Suraj Estate Developers (NSE:SURAJEST) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Q1 FY 'twenty seven Earnings Conference Call hosted by Suraj Estate Developers Limited. As a reminder, all participant lines will be in a listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to mister Rahul Thomas, hold 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 'twenty seven earnings conference call.

0:51 Along with me, I have our CFO, Mr. Srikal Shah and SCA, 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 sectors. In the office segment, the CBD and Worley continue to see limited availability of quality grade A space, while Lower Brill 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.

1:42 The residential market is similarly positioned towards the high end and luxury segments, with South Central Mumbai encompassing Worli, Prabhadevi, Lower Parral, Parral, Datur, Matunga, Maheem, etcetera. 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 metro 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.

2:29 Our established footprint in these micro markets position the company well to benefit from the sustained demand for premium residential development 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 the total sold area reaching 5.95 lakh square feet with an average realization of approximately 45,922 per square foot.

3:18 We have achieved cumulative collections of $16.72 crores with a balance receivable of approximately INR $10.60 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 Mayeen 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 Mahi micro market.

4:15 Additionally, we acquired a strategically located land parcel in Dada West with a total acquisition cost of approximately INR 18 crores. The parcel has a sale carpet potential of approximately 18,000 square feet with an estimated GDV of approximately 100 CR. 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 continued to create attractiveness avenues for sustainable growth.

5:04 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. Sheepal for the financial and operational highlights. 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 'twenty seven, total income stood at INR 146 crores compared to INR 133 crores in quarter one FY 'twenty six, registering a 10 year on year growth.

5:49 EBITDA increased to INR 55 crore from INR 50 crore, 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 crore compared to INR 21 crore in quarter one FY 'twenty six, registering a 10% year on year growth. Operationally, the company continued to deliver strong sales momentum during quarter one FY 'twenty seven. Sales value increased by 74% year on year to INR 141 crore compared to INR 81 crore in the quarter one FY 'twenty six, while sales area also grew by 74% to 28,834 square feet from INR 16 500 twenty four square feet.

6:34 The corrections during the quarter stood at INR 86 crores compared to INR 115 crores in quarter one FY 'twenty six. As of June 2026, the company's net debt stood at INR $6.14 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. Thank you very much.

7:21 We will now begin the question and answer session. May please press star and 1 on their touch tone telephone. If you wish to remove yourself from the questions queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, please wait for a moment while the question queue assembles. Ladies and gentlemen, to ask a question, please press star and 1 now. Participants who wish to ask questions, may please press star and 1 at this time.

8:13 The first question is from the line of from JJ Capital. Please proceed with your question. Hi sir, am I audible? Yes sir. Yes. Sir, I have just two questions. Sir, first is what is the expected launch pipeline for FY twenty seven, particularly on the residential side? And by... When do we expect these projects to be launched? Ajay, so the launch pipeline in total for this financial year is about INR 1,600 crores. The launch pipeline, if I were to give you a synopsis, we are planning to roughly launch about INR $2.40 crores in quarter two, almost about INR 800 crores to 80 crores in quarter three and about INR $4.80 crores in quarter four.

9:10 So INR 1,500 crores is the one pipeline for this year. Got it. And the second one is, could you highlight these the projects, what are that are likely to be the biggest contributors to our sales and collections over the next two, three 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.

10:01 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. Please proceed with your question. Mister your line has been unmuted. As there is no response, we'll move to the next question. Ladies and gentlemen, to ask a question, please press star and one now. Participants who wish to ask questions may please press star and 1 at this time. The next question is from the line of Rohit from ADAM Advisors.

10:47 Please proceed with your question. Yeah. Hi, sir. 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 already? So the Bandra land parcel, there are two balance conveniences, 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?

11:41 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 costs going on with some societies. But once we tie up, those are the projects which may again come back in the luxury segment. Okay, sir. That was very helpful. Thank you for taking my question. Thank you sir. Ladies and gentlemen to ask a question please press star and one now.

12:31 The next question is from the line of from Swan Investments. Please proceed with your question. Hi, sir. Thank you for the opportunity. Sir, what is the funds that we need to launch the Vanda project since it is a large one, and how are you planning to fund it? And how do you see that 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 IOT. Now whether it is a CF or NBF3, we have to see it when we come closer to the launch. But right now, we are putting only our internal crores in the plot.

13:22 And how much capital do we need to launch it? Estimated? Estimated premiums would be in the the range of INR 300 crores to INR $3.50 crores, the overall for the entire client parcel. And then, of course, there will be a CF limit for the construction would be separate. Okay. And sir, your one business, they have seen a very good sales response. So what is your sales strategy for the balanced inventory? And what is the plan for Phase II? So as we mentioned in the commentary that we've also got our concession plan approved for the amalgamated portion.

14:07 So as we speak, the plan has already been approved. So we don't see the launch of the INR 800 the top line of 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 had mentioned about the launch pipeline of INR 1,600 crores in FY 'twenty seven. So apart from this project, can you name the project that will be launched this year? So we have Suraj Nova, which is in Mahe, which is called Logo Villa in our presentation. Then we have that is about almost INR 180 crores, which is expected in Q2.

14:55 We have a small project called Madonna, which is in Dagar again. That's a INR 60 crore top line. We have Suraj 1 Business Bay Phase II, 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 Shiptit, which is at Shivaji Park, which will again come with the INR 80 crore top line, which comes in Q3. And then you have two more three more projects coming in Q4 with the top line of approximately 80 crores. INR $480.80 Q4. Thank you, ma'am. Ladies and gentlemen, to ask a question, please press star and 1 now.

15:44 Participants who wish to ask questions, may please press star and 1 at this time. The next question is from the line of Harshith from Robo Capital. Please proceed with your question. Thank you for the opportunity. I just wanted to understand like what is going to their accounting revenue for FY 'twenty seven and 'twenty eight? So we will maintain the growth momentum as per last year. And it's 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?

16:35 Close to 10%, 15% growth we will achieve as compared to the last financial year. Okay, sir. And what is going to their EBITDA margins for the next two years? It will be in the range of 35%, 35 to 39%. Okay, Suraj. Thank you. Thank you, sir. The next question is from the line of from First Water Capital. Please proceed with your question. Yes. Hello. Thank you for the opportunity. I just wanted to know with your commentary, you mentioned that one business day, the second portion is being launched in q three.

17:22 So in terms of presales, what is our outlook for the entire parcel that we are forecasting for the year for FY 'twenty seven? So Viraja, I would we are looking at overall, I would say presales, of course, we are 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 for the one lakh square feet in one business way. That's our minimum target. One lakh additional for the year for the total amalgamated plot is what you're saying?

18:13 Yes, in total. Yes. And what is your pre sale guidance for like the entire portfolio, residential plus commercial for 'twenty seven? Overall, we're going to be targeting our leases of about INR 700 crores, both put together. But our 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 June 30, if you can provide that, please? So gross debt is 46.94 crores and cash and cash equivalents are INR 33.03 crores. So net debt is INR 613.91 crores.

19:02 So close to INR $6.14 crores is our net debt. Okay. Those were my questions. I'll join back in the queue. Thank you. Thank you, ma'am. The next question is from the line of Rajendra Pasi from NP analyst. Please proceed with your question. Hello. Yes, sir. Yes. We are doing good. Yes. Thank you for the opportunity. So my first question is regarding can you provide the balance inventory on the residential side that we are holding right now? You mean, cafeteria, right?

19:51 Cafeteria as well as like the total value of it. Because in the PPT, it was like, I guess, the most value with the commercial. So can you provide the breakup of that? Yes. So INR 22,000 is available as a sale for residential segment, for which the estimated GDV is close to INR 109 crore. And commercial is close to INR 1.4 lakhs, which for me, the estimated top line is INR $8.41 crore. So total INR $9.50 crores is unsold inventory in total from the ongoing portfolio of projects. Got it. Got it. And we are seeing that in this quarter as compared to the same quarter for the last financial year, there has been decline on the residential side.

20:50 So is it mainly due to low inventory or are we seeing some kind of residential slowdown in the MMR market? No, it's mainly because of low inventory. Okay. And last question would be on the Bandra project like we have I guess amalgamated two of the land parcels and third one was pending as of last quarter, Wonkol as well. So has there been any progress on that part? Yes. Things are working out, and we are moving very quickly. We shall keep you updated once those conveniences are done. But do we have any time line on the amalgamation for the third plot? When can we roughly estimate it?

21:38 No, there's no time line means, see, unless we get the plot, only then we can discuss amalgamation. So I think first is to get the conveniences done and the tie up done of the ownership, then we can give you time lines on the plot amalgamation. But that is a process of the BMC. So I don't see that as an issue, mainly is to get the balance plots tied up. Okay. But it should be done within this financial year, right? Our target is before that. Let's see how it shapes up. Okay. Okay. All the best. Thank you. Thank you, sir. Participants who wish to ask questions may please press star and 1 at this time.

22:33 The next question is from the line of from Swan Investments. Please proceed with your question. Thank you, sir, for the follow-up opportunity. What is your target for OCF operating cash flow generation and collections for this financial year? We can discuss offline, Nishida. The reason why I'm asking is because next year, you were saying that Bandhapajeet would be funded from internal occurrence. And today, we are sitting on a net debt of $6.14 crores.

23:20 I'm sure happy to discuss that offline. Yeah. Thank you. Thank you, ma'am. The next question is from the line of Sahil from Sahil Securities. Please proceed with your question. Oh, no. Thanks. Thanks for for your question. Couple of questions from my side. Firstly, like, given the most of your portfolio, sold area has already already already been monetized. Sorry to interrupt, Sahil, Your voice is breaking in between. Hello? Now it's audible? Hello? Yes, sir. Please proceed. Yeah. Given that most of the ongoing portfolio, sold area has already been monetized, where do you see the next level of sales growth coming from? So new launches or absorption and investment in inventory?

24:11 Is your question about the new launches and where do you see the next cash flow is coming from? Yes, next page, so from where it will come from new launches or absorption of existing inventory? Your voice is not very audible, but I'm assuming you are hitting me. Yes. So my question is from where the next phase growth will come from. Is it from new launches or objection on suggestion and metric? It is both. It is both because we have already a launch pipeline, which we discussed earlier, 1,600 crores for this year. So it will be coming as an amalgamation of both. So the presale will come from both upcoming launches and also with the unsold area, which we already currently have.

25:02 Okay. And one more question. So like how do you see the company's debt position evolving over the next twelve to eighteen months? And how much do you have anything we can expect? Can you repeat that? Sorry. I'm not... Your voice is not audible. Yes, sir. Voice is not clear, Sahil, sir. Hello? So the... Hello? Yes. Yes. Yes. Yes. So just wanted to understand, like, how the company's debt position evolving over the next twelve to eighteen months? And how much deleveraging we have expected? So as we have new launches and as you can see, there's a INR 1,600 crore pipeline, which is being created for this year. There will be a debt level, which will be going up. But as I said, it will be going up temporarily.

25:51 And because of the good traction of sales, especially in our commercial projects and also in the value luxury, it will be an initial increase and again come down on a sustainable basis. Understood. Thank you. Thank you, sir. The next question is from the line of from Securities. Please proceed with your question. Hello, sir. Thanks for the opportunity, sir. I have two questions for you. Firstly, given the large redevelopment opportunity that we have in South And Central Mumbai, are we seeing any increase in acquisition cost of completion competition for redevelopment projects, sir? So not as yet, Sachi. We are actually in talks with couple of societies, and we don't see I mean, of course, they also want to go with the builder who's well known in the area. And I think that's where we come in, in South Central Mumbai.

26:52 So yes, of course, there is competition, and there are many people getting into redevelopment. But overall, we don't see any increase because the deal that we're discussing is pretty standard, and we're not giving them very addition too much additional area. So I think it's a very standard deal. Understood. Got it. Secondly, sir, what kind of pricing movement have you seen in business plays since launch? And is there scope for any further price appreciation as the project progresses? So, see, right now, I mean, we achieved roughly about the average of 50,000. So I think there will be appreciation as a project goes along, right? Right now, we're the basement level.

27:37 But having said that, we are working on our velocity right now, and I think that's our main focus. And once the project comes up to a decent stage in terms of RCC, then we can also talk about increase of rates. But right now, our focus is on velocity. Understood. Got it. Thank you so much for the detailed answer, sir. Thank you, ma'am. Ladies and gentlemen to ask a question please press star and 1 now. Participants who wish to ask questions may please press star and 1 at this time. As there are no further questions from the participants, I now hand the conference over to management for closing comments.

28:28 In conclusion, Q1 FY 'twenty seven marked a quarter of healthy operational progress for the company, supported by resilient customer demand, strong sales momentum and continued absorption across our residential and commercial portfolio. With a healthy ongoing and upcoming project pipeline, selective additions to the development portfolio and a continued focus on our disciplined execution and timely monetization, we remain well positioned to build on the momentum achieved during the quarter and capitalize on the long term growth opportunities across South Central Mumbai. Thank you so much. Thank you, sir. On behalf of Suraj Estate Developers Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.