Arkade Developers (NSE:ARKADE) Q2 2027 Earnings Call

0:01 Ladies and gentlemen, good day, and welcome to the Arkade Developers Limited Q2 H1 FY 'twenty seven Earnings Call hosted by Valorum Advisors. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. I now hand the conference over to Ms. Parangay Chen from Valorum Advisors. Thank you, and over to you. Thank you. Good evening, everyone, and a very warm welcome to you all. My name is Prudhranki Jain from Validram Advisors. We represent the Investor Relations of Arkade Developers Limited.

0:47 On behalf of the company, I would like to thank you all for participating in the company's earnings call for the second quarter and first half of the financial year 2027. Before we begin, a quick cautionary statement. Some of the statements made in today's earnings conference call may be forward looking in nature. Such forward looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward looking statements in making any investment decisions. The purpose of today's conference call is purely to educate and bring awareness about the company's fundamental business and financial performance for the period under review. Now I would like to introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks.

1:43 We have with us Mr. Arkade Jain, Hold Time Director Mr. Samshed Shetty, Chief Financial Officer and Ms. Dipti Nair, Head of Marketing. Without any further delay, I request Mr. Arkade Jain to give his opening remarks. Thank you, and over to you, sir. Good evening, everyone, and thank you for joining us for ARKADE Developers Q2 Financial Year 'twenty seven Earnings Conference Call. Mumbai's residential real estate market continues to offer meaningful long term growth opportunities. And at ARKADE, our focus remains on building a scalable business backed by quality development, disciplined capital allocation and consistent execution. During the quarter, we maintained our operational momentum with collections assisting healthy growth while continuing to strengthen our development pipeline and prepare for the next phase of expansion.

2:34 In terms of numbers, our collections grew by 22% year on year to 183 crore in Q2 financial year 'twenty seven, taking first half collections to INR $3.47 crore, an 8% increase over the corresponding period last year. Presales for the quarter stood at INR 151 crore, with first half presales at INR $30.06 crore. While sales remain moderate and moderate amid evolving market dynamics, we continue to prioritize timely project delivery, customer confidence and operational efficiency as key drivers of sustainable business growth. On the business development front, we further strengthened our presence across Western Mumbai with the addition of four redevelopment projects across Malad, Kantini and Buriwish. These projects collectively span approximately 11 acres with an estimated saleable carpet area of 15 lakhs per feet and a combined DD potential of approximately 5,000 crores.

3:24 These additions reinforce our redevelopment led towards story and expand our presence across established residential micro market. Execution continues to remain one of our core strengths. During the phase, we achieved an important milestone in Arkade Eden in Malad West, where we handed over a flat to our buyers. In Arkade 12, Phase 1, where we received the occupation certificate ahead of the committed. This reflects our emphasis on construction efficiency, quality development and time management, which remains essential to building long term customer trust. Looking ahead, our development portfolio provides strong visibility for the coming years. We have a robust pipeline with an estimated GDV of approximately INR 19,000 crores across 5,700,000 square feet of saleable carpet area. We are targeting launch of two projects with a combined GDV of approximately INR 2,850 crores in Q3 financial year 'twenty seven. These launches, alongside our continued focus on strategic land acquisitions across key micro markets in the NMR, will strengthen our portfolio and support our long term growth ambitions.

4:27 As we move into the second half of financial year 'twenty seven, we remain focused on converting our development pipeline into acquisition led growth, expanding our presence in attractive micro markets and delivering lasting value to our customers and shareholders. We believe that a combination of a strong project pipeline, financial discipline and a continued commitment to quality will position Arkade well for its next phase of growth. With that, I would now like to invite Ms. Deepi Nayar to share the perspective on the marketing initiatives and strategy at Arkade. Thank you, mister Jay. At ARKADE, our marketing approach is centered on building a strong and recognizable brand, understanding buyer preferences, creating meaningful engagement with prospective customers. Our positioning is built around premium residential development, quality construction, and design excellence, and our track record of timely product delivery.

5:18 We aim to further strengthen our brand presence across Mumbai through consistent brand communication, targeted marketing initiative, and increased visibility across relevant customer touch points with the objective of enhancing the brand recall. Looking ahead with two project launches targeted in Q3 of FY 'twenty seven, having a combined GDV of INR 2,850 crores, our focus will be on aligning marketing and customer outreach with the upcoming launch plan. We aim to communicate the value proposition of each of the product effectively based on its location, product offering, and target customer segment, while supporting customer inquiries and sales conversion through consistent and personalized engagement. In parallel, we intend to strengthen customer loyalty by nurturing long term relationships with existing customers, enhancing full sales engagement, and creating positive customer experiences that encourage repeat purchases and referrals.

6:15 We believe that satisfied customers and word-of-mouth recommendations can play an important role in expanding our customer base, generating quality lead sales, and strengthening brand credibility. Our combining market targeted marketing, enhancing brand visibility, customer centric engagement, and continued commitment to quality and timely delivery, we will aim to improve the top of the mind brand recall, drive customer loyalty and referral less sales and support Arkade's long term growth. With that, I would now like to hand over the call to our Chief Financial Officer, Mr. Samshed, who will take you through the company's financial performance. Thank you, Deepi. Good morning, everyone. Let me take you through our financial performance for the second quarter and half year ended 09/30/2026.

7:05 Coming to our financial performance for the quarter, the revenue from operations stood at INR 145 crore. Operating EBITDA was INR 35 crore, translating into EBITDA margin of 24%. Gross margin improved to 35% during the quarter compared to the previous quarter, reflecting the strength of our project economics and our continued focus on maintaining healthy project level profitability. Profit after tax INR $2.25 crores with a PAT margin of 17.14%. The year on year decline in revenue was partly attributed to a higher base in the corresponding quarter last year when four projects commenced revenue recognition after crossing the 25% construction threshold.

7:51 During the current quarter, we did not have a similar contribution from crossing this milestone. As a result, the revenue recognition was relatively lower. However, our strong development pipeline and ongoing project execution provide visibility for revenue recognition in the coming period. For the first half of FY 'twenty seven, the revenue from operations stood at INR $2.92 crores. Operating EBITDA was INR 62 crores with EBITDA margin of 21.4%. Gross margin stood at 32%, while profit after tax was INR 44 crores, translating into tax margin of 15.1%. From a business perspective, collections grew by 22% year on year to INR 183 crores during the quarter, taking H1 FY 'twenty seven collections to rupees $3.47 crores, up 8%.

8:48 Presales stood at rupees 151 crores from the quarter and INR $30.06 crores for the first half, while pre sales remained moderate amid evolving market dynamics. We continue to focus on customer engagement, execution and strengthening our sales momentum. Our balance sheet remains robust. As of 09/30/2026, we had a liquid cash balance of INR 119 crores against gross debt of INR 56 crores, resulting in a net liquid cash position of INR 63 crores. This provides us with the financial flexibility to pursue attractive growth opportunities while maintaining prudent capital allocation.

9:35 Looking ahead, we remain confident in our long term growth process, supported by our strong project pipeline, planned launches, healthy collections and disciplined financial management. We will continue to focus on timely project execution, operational efficiency and sustainable growth to create long term value for all stakeholders. With that, we conclude our opening remarks and will now be happy to take your questions. Thank you. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the attached tone telephone. If you wish to remove yourself from the question queue, you may press star and 2.

10:24 Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sahil Patani from Strokes Capital. So in the presentation, I can see you mentioned that there is the sales have kind of you're kind of seeing the demand being a bit moderated in the first half. So if you could just elaborate on that? And how are you seeing the demand now in Q3 and Q4 coming up? So it was specific to our company where the pre sales remain moderate considering the new launches have not yet come up. And we are expecting to launch two projects in the upcoming quarter.

11:28 And so existing presales, which we checked from the last quarter and quarter on quarter growth, it is more or less the same. So existing projects have a healthy demand. Okay. Okay. All right. Yes. That's all I wanted to know. Thank you. Yes. Thank you. Next question is from the line of Rohan Joshi from L and D Mutual Investor. Please go ahead. Hi, sir. Am I audible? Yes. You are audible. Yes. Hi, sir. So thanks for the opportunity. So I just want to ask you that in the Q3, our launch pipeline includes two products, right, which is which is total GDV of 2,800 odd crores.

12:14 So like, what sales contribution do we expect from these launches? Like, how will the new wireless, like, new launches be executed in the coming quarters? Can you repeat the last one? Can you repeat the question? Yes, sure. So I was asking that in the quarter three, we have two new launches that we are going to do, which of course GDV were around INR 6,000 crores. So like what sales growth contribution do expect from this? And like how will the launches look forward going quarter side? So we plan the project sales according to the construction milestone in the timeline. So overall, the timeline of these two projects are five years or four to five years rather.

13:04 And the sales will be evenly distributed across those four years. Currently, the market has received us very well. We have good interactions with the channel partners and good amount of inquiries have already come up. So as soon as we launch, we'll be able to release the numbers also. Okay. Okay. Got it. And then one more thing that Arkade Rare has reportedly faced a delay of nearly one year against the expected effort that we had. Like, what are some of the, like, reasons behind that? I think you have some wrong data point, I guess. We have preformed the ARKADE RAY. If you see the RAY certificate or RAY registration, it was December 28. And now we have preformed it to December 27. So it is well before time, I guess.

13:55 Sir, not RERA. I was talking about Arkade RERA project that we have. Yes, Arkade RERA project only I am talking about. We have preformed the error rate of handing over to the clients. It is well before target right now. Thank you. Before we take the next question, a reminder to all the participants. Next question is from the line of Sampriti, an individual investor. So my question is that is there anything specifically the company is planning to strengthen their brand positioning and customer engagement in order to improve their sales conversion across its micro market key micro market?

14:55 So she can answer this question. Yeah. Hi, good evening. So I just, of course, have got a lot of initiatives lined up. We've got a very strong customer base of nearly 5,800 residents, and we would want to leverage them and PairConnect in creating a baseline, you know, getting a better start point in both our projects. So... And we've also ensured that in key markets, we create a long term brand presence. So having a top to mind recall is one of our key agendas and objectives, which I think through our initiatives that you've seen in Bandra and in Goregaon West where we have extreme strong presence for our projects ongoing as well as upcoming. We've got the Metro branding. So we will continue to do more such initiatives that will help in top of the mind recall for customers.

15:46 Okay. Understood, ma'am. And my second question would be, are there any specific challenges that the company is facing when it comes to executing multiple redevelopment projects simultaneously? No. So as of now, there are no major challenges that we have faced, and everything is going as per plan and estimates that we have. So Madhav, anything specific that you all are doing to ensure consistency in the construction quality and your delivery time lines? Yes. So we have in house quality department, quality assurance, quality checks, and we have all the SOPs in place, which have given us a certification as well. And we are adhering to these compliances, and I don't see any or foresee any quality issues coming up in our project right now.

16:43 Okay, sir. Understood. That is all, sir. Thank you. Thank you. Next question is from the line of Fahil Pattani from ShopCapital. Please go ahead. Yeah. So I wanted to understand. So Filmistan is going to be like a big project, I think, about INR 4,000 crore GDV, right? And previously, historically, we've done projects in the range of INR 500 crores, INR 2,000 crore GDV. So how what's going to be different in your execution framework because we are obviously this is going be a big project. So how do you look at handling this kind of scariest?

17:30 So if you've been running the company over the past one year or so, we have equipped ourselves a lot in terms of manpower and as well as consultants onboarding. And we have got good consultants who have experience in such a bigger development as well, be it an architect consultant or an MEP consultant or landscape consultant or execution contracts. So we have them onboard, which will help us to manage the project at that scale. Okay. Okay. And you're obviously sitting on cash about INR 63 crores, right? And your balance sheet is also debt free. So are you looking at more land acquisitions over the next, let's say, to eighteen months something?

18:19 Yes. We have entered into an MOU as well in the markup market, Gulen Mills. That transaction is expected to get complete over the next coming few months. And we are also looking at a couple of opportunities which are there in the market, which would materialize in the next twelve months or so. You will be updated about that as well. Okay. And at this point, we are solely focused on the MMR region, right, like not moving to Pune or anything like that? No. As of now, the developments that are happening in the NMR market is quite fascinating and interesting. So we are focused on this market on the right one. Okay. Okay. And on the Thane Greenpea project, the 2,000 crore GDP for Q4 'twenty seven, what's the approval status? And is that time line confirmed, like Q4 'twenty seven?

19:13 Yes. So we have got the first initial approval that is there, that is called as LOI in the Hana market. And we are awaiting our CC as well. And we have already all the documents and things required for our RERA application. As soon as we get the CC, we'll upload or we'll put up for the RERA approval as well. We have got the MOF clearance as well for that land parcel. Okay. So Q4 'twenty seven is realistic? Yes, absolutely. All right. Okay. That's it for me. Thank you. Thank you. Thank you. Next question is from the line of Sahil Radia from Fagman Capital. Please go ahead.

20:14 Sorry. Can you repeat the question? It's not quite audible. Hello? Yes. Yeah. Now it's on. Yes. So my question is, so the Thane project, so are you going to launch in phase wise manner or the whole INR 2,000 crore at once? So it will be a phase wise launch. We have currently planned five towers in six acres, and we are planning to launch it tower wide. And accordingly, those launches will come in the market over the next three Okay. And my second question is regarding the Yogi Nagar. So what's the progress over there? Has the DA has been done? Or is it in progress?

21:00 So DA has been finalized between our lawyers and their lawyers. And now the respective societies will take it up under their respective LGBM meetings, and then we'll proceed for registration of the fee. Next question is from the line of Tresla from Tresla Tools. Am I audible? Yes, you're audible. So I would like to ask, since your free sales declined by 20% year on year in this call in the last quarter, So what were the key factors behind the moderation and how does the management expect sales momentum to improve in the next quarter?

21:47 So as we discussed earlier in the call as well, the new launches are shifted a couple of quarters. So two new launches are expected, and the existing project is getting healthy demand as well. So if you compare to the last quarter of this financial year, result is this quarter, the sales have remained steady. Okay. And your revenue from the operations declined 45.1% partly due to higher base in the previous year. So when do you expect the revenue recognition to improve and which projects are likely to drive the recovery? So say from this January to October, we have launched two projects, Arkade Developers in Bangalore and Arkade Safire in Bangladesh. So these projects are expected to fall in the revenue recognition bracket over the next Q4 or the Q1 of the next financial year. So these should help us increasing the revenue part.

22:44 At the same time, all the ongoing projects are progressing at healthy stages and healthy construction progress. So these also could drive the revenue recognition in the next financial year. Okay. And lastly, the gross margin improved to 35% in this quarter, while operating EBITDA margin remained broadly stable. So what drove the improvement in the gross margin? And what is the sustainable margin outlook for the coming quarters? And also, if you could reflect and throw some light in construction expense, that would also be a great thing. So overall, our realization has been better on the higher side on the existing projects, and that has driven the EBITDA margin for the higher side side or gross profit margin of the higher side. We have completed two developments as well in Arkade Mallard, Arkade Evening and in Vileparla Arkade Call where we have received the OC.

23:35 So once you see the AC, there is certain natural appreciation as well in the product. And apart from that also, our other realization in other ongoing projects has improved a bit, and that is the reason the margins are a bit high. Okay. And could you please just throw some light on the expense side, construction expense or anything? In terms of any specific question that you have, we can address that. No. The margins that I stated regarding that only, if you could. So construction, when we incur expenses for the ongoing project, it goes in the inventory and as in when you recognize the revenue, so it reflects in the margins. Once you the percentage of execution is completed, so the increase in the costs are distributed over the period of two, three years. So it's immediately impacted.

24:30 That is 90. Recover in the margin as well in the realization value. Okay. That's it. That was it from my side. Thank you so much. Thank you. Next question is from the line of Farahq Nayed, an individual investor. So basically, my question comes to this JV of Filmestan. So there was an increase in the JV, right? So what exactly led to this increase? So as in when you acquire the project and as in when you launch, there is a certain time line that has passed. And now we are quite optimistic about the realization that are getting the project. And the product that we are developing, which is we are quite bullish on that, and hence, that has increased the deal.

25:31 Okay. So we would expect that the margin would also increase and when the GDV has would have increased of the project, right? Yes, not entirely. Obviously, we'll improve certain products as well, certain construction costs will also go up. But yes, the margins will be better. Right, sir. Right, sir. And also, on the side that you had INR 1,000 crores of pre sales, so are we on track with that thing as we were expecting that 70 percent of it will come in the second half? So how do we exactly like, I want to know it on a more granular level that how exactly is going to be contributed by which projects and how.

26:18 So as we already spoke about there are two launches that are expected in this financial year now. So those will predominantly drive the presales now upwards to the target that we have set for this year. And all the ongoing projects are already at a LV rate and pace, as you can see, 150 crores and INR 150 around INR $30.06 crore over the six months. And combining with these two new launches, that should help us achieve our target. Okay. So it might also go beyond INR 1,000 crores or it will stay somewhere near that? So we can stay positive for that, We'll definitely cross INR 1,000 crores. Next question is from the line of Sahil Rathia from Sackman Capital.

27:10 So my question is on the South Bombay redevelopment projects. What's the progress over there? When are we announcing it? And if you can throw some light on the project details, if you can? So so we are in the session where we have been finalizing the top two developer... The top three developer in fact, and they are now going to proceed for their formality for voting in 799 where we are positive that we'll come out on top. And as and when we get information from the society, we shall inform the exchanges, and maybe then we'll get an idea of the same. As far as the product is concerned, it is too nascent to at a nascent stage to review any details about this.

27:59 Okay. Thank you so much. Thank you. Next question is from the line of Sartak, an individual investor. Please go ahead. Sartak, your line is unmuted. Please proceed. Hello. Yes. Am I audible now? Yes, you are audible. Yeah. Yes, sir. So my question is, how do you expect the Mumbai redevelopment model to be from a competition perspective? You see, right now, redevelopment is the team in Mumbai, and there are quite a few players who are pushing for more and more redevelopment projects actively and aggressively doing their business development.

28:54 So how do you see the competitive nature of this? And how do you plan to differentiate? And how do you plan to be a winning company here? So as you rightly mentioned, over the past two, three years, redevelopment has gathered a lot of interest from a lot of developers in Mumbai and even outside Mumbai. But as you can see, we have a, like experience of say, nearly four decades, we are into this business. And over the last fifteen, twenty years, we have done around 15 redevelopments projects completed and handed over. Around five to six redevelopment projects are already ongoing right now. So and we have obviously you can see the portfolio as well. We have a good amount of redevelopment in the pipeline as well. So in terms of our bidding, we have been very selective in choosing the projects in which we have to bid.

29:46 And we have a lot of criteria in terms of location size, in terms of development potential, in terms of revenue of the project, the GDV. And once we choose a project, we try to, you know, like, all out in the tendering process and in the bidding process to finally... To get the project in our city. Sure, sir. I got it. But just wanted to understand how do you feel on competition? Is there increasing competition trend going on in the last twelve to twenty four months in the Mumbai region for the development projects particularly? Yes. There has been fair share of participation now. It has increased drastically in the last twelve to eighteen months.

30:34 Sure, sir. And next please, so do you plan or do you have any plans to go into the Navi Mumbai market as well considering the whole new airport and the lots of new development that is coming within Naina project as well? So do you plan to foray into that particular market? So currently, we are evaluating all the possible micro markets in and around Mumbai. So even Nairoomba falls in that criteria. We have evaluated in the past also a couple of projects where that did not fall through. But currently also we are evaluating a few proposals. Alright, sir. And last question from my side, We have recently acquired or launched a project as a cluster redevelopment, right? So could you throw some more light into that?

31:22 The redevelopment project that we acquired in Malart, Gandhiri and Bodhi. Right. Yes, yes. So one is in Gandhivili West, one is in Bodhiwili West and one is in Alad West. Predominantly all in the Western market of the Western Sahara. And these are society development. So cumulatively, fall across 11 acres and with a potential GDV of around 5,000. Alright, sir. Any any timeline in terms of the launch and the completion for these three projects? So as of now, we've been appointed as the preferred developer, and now we are proceeding towards the DA part of the society that one of the earlier questions was of Yogi Nagar as well, which falls under this four development as well. And we are proceeding towards completion of PA, and after that, we'll probably able to give a timeline at this point.

32:20 All right. Sir, I might have missed the earlier question. I just joined it. That's fine, sir. All right. Thank you for your time, and thanks for answering all questions. Thanks. Thank you. Next question is from the line of Jay Jay, an individual investor. Please go ahead. Hello, am I audible? Yes. Hello sir, thank you for the opportunity. I just had a couple of questions. My first question is on that how much net cash flow are we expecting because we have roughly around INR $12.50 crores of cash flow potential from our ongoing project. So how much are we how much of net cash flow are we expecting? I'll direct some straight one of the question. So I think you are talking about the ongoing projects and balance, what what is So you know, these projects are almost 60%, 70% completed, and cost has already been incurred.

33:15 So you can say 30% of the cash is yet to be incurred. The the cost needs to be incurred for this and balance what what will what will be generated as cash inflow for us. Okay. Alright. Okay. That answers your question. Second question that I had was that how much approval related cost have you already paid for the recently acquired project? So for this recently acquired project, we are we are planning for the upcoming project, you know, like, which is which is. So for all these projects, till date, we have incurred about 70 crores towards the approval cost. Yeah. In in this upcoming quarter, or has this already been No. This is cost that's been incurred towards approval, you know, for the upcoming product. Okay. Alright.

34:08 Thank you. Yeah. This is nine in the inventory. Alright. Thank you. Thank you so much for answering. Thank you. Next question is from the line of Suhad Patel, an individual investor. My question is regarding what is our long term presale target, let's just say, till FY twenty twenty eight, twenty twenty nine? I'm sorry, what target did you ask? Presale target for FY twenty eight, twenty twenty nine around. So if you see the upcoming GDV potential that we have, say around INR 19,000 crore, and we plan to launch this over the next four to five years. So a couple of projects may go even further, but as of now, these are planned for the next four years.

35:00 Okay. And one more question, like what is the quantum of building pipeline in a greenfield project as of now? Sorry, can you repeat the question? So quantum of BD pipeline in greenfield project in greenfield. So if you can see upcoming project portfolio right now, once we have acquired in San Agis, we are planning to launch in the next quarter. One is in Tillmitsan, the studio which we are planning to launch in the next financial year. And one MOU that we have entered with Woolen Mills in Pondo. And apart from that, we are evaluating two other proposals as well, which as and when the details are materialized, you all will get to know from the changes that we have closed.

35:53 Okay. And last question from my side. Like is there any micro market that we are exploring other than that already shown in the investor presentation or something like any new market we are trying to enter? So we are evaluating a couple of proposals in South Mumbai and as well as in the market that we are exploring right now. Okay. Okay. Yes. That's it from my side. Thank you. Thank you. Thank you. As there are no further questions from the participants, I now hand the conference back to management for closing comments.

36:50 Okay. Thank you. Thank you for all for participating in this earnings conference call. I hope you were able to answer your questions satisfactory and at same time offer insight into our business. If you have any further questions or would like to know more about the company, please reach out to our Investor Relations Manager at Randomad. Thank you. Thank you very much. Behalf of Arkade Developers Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.