Kalpataru (NSE:KALPATARU) Q1 2027 Earnings Call

0:01 Ladies and gentlemen, good day, and welcome to Kalpataru Limited Q1 FY 'twenty seven Earnings Conference Call. As a reminder, all participant lines will be in 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 Mr. Adwit Fattarpur, Head, Investor Relations at Kalpataru Limited. Thank you, and over to you, Mr. Fattarpur. Thank you, Renju. Good morning, ladies and gentlemen. Welcome to Q1 FY twenty twenty seven Results Call of Kalpataru Limited.

0:46 We have with us today the management of Kalpataru Limited, represented by Mr. Parag Munoz, Managing Director Mr. Narendra Loda, Executive Director and Mr. Chandrasekar Zobekar, Director of Finance and CFO. I would like to state that any forward looking statements made during the discussion today are based on our current expectations, assumptions and projections about future events and are subject to risks and uncertainties beyond our control. With that, I will now hand over the call to Mr. Munoz for the opening remarks, post which we shall open the floor for Q and A. Over to you, sir. Thank you, Adrit. Good morning, everyone, and a warm welcome to all of you.

1:33 Before we dive into our quarterly operational and financial metrics, I want to take a step back and reflect on the macroeconomic background against which this quarter unfolded. Entering the first quarter of FY twenty twenty seven, the global landscape faced significant turbulence, geopolitical friction in The Middle East, and rippled through global supply chains, stoked energy price volatility, and raised fresh questions around inflation and rate trajectories. In many developed markets, this macro uncertainty led to extended decision cycles and institution caution. However, we witnessed in India and specifically within urban real estate was a remarkable demonstration of structural resilience.

2:19 Historically, real estate was viewed primarily as a cyclical rate sensitive asset class. Today, Indian residential real estate and Mumbai in particular is being driven by a fundamentally different set of structural growth engines. We are seeing rising number of high earning end users actively upgrading to larger premium homes that offer holistic lifestyle ecosystems generating steady demand for quality branded real estate. With that context in mind, Kalpataru delivered a steady start to the fiscal year, driven by operational momentum, robust sales collections, strategic projects launches, along with the new project addition and continued execution across our core micro markets.

3:11 Let me walk you through some of the key numbers. Pre sales grew 6% year on year to reach INR1329 crores in quarter one FY twenty seven, up from INR1249 crores in quarter one FY twenty six. Sales collections showed a 17% year on year growth to INR1365 crores. Our cash flows remain visibility remained robust, backed by ongoing project inflows. Sales momentum at Kalpataru Park City, Thana expanded significantly this quarter with presales surging 350% year on year compared to quarter one FY 'twenty six on a sub par basis.

4:00 With more than 2,000 families already residing on-site, we anticipate welcoming over 3,000 families by the year end of next year. Increase in resident occupancy and key retail outlets turning operational are actively driving higher walk ins and accelerate conversion rates in Kalpataru Park City. Coming to new launches, we launched two projects phases which have a total potential of 1,250,000 square feet of saleable area. This includes Tower C Of Estella at Kalpataru Park City, Thane and our luxury development Kalpataru Viyaan Rishikesh Lokanwala in Mumbai. Kalpataru Viyaan Rishikesh features bespoke three, four and four point five bedroom residences with expansive grand decks offering uninterrupted views of Mumbai's mangroves across a private four acre enclave.

5:03 Positioned strategically within the vibrant ecosystems of Andheri West, Kalpataru Viya and Rishikesh enjoys unmatched connectivity to key infrastructure, including major metro lines, upcoming coastal road projects and the city's finest retail education and wellness destinations. This project was launched towards the end of June twenty twenty six, and the response we have received has been encouraging. We have a strong pipeline of launches spread over approximately 5,000,000 square feet and worth approximately INR 7,800 crores this year, and we hope to carry this momentum into other project spaces when we launch them. Turning to project completion. During the quarter, we received occupation certificate for 790,000 square feet across six sixty eight units, continuing a strong track record of project execution and handovers.

6:02 We received occupation certificate for Kalpataru Elites Tower B and Kalpataru Summit office complex in Mulund during this quarter. We are well on track to deliver on a target of 5,500,000 square feet of completions this year. On the business development front, I'm pleased to share that we have secured a development agreement for the redevelopment of five societies in Ashok Nagar, Kandival East. This project is situated on approximately 2.8 acre land parcel and has a GDV potential of INR1250 crores. Kalpataru has deep roots in this micro market and has already delivered six projects in the past. During the quarter, we have monetized our commercial office property Kalpataru Infinia, Pune located at Shivra Idi Nagar in Pune for a consideration of INR119 crores.

6:59 With that, I would now like to hand over the call to Mr. Chandrasekar Zuglekar for a detailed update on our financial performance. Over to you, Chandrasekar. Thank you, Parag. Good morning, everyone, and welcome to our Q1 FY twenty twenty seven earnings call. Let me start with the financial update first. In Q1, we reported revenue from operations of INR472 crores. Our adjusted EBITDA during the quarter was INR95 crores with the margin of 20%. On the profitability front, we reported a loss of INR29 crores for the quarter. The company follows project completion method as we know for revenue recognition for most of our projects.

7:48 During H2 second half of FY twenty twenty seven, we will be completing several projects as mentioned by Mr. Prahlad Kumar, which will lead to recognition of substantial revenue and thereby profits. Turning to our balance sheet position, as on 06/30/2026, our gross debt stood at INR9189 crores, while our cash and cash equivalents were INR960 crores, resulting into a net debt of INR8229 crores. Consequently, our net debt to equity ratio stands at two times. In continuation to our strategy for optimizing cost of the debt, during this quarter, we have refinanced a debt of approximately INR1800 crores, which will give us an estimated annual savings of INR55 crores in a finance cost.

8:47 As a result of this refinancing, since our IPO, the total debt which stands refinanced is approximately INR5300 crores. Hence, our weighted average cost of borrowing now stands at 11% per annum, down by approximately 200 basis points since the listing. This cumulative optimization of borrowing costs therefore adds to approximately INR180 crores annually. For remainder of financial year FY 2027, our focus is clear to build upon the foundation we established in Q1. We have a robust pipeline of new launches designed to sustain our pre sales trajectory.

9:37 Looking ahead to FY 2027, we target closing the year with pre sales of approximately INR 6,500 crores, which would be a growth of 23% over FY 2026. Keeping in view the capital allocation of upcoming launches and the business development spends, we expect that net debt levels to end for FY 2027 and to remain around the same levels of FY 2026. However, the net debt equity ratio is expected to improve from current levels of two due to recognition of profits at the end of FY 2027. In closing, I wish to state that company would be completing around 15,000,000 square feet of ongoing projects in FY 2027, FY 2028 and FY 2029 gradually.

10:35 All these projects will recognize revenue and profits in these three years. This will also strengthen our balance sheet and cash flows significantly and reduce the debt. With that, we would be happy to take your questions. Thank you. We will now begin the question and answer session. The first question comes from the line of Shivam Gupta with Prenetra Asset Managers. Please go ahead.

11:27 Hi, sir. Thank you for the opportunity. I want to like areas sold increased by 48% in Q1, but presale grew only 6% as an average utilization fell. Was this entirely due to project mix? Or was there some discounting in specific project? It is right. It was sorry, yes, was it is right. It is due to project mix. Okay. And collection was strong around INR $13.65 crore. How much it came from the older sold receivable and how much was linked to booking made during the quarter? The booking made during the quarter were not they were marginal only. Most of the collection was due to the units sold earlier.

12:17 And the debt increasing from March to June, can you please give us some bridge like whether cash was deployed during the quarter? So on the debt, the company is very clear. Directionally, it is going to be on the downside year on year. Periodically, within quarters, it is possible that it may increase slightly or marginally due to the spend or investment or capital allocation on to the ongoing projects or the new projects which are acquired on the new BD. However, the trend would be generally on the downside. Okay, sir. And earlier call, have told like INR800 crores to INR200 crores of FY 'twenty seven sales to come from new launches.

13:03 How much of this already have been achieved in Q1? And does the full year expectation remains unchanged it's unchanged only? Yes. In this quarter, the 35% was from new sales. And as we had said, for the entire year, we'll be about 25% will be from new launches. Okay. And what the expectation will remain the same for the full year? Sorry? Expectation for the full year from new launches will be about 25%. Okay. That's it from my side. Thank you. Thank you. Thank you. Next question comes from the line of Saurabh Gilda with GM Financial. Please go ahead.

13:58 Yes. Hi, good morning. Thank you for taking my question. I just wanted to get a sense on the time line for the launches that you've highlighted in the PPT. If you can share any update at what stages these launches are and when can we expect the launch of these projects? Are they back ended or are well spread across the next three quarters? Yes. Hi, sir. They are well spread across the three quarters. Blossom will happen in the next quarter. Astellas, the One Tower will happen in this quarter. Hari Neketan will happen this quarter and Adeen and Sumanaga will go next quarter.

14:47 Okay. Thanks for the update sir. And just wanted to get a sense on pricing sir, how are you seeing over the last post war the recovery specifically? How are you seeing the pricing trend across your projects and across the markets that you're operating? We are seeing a positive trend towards walk ins and conversion and also the pricing is looking stable and strong. Anything that you can quantify from maybe what's the expectation for the year in terms of pricing? So the pricing generally as the progress of the project goes, wherever we can see an increase, we are planning to move towards that.

15:50 By Q2, we will know how much the price increase shall be about. Sure, sir. Thank you. Those are the questions. I will come back in the queue. Thank you so much. Thank you. Thank you. Ladies and gentlemen, as there are no further questions, we have reached the end of question and answer session. I now hand the conference over to the management for closing comments.

16:44 Thank you to all the participants for joining our results call. We look forward to regularly interacting with you. In case of any further questions, feel free to reach out to our Investor Relations or the Ernst and Young team for clarification. Thank you. Thank you. On behalf of Kalpataru Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.