Suraj Estate Developers Limited (SURAJEST) Q1 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q1 FY '26 Earnings Conference Call hosted by Suraj Estate Developers Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Thomas, Whole-Time Director from Suraj Estate Developers Limited. Thank you, and over to you, Mr. Thomas.

Thank you. Good evening, and I welcome, everyone, to our Q1 FY '26 earnings conference call. Along with me, we have our CFO, Mr. Shreepal Shah; Mr. Ashish Samal, our internal IR; and SGA, our Investor Relation advisers. I hope all of you have gone through our investor presentation uploaded on the exchange and our company website. Let me begin with a brief overview of the broader market environment. The Indian real estate sector continues to exhibit strong momentum, supported by resilient domestic demand, improved affordability metrics and sustained infrastructure push across metros. Within this landscape, we are witnessing robust traction in both the value-luxury segment in the residential space and commercial office spaces driven by urbanization trends, aspirational home upgrades and growing demand for quality workspaces in prime locations. For the quarter ended June 25, Suraj Estate Developers Limited recorded a revenue of INR 133 crores and a profit after tax of INR 21.3 crores. Presales for the quarter stood at INR 81 crores, impacted by limited available inventory. However, collections registered a growth of 60% year-on-year and 12% quarter-on-quarter, reflecting stable customer cash flows and continued progress in the project execution. We are consciously aligning our portfolio to meet the strong demand in value-luxury and commercial segments. A key development this quarter was the launch of Suraj Aureva in Prabhadevi. The initial response to this launch has been encouraging and reinforces our thesis on segmental demand. In parallel, Suraj Parkview 1 has received planning approvals, and we are in advanced stages for securing both commensurate certificates and the RERA registration formalities setting the stage for a timely launch. On the commercial front, we have made significant headway, concession plans for the amalgamated plans for upcoming commercial project has now been approved. We are currently in the process of obtaining environment clearance as the project size is beyond 20,000 square meters. Post RERA registration, we're on course for a high-impact launch in the first half of FY '26. This marks an important milestone in our commercial strategy, which aims to build scale in strategically located micro markets of Mumbai. As guided earlier, we remain committed to launching projects with a cumulative GDV of INR 1,600 crores in H1 of FY '26. Additionally, we are pleased to share a key update in our Marinagar project in Mahim while we had secured in-principle approvals last quarter, we have now successfully added 2 lakh square feet of additional carpet area under the Metro FSI, significantly enhancing the project's development potential. This addition is expected to generate an incremental GDV of approximately INR 800 crores from this project alone, further reinforcing our long-term growth visibility. With this, our upcoming project pipeline now stands at 19 projects with an estimated saleable carpet area of 12,20,307 square feet. In addition, following the completion of Nirvana, Louisandra and Ave Maria project, we now have 10 ongoing projects under development, representing a total development carpet area of 4.69 lakh square feet. The estimated receivables from both sold and unsold from the ongoing projects, stand at around INR 875 crores. This calibrated strategy, coupled with our robust pipeline, regulatory preparedness and supportive market fundamentals position us to drive sustained growth and deliver long-term value to our stakeholders. With this, I would like to hand over our call to our CFO, who will run you through the financial highlights.

Thank you, Rahul. Good evening, everybody. I will now run you through the financial highlights for the quarter ended June 2025. On the operational front, in quarter 1 FY '26, we have achieved presales of 16,524 square feet versus 27,431 square feet in quarter 1 FY 2025, translating to a sales value of close to INR 81 crores versus INR 140 crores in quarter 1 FY '25. Collections for quarter 1 FY '26 stood at INR 115 crores versus INR 72 crores in the previous quarter 1 FY '25. While presales softened this quarter due to the constrained inventory, underlying demand in the value-luxury and commercial segment remains robust. Collections remained robust despite lower presales, underscoring the strength of our execution capabilities. Average for quarter 1 FY '26 dropped to INR 49,028 per square feet versus INR 51,165 square feet in quarter 1 FY '25, due to the change in the sales composition. During the quarter under review, 64% sales were from the value-luxury segment and 36% sales were on the luxury projects. Talking about the financial performance. The total income for quarter 1 FY '26 was INR 133.1 crores versus INR 134.6 crores in quarter 1 FY '25. EBITDA for quarter 1 FY '26 stood at INR 50.3 crores versus INR 64.2 crores in FY '25, corresponding to the quarter previous to FY '25. PAT for the quarter end stood at INR 21.3 crores versus INR 30 crores in quarter 1 FY '25. With this, I would like to open the floor for questions. Thank you.

[Operator Instructions] The first question comes from the line of [ Rajender Passi from Equity Research ].

So sir, I wanted to understand like our operating cost is still high by approximately 20% in this quarter, if I remove the change in inventory, as compared to the previous quarter in FY '25. So is that mainly due to the development cost or something else?

So technically, there is that if a product mix difference. So this quarter, we had 64% coming from the value-luxury as compared to the previous quarters, and because of which you can see the difference in the margins also. Because the luxury project, the sales value -- sales realization per square feet goes from INR 60,000 to INR 70,000 per square feet. And as compared to value-luxury, where we command sale rate of INR 40,000 to INR 50,000 depending on the project and location of the project.

Okay. And let's say, as we have already mentioned that we are going to maintain the 40% to 45% of EBITDA margin on annual basis. So are we still confident that we can do that for this year? Or are we going to take some hit on that part?

We will try to maintain, but however, we wish to inform that the product mix is -- the projects, which we are going to launch this financial year are most of them are in the value-luxury segment. So there, we might have some hit in the margins. However, having said that, we also would like to highlight that new projects like commercial and all, which are vacant land parcel and those have been acquired at today's market value, so that the margin profile is good for the historically acquired land banks for the commercial projects or for lands, which are recently acquired we propose to maintain 25% to 30% margin on an overall basis.

You mean the EBITDA margins or the operating margin?

EBITDA margins, we are saying.

Okay. And what would be our presale and revenue guidance for this year? As I remember that you mentioned in the last call that we are going to give that in the next quarter. So can we expect something right now?

We are -- Since we are already in the stage of launching new sites and it all depends on the launch pipeline, so when the projects are getting launched and the major project being commercial, so we will refrain from giving presales guidance this quarter, but maybe from the next quarter, we'll give you proper guidance.

Okay. And the last question from my side would be, as we are hearing that there is slowdown in the property registrations in the Mumbai Metro region and the demand side is basically a bit tedious right now. So can you explain something around that, like how we are experiencing these things?

So Rajender coming to the demand, we are seeing good demand for the 1 and 2 BHK category. And I think that's what we are launching right now, whether it's Suraj Aureva or Suraj Parkview, we are in that category. So the response we are getting in a project called Suraj Aureva is also very good, and we expect that this demand will continue for these kind of ticket sizes. And also commercial, we're seeing a great demand. So I think going forward, I don't see demand to be an issue, at least for the new launches for this year.

Okay. And as you have already mentioned that our commercial projects as well as the Parkview 1 is going to be launched in Hi FY '26, right, so we are still confident on that part?

Correct. Absolutely.

[Operator Instructions] The next question comes from the line of Amit Sagar, an individual investor.

Yes. So I mean, my question is mainly like before the start of this presentation, you're painting a very rosy picture of the real estate demand being robust and good sales number. But we have been constantly hearing about -- like we've been constantly iterating on Q-on-Q new launch projects, but they're not getting launched. I mean it's been -- if we forget about the recent INR 120 crore project launch in Prabhadevi, like there was no launch in like last 12 months. And between that, I mean, everybody here is an investor as well, and the stock price is at INR 52-week low. When we look at the other like companies, they're doing pretty well. Like what is the -- where is the disconnect between how market is taking what you are giving versus what you are saying on the conference call or basically sharing in the investor presentation. Where is the disconnect, that's what all I'm talking about. Can you please point -- shed some light on to that?

Thanks, Amit. So I think what we have said last time in terms of our project launch pipeline does not change from the last call to this call, we still committed to have a INR 1,600 crore launch, and we're still committing on this call from the launch pipeline perspective. From the last call to this call, we've already launched Suraj Aureva, like you correctly said, INR 120 crores. We have Suraj Parkview, which we've already said in our presentation that we have the approvals in place. Currently, the RERA formalities are on, and we are very confident of achieving that launch before the end of this current quarter. So coming to your question on the disconnect, I would not want to comment on the disconnect between what the market is or the price of the stock. What I can comment is the sales, which we will be doing for this quarter, and we are very, very confident on our group and also the velocity and the segment we are operating. And that will clearly reflect in the current quarter's performance. So I think you can kindly wait to see the performance for this quarter. Thank you.

Thanks for the update. I mean, my follow-up would be, I mean, I agree with what you're saying, okay? But the thing is, as a real estate company, you need to launch projects, you need to have an inventory to make that sale, right? That is the basic disconnect that I've been talking about. Like from last 1 year, if we minus this -- the last project, there was no new launch. So we basically are only selling the inventory that we have like based on that. And the demand was robust. Now the price is -- now everywhere, it's like reports are coming out that Mumbai Metro or some like investor before me also asked the same thing, that prices are falling. Now we are going to launch something where the demand might be not that robust. But in the beginning of the call, you're saying demand is very robust, like that is the disconnect that I'm talking about. If you can please talk about like -- I understand that your Mahim project, but where are those launches? What is the disconnect? Like where is the delay between those RERA licenses?

So like I said, we've given you a clear status update on the launch pipeline. One is already launched from the last time, which is Suraj Aureva. Parkview, as I said, we are very confident on launching it by getting the RERA formalities done and the commercial. So these 3 are happening together. And in terms of the demand, I told you, we are very confident in the kind of demand we're seeing even for a project Suraj Aureva right now. The 1 and 2 BHK, I mean, I think we have to just wait and understand how the quarterly results will come. But we are confident -- from a management perspective, we are confident that the ticket size and the segment we are operating, we're sure -- it does not -- we are seeing a good demand for this.

Got it. So the ones -- the 2 that you are saying that are getting launched very soon, are they going to happen in the beginning, mid of the quarter or towards the end? Yes.

Sorry to interrupt, sir. May we request you to return to the question queue for the follow-up question.

Sure. I can do that. Just follow-up -- just last question, like just a very small thing. He just said -- like you just said that the launch will happen very soon. I'm just asking, is it going to happen in the beginning, mid or the end of the quarter? Any idea...

So Amit ji, what I would -- you can take a time line of towards the end because we do not want to give early commitment and then failing. So you can take it for end of the quarter, but our endeavor would be much before that.

The next question comes from the line of Bhavin Modi from Anand Rathi.

Sir, I just want a few numbers. So sir, can you help me with what was the collection already received for Louisandra, Ave Maria, and yes, Mestry House -- sorry, Nirvana. Hello?

Sir, you are not audible.

Yes, am I audible now?

No, the management is not audible. Just a moment. Ladies and gentlemen, the line for the management has been disconnected. Please hold while we reconnect them. Ladies and gentlemen, the line from the management has been reconnected. Thank you, and over to you, sir.

So the collection during the quarter for the project Louisandra was close to INR 1.91 crores. For our project, Ave Maria, it was INR 1.82 crores. And for the project Nirvana, it was INR 14.95 crores.

Okay. Second is what is the gross debt and the cash and cash equivalents standing as on 30th June?

So the gross debt is INR 528.7. And the cash equivalent is INR 95.4 crores. And the net debt is INR 433.3 crores.

So sir, last quarter, it was INR 417 crores net debt, now it has increased to INR 433 crores despite there was INR 115 crores of collection. So can we say around INR 135 crores was spent on the business development activity?

No, it was not on the -- entirely on the business development. So we had ongoing projects majorly, which are in advanced stages of construction. And the money was spent on upcoming projects also like Suraj Aureva we launched also on the commercial side and some amount towards upcoming projects more. And there were operating expenses like employee cost and statutory payments and finance cost was also there. And just to correct, last time, the net debt number was close to INR 414 crores, not INR 417 crores.

Okay. Next is, sir, can you help me with like what is the BD pipeline? Like anything in progress, like if the management can guide us with respect to BD development activities?

So we are currently -- in terms of business development, we are discussing with a lot of societies. So I mean, at the right time, we will be informing. We're talking to a few societies in Prabhadevi and also certain land parcels. So that will come as and when we are closer and we get into a definitive agreement, we will be informing everyone.

Okay. And last thing with respect to the Suraj Vibe, our Mahim commercial project. So can you just help me with what is the environment -- what is the stage of the environment approval, whether it is -- whether the ToR study is done, whether the state Environmental Impact Assessment study, what is the progress on that? So I understand before the plots were amalgamated, there was no requirement of EIA study, but now like what is the development currently?

We submitted for environment clearance. So hearing is for the first week of August. There will be obviously 2. One, it will be the committee and then the authority, so 2-stage approval, so we've already made all the arrangements with all the studies internally to present our case on the first week of August.

So can we expect the EC approval, state EC approval to be by 30th September?

That is our target. We are targeting because luckily, there's not a very big queue in the MoEF approval standpoint. So I think we can push our case to get faster.

And after receiving this EC approval, then there will be only the RERA thing that will be pending, right? All the other approvals are in place, right?

Correct. CC and RERA.

The next question comes from the line of Sagar Kar from Nirmal Bang Equities.

Firstly, I just wanted to understand, you mentioned that for our commercial Vibe project, we are expecting a high-impact launch in the first half of FY '26. Is that a correct time line that you mentioned?

Correct.

So Vibe, we will be launching by September, hopefully, subject to all the approvals coming in place. And generally, my understanding is in resi like we have presales; in commercial, we don't get great presales and the larger chunk of the sales happen post construction. Is that a correct understanding for Vibe? I just want to understand how the cash flows will happen for Vibe?

So we have planned smaller office spaces in Suraj Vibe right now, where we are planning offices closer to the range of 1,000 to 1,200 square feet offices. So in this case, presales can happen very easily because these are smaller ticket size offices, which we are planning in a particular floor. Having said that, there will be certain floors, which are larger formats. So we can expect good presales coming from the areas where the offices are in the range of 1,000 to 1,200 square feet.

Understood. Perfect. And secondly, on the ongoing projects, I just wanted to know what is the status of the construction right now for, let's say, Vitalis, Palette, Ocean Star and Lumina?

So the stage of construction in Palette, we are on the 49th slab out of the 50. So we have only 2 more slabs to go. In Ocean Star, we are on the 40th slab. And in Vitalis, we are on the 10th slab.

And Lumina?

Lumina, we've reached the plinth.

Okay. All right. And thirdly, you mentioned about the Marinagar additional FSI that you have received. You mentioned 2 lakh square feet of additional FSI, is that correct?

Yes.

So at our current average realization of around INR 45,000 per square feet, even if I take, that's almost worth INR 900 crores odd. Is that the correct number?

Correct. We said INR 800 crores, assuming INR 40,000 per square foot.

Okay. Okay. So INR 800 crores. And what do we have to like do -- like we pay fungible FSI premium, do we have to pay anything for getting this additional FSI?

We've already paid that.

And what is the working? Like what -- how much do you have to pay? Is it based on the [ enactment ] date? Or how does it work?

It's a notification. Sagar, I can maybe share with you offline.

So I just wanted to know this INR 800 crores additional FSI, how much will be our outflow in terms of absolute number?

We can give you that detailed breakup.

Sure. Sure. Okay. And secondly -- thirdly, on the Bandra Mount Mary project, anything that you would like to speak, what is the update?

So Bandra Mount Mary, a few acquisitions are still underway. We will be announcing a few. In terms of BD, we will be purchasing a few land parcels there. So at the right time, we will be making those announcements. I can only say that everything is in advanced stage and paperwork is already in order. So we just need to complete certain formalities and then announce those acquisitions.

Okay. So optimistically, when would be the first launch you feel in the Bandra project? Will it be in the next financial year? Or do you think it can be even after that?

No, it will be definitely -- it will be -- the targeting is before that, but next financial year would be a reasonable estimate.

The next question comes from the line of Darshil Jhaveri from Crown Capital.

Sir, some of the questions have already been answered. Just one clarification. When we are talking about EBITDA, did we say like for the places where we have to buy the land, our margins will be around 25%? And other than that, what would be our margin, sir?

That is regarding the vacant land we are talking of. If we are supposed to acquire a vacant land today, then the margin profile ranges from 25% to 30%. But for 33(B)(7) projects, the margins are a little higher because we are taking the risk of tenant and other things and rehousing those. So the margins are better in those. So on a blended average at the group level, we feel it may vary from 30% to 35%.

On a blended level, it will be around 30%, 35% is what we are targeting, right?

Blended average.

Yes. Okay. Okay. Fair enough, sir. And sorry to harp on the fact that what other people are saying, but any kind of indication of what kind of presale we can target this year because that would be really helpful for us as an indication of how we see the current year.

So Darshil ji, basically, we are happy to give you a guidance, but the thing is we have these 2 big launches planned. As you can see, our unsold inventory is very less in our ongoing sites. So it's very imperative that these launches happen so that we can give you a very clear guidance, which we are estimating by the end of this current quarter. So I would say just wait till the end of this current quarter, we'll definitely give you that. By then, we are very confident that these will be launched, so it becomes very practical for us to give you a clear guidance.

Okay. Fair enough, sir. And sorry, these 2 launches, what is the GDV for that? It's INR 1,200 crores, right, sir?

Yes, INR 1,200 crores is what is our estimated GDV of this project, commercial.

Sorry, I couldn't get you, sir. Sorry.

Sorry, can you repeat that again?

I couldn't hear the reply, what is the GDV, sir, of these 2 launches?

So the INR 1,200 crores would be from the commercial launch.

INR 250 crores from the Parkview 1.

The next question comes from the line of Rajender Passi from Equity Research.

So on the presales perspective, I wanted to understand that for this quarter, we had like INR 81 crores while previously also, we were able to maintain the kind of presales that we were having previously, even with the low inventory of, I guess, for the last quarter was INR 300 crores, I guess. So why like it happened that it came down to, let's say, INR 81 crores from INR 144 crores even when we didn't have a lot of high inventory basically. So can you throw some light on that?

So with the limited inventory, which we have, we have got a presale of INR 81 crores. That is only for this particular quarter, but we are very confident with these new -- 2 new launches, we will surpass the earlier expectations. So we'll give you a clear guidance by the end of this current quarter so that you have a very clear estimate of what is the launch pipeline and also the guidance in terms of presales.

Okay. Okay. And as July has also passed, so what kind of presales can we -- or what kind of presales have we seen for the July month, like we have a very limited inventory right now. So can you explain on that as well?

So we are currently busy selling our value-luxury. So Suraj Aureva, we have seen good demand. So of course, we cannot give you an exact thing right now, but it will come in our presentation by the end of the quarter that we are seeing good demand in Suraj Aureva, which is newly launched. And also Parkview, we already started talking to the brokers that we're coming up with this launch. And we will be -- they've given us confidence that there will be a lot of EOIs, that's expression of interest, from the customers. So we are very confident that this quarter, we will see good numbers in at least these 2 projects.

Okay. Okay. And the last question was, as in the previous calls as well, we maintained of 40% to 45% of EBITDA margin. And I know that now we are going to have a new launch where the EBITDA margins are going to be 20%, 25% for the commercial projects. But the point is like we already knew that we are going to launch the value-luxury projects and the commercial project, right, for the H1. And so why then we basically -- I basically don't able to understand, I'm not able to understand that previously, we had the 40% to 45% of EBITDA margin guidance, and now we are basically talking about 25% to 30%. So have we not considered this thing that we are going to have a new launch and the value-luxury project, so we won't be able to maintain the 40% to 45% of guidance. So like where the miss did happen basically, I just want to understand that.

Rajender ji, the product mix will be in different stages. Our commercial was never guided for 40% to 45%. We always maintain that new projects, vacant lands would be in the 25% range. Having said that, we have certain land bank, which is old. We still continue -- even it being value-luxury, we will still continue to have about 40%. There are certain new value luxury projects, which will -- like, for example, a society development, again, which will be a bit lesser, not the 40%, but maybe about 30-odd percent. So you have to look at it as a blended average. It cannot be -- thing is this will be a blended average. We're expecting between the 35% to 40% would be a blended average. It will not be 25%, it will be more than 25%.

Got it. Got it. So even in the value-luxury, you mean that it can vary from, let's say, 30%, 35% to 40% or 45% depending upon project to project, even in the case of redevelopment, right?

Correct.

It also depends whether the land is historically acquired or it is acquired at today's rate.

So the land which we have acquired earlier will still remain to be in that margin. The value-luxury projects, which are acquired recently will have a lesser margin, while commercial will have a range of 25%.

As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Thank you, and over to you, sir.

I take this opportunity to thank everyone for joining the call. I hope we are able to address your queries. For any further information, kindly get in touch with us or SGA, our Investor Relations advisers. Thank you.

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