Raymond Realty (NSE:RAYMONDREL) Q2 2027 Earnings Call

0:01 Ladies and gentlemen, good day, and welcome to the Raymond Realty Limited Q2 FY 'twenty seven Earnings Conference Call. 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 Mr. Akhil Kaljandani from Antique Stock Broking Limited. Thank you, and over to you, sir. Thank you. On behalf of Antique Limited, I would like to welcome all the participants to the q two and h one FY twenty seven conference call of Raymond Realty Limited.

0:50 Today, we have with us from the senior management of Raymond Realty Limited, Mr. Akesh Tiwari, Group CFO Mr. Harmon Sani, MD and CEO Mr. Ankur Jindal, CFO Mr. Salih Baha, Group Head of Investor Relations Mr. Amit Agrabal, Head of Investor Relations. Without taking further time, I would like to hand over the call to Mr. Harmon Sai. Over to you, Harmon. Thank you. Good morning, everyone, and thank you for joining us today to discuss our financial and operational performance for the second quarter of financial year twenty twenty seven. So guided by our go beyond ethos, we have successfully carried out the scaled execution and with strategic clarity from last year, we have walked into the first half of FY 'twenty seven.

1:49 Our performance this quarter reflects strong operational momentum, validating our execution capabilities and deep trust homebuyers place in our brand. I would now like to share the operational and financial updates for the quarter Q2 in detail. We achieved a landmark milestone this quarter by nearly doubling our quarterly presales without any new launches, driven entirely by robust sales velocity and steady price realizations within our existing product portfolio. Total income for Q2 FY 'twenty seven grew at a steady 7% year on year to INR $7.57 crores.

2:39 And through an optimized product mix and disciplined cost management, our EBITDA also rose from 14% to INR 115 crores with margins now at 15% as compared to 14% in the corresponding quarter. While our margins naturally fluctuate by project sales due to upfront marketing and construction setup costs, they are expected to normalize progressively as more of our projects go in mid stage as this year progresses and moves into next year also. So we are firmly on track to meet our full year FY 'twenty seven EBITDA margin guidance of 17% to 19%, you will start seeing further improvements in the balance year.

3:34 Our booking value contribution mix for the period reflects a well balanced portfolio with projects outside of our legacy Thana land contributing 57% and Thana, which is our own land, which started the business, contributing 43%. And this ratio will keep getting skewed more and more towards projects which are outside because most of the growth will come from outside of Thane. We also witnessed a 67% surge in customer collection to INR $6.82 crores. This highlights our intense focus on cash flow efficiency and operational labor. For the first half of the year, our cumulative collections have reached $12.33 crores and booking values increased by 111% year on year to INR $160.02 crores.

4:35 So this quarter has been a standout operational achievement for us. And one of the features of that was receiving the occupation certificate for address by GS1 Tower B in Thane, which comprises two seventy units and almost 3.5 lakh square feet. And this also has been delivered ahead of RAYMONDREL completion time line as has been our tradition for all our projects we have delivered well before the time line committed to the market and customers. So as a result, delivering ahead of schedule stands as a testament to our strong execution capability and operational efficiency. Our total portfolio now stands at an impressive GDV of approximately INR 52,000 crores, which includes what we have added in H1 of approximately INR 8,500 crores in per rail. So this year itself, we have added INR 8,500 crores to reach this level of INR 52,000 crores.

5:40 So our this reflects a diversified and high growth asset base across MMR. And it, as of now, represents a prudent mix of owned land and asset light JDA projects. If you look at the Thana land parcel, which is a 100 acre parcel, that remains the launch pad on which this business started, and it carries 25,000 crore revenue potential. Out of this, approximately 65 acres is currently under development, which represents about 6,700,000 square feet of RAYRA carpet area and a revenue potential of INR 16,500 crores. So out of this INR 16,500 crores, INR 9,770 crores has already been sold over the years and collections have reached INR 7,977 crores till date from the initiation of the business.

6:42 Now driven by our strategic pivot towards asset light model, if we look at the JDA, JDAs now account for approximately 52% of our total GDV portfolio, which represents a revenue potential of INR 27,000 crores at current prices. Now within the JDA, if we look at all the projects, four projects, which are the Bandra project, the BKC project, Wadala and Sayan have already been launched, and they are progressing rapidly. And they have already generated for us over the last two point five, three years that we have launched this JDA based model. They've already generated a sales value of INR 3,432 crores and a collection of INR $8.57 crores till date.

7:37 And this will keep on growing as we go on. So if you look at our booking value contribution mix for the period, that also reflects and follows a very similar pattern of the GDV, where non Hane JDAs have contributed 57% of the presale value and has contributed 43% of the sale value. So while there is lot we lot the seeing market. Across various micro markets and the potential of to grow in over there is much higher.

8:28 Now let's if you look at our balance sheet, we maintained a highly disciplined approach to capital allocation. We closed the quarter with a net debt of INR $9.12 crores and a gross debt of INR 1,200 odd crores with a healthy debt to equity ratio of 0.8x. If you look at the net debt to equity ratio, which it will be closer to 0.5. So which remains comfortably well below our one:one ceiling and gives us ample headroom for growth going forward. Now backed by INR 300 crores liquidity buffer and a stable cost of debt at 9.6%, we are comfortably funded for our construction requirements over the current year.

9:20 Additionally, total interest cost for Q2 FY 'twenty seven is INR 44 crores, which includes interest on bank borrowings of INR 27 crores and INR 17 crores of interest to government authorities for various approval payments, which are which get paid over a period of time, particularly agencies like BMC, DMC and MADA, where the approval costs get paid over a period of time. And on the balance, the government charges a nominal interest without any documentation. Regarding our cash flows, if you look at, we have also shared a detailed breakdown of our first half FY 'twenty seven cash flows on as a part of our investor deck, you can refer to Slide 23 of our investor presentation.

10:18 You will see that our existing mature projects continue to deliver strong operating cash flows, which is being reinvested into recently launched and new yet to be launched projects. The reason we have broken it up is because it gives you a better insight, and it will help you understand in greater detail how the cash flow cycle for various projects move as they move from early stage to mid stage and then late stage. And as is typical for any new JDA project, it remains cash flow negative for the first two years due to upfront investments and then becomes cash flow positive from third year or middle of third year onward.

11:05 And then so it goes on towards positivity after that. So all our projects have very healthy IRR and strong underlying cash flows. Therefore, as these projects mature, we shall see the cash flows improving. Once we reach a steady state in terms of eight to 10 projects outside of Thana, which will be under execution and start throwing out cash and Thana is already net cash positive, you can see. So between these two, I think within I mean, my estimate is that within the period of two years, we will reach that steady state. And you will start seeing much more stability in cash flows, much more stability even on quarterly quarter on quarter numbers because the hyper growth phase will start to stabilize in the next two years. Just now in the last six years, and we are continuing in that hyper growth phase, which requires a lot of capital, and we have done this growth profitably.

12:17 It's always a challenge to display a profitable growth, but happy to share with you that your company has managed to grow in a profitable manner and yet maintained the financial discipline of not exceeding one:one debt equity. One more thing, I think, which I have heard echoes of, which I want to address just now is that a lot of people have asked me that your interest charge has gone up and the debt level has gone up, which is a fact. But if you compare it with last year, the last year, the debt level was extremely low because a lot of new projects had not launched and only mature or very early stage one or two projects were there in the annual. But last year, towards the end of Q4, we launched a lot of new projects.

13:15 And as a result of that, all these projects are in early stage, and they require capital to begin with. And because of that, the debt level has gone up. And if you look at a steady state debt level, one:one debt equity is a very healthy norm. Of course, we our endeavor is to stay well within that. And this debt level will also stabilize. So if debt level stabilizes, let's say, at this INR 1,200 crores, 1,400 crores level, then next year's comparison will not give you this kind of a delta, which you see because last year, the average debt was about INR 300 crores, 400 crores in that zone. And this year, the average debt is higher, but it is still at a very healthy level.

14:02 So moving on, as mentioned in our earlier conference call, our endeavor has always been to attract institutional capital with a focus to enhance scalability. We are also very happy to share that Raymond Realty's subsidiary company has raised INR $2.10 crores from AIF, which is promoted by ICICI Prudential AMC Limited. This is part of our ongoing process of addressing the cap table at the same time since I alluded to all the interest cost. Apart from that, the promoter himself has committed about INR 400 crores of equity that he is infusing. And the first tranche of that is going to be received shortly as per the schedule and balance will be as has been approved by the shareholders in the AGM.

15:01 And with this strategic collaboration with ICICI, our subsidiary will get INR $2.10 crores as part of the peak investment, which would represent almost 60% of the peak investment that project particular project needs. So this is this joint equity investment will directly fund the high value redevelopment project in one of the Mumbai's very premium micro markets. And this transaction actually validates our very disciplined asset light expansion strategy, where we continue to spread our risk as the project moves on and accelerates.

15:47 And we keep derisking ourselves and share the risk with other market participants. It allows us to accelerate project time lines. It allows us to grow even faster than we have grown in the past. And also, the most important part is it keeps our capital efficiency at an optimum level, which is what the endeavor is. So by leveraging this institutional capital, we can scale across premium micro markets without overleveraging our balance sheet, ensuring strong project delivery and enhanced returns. That's the conclusion of working on the cap table. Now looking ahead, if you see, we are accelerating our growth trajectory over the next two quarters. So H2, we'll see two launches from us. Both of these launches are going to be in Mahindra.

16:35 The combined GDP of these projects is about INR 4,100 crores approximately. Now so with a clear strategy and the land parcel that we have in Kane and GDA pipeline, which is already signed up, plus there are more JDAs, which are in the pipeline, which we will be signing going forward. Along with that, our operational intensity of committing to timely delivery and everywhere so far we have maintained before time delivery. And going forward also, all our projects are currently on time or ahead of schedule.

17:21 We see no significant challenge in maintaining that track record going forward as well. So as a result of that, we remain firmly on track to achieve our full year guidance of 20% minimum presales growth, return on capital employed of 20% and our EBITDA margins for the year will range between 17% to 19% and the PAT margin will be 9% to 10%. This has been our earlier guidance. We are maintaining that guidance. And as of now, everything is on track to deliver this performance that we have promised you. So with that, thank you once again for your continued confidence in Raymond Realty.

18:07 And I would now like to open the floor for questions. Thank you, sir. We will now begin the question and answer session. The The first question comes from the line of Ritu Shah with Adhumuti Advisors LLP. Sir, my question was with respect to the investment that we have received from ICICI EMC.

19:00 So what is the amount of stake that the fund would be received in their NX subsidiary for this 210 CR? So they have infused through OCPRS. As far as the economic interest is concerned, the deal is structured in a way where we are the execution partner, and we will be charging a fee to them for executing the project, which is about 5% of the total turnover of the project, we will charge as fee. And they are contributing 60% of the capital, which is required up to INR $2.10 crores of rupees, and we are contributing 40% of the capital.

19:48 So the balance profit which is left will be distributed in that sixty-forty ratio. So we will be contributing 40%, but we will be getting profit on that 40% plus 5% on top line. So that's the deal. Okay. Got it. And sir, you mentioned that we are comfortably placed at debt equity level, then we have already received the fund for the 10x subsidiary from IC AGI. Then why we have, you know, announced the preferential issue to the promoter. And if I recall before two or three con call, we said that we are not looking for any fundraise. So is there any major land parcel that we are eyeing? Or what is the major reason for diluting our equity currently?

20:43 So promoter has infused equity of approximately INR $4.10 crores. See, our ambition is to grow even faster and better than what we and we are doing it with a lot of discipline and the right kind of assets. So naturally, capital is needed. And as you are aware, with real estate companies, anyway, is showing concern on debt levels and interest cost and also we don't want the debt to go out of control. So naturally, the other option is to raise equity. As far as ICICI is concerned, that was always part of our plan. And it was baked into our annual operating plan for the current year that we will be getting money from some private equity player. And that will remain a strategy going forward. Also, if we get the right opportunity, we would continue to do this because it helps us in two, three ways.

21:47 One is, of course, we share our risk with other market participants. Second is we get access to capital so we can grow rapidly. And third is my margin profile also improves because I am charging a fee, which was never part of my revenue stream. So all three benefits we get, so we will continue to do that. So as a result of that, this has happened. The next question comes from the line of Avantika Jahar with Banyan Tree LLP. I noticed in this slide's presentation on the guidance, there hasn't been a guidance on revenue mentioned of 20 unlike last time where the revenue guidance was also called out of 20%.

22:45 I wanted to check if you're still on track on that? This year, we have not given a guidance on revenue growth. But if the revenue growth is lower and the EBITDA growth is 20, you should be happy because my margin is expanding. I'm not saying that it will be lower, but we haven't given a guidance on revenue so far because the reason for that is simple. As our operation becomes more complex and with so many projects and we follow percentage completion, there are many moving parts in calculation of turnover. So we didn't want to give a guidance where we were not 100% sure that we will be in a position to meet that guidance. But rest assured, as far as EBITDA is concerned, we will deliver a 20% and even on presale also, we will deliver a 20% growth.

23:47 Understood. I think that's clear. I was just just to clarify, I was referring to the August 'nineteen presentation, Slide nine, where you called out a revenue guidance also besides the presale one of 20%. But thank you for your response. So you can assume it will be within the similar range. It's not going to be significantly different. Got it. Thank you. Thank you. The next question comes from the line of Daksh with Tesfelato Research. Mr. Daksh, your line has been unmuted. Please go ahead with your question.

24:46 Am I audible, Yes. You are audible. Sir, I just have one question. Our interest expenses have already reached 91 crores this half. Do we still maintain the full year interest cost cap of INR 100 crores to INR 120 crores? Or will cost be elevated in the second half? I don't know where you got this number from, but our full year number will be in line with whatever is in H1. You can safely assume that it will be following the same run rate. Okay, sir. All right. Thank you. Thank you.

25:36 The next question comes from the line of Rishabh Kothari with Ashish Investment. Please go ahead. Sir, given the current macroeconomic uncertainty and the possibility of, let's say, 50 to 75 basis point rise in the interest rates over the next year, How do you see this impacting the homebuyer demand, particularly when it comes to MMR market? Do you believe that the underlying demand remains strong enough to withstand higher borrowing costs? Over to you, sir. Yes. So naturally, borrowing costs definitely impact higher ticket purchases. But the point is when is that tipping point an inflection point going to reach when it starts pinching household budgets.

26:27 At 25, 50 basis point, I don't see that will have any major impact where people will change their decision because their EMI is going to be impacted. And the reason I say this is and I'm only referring to our portfolio. I'm not talking about market in general and other players and what which segment they are present in Because our segment is very clearly mid market and above, we are not present at the bottom of the pyramid or even lower value apartments, which is most sensitive to these interest rate changes, where even a 75 basis point interest rate change will immediately reverse the decision or change the decision.

27:13 Our lowest value apartment in Thana is not less than INR 1.5 crore, and that's the lowest value. And bulk of our inventory is in the category of about INR 3.5 crores and onwards, going all the way up to INR 20 crores if we look at all the MMR inventory that we've got. In that segment, my belief is that unless interest rate really run away, there is not going to be any serious impact. The only issue with interest rates is that generally, if the economy starts to slow down because of that, but usually, that's with a lag, and you see early signs of that. As of now, there doesn't seem to be any major impact.

27:59 I guess India also doesn't have a choice looking at the interest rates in U. S. And the way our currency has behaved so far that they have to harden interest rate a little bit. But I think it's already priced in people's decision. Okay. It's already pricing. Okay. Sure. And sir, my next question is in terms of valuation. Sir, we listed at a valuation of around 6,500 crores. But despite delivering the growth in both top line and bottom line, our market valuation is still nearly 50% below the listing levels. How does the management view that significant disconnect between the company's operating performance, let's say, and its stock price? How concerning is this for the management And what steps are being taken to improve the institutional participation given the decline in DI and FII holdings since the listing, sir? Over to you.

29:01 Yes. So naturally, like you said, the performance has been good if we compare ourselves to our peers also in terms of growth, in terms of return on capital employed, our numbers really stand out. But yes, market is giving us a message that we have to work even harder and deliver better numbers. So we are committed to that, and we are working out strategies to see, like, for instance, this ICICI deal we have done is in line with that, which will improve our margins and our growth also further. At the same time, like you mentioned that the efforts in to reach out and communicate with the market, see, it's a three pronged strategy that we have come out with. One is, of course, the communication part, which we have to do. Second is we need to increase the coverage of the stock.

29:57 Since you rightly mentioned that we listed only in last July. And suddenly, we were not in any of the indexes. So a lot of passives sold our stock And we became a small cap. So a lot of mutual fund radar we were not on. So naturally, the strategy now is to look at all the market participants who focus on smaller cap companies so that the cap table for us changes, and there is more institutional participation. These things do take time. And we are already making efforts, significant efforts actually in this. And you will see this year itself that our coverage with a lot of institutional brokers and research firms, the coverage will increase. So far, there was only one entity which was covering us. And we are expecting by the end of this year, at least four people will be putting out report on us and covering us.

31:02 So there is more information available even if people have interest, they didn't have any place to go to other than talking to management. And not everybody has the time to do that. So that's one effort. Then Amit, who is on the call with me just now, Amit Sabarwal, he has joined us as Head of Investor Relations. And he has started his outreach with all the mutual funds who focus on smaller caps and also other institutional participants in the market so that there is a constant connect and communication about the good work that we are doing. Now these are the two things we can do. And third is, of course, through PR activities, whatever work we do should get publicized with public at large that you would have noticed that we are doing as much as we can, everything any significant event which happens, we communicate to the market.

31:58 So I guess it's just an equation of time, maybe a couple of quarters more of these efforts will start showing results going forward. So that's what we are doing. The next question comes from the line of Tananjay Mishra with Central Broking. Yeah. Hello, sir. This 14,800 unsold part, what proportion is it to be launched in this? I mean, Yes,. Sorry. Can you repeat? We have 14,800 of unsold inventory, and within that also, we we have to...

32:50 Certain part, we have to launch, right? So what is that also? So, basically, that changes from project to project. And therefore, as a footnote also, we have mentioned that in the next year, have given project by project breakup. Basically, how many units have been launched. For example, in Madala, the total inventory is, for example, 1,500 units. But only currently, six seventeen units have been launched, which is like almost kind of 45% of the inventory has been launched in that particular project. Although the GDV of the project overall is INR 5,000 crore. But within that, only 45% has been opened up right now. And within that, we have already sold around 60% kind of around three seventy units plus. So that way, we have given every project by project break up in the next year, if you check.

33:38 Yes, that is there. So I just wondered the consolidated figure. I mean, if it is ready, I will I will... I I can I can share that with you? We'll communicate separately that with you. We don't have it readily available just now with us. Okay. Okay. And secondly, on this 14,300 crore project level cash flow you are talking about, likewise, what will be the net operating cash flow, if you can give some estimate over next four, five years? So with the current portfolio, so this has been prepared keeping in mind the current portfolio, which is INR 52,000 of the GDV as it gets executed. So in that, this is the project level cash flow of around INR 14,375 crore. Within that, if you see, we have mentioned that there would be selling and marketing expenses to the tune of around 5% to 6%.

34:30 And there is a corporate overhead, which is currently at around 5%. But as we grow in size, maybe it might reduce. But even if I take the 5% as is figure, then you can reduce the 10% from that. So it is around INR 10,000 crores kind of pretax cash flow that will be getting generated from this current portfolio. Okay. So 10% of the GD value, GDV value of INR 50,000 crores, we can exclude. INR 50,000 crores because only the unsold and unlaunched inventory, INR 38,008 ten percent, which is like 3,800 crore you'll have to reduce. Right. So 10,000 crore net operating cash flow, we can assume over next four, five years. Correct. As we execute these projects. Correct. Okay. Okay. That is It would be pretax.

35:16 And this Mahim, again, we have Mahim one and two. We are launching close to 4,000. So that will be also launched phase wise. Right? Not entire Yes. So so so we are we are launching currently in q three one project and in q four one project. Okay. Okay. That is all from my side. Thank you. Thank you. The next question comes from the line of with Swan Investments. Please go ahead. Hello, sir. Thank you for the opportunity. My first question is with respect to IPI deal that we did. So can you expect to receive the entire sum by H2?

36:09 Yes. So this money, obviously, will come in tranches. The first part of that money is expected in the next thirty days. And the balance should come towards the end of this year. So by end of this year, by March, we would have received the entire sum. Got it. And also, it is for 10x Realty West. So is my understanding that it is for the Mahim project that we are planning to launch or any other project also? So currently, this investment is against the Mahim project. Okay. And at the time of launch, how much inventory are we planning to open for sale?

36:56 We haven't taken that call yet. Closer to launch, we will decide on that based on market conditions and feedback from the participants. Okay. Also, the sustainment sales was very good in the last two quarters. So can we expand the same trajectory to continue in coming quarters as well? Actually, it will be better than H1 because the festive season is now beginning. And typically, the sales are better. That's been our experience over the last few years. Okay. Also, doing this deal with IPRO, like is this IRR accretive to us? And will you consider to do similar deals for other upcoming projects as well?

37:46 Yes, it is definitely IRR accretive and quite beneficial for us. And we will certainly for the right project, we will certainly consider this going forward. It's part of our strategy. The next question comes from the line of Jayanam Shah with Equatorial Securities. Please go ahead. Yes. Hi. Hope I'm audible. Yes. You are. Yes. So this would be some kind of a longer term question. So if we see our company, we started with the Thailand. Over the period of time, we added new JD approaches across the region.

38:32 And now we are doing almost fifty fifty in terms of our overall JDB as well as in terms of pre sales between and non. And we are now expected to grow at around 20% for this particular year. If we see, let's say, next five year trajectory for the company, how do we see the pre sales CAGR growth that we can achieve? And this would be in conjunction with what kind of BD activities we wanted to do every year to make sure that our growth happens. Along with that, how the capital will be managed to make sure that that growth happens without any deterioration in the overall financial, you can say, numbers as well. So if you can just guide us how we think our company moving forward over next, you can say, four, five years kind of a medium term perspective? Sure, sure. Your question is actually very well timed. We have just finished our activity of long range planning because the earlier long range plan that we had will be finishing by the end of this year. So for the next five years, we have just finalized that looking at all the facts and figures and everything. So you can expect approximately 20% CAGR as well as presale is concerned over the next five years.

39:42 And in terms of capital, we as of now, we don't see any significant requirement for capital, maybe in the range of INR $506,100 crores of equity going forward we may need apart from what we have already raised. And lot time have do we see a good that. Growth going forward. Of Given our strategy, there is a lot of interest that we have. As far as business development and GDV is concerned, going forward, if we add about INR 8,000 crores to 10,000 crores worth of GDV every year, it should give us this kind of a target easily, given that we already have a strong base, which has been established in the last few years.

40:43 Got it. One more question on this, how you would be targeting against the land acquisition? Will it be like, let's say, adding up something like 500 to 1,500 kind of for pre sales velocity kind of a land and then you can be churning it out as early as possible in four years? Or will you find out a large land parcel and that project can go on, you can say for ten years kind of a thing with phases and all those things. So any specific thing that we would be doing in this particular thing, or we are open for everything as of now? I mean, we are obviously in business. So we are open for any good opportunity provided it meets my financial criteria and the promises that I have made to all the stakeholders. Having said that, as of today, buying land and sitting on it is not my strategy.

41:31 So even if, let's say, I was I had I decided to buy a land and it was very attractive, it will be in the market as quickly as possible. If at all, I was to do that. But our stated strategy is to do JDAs. Got it. Just last question from my side. Remember, you guys are good guidance that you are giving in terms of presales. How do we generally assume this? Like, the market growth would be, you can say, 20 odd percentage, and we'll be maintaining the market share or, like, the market growth. Whatever will be the market growth, our positioning would be such that we will be doing this 20% kind of a CAGR number. How do you see overall market versus our market share in a particular market? Or it's a broader MMR share? So see, the way we look at it is our margin of participation in the market, market share is so abysmally low today. I mean, Bombay sells INR 2.5 lakh crores of real estate every year.

42:36 And that's a ballpark number. Probably, it will be higher. And what are we doing? We are very, very small as percentage of that. So I don't think market growing and all really is in a hypothesis. If I was Coke, I had 50% market share, then I have to worry about that. Today, I can grow just by entering a new micro market or starting a new project or starting a new product line also. For instance, Thana, when we started out, we had started out with a sale of INR $405,100 crores in a year, and we are currently doing between INR 1,500 to INR 2,000 range every year, it's different. So let's say, Thana will stabilize at INR $1,516,100 crores per annum. I don't see any significant growth coming beyond this number from Thana.

43:28 But all the other projects that we have got, some of them are early stage, and then we are launching new projects. We are entering new micro markets. So a lot of growth will come from there. And as a result of that, managing and maintaining that growth is not such a big challenge. The bigger challenge actually is executing all those projects for which we are fully geared up and our track record shows that we can manage that. So growth will come. I mean, that's not a matter of concern to us because there are so many micro markets and new products that we have yet not touched. Got it, sir. Got it. And any other market we would be trying in maybe NCR, South, Southern India, Pune, anything in the near term or we will be focusing more on the MMR only as of now?

44:23 As of now, our focus remains that. But like I said, we are opportunistic. If something comes, which meets my financial criteria, and I'm confident of executing it, we will definitely consider it. But our key criteria is going to be it should meet my financial metric, and I should have the execution capability of doing a project like that. We will not take speculative bets. Got it. Got it. Yes, that's it from my side. Thank you so much for the. The next question comes from the line of Bhavan Modi with Anandrati. So my first question is with respect to the debt levels. Right now, we stand it down INR 1,200 crore gross debt.

45:13 So going forward, should we see this as the peak debt level and now it should come down, right? Should we still see some inch up in the debt? And what was the promoter contribution is done, right? So would it be utilized towards this debt repayment or would it be towards the projects? Yeah. Sorry, carry on. You... No. No. This was my first question. Should I answer that first or you want to... Yeah. You can answer, you know, then I will follow-up with my other questions. Sure, sure, sure. So see, as far as debt is concerned, I mean, it's a strategy of how you are going to manage your capital table.

45:58 So like we have stated that we will remain within one is to one. And at the end of the day, it makes eminent sense to have some kind of debt on your balance sheet because debt is available to me at under 10%. And all my projects give me an IRR of 20% to 25%, around 25%. So it makes eminent sense. And equity anyway is available at a higher rate, and nobody likes dilution unless it's really necessary. So having said that, debt, to answer your question specifically, we are at 1,200. It will not come down at least for the next one or two years for sure because we are continuing to grow and we are adding new projects, and we want grow and we don't want to raise any kind of significant equity going forward.

46:55 Like I said, our requirement as per the LRP is in the range of maybe INR 400 to 600 crores additionally and not more than that. So debt is avenue we will definitely resort to. And it will remain around this range. So I think we I don't see any challenge in maintaining that kind of range. And it will still be within one:one. Got it. Got it. And sir, to follow-up with the related question with respect to the fund infusion done by the ICICI, right? So first thing, our INR 140 crore heavy already infused. And second thing, from the debt perspective, if the instrument is OCPRS, right? So I believe from the bookkeeping perspective, there will be some portion which will come as a debt and some will be recorded as equity.

47:53 So, optically that will also in a way inch up our debt, right? Am I right in my understanding? No, it will not reflect as debt. Because it dependent on the terms that you agreed And our terms are that this is equity that we have got from ICICI. And only for ease of movement of cash flow, they have structured it as OCPRS. And there is no reason for it to be classified as debt on our balance sheet. Understood. Understood. So second thing is with respect to our pre sales guidance. So we have guided 20% growth. So that will be in a turnout between INR 3,500 to 3,600 crores. And we have already done INR 1,600 crores of like the pre sales already in H1.

48:46 So we are still spending with INR 2,000 crores, right? And if even if I expect Mahim conversion to be the 25%, so can we safely assume that we are assuming INR 1,000 crores of pre sales from our existing portfolio? No, it will be much more than that. Okay. Okay. And sir, what will be the like the in this quarter, we saw out of the INR900 crore, INR700 crore came from the address by GS product, right? So can we assume Mahim product to be more of a address type of a thing rather than the Invictus product? So have we decided on the product category for the Mahim? Yes. So one Mahindra will be in vectors and the other Mahindra will be address.

49:35 Okay. Got it. And so just last question with respect to the overall, we have been here tracking the and seeing a bit of a, you can say, a flattishness in terms of luxury and ultra luxury projects. And even in our case, when I see the Invictus in Thane, there was almost like the Tawabi, there was almost like no sales. And I think BKC, we saw this sale units of 14 units. So shall we see this as a more as a momentary thing? Or there is a underlying pain in the luxury or ultra luxury products? So how should we see this? Thana was you you treat Thana as our lab that where we test our various products.

50:25 So Invictus actually is a product for Bombay market and not really for Kannathana per se because of for the obvious reasons, ticket size and what have you. So the kind of clientele that we have. After having tested it in Thane and seeing success in Tower A, if you see, we have introduced very limited inventory of Invictus in Thane. It's not as though we've saturated the market. 100 units launch. So it's not any I mean, don't go by percentages, they are misleading. But we haven't introduced any significant quantity in Fana market. As far as Bandra is concerned, the Bandra in Victor did exceedingly well way beyond our imagination it has done. Now we don't have upper floors available to us in BKC just now because of the aviation approval, which is pending, which is expected shortly. It should happen in the next few weeks. Once that comes, then you will see sales because currently, our choice is also limited as far as consumer is concerned because of the typical nature of the product and Invictus. Those guys actually don't mind paying more money, but they want a certain type of apartment.

51:50 And those apartments are today not available because of the approval. I have to get rare registration of those once I have the approval. And then those you will see sales pick up in Victor's BKC also. We already have a strong pipeline for higher floors where people are just waiting for my approval to come. Okay. So sir, just last question. So from this thing, from this experience, can we see any of going future, if any, you know, project that comes in, you know, so the lower flows will be, you know, the address product and the higher flows, you know, we can, you know, we can have a mix of, you know, investors. So can we see that mix, you know, going forward in our product or it will be like, you know, totally, you know, a particular tower allocated as address or in vectors? How or can we see the mix combination?

52:42 See it will always be a separate tower. It's unlikely that we will mix address and investors in the same tower. It's highly unlikely. Got it. Got it. Yes, that's it from my side, sir. Thanks. The next question comes from the line of Deepak Pouda with Saphy Capital. Thank you very much for this opportunity. So just wanted to clarify, I mean this year we are looking at EBITDA growth of about 20%. Is that the right understanding? I think you mentioned somewhere to the previous participants. That's right. So I was just doing back up the envelope calculation. So ideally, because we are expecting some margin expansion also from 17% to 19%, and earlier, I think last year, was 16.5%, including your other income.

53:39 So ideally, in spite of EBITDA margin expansion, we are expecting 20% EBITDA growth. So ideally, the revenue growth will be low double digit or high single digit rate. I mean, if I have to calculate backward, yes. Is my understanding correct? You got the same calculator as me, my friend. But to be serious on this, see, this is a question which one of the other participants also asked. So we haven't given a guidance as far as the top line is concerned, but it's not be very different from a 20% growth. I don't have an exact number to guide you with, but it will be in that range.

54:30 Okay. Okay. Okay. I got it. That would be from my side. All the way. Thank you so much. Thank you. The next question comes from the line of Ehaz Paramesh with Claritian Management. Please go ahead. Hi. Am I audible? Yes, sir. Yeah. Hi, mister Sunny. Thank you so much for the opportunity. Again, congratulations on both the fundraise as well as the great set of numbers. I just had a quick question on the cost side of things. What I've been observing is that with a lot of these EPC contractors as well as what I'm seeing in the market as well is that construction costs, labor, has increased after the April elections.

55:29 And with crude oil where it is, you know, I think construction costs and raw material costs have gone up across the board. So one, the the question really is, like, surely, these costs should moderate apart from labor, I guess, which will remain elevated at this price. How are we placed on that? Do we have fixed contracts with these EPC contractors and builders that were able to maintain our costs? Or are we... Do we have the flexibility of passing on the price increases or the cost increases to the end customers? So that's the first question. The second question is on the OCPRS raised from ICICI.

56:14 Is there a preference dividend or is it a 0% dividend? Is it cumulative? That was the second question. What is the... You know, if there's any dividend attached to that reference shares? Yes. I'll answer your second question first. As far as the OCPRS is concerned, the coupon is virtually zero because, like I mentioned, it is actually an equity investment that they have done. It's only for structuring point of view, it is OCPRS. So there will be no dividend payout. It is effectively zero. So that's one. The other is as far as costs are concerned, naturally, it is a matter of concern for the entire industry today.

57:06 And not just our industry, it is a matter of concern for the entire economy, for the entire world. But the projects which are under execution as of now, where contracts have already been given, there these are all fixed price contracts. There is no provision of increases that anybody can ask for. Even if they ask for it, it's not going to be easy. We had a similar situation when the war broke out also and suddenly, there was panic. And now, of course, things have settled down quite a bit. And there was no relenting from most of the industry participants on contracts, which were already awarded. But despite that, all our projects have a healthy level of contingency that we provide because it's a project activity to be executed over a four-, five year period.

58:04 So it is prudent to have some contingency available within your budget to absorb any kind of fluctuations in cost because there are always reasons. And every time, it's a different reason, but there is fluctuation. Sometimes the seasonality itself plays out, cement, steel and labor is something which will anyway keep on changing. So as of now, yes, it's a matter of concern. But on the ongoing projects, there is no immediate impact that we have today. The projects which will get launched in future will definitely have that impact. But we are factoring that in our planning and the way we are pricing them. So part of it will get passed on to the customer. And part of it, we will absorb in our contingencies.

58:56 And that's how we will maintain our margins going forward also. Of course, all this is subject to this not being prolonged into years and years of inflationary pressures. But if it is temporary, I think there is enough resilience in the numbers to absorb that. Got it. Thank you so much. You're welcome. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Thank you everyone for taking time out and attending our Q2 and H1 FY twenty twenty seven conference call. Please feel free to connect with us for any further queries or any further details and we'll be happy to share all the answers as well as all the data which is required. Thank you. Thank you everyone.

59:55 Thank you, sir. On behalf of Antique Stock Broking Limited and Raymond Realty Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.