Max Estates Limited ($MAXESTATES)

Ladies and gentlemen, good day, and welcome to Max Estates Limited Q4 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. Also, this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Sahil Vachani, MD and Vice Chairman of Max Estates Limited. Thank you, and over to you, sir.

Thank you, and good morning, everyone. Welcome to Max Estates Q4 and the Full Financial Year '26 Earnings Conference Call. Joining me today are my colleagues, Nitin Kansal, our Chief Financial Officer; and Archit Goyal, Head of IR and Corporate Finance, as also our Investor Relations advisers at SGA. The investor presentation and press release has been filed with the stock exchanges and are available on our website. I hope you've had an opportunity to go through them before this call. Let me start with a brief overview of the market context before moving into our performance and closing with an outlook for the future. Delhi NCR's residential market moderated in 2026, particularly over the last 6 months amid global uncertainties and overall a cautious sentiment. Having said that, Max Estate still crossed INR 5,300 crores in presales for the second consecutive year, affirming our strength of our platform and the trust that our clients and our stakeholders place in us. On the commercial side, office leasing hit approximately 2.8 million in Q4, which was 36% up quarter-on-quarter with the national capital region recording the highest rental growth amongst major Indian cities at about 15% year-on-year. For the first time, in both, I think, NCR and Bangalore, average rents have crossed INR 100 a square foot and vacancy rates continue to compress. Obviously, the macroeconomic development worth flagging is the escalation of the West Asia conflict, and that has introduced some near-term caution into not only the residential sentiment on the demand side, but also pressure on the supply side in terms of cost. However, India's market today, we believe, is significantly more end user driven than in previous cycles, and that I think is particularly true for NCR as well. For Max Estates specifically with a predominantly domestic NCR-focused buyer base, we believe that we are well positioned. Our launch plans and long-term conviction remain very much intact. Just to give you an update on the FY '26 performance in terms of headline numbers on the residential business, the full year presales came in at INR 5,305 crores, the second consecutive year that we've crossed the INR 5,000 crore presales milestone. Our 3-year presales CAGR from FY '24 stands at 70%. Importantly, in Q4 FY '26, we recorded INR 3,300 crores of bookings driven by 2 major launches, Estate 105 in Noida and Max One in Sector 16B Noida as well, making Q4 by far our strongest quarterly performance ever. Collections for the year stood at INR 1,578 crores, which is up 61% year-on-year. This is an important operating metric because it directly reflects our ability to fund construction. Our payment plans are structured to generate annual collections in the range of 20% to 25% of the sales booking. And also this reflects the strong quality of sales that we continue to do. And obviously, as the book has grown, the collection engine has strengthened meaningfully. Average realizations continue to move up INR 18,000 a square foot in FY '24 to INR 20,000 approximately in '25 and INR 23,000 in FY '26. That's a 29% increase in 2 years, a combination of better micro market positioning and improved product quality and genuine brand power. Cancellations remain very, very negligible, a strong reflection of our strong buyer commitment and the end user nature of our buyer base. I now want to spend a moment on something that our reported P&L doesn't fully capture, but which I think is one of the most important dimensions as to how one can think about Max Estates today. Total revenue from launch projects yet to be recognized in our income statement stands at INR 16,310 crores. Of this, INR 12,500 crores is already sold, contracted and locked in, waiting for the completion of the project milestone to trigger the revenue recognition. The embedded profit before tax, PBT from these launch projects is estimated at between INR 4,200 crores to INR 4,900 crores. This is a critical distinction. A substantial majority of our future reported revenue is already contracted, derisking the earnings trajectory materially. Looking ahead, our residential pipeline stands at over INR 17,200 crores in FY '27. We've already launched The Terraces in May '26 as the newest precinct within Estate 361, offering 1.5 and 2-bedroom smart homes and duplex soft residences. The project has a development value of about INR 1,200 crores and is part of Estate 361. We also plan to launch our Sector 59 project on Golf Course Extension in Gurgaon with an estimated GDV of about INR 3,900 crores. Estate 105 has been strategically repositioned, driven by a strong market response with a revised mix of residential and service apartments. This calibration has doubled the project GDV from INR 3,000 crores to INR 6,000 crores. Phase 2 is planned in FY '27 -- sorry, FY '28. We continue to target adding approximately 2 million square feet of residential development and 1 million square feet of commercial space annually, building the platform through a derisked and a steady approach. On the commercial side, all our 3 assets continue to operate at 100% occupancy, which is perhaps the single most important data point for our commercial business. It validates the quality of the product, the strength of the tenant demand and in the micro markets that we operate. As far as our under construction pipeline is concerned, which is basically Max Square Two, Max District and Max One, progressively as we look to achieve occupancy over the next few years, our rental income is estimated to scale INR 700 crores at peak occupancy. We have a clear strategic ambition to add 1 million square feet of commercial real estate as well, expanding our annuity business alongside our residential business. As this portfolio matures, it will provide Max Estates with a growing high margin and recurring income stream that meaningfully diversifies and stabilizes the overall earnings profile of the company. I'll now hand over to my colleague, Nitin, who will take you through the project level details and our financial highlights. Thank you.

Thank you, Sahil, and good morning, everyone. Let me take you through the operational and financial highlights for quarter 4 and financial year '25-'26. In our residential portfolio, Estate 361 Gurugram, we recorded presales of INR 1,700 crores in the year. This is India's first forest-anchored intergenerational residential community had a very strong year. Phase 1 recorded a presales of approximately INR 1,700 crores during the financial year, representing over 68% absorption of the launch inventory. Average realizations of approximately INR 22,000 per square feet also reflected the project's clear differentiation within the micro market. Construction is on track and progressing well. Estate 128 in Noida is a fully sold out project with a cumulative presales of INR 2,700 crores. Collections are on track at INR 1,100 crores received till date. We are on track for delivery in calendar year 2027. Phase 1 is currently progressing at the 35th and 36th floor slab levels and Phase 2 is at the third floor slab level. In Gurgaon Estate 360, cumulative presales stood at INR 4,800 crores with a collection of INR 1,600 crores. Construction is progressing well across all the towers and the ground floor is complete for Tower 1 and 2 and the first floor slab for Towers 3 and 5 and the second floor slab for Towers 4 and 6. Mixed use portfolio. Talking about Estate 105, which was launched on 20th March 2026 and has achieved sales of approximately INR 1,800 crores within just 10 days of the launch. Max One in Sector 16B again in Noida has been a long stalled project, now which has gotten into live active selling residential community within months of acquisition. Following RERA approval in March of 2026, the project contributed INR 1,400 crores to FY '26 presales. The development spans approximately 2.5 million square feet with an estimated GDV of over INR 3,200 crores and an annuity income potential of approximately INR 140 crores from the commercial component. This transaction exemplifies our disciplined approach to value-accretive acquisitions in NCR market. Now coming to our commercial real estate portfolio. Our 3 operational commercial assets, Max Towers, Max House Phase 1 and Phase 2, and Max Square continue to be running at full occupancy. Aggregate leased area as of 31st March stood at 1.2 million square feet and lease rental income grew 40% year-on-year to INR 150 crores in FY '26. The asset level breakdown stands under Max Tower generated INR 53 crores, followed by Max House at INR 45 crores and Max Square at INR 60 crores annual lease rents. Coming to the pre-leasing, we had 2 notable leasing milestones in FY '26. At Max District in Sector 65 Gurugram, we signed an LOI for approximately 2 lakh square feet for a long-term pre-leasing, 3 years ahead of projected completion, securing gross rentals in excess of INR 270 crores over the lease period. This is at a 35% premium to the prevailing micro market. That transaction validates both the quality of the asset and the depth of tenant demand in that quarter. On another project, Max Square Two in Sector 129 Noida, we have pre-leased approximately 80,000 square feet, securing gross rentals in excess of INR 95 crores. We are maintaining a very strong leasing pipeline at both the assets. On the under construction pipeline, Max Square Two with an approximately 1 million square feet of leasable area is expected to receive its occupancy certificate in quarter 2 FY '28, it will add another INR 125 crores to our annual annuity income upon stabilization. Max District in Gurugram with approximately 1.6 million square feet will be delivered across 2 phases, first in quarter 2 FY '28 and quarter 3 FY '29 and will add approximately INR 225 crores to our annuity income. Together, these assets alone will add INR 350 crores plus to the annuity portfolio upon full completion. Our total 5-year annuity potential across delivered under construction and pipeline assets stand in excess of INR 700 crores on a 100% basis. We continue to target adding approximately 1 million square feet of commercial space every year. Now coming to the financial highlights. The consol revenue for FY '26 stood at INR 200 crores and EBITDA at INR 24 crores and PBT at INR 23 crores. Max Asset Services contributed INR 88 crores in the revenues. On the balance sheet side, the total debt as of 31st March stood at INR 1,850 crores, of which INR 970 crores represents lease rental discounting borrowing against our commercial -- operational commercial assets. These are essentially asset-backed, cash flow backed facilities. Cash and cash equivalents were at INR 1,750 crores, leaving a net debt position of approximately INR 100 crores. For a company with our scale of pipeline, that presents a very lean and healthy balance sheet. Now I'd like to hand over to Nirav for the opening the question-and-answer session. Thank you.

We'll now begin with the question and answers session. [Operator Instructions] Ladies and gentlemen, we will wait for a moment while the question queue assembles. [Operator Instructions] First question is from the line of Mohit Agrawal from IIFL.

My first question is, Sahil, you've not given an explicit guidance in the presentation on how you're looking at FY '27. So if you could give some color on both launches and presales. Launches, you mentioned some, but I think apart from Terraces, if you could give some color on what is the launch pipeline for this year in terms of GDV and project and also presales, what is the expectation?

Yes. So we are not sharing a presales guidance as of now, Mohit. As you will understand and appreciate that we're in a very evolving macroeconomic situation. And we are very conscious about meeting every commitment that we share not just with our customers, but also with our largest stakeholders. And obviously, the investor community is a very important component of that. So it's very difficult at this stage to give a guidance for how things will pan out. Having said that, from a launch perspective, we can share that there is almost about INR 17,000 crores of GDV that are yet to come to the market. And obviously, we will calibrate it and launch it in a phased manner. One is obviously the The Terraces. And in my comments earlier, I also mentioned about our Golf Course Extension project. So definitely, those are 2 very large components of it in addition to some of the products that we already have and that we will be bringing to the market. So at Max One and at Estate 105, et cetera. So I hope that kind of gives you a flavor of how we are thinking about it.

So 105 Phase 2 you mentioned will be in '28, right?

Yes. But there is almost about INR 1,200 crores of inventory from Phase 1 as well.

And Phase 2 of 361, is that planned in this year?

Yes. Yes. Some part of it will come in this year.

Okay. Directionally, do you think presales could be flattish or there could be a moderate high single-digit, low double-digit kind of growth?

I would have might as well to share the guidance in that case. But I think we -- like I said, I think the situation is evolving. And I think from -- for the health of the long-term nature of the good health of Max Estates, we want to be able to continue to make very, very high-quality sales that we've done. So I will refrain from commenting on that at this time, Mohit. I hope you understand. Thank you.

Understood. No. So second question is, basically, you had an interesting quarter like last 3 months, you've launched The Terraces and you've also launched Max One, both sit on the extreme end of your spectrum from your regular launches. So if you could run through what has been the experience, let's say, with The Terraces INR 2.5 crore ticket size on one end and then Max One where probably ticket sizes would be INR 20 crores, INR 25 crores plus -- and how would you then look at these -- demand across these 3 buckets, INR 2.5 crore ticket size, INR 6 crores to INR 8 crore ticket size and the INR 20 crores, INR 25 crores ticket size?

Yes. I think in general, there is a cautious sentimental approach that is flowing across all the segments, if I can share that from all 3 across The Terraces, across what we call the Luxury and the Ultra-Luxury segment. I think it's cautious, but I would not say that there is no demand. I think there is still a good level of demand. What we are pleased about is that there is more about end user demand that's coming through. And yes, it is taking a longer period for people to consider. And as I said, they are very cautious in their decision-making. So we are seeing a lot of cautiousness. We are not seeing a complete slowdown or that sense of sales.

Okay. And then last question from my side is, you've been mentioning about moderation in the last 6 months. Has that reflected in the expectations of the landowner when you sit across the table for business development?

Yes, absolutely.

Okay. So is that an opportunity that you think you'll be able to tap in like you could see more aggressive business development?

Absolutely. I think we will be looking at business development very keenly, and we feel that the fundamental nature of long-term demand in the NCR continues to remain very, very strong. And yes, I think for the right parcels, we will be very focused on business development.

[Operator Instructions] Next question is from the line of Parikshit Gupta from Fair Value Capital.

Congratulations for a good set of results. My first question is on the rental income. So while the Q4 FY '26 rental income has increased significantly by about 43%, the total leased area and the rents across each of our 4 commercial projects have not increased as meaningfully. So can you please help us understand what contributed to this increase? Was it back-ended rental increases or something else, please?

Parikshit, good morning. This is Nitin Kansal. Our rental agreements are structured in a form and fashion of 3 plus 3 plus 3. During the course of year, once the rental agreement -- the rents are reset, we see a corresponding income getting reflected in the balance sheet. This is how the income have been reflecting. If we see currently in the current year, we have reported a rental income of close to INR 155-odd crores. This is a reflection of all the 3 assets, Max Square, Max House and Max Towers. If you see our portfolio, in the next 5 years basis the peak occupancy of the same set of assets, they would be in the range of INR 210 crores of rental income, and we would have an incremental revenue of close to INR 500 crores coming from the new assets which will come online.

Understood. Let me just rephrase my question. So in the presentation, where we have mentioned the commercial projects in operations, there is a weighted average rental information given across the project. So does that number not reflect what the current rentals are? Or is there something missing from my understanding?

So Parikshit, what happened in the quarter 4 primarily is due to accounting adjustment, there is an Ind AS rental equalization adjustment, wherein after the operational rent fee, the rentals start recognizing from an accounting standpoint. While there has not been any significant percentage other than the escalations, which, as Nitin mentioned, 15% every 3 year, the primarily increased between INR 386 crores to INR 392 crores was on account of this accounting Ind AS adjustment on revenue 386 equalization.

I understand. This is very helpful. My second question on Sector 59. Can you please help me with the RERA status for this project? And just on top of this, we have seen that the GDV has been up by 30%. And in the press release, you have mentioned due to the pricing across the micro markets. But has there been any strategic change in the structure or the offerings of the project as well, which gives us the confidence that we will be able to achieve -- we will be able to overachieve the initial estimates of our pricing?

Yes. So firstly, we have not yet filed for RERA for this project. On the second question with respect to the GDV, yes, the micro market, we believe that at the price that we are assuming is a fair price for the micro market, A; B, we've also sped up the product in line with the demand that is coming in from that micro market. So from both of these aspects, we feel that the revised GDV is a fair estimate.

Understood. My final question, if I may, before I rejoin the queue. So we know that there has been a new TOD rule for projects in Delhi, affecting the ability of high rises across the metro lines. Does this help us get more projects? I mean, can you share a couple of -- your views on this change in policy?

Yes. We are evaluating a couple of projects on -- from a business development perspective on these lines. The policy has various nuances, which is, A, a mix of various end uses, residential and commercial; B is around sizes of units. So we are currently evaluating a few opportunities in this, but have not yet acquired anything in Delhi yet from a TOD perspective.

So just a quick follow-up on this. So then the growth pipeline, there is a 4.1 million square feet project, which is under the regulatory approval. Is this maybe in the Najafgarh area or something else?

Yes. That's correct. That's part of the land pooling policy.

[Operator Instructions] Next question is from the line of Rishith Shah from Axis Capital.

Two questions. So firstly, on the collections or maybe the payment plans for the 2 new projects that we have launched. Is it similar to what we have been doing?

Good one, Rishith. Yes, exactly. What we do is an equal distributed payments plan and distributed over the life cycle of the project. So we have a INR 20 crores high payment plan across the assets.

Okay. So both the projects. Okay. In relation itself, how do you look at the collections and operating cash flows for next year?

So in the next year, what we are -- what we have is -- we would have the collections expecting on 2 lines for the projects which already sold in the previous quarter, we're expecting a collection in the range of INR 1,200 crores to INR 1,500 crores to come from them. And we expect another INR 1,200 crores to INR 1,500 crores to come from the new launches, which -- some new sales, which we are expecting to do in the next year. All told together, we can expect collections to be ranging in the range of INR 2,500 crores to INR 3,000 crores going across the project. And what we are expecting on the project deployment is that we expect a deployment of close to INR 1,500 crores to INR 1,800 crores to go on the project, resulting in an operating cash flow also revealing to us.

Right. Perfect. Makes sense. And secondly, you kind of alluded to the launches, would you like to add some quarterly kind of timeline where you -- which quarters do you see the 2 launches that we have [indiscernible]?

So the launches for The Terraces, we've already done in Q1, which is the current quarter. Obviously, we'll give an update on this at the end of this quarter. And we anticipate to launch our second project in Golf Course Extension Road in quarter 3. That's the plan so far for some of the big launches. And there will be a few other launches of Estate 105 and Max One that will be between Q2 and Q3 as well.

Okay. And the remaining part of 360?

Yes, that will be, like I said, around Q3 as well.

I can just add in over here, we have got an inventory of close to INR 3,800 crores from the existing launches which we have done in the previous year, which was also available to us in addition to the launches that you plan to do in the current year.

Next question is from the line of Samarth Khandelwal from ICICI Securities. Samarth, may I request to unmute your line and proceed with your question.

Am I audible now?

Yes. Go ahead.

I wanted to ask -- understand about the Project Max One that we have taken over. The press release states that we have sold INR 1,400 crores of pre-sales this year and out of which INR 1,200 crores is from return over, so inherited from the erstwhile developer. So if you could elaborate on this, it will be really helpful.

Thank you. Samarth, just to give context, the Delhi one as a project had a total salable area in the range of 2.5 million square feet, of which close to 1.4 million square feet was already monetized by the erstwhile developer. So when we talk about the new sales getting recognized, the corresponding revenue of that 1.4 million square feet got recognized, which we post we got a approval, then we had to enter fresh contracts with the set of buyers for the erstwhile and the entire income profit and loss statement of the sale will be reflected in the books of account -- for the remaining 1.1 million square feet, we intend to monetize it through annuity portfolio and also residential income. What we expect is to have a residential income in the range of close to INR 2,000 crores to come to us from the new sales and an annuity income of close to INR 140-odd crores come our way from the annuity portfolio.

Right. So the 1.4 million square feet that was already monetized by the erstwhile, what will we be receiving for it and how much we -- how should we see this as a net cash flow?

So out of this INR 1,221 crores, we are expected to receive an incremental some in the range of INR 550 crores to INR 600 crores to come to our way. The remaining capital was already received by the erstwhile developer. So if you see from a cost of construction perspective, we would not like to distinguish between what we are spending on what the erstwhile developer had sold and what we are selling. It's about the entire project as a whole.

Next question is from the line of Ritwik Sheth from One Up Financial.

A couple of questions from my end. So firstly, what was the OCF in FY '26?

Ritwik, good morning. This is Nitin. What we had an OCF of close to INR 450 crores to INR 500 crores in the previous year in FY '26.

Okay. INR 450 crores to INR 500 crores. Okay. And that probably could move to INR 800 crores to INR 1,000 crores I think the previous participant asked it looks like.

So it's gradually progressing. This is the collections from the previous -- already sold and the new sales which we do. So we are very bullish on the OCF in the coming years.

Got it. Got it, sir. And sorry, a couple of questions were asked on the launches, but just one clarification. Sector 359, we are looking to launch this at one go or it will be in phases?

So just to correct what will happen, we have got 2 projects. We have got Estate 361 and we have got another project in Sector 59 Gurugram. So 361, so we have already launched a portion of it in the last year, and we've also launched one of the sections of it called The Terraces in the first quarter of the current year. Estate 59, which is a potential GDV of close to INR 3,900 crores, we're expecting to launch in the quarter 4 -- quarter 3 of the current financial.

Okay. And that will be completely INR 3,900 crores?

We'll figure it out depending on how the market is pushing at that point of time. We may choose to phase it out and do it one shot.

Right, right. So Terraces, which has already been launched, then another potential phase of Sector 361 coming in and then Sector 59 at Gurgaon, depending on the market conditions, you will look to launch and plus the INR 4,000 crores of unsold inventory that we have.

Yes, exactly. You just summarized it very nicely.

Yes. Okay. Yes, yes. Okay. And sir, what is the BD target in terms of allocating capital for FY '27 and '28?

Yes. So we've already shared that we are aspiring to add between 2 million square feet of residential and 1 million square feet of commercial every year. So we continue to hold ourselves to those targets. And as we've shared earlier, we'll continue to explore opportunities around combination of outright acquisition as well as joint development, both.

Right. Okay. So similar figure for what we've done in the last 1 year?

Yes. Exactly. Exactly. So we'll continue to keep on that.

[Operator Instructions] Next question is from the line of Sucrit Patil Eyesight Fintrade.

I have 2 questions. The first question to Mr. Sahil is, what type of strategic levers is Max Estates prioritizing over the next 6 to 12 months to strengthen its position in commercial and residential real estate while managing risks from interest rate movements, regulatory changes and competitive pressure? That's my first question. I'll ask my second question after this.

I think if you go through our presentation, you'll be able to get a very good handle on it and an understanding of it. We are very focused on the philosophy of live well for our residential communities and work well for our office communities. We are very focused in terms of the national capital region. We are very clear about the segments that we are operating in, whether it be studio homes or luxury residential or senior housing as well under the Antara brand. So I think if you go through the presentation, you get a very clear perspective of what is the clear strategy with which we are following. From a risk perspective, I'm very pleased to share with you that our balance sheet continues to be extremely strong. We are at a net debt of about INR 100 crores, which -- and as I said, we have about INR 4,500 crores of profit to be booked in the books. And so from that perspective, I think we are in a very derisked perspective and in a very strong -- with a very strong balance sheet. So I hope that addresses your question.

My second question to Mr. Kansal is what type of financial framework have been applied in FY 2027 to align debt maturities refinancing schedules and project level cash flows so that the funding remains efficient and predictable?

Thank you. That's a very interesting question. Just to share with you, we have a different strategy in terms of when we talk about our commercial assets and we talk about residential assets. But the overarching principle is that we strictly avoid acquiring land from debt. So the principle remains is from the internal accruals only we would like to acquire fresh assets. On the -- if you look at our assets in distinct business divisions, in the terms of residential basis on the back of the strong residential collections, we have got a surplus of close to INR 1,200 crores lying in our RERA account itself, which are good enough to take care of the construction, and we don't foresee any debt to be taken on the project. Secondly, on the commercial assets, what we have done is currently, we have achieved -- the equity financing has already been done on the stock, and we have also tied up construction finance, which is to be taken out through the -- once the building is completely leased out through LRD. So that is still some time to go. And all our lease rental discounting, which is the debt on our operating assets is very well financed through the cash flow coming from the lease rentals, which is running at 100% occupancy without any delinquency. So in terms of having a cash flow mismatch, that looks a bit remote at this point of time.

Next question is from the line of Prateek Giri from Subh Labh Research.

Sahil, I just wanted to understand the cautious statement, which probably has come from you. Just wanted to understand the longevity of it. Is it primarily because of the current geopolitical scenario? And can it wane off if things normalize? Or are you sensing some fundamental shift or change in the demand scenario in Delhi NCR that is leading to this cautious comment?

Actually, if you -- I think my point of view was that in relative to the last couple of years, yes, things are a little slower and therefore, you are sensing a certain cautiousness. But if you also see what I said is that we are continuing to see good levels of demand, right? It may not be the levels of demand that was in the last 1 or 2 years, but we are still continuing to see very robust end user demand. So from that perspective, we remain extremely optimistic about the medium-term and long-term potential for residential and commercial real estate in NCR. If you look at it from a commercial side, we've shared 100% occupancy. We've shared pre-leasing that we've done on the residential side. In spite of launching in the middle of a war, we've done INR 5,000 crores of sales in 2 consecutive years. We've done INR 3,000-plus crores of presales in 1 quarter, which was practically in the middle of a war. So I think the -- we are cautiously optimistic. And as you said, yes, it's primarily driven by the macroeconomic scenario, and we are hopeful that if things settle, things continue to be very optimistic in the future.

Understood. Very helpful. My second question is to Mr. Kansal. So we are seeing some inflationary wins in most of the commodities we use. So I just wanted to get -- I know you have guided for the margins in the presentation very clearly. But if you wanted to get some sense on this inflation mitigation strategies we have for us.

Good morning, so just to give a perspective, when we do our budgeting for the projects because end of the day, if you say we have a industry whereby we end up committing to the customer at day 1 and the product is delivered over the period of next 3 to 5 years, which leads us to the vagaries of the market, which can be -- are internal made up also external, which is the current case. So what we have -- what basis our experience in the past during the COVID and also during -- what we have done in the budgets, we keep sufficient margins in the form of escalation and contingencies. So what we feel is currently till now, whatever the impact of inflation is there, we have beat them. But just to add, in case these kind of geopolitical issues continue to strain for a longer period of time, we would have to figure out how much impact does it have on the inflation.

Understood, Mr. Kansal. So probably the band which is given for the margins will ultimately be achieved.

Yes. This is what we aspire to achieve the band in which we have mentioned in the presentation.

Next question is from the line of Rishith Shah from Axis Capital.

Sir just one question. Would you like to share some early trends on The Terraces as to how the velocity has been? What are you seeing on ground? What's the investor versus maybe end user mix? And is the pricing versus the previous space of 361?

Yes. So the pricing is at a premium to our previous phase, A; B, we've got a very positive response, and we are very encouraged. And I think there's a lot of credit to the brand, the product and our increasing depth and strength of distribution. So we remain very optimistic and encouraged with the continuing and growing brand presence for Max Estates in the national capital region. So at this stage, I can share that we are very happy with the outcome.

Sure. And just a follow-up, I mean, would the end user versus the investor must be different in this project or it's more of negligible?

This one is a combination of both end users and investors, whereas in our Estate 105 and in the luxury residences of 361, we are seeing a much higher percentage of end users per se. But on this one, it's mixed because it is a lower ticket investment -- good investment opportunity product.

As there are no further questions, I'll now hand the conference over to the management for closing comments.

Thank you, and look forward to speaking with all of you next quarter. Thank you so much.

Thank you very much. On behalf of Max Estates Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.