Puravankara Limited ($PURVA)

Ladies and gentlemen, good morning, and welcome to the Puravankara Limited Q4 FY '26 Earnings Conference Call hosted by Dolat Capital Markets Private Limited. [Operator Instructions] Please note that this conference is being recorded. I will now hand the conference over to Ms. Savita Singh from Dolat Capital Markets Private Limited for opening remarks. Thank you, and over to you, Savita.

Thank you, Ram. Good morning, everyone. I, Savita Singh on behalf of Dolat Capital, welcome you all for the Q4 earnings conference call of Puravankara Limited. I would like to welcome the management of Puravankara Limited and thank them for this opportunity. We have with us today Mr. Ashish Puravankara, Managing Director; Mallanna Sasalu, CEO of South; Mr. Rajat Rastogi, CEO, Wealth and Commercial Assets; and Mr. Neeraj Gautam, CFO for the company. I shall now hand over the call to Mr. Neeraj Gautam for the opening remarks. Over to you, sir.

Thank you, Savita. Thank you, Ram. Good morning, everyone. I'm Neeraj Gautam, and I welcome you all to Purvankara Limited earnings conference call to discuss the performance for the fourth quarter and year ended FY '26. The financial results, investor presentation and press release have been filed with the stock exchanges and are available on the company website as well. I would also like to thank Dolat Capital for hosting today's call. I will begin with a brief overview of the macroeconomic and sector environment, followed by the company's operational and financial performance for the quarter and year ended FY '26. India's economy remained resilient during FY '25, '26 with the real GDP growth estimated at 7.6%, reinforcing its position among the fastest-growing major economies globally. Growth was supported by a strong domestic demand, a stable policy environment and continued investment activity. Looking ahead, the RBI has projected a GDP growth of 6.9% for FY '26, '27 compared to 7.6% in FY '25, '26, indicating a moderation from the current year's high base. This expected easing is largely due to global factors, including geopolitical conditions in West Asia, which may lead to higher energy price, supply chain disruption and increased logistics costs. Despite the external challenges, a strong domestic demand continues to support the overall growth outlook. On the residential real estate front, the market entered a phase of consolidation after a sustained period of strong growth during Q4 FY '26. Housing sales across the top 8 cities stood at approximately 4,800 units. Buyer preference continues to shift towards premium and high-value housing with homes priced above INR 10 million, accounting for nearly 53% of overall residential sales, reflecting a sustained demand for larger and lifestyle-oriented developments. On the commercial real estate side, India's office market maintained a strong momentum, recorded its highest ever quarterly leasing during Q4 FY '26 with gross leasing activity reaching approximately 29.9 million square feet, representing a 6% year-on-year growth. Demand remained broad-based across key markets and continued to led by the global capacity centers, which accounted for nearly 48% of total leasing activity during the quarter. The continued preference for high-quality Grade A office assets, coupled with limited new supply supported healthy occupancy levels and stable rental growth across major office markets. Overall, the outlook for the real estate sector remains positive, supported by strong macroeconomic fundamentals, improving infrastructure, favorable demographics and continued institutional participation. Moving to our operational performance for the quarter and the financial year ended FY '26. FY '26 has been a landmark year for the company. We have delivered our highest ever quarterly and annual sales performance, supported by a strong launch momentum, healthy customer demand and improved realization across key markets. During Q4 FY '26, our presales stood at INR 3,547 crores, registering a strong growth of 190% year-on-year and 151% sequentially. The performance was driven by successful new launches and sustained traction across our existing portfolio. For the full year FY '26, presales reached to an all-time high of INR 7,407 crores, reflecting a robust year-on-year growth of 5%. Customer collection during Q4, FY '26 stood at INR 1,213 crores, up 36% year-on-year, while FY '26 collection reached a record INR 4,258 crores, reflecting a growth of 15% year-on-year. This growth was supported by a steady construction progress, healthy conversion of sales into cash flows. Sales volume during Q4 FY '26 stood at 3.01 million square feet compared to 1.42 million square feet in Q4 FY '25, reflecting a strong demand momentum during the quarter. Average realization also improved significantly by 37% year-on-year to INR 11,787 per square feet, driven by better pricing and improved product mix across markets. For the full year FY '26, total sales volume stood at 7.25 million square feet, which average realization increased by 21% year-on-year to INR 10,213 per square feet highlighting a sustained demand for premium and higher value offering across the portfolio. On the execution front, we handed over 1,301 homes aggregating to 1.67 million square feet during Q4 FY '26. This took our cumulative handovers for FY '26 to 3,747 homes, aggregating 4.25 million square feet, demonstrating our continued focus on timely delivery, execution excellence and customer satisfaction. Coming to financial performance for the quarter and year. Total income grew to INR 1,541 crores in Q4 FY '26 compared to INR 564 crores in the same period last year, reflecting a strong year-on-year growth of 173% driven by higher handovers during the quarter. For FY '26, total income stood at INR 3,846 crores compared to INR 2,093 crores last year, reflecting 8% year-on-year increase. On the profitability front, we reported an EBITDA margin of 22% in Q4 FY '26 reflecting a significant improvement in operational efficiency, better cost control and operating leverage as a result of reported profit after tax of INR 111 crores for the quarter compared to a loss of INR 88 crores in similar quarter previous financial year. Coming to our debt. Our net debt stood at INR 2,321 crores as on 31st March 2026 with a net debt equity ratio of 1.31x. During the quarter, the net debt declined by INR 160 crores. Our cash and bank balance as on 31st March 2026 stood at INR 1,695 crores, indicating a strong liquidity profile and ensuring operational stability. Additionally, the cost of debt also declined further to 11.05%. Now moving to the launches and business development. During the financial year, we have launched 3 new projects, Purva SilverSky, Purva Northern Light and Purva Estrella and 7 new phases of existing projects with a total developable area of 6.39 million square feet, of which approximately 3.539 million square feet came from new projects. On the business development front, FY '26 was a strong year for us. We added 6 new projects across key markets, including Mumbai and Bengaluru. During the year, we added approximately over 12 million square feet of potential development area with estimated gross development value of around INR 15,200 crores significantly strengthening our long-term growth pipeline. In Mumbai, we secured 2 redevelopment opportunities at Chembur and Malabar Hills. The Chembur project involves 8 residential societies spread across nearly 4 acres, unlocking over 1.2 million square feet of developable area with an estimated GDV of around INR 2,100 crores. The Malabar Hills project 1.43 acres and offers approximately 0.7 million square feet of development potential with an estimated GDV of around INR 2,700 crores. In Bangalore, we continue to strengthen our presence across key micro markets through multiple business development during the year. We recently added a joint development project in Hennur Road with a salable area of approximately 0.8 million square feet with an estimated GDV of over INR 1,300 crores. We also added a joint development project in Balegere in Bengaluru with a development potential of around 0.85 million square feet for an estimated GDV of over INR 1,000 crores. During the -- along with 53.5 acres land parcel in Attibele having a development potential of approximately 6.4 million square feet and estimated GBV of around INR 4,800 crores. Earlier during the year, we had entered into a development agreement with KVN Property Holdings LLP in the Northern Bangalore near Airport with a developable potential of approximately 3.48 million square feet and an estimated GDV of INR 3,300 crores. We subsequently launched Purva Northern Lights during Q4, highlighting our strong execution capabilities and ability to quickly operationalize and monetize acquired business development opportunities. Coming to the outlook for next financial year, we remain positive on the momentum to long-term outlook of our residential real estate sector, supported by strong macroeconomic fundamentals, improving infrastructure and sustained end user demand, particularly in premium and well-located developments, while global uncertainties may continue to impact sentiment, underlying demand across key markets remain healthy. For FY '26-'27, we would like to provide a guidance for both sales performance and debt reduction. We are targeting a presales value of approximately INR 11,200 crores for FY '26-'27 and the total projected around 43% is expected to be driven by residential sales with the remaining 52% is anticipated to come from new product launches. On the balance sheet front, we are targeting a debt reduction of approximately INR 750 crores for FY '26-'27, excluding any incremental borrowing undertaken for strategic business development opportunities. Thank you for your patience. With this, we can open the call for questions. Thank you.

[Operator Instructions] we take the first question from the line of Deepak Purswani from Swan Investment Managers.

Congratulations for a very good set of operating metrics, and strong guidance. Just wanted to check out a couple of things. Firstly, if I were to look into the Slide #18 for the planned project pipeline, if you can give a broader sense in terms of the key projects like Bandra, how we are placed in terms of the launch pipeline? And what would be the GDV of these projects as a whole, which we are looking to launch in the next year?

Good morning, everyone. My name is Rajat. The Bandra launch as of now, the vacation notice is underway. Members are leaving. By end of June, we hope that the members will vacate, post which we will demolish and start working on our launch timeline. So I think we're looking at around the Dusshera to Diwali as a launch period for us to launch. The second part of the question was on the GDV, GDV of the asset right now is around INR 2,700 crores up for a sale portion.

And for the entire launch pipeline of 14.85 million square feet inventory as a whole, would it be fair to say this would be somewhere close to INR 20,000-odd crores kind of inventory?

INR 2,547 crores.

Okay. And see, I mean, historically, if I were to look from the launch pipeline point of view, there has been some slippages in terms of the launching the project, given -- I do understand there has been some delay in the approval. Looking at the current progress of the launch pipeline, how confident are we, we would be launching these projects on time? Or how should we look into this pipeline from the next year perspective?

Yes, you are right. And maybe the previous year that we had some launches that which did not go through, and that's all the more reason why that we were confident that this will go through because whatever reason that whether the E-Khata or some of the changing parameters in the planning authority and also creation of the global -- sorry, the greater Bangalore Authority and the 4, 5 divisions, which really took the toll. And if you look at across Bangalore, even all the entire sector in Bangalore is having difficulty in launching the projects. So given that situation that now it's all mature and they are all in the last steps, also now the question here is how to space them in such a way that the entire team and resources and everything are deployed for successful launches of the project. We are reasonably confident or I should say that most of the projects have to go through the -- most of the projects will go through to the launch.

Just on the second part of the business, just wanted to check it out on the cash flow point of view. See, I mean, we had a very strong sales momentum this time, especially in Q4 and if I were to look year as a whole. But just wanted to get a sense, if I'm looking into the sales collection number on the year-on-year basis, it's just a 15% and on the quarter-on-quarter, relatively not seeing significant growth, especially if I were to look on the Western side region collection, which we have given in the presentation, that seems to be more or less flattish since last 3. So if you can give a broader sense in terms of the collection, how should we see from the next year perspective?

Sure. What happened is if you look at our quarter-on-quarter sales, more than INR 3,000 crores sales has come in Q4. And this comes from largely because of the two big launches which we've done in the quarter, which is Northern Lights in Bengaluru and Purva Estella in Mumbai. Because these launches happened in the last quarter, and hence, collection will into the next financial year. So that means the sales has been committed, receivable has been committed all while we have to convert this into the billing and collection, et cetera. Hence, all collection for all these sales, the sales which we have done with the entire financial about INR 700 -- more than INR 7,000 crores, the collection will follow in the next financial year. And also, we have given a guidance on INR 11,200 crores of sales for the next financial year. The collection from that sales also will come. And hence, we are -- the outlook positive and sustained growth in collection, which we are expecting for next financial year.

Can you please quantify the collection for the next year point of view? How should we see that as a number?

We have given a guidance for sales and the debt reduction. The we have not given, but rather I'll give you estimate offline, we'll collect and I'll give you an estimate what kind of collection we are looking at.

It will be reasonable to expect that it is not going to be flattish, and it is going to be in double digits, you will see that it's becoming better than what it is right now. It's reasonable to estimate and we do not have the perfect number to say that. But nevertheless, from the sales that whatever the projections that we have done or also the sales that has happened in the previous year, INR 7,400 crores of sales have happened, it's reasonable to expect that with those big launches in the first year that we collect almost 45% to 50% of whatever the sales that might have happened. which should really augur well with our collections.

Okay. And just finally, on the operating surplus after interest and -- tax and interest, if I were to look into this year, this year, we have done actually INR 270 crores versus INR 292 crores last year. On the collection part, we already had a discussion. Just wanted to check it out another component which has seen significant increase is interest expenses, which has increased to INR 600 crores.

Now if you can give a sense...

One thing you have to look at is that our business -- if I look at business on a going concern basis, that means the kind of inflow I'm doing in the business, kind of outflow I'm doing in the business, whether overall basis I'm generating the surplus after meeting all my expenses or not. So if you look at not only the last 2 financial years, for the last 4, 5 -- more than 5 financial years, we have been generating can operating surplus. Now why it is kind of this kind of number, but operating surplus is also a function of the kind of outflow I'm doing. Today, as we have given a kind of launch pipeline. So today, the collections from which -- collection we are making not only I'm investing that money on completing the construction of existing projects, are also investing this money for making the other projects ready for launches. And hence, the money was getting deployed in the business development only. And after this all the business development expenses, after the meeting the launch expenses and construction also and also paying all my interest, we are generating surplus. That is how we should look at the cash flow, that is how we are looking at it. Interest again, interest is a little bit has gone up because of the incremental debt which we have taken, though these debt we are not taken for the business operations. The debt we have taken for the business development. Yet we are servicing and paying off interest out of the ongoing inflows and yet I'm generating surplus. That's how you have to look at it.

So see, I mean, if I were to look even if at the gross debt level, which is somewhere close to INR 3,900 crores or INR 4,000 crores. And if I were to look into the annual interest cost of INR 600-plus crores that seems to be at a 15% kind of interest cost, right? I mean how should we see this number on the absolute basis?

We have to connect offline for this. What happens is it cannot be debt is taken over a period of time. Not that it can be overall when you calculate interest like this. Some of the processing fee also have to pay, some amortization has to happen. I can give you offline. I can give you the detailed working of how interest arrive.

Okay. Finally, if you can just give an update on the commercial property portfolio. I think we have received the OC for this time. And how should we see commercial portfolio shaping up over a period of time? And finally, on the position point of view or delivery point of view, how should we see FY '27 as a whole? If you can throw light on these 2 aspects, that would be helpful.

So Deepak, on the commercial business, we have received OC for Aerocity. The leasing process for the asset is underway. We are getting very, very good inquiries right now. And we are pretty hopeful that in the quarter, we will start leasing in Aerocity. With regards to Zentec, we're expecting the OC to come any time this month. And right now, I think last year was a good year for Zentec. In fact, this year also, we have started leasing in Zentek. So that asset is also picking up really well. Overall, last year, we did almost 2.6 lakh square feet of sales and leasing in the commercial assets. And that number, I think, is going to substantially increase in this financial year.

Okay. And what was the delivery guideline for the next year for FY '25?

I think our 2 under construction assets have both been delivered. So I think we have a total of close to around 2 million-odd square feet of assets which is delivered now. The other assets which are in the other stages of construction and planning, they're going to take some time for delivery.

Delivery guideline for the residential business as a whole for FY '24, how should we look into it?

Deepak come -- we can give you the number offline.

[Operator Instructions] We take the next question from the line of, Ruben Matthew, who is an individual investor.

Am I audible?

Yes, yes, you are audible. Please go ahead.

I just had a few questions. So where was the incremental debt used for?

Incremental debt is used for the business development. If you look at -- we have also mentioned about what kind of business development we have done in the next 12 months. And if you go to Slide 32, we have given a detail about 6 projects we have added INR 15,200 crores of GDV and that is where the incremental debt has been utilized. Partly the money would have also gone for the working capital for funding the launch expenses, et cetera, but substantial amount of incremental borrowing has used only and only for business development purpose.

Okay. And one more question was how much is the Lokhandwala project contribute for this quarter?

Lokhandwala has done slightly more than INR 800-odd crores of sales in quarter 4.

We take the next question from the line of Chintan Mehta from Puniska Family Office.

Congratulations on that. I had a query regarding estimated surplus cash flow is INR 19,290 crores. To arrive at that number, what kind of GDV we have included? And after this INR 19,000 crores of cash surplus, what kind of land we will remain with?

All 3 are different question in itself. See, if you go to our Slide #25, how we arrive at the surpluses are we have -- there is a component of this is about INR 8,816 crores, which is coming from the surplus from all current ongoing projects where either we have launched or we are about to launch, if I reduce all my construction and project expenses, what kind of surplus you're estimating to generate. After that, we have 2 commercial assets. If we choose to come exit out of those assets, what kind of surplus we're going to generate. After that which is INR 2,131 crores. Besides that, we have given a guidance for the new launch pipeline. If those new launches, if I estimate a surplus from those new launches will come about another INR 834 crores and thereby add up all 3, the estimated surplus from current ongoing projects, commercial projects in the launch pipeline, it comes to INR 1,219 crores. So coming to the kind of GDV we have taken, the launch pipeline GDV we are told about INR 22,000-odd crores. Ongoing project, it's not coming out of the GDV. The ongoing project is coming from the balance collection from sold or unsold units, which has remained there. And then that is how it is calculated. I hope I clarified your questions.

So this surplus is the free cash flow after all the expenses we have right now?

This cash flow is we have to meet sales and marketing expenses out of it. We have to pay income tax out of it. And of course, there are -- what are our debt with our balance sheet, that debt needs to be paid out of the collection surplus.

And after this, how much land bank approximately will be left with?

Land is about 56.48 million square feet. Out of that, we have given a guidance of about 21 million square feet right now. So 56 minus 21 is about 35 million square feet will remain with us.

After this INR 19,000 crores surplus.

Yes, yes. If you refer to Slide 15 of our investor presentation, there we are giving detail of what kind of land asset we have. And if I minus it from the guidance which we have given this number.

And sir, last many times I was asking about any diversification apart from residential and some initiation or some finding something on?

Commercial has already we have commercial business already 2 commercial assets have been developed and new -- as Rajat has mentioned, coming up the new commercial business. I think both the CEOs are there. They can give some thoughts about it that any new vertical you want to explore.

So just to add to what we are doing on commercial, we also steadily developing our retail portfolio like in Mumbai, in one of our projects in Thane, we have almost 50 lakh square feet of retail portfolio that we are developing over there. Also as a business strategy and expansion, we're looking at the growth verticals like data center and warehousing where we are looking at right opportunities to enter. So from an overall business perspective, I think we are open to opportunities in terms of where we get the requisite benchmark IRR rates and then we'll explore that. But right now, data center and warehousing and retail are the 3 areas that we are looking at opportunities.

Understood, sir. But any timeline you want to give like 2 quarters.

No, it all depends upon the right opportunity at the right time. So we are open in the market. We're looking at meeting the respective partners. But right now, I think it's difficult to give any time line. As I said, it is the right opportunity that we'll enter.

Okay. On the Star side, what is the current order book size? And any possibility we can separately start reporting.

Right now, Star works is not a segment of Puravanka Limited business. However, financial statement of Star works is currently separately published and uploaded on our website. It's not a listed company, hence, I do not need to stock extent, but our website, we published financial statement of Star. As of now, financial statement of Star is up to FY 2025 is uploaded and available. FY '26 after this financial results, we will publish the Star financial statement as far as publishing is concerned. Coming to the order book is concerned, Star today has an order book of more than INR 2,000 crores.

Okay. Fantastic. And sir, last question from my side. Any geographical diversification we are looking on the East side like West Bengal or Bihar. We have the emerging real estate or possible percentage again, we are looking apart from Southern belt.

So we are looking at NCR as an expansion strategy for our business. I think our teams are there. Again, as I said, we're looking at right opportunities. We're looking primarily at the region of Delhi, Noida and Gurgaon to focus on right now.

Okay. Not Tier 2 towns or anything like kind of opportunities we are looking at?

Not as part of the strategy right now.

We take the next question from the line of Dhanwani, who is an individual investor.

Hello, am I audible?

Yes, you are.

Sir, what is the update on Malabar project on the approval side? And what is the price per square feet we are looking in this project?

So Malabar project, I think the DA has been completed. I think we are yet to register it, which we are going to do in the next 45-odd days. Subsequently, we're going to apply for approvals. So I think the approval time line is between 9 to 12 months. The pricing that we're looking at is around INR 15,000 to INR 120,000 on carpet areas.

Okay. And I have one more question. And also given the ongoing geopolitical uncertainties, are you witnessing any change in customer behavior, particularly in delays in booking decisions from end users? And how is the actually company managing the impact of rising construction costs? Do you expect any meaningful effect on project margins or demand going forward?

Yes, I think it's in 2 buckets that you asked the question. One is what is -- how are the nonresident Indians or the buyers from outside, how they are behaving. Since we had a very successful launch quarter last previous quarter that we didn't find anything that is substantially different from what it is. And in fact, we had a good sales from NA market. So as we go forward, yes, any such situation like a war is not something that is desirable, and it will have an effect on people. But whether it is a positive or negative at this point of time, we couldn't say that because people -- yes, generally, people want to invest from outside the country in India when there is distress outside the country. Also, one thing that needs to be taken into consideration is the rupee depreciation. The rupee depreciation should encourage people to put more money into India and -- coupled with uncertainties. At the same time, we should also be mindful of people may be having some uncertainties about their earning outside the country because of whatever is happening. So we're cautiously looking at it and maybe in a couple of months that things will be sorting out, I believe. Let us look at it. As part of the second part of this the construction cost, at this point of time, yes, we are looking at some 6% to 7% construction costs going up in terms of the -- because of the diesel prices, which went up recently. So -- but with the kind of margins and other things that are already taken into consideration and the contingencies that are developed. At this point of time, we are not unduly concerned about it. But as we go forward, again, in the next couple of months, we'll have to wait and watch how all these things unfold.

[Operator Instructions] we take the next question from the line of Manik Shah, who is an individual investor.

So I just want to know like what is the per square feet we are charging on the Northern Light project? And like what is the broader margin on such development we can expect? And what is the contribution of this project in this quarter, like presales contribution?

So Northern Lights, we are at around INR 10,700 per square feet and above is what is the average price realization is what we say. So that's where we are at this point of time. And usually, these kind of projects make in excess of 20% to 21% gross profit margins are there in a project like this. Apart from that, the third question is that I think it contributed for INR 1,100 crores -- INR 1,100 crores to INR 1,200 crores for the quarter presales number.

And I also want to know like can you throw some light on the margins in the redevelopment projects as well as in Purva project?

On the redevelopment projects, our strategy has been clear that we want to take opportunities which are close to around 20% margin, and that's what we're following. Even in the recent launch that we did in Purva Estella, I think our margins are close to 20% now, slightly upwards of 20%.

Purva land if you're referring to the project, project margins are 35% plus all the projects, maybe 40%, 35% to 40% on the gross profit margin in the product development projects.

Also it is not -- it depends on each project also. So there may be some projects where we go for joint development with a partner, then maybe our margins could be a little bit lower as well. project specific, as Neeraj spoke it's 30% to 35% on land is possible.

We take the next question from the line of Harsh Pathak from Motilal Oswal Financial Services Limited.

Congratulations, Ashish and team for the strong Q4 performance and very encouraging to see the growth guidance as well as the outlook on debt reduction. So my first question is on the growth guidance that we have given and especially now that we are ramping up in Bangalore and Mumbai. So particularly to Bangalore, given this narrative on the demand impact due to AI. So what kind of dynamics are you seeing on ground? And what are the strategies we are adopting to counter that?

I don't see that in the residential development at least that we are seeing any kind of a large difference. Yes, if you look at what I call the frenzy a year back, and that might not be there, but it's a very realistic market, Bangalore being where end user market. So it's been -- the sales have been steady. So you can also look at from our previous -- the launch that what we had. We did extremely well, and we sold around 30% of our project. And also that now there are another 3 projects which are coming up, and we are studying the market warming up the market, and we've got some encouraging results from there as well. So whether it is AI, I would actually look at it as a positive thing for any place which is technology centric simply because AI also requires work and implementation and everything else that goes along with that. And with the kind of AI plus GCC that is the combination, I expect the markets to be doing better, even better. And it's also kind of reflected in what's happening in the commercial offtake in the first quarter and what is happening in this quarter of the new year and also the last quarter of the last year. So I believe that it is -- AI is a good thing to happen, and it will be good for all businesses, which serve the people.

Sure, in the last 1 or 2 months, have you seen some difference in the footfalls or the conversion ratios that the projects that are ongoing? Any color on that?

As I said that if you look at the last 1 year, 1 year before, the frenzy, which I spoke about, may not be there, but it is a very, very steady market. I have not seen any decrease in the footfall. Maybe people sometimes take a little bit more time to decide, but we are quite comfortable with it, and it is -- most of the sales and the numbers are matching whatever the plans that we had, quite comfortable.

Understood. And I see the response at the Lokhandwala project was also very strong. So what kind of strategies we have adopted because we have seen there were players in the vicinity who have already been in the Mumbai market. So what kind of strategies did we adopt to capture this market? And how do we intend to get -- capture a higher sales velocity at the upcoming projects in Mumbai?

See, honestly, I think our brand is playing a very, very key role in the overall the numbers that we're achieving right now. Of course, not to say that we spend a lot of time in understanding the consumers, getting the right product in the market. And I think that's going to be a strategy for even the upcoming launches that we're going to be having in Mumbai. So we -- as a company, as a part of the process, there's a lot of time we spend on design. I think that was one of big differentiating factor. We also spent a lot of time in identifying the asset that we want to enter, like, for example, the Lokhandwala asset right next to the Lokhandwala Market and Lokhandwala Circle, I think itself was, I think, a big bonus point for us. Similarly, like the other launches like we're going to have is the Pali Hill or Breach Candy or even the Donarabag launch that we're going to have planning this year, the amount of effort that we're making at each and every checkpoint, asset, product and the sales strategy, I think that is all coming up to resulting in these kind of numbers.

Understood, sir. And in terms of our expansion in the Mumbai market, how are we looking at different micro markets? And what are the kind of projects under evaluation currently?

So Harsh, I think as we've always said that we want to be catering to all parts of Mumbai. We will start from Dombivali and even the most expensive part of Mumbai in Cuff Parade or even in Breach Candy. So from a strategy point of view, I think that will continue to be a mantra in Mumbai growth story. We want to be more in the Western suburb. We also want to grow in the eastern side of the city. Also we want to grow in the Mumbai 3.0. So we will be technically in all parts of Mumbai and cater to entire consumer Mumbai.

The portion on the commercial segment that you mentioned in one of the earlier questions. So what is the kind of traction you said that you are getting an encouraging traction. But if you can quantify or maybe give some deeper color into that, that will be really helpful.

Yes. I think the traction is phenomenal. I think if you look at the Zentech asset, we're already almost 44% either leased or sold. And I think all the leasing is gone to Grade A companies. So I think from a -- even I think when the OC is expected in the next 15, 20 days' time. So even before the OC, we are around 40%, 45% leased and sold. Similarly, on the AeroCity, I think it's a large grade A platinum rated asset. I think we are obviously talking to a lot of GCCs right now. We're talking to a lot of filling in a lot of RFPs. In fact, the quantum RFP that we fill is in excess of around a couple of million odd square feet. So we are very, very hopeful that in the next couple of quarters, we'll be able to do a couple of large deals in AeroCity and the traction in Gentewaysing on. So I think the momentum on the commercial business is also very, very positive.

That's really encouraging. And finally, on the data center that you mentioned earlier, so what is the outlook there? I mean how are we planning to enter this segment? And what is the product road map to this?

So, as you know that data center is a very, very micro market-centric business, right? I mean Mumbai is around 49% of the market followed by Chennai. We are open to opportunities. We are talking to partners, but I cannot give any time line in terms of when we will enter this business. If the right opportunity basis our benchmark, IRRs meet us, I think that's when we're going to enter the segment.

So this will be, I believe, broadly a leasing business, right? Not we won't be partnering with any data center operator or any such thing?

Yes, it will be purely on the leasing side.

Again, many congratulations for the performance and the encouraging guidance.

We take the next question from the line of Dhananjay Mishra from Centrum Broking.

Am I audible?

Yes, you are.

So congrats on very strong operating performance and very encouraging guidance as well. So just a bookkeeping question with respect to debt, which is not including NCD of INR 1,400 crores. So in P&L, whatever interest we are providing of INR 650 crores, so are we also considering interest to be payable on NCD in that INR 650 crores?

Yes, yes. Because of the accounting norms borrowing is payable in our debt or even debt which I have taken, which is payable as a performance function of the project also. But on a fair value accounting perspective, I have to calculate the cost, fair value cost of that instrument and we have to charge to the P&L. That is the accounting reg.

But we are not paying interest...

We are not paying -- for example, I can give you, if I've taken money from which are equity in nature, where my repayment is a function of the performance of the project because the servicing and the prepayment has been linked with the performance of the essentially if, by any chance, I'm sure all our project will do well. But by any chance, project doesn't do well, then my cost of debt for will come down. But for the fair value accounting perspective, today, we have to get this debt continued and taken on this, what would have been the cost on that basis, we have to charge P&L and that has been done.

So I mean interest cost or coupon rate, whatever you say, that will be higher than the 11% of the overall book on the equity.

Of course, fair value will be more of that particular instrument, not what my overall book is at 11.05%. However, that particular instrument which we -- against which we have raised money to buy land, that particular cost will be more. Again, as I said, the cost of more or less would be the function of the performance of the project...

So INR 750 crores reduction plan we have, that is net debt of INR 2,300 crores, the gross debt...

Net debt is after reducing cash and bank balances. If my gross debt reduced by INR 750 crores, the same amount will be reduced by the net debt as well.

I mean if we use our cash to reduce our gross debt, net debt will be...

I'll not be -- is not that I scheduled repayment is about INR 800 crores this financial year, INR 836 crores. So whatever said my debt will be INR [indiscernible] -- besides that, I'll be also doing some excess collection and then some loan repayment happen through the SI itself. So those repayments will happen from project level itself. As far as cash and cash equivalent is concerned, it has multiple uses. If some cash is sitting in the RE account which is for projects still after meeting all my project cost servicing all the interest there is say debt as well. So INR 750 crores reduction on gross debt, right?

[Operator Instructions] We take the next question from the line of Rohan Joshi, an individual investor.

Would like to congrat great set of numbers. And sir, we have done really well in FY '26 in terms of presales and collection. And I know we usually don't give such forward-looking guidance. But can we expect such growth going forward? And what will be the geographical split and...

We have given guidance this financial year. In my opening remarks, we have mentioned that next financial year, we are targeting a sales of INR 11,200 crores as a company as a whole. Out of that, about INR 7,000 crores will come from the Southern market and remaining sales we are expecting to come from the west and commercial business.

Okay, sir. And sir, I would like to ask one more question that are we looking into the senior housing space as we have seen many players in the North has entered into, it has like a bit of higher margins. So I just would like a comment on that.

Yes. So basically because we are developing large townships kind of projects, right? One or some of the projects are in excess of 2 million and 3 million and so where we have a number of towers. And so now we would like to look at it, explore the possibility of putting 1 or 2 towers into this senior living. At the same time, senior living has 3 different components that is one is the real estate, the other one is the hospitality, the other one is the health care. So do we want to become the service providers ourselves is another question that we have to -- we are just exploring internally. But being in there as real estate developers, and I think that is a must for us as we go forward as the population also will age and also the people who have the affordability are becoming older, right? So I'm sure that there is a great opportunity in this, and we will definitely participate.

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

Thank you, everybody, for joining this conference call. And I hope myself and my colleagues have been able to answer all your questions. For any further questions, you reach out to us on our mail ID, which is provided an investor presentation. We'll be happy to give you any information and explanation. Thank you very much once again.

Thank you. On behalf of Dolat Capital Markets Private Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.