2025. But our view is that this number could easily grew to 40% to 45% by end of the decade. As the biggest player with low brands keep exiting the space, this will keep the industry structure good for branded developer like us and very good for the consumer because the consumer basic expectation is a great quality product, product on time and great services. And for that, you need resources, you need experience, you need expertise, and you need that operational strength. And I think Lodha is a developer, we provide everything on that regard. As far as the Lodha Development business performance is concerned, as Abhishek pointed out, the biggest strength of our business is balanced. The balance is how much business are you going to get from your existing products? And how much business from the new launches. We have always kept the balance in the range that 70% of the business, 65% to 70% coming from the existing projects and 30% to 35% coming from the new launches. So we try to keep balance between the geographies as well as the categories of the business. What this ensures for our business is consistency and -- and I'm absolutely consistent that, that is what we have given over the last 5 years. So typically, 30% to 35%, as I said, of the business -- of the presales is driven by new launches. But in this quarter, we have had no such launches and despite that we deliver the business, which is in consistency -- so when you look at the overall business for the year and if you compare with the quarterly business, this all the quarter 1 business has been driven with sustainable business coming all from the existing business. Most of the new launches will be happening in the second half of the year coinciding with the festive season. We have one launch that has happened in the month of July in Bangalore. And the kind of the first good results that we're getting there are extremely encouraging, and that reinforces our confidence in the structure that we have built on sustenance business as well as the new launches. We have 67, we have 1 more launch coming up in Bangalore, 2 in Pune and will also be entering the MCR and 2 in 1 in MMS and we're very confident that with the confidence that the sustenance as well as the new launches will take us to the early goals. One of the biggest strengths of ours, which is less understood is our ability to innovate and being the first to bring in new products in the market. For example, we clearly identified a gap in the commercial market in the great developments for the for sale product. We brought in our commercial for sale product in Worli last year, which was hugely successful and continues to drive strong sales. We are similarly also innovating new product categories within our existing projects. We are going to see multiple new project launches at Palava as well as other locations between MMR and other cities. Even in Bangalore, where we did the new launch, we went ahead of the market curve and introduced the product at a price point which was almost 30% higher than the existing price points available, but the consumers have clearly given us a huge confidence by really accepting the product. So just to sum up, in the first half, as Abhishek said, that we will achieve 40% to 40% of our guidance of the presales and the remaining in the second half. So if we see our basic strength is focused on profitability, the -- our portfolio across midterm premium and luxury segments are now well balanced with mid income, which is anything below INR 3 crores is now about for 50% and remaining coming from premium and luxury segments. City, this diversity and across the cities and categories helps us paper over any volatility presented by other factors such as conflicts in Middle East or impact of high inflation and interest rates on entry-level home buyers. While presales remains one of the key KPI for us, the biggest KPI is the profitability and delivery of the PAT. With the brand strength even something even more pricing power continues to enhance even in the newer markets. In the near terms, we expect to enhance our pricing by 5% to 7% across different micro markets over the year. This sort of pricing growth, which is still below the white collar salary growth of 9% to 10% keeps the affordability impact and helps in boosting the volumes. On the strength of our brand, we have the lever to further take the price growth up by at least 100 to 200 bps, which will straightaway give us confidence in the margins. Our new markets are now performing very well with Bangalore now entering the growth phase. We also -- we are also starting the operating in the NCR. With this, we would have 4 cities, which will be contributing to a '26, '27. While MMR will remain our dominant home-based new cities together will start contributing our 30% to 45% of our presales in the medium term, which makes our portfolio even more balanced. The strength of -- the other positive thing that we have seen is that the conversion number, which we are seeing, especially from quarter 2 from July onwards is in upwards of 8% and above. And that is a very positive sign for us. And we believe that in the long run, we hope to reach the holy grail of 10%. And once we reach the 10% mark, the kind of advantage it gives on velocity and more importantly, margins will be very significant. To sum up, we remain very confident of our fairly covering our guidance for the year. We have built a very granular plan, which enables us to achieve the guidance and with the right margin delivery. With this, I hand over back to Chintan. Thank you, Chintan.

Thank you, Prashant. Leo, we can open the floor for Q&A.

[Operator Instructions] We have the first question from Pritesh Sheth from Axis Capital. .

A couple of questions on the data center side. Firstly, just wanted to understand the value of the land sales that we did this quarter. And I'm assuming everything would have been recognized in the revenue as well. And what kind of margins we are reporting for those land sales? That's the first question.

In terms of the value of land sales for this quarter, the total including the center and southern sources of land sales was approximately INR 1,200 crores of presales. Out of that, the revenue recognition is not 100% because there are certain activities that we need to complete for the buyers, so that has been [indiscernible] of the contribution to PAT from the that is approximately about INR 600 crores.

Contribution to PAT INR 600 crores. Okay. And just a follow-up to 660 acres. Everything falls under that MOU, which we have with the Maharashtra government? Or now it's just INR 400 crore and then -- 400 acres and then we can expand to the 660 acres?

The 660 acres is now part of the green data center, which is approved by the government of Maharashtra.

Okay. Awesome. And just on the rental part, right? I think earlier, we had an estimate of INR 30 billion rentals coming from this power shell that we're targeting. In the presentation now, I see INR 20 billion plus kind of number. Is it just a conservative estimate? Or this is something which is now revised downwards based on the transactions that we are seeing on the market? Or how should we think about it?

Pritesh, there may be some gap in understanding. Our numbers have not -- but there's been no change in our numbers. So we had suggested that our rentals would be growing by 10x from the INR 3 billion level at the end of fiscal '26 to INR 30 billion at the end of fiscal '32. Of that, the contribution was from all the 3 verticals, i.e., data centers, retail and office and warehousing and industrial. And that same breakup continues. The current numbers are definitely in our opinion and have some upside potential to it, but these are our current projections.

Sure. Got it. So for data center power shell, it would be INR 20 million per megawatt kind of annual rentals that one should expect, right?

Yes, a little over INR 20 million, yes.

[Operator Instructions] The next question is from Abhinav Sinha from Jefferies.

Good to see the strong P&L numbers that we have this time. Just a couple of questions on data center bit. So firstly, on the incremental size that we have allocated for the business. Where are we on power availability? And what are you expecting on the demand side, which is probably this big jump?

The demand environment for data centers continues to strengthen. We have to note that this is not demand, which is national or regional. This is global demand. And as data center operators look to locate their sites, they will look at Virginia, they will look at Scandinavia, they will look at Johor, and they will look at India. So therefore, from an Indian perspective, it's important to note that this is not about competition within India, but it is about how India can position itself and gain share at a global level. Given India is very critical competitive advantages primarily in terms of time because from breaking ground to getting a data center operational in India can be done in under 3 years compared to 4.5, 5 years in the West, as well as in terms of costs where the cost of building power shell as well as Turnkey Shell in India is almost half of that in the West, plus the fact that the government in India is very proactive, both at the state level and equally and more importantly, at the central level as we saw with the tax exemption counted for data center operators where the usage is outside India. So with all these factors in place, India is emerging as a strong location. The reason for the expansion of our park, we believe that the park has created immense credibility given that 3 top operators, AWS, Amazon, STT, which is Temasek and KKR subsidiary. And now Digital Edge India, which is a joint venture, between Digital Edge Singapore and NIIF, which is 49% owned by the government of India, funded by the government of India. These are all evidences of how important this park is to the global ecosystem. We now expect to further scale up our efforts to do development of clientele in the U.S., which is where most of the demand is likely to be usually catered and coming from, and hope that we can further increase capacity. We think that in this segment, capacity attracts demand and that's really our direction of play. And so far, that's played out reasonably well. We also are making good progress towards the leasing of the first of our boxes, which will be held on our balance sheet. And we hope that in the course of this fiscal year that will also come to fruition. Your last point in terms of the incremental path, that's an activity which we continue to work on, and will, of course, update as when those further gets fructified. But we -- I would like to conclude by stating that the positive mine of the government and the regulators is very supportive of expanding India's data center capacity and Park in Navi Mumbai/Palava is a key part of India's butting ecosystem in data centers.

That's very helpful. Sir, second question on Palava. There seem to be some uplift in sales in the current quarter and Mr. Bindal also hinting at a better outcome there during the year. So what do you see as, let's say, the launch time line of the premium inventory there? And can we see big price uplift this year or maybe that can take another odd year? .

Abhinav, we expect that the connectivity, which is fairly physically ready, will open after the monsoon. And that happens, and of course, we expect to see that it will lead to much greater and improved connectivity to the location from Airoli as well as Mulund. This will not only unlock the higher categories within residential and therefore, we can count on that starting to surface from the fourth quarter, though I would say meaningful impact might not be visible in the numbers till fiscal. But this will also start happening unlocking -- this will also start unlocking the LandCo side because as this connectivity comes through and as we know that next year on 15th August, the bullet train is going to start operations in -- or part of its life not Palava but on a part of its life. And with both of those things, the LandCo, which is about selling the land that we have surplus for noncompeting users, for example, affordable housing or back office that will also benefit from this connectivity. I would say is that calendar year 2027 is when we see a significant impact.

Next question is from Kunal Lakhan.

Yes. My first question on the presales guidance. We maintain that guidance. And does that factor in the sustained impact from the Middle East war? And if say, hypothetically in the war ends, is there an upside potential to this guidance?

This question is something which is very difficult for us to form a view on because when will the war end, what will be the nature of the end? And how will that impact demand? I think as I mentioned in my remarks, so far, what we see is that the impact is contained. The duration has extended beyond what we assume, but we don't yet given the other strengths, I expect that in spite of that, we'll maintain our presales guidance. And let's review it once it actually ends what that the end is.

Just on the data center bit. When do you expect the leasing activity for the data center to commence? And what kind of demand are you forecasting in terms of simple rack cabinet demand or it will be more so to speak, like hosting this over and the end-to-end build-to-suit kind of demand. So what kind of demand you are seeing there?

In terms of leasing, as I mentioned in my response to Abhinav, we expect that the leasing for the first of the boxes within that one big of our shell that we intend to build will conclude in this fiscal year. We are in talks with a couple of large operators for that and hope that there will be good progress over the next 6 to 9 months. As we have laid out earlier, our current strategy is to move from the sale of land to additionally in addition, building powered shell, that means that we built the physical box and enable the power up to 1 point in the box. The activities after that, which is the MEP and HVAC, which takes it from powered shell to turnkey shell and thereafter in the turnkey shell, the fit out of the racks and the chips, those are not within our purview of focus right now because we don't really believe we yet have the technical competence for that. Over time, we might move from power shell to turnkey shell, but that's at least a couple of years out. So as of now, it's only powered shell and then the operators the hyperscalers, the new clouds, the colo players, they take it further from here and then they add various layers of value. So we're really looking added from a very wholesale perspective at this stage. We are not in the business right now, more business model of putting in the chips and the racks, which is highly capital intensive, and also at risk of technological obsolescence as well as depreciation risk, we are not in that part of the business.

Understood. And just the last one, on the data center bit again, similar to the committed supply of 3 gigawatts on the electricity side that we have from state as well as mentioned,d o we also have a commitment on the water supply side, especially considering the usual pressure on water resources that we have?

I think it's important to understand that water consumption in data centers does not use any freshwater. There is 0 planned utilization of any fresh water in our green data center park. The reason is referred to as a green data center part is because it will operate at amongst the highest levels of sustainable data centers anywhere in the world. And the water that will be used will be all recycled water, by the Mumbai region, the MMR as a whole generates about 3,500 MLD. I'll repeat that number, 3,500 MLD of recycled water, which is generally thrown out into the sea. Now with the build-out of infrastructure and under the leadership of the Honorable Chief Minister and his long-term vision, a large part of this water rather than being thrown into the sea will become a revenue source for the municipal corporations and municipal councils by being redirected for usage at the data centers. So again, I repeat, there is 0 usage of fresh water at any of the green data center parks, and it is about utilizing the water, which would otherwise be thrown out -- the recycled water, which would otherwise be thrown out into the sea. If that 3,500 MLD was to be effectively used, Mumbai could probably support upwards of 40 gigawatts of data centers. But obviously, that's a long, long story, and we are not aware as and when that will happen. But yes, we do have good availability of recycled water from the industrial areas around where our data center market is located. And again, I repeat, there will be -- our data center park will only use recycled water, which would otherwise be thrown out into the sea and not use any freshwater.

The next question is from Akash Gupta from Nomura.

Sir, congratulations on a great set of numbers. So my first question is with respect to your Palava land parcel right now. What I understand is out of 4,000 acres, you have allocated roughly 600 acres towards the data center. My question is, is there a change in strategy for the Palava land for access where we moved primarily from residential to more towards data centers eventually, where this mix it is currently at probably 15% eventually move to 20%, 25%? Or is there a continuing factor where this type of story can never happen?

I think we would all agree that many of you have been tracking our company for long that 2 years ago, data center was virtually sealed. Hence, what it really tells you is that our land at Palava and Upper Thane is usually valuable because this kind of large aggregated land in the -- touching the Navi Mumbai is invaluable and rare and it can be used to various users. So far, we've developed more than 1,000 acres for residential and related uses. And as you talk about your market for data centers. We still have significant amount of land other than what's been earmarked for these 2 in the order of plus 1,000 acres, which is yet to be earmarked for any use. And therefore, can be allocated whatever use makes more sense, including based on market demand factors and so on. Now on the residential side as a connectivity to Airoli and Mulund concludes in the -- after the monsoon this year, and over the next 2 to 3 years, as the bullet train comes through, we expect a significant upside in the residential demand as well as the price points. Further, we expect that the LandCo that we are now slowly getting into shape will from fiscal '28 start showing that the land in Palava be used for other noncompeting users at similar price points, about INR 500 million per acre, things like back office, things like affordable housing and so on. So there are various uses of this land, including, of course, the fact that the data center is now at about 600-plus acres.

The next question is from Gaurav Khandelwal from JPMorgan.

I just have one question. I know that our focus metrics have evolved, but could we get some sense on how are the embedded margins this quarter excluding the land sales?