Kalpataru (NSE:KALPATARU) Q2 2027 Earnings Call

0:02 Ladies and gentlemen, good day, and welcome to the Kalpataru Limited's Q2 and H1 FY 'twenty seven Earnings Conference Call. 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 Mr. Advaith Patarpur, Head, Investor Relations at Kalpataru Limited. Thank you, and over to you, sir. Thank you, Michelle. Good morning, ladies and gentlemen. Welcome to Q2 and H1 FY twenty twenty seven Results Call of Kalpataru Limited. We have with us today the management of Kalpataru Limited represented by Mr. Parag Manod, Managing Director Mr. Narendra Lodha, Executive Director and Mr. Chandrasekar Zobekar, Director of Finance and CFO.

0:59 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. The macro environment continued to be challenging for second quarter in a row. Despite an external environment marked by global economic uncertainties, volatile geopolitical developments and evolving interest rate trajectories, the Indian economy continues to demonstrate resilience underpinned by strong domestic fundamentals.

1:53 The Mumbai Metropolitan Region remains amongst the most compelling real estate markets in India, benefiting from sustained infrastructure investments, improving connectivity, urban regeneration initiatives and increasing demand for high quality residential developments. Consumer preferences continue to shift towards established and execution focused developers, leading to consolidation within the sector. Supported by these favorable industry dynamics, Kalpataru continues to execute on its strategy of delivering premium developments in premium and prime locations, while maintaining a disciplined approach towards growth and capital allocation.

2:42 Now let me walk you through some of the key numbers for Q2 and H1. Pre sales for Q2 FY 'twenty seven was crores, down 5% while it was crores for H1 flat Y o Y. Sales collection was flat INR1189 crores for Q2, while it was INR2554 crore, up 9% Y o Y for H1. Sales momentum at Kalpataru Park City, Thane has been very strong. We have recorded INR $4.20 crores of presales during H1 so far, and walk in interest remains high with healthy conversion.

3:31 On a Y o Y basis, our walk ins are up by 25%. Conversion rate has almost doubled, resulting into a pre sold growth of 130 at Kalpataru Park City. H1 FY 'twenty six was INR167 crore and now our H1 FY twenty seven was INR420 crore. With more than 2,000 families already residing on-site, we anticipate welcoming over 3,000 families by the end of next year. Increasing resident occupancy and key retail outlets turning operational during higher walk ins and better conversion. With this, we anticipate H2 to be better than H1.

4:21 At Kalpataru 1 in Worley, we continue to see very strong customer interest in the product. The demand is building up and we have started seeing conversion improve in this festive season. This is a best in class product, and we remain confident on its long term performance. Coming to new launches. We launched our premium project Kalpataru Alara in Baikalnagar, Gorega West during the quarter, which received very good response. The projects featured two, three and four bedroom residences along with 25 plus curated lifestyle amenities. This project was launched towards mid September and the response we have received has been encouraging with 30% of the projects sold.

5:09 This is on the back of another strong launch that we did in quarter one for Kalpataru Viyaan Rishikesh Lokanwala, which continued its sales momentum in this quarter as well. We have a strong pipeline of launches for the remaining year, and we hope to carry this momentum into other project phases when we launch them. Turning to project completions. During the quarter, we received occupation certificate for 1,580,000 square feet across 1,500 units. For H1 FY 'twenty seven, we have delivered over 2,200 units, adding up to 2,370,000 square feet, continuing our strong track record of project execution and handovers.

5:57 We are well on track to deliver our on a target of 5,500,000 square feet of completion this year. With that, I would now like to hand over the call to Chandrasekar Zublakar for a detailed update on our financial performance. Over to you, Chandrasekar. Thank you, Praj. Good morning, everyone, and welcome to our Q2 and H1 FY twenty twenty seven earnings call. Let me start with the financial update. During Q2, we reported revenue from operations of Rs. $4.37 crores. Our adjusted EBITDA during the quarter was Rs. 73 crores with the margins of 16.6. On the profitability front, we reported a loss of INR71 crore for the quarter.

6:47 During H1 on the other hand, our revenue came in at INR909 crore. Our adjusted EBITDA was INR167 crore with margin of 18.4%. On the profitability, we reported a loss of INR100 crore. The company follows project completion method as has been said earlier for its revenue recognition for the most of its projects. During H2 of FY twenty twenty seven, we will be completing few of our projects which will lead to its first time revenue recognition of the corresponding revenue and profits. Turning to our balance sheet, as of 09/30/2026, our gross debt stood at crore, while cash and cash equivalents were INR856 crore, resulting into net debt of INR8323 crore.

7:51 Consequently, our net debt to equity ratio stands at 2.1x. Our gross debt was flat quarter over quarter, while net debt went up slightly because of consumption of the working capital cash balances. H1 FY twenty twenty seven has been steady for us. For reminder of the fiscal year FY twenty twenty seven, our focus is clear to accelerate on the pre sales. We do have a good pipeline of new launches as well as sustained sales from the existing portfolio that should help us achieve our targets for the year. Our guidance for presales for FY twenty twenty seven remains unchanged at INR 6,500 crores.

8:45 Equal focus will be also on execution so that we are able to deliver all our projects as planned and augment our collections and drive cash flows. In closing, I wish to state that the company would be completing around 14,000,000 square feet of ongoing projects in FY 2027, FY 2028 and FY twenty twenty nine gradually. Out of that, around 5,500,000 square feet will be completed in FY twenty twenty seven itself. Out of that 5,500,000 square feet target for FY twenty completion, 2,300,000 square feet has already been completed in H1 of FY27. The remaining out of 14,000,000 will be completed in FY28 and FY29 gradually.

9:34 All these projects will recognize revenue and profits in their respective year of completion because they follow project completion method of revenue recognition. This will also strengthen our balance sheet and cash flow significantly thereby leading to reduction in the gross debt as well as net debt. With that, we would be happy to take your questions. Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask questions may please press star and 1 on the touch tone phone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use only handset while asking a question. Please and gentlemen, we will wait for a moment while the question queue ascends.

10:39 The first question is from the line of Saurav Gilta from GM Financials. Please go ahead. Hi. Good morning. Am I audible? Yes, sir. You are. Yes. Yes. Hi. So my first question is on the guidance with the pre sales of close to INR 2,600 crore achieved in H1. Can you please share a broad level bridge between the current pre sales number and the guidance that we have provided for the year? So, of INR 6,500 crore, around 40% of the pre sales has been already achieved in H1 and the remaining H2 period for FY 2027 will take will the pre sales will be achieved out of the sustainer sales from all the ongoing projects and couple of launches which we'll be doing, which are especially Suman Nagar at Chembool, Kalpataru Blossom at Pune and Kalpataru Ardeen at Nagpur. However, the weightage of the presales for the remaining H1 I mean H2 of FY twenty twenty seven will be on the sustain and sale and the whole positive period starting from October till March will take care of it. And it has been a usual trend that and we have met that trend that 40% of the pre sales guidance is generally met in the H1 and around 60% is met in H2.

12:08 Sure. Thanks for the response. And my last question is on the launch readiness. If you can highlight the current status of the three launches that you have highlighted in terms of approvals, where they are in terms of launch time lines? Will that be back ended or do you see those products getting launched in the first two seasons? So the Sumanagar project at Chembool, where IOD has come, vacation of the residence is happening and we should get it and it will happen in the fourth quarter of this year. Regarding the Nagpur, we have got the pre approval. The final approval will come in a month and a half, and then we would get the RERA and it should also be launching in fourth quarter.

12:58 Blossoms at Pune, we have applied for RERA and we should be able to launch it in before December. Okay. Thank you so much, Those are my questions. All the best. Thank you. Thank you. Thank you, sir. A reminder to all the participants that you may please press star and one to ask questions at this time. We'll take some more questions from Saurabh Gilda from JM Financials. Please go ahead.

13:58 Yes. Just a follow-up on the demand environment, given that we have a portfolio which is across the spectrum, right from 2 crore, 3 crore to upwards of the luxury projects in Worli. Any specific segment that you are seeing a demand slowdown or any moderation in uptick that you want to highlight or everything is or the demand trend across spectrums remain healthy? Just wanted to understand the demand environment across the price spectrum. In the executive summary, yes, the demand seems healthy across everywhere and I'll break it down under the INR3 crore bracket, we are seeing good response, may it be in Thana, may it be in Meera Road, may it be in Pune, may it be in Sawoth.

14:55 In the Western, that's one zone we are in. In the plotting zone, also we have got very good demand. Good sales are happening in that. In the Western Mumbai where we have projects, where we have done two launches, one was at Lokanwala and one in Bangunagar, we saw a very good response and our undergoing under construction projects which are also selling well. These are all in the 3 to 10 crore bracket. In luxury market that's in Sogou, there is a good walk in, there is a good interest, demand is there and conversions will happen in the next few months. So, at this moment, are finding demand across everywhere. So, nice to hear. Thank you.

15:47 Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management of Kalpataru Limited for closing comments. Thank you and over to you, sir. I'm sorry, sir. You're not audible. Yes, sir. One more question. I understand there is one more question. Yes, sir. Can we take that question? Yes. Okay, sir. We'll take the next question from the line of Vishal Singh, an individual investor. So sir, I have just three questions. So one is regarding net debt level. So sir, what is the year end guidance for the net debt level? And my second question is on the are we on the verge of executing our year end pre sales guidance?

16:46 And my third question is on the are also some color on the protein development project, please? Yes, Vishal. So our guidance for the net debt at the year end will remain flat as we have said earlier in the guidance. As compared to FY 2026, the net debt for FY 2027 will be more or less same. The focus will be on execution as I said earlier on the projects and we will be consuming our capital and funds and cash flow for execution of the projects as well as some spend will be on the business development also for the growth. Got it. Second question was regarding the plotted... Plotted developments are in Nagpur and in Kharjat.

17:35 Got it, sir. Got it. And sir, what is your year end pieces guidance? As I said earlier, is INR 6,500 crores around, gross, net sales. And also can you put some light on the cash flow part? How is that panning out? The net operating cash flows and the gross cash flows will remain more or less same as compared to FY 2026. FY 2027 also will be because in FY 2026 we had a presales of 5,280. In FY '27 we will be having around 6,500. Cash flows will be in proportion to that. Sure, sir. Sure. Thank you so much sir.

18:23 Thank you. Thank you. The next question is from the line of Ashish from MyCell Advisors. Please go ahead. Hi. Am I audible? Yes. Yeah. Hi, sir. Sir, I just wanted to ask a couple of questions. So I wanted to know which other projects which are yet awaiting approvals, and could these delay could these delay our launches? That's my first question. Hi, Ashish. We had answered this earlier. We have three projects to be launched, one in Chembur, one in Pune and one in Nagpur plotting and all are on track, will be launched in quarter three and quarter four.

19:18 Okay, okay. And sir, what is the amount of price hike that we have taken in the past few months to absorb this inflationary impact? And how much headroom would be remaining for the price increases in the next phases? Yeah. The price rise has happened up to 3% to 5% in the projects and it's taken care of the increase in inflation and cost of product now and what we anticipate in the future. Understood, understood. Okay, sir. That's it from my side. If I have any more questions, I'll come back. Thank you. Thank you. You. Ladies and gentlemen, that was the last question.

20:05 I would now like to hand the conference over to the management of Kalpataru Limited for closing comments. Over to you, sir. 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 ANY team for clarification. Thank you. Thank you, members of the management. On behalf of Kalpataru Limited, that concludes this conference. We thank you for joining us and you may now disconnect your lines. Thank you.