Shriram Properties Limited ($SHRIRAMPPS)

Ladies and gentlemen, good day, and welcome to the Q4 and FY '26 Earnings Conference Call hosted by Shriram Properties Limited. [Operator Instructions] I now hand the conference over to Mr. Murali, Chairman and Managing Director for Shriram Properties Limited. Thank you, and over to you.

Thank you. Good evening, everyone, and thank you for joining us today for the earnings call to discuss our Q4 and FY '26 performance. On behalf of Shriram Properties Limited, I welcome all our investors, analysts and all the stakeholders. FY '26 was defining year for us marked by very strong operation resilience, disciplined execution and an encouraging recovery and momentum towards the end of the fiscal year. Despite certain external challenges during the year, our teams demonstrated exceptional execution agility, enabling healthy customer handover and sustained delivery momentum across projects. I'm pleased to share that Q4 witnessed a remarkable all-round performance. Strong handover momentum during the quarter led to a substantial recovery in revenues and earnings, helping us close the year on a very strong note. Record handovers during FY '26 drove all-time high revenues for the company, reflecting the strength of our execution capabilities. As we move into FY '27, we remain optimistic about the opportunities ahead with a stronger launch pipeline, improving visibility across projects and continued emphasis on execution and customer centricity, we believe we are well positioned to sustain growth momentum and create long-term value for all stakeholders. With that, I'll now hand it over to Mr. Gopalakrishnan, CEO; and Mr. Ravindra Kumar Pandey, CFO, to take you through the financial and operational details in greater depth.

Good evening, everyone. My name is Ravindra Pandey. I'm the CFO of Shriram Properties Limited. Thank you for taking time to join us today. We are delighted to present the financial and operational performance of the company for the fourth quarter and full year ended 31st March 2026. FY '26 was a year of resilience and recovery. While the company faced external challenges during the first 9 months, including delays in approval, ICA, OCs and moderation in launches, mostly in Bangalore, we demonstrated a strong bounce back in Q4 and ended the year with a robust performance. I will take you through the key operational, financial and strategic developments during the year and our outlook for FY '27. During our conversation, I will keep referring to the presentation uploaded today on the website and the stock exchanges. Hope you all have access to it. I'm referring to the Slide #4. FY '26 was a year of resilience execution and progressive recovery despite a challenging external environment. We entered the Pune market, sustained strong operational momentum across business metrics and delivered a robust finish to the year. One of the key achievements during the year was the amicable resolution of long-standing land matter in Kolkata. The settlement and convenience process has significantly enhanced the monetization potential of our land bank and are expected to unlock value in an accelerated manner. Operationally, the company demonstrated strong execution capabilities, particularly in the fourth quarter, delivering the customer handovers and effectively managing temporary disruptions related to e-Khata and Kaveri portal processes through close coordination and focused execution. This strong handover momentum translated into record revenue recognition and earnings, enabling us to achieve our highest ever revenue and profitability performance. Improved visibility on FY '27. FY '26. Overall, FY '26 ended on a strong, reinforcing the strength of our operating platform and positioning the company well for this next phase of Re to the Slide #6, coming the operational performance. For FY '26, sales value for the year stood at INR 2,354 crores, registering a marginal increase over the previous year despite delays in certain plant project launches. Sales volume of 4.1 million square feet. Collection reached all-time high of INR 1,661 crores, growing 12% year-on-year. Customer handover reached 3,465 units, up 10% over the previous year. The fourth quarter witnessed a strong rebound, sales value of INR 663 crores, collections INR 511 crores, handover of 1,348 units. These numbers demonstrate the strength of our execution platform and our ability to recover quickly once operational challenges subside. Referring to Slide #7. The operational momentum translated into a record financial performance for FY '26 Revenue increased by 39% to INR 1,357 crores. Gross profit increased by 47% to INR 365 crores. EBITDA stood at INR 177 crores. Net profit increased by 30% to INR 101 crores, passing the INR 100 crore mark for the first time. This reflects the strength of our operating performance, disciplined execution and continued focus on profitability. For Q4 alone, revenue was INR 663 crores, up 55% year-on-year. EBITDA reached INR 109 crores, up 59% year-on-year. Net profit stood at INR 79 crores, up 65% year-on-year. The strong performance was driven primarily by higher handovers and revenue recognition in Bangalore, Chennai and Kolkata projects. Referring to Slide #8. The company continued to generate healthy operating cash flows. For FY '26, operating inflow reached to INR 1,049 crores. Cash flow from operations stood at INR 271 crores. Free cash flow before new project investment was INR 224 crores. We invested INR 372 crores in new business development opportunities to strengthen our future growth. This is one of the highest annual investment made by the company on new project pipeline acquisition in any single year. Over the last 4 years, we have generated cumulative operating cash flows of over INR 900 crores and around 80% of this cash has been reinvested into new projects, reflecting both the quality of our cash generation and our commitment to the sustainable growth. The recent settlement with Government of West Bengal has significantly improved the monetization visibility and will accelerate value realization from our land holdings. The next slide sum our discussion. I'm referring to the Slide #10. On project pipeline, our project pipeline remains robust and provides a strong visibility for future growth. We currently have 16.7 million square feet under ongoing projects, of which 85% has already been sold. Along with 2.6 million square feet of unsold area of ongoing projects and an additional 18.6 million square feet of the upcoming pipeline, total unsold development potential is over 21 million square feet, representing GDV of nearly INR 13,950 crores. The approval process has already commenced for all 7 projects acquired during the year, and we expect over 7 million square feet to be added to the launch pipeline over the next 3 to 6 months. Going forward, our objective is to double the upcoming project pipeline over the next 18 to 24 months, while continuing to maintain capital discipline and our asset-light growth strategy. Referring to Slide #10. Although launches were limited during FY '26 due to approval delays, the project launch witnessed exceptional market acceptance. This includes Spectrum Pune, over 300 units sold during launch year, Sansa DF Bangalore over 85% sold in launch year, Sky Blue Villas, Kolkata over 50% sold; Skal and Kolkata, approximately 40% sold at launch. All launch projects have witnessed encouraging sales traction with 30% to 85% of the inventory sold at launch are within the launch year. These outcomes validate our product positioning, price strategy and demand for -- not across our key markets. Referring to Slide #12. SPL successfully forayed into the promising growth market for Western India with its maiden launch at Undri. SPL has sold over 300 units in less than a year of launch, a remarkable achievement considering that the micro market as a whole has absorbed only around 850 units annually in the last 3 years. The market acceptance of the Shriram brand and our team's ability to penetrate into new markets provides encouraged confidence in accelerating growth strategies for the region. Referring to Slide #13. Execution remained one of our strongest differentiators. During FY '26, we completed and delivered 8 projects. Collectively, these projects represented 3.8 million square feet, enabling the handover and reinforcing our commitment to timely project delivery well ahead of RERA time lines. Referring to Slide #16. FY '26 delivered a strong financial performance. Q4 was particularly strong with total revenue increasing 55% year-on-year to INR 663 crores, driven by robust revenue recognition from completed projects and record customer handovers. Net profit for the year grew 65% to INR 79 crores, reflecting improved operating leverage and execution momentum. For the full year, total revenue reached a record of INR 1,357 crores, representing 39% growth over FY '25. Gross profit also reached a INR 365 crores, while gross margin remained stable at 29%. Higher marketing investment towards accelerating sales number and certain legacy project provisions led to flat EBITDA during the year. Finance costs reduced by 18% year-on-year. Lower finance costs and improved operational efficiency supported a 25% growth in PBT before Shera JV income. Net profit increased by 30% to INR 101 crores, crossing the INR 100 crore milestone for the first time in the company's history. With revenue recognition commencing in recently completed projects and a healthy launch pipeline, we expect revenue and profitability momentum to remain strong going forward. Referring to Slide #18. This slide represents the company's balance sheet position as of March 2026. Our balance sheet continues to remain strong, supported by a healthy equity base of INR 1,460 crores and one of the lowest gearing levels in the sector. Current borrowings reduced from INR 593 crores to INR 448 crores. Our debt-to-equity ratio at 0.3x remains one of the lowest among listed real estate players. We have maintained a healthy liquidity position with cash and cash equivalents of INR 172 crores. Overall, the balance sheet remains robust, providing us with the financial flexibility to pursue growth opportunities while maintaining a disciplined approach to capital allocation and leverage. Flipping to Slide #19. This slide summarizes our cash flow performance for the year. The business continued to generate healthy operating cash flows, supported by strong collections and improved handovers. SPL share of operating inflows crossed INR 1,000 crores during FY '26, reflecting the quality of our revenue conversions and customer collections. Cash generated from operations were largely deployed into construction activities to support project execution and future revenue recognition. In addition, we invested INR 372 crores in new business development opportunities during the year, consistent with our growth strategy. Overall, our cash flows remains healthy and the investment made during FY '26 position us well for a stronger milestone collection and operating cash generation in the coming years. Referring to Slide 20. Our balance sheet continues to reflect a prudent and disciplined approach to leverage. As of March 2026, net debt stood at INR 438 crores, while the net debt-to-equity ratio remained comfortable at 0.3x, among the lowest in the sector. The debt is largely deployed towards project construction. Importantly, our cost of debt remained competitive at 11.2%, benefiting from a favorable interest rate environment and strong lender relationships. The company's strong equity base of nearly INR 1,460 crores, healthy liquidity position and the CRISIL A- positive rating provide ample funding capacity to support future growth. With cash balances of INR 172 crores and undrawn funding lines of INR 358 crores, the company has over INR 520 crores of readily available liquidity. This provides significant financial flexibility to accelerate project construction, support new business development and capitalize on growth opportunities while maintaining a prudent leverage profile. Referring to Slide #22. While the global environment continues to face uncertainties arising from geopolitical development, interest rate momentum and inflationary pressures, the Indian residential real estate sector has demonstrated remarkable resilience. Demand in the mid-market and mid-premium segment remains strong, supported by rising incomes, urbanization and sustained individual demand. Importantly, our core markets, Bangalore, Pune, Chennai and Kolkata continue to exhibit healthy economic activity and favorable housing demand fundamentals. Against this backdrop, Shriram Properties remains well positioned for sustainable growth. Our diversified presence across high-growth markets, disciplined execution, calibrated pricing strategy and asset-light development model provide both scalability and capital efficiency. The market continues to witness increasing preferences for branded and organized developers, creating a favorable environment for established players like us. Coupled with healthy inventory levels and a strong upcoming pipeline, we are well placed to capitalize on emerging opportunities. Therefore, while we remain cautious in the near term in terms of our guidance to the market on FY '27 KPIs, we are fully geared to seize the opportunities in the market and sustain our growth momentum in FY '27 and beyond. Referring to Slide #23. Based on current visibility, management expects FY '27 performance to be stronger than FY '26. Our guidance includes sales volume of 5 million to 5.5 million square feet during FY '27, sales value of INR 8,300 crores to INR 3,500 crores, collections of INR 2,100 crores to INR 2,200 crores, handovers of 3,750 to 3,800 units, pipeline addition of 7 million to 8 million square feet, GGV addition of INR 5,000 to INR 6,000 crores. The risk profile for FY '27 is lower owing to greater geographical diversification and a broader launch pipeline. Referring to the Slide #24. As we look ahead to FY '27, we remain mindful of the evolving macroeconomic environment and the potential risk that could impact the sector. At the sector level, factors such as ID sector, employment trends, affordability pressure arising from the interest rates and extended sales cycles warrant close monitoring. We also remain focused on execution-related risk, particularly timely approval, receipt of occupancy certificates and conversion of our BD pipeline into launches. To mitigate this risk, we continue to maintain an overall position in the resilient mid- and upper mid-housing segment, where demand remains relatively stable and credit risk are lower. Our growth strategy is centered on Bengaluru and Pune, while selectively expanding in Chennai and Kolkata with a disciplined risk-adjusted approach. We have also instituted active monitoring of IT sector employment trends in our key markets and continue to focus on calibrated pricing, execution excellence and prudent capital allocation. Overall, while external uncertainties remain, we believe our diversified portfolio, strong balance sheet and disciplined operating model position us well to navigate risk and capitalize on growth opportunities in FY '27. Referring to Slide #25. This slide outlines our key sales objective for FY '27 and reflect a balanced growth strategy across markets. The FY '27 sales plan is well diversified across Bangalore, Chennai, Kolkata and Pune, reducing dependency on any single market. This balanced portfolio reduces dependence on any single project or approval milestone, thereby mitigating the impact of potential approval delays. Our project portfolio are well diversified across market, not only from a sales and launch perspective, but also in terms of project completions and customer handovers. Referring to the Slide #26. This slide provides visibility on our FY '27 launch pipeline. We have identified over 7 million square feet of projects, which nearly 6 million square feet planned for launch during the year across Bangalore, Chennai, Pune and Kolkata. Almost all target launch projects are already secured and progressing through the approval process, significantly reducing execution risk. Several projects are already at advanced stage of approvals with some launches scheduled to commence in the first quarter itself. With approved activities already underway for most projects and a well-distributed launch calendar across the year, we are well positioned to drive sales growth and maintain a strong business momentum in FY '27. Referring to Slide #27. This slide highlights the key projects expected to drive revenue recognition in FY '27. We expect approximately 3.8 million square feet of project completions during the year, creating a revenue recognition potential of nearly INR 1,740 crores and handovers of over INR 3,500 crores -- 3,500 units. Project execution remains on track with a majority of deliveries expected ahead of RERA time lines. This gives us confidence in achieving our FY '27 revenue and profitability objectives while continuing to enhance customer satisfaction through timely delivery. The planned completions and handovers are also expected to translate into a strong collection momentum, further strengthening operating cash flows. Referring to Slide #28. This slide recaps our mission 12 34 for FY '28 and the path to achieving it. We had discussed this earlier in our earlier quarter earnings calls. This is to reassure that based on the current performance and organizational outlook, we believe we are on track for achieving our aspiration of INR 5,000 crores sales, revenues of INR 2,500 crores and PBT of INR 250 crores by FY '28. Projects already under implementation and projects that are secured by SPL already carry a revenue recognition potential of over INR 15,000 crores in about 5 to 7 years. Overall, FY '26 has marked a year of recovery, execution and strategic progress. We delivered record revenues, collections, handovers and profitability while strengthening our project pipeline, entering a new market and resolving a long-standing strategic matter in Kolkata. With a robust balance sheet, strong launch visibility and significantly embedded cash flow potential, we enter FY '27 with confidence and a clear pathway towards achieving our mission FY '28 objectives. Thank you all for your continued trust and support. I now hand over the call back to the operator. Myself, along with our CEO and CMD will be glad to answer all your queries. Thank you.

[Operator Instructions] The first question from the line of Nitin Jain from Fair Value Advisors.

My question is on Slide #8. So your operating cash flows, while they have increased year-on-year, the CFO has declined, whereas your new project investments have increased significantly. So my question is, will this lead to some kind of a cash crunch in the near term? And would we be required to take on more debt?

So that's not the case. Yes, it has declined slightly, but the focus was on mainly to execute the project and the faster completion. We have completed close to around 4 million square feet during the year. And as you know that very soon we reach on the finishing stage of the construction, there is a good amount of money that has to be infused to complete the construction. And that is why the free cash flow from the operation has come down slightly, which is mainly because of the additional spending on the construction activity. So there's no additional debt is required for the purpose of accelerating the construction. There's enough liquidity available for that.

Right. And with the recent increase in raw material prices, what kind of margins do we anticipate going forward in FY '27?

See, we are into a very strong footing as of now. We have recently completed close to 4 million square feet and the project where we are completing that is not too much of dependency on the -- in this current trend as of now. If you look at the basic material prices like cement and steel and RMC, the prices are continuously -- it is -- I can say, if it is not going up, it is actually coming down and we can say stable pricing. The prices which are impacted, it is mainly on account of the plastic-related things like we have tiles are getting impacted a little bit and mostly paints and PVC windows. Those are having a little bit of pricing stress on that and the people are demanding close to maybe 5% to 10% of the initial pricing on that. But it is not going to impact the project profitability significantly. And any of our projects, whenever that we launch any of our project, we are always having some cushion in terms of any contingency. We are keeping a cushion for that and which is not going to impact the profitability of any of our project as of now.

Right. Just a follow-up to that question. Do we anticipate to take any price hikes in the near to midterm to battle the raw material inflation?

I don't think that any -- the prices in most of the real estate market has already stabilized now, and there is not too much of headroom available for any developer to increase the prices. However, if the inflationary trend continues and there is a price pressure on that, then it has to be decided and maybe some price increase will happen going forward in the new launches.

So this is Gopal, CEO of Shriram Properties. And I just want to supplement what Mr. Pandey has said. So the markets are looking at not more than 5%, 6% annual upside in the existing projects or the market pricing increase is not more than 5%, 6%. That will cover an inflationary pressure of what, 8% to 10% in the construction cost side. So I think margin expansion may not happen due to price hikes. -- margin protection and margin enhancement -- margin protection is real. Margin enhancement happen only through new project, new micro portfolio upgrades where you better enter micro markets or launch projects in new micro market, which have a higher pricing potential. We see that potential across multiple locations that we are targeting to launch, especially within Bangalore, it is like North Bangalore seems to present a much stronger upside potential. We are -- we will be opportunistic about what the launch price should be, but generic increase -- organic growth in pricing may not be beyond 5%, 6%.

[Operator Instructions] We have the next question from the line of Harshit Khadka from RoboCapital.

Sir, just wanted to understand that last year, our other expenses were INR 126 crores, and this year, it is INR 172 crores. So what is the reason of a jump in other expenses? And how do you see it in FY '27?

So overall, the increase has happened because of 2 reasons. One is that there's an accelerated revenue recognition which has happened. Last year, we have recognized revenue of close to around INR 800 crores. This year, we have recognized close to INR 1,200 crores of revenue recognition. You may be aware that whenever we do the spending on account of marketing, the brokerage cost that is getting capitalized and it gets charged off only when we recognize the revenue. So this year, because of the accelerated revenue recognition, there is a good amount of close to INR 25 crores of the additional brokerage that has got booked because of the additional revenue recognition. And there are certain provisions have been made. We have already communicated in the earlier in the Q2 quarter when we have done the Ashiana settlement of our Bengal land, we have taken close to INR 7 crores of the impairment we have taken. And during this year also close to around some INR 10 crores of the additional expenses we have to book, which is not the booking basically provisioning what we have made. There was some recoverable from the landowner and the auditors think that it is getting delayed and hence, we have a provision INR 5 crores to INR 10 crores. So that is why the other expenses are a little higher close to around INR 50 crores. However, this INR 10 crores what we are talking about, this is recoverable as per our view, the prudent it has been provided in the business.

So you are saying the other expense wouldn't jump in FY '27, right?

Yes.

Okay. And sir, I'm referring to Slide #28. So is it fair to assume that the PBT, the profit before tax would be in the range of 10% and the PAT would be in the range of 7% to 7.5% going forward?

So we have consistently maintained that, yes, we are looking at net PBT margins of about 10% to 11% as we go in the future. So therefore, that benchmark applied on this future revenue recognition potential would be reasonable.

And PAT margin in the range of 7% to 7.5%, right?

Slightly more than that. We have always had a much lower tax because, as you know, the expense -- in the early years of a project, we provide for those expenses, losses, the income recognition doesn't happen. And towards the end when we recognize income, therefore, there's a carryforward losses are there. So therefore, overall year-to-year, if you look at it, the effective tax rate may not be 25%. That's a limited point I'm making. Therefore, applying 25% might not be the right way. So 8% to 9% PAT margin would be a fair expectation on a longer-term basis. Fluctuations will always be there on a year-to-year, quarter-to-quarter basis. On a normalized basis, over a period of 3 years, I would imagine 8% plus would be a safe number, and it can be between 8% to 9%.

[Operator Instructions] We have the next question from the line of Ronald Siyoni from ICICI Securities.

Congratulations on good results, sir. Sir, firstly, on the sales number, like presales, we missed marginally with respect to our guidance of INR 2,600 crores. So any particular reason, any projects which got deferred to the next -- for FY '27? Any launches which got deferred?

So yes, I think Q4, we were thinking of a couple of projects will take off for a variety of reasons. They are getting launched now this week, one project and in about a week's time another project in Chennai. So they are getting moved to Q1. Despite that, we have still maintained a very stable sales value and the volumes. And going forward, yes, this will get impacted in -- positively impacted in FY '27. As Mr. Pandey pointed out, we may have a higher potential, but given the macro uncertainties that are there in terms of geopolitical AI impact on earnings capacity, consumer confidence, consumer decision-making, we thought it appropriate to put a number as a guidance, which are more conservative, more prudent. And then as the market picks up, as the market stabilizes, try and optimize the number then trying to put a big number and then scale back. That's why we have maintained our expectation in the 5 million to 5.5 million square feet range for the market potential.

Okay. And I only see one project launch in Kolkata, which is a plotted one. So any particular reason that you're not going to -- you're not going ahead with more project launches in Kolkata region? And in that line also that with the change in government, what kind of positives or say a little bit headwinds in terms of approvals or something of that sort you would be experiencing or any color on post-election results, what kind of environment you look in the Kolkata region, especially?

As you know, Kolkata is -- I mean, the new government has come in place. It's going to throw lots of positivity to us. And as you know, that we have got a good land parcel available there. We expect Kolkata to do phenomenally well. not come like Bangalore or Pune in short term. But long term, yes, there is a very high probability. So we are extremely bullish on Kolkata market now.

Sorry, if I can add a few more. Just to supplement Mr. Murali's comment, with regard to your specific query on the launches, as you know, we launched the Villa project last -- late last year, last fiscal. And that was, again, a new product. Villa was never launched in this micro market. We don't have any villa projects in the micro market that we operate. Therefore, we started well, did very well. Similarly, plotter development, branded plotter development is not a common thing in the micro market that we are operating. Therefore, we wanted to start with plots -- we already have an approval. So the question about whether we are concerned about the new government and l approval delays, no. We already have an approval for 2.3 million square feet of apartment launches. We have just not sequenced it right now because we want to first test the plots and then see what do you want to do with the land bank monetization. As Mr. Pandey pointed out, post settlement of this Kolkata land issues with the government, we are evolving a new strategy for accelerating monetization of our remaining land. As you know, out of all the settlement we have done out of the 314 acres after this surrender of 42 acres and the development that we have done already, including even after taking the 2.4 million square feet of approved area, we still have INR 100-odd crores, 103, 105 acres of land, which is available. Therefore, we want to evolve a new strategy based on how plot -- how well the plots do in this micro market. So that depending on how plots will be doing in the next couple of weeks, we will know. Plus we know how strong the villas have done. Then we have to recalibrate the whole thing between -- we have -- and of course, my colleagues pointed out that the commercial also went very successfully last month. We launched a small commercial project within our site. So between all of these tested new products, we need to recalibrate how do we accelerate monetization of 100-odd acres which are available. Therefore, we have not really introduced them as part of the launches. But the scope exists and there is approval already for 2.3 million square foot of apartment, and we can get plot approval in less than 6 months' time, which we are very confident of. So we may have more supplies coming in from a launch perspective beyond the numbers that you see on Slide #26. But I think the point is 26 itself feeds us with 7 million square feet of supply. So next year, and it is well diversified between geographies, all the 3 -- all the 4 geographies. And therefore, unlike the past year, where the dependence on a particular city was there, those things are not there. Therefore, we are more confident of achieving our presales number, number one, point number one. Point number two, 7 million fuel supply itself should support this growth aspiration. Point number three, beyond this, there is some more scope for supplies, especially in Kolkata and maybe some water development in Bangalore markets. These are outside this slide right now.

Okay, sir. And lastly on -- I haven't seen the construction cost increase the quarterly run rate. It's still in the band of INR 90 crores to INR 95 crores between the quarterly run rate. Unlike previous quarters, it used to be more than INR 100 crores construction spend. So when do you expect this construction spends to ramp up? Or you would be weighing new project investments versus construction spends?

No, I think these are 2 different buckets. We don't mix this capital between construction and new projects. The thumb rule is that a percentage of collection has to go and will continue to go. maybe you will see a spike up in the coming quarters for the FY '27, including GST cost charges, we should be anywhere between INR 900 crores to INR 1,000 crores of capital spend on project completion activities. So you would see INR 1,000 crores spending. Therefore, quarterly numbers should be more robust in the coming quarters. Projects have been lined up accordingly because we have -- as you know, we had 3, 4 launches early last year or late FY '24. So they are all making progress now, and they will start consuming larger capital run rate in the coming quarters.

Okay, sir. Okay, sir. And one last question on any particular figure you have in mind for FY '27 in terms of new project investment. Likely, it was around INR 372-odd crores in FY '26. So you will also be going for new business development. So any particular number you have in mind that this much cash flow would go for new project investments in FY '27?

So it would be difficult to quantify in rupee crore number. All we said was we are looking at 8 million, unless we have disclosed publicly that 8 million square feet, we want to add, maybe slightly more as well as possible based on the market. And so that 8 million addition would mean anywhere between INR 350 crores, INR 400 crores of capital commitment. But be assured that is not going to go away from collections from the existing projects because that's a project level cash flows that will be used only in the project and their own debt repayment, if any. Therefore, the capital will -- based on the completed projects, Shriram's share of cash flows, profits or cash flows from the completed projects will be used as well as if required, we might embark on an intermittent debt to support any bridge that is required between the profit generation or the cash flow -- our share of cash flow being realized versus capital commitment being made on the land part. So we are fairly confident that the capital can be generated, INR 350 crores, INR 400 crores of capital, which might be required will be generated from our completed project cash flows accruing to Shriram share. We don't cash collections moving from ongoing projects to land bank.

We have the next question from the line of Diwakar Rana from Prudent Equity.

[indiscernible].

Mr. Diwakar Rana, we can't hear you very well. Could you please use the speaker phone?

Congrats on the great set of revenue. Sir, in the press release and in the past con calls, you have mentioned that the revenue recognition potential is around INR 4,000 crores in next 3 years. So isn't it conservative, sir? Because considering the land unlocking in Kolkata and some other projects that we are doing in Southern state, can we not do more than INR 4,000 crores?

Potential exists, but let's take one step at a time. 300 crores of revenue. And I think the need of us to cross this milestone of INR 4,400 crores, which is existing ongoing projects alone can give us that INR 4,400 crores. Based on the project completion schedule, we have obviously worked out FY '27 plan. We believe it can be unlocked in 2 years' time, maximum 3 years is what we have been highlighting. During that period, as you rightly pointed out, this new bucket that has been introduced in the Slide 28, where we try to give some visibility on potential value of 18.6 million square foot pipeline. Some part of that also will come in, especially the profit development revenues can be unlocked or recognized in 12 to 18 months' time from the time of launch. Apartments might take a little longer. So as you know, we are building up the pipeline now. They might take anywhere between 2 to 4 years, depending on the size to reach the completion stage. And therefore, acceleration only to some extent possible. We might try -- we would obviously endeavor -- aspire to accelerate this INR 4,400 crores as soon as possible. And then, of course, Bengal acceleration is still on the way. So there is an upside that exists on this revenue number, revenue recognition number. But for now, I think it will be better to be conservative than saying something which is very big and then pulling back.

Okay. Sir, in last financial year, we did around INR 823 crores of revenue. This year, we did around INR 1,200 crores. So this growth will continue in FY '27 and FY '28?

That's our expectation as well. We have -- earlier this year, the Board has approved the FY '27 plan, and there also aspires for 25% plus upwards of growth in -- across various financial metrics. So that is our aspiration as well to sustain the growth momentum, whether it is number, difficult for me to comment. But yes, growth momentum will be sustained even in FY '27.

We have the next question from the line of Darshil Zaveri from Crown Capital.

Firstly, congratulations on a really great set of numbers, sir. Sir, most of my questions have been answered. Just one small question. So I think in the PPT, we were mentioning that we have the potential to do revenue recognition of INR 1,700 crores, right? So that's for FY '27, right? We are planning with the base of our execution and handoff, sir, right? Yes. So that's correct, right? We can do around roughly INR 1,700 crores of revenue.

Yes. So this what we are talking about, that is for the project which is getting completed during this year alone. So what we said that if you look at the PPT December, we are saying that 3.8 million square feet will get completed during this year. It is having a potential to recognize a revenue of INR 1,740 crores. That is from this project alone. There is a good amount of revenue which has not been recognized for the latest project which has been completed during FY '26. So those revenues will also having a potential to come during this year.

Okay. Okay. That helps a lot, sir. And I just wanted to understand, we follow project completion method in revenue recognition or percentage completion, sir?

So we follow the project completion method for the projects which we are doing mostly in Bangalore, Chennai and Kolkata.

Sorry, where sir?

Bangalore, Chennai and Kolkata, we are following the project completion method. Only for the Pune project, we are following the POCs. Per Maharashtra practice, we are following that. Otherwise, all other regions, we are recognizing the revenue as per the project completion.

Okay. Okay. Fair enough. Fair enough, sir. Sir, just any comment on EBITDA, like how would we generate -- what would we quantify our operating profit like we could have a double-digit EBITDA in FY '27 onwards, sir?

Double digit. It is double digit. Sorry, I couldn't follow. You mean double digit, what?

Operating profits, like on what you call on the basis of like reported numbers, how should we look at it? Or should we just look at PBT, sir? Just wanted to get your thoughts.

If you can look at PBT, I'll clarify this. I've done this in the past -- in the earnings calls in the past. You should see our total operating revenue as a whole. Other income is only other income, which is interest income and mutual fund gains and all that is the other income. The other operating revenues are core to our operations, whether this could be a gain on sale of development rights here or Elbow share-related unit sale profits, things like that, right? These are all core to our real estate operation. They are not other income. So if you are talking about gross margin or EBITDA, I think it is already -- I mean...

I was just inquiring why you say double-digit EBITDA.

Current EBITDA is still around INR 179 crores, INR 178 crores. So that EBITDA, only other income of INR 30 crores will go away from it. Rest is all our profit from core operations. If you look at the gross margin, the gross margin is about 30%, right? So 30% of income from operation has to be our gross, yes, sir.

Okay. Okay, that helps a lot, sir. And sir, just last question from my end. Sir, going forward, we said we might have some intermittent interest cost. So what kind of a run rate can we see for our interest finance cost going forward in the next few years? Because a lot of launches are happening and there might be some time mismatch in cash flows like incoming and outgoing. So any comment on like our finance costs or net debt levels that we are looking at, sir?

Yes. If I look at the finance cost, I think launches have a limited impact on cash flow. The launch-related cash flows have a limited impact on the interest cost. These are all construction finance taken on existing projects. And therefore, those -- these are the loans which we take for construction of the ongoing projects and then repay from those cash flows through a sweep percentage of collection will be taken by the lender. Therefore, there will be a continuous -- so some projects may be repaying debt, some project may be still taking a fresh debt. The gross debt of the INR 500-odd crores that we have will continue. And therefore, I would imagine the finance cost may have a small downside from here, but not substantially lower number.

As there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments.

Yes. Thank you. Thank you, everyone, for being with us and giving us a patient hearing to explain -- to understand our perspective on the results. We believe we've delivered quality financial performance and operational performance for the fiscal '26. We have a very strong plan ahead. The guidance is in front of you. We believe we have -- we should be able to comfortably meet and if the market conditions are better than what it is today in terms of geopolitical uncertainties and the uncertainty on a particular certain sectors, if things improve from where it is today, we have an upside to the guidance that we have given. So we look forward to another strong year ahead for Shriram Properties, and we look forward to creating long-term value for all our stakeholders. Many of them are on this call. And therefore, we would like to assure the stakeholders here on the call, analysts, investors and observers of Shriram Properties that we are committed and working over time to ensure that we deliver -- we create a strong operating platform, leverage the pipeline to deliver a strong outcome in terms of KPIs and also revenue recognized and delivered strong financial earnings in FY '27 as well. With that, I look forward to interacting with you again on the first quarter results when we announce in the next couple of months with another set of good numbers in front of you. Thank you for your time, and thank you for joining us again today. Thank you.

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