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

Ladies and gentlemen, good day, and welcome to the Q1 FY '27 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, sir.

Good afternoon, everyone. I welcome you all to our Q1 FY '27 earnings conference call. Along with me, I have our CFO, Mr. Shreepal Shah; and SGA, our Investor Relations advisers. I hope all of you have gone through our investor presentation uploaded on the stock exchanges and our company website. South and Central Mumbai remain among Mumbai's most established and premium real estate markets, benefiting from a mature commercial ecosystem, strong social infrastructure, connectivity and proximity to key employment centers. In the office segment, the CBD and Worli continue to see limited availability of quality Grade A space, while Lower Parel remains an active leasing destination, supported by demand from established occupiers. With limited development opportunities in these established locations, the office market is expected to retain its premium positioning and rental resilience. The residential market is similarly positioned towards the high-end and luxury segments with South Central Mumbai encompassing Worli, Prabhadevi, Lower Parel, Parel, Dadar, Matunga, Mahim, et cetera. Demand is supported by strong end user preferences for established neighborhood, while redevelopment is emerging as an important avenue for creating new housing supply within these mature locations. The continued development of premium residential projects, combined with limited land availability is reinforcing the region's positioning as a preferred destination for premium housing. These markets are the key focus markets for Suraj Estate, where the company has established a strong presence and a deep market understanding, particularly across South and Central Mumbai. Our established footprint in these micro markets position the company well to benefit from the sustained demand from -- for premium residential developments and continued redevelopment opportunity in the region. Overall, the region's established character and scarcity of developable opportunities provide a strong structural foundation for both commercial and residential real estate. The combination of sustained occupiers and homebuyer interest, redevelopment-led development potential and premium asset positioning should continue to support the market's long-term attractiveness. Our ongoing projects continue to witness healthy momentum with a total sold area reaching 5.95 lakh square feet with an average realization of approximately INR 45,922 per square foot. We have achieved cumulative collections of INR 1,672 crores with a balance receivable of approximately INR 1,060 crores providing strong cash flow visibility and reinforcing our confidence in the company's long-term growth trajectory. During the quarter, we continued to make steady progress across our ongoing developments with healthy absorption across both residential and commercial projects. Suraj One Business Bay, our marquee commercial development in Mahim has witnessed strong sales traction since its launch with approximately 33% of inventory sold post launch, demonstrating healthy demand and strong absorption for our commercial offering. We have also continued to strengthen the project development potential through the proposed acquisition of the adjoining land parcel, which is expected to further enhance the project scale and strengthen our commercial footprint in the Mahim micro market. Additionally, we acquired a strategically located land parcel in Dadar West with a total acquisition cost of approximately INR 18 crores. The parcel has a sale potential of approximately 18,000 square feet with an estimated GDV of approximately INR 100 crores. This acquisition strengthens our near- to medium-term project pipeline and further consolidates our presence across the core South Central Mumbai micro market. Looking ahead, we remain optimistic about the long-term outlook for Mumbai's real estate across both residential and commercial segments. Resilient customer demand, redevelopment opportunities, disciplined execution and selective addition of new development opportunities continue to create attractiveness avenues for sustainable growth. With a healthy mix of residential and commercial projects across our core markets, a healthy pipeline of ongoing and upcoming developments, we remain well positioned to build on the momentum achieved during the quarter and strengthen our long-term growth trajectory. With this, I would like to hand over the call to Mr. Shreepal for the financial and operational highlights. Thank you.

Thank you, Rahul. I will run you through the financial and operational highlights for the quarter ended June 2026. Starting with the quarterly financial performance for Q1 FY '27, total income stood at INR 146 crores compared to INR 133 crores in quarter one FY '26, registering a 10% year-on-year growth. EBITDA increased to INR 55 crores from INR 50 crores, representing a 9% year-on-year growth in the EBITDA, while EBITDA margin stood at close to 37.5%. PAT for the quarter stood at INR 23 crores compared to INR 21 crores in quarter one FY '26, registering a 7% year-on-year growth. Operationally, the company continued to deliver strong sales momentum during quarter one FY '27. Sales value increased by 74% year-on-year to INR 141 crores compared to INR 81 crores in the quarter 1 FY '26, while sales area also grew by 74% to 28,834 square feet from 16,524 square feet. The collections during the quarter stood at INR 86 crores compared to INR 115 crores in quarter one FY '26. As of June 2026, the company's net debt stood at INR 614 crores, primarily reflecting capital deployment towards business development activities, strategic acquisitions and investments in ongoing and upcoming projects. The increase in debt will also be driven by investments to strengthen the company's development pipeline, support project execution and create greater long-term growth visibility across the South Central Mumbai. With this, I would like to open the floor for questions. Thank you.

[Operator Instructions] The first question is from the line of Jay Jain from JJ Capital.

Sir, I have just two questions. Sir, first is what is the expected launch pipeline for FY '27, particularly on the residential side? And by when do we expect these projects to be launched?

So the launch pipeline in total for this financial year is about INR 1,600 crores. The launch pipeline, if I give you a synopsis, we are planning to roughly launch about INR 240 crores in quarter two, almost about INR 800 crores to INR 80 crores in quarter three and about INR 480 crores in quarter four. So INR 1,600 crores is the launch pipeline for this year.

Got it. And sir, second one is, could you highlight this -- the projects what are -- that are likely to be the biggest contributors to our sales and collections over the next 2, 3 quarters?

Can you repeat that question again?

Yes. So could you please highlight the projects that are likely to be the biggest contributors to sales and collection over the next two to three quarters?

For the next two to three quarters in terms of ongoing projects, it is our commercial, which is the largest. So I think that will be the major contributor. And also in the residential side, we are launching a project called Suraj Nova, where we already are expecting the CC and the RERA very soon. So these would be the immediate projects where you can see cash flows.

The next question is from the line of Uttam Samar from RVG Educational Foundation. As there is no response, we'll move to the next question. [Operator Instructions] The next question is from the line of Rohit from ADM Advisors.

Could you give us an update on the Bandra project specifically? Where do you stand on the remaining land acquisition and amalgamation? And has there been any change in the expected time line for the project to become launch-ready?

So the Bandra land parcel, there are two balance conveyances which are pending, which is underway as we speak. In terms of a launch pipeline in terms of the Bandra project, it will be in the next financial year.

Okay. Okay. And sir, with sales value growing significantly year-on-year, are you seeing any change in the customer profile or ticket size across the Value Luxury and Luxury segment?

So actually, in the Luxury segment, as we speak, we do not have a lot of inventory in the ongoing projects. It is majorly the commercial project and the Value Luxury, which we have inventory. So we are seeing traction across both these segments in both the commercial and the residential. The Luxury, we will be launching a few more projects in the Luxury segment. But of course, that's yet to be announced because we have certain talks going on with some societies. But once we tie up, those are the projects which may again come back in the Luxury segment.

[Operator Instructions] The next question is from the line of Ishita Lodha from SVAN Investments.

Sir, what is the funds that we need to launch the Bandra project since it is a large one? And how are you planning to fund it? And how do you see debt going by the end of this year and next year?

So the initial capital will be put in through our internal accruals because we've not borrowed anything for the land for the Bandra project. And of course, we will be tying up with some institution once we are ready with the basic level IOD. Now whether it is a CF or NBFC, we have to see when we come closer to the launch. But right now, we are putting only our internal accruals in the plot.

And how much capital do we need to launch it? Estimated?

Estimated premiums would be in the roughly in the range of INR 300 crores to INR 350 crores for the overall for the entire land parcel. And then, of course, there will be a CF limit for the construction will be separate.

And sir, your One Business Bay has seen a very good sales response. So what is your sales strategy for the balance inventory? And what is the plan for Phase 2?

So as we mentioned in the commentary that we've also got our concession plan approved for the amalgamated portion. So as we speak, the plan has already been approved. So we don't see the launch of the 800 -- the top line of INR 800 crores coming. It will come in very soon once we amend the RERA, and we can obviously inform the exchange. And we're seeing good traction. So our strategy is very clear that we will continue selling and continue the momentum.

Okay. And sir, you mentioned about the launch pipeline of INR 1,600 crores in FY '27. So apart from this project, can you name the projects that will be launched this year?

So we have Suraj Nova, which is in Mahim, which is called Lobo Villa in our presentation. Then we have -- that is about almost about INR 180 crores, which is expected in Q2. We have a small project called Bona, which is in Dadar again. That's a INR 60 crore top line. We are Suraj One Business Bay Phase 2, which I said will be amalgamated to the current phase, which has an INR 800 crore top line. That will come in Q3. We have a small project called Shivteerth, which is at Shivaji Park, which again comes with the INR 80 crore top line, which comes in Q3. And then you have two more -- three more projects coming in Q4 with a top line of approximately INR 480 crores in Q4.

[Operator Instructions] The next question is from the line of Harshit from RoboCapital.

I just wanted to understand like what is going to be our accounting revenue for FY '27 and '28?

So we will maintain the growth momentum as per last year and all subject to the launches and the timing of the launch of the new projects.

Okay, sir. Any estimated broad range can you like guide?

So close to 10%, 15% growth we will achieve as compared to the last financial year.

Okay, sir. And what is going to be our EBITDA margins for the next 2 years?

It will be in the range of 35% to 37%.

The next question is from the line of Renuka Sivsankar from First Water Capital.

I just wanted to know with your commentary, you mentioned that One business Bay, the second portion is being launched in Q3. So in terms of presales, what is our outlook for the entire parcel that we are forecasting for the year for FY '27?

So Renuka, I would -- we are looking at overall, I would say, presales, of course, we're going to be selling as we see the demand, and we're seeing good traction now. So I think it will only get better with the amalgamated portion. Having said that, I think the guidance will be for the year rather than only for that particular plot isolated. But we are seeing good traction, and our target is to at least minimum sell a further 1 lakh square feet in One Business Bay. That's our minimum target.

1 lakh additional for the year is for the total amalgamated plot is what you're seeing?

Yes, in total.

Yes. And what is your presales guidance for like the entire portfolio, residential plus commercial for '27?

Overall, we're going to be targeting a presales of about INR 700 crores, both put together. But internal thing will be higher. But right now, we'll be guiding for INR 700 crores.

Okay. And I'm sorry, I missed the number for the gross and net debt figures as of 30th June, if you can provide that, please?

So gross debt is INR 646.94 crores, and cash and cash equivalents are INR 33.03 crores. So net debt is INR 613.91 crores. So close to INR 614 crores is the net debt.

The next question is from the line of Rajendra Passi from NP Analyst.