Suraj Estate Developers (NSE:SURAJEST) Q2 2027 Earnings Call

0:01 Ladies and gentlemen, good day, and welcome to the q two and h one FY twenty seven earnings conference call hosted by Suraj Estate Developers Limited. As a reminder, all participant lines will be in a listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I would now hand the conference over to Mr. Rahul Thomas, Hold Time Director from Suraj Estate Developers Limited. Thank you, and over to you, sir. Good afternoon, everyone. I welcome you all to our Q2 and H1 earnings conference call. Along with me, I have our CFO, Mr. Sripal Shah and SGA, our Investor Relations Advisers.

0:54 I hope all of you have gone through our investor presentation upload on the stock exchanges and our company website. Before taking you through our performance, let me briefly touch upon the real estate market in which we operate. South And Central Mumbai continued continue to be among the city's most established and premium real estate markets. These locations benefit from well developed social infrastructure, strong connectivity, proximity to key employment centers and an established commercial ecosystem. In the commercial segment, locations such as the CBD and Worley continue to see limited availability of quality grade A office spaces, while Lower Pearl remains as an active leasing destination, supported by demand from established corporate occupiers.

1:41 This, coupled with limited development opportunities in these established locations, supports the premium positioning of the commercial market. On the residential side, South Central Mumbai continues to attract demand across the value luxury and luxury segments. Established neighborhoods such as Worli, Prabhadevi, Lower Farrell, Farrell, Dagar and Makunga remain preferred destinations for homebuyers. Overall, we believe that the established nature of these locations, continued demand from homebuyers and commercial occupiers and the availability of redevelopment opportunities will continue to support the long term attractiveness of South Central Mumbai.

2:53 Coming to our business performance, we continue to witness healthy momentum sales momentum during the quarter. During Q2 FY 'twenty seven, we recorded a sales value of INR $20.06 crores compared to INR 153 crores in the corresponding quarter last year, registering a growth of 35% year on year. Sales area increased by 19% to INR 41,004 hundred and eighty seven square feet, while collections stood at INR 104 crores, reflecting a growth of 46% over the previous year. On a half year basis, sales value stood at INR $3.47 crores, registering a growth of 48% year on year. Sales area increased by 37% to INR 70,000 three hundred and twenty one square feet, while collections stood at INR 190 crores compared to INR 186 crores in H1 of FY 'twenty six.

3:45 This performance reflects the continued contribution of our residential and commercial development and the healthy traction across our project portfolio. One of the key highlights during the quarter was the encouraging response to SURAJ ONE Business Pay, our marquee commercial development in March. This project has witnessed strong market traction, 100 crores worth of inventory sold since its launch. We have also completed the acquisition of development rights for the adjoining land parcel, which will further enhance the scale and development potential of the project. With this expansion, the combined project will have an estimated saleable area of 3.59 lakh square feet, taking its GDV potential to around INR 2,000 crores compared to the earlier estimate of 1,200 crores.

4:40 We believe this expansion will further strengthen our commercial portfolio and consolidate our presence in the Mahi micro market. In addition, we have received commencement certificate for Lobo Villa and Ellis Villa, which is now named as Suraj Nova, and work on the project has commenced. Located in Mayim West, this value luxury residential project is planned for the launch in Q3 FY 'twenty seven with RADAR registration also expected during the same quarter. Similarly, we have received commencement certificate for Suraj Madonna, a value luxury residential project in the other West, which is also targeted for launch and RADAR registration in Q3 FY 'twenty seven. Together, two projects have an estimated combined GDV of INR $2.50 crores and are expected to further strengthen our presence in the South Central Mumbai market.

5:29 Moving to our overall project portfolio. As of September 26, our ongoing projects had achieved a cumulative sold area of 6.36 lakh square feet at an average realization of approximately 46,170 per square foot. Collections received from these projects stood at INR $17.70 crores with a balance receivable of approximately INR $11.68 crores. In addition, our unsold area stood at 1.20 lakh square feet with an estimated GDV of around INR $70.08 crores. Taking together the balance receivable from sold inventory and estimated value of unsold, the total estimated receivables from our ongoing projects stand at approximately $18.76 crores, providing healthy visibility of future cash flows.

6:21 Currently, we have 13 ongoing sites with a development area of 23.54 lakh square feet and a saleable RADAR carpet of 7.57 lakh square feet. In addition, our upcoming pipeline comprises of 18 projects with an estimated GDV estimated carpet area of 13.46 lakh square feet. This provides us with a strong pipeline to support our growth in the coming years. Looking ahead, we remain positive about the long term prospects of South Central Mumbai real estate market. The combination of sustained demand for premium housing, established commercial locations and redevelopment opportunities continues to create attractive growth opportunities for the company. Our focus will remain on progressing our ongoing projects, bringing upcoming developments to the market, maintaining healthy sales and collection momentum and selectively pursuing redevelopment opportunities that complement our existing portfolio.

7:19 With our established presence across South Central Mumbai, strong understanding of the local market and the growth pipeline, project pipeline, we remain confident of achieving our FY 'twenty seven pre sales guidance of INR700 crores. With this, I would like to hand over the call to Mr. Shri Pal Shah, who will take you through the financial performance and the key operational highlights in greater detail. Thank you. Thank you, Rahul. A very good afternoon, everyone. I will now take you through the financial and operational performance of the company for Q2 and H1 FY twenty twenty seven. Starting with our financial performance. Today, the total income for Q2 FY twenty twenty seven stood at INR171 crores compared to INR 145 crores in the corresponding quarter last year, registering a growth of 18% year on year. EBITDA for the quarter stood at INR 56 crores compared to INR 66 crores in Q2 FY twenty six with an EBITDA margin of 33%.

8:24 Profit after tax stood at INR 23 crores as against INR 33 crores in the last previous year. For H1 FY twenty seven, the total income stood at INR $3.17 crores, registering a growth of 14% year on year compared to INR $2.79 crores in H1 FY 'twenty six. EBITDA for the first half stood at INR 111 crores compared to INR 116 crores in the corresponding prior last year period, with EBITDA margins of approximately 35%. Profit after tax for H1 FY 'twenty seven stood at INR 46 crores compared to INR 54 crores in H1 FY 'twenty six.

9:11 Moving to our operational performance. We continue to see healthy sales momentum across our portfolio. During Q2 FY twenty seven, we recorded a sales value of Rs. $20.06 crores compared to Rs. 153 crores in the corresponding last year quarter. Sales area increased to 41,487 square feet from INR 34 thousand eight hundred forty six square feet, while collections during the quarter stood at INR 104 crores. For the H1 FY 'twenty seven, sales value reached INR $3.47 crores compared to INR $2.34 crores in the previous year. Sales area also increased to INR 70,000 three hundred twenty one square feet from INR 51 thousand three hundred seventy two square feet, while collections stood at INR 190 crore. This reflects continued traction across our residential and commercial developments.

10:11 Moving to our debt position. As of 09/30/2026, our gross debt stood at INR800 crores and net debt stood at INR1710 crores. The increase in debt was primarily driven by business development activity and capital deployment towards our ongoing and upcoming projects. Overall, we continue to focus on maintaining healthy sales and production momentum, while ensuring timely execution of our projects and strengthening our development pipeline. With this, I would like to hand over the call to the moderator for question and answer session. Thank you. Thank you so much. We will now begin the question and answer If you wish to remove your cell from question queue, you may press star and two.

11:05 Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment for the question queue assembled. The first question is from the line of from JH Investments. Please go ahead. Hi there. Thank you for this opportunity, and hopefully, I'm audible. Sir, can you speak little louder, please? Yeah. Am I audible now? Yes. Okay. So I had a couple of questions. The first being that with the h one presales had $3.47 crores against the guidance of 700.

11:55 Like what is the expected contribution from upcoming launches and existing projects in the second half of the year to achieve the guidance? So the guidance, which we have given of INR 700 crores, primarily will be coming mainly from the ongoing projects, which are already launched and also a couple of upcoming projects, which are the residential components. But if I have to give you a broad nutshell, it should it will come mainly from the projects which are launched and especially because of our commercial, which is doing well, we expect good traction from that project alone. Okay. Understood. And the second question being that following the acquisition of the development rights for the adjoining land at SURAJAN one business day, like what is the expected time line for October's construction commitment and also the execution of the extended project?

12:57 So we've already received the approvals in terms of concession plans and also have obtained the environment clearance, which is the major lagger in terms of time. So we are in the process of issuing the IOD for the combined potential. And work is we already have CC for the first phase. So work has already commenced. And in fact, we've also casted some part of the basement and the raft. So only the amalgamation of the two plots and excavation is pending of the additional component, which we expect within the next sixty days. Thank you. A reminder to all the participants, you may press star and want to ask question.

13:48 Next question is from client of Rohit Kumar from ADM Advisors. Please go ahead. Yeah. Thank you, sir, for the opportunity. Sir, in the previous call, you have indicated that the FY twenty seven launch pipeline approximately 1,600 crores. So with a major launch expected across Q2, Q3 and Q4. So could you please provide us an update on the execution of this launch pipeline and indicated whether there have been any changes in the timeline? To answer your question, the total project pipeline, which we are going to launch in this FY 'twenty seven is 1,600, out of which 800 is from the second phase of the commercial project, which we are expected to launch by end of this back end of this quarter, which for which I think we have already got the environment in clearance. Major component is that we are very confident we will launch by the end of this quarter.

14:54 Having said that, the balance 800,000,000 comes from the residential portfolio, of which $250,000,000 we are targeting to launch this particular quarter and balance should come in the fourth quarter. Okay. That answered my question. Thank you. Thank you. Participants may press star and one to ask question. The next question is from the line of Palikaj Jain from Jain Securities. Please go ahead.

15:40 Hi. I'll take some for your question. I have a couple of questions related to debt. So first one is, like, your debt has decreased to around 700. Could you please provide us an update on the cost of debt and your expected debt going forward? Secondly, what has been the primary replacement of the additional borrowing? And how the company plan to manage this whether they will be coming forward? Yes. So the net debt has increased by close to INR 96 crores. So in that, majorly, we have done the acquisition of the development as of the backside with for consideration of close to INR 85 crores, including the $10,000,000 And it is deployed towards the upcoming portfolio, which will be part will becoming part of the ongoing portfolio after the end of this quarter.

16:50 With regards to the reduction of the other debts, we have five to six projects which we are handling over this particular financial year, which will automatically bring down the debt by 150 crores. Hello, mister? Yes. And, sir, what is the cost of what is the cost of debt and how we are expecting the leverage in the coming quarter? So it will be close to $13.13.25 percent range. Okay. And anything on the leverage part, like how we are expecting in the coming quarters?

17:40 So we are targeting to bring the net debt to close to INR600 odd crores. Okay. Okay. Understood, sir. Thank you. Thank you. The next question is from the line of Rohit Mehra from SK Securities. Am I audible, sir? Yes. Sir, my first question is, could you please provide an indicative time line for monetization of $11.68 crore balance reserves from sold inventory and also expected contribution towards the cash flow over the next year and two?

18:31 Suraj, basically, the sold receivables are spread across various sites. We can give you an integrated time line on the projects which are closer to completion. So those will be coming immediately. And also the possible milestones where the payments of cash flow will come from the clients for the sole receivables, which are the projects which are under construction. So I think that we can ask our IR to send you roughly on the next one year, what are the cash flows coming from the completed projects, which are almost getting completed and the ongoing inventory. Sure, sir. That will be helpful. And also in the previous call, you indicated that FY twenty seven launch pipeline of approximately around INR1600 crores and major launches are expected to be after quarter two in second half of the year. Could you provide an update on execution of this launch pipeline and indicate whether there have been any changes in the timeline?

19:33 That will be helpful. So as I think Shripal answered it in the earlier question, crores over the INR1600 crores is coming from the commercial launch of One Business Pay, which we said we have acquired, and we expect that within this quarter itself, the current quarter as Q3. We have already received CC that's INR800 crores. We've already commenced work in our project called Suraj Nova, which is shown as Lobo Villa in our presentation. That is approximately that and another project called Suraj Madonna, both these sites have already obtained the commencement certificate, which has a GDV of INR $2.50 crores. So INR 800 crores plus INR $2.50 crores is INR $10.50 crores of launch pipeline is already planned for Q3.

20:25 And we have the others which we're expecting by Q4. So that's roughly the balance of INR $5.50 crores. Yes, got it, sir. And my last question is, could you provide some color on expected cash flow contribution from key projects, particularly Surajwan business there over the next few years? So we are following a very simple model of a construction linked plan. So it is between 20% to 30% on booking and 4540% to 45% on the plinth and construction link plan. So I think we're just following a very standard plan. There's no subvention or no payment terms apart from the standard payment option, which we're giving to the Got it, sir. That's it from my side.

21:21 Thank you and all the best. Thank you. Thank you. The next question is from the line of from Pratas Securities. Please go ahead. Hi, sir. Thanks for providing the opportunity. Sir, I had two questions. Firstly, if you can provide the... Some update on the progress of the Bandra project that we had, particularly regarding the completion of remaining land acquisition, legal formalities, and also what would be the expected time line for taking this project forward as in commencing the launch? So the Bandra pipeline in terms of acquisition, we have only one acquisition pending. The rest are almost it's already closed. We are following certain of the lands, require certain charity commissioner and other approvals, which we are work is underway. So I think barring one line, I think everything else is already acquired.

22:34 Okay. And second question, sir, is apart from the project currently under development, are there any other redevelopment opportunities that the company is actively evaluating, especially in South Central Mumbai? We are actually looking at a couple of sort of society redevelopments, which are time locations of South Central Mumbai and also a couple of build to suit commercial transactions because we're seeing the commercial market quite wide. And we feel that there are some good opportunities in South Central, which we can kind of put our hands on. And so I think commercial broadly, a couple of society developments and one or two commercial opportunities. That's what we're looking at The The next question is from the line of Rohit Kumar from ADM Advisors.

23:41 Please go ahead. Yeah. Thank you. Sir, my question is basically, do you see the contribution of residential and commercial developments evolving over the next two, three years? Could the commercial products become a structurally larger contributor to profitability and cash flows? Yes. I think the commercial segment overall will form a larger part of the cash flows because not by anything, but by sheer size of the project. One business by itself is INR 2,000 crores. So I think that itself will create a larger contribution in profitability and then on the top line of the projects and the cash flow.

24:29 We're also exploring new opportunities in commercial because we see the market is quite buoyant. So I think that will definitely play a larger role, but we are also having a value luxury of one and two VHCs continuing because that segment is also doing well. We are not doing a very ultra luxury projects right now in terms in South Central Mumbai particularly because we feel that the value luxury of one and two BHKs in the commercial segment is what we feel is going to well. Okay. And sir, given your strong presence in the South Central Mumbai, are you witnessing any improvement in the availability and attractiveness of redevelopment opportunities? How means acquisition cost and deal structures become more competitive?

25:21 So we are looking at a couple of society redevelopments. In fact, we are in a very in advanced stages with a couple of them, which we shall announce in due course. So I think society development, and as I said earlier, a few commercial opportunities is what our strategy is for the new acquisitions. Sir, my third question was basically, do you intend to remain focused on South Central Mumbai or are you evaluating opportunities in other Mumbai micro market where redevelopment economics may be more attractive? No, we are focused on South Central Mumbai. And I think the kind of opportunities that we get here, being a known player, especially with the landowners, with the tenants, with the society members, I think that kind of opportunity, we won't get somewhere else, which at least for now, we feel like we are quite content with being in this location because we see great opportunity, and it's been a very, very steady market in terms of from a market a larger market perspective.

26:29 Just to add to, Raj, since large part of the land parcels form part of the inventory, we would like to explore executing these land parcels before we move out to a new micro market as well. Okay. Thank you, sir. That's it from my side. Thank you. As there are no further questions from the participants, I would now hand the conference over to management for closing comments. Over to you, sir. We thank everyone. We remain focused on our timely project execution, maintaining healthy sales and collection momentum and strengthening our development pipeline.

27:16 With our established presence in South Central Mumbai and strong redevelopment capabilities, we are confident about the opportunities ahead. We thank you. Thank you. On behalf of Suraj Estate Developers Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.