Sunteck Realty Limited (512179) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Sunteck Realty Earnings Conference Call for Q1 FY '26. We have with us today Mr. Kamal Khetan, the Chairman and Managing Director of the company; Mr. Prashant Chaubey, the Chief Financial Officer; and Mr. Abhishek Shukla, the Vice President of Strategy and Investor Relations. Please note, this call will be for 30 minutes [Operator Instructions]. This conference call is being recorded, and the transcript for the same may be put up on the website of the company. After the management's discussion, there will be an opportunity for you to ask questions. There will be a Q&A session [Operator Instructions]. Before I hand the conference over to the management, I would like to remind you that certain statements made during the course of this call may not be based on historical information or facts and may be forward-looking statements. including those related to business statements, plans and strategies of the company, its future financial condition and growth prospects. These forward-looking statements are based on expectations and projections and may involve a number of risks and uncertainties and other factors that could cause actual results, opportunities and growth potential to differ materially from those suggested by such statements. I would like to turn the conference over to Mr. Khetan, the Chairman and Managing Director of the company. Thank you, and over to you, sir.

A very good afternoon to everyone, and thank you for joining us today. We are off to a strong start with several positive developments that sets the tone for the year ahead. I would like to highlight a few key achievements that showcases our progress and momentum. We achieved a significant milestone with the highest ever first quarter presales bookings of INR 657 crores in Q1 of FY '26, representing a year-on-year growth of 31% as against INR 502 crores in Q1 of FY '25. Building on our strong performance, we reaffirm our guidance of achieving similar or better growth for the full year of FY '26. As the uber luxury and premium luxury segment continues to drive a larger share of our presales, we anticipate further margin expansion, contributing to our overall profitability. On the business development front, I am pleased to share the addition of 2.5 acres of redevelopment project at Andheri Mumbai, near Western Express Highway, with gross development value of INR 11 billion. With this project, and more to be added in coming quarters, we are confident of taking our GDV to more than INR 500 billion from the current GDV of INR 400 billion. We are accelerating our BD activity and have already invested more than INR 3 billion in current quarter compared to INR 1.8 billion for the full year FY '25. We continue to scale our operations by aggressively investing to drive the growth, but at the same time, our prudent cash flow management allows our balance sheet to remain strong with negligible net debt-to-equity ratio of 0.02x. As we are increasing our GDV value exponentially, we are gearing up for the new launches, and we have set a target to launch new projects worth INR 11 billion -- sorry, INR 110 billion GDV in the coming 3 quarters of the financial year FY '26. I repeat this, we have set a target to launch new projects worth INR 110 billion GDV value in the coming 3 quarters of the financial year FY '26. Our strong financial foundation enables us to pursue strategic initiatives and be more agile and responsive to changing market conditions, ultimately driving long-term value creation for the company. I shall now hand over the call to Prashant Chaubey to take you through the financial performance of Q1 FY '26.

Thank you, sir. Good afternoon, everyone. I trust you have had the opportunity to go through the latest results and the investor presentation, which are published on our company website and the stock exchanges. I would like to take this opportunity to share a brief update on financial and operational performance of quarter 1 FY '26. The key details are: We sold INR 657 crores worth of area in quarter 1 of FY '26, which is a 31% growth over quarter 1 of FY '25. Collections for quarter 1 FY '26 stood at INR 351 crores as compared to INR 342 crores in quarter 1 of FY '25. The strong collections has resulted in a net operating cash flow surplus of INR 108 crores in quarter 1 of FY '26. On the P&L front, operating revenue stood at INR 188 crores for quarter 1 of FY '26. EBITDA stood strong at INR 48 crores in quarter 1 of FY '26, representing 52% growth over quarter 1 of FY '25, EBITDA of INR 31 crores. EBITDA margin stood at 25%, up 15% on a year-on-year basis. We reported net profit of INR 33 crores, which is a 47% growth over quarter 1 of FY '25, and net profit margin stood at 18%. Our net debt to equity stood at 0.02x and Switch India Ratings has a firm long-term credit rating of AA Stable to us. With this, we open the floor for questions. Thank you.

[Operator Instructions]. We take the first question from the line of Biplab Debbarma from Antique Stockbroking. Biplab if you could please unmute your line and ask your question.

Am I audible now? Am I audible?

Since there is no response, we'll move on to the next question, which is from the line of Sourabh Gilda from JM Financial.

Am I audible?

Hope there is no problem in your line. Excuse me, [indiscernible]?

Yes, I think...

Yes, sir. I'm here.

Is there a problem in your line?

No, sir.

Then why the questions are not getting asked?

I do apologize, sir, but I will still check on that, just give me a moment, please.

Is there a problem?

He has not unmuted the line analysts say.

You have not unmuted the line.

For analysts.

You have not unmuted the line for analysts.

Sir, Sourabh's line unmuted from my end, sir.

Then give it to someone else. There is some problem people are saying. There is a line problem. Can you give it to the third participant and unmute the line?

Sure. Sir, just give me one moment. We take the next question from the line of Abhishek Lodhiya from Motilal Oswal Financial Services Limited.

Am I audible?

Yes, very much.

So my question is about collections. Collection somehow looks a little weaker. Is there any reason to it or what -- how should one look at the collections?

Abhishek, Prashant this side. So if you look at the collections, both on a Q-on-Q basis and on a year-on-year basis, our collections have gone up. And in the coming quarters, you will see these collections improving even further. As you are witnessing, our presales is coming from newly launched projects. So as the construction moves ahead, you will see collections moving collections moving -- collection momentum gaining further strength going forward.

We take the next question from the line of Vasudev from Nuvama Wealth Management Limited.

Congratulations on these great set of presales. Sir, my first question is, you said we are trying to target into launch...

Is there a problem in your system? I think why the -- most of the people are not able to -- you unmute their lines? Is there a problem...

Yes, sir. No, sir, the previous questioner did ask his question.

Am I audible now?

But then why 3 people have not been able to -- we are not able to hear them.

Sir, let me check once again. We do have follow-up questions from Biplab from Antique Stockbroking.

Can you ask Biplab once again?

Am I audible.

Biplab, if you can please proceed with your question.

Am I audible.

Biplab, please unmute yourself from your end and ask your question.

Am I audible.

Boss, there is a problem in your system. It cannot happen this way. There is a problem in your system.

Sir, let me check just give me one moment, please.

There is a problem in your system, please. Just check.

Sir, till then, we'll move on to the next question from the line of Abhinav Sinha from Jefferies.

Okay. [Foreign Language]. Even he is not able to. Let's take the alternate line. Take the backup line.

Abhinav, if you can please unmute yourself and ask your question?

Everybody is unmuted. Abhinav, we can hear you now.

Okay. So let me just go ahead with my questions.

Yes, please. Sorry for this everybody.

Yes. No worries, sir. Good to see the strong numbers. Just a couple of things. One is on the new launch project target that you have said of INR 110 billion in the next 9 months. So can you detail what are these projects?

So yes, Abhinav, so this is the launches from ODC 5th Avenue, Sunteck City, which is close to more than INR 1,500 crores. And then Bandra Bandstand, which is more than INR 1,000 crores. Andheri, this Western Express Highway, which is the new acquisition, which is, again, INR 1,100 crores. Mira Road, we are looking to launch one more new tower, which is again INR 1,000 crores. Vasai Sunteck Beach Residencies, which is, again, 2 more new towers because we are -- from the old inventories, we are almost exhausting most of the inventory, so 2 more new towers there, close to INR 500 crores, INR 600 crores there. Naigaon Sunteck World, the one more new phase. From there, we are looking to, again, garner another INR 500 crores launch, a new launch of -- GDV value of INR 500 crores. So total GDV value from this launch pipeline, including Nepeansea Road should be close to INR 11,000 crores what we look at this 3 quarters.

Okay. And how much of this you think is, say, 2Q versus second half of the year, should we build in something right now?

So Abhinav, we all know that we are in the world of uncertainty in the case of approvals when it comes, it is not in the company's hand most of the time. So -- but we want to -- that's why we gave targets for the full year. And we are confident that we will be able to launch this kind of a GDV value for this financial year of FY '26.

Sure. Sir, second question is on the business development side where you spent close to INR 3 billion this quarter. So how much of this is for Andheri, if you can guide us, and what is, say, on the horizon from this money?

I would say Andheri would be very negligible. In fact, it is for all most of the things, it's new horizon or maybe in 1 or 2 existing months to increase the size of it.

Okay. And sir, this INR 500 billion GDV target this we should achieve by March or maybe sometime next year?

I'm -- we are talking about FY '26 March.

Okay. Great to see the strong sort of outlook here.

Thanks, Abhinav. Thanks.

We take the next question from the line of Sourabh Gilda from JM Financial.

Am I audible?

Yes, Sourabh. Yes, you're audible now.

Congrats on the good set of numbers. Just wanted to get your outlook on Nepeansea project. I think it has been doing very well since the launch. And this quarter also, I think that has driven the luxury sales. So how do you see the trajectory in FY '26?

So we are -- if you see the sales are coming from both luxury projects, BKC and ODC -- sorry, BKC and Nepeansea as well. And we are looking, obviously, that's why to launch all our very premium end segments, including our Bandstand, Bandra West and that's why even the Western suburbs are also driving good sales we are seeing. So that's why ODC and Andheri. So that's how we are looking and this will continue in FY '26 and FY '27. So we are more focused on now uber luxury and premium luxury.

Okay. And just taking the collection part, again, is there any collection guidance that one can look at this year?

So collection guidance, giving guidance of collection would be very hard, but we can say that we will be definitely doing much higher than what we have done collections last year because new sales which are happening is from the new launches. So once the construction of these project starts, obviously, the collections will -- you will see the exponential growth in the collection accordingly, for sure. But it will be substantially more than what we have collected last year, I can say. So we are talking about sales -- presales growth of more than 30%, where we can say a year also, there can be a similar or something -- there will be a substantial growth, I can say, similar growth we can look at the collections also.

So similar as the sales growth?

Not exactly, I would say, because I'm just understanding if you -- we can at least say 0.9% of that because -- see, you have to understand what we are doing is the new sales which are presales of the new launches. So new launches, the construction starts and it picks up, then the collections will pick up. So that's how it is. So -- but I can say it will be substantially more than the last year. Collection guidance will be very difficult for us to give it right now.

We take the next question from the line of Shreyans Mehta from Equirus.

Sir, first on, any updates on our Dubai project? I mean, when can we expect that to come on stream? And secondly, as far as our commercial asset of everything is concerned, will the resi and commercial both come together?

Yes. So when it comes to Dubai project, I have maintained, in fact, even in my last call, that Dubai launch will be -- we are looking to be launching it closer to either Q4 of FY '26 or closer -- or Q1 of FY '27. That's what we are targeting. And we continue to maintain that. And when it comes to your commercial launch because our same resi launch an ODC launch commercial, both our 5th Avenue and both are related to this environment clearance approval. Once we get the approval for the resi, simultaneously, we are expecting the approval for the commercial to also come.

Got it. Got it. Got it. And sir, 1 last, if I can. In terms of our new GDV, which we are targeting, will it be on our asset-light model? Or will we go for some land acquisition? How should one look at it?

So it will be a combination of, I would say, all 3. All 3 when I say in asset light, it will be redevelopment as well as JD, JVs. And when it comes to asset heavy, we have been doing -- so if you see that this quarter, we have invested almost INR 300 crores in just 1 quarter for new acquisitions. And if you see vis-a-vis INR 180 crores, which was invested in the last full financial year of FY '25. So we are very clear that we want to go aggressively at the same time, we also want to launch this GDV aggressively.

[Operator Instructions]. We take the next question from the line of Anuj Upadhyay from Investec.

Sir, I do understand it's difficult for you to quote a number of the collection growth for the year, but at least if you get kind of a sense which are the projects from where we can expect the collection to be higher relative basis, that would be helpful. Who would be the major contributor in terms of the collections?

So obviously, a major contribution, whatever we have already launched and the constructions have already started and incremental sales happening in those like ODC, 4th Avenue, which is we have already received the occupation certificate. There, we are seeing large collections coming up. Mira Road, which is launched last year. And we have launched 3 towers. And the construction is going at the full swing there. There, we'll see a huge collection. Vasai, we have sold very heavily. And there are 6 towers which are under construction. There, you will see a huge collection. All this will give you numbers, which is higher than the current FY '25 number, which is much higher. So if I'm saying -- I want to very clarify that if our presales grows by 30%, 35%, we might not grow collection by 30%, 35%, but we can decently look at anything closer to 20% or -- around that area. So that's how we are looking at. Because more sales, presales that you see are coming from the new launches. So the new launches, obviously, next year, you will see that effect of those coming. So incrementally, you might see next year maybe we will be in line with the presales growth -- collection growth or maybe more than that.

[Operator Instructions]. Ladies and gentlemen, we take that as the last question, and I now hand the conference over to the management for their closing comments.

Thank you all for taking the time out of your busy schedule to join us today for the call. In case if any of your queries have been left unanswered, please feel free to reach out to us. We truly value your continued support and look forward to strengthen this relationship. Thank you.

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