Q1 2027 Keystone Realtors Ltd Earnings Call

August 4, 2026

Sajal Gupta: Thank you. Thank you so much.

Speaker #1: Ladies and gentlemen, good day and welcome to the Keystone Realtors Ltd. Q1, FY27, earnings conference call hosted by Axis Capital. As a reminder, all participant lines will have been the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Speaker #1: Thank you. The next question is from the line of Devyansh Jadu from 3Netra Asset Managers. Please proceed.

Operator 2: Thank you. The next question is on the line of Divyansh Jaju from Trinetra Asset Managers. Please proceed.

Operator: Thank you. The next question is on the line of Divyansh Jaju from Trinetra Asset Managers. Please proceed.

Speaker #4: Devyansh. Hello, sir. Thank you for the opportunity. Just want to understand first from your you pulled out only. What are the criteria which are there to a project get canceled?

Boman Irani: Divyansh.

Divyansh Jaju: Hello, sir. Thank you for the opportunity. Sir, just want to understand, I am just a bit confused out on this, what are the criteria which are there to when a project gets canceled?

Speaker #1: Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded.

Speaker #1: Aina hand over the conference to Mr. Pratesh Nair from Axis Capital. Thank you, and over to you, sir.

Boman Irani: I couldn't hear you very well. Could you please repeat?

Speaker #2: I couldn't hear you very well. Could you please repeat that?

Speaker #4: That's my first question. On what criteria does a project get canceled? What are the criteria on which a project gets canceled?

Divyansh Jaju: Sir, my first question was that on which criteria any project gets canceled. What are the criteria on which that project gets canceled?

Speaker #2: Thank you, Shruthi. Good afternoon, everyone, and welcome to the call. From the management of Keystone Realtors, we have with us Mr. Barman Irani, Chairman and Managing Director.

Speaker #2: Mr. Chandesh Mehta, Executive Director. Mr. Percy Choudhury, Executive Director. And Mr. Sajal Gupta, the group CFO. I'll now hand over the call to management for their opening remarks.

Speaker #2: Yeah, Devyanshu, I think Mr. Pamanirani has already mentioned that we have certain guardrails. The project has to meet our guidance in terms of the gross margins. Generally, we would like to work on a gross margin of 35%.

Sajal Gupta: Yeah, Divyansh, I think Mr. Pavan Irani has already mentioned that we have certain guardrails. The project has to meet our guidance in terms of the gross margins. Generally, we would like to work on the gross margin of 35%. Having said that, it should be little more on the luxury side or the premium side of the project, and little lower on the emerging premium side of the project. Secondly, we are very conscious about the investment, that how much of our investment is going. Generally, we believe in the asset-light model that we should be investing about 10% of our total GDV before the project go live. Third is the kind of a market that we are operating in. We are very conscious about the location. Either it should be infrastructure-led location or it should be the location which has a blue view or a green view.

Speaker #2: Over to you, Barman sir.

Speaker #2: Having said that, it should be a little more on the luxury side or the premium side of the project, and a little lower on the emerging premium side of the project.

Speaker #3: Hello.

Speaker #2: Yes, sir. Over to you for the opening remarks.

Speaker #2: Secondly, we are very conscious about the investments, about how much of our investment is going. Generally, we believe in the asset-light model, that we should be investing about 10% of our total GDV before the project goes live.

Speaker #3: Sorry, we lost you, Pratesh. Should I just take over? This is Barman Irani.

Speaker #1: Yes, sir.

Speaker #2: Yes, yes, yes. Please take over.

Speaker #3: Excellent. Thank you. Good afternoon, everyone. I'm Barman Irani, Chairman and Managing Director of Keystone Realtors Ltd. I welcome you all to our Q1, FY27 earnings call.

Speaker #2: And third is the kind of market that we are operating in. We are very conscious about the location; either it should be an infrastructure-led location or it should be a location which has a blue view or a green view.

Speaker #3: I thank you sincerely for taking the time and being with us today. Let me begin with the key highlights of our operational performance for Q1, FY27.

Speaker #3: We have delivered pre-sales of Rs. 617 crores, and we've had collections of Rs. 599 crores. We've added two new projects. One is our plotted development at Igadpuri, and the other is part of a larger cluster in Dindoshi, with a combined GDV of about Rs.

Speaker #2: These are some of the criteria which we take into account. If this is not meeting these criteria, then we are happy to let it cancel or go away.

Sajal Gupta: These are some of the criteria which we take into account. If this is not meeting these criteria, then we are happy to let it cancel or go away.

Speaker #4: Okay. And.

Divyansh Jaju: Okay.

Speaker #2: I guess that was the question. I'm sorry, I'm not too sure whether I understood your question correctly.

Sajal Gupta: I asked this before the question. I'm sorry. I am not too sure whether I understood your question right.

Speaker #3: 547 crores. Our financial statements reflect the margin profile that we have consistently guided. This marks an important evolution of our reported financial performance, against the backdrop we have delivered a strong start to FY27.

Divyansh Jaju: No, it was correct. Just want to understand what are the criteria for a cancellation of one project?

Speaker #4: It was correct. I just want to understand what the criteria are for the cancellation of a project.

Speaker #2: This is not cancellation. This basically only speaks to our level of aggressiveness in the bid. It is not that once we take the project and the LOI comes to us and we sign the DA, then thereafter any consideration like this.

Sajal Gupta: This is not cancellation. This only speaks of our level of aggressiveness in the bid. It is not that once we take the project, and the LOI comes to us, and we sign the DA, thereafter any consideration like this. There is no cancellation. I will not call the word cancellation. I will call the parameters which goes into making a choice about the project in which we are bidding. These are, you can say, the bidding parameters rather than the cancellation.

Speaker #3: Revenue for Q1, FY27 stood at Rs. 470 crores, up about 72% year-on-year EBITDA grew at Rs. s. 105.1 crores, from Rs. 30 crores. In FY26, Q1, FY26, an increase of 259% year-on-year.

Speaker #2: So there is no cancellation. I will not use the word 'cancellation.' I will refer to the parameters that go into making a choice about the project in which we are bidding.

Speaker #3: EBITDA margins expanded to 21.3% from 10.1% in Q1, FY26. PAT grew to Rs. 52.4 crores, from 16.3 crores. In Q1, FY26. This is an increase of 221% year-on-year.

Speaker #2: So these are, you can say, the bidding parameters rather than the cancellation.

Speaker #4: Yes. What about selection criteria?

Divyansh Jaju: Yes. What about selection criteria of having-

Speaker #2: Like selection criteria.

Sajal Gupta: Like selection criteria.

Speaker #4: Perfect. Yes. Okay. And apart from the R&D geography, where is the Western G brand successfully sinking into or getting into?

Divyansh Jaju: Perfect. Yes. Okay. Apart from Mumbai, are any geographies where the Rustomjee is successfully thinking to more getting into it?

Speaker #3: Our balance sheet remains robust, with gross debt-to-equity ratio of 0.3:1, and net debt-to-equity ratio of just 0.02:1. This further reinforces our strong financial position.

Speaker #2: I'm so sorry, we just missed your question.

Sajal Gupta: I'm so sorry. We just missed your question.

Speaker #4: Let me ask you a question. Looking beyond Mumbai, are there any other geographies where our brand is seeking to successfully replicate and do the same task?

Divyansh Jaju: My question is looking beyond Mumbai, any other geographies where our brand is thinking to successfully replicate and doing the same task?

Speaker #3: I'm happy to state that both CRISL and ICRA have assigned us a AA- credit rating with a stable outlook. Let me walk you through the key metrics for Q1, FY27.

Speaker #2: So, we had mentioned earlier that we are already in Nagpur. And the other thing that we had mentioned is, given the way the Mumbai MMR market is growing—whether it is Palghar, whether it is Karjat, Kasara—so we are trying to be, we want to be definitely there in the expanding MMR.

Boman Irani: We had mentioned earlier that we are already in Nagpur. The other thing that we had mentioned is, given the way Mumbai MMR market is growing, whether it is Palghar, whether it is Karjat-Kasara, we want to be definitely there in the expanding MMR. We are pretty focused on moving towards where infrastructure grows. You might hear very soon about our tie-up in Palghar as well.

Speaker #3: In Q1, FY27, despite no new planned launches, we recorded a pre-sales of Rs. 617 crores, driven by the resilience, sustainance sales, reflecting continued confidence from home buyers in our projects.

Speaker #3: The company is navigating a high-base effect, with a focus on sustainable cash flow and pipeline growth. Cash flows remain resilient. Our collections are nearly matching the pre-sales figures for the quarter, rising 4% to Rs.

Speaker #2: And we are pretty focused on moving towards where infrastructure grows. So, you might hear very soon about our tie-up in Palghar as well.

Speaker #4: Okay. Okay, sir. Thank you for sharing it.

Divyansh Jaju: Okay. Thank you for sharing.

Speaker #3: 599 crores on a year-on-year basis, at collection efficiency of 97%. This indicates a very strong execution on ground. The key strategic focus area continues to be accelerating the pace of construction.

Speaker #1: Thank you. The next question is from the line of Prateesh Seth from Axis Capital. Please proceed.

Operator 2: Thank you. The next question is from the line of Pritesh Sheth from Axis Capital. Please proceed.

Operator: Thank you. The next question is from the line of Pritesh Sheth from Axis Capital. Please proceed.

Speaker #3: Yeah, thanks for the opportunity. Just two or three questions. Firstly, on the cash flows—while I think we did well on the collections run, OCF was a laggard.

Pritesh Sheth: Yeah. Thanks for the opportunity. Just two, three questions. Firstly, on the cash flows. While I think we did well on the collections front, but OCF was a laggard in terms of this quarter. I understand the quarter-to-quarter trend, but I think we guided for INR 1,000 crore OCF last time for this year. By when should one expect a uptick in OCF? Would it be from Q2 onwards, or it's more of a H2 kind of a story?

Speaker #3: Not only to uphold and exceed our delivery commitments, enhancing customer satisfaction, but most importantly, to optimize our collection cycle. With faster progress on construction milestones, we are witnessing a direct positive impact on cash flows.

Speaker #3: And so this quarter, I understand the quarter-on-quarter trend, but I think we guided for ₹1,000 crore OCF last time for this year. By when should one expect an uptick in OCF?

Speaker #3: Our construction spends have increased, from Rs. 238 crores in FY26 Q1 to Rs. s. 299 crores in Q1 of FY27. Twenty-six percent growth year-on-year on quarterly basis.

Speaker #3: Would it be from Q2 onwards, or is it more of a second-half kind of story?

Speaker #2: No, for sure, it will start picking up from Q2. But a more noticeable difference you will be able to see in Q3 and Q4.

Sajal Gupta: No. For sure that it will start picking up from the Q2, but more noticeable difference you will be able to see in Q3 and Q4.

Speaker #3: This reflects our commitment to the delivery velocity. I would like to mention that a total of about 12 million square feet of construction area is under development in 17 ongoing projects.

Speaker #3: Sure. And the ₹1,000 crore guidance remains intact, right? No change on that.

Pritesh Sheth: Sure. The INR 1,000 crore guidance remains intact, right? No change on that.

Speaker #2: 1,000 crore guidance remains intact, yes.

Sajal Gupta: INR 1,000 crore guidance remains intact. Yes.

Speaker #3: Our projects Rustamji Balmoral and Rustamji 180 Bayview have successfully completed fastest 1 million safe-man-hours. Our gross debt-to-equity ratio remains comfortably within the guidance and is at 0.3:1.

Speaker #3: Perfect, okay. Thanks. Second, on the demand trend across the segments, I think as soon as the West Asia crisis started, we started hearing some negative feedback around the luxury demand.

Pritesh Sheth: Perfect. Okay. Thanks. Second, on the demand trend, across the segments, I think as soon as the West Asia crisis started, we started hearing some negative feedback around the luxury demand. If you can just highlight, for each of the segment, how has been the demand trend in last quarter? Any significant difference between each of them, if you want to just cater to.

Speaker #3: So, if you can just highlight for each of the segments, how has the demand trend been in the last quarter? Is there any significant difference between each of them that you would like to comment on?

Speaker #3: This is a reflection of financial discipline, which becomes increasingly valuable in an environment where the cost of capital really matters. There were no new launches planned in Q1, FY27.

Speaker #3: Yeah.

Speaker #3: However, the company has a very strong launch pipeline, planned across the MMR over the coming quarters. This is expected to enhance our market position and drive sustainable growth while creating value for our customers and stakeholders alike.

Speaker #2: Very clearly, there has actually been an equivalent amount of demand in the luxury and premium segments. I would like to state that in the segments classified as mid-mass and aspirational, depending on the location, we have seen a good amount of walk-ins.

Boman Irani: Very clearly, there has been actually equivalent amount of demand in the luxury and premium segments. I would like to state that in the segments which are classified as mid-mass and aspirational, depending on the location, we have seen a good amount of walk-ins. Our two projects, one project which is getting launched in Goregaon West will give us a better dipstick on the happenings. Thane has done standard as was expected as per the business plan, so has Dombivli. We're not seeing any kind of reduction in it. One of the reasons could be that basically, whenever there's a downturn, customers start moving towards the more established brands. While, if at all, the overall market has seen some kind of a reduction in walk-ins, we've not seen that.

Speaker #3: With that in context, I'm pleased to share two significant milestones achieved during July 2026. We've performed the Bhumi Pujan and construction activity has commenced.

Speaker #2: Our two projects—I mean, one project which is getting launched in Goregaon West—will give us a better dipstick on the happenings. But Thane has done as expected, as per the business plan.

Speaker #3: On our commercial project, named 28HQ, which is located in Prabhadevi. In addition, we have started work and received the RERA approval for our residential project, Rustamji Ozone Sky, located in Goregaon West, adjoining our project, Rustamji Ozone, which we completed in 2012-13.

Speaker #2: So has Dombivli. So, we do not see a huge—how do I say this? We're not seeing any kind of reduction in it. And one of the reasons could be that basically, whenever there's a downturn, customers start moving towards the more established brands.

Speaker #3: We are now ready for launch for this project. To drive future growth, the company added two new projects to its portfolio during the quarter, having the estimated GDV of Rs.

Speaker #2: And while, if at all, the overall market has seen some kind of a reduction in walk-ins, we've not seen that.

Speaker #3: 547 crores. We are investing time and resources to be ready for the next phase of growth, as mentioned earlier, one of these was in addition to our cluster development in Dindoshi, which will make that project even larger now.

Speaker #3: Sure, good to know that. Thanks for that answer. One question on the plotted side: since we have started seriously looking at this segment, out of this ₹10,000 crore pre-sales guidance in FY30, how large would this plotted development segment be for us?

Pritesh Sheth: Sure. Good to know that. Thanks for that answer. One question on the plotted side, since you have started seriously looking at this segment. Out of this INR 10,000 crore pre-sales guidance in FY30, how large this plotted development segment would be for us in terms of annual pre-sales once we get there?

Speaker #3: Our strategic additions further strengthen our leadership in cluster development, which continues to be a key scale multiplier for our company. At the same point of time, our entry into the Igadpuri micro market through our plotted development vertical is approximately 62 acres, and this expands our presence in the high-growth lifestyle real estate segment.

Speaker #3: In terms of annual pre-sales, once we get there.

Speaker #4: So Prateesh, we've

Boman Irani: Pritesh, we've already said this in the past. I'm looking at this as a INR 500 to 750 crore year on year in terms of pre-sales, with a margin exceeding INR 150 to 200 crore year on year. This is the minimum that I expect from this business. As we go along, we are learning more about it. When we entered this market, we were one of the larger established real estate developers that was working on plotted developments. We were doing larger layouts. What we've picked up from there is the consumer looks at a lot more in terms of development before launch.

Speaker #2: As I have already mentioned in the past, I'm looking at this as ₹500–750 crore year-on-year in terms of pre-sales, with a margin exceeding ₹150–200 crore year-on-year.

Speaker #3: With its proximity to Mumbai, Pune, and Nashik, strong connectivity through the road network and rail network, and increasing appeal as a leisure and second-home destination, Igadpuri offers significant long-term potential and living charm in the short run.

Speaker #2: So, this is the minimum that I expect from this business. As we go along, we are learning more about it. When we entered this market, we were one of the larger, established real estate developers that was working on plotted developments.

Speaker #3: The venture is well aligned with our business model, as plotted developments typically deliver faster cash flow cycles. Improved profitability and our return ratios. They also act as a velocity multiplier supporting our long-term growth strategy.

Speaker #2: And we were doing larger layouts. What we picked up from there is that the consumer looks at a lot more in terms of development before launch.

Speaker #2: So now, our next projects will get launched only when they are, let's say, 70% ready. This way, the buyer can have the ability to come and start living in those places in, let's say, less than a year's time.

Boman Irani: Now our next projects will get launched only when they are, let's say, 70% ready so that the buyer can have the ability to come and start living in those places in, let's say, less than a year's time, because that is what their demand, we've noticed, has been. Secondly, we also noticed that there are certain crowded belts where there is a lot of, how do I say this? A lot more floss than there is reality. We are staying to those markets where we can give a huge upside to our investors because we believe that land is possibly the best investment, and if done right, it should give return in terms of multiples.

Speaker #3: You know that since FY23, we've added 27 projects totaling, a total estimated GDV of Rs. 31,079 crores. Notably, 21 of these redevelopment projects notably, 21 of these are redevelopment projects, and 23 serve the luxury super premium premium and emerging premium housing segments.

Speaker #2: Because that is what their demand, we've noticed, has been. Secondly, we also noticed that there are certain crowded belts where there is a lot of—how do I say this?

Speaker #2: A lot more gloss than there is reality. So we are staying in those markets where we can give a huge upside to our investors, because we believe that land is possibly the best investment.

Speaker #3: With a strong and diversified portfolio across MMR, in price points and the markets we serve, our strategy ensures resilience and growth across various market cycles.

Speaker #2: And, if done right, it should give returns in terms of multiples.

Speaker #3: Sure. Perfect. And just one last question on the revenue recognition side, Sajal sir. Since now it's a mix of completed projects as well as under-construction projects, how should we think about the revenue recognition for the next two years? If you can potentially give us some guidance or a trajectory, or some numbers around that?

Pritesh Sheth: Sure. Perfect. Just one last on the revenue recognition side. Sajal sir, since now it's mix of completed projects as well as under construction projects. How should one think about the revenue recognition for next 2 years? If you can potentially give us some guidance, a trajectory or some numbers around that. What should be the absolute number that one should look at?

Speaker #3: Turning to our financial performance, we've generated an OCF, operating cash flow of Rs. 68 crores. During the Q1 of FY27, our land and approval investment in projects has increased, to Rs.

Speaker #3: 232 crores compared to Rs. 151 crores in Q1, FY26. This is a 54% year-on-year taking place now. The investment scale continues to strengthen our development pipeline, and positions us well for future launches.

Speaker #3: What should be the absolute number that one should look at?

Speaker #2: So Prateesh, effective 1st April 2025, we transitioned into the percentage of completion method. And how we transitioned is that all existing projects at that point of time, we continued in the completed project method.

Sajal Gupta: Pritesh, effective 1 April 2025, we transitioned into the Percentage of Completion Method. How we transitioned is that all existing projects at that point over time, we continued in the completed project method, and all new projects we started recognizing the margins based on Percentage of Completion Method. We have still about five or six projects which are in the old method of revenue recognition, which is the completed project method. We expect substantial portion of that, almost 95% of that, to be recognized during the current year only. From the next year onwards, the bulk of the revenue, or say almost 98% of our revenue, will be comprising of the projects from the Percentage of Completion Method only. All these projects will get over during the course of the current financial year.

Speaker #3: On a consolidated basis, we've reported revenue from operations of Rs. 470 crores, in Q1, FY27. This is a 72% year-on-year growth. EBITDA has increased to Rs.

Speaker #2: And all new projects, we started recognizing the margins based on the percentage of completion method. We still have about five or six projects which are under the old method of revenue recognition, which is the completed project method.

Speaker #3: 105 crores, from Rs. 29 crores, in the corresponding quarter last year. Reflecting Rs. 259% year-on-year growth. While EBITDA margins stood at 21.3%, up from 10.1% in the corresponding quarter last year.

Speaker #2: We expect a substantial portion of that, almost 95% of it, to be recognized during the current year only. From next year onwards, the bulk of the revenue, or almost 98% of our revenue, will be comprised of projects recognized by the percentage completion method only.

Speaker #3: Profit after taxes also increased to Rs. 52 crores in Q1, FY27. This is up from Rs. 16 crores in the corresponding quarter last year, which again reflects a robust Rs.

Speaker #3: 221% year-on-year growth, marking our highest ever Q1 PAT. Our balance sheet continues to remain strong, as of 30 June 2026, gross debt stood at approximately Rs.

Speaker #2: So, all these projects will get over during the course of the current financial year. Even the portion in the current financial year, as you rightly said, it's a bit of a mix.

Sajal Gupta: Even the portion in the current financial year, as you rightly said, it's a bit of a mix. About 40% of our revenue in the current year comes from those projects which are under completion method, and 60% comes from the projects which are under the POC method.

Speaker #3: 876 crores, with a gross debt-to-equity ratio of 0.3:1, well within our stated guidelines. We've closed the quarter with free cash of about Rs. 803 crores, underscoring our healthy liquidity position and our net debt-to-equity ratio remained very comfortable at 0.02:1.

Speaker #2: About 40% of our revenue in the current year comes from those projects which are under the completion method, and 60% comes from projects which are under the POC method.

Speaker #3: Sure. Okay. Okay, no worries. Thanks. That's it from my side. And all the best.

Pritesh Sheth: Sure. Okay. No worries. Thank you. That's it from my side, all the best.

Speaker #3: I'm delighted to share the company's credit rating has recently got upgraded by ICRA as well, from A+ with sale outlook to AA- with a stable outlook.

Speaker #2: Thank you.

Sajal Gupta: Thank you.

Speaker #1: Thank you. The next question is from the line of Raja Kumar. Wait. Dinarten from RT Investment. Please proceed.

Operator 2: Thank you. The next question is on the line of Raja Kumar Vaidyanathan from RK Investment. Please proceed.

Operator: Thank you. The next question is on the line of Raja Kumar Vaidyanathan from RK Investment. Please proceed.

Speaker #3: This is, alongside the CRYSTAL ratings, assigning where they have assigned us a AA- with a stable outlook. With this, we are dually AA-, with a stable outlook rated company.

Speaker #4: Yeah. Good evening, sir. Thanks for the opportunity. So, just a couple of questions. The first one is: I just want to understand, if there is an interest rate hike, how much of a dampener would it be to your plans?

Raja Vaidyanathan: Yeah, good evening. Sir, thanks for the opportunity. Just couple of questions. The first one is, I just want to understand if there is an interest rate hike, how much of a dampener it will be to your plans?

Raja Kumar Vaidyanathan: Yeah, good evening. Sir, thanks for the opportunity. Just couple of questions. The first one is, I just want to understand if there is an interest rate hike, how much of a dampener it will be to your plans?

Speaker #3: This is a clear market endorsement of our financial profile, project pipeline, capital allocation, discipline, and progress. On the ESG front, we've continued to make meaningful progress across environmental, social, and governance guidelines.

Speaker #2: So fundamentally, number one, if you look at our debt profile, our debt is very small. We are not having a large debt. My debt to equity ratio is only 0.3 is to 1.

Sajal Gupta: Fundamentally, number 1, if you look at our debt profile, our debt is very small. We are not having a large debt. My debt to equity ratio is only 0.3:1. That is a point number 1. Number 2, you would have also observed that consistently we are able to improve our credit rating. We are amongst now a few players who are having a AA- credit rating. In fact, now both from the CRISIL as well as from the ICRA, we are enjoying the credit rating of AA-. Should there be a situation that there is some small hike in the interest rates, I will say that it will have insignificant impact on the margin profile.

Speaker #2: That is point number one. Number two, you would have also observed that consistently we are able to improve our credit rating. We are now among the few players who have a double A minus credit rating.

Speaker #3: We've achieved the ISO 14001:2015 and the ISO 45001:2018 certifications across all Rustamji projects in MMR. This reflects our commitment to robust environmental management and high standards of occupational health and safety.

Speaker #2: In fact, now, both from CRISIL as well as from ICRA, we are enjoying the credit rating of Double A minus. So, should there be a situation where there is some small hike in the interest rates, I will say that it will have insignificant impact on the margin profiles.

Speaker #3: Our projects, Rustamji Crescent, Rustamji 180 Bayview, and Rustamji Ocean Vista, also have received gold pre-certification under IGBC. This is a green building rating system this reinforces our focus on high quality and sustainable development.

Speaker #4: Yeah, sorry. My question is more from the customer standpoint. So, how much of a dampener will it be for demand?

Raja Vaidyanathan: Yeah. Sorry, my question is more from the customer standpoint. How much of a dampener it will be from the customer standpoint?

Raja Kumar Vaidyanathan: Yeah. Sorry, my question is more from the customer standpoint. How much of a dampener it will be from the customer standpoint?

Speaker #2: From a customer standpoint, look, I don't know what the view is, but the government view is generally to keep the interest rates intact. We are not hearing any news about the interest rates going up very soon.

Sajal Gupta: Customer standpoint, look, I don't know what is the view. The government view is generally to keep the interest rates intact. We are not hearing any news about the interest rates going up very soon. We have seen one thing that whenever, even if the interest rate goes up, the customers look at basically the larger cycles. Most of the home buyers basically look at about 15, 20 years or 10 to 20 years of the horizon. During this horizon, the interest rates at times goes up and at times goes down. In any of the cycle, if the customer buys and look at the overall interest burden through the whole of a cycle, it more or less works out to be same.

Speaker #3: On the social impact front, I'm happy to say that in partnership with Rotary Club of Bombay Airport, we've successfully completed the Kavle Village Dam project.

Speaker #3: This project is expected to create lasting benefits by ensuring year-round water availability for nearly 1,800 farming families and significantly contributing to groundwater recharge; thereby strengthening the long-term sustainability and resilience of the local community while enhancing local biodiversity.

Speaker #2: But we have seen one thing: that whenever, even if the interest rate goes up, the customer looks at basically the larger cycles. Most of the home buyers basically look at about 15 to 20 years, or 10 to 20 years of horizon.

Speaker #2: And during this horizon, the interest rates at times go up and at times go down. But in any of the cycles, the customer buys and looks at the overall interest burden throughout the whole of a cycle.

Speaker #3: We at Rustamji believe such initiatives not only create lasting value for communities, but further enforce our commitment to responsible and sustainable development. We not only build homes; we build trust.

Speaker #2: It more or less works out to be safe. So now, with the more educated customer, they have started looking at the product. They have started looking at the opportunity.

Sajal Gupta: Now with the more educated customer, they have started looking at the product, they have started looking at opportunity. The influence of the interest rates on the buying decision is forming a smaller proportion of the overall buying decision-making.

Speaker #3: We build communities. We build futures. We strive to create homes for a place called family, which you must have seen in our new campaign.

Speaker #2: And the influence of interest rates on the buying decision is forming a smaller proportion of the overall buying decision-making.

Speaker #3: We put belief first, blueprint next. A belief that says every family deserves to live in a space that is thoughtfully designed, for them. As we intend to keep doing exactly only bigger, faster, and better going forward.

Speaker #4: Okay, got it, sir. So, have you done any sensitivity around this, or do you think it's not a big discerning factor?

Raja Vaidyanathan: Okay, got it, sir. You haven't done any sensitivity around this? Or you think it's not a big deciding factor?

Raja Kumar Vaidyanathan: Okay, got it, sir. You haven't done any sensitivity around this? Or you think it's not a big deciding factor?

Speaker #2: We have done a sensitivity analysis. Look, this company is now 30 years old, so obviously, we have also gone through various interest rate cycles.

Sajal Gupta: We have done a sensitivity. Look, this company is now 30 years old. Obviously, we have also gone through various interest rate cycles. Since you also know that we have a good amount of portfolio into the premium segment, to super premium segment, to the luxury segment. This segment generally is less sensitive to the interest rates. Extremely affordable segment, less than INR 1 crore, that is more sensitive. Progressively, our stake in that segment is going down, is what you can observe from the overall pipeline.

Speaker #3: The best of Rustamji is ahead of us. I look forward to sharing that journey with each of you, thank you for your trust, your partnership, and your continued confidence in us.

Speaker #2: And then we have, and then, since you also know that we have a good amount of portfolio in the premium segment, super-premium segment, and the luxury segment.

Speaker #3: We now look forward to your questions. Thank you.

Speaker #1: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question, may press star and 1 on their touchstone telephone.

Speaker #2: And this segment generally is less sensitive to interest rates. The extremely affordable segment, less than ₹1 crore, is more sensitive. And progressively, our stake in that segment is going down, as you can observe from the overall pipeline.

Speaker #1: If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking questions.

Speaker #4: Okay. Okay. Got it, sir. So, the second question is on the P&L for this quarter. It looks good—the margins are really looking very nice.

Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue is assembled. The first question is from the line of Harsh Pratap from Motila, Los Ones.

Raja Vaidyanathan: Sir, the second question is on the P&L for this quarter. It looks good. The margins are really looking very nice. Just wanted to know whether all your low-margin Crown projects are all done or we'll be taking hits somewhere in the upcoming quarters.

Raja Kumar Vaidyanathan: Sir, the second question is on the P&L for this quarter. It looks good. The margins are really looking very nice. Just wanted to know whether all your low-margin Crown projects are all done or we'll be taking hits somewhere in the upcoming quarters.

Speaker #4: So, just wanted to know whether all your low-margin crown projects are done, or will you be taking a hit somewhere in the upcoming quarters?

Speaker #1: You may proceed.

Speaker #2: Yeah, hi, permanent team. Good afternoon. It's good to see the performance on the collections front. So keeping in view the Q1 performance, I think for the next three quarters, we are left with a, you know, asking rate of 4,300 to 4,400 crores of pre-sales.

Speaker #2: No, it is not all done. As I said, some portion of the revenue recognition from the legacy project is still in the works.

Sajal Gupta: No, it is not all done. As I said that some portion of the revenue recognition from the legacy project is still in the work. Having said that, the proportion of the revenue recognition out of a legacy project is going to be insignificant, as large portion has already been recognized. In the current year of the total revenue profile, we are expecting 15% of the revenue to be contributed by the legacy projects and 85% to be recognized from the current projects. As you know, on the current projects, our margin profile is good, 35% gross margins, 20% PBT. Large portion of the revenue is going to be contributed from the current projects, and this year should logically be the last year of the legacy project, and that too, a insignificant portion in the overall revenue profile.

Speaker #2: But having said that, the proportion of the revenue recognition out of the legacy projects is going to be insignificant, as a large portion has already been recognized.

Speaker #2: While you have given the launch pipeline, can you please highlight which would be the key launches in the forthcoming quarters?

Speaker #2: In the current year, of the total revenue profile, we are expecting 15% of the revenue to be contributed by the legacy projects, and 85% to be recognized from the current projects.

Speaker #3: Sorry, who is this? May I just know?

Speaker #2: Yeah, this is Harsh Pratap from Motila, Los Ones. Harsh Pratap from Motila, am I right?

Speaker #2: And as you know, on the current projects, our margin profile is good—35% gross margins and 20% PBT. So, a large portion of the revenue is going to be contributed from the current projects.

Speaker #3: Yes.

Speaker #2: Yes, yes. Harsh Pratap from Motila, am I right?

Speaker #3: Yes, yes.

Speaker #2: Thank you, thank you. One second. So, Harsh, I'm just going to tell you which are the projects in our launch pipeline for this year.

Speaker #2: And this year should logically be the last year of the legacy project, and that too, an insignificant portion in the overall revenue profile.

Speaker #4: Okay, so which means your margin profile will look good going forward.

Raja Vaidyanathan: Okay. Which means the margin profile will look good go forward.

Raja Kumar Vaidyanathan: Okay. Which means the margin profile will look good go forward.

Speaker #2: One is Urban Woods. We are launching two towers. Total value of about 300-plus crores. Avinash Towers, which is in Barsova, Urbania, which is our Thane project, we're launching two towers.

Speaker #2: The margin profile will continue. The margin profile—I would like to summarize it like that—the margin profile will continue to improve quarter by quarter. As we move forward, it will be more in sync with the goals that we have been given.

Sajal Gupta: Margin profile will continue. I would like to summarize it like that. The margin profile will continue to improve quarter by quarter, and as we move, that it will be more in sync with the guidance that we have been giving.

Speaker #2: 28 HQ, as I already mentioned, in Prabhadevi, is launched. Rustamji Ozone Sky, work has started. We are launching the project. GTB Nagar, we should be launching phase one, this year.

Speaker #4: Okay, sir. Thank you so much. All the best.

Raja Vaidyanathan: Okay, sir. Thank you so much. All the best.

Raja Kumar Vaidyanathan: Okay, sir. Thank you so much. All the best.

Speaker #1: Thank you. The next question is from the line of Ronald from ICICI Securities. Please proceed.

Operator 2: Thank you. The next question is on the line of Ronald from ICICI Securities. Please proceed.

Operator: Thank you. The next question is on the line of Ronald from ICICI Securities. Please proceed.

Speaker #5: Yeah. Thank you, sir, for the opportunity. And congratulations on a good sales run rate and collections. On the collection front, sir, I wanted to ask—we have increased our ads with respect to 1,090 schemes.

[Analyst] (ICICI Securities): Yeah. Thank you, sir, for the opportunity. Congratulations on the good sales and return collections. On the collection front, sir, I wanted to ask, we have increased our ads with respect to 10:90 schemes. Is it for the selected few projects or are we going to do this for the whole bucket of projects? Whether although it would help you a lot in terms of completing the projects much earlier and earlier cash flow recognition, but the collections might get affected in the interim. I would say some takeaway from this.

Ronald Siyoni: Yeah. Thank you, sir, for the opportunity. Congratulations on the good sales and return collections. On the collection front, sir, I wanted to ask, we have increased our ads with respect to 10:90 schemes. Is it for the selected few projects or are we going to do this for the whole bucket of projects? Whether although it would help you a lot in terms of completing the projects much earlier and earlier cash flow recognition, but the collections might get affected in the interim. I would say some takeaway from this.

Speaker #2: The Dindoshi Cluster, should also be launched later this year. And Om Nagar, which rests in Andheri East, altogether these projects should be an estimated GDV of about 8,000 crores plus, as was guided by us earlier.

Speaker #5: So, is it for a selected few projects, or are we going to do this for the whole bucket of projects? Also, it would help a lot in terms of completing the projects much earlier and enabling earlier cash flow recognition.

Speaker #2: Like I mentioned, I just want to repeat, we've already done about 2,000-plus crores of launches. With 28 HQ in Prabhadevi and Ozone Sky, which is in Goregram West.

Speaker #3: Understood. Okay. And one also looking at the embedded margins.

Speaker #5: But the collections might get affected in the interim. Is it, or is there some takeover from this?

Speaker #2: Was I clear? Can everyone hear me?

Speaker #3: Yeah, am I audible?

Speaker #2: Yes, you are now.

Speaker #3: Yeah. So yes, that was clear. I was also looking at the slide number 44, highlighting the embedded EBITDA margins. So for your unsold projects, which are yet to be recognized, I think I just wanted this clarity in the mass market segment, we are having a 30% EBITDA margin which looks, I think, quite higher than the rest of the projects which are in the super premium, premium, and emerging premium segments.

Speaker #2: So, Ronald, thank you very much for the question. I think you asked this question to me offline also, and I'm happy now to answer this question for the benefit of everyone.

Sajal Gupta: Ronald, thank you very much for the question. I think you asked this question to me offline also, and I'm happy now to answer this question for the benefit of everyone.

[Analyst] (ICICI Securities): Okay.

Ronald Siyoni: Okay.

Speaker #2: So, most of this 10:90 plan that you look at, these are the plans which are generally backed by the banking plans simultaneously. These are not the open plans, wherein the customer pays 10% today and he has to forget about making any payment for the life.

Sajal Gupta: Most of this 10:90 plan that you look at, these are the plans which are generally backed by the banking plan simultaneously. These are not the open plans wherein the customer pays 10% today and he has to forget about making any payment for the life. Maybe customer may not make the payment, but these are simultaneously tied up with the bank subventions plan, wherein bank is giving us the money with the progress of the work at every stage. The customer EMI, of course, starts after the completion of the project. 90%, or I will say about 85% of the situation that these plans are simultaneously backed up with the bank tie-up, wherein we are able to get the progressive payment as we move.

Speaker #2: Maybe the customer need not make the payment. But these are simultaneously tied up with the bank subvention plans, wherein the bank is giving us the money with the progress of the work at every stage.

Speaker #3: So how should we look at this? And how would this margins be higher at 30%?

Speaker #2: And the customer EMI, of course, starts after the completion of the project. So 90% or I will say about 85% of the situation that these plans are simultaneously backed up with the bank tie-up wherein we are able to get the progressive payment as we move.

Speaker #4: Hello. This is now being recorded.

Speaker #2: Sorry, I think we got dropped off for some time in between. You were mentioning 30% EBITDA margin on.

Speaker #3: The mass market projects. Which is, you know, which appears to be quite higher than these projects in super premium, premium, and emerging premium. So how should we look at this?

Speaker #2: And maybe in 15% of situations, for specific projects which are nearing completion and for specific inventory, and for a very limited period, we may give the payment plan.

Sajal Gupta: Maybe 15% of our situations for the specific projects which are nearing completion, and for the specific inventory and for a very limited period, we may give the payment plan, but generally for all the regular projects, that these are the bank-backed payment plan.

Speaker #2: Thanks, Harsh. I'll let Sajal take that, please.

Speaker #3: Sure.

Speaker #4: Yeah. Hi. So look, what happens that in the mass market segment, we have the Veras, the Veras is a part of the mass market.

Speaker #2: But generally, for all the regular projects, these are the bank-backed payment plans.

Speaker #3: Also, Ronald, just to add to that, what we observed is that when we offer such schemes, not more than 30% of our buyers would generally opt for it.

[Company Representative] (Keystone Realtors): Also, Ronald, just to add to that, what we observed is when we offer such schemes, not more than 30% of our buyers would generally opt for it. Most of them continue to opt for construction-linked payment schemes themselves.

Boman Irani: Also, Ronald, just to add to that, what we observed is when we offer such schemes, not more than 30% of our buyers would generally opt for it. Most of them continue to opt for construction-linked payment schemes themselves.

Speaker #4: What happens the Veras that we have given out, we explained our strategy, that we have given out the FSI through a JDS to a various developers.

Speaker #3: Most of them continue to opt for construction-linked payment schemes.

Speaker #4: Various developers. Most of the cost has already been incurred on that. What we get is a revenue share and a security deposit. And as a result, we have about 60% margins which comes to us net of the approval cost that we have already or a good part of the approval cost that we have already incurred.

Speaker #5: I'm very pleased. Secondly, on some of these cluster redevelopment opportunities, we have been adding lands in the cluster projects that we already have.

[Analyst] (ICICI Securities): Get it. Secondly, on, sir, this cluster redevelopment opportunities. We have been adding lands in the cluster projects which we already have. Going ahead, also, we should be looking at further enlargement on those projects. Are we also looking at newer clusters or newer projects? Would you prefer to add in a already backed cluster redevelopment project, or you would prefer a new cluster to redevelop? Does this have any impact on margins? Should it get better margins with additions? Does that project impact the launch or that launch would happen timely, only the newer additions, that portion would get launched at a much later date?

Ronald Siyoni: Get it. Secondly, on, sir, this cluster redevelopment opportunities. We have been adding lands in the cluster projects which we already have. Going ahead, also, we should be looking at further enlargement on those projects. Are we also looking at newer clusters or newer projects? Would you prefer to add in a already backed cluster redevelopment project, or you would prefer a new cluster to redevelop? Does this have any impact on margins? Should it get better margins with additions? Does that project impact the launch or that launch would happen timely, only the newer additions, that portion would get launched at a much later date?

Speaker #5: So, going ahead also, should we be looking at further enlargement on those projects, or are we also looking at newer clusters or newer projects?

Speaker #4: Now, since this JDS have just been started, the historical number include a very small portion in the sold area. And the future number includes a larger portion which is yet to be sold.

Speaker #5: So, would you prefer to add in an already backed cluster redevelopment project, or would you prefer a new cluster to redevelop? And does this have any impact on margins?

Speaker #4: So in my 570 crores of the revenue, which is meant to be in an unsold, about 181 crores is to come from the Veras JDS, which are about 32%.

Speaker #5: Should it get better margins with additions? And does that project—can that impact the launch or will the launch happen on time and only the newer additions, that portion, would get launched at a much later date?

Speaker #4: And where I have about 60% margins. Where in my current sold value, it is only 8%. So it is more of a product mix, basically, which is giving this kind of an increase in the embedded EBITDA.

Speaker #4: Okay, so three questions is what you’re asking. I’ll answer the last one first. Can these affect launch dates? No, because what really happens is, the project gets launched and 33.9 allows you to add more to it.

[Company Representative] (Keystone Realtors): Okay, three questions is what you're asking. I'll answer the last one first. Can these affect launch dates? No, because

Boman Irani: Okay, three questions is what you're asking. I'll answer the last one first. Can these affect launch dates? No, because

Speaker #2: Understood. Thanks a lot for the clarity. And lastly, on the net debt side, I think after many quarters, we have reported a net debt number.

Boman Irani: What really happens is project gets launched and 33(9) allows you to add more to it. Of course, there are certain guidelines. The cluster has got to have 20% to 25% of the new area that is added to it as a minimum criteria.

Speaker #2: How should we look at this for FY 27 and 28?

Speaker #4: Of course, there are certain guidelines. The cluster has got to have 20% to 25% of the new area that is added to it, as a minimum criteria.

Speaker #4: Yeah. So our

Speaker #4: So, it does not affect any timeline launches. What we have to examine is, when you are in a particular locality and you're able to get more plots added to the cluster, it actually gives you a higher return than going in for a whole new cluster.

Boman Irani: It does not affect any timeline launches. What we have to examine is when you are in a particular locality and you are able to get more plots added to the cluster, it actually gives you a higher return than going in for a whole new cluster.

Speaker #2: Okay. There's an issue. How does one resolve it?

Speaker #4: Can we take it on your mobile?

Speaker #2: Yeah, give it, then we can continue.

Speaker #4: Again, not really a direct answer to you, but each one is a specific case on its own. And we keep observing which one works out better for us.

Boman Irani: Again, it's not really a direct answer to you, but each one is a specific case in its own.

Speaker #4: Yeah, just call me. Just call me on my number. Yeah.

Boman Irani: we keep observing which one works out better for us. In light of making better development or making the area better for the development that we have already started, we readily welcome more and more plots to join us, and once they cross the criteria of the 20% or 25%, we take them for the HPC clearance, and we take them for the approvals.

Speaker #4: But in light of making better development or making the area better, for the development that we have already started, we readily welcome more and more plots to join us.

Speaker #2: Pritesh, can you hear us?

Speaker #4: And once they cross the criteria of the 20% or 25%, then we take them for the HPC clearance, and then we take them for the approvals.

Speaker #5: Yes, sir. I'll just connect that number. One moment.

[Company Representative] (Keystone Realtors): Ronald, just to add on to this. The additional area that we look at, definitely we look at equivalent or better commercial terms compared to our earlier clusters. That's one of the criteria we look at. Also qualitatively, does it have a potential to improve the overall planning and overall layout, and the overall customer experience that we intend to deliver? These are the two criteria under which we allow any additional area to be added onto the cluster over and above the criteria, as Boman mentioned. Secondly, we are not averse to looking at newer clusters because we believe that this is where our competitive advantage lies compared to standalone development or smaller developments-

[Company Representative] (Rustomjee): Ronald, just to add on to this. The additional area that we look at, definitely we look at equivalent or better commercial terms compared to our earlier clusters. That's one of the criteria we look at. Also qualitatively, does it have a potential to improve the overall planning and overall layout, and the overall customer experience that we intend to deliver? These are the two criteria under which we allow any additional area to be added onto the cluster over and above the criteria, as Boman mentioned. Secondly, we are not averse to looking at newer clusters because we believe that this is where our competitive advantage lies compared to standalone development or smaller developments-

Speaker #4: Just to Ronald, just to add on to this, the additional area that we look at is definitely, we look at equivalent or better commercial terms compared to our earlier clusters.

Speaker #4: Hello. Yeah, Shruti.

Speaker #5: Yes, sir. I'll just connect you to the call. Yes, sir. You may proceed.

Speaker #4: So that's one of the criteria we look at. And also, qualitatively, does it have the potential to improve the overall planning, the overall layout, and the overall customer experience that we intend to deliver?

Speaker #2: Yeah, Pritesh, apologies. There was some technical glitch. The call got dropped off, but I think we are now good. So you may continue your question on the net debt.

Speaker #4: So these are the two criteria under which we allow any additional area to be added onto the cluster, over and above the criteria, as someone mentioned.

Speaker #3: Yeah. This is Harsh Patel from Motira Lokpal.

Speaker #4: Secondly, we are not averse to looking at newer clusters, because we believe that this is where our competitive advantage lies—compared to standalone development or smaller developments, especially in the redevelopment space.

Speaker #2: Yeah, Harsh. Sorry. You can continue your question. Sorry.

Speaker #3: Yeah, yeah. So my question was on the net debt side after many quarters of being net cash. We are now, we are not reported a net debt number.

Speaker #3: So how should we look at this figure for FY 27 and 28?

[Company Representative] (Keystone Realtors): especially in the redevelopment space. This is where looking at our history and track record of doing redevelopment across various locations and across various sizes of land development. I think we are best suited for cluster redevelopment. Government of Maharashtra is of course giving additional benefits for larger cluster development. All in all, it's a win-win for everybody. Win-win for the original residents of that location, win for the customer because he gets a better and a bigger layout, and definitely for the developer because it improves the margin profile of the cluster that we are undertaking.

[Company Representative] (Rustomjee): especially in the redevelopment space. This is where looking at our history and track record of doing redevelopment across various locations and across various sizes of land development. I think we are best suited for cluster redevelopment. Government of Maharashtra is of course giving additional benefits for larger cluster development. All in all, it's a win-win for everybody. Win-win for the original residents of that location, win for the customer because he gets a better and a bigger layout, and definitely for the developer because it improves the margin profile of the cluster that we are undertaking.

Speaker #4: So look, we have always been guiding earlier. We used to guide that our gross debt to the equity should be 1:1. Then we raised the bar further.

Speaker #4: So, this is where, looking at our history and track record of doing redevelopment across various locations and across various sizes of land development, I think we are best suited for cluster redevelopment.

Speaker #4: At the start of this year, and we have said that our gross debt to the gross debt to the equity will be 0.75:1. Now, we are still at 0.3:1.

Speaker #4: And the government of Maharashtra is, of course, giving additional benefits for larger cluster development. So, all in all, it's a win-win for everybody—a win-win for the original residents of that location.

Speaker #4: Net debt at some point of a time is bound to go into the positive territory. It may not be appropriate for us to hold the large amount of cash.

Speaker #4: And we are into a business wherein deploying the cash makes much sense than, you know, holding it back. So fundamentally, our intention is not to continue into the net cash position.

Speaker #4: It's a win for the customer because he gets a better and bigger layout, and definitely for the developer because it improves the margin profile of the cluster that we are undertaking.

Speaker #4: But having said that, we still have a comfortable cash position. We are holding more than 800 crores as a cash with us. And I think these are the signs of an absolute comfort in terms of liquidity.

Speaker #5: Yeah. Thanks. Thank you very much for the detail, Amber. And best of luck.

[Analyst] (ICICI Securities): Yeah. Thank you very much, sir, for the detail and best of luck, sir.

Ronald Siyoni: Yeah. Thank you very much, sir, for the detail and best of luck, sir.

Speaker #4: Thank you. Thank you.

[Company Representative] (Keystone Realtors): Thank you.

[Company Representative] (Rustomjee): Thank you.

[Company Representative] (Keystone Realtors): Thank you.

Ronald Siyoni: Thank you.

Speaker #1: Thank you. That was the last question for today. I would now like to hand the conference over to the management for their closing comments.

Operator 2: Thank you. That was the last question for the day. I would now like to hand the conference over to the management for the closing comments. Over to you, sir.

Operator: Thank you. That was the last question for the day. I would now like to hand the conference over to the management for the closing comments. Over to you, sir.

Speaker #3: Sure. Understood. Thanks, Sajal, for taking my question and all the best.

Speaker #1: Over to you, sir.

Speaker #4: Thank you. Thank you.

Speaker #5: So, thank you again, one and all, for joining us on this Q1 FY2027 earnings call. On behalf of the Keystone Realtors management, I thank you for joining us.

Boman Irani: Thank you again one and all for joining us on this Q1 FY27 earnings call. On behalf of the Rustomjee management, I thank you for joining us. Should there be any further queries, please feel free to reach out to us and our team will respond to it immediately. Have a lovely day and a great year ahead. Thank you.

Speaker #5: Before we take the next question, we would like to remind participants that you may press star and one to ask your question. The next question is from the line of Rishabh Shah from Boldrock PMS.

Speaker #5: And should there be any further queries, please feel free to reach out to us, and our team will respond to them immediately. Have a lovely day and a great year ahead.

Speaker #5: Please proceed.

Speaker #3: Yeah. Hi. So my question is, in the ongoing projects, do you have luxury and super premium projects? But in the forthcoming part of it, we are more focused on the emerging premium projects.

Speaker #5: Thank you.

Operator 2: Thank you. On behalf of Axis Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Operator: Thank you. On behalf of Axis Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Speaker #3: So just wanted to know the thought process behind it. Do you think the do you think our IRR is better in the emerging premium market than the luxury or super premium?

Speaker #4: Understood.

Speaker #2: So you know, just to answer your question, if you go to slide 32, you will see that we have quite a few luxury projects that we already have launched.

Speaker #2: So while keeping that in mind, we are moving more towards the premium and super premium. And yeah, that is our that is our business plan strategy.

Speaker #3: Okay. The question.

Speaker #4: And we are also rebuilding the pipeline. Given that a lot of projects have only recently gone in the launch, all the projects that bounce are just told that ocean vista, panorama, cliff, bandstand, crescent.

Speaker #4: All of these have gone into a launch mostly in the last year. We are also working towards rebuilding the pipeline because these pipelines should continue to go for the next four years or so.

Speaker #4: And obviously, we are looking at the business development and strategies to build the project's portfolio into this segment as well. So there is no intent to, let us say, get away with the luxury pipeline.

Speaker #4: But yes, our focus will always be more on a premium and super premium category.

Speaker #3: Okay. And so, you say that you are very selective in the kind of locations as well as the types of projects you take. So just wanted to know, which are those projects?

Speaker #3: Like, you will never take, like, what would be those three or four things that will make you avoid any kind of projects?

Speaker #2: So we are very, very careful while choosing our projects. Any project that does not meet our criteria that we've set out for ourselves, namely that, you know, gross sorry, gross margins to GDV and/or EBITDA margins thereof and/or projects that do not have any kind of certainty in terms of line of sight for launches and completion, are the kind of projects we'll stay away from.

Speaker #2: But let me tell you the kind of projects we will do. We believe that, you know, the redevelopment market where we've got a very strong base, continues to be something that will be in the supply side for Mumbai and MMR area.

Speaker #2: And since we are the strongest in this, we'll continue to be there in that field. As a matter of fact, you'll hear about a lot of projects that we are taking up in this space.

Speaker #2: And, you know, we are only working on projects which fit all our criteria. And that's how we enter inside otherwise, we let it go.

Speaker #2: So I said this before. I'll say it again. When I win a project, I'm happy. When I don't win a project, I'm happier because what happens with that is somebody else is deciding to take a bet, which is far beyond the market's reward areas.

Speaker #2: So I would not I would not go there.

Speaker #3: Okay. Thank you, sir.

Speaker #4: Thank you, sir.

Speaker #5: Thank you. Before we take the next question, we would like to remind participants, Sajal will press star and one to ask a question. The next question is from the line of Sumit Kumar from JM Financial.

Speaker #5: Please proceed.

Speaker #4: Hi. Good afternoon. Congratulations on a good set of numbers. And it increased disclosures as well. My first question is on the launch tracker that you've given or the pipeline.

Speaker #4: The major part coming from two projects both of them cluster development. One is GTV and the other one is in Malad. So in terms of readiness, where are we in terms of approvals?

Speaker #4: And do we expect it these launches to happen in the second half? And what is the preparedness for these two projects?

Speaker #2: So hi. Hi, Sumit. Thanks for that question. Basically, if you look at GTB, GTB Nagar is a MHADA CNDA project wherein we've just cleared the HPC.

Speaker #2: It's gone for what's called the final leg of signatures. And we should have that in place as a matter of fact, I think, if I'm not mistaken, we should be able to launch it in this quarter itself.

Speaker #2: And/or early next quarter. But more likely in this quarter itself. With regards to Dindoshi, also, that project has been put up for its approvals.

Speaker #2: It'll come up for hearing in the next HPC meeting, which is a normal process. After which, it'll take again, it's a MHADA project. It'll take about two and a half, three months thereafter to get that launched also.

Speaker #4: Okay. So I mean, fairly safe to assume that both these projects will come up in this financial year itself and no risk of any spillover.

Speaker #2: In this financial year for sure. And maybe latest in the next quarter itself.

Speaker #4: Okay. My second question is to Sajal. Sir, on that unrecognized revenue of the sold but yet to be recognized projects, you have like 63 billion.

Speaker #4: So what is the timeline of recognition that you would estimate or foresee within the next two years or three years? What kind of a timeline you're seeing there?

Speaker #2: I think three years will be the more correct estimate. But you know that it will be progressively done. Some of the projects are in the late stages of the construction.

Speaker #2: And some projects are in the early stages of the construction. Those projects which are in early stages of the construction, it may take about three years.

Speaker #2: For the entire margin to be recognized. And those which are in the late stages, maybe it is one to two years. But on an average, I will say about two to two and a half, two and a half years or so should be the average time period that you can take for all the projects.

Speaker #3: And just a follow-up on this, in the luxury segment, if I see 12 billion, where does the recent launches stand here? I mean, whatever we had launched last year, it is included in which of the buckets?

Speaker #2: There are so fundamentally, there are five projects. So four projects in this segment, five projects in this segment. One is a panorama. One is a panorama, you know, is in the Pali Hills.

Speaker #2: Ocean Vista, which is in Varsova. Cliff Tower, again, at Bendra. Mount Mary. And the Bandstand Kama, that we have launched in the last quarter of the last financial year, which is the Bandstand project.

Speaker #2: And we have one completed project, which is a Parisham. So these are the five projects which is into the segment.

Speaker #3: Okay. But largely, we do have one sold in Vintree and all these, right? So actually, y, largely.

Speaker #2: We have one sold in Vintree and all the four projects. Like Parisham, we can take it out because it is completed. So there is an insignificant unsold inventory.

Speaker #2: But yes, we have an unsold inventory across these four projects.

Speaker #3: Okay. Okay. Thank you. That's all from my side. Very helpful. Thank you and all the best.

Speaker #2: Thank you. Thank you, Sumit.

Speaker #5: Thank you. The next question is from the line of Devyansh Jadu from Sreenetra Asset Managers. Please proceed.

Speaker #4: Devyansh.

Speaker #3: Thanks, sir. Thank you for the opportunity. Sir, I just want to understand we pulled out only that what are the criteria which are there to a project get canceled?

Speaker #2: I couldn't hear you very well. Could you please repeat?

Speaker #3: Sir, my first question was that on which criteria we like any project gets canceled? So what are the criteria on which that project get canceled?

Speaker #2: Yeah. Devyanshu, I think Mr. Bamanirani has already mentioned that we have certain guardrails. The project has to meet our guidance in terms of the gross margins, generally we would like to work on the gross margin of 35 percent, having said that it should be a little more on the luxury side or the premium side of the project, and a little lower on the emerging premium side of the project.

Speaker #2: Secondly, we are very conscious about the investments that how much of our investment is going. Generally, we believe in the asset flight model that we should be investing about 10 percent of our total GDP before the project go live.

Speaker #2: And third is the kind of a market that we are operating in. We are very conscious about the location, either it should be infrastructure-led location or it should be the location which has a blue view or a green view.

Speaker #2: These are some of the criteria which we take into account if this is not meeting these criteria, then we are happy to let it cancel or go away.

Speaker #3: Okay. And I guess that.

Speaker #2: This was the question. I'm sorry. I have not too sure whether I understood your question right.

Speaker #3: It was correct. I just want to understand what are the criteria for a cancellation of some project.

Speaker #2: This is not cancellation. This is like basically this only speaks of our level of aggressiveness in the bid. It is not that once we take the project and the LOI comes to us and we sign the DA, then thereafter any consideration like this.

Speaker #2: So there is no cancellation. I will not call the word cancellation. I will call the parameters which goes into making a choice about the project in which we are bidding.

Speaker #2: So these are you can say the bidding parameters rather than the cancellation.

Speaker #3: Yes. What about selection criteria?

Speaker #2: Like selection criteria.

Speaker #3: Perfect. Yes. Okay. And apart from the RNE geography, we are just some G brand is successfully linking to more getting into it.

Speaker #2: I'm so sorry. We just missed your question.

Speaker #3: Take my question. He's looking beyond Mumbai. Any other geographies where our brand is thinking to successfully replicate it and doing the same task?

Speaker #2: So you know, we had mentioned earlier that we are already in Nagpur. And the other thing that we had mentioned is given the way Mumbai MMR market is growing, whether it is Palgar, whether it is Karjat Kasara, so we are trying to be we want to be definitely there.

Speaker #2: In the expanding MMR. And we are pretty focused on moving towards where infrastructure grows. So you might hear very soon about our tie-up in Palgar as well.

Speaker #3: Okay. Okay, sir. Thank you for sharing. Thank you for sharing.

Speaker #5: Thank you. The next question is from the line of Prateesh Seth from Axis Capital. Please proceed.

Speaker #1: Yeah. Thanks for the opportunity. Just two, three questions. Firstly, on the cash flows, while I think we did well on the collections front, but OCF was a laggard.

Speaker #1: And so this quarter, I understand the quarter-quarter trend, but I think we guided for 1,000 crore OCF last time for this year. By when should one expect uptick in OCF?

Speaker #1: Would it be from Q2 onwards or it's more of a second half kind of a story?

Speaker #2: No. For sure that it will start picking up from the Q2. But more noticeable difference, you will be able to see in Q3 and Q4.

Speaker #1: Sure. And the 1,000 crore guidance remains intact, right? No change on that?

Speaker #2: 1,000 crore guidance remains intact, yes.

Speaker #1: Perfect. Okay. Okay. Thanks. Second, on the demand trend, across the segments, I think as soon as the West Asia crisis started, we started hearing some negative feedback around the luxury demand.

Speaker #1: So if you can just highlight for each of the segment, how has been the demand trend in last quarter? Any significant difference between each of them if you want to just cater to?

Speaker #1: Yeah.

Speaker #2: Very clearly, there has been actually equivalent amount of demand in the luxury and premium segments. I would like to state that in the segments which are classified as mid-mass and aspirational, depending on the location, we have seen a good amount of walk-ins.

Speaker #2: Our two projects I mean, one project which is getting launched in Goregaon West will give us a better dipstick on the happenings. But Thane has done standard as was expected as per the business plan.

Speaker #2: So as Dhombivali so we do not see a huge how do I say this? We're not seeing any kind of reduction in it. And one of the reasons could be that basically whenever there's a downturn, customers start moving towards the more established brands.

Speaker #2: And while if at all the overall market has seen some kind of a reduction in walk-ins we've not seen that.

Speaker #1: Sure. Good to know that. Thanks for that answer. One question on the plotted side, since we have started seriously looking at this segment, out of this 10,000 crore pre-sales guidance in FY30, how large is this product development segment would be for us?

Speaker #1: In terms of annual pre-sales, once we get there.

Speaker #3: So Prateesh, we've

Speaker #2: already said this in the past. I'm looking at this as a 500 to 750 crore year-on-year in terms of pre-sales. With a margin of exceeding 150 to 200 crores year-on-year.

Speaker #2: So this is the minimum that I expect from this business. And as we go along, we are learning more about it. When we entered this market, we were one of the larger established real estate developers that was working on plotted developments.

Speaker #2: And we were doing larger layouts. And what we picked up from there is the consumer looks at a lot more in terms of development before launch.

Speaker #2: So now our next projects will get launched only when they are, let's say, 70% ready. So that the buyer can have the ability to come and start living in those places in, let's say, less than a year's time.

Speaker #2: Because that is what their demand we've noticed has been. Secondly, we also noticed that there are certain crowded belts where there is a lot of how do I say this?

Speaker #2: A lot more floss than there is reality. So we are staying to those markets where we can give a huge upside to our investors because we believe that land is possibly the best investment.

Speaker #2: And we've done right. It should give return in terms of multiples.

Speaker #1: Sure. Sure. Perfect. And just one last on the revenue recognition side, Sajal sir, since now it's mixed of completed projects as well as under construction projects, so how should we one think about the revenue recognition for next two years if you can potentially give us some guidance or trajectory or some numbers around that?

Speaker #1: What should be the absolute number that one should look at?

Speaker #2: So Prateesh, you know effective 1st April 2025, we transitioned into the percentage of completion method. And how we transitioned is that all existing projects at that point of our time, we continued in the completed project method.

Speaker #2: And all new projects we started recognizing the margins based on percentage of completion method. We have still about five or six projects which are in the old method of revenue recognition, which is the completed project method.

Speaker #2: We expect substantial portion of that, almost 95% of that, be recognized during the current year only. And from the next year onwards, the bulk of the revenue, or say, almost 98% of our revenue will be comprising of the projects from the percentage completion method only.

Speaker #2: So all these projects will get over during the course of the current financial year. Even the portion in the current financial year, as you rightly said, it's a bit of a mix.

Speaker #2: About 40% of our revenue in the current year comes from those projects which are under completion method. And 60% comes from the projects which are under the POC method.

Speaker #1: Sure. Okay. Okay. No worries. Thanks. That's it from my side. And all the best.

Speaker #2: Thank you.

Speaker #3: Thank you. The next question is on the line of Raja Kumar. Vaidyanathan from RK Investments, please proceed.

Speaker #1: Yeah. Good evening, sir. Thanks for the opportunity. So just a couple of questions. So the first one is, sir, I just want to understand if there is an interest rate hike, how much of a dampener it will be to your plans?

Speaker #2: So fundamentally, number one, if you look at our debt profile, our debt is very small. We are not having a large debt. My debt to equity ratio is only 0.3 is to 1.

Speaker #2: That is the point number one. Number two, you would have also observed that consistently we are able to improve our credit rating. We are amongst now a few players who are having a double A minus credit rating.

Speaker #2: In fact, now both from the pre-sale as well as from the ICRA, we are enjoying the credit rating of double A minus. So should there be a situation that there is some small hike in the interest rates, I will say that it will have insignificant improve insignificant impact on the margin profiles.

Speaker #1: Yeah. Sorry. My question is more from the customer standpoint. So how much of a dampener it will be from the demand?

Speaker #2: Customer standpoint, look, I don't know what is the view, but the government view is generally to keep the interest rates intact. We are not hearing any news about the interest rates going up very soon.

Speaker #2: But we have seen one thing that whenever even if the interest rate goes up, the customers look at basically the larger cycles. Most of the home buyers basically look at about 15, 20 years, or 10 to 20 years of the horizon.

Speaker #2: And during this horizon, the interest rates at times goes up and at times goes down. But in any of the cycles, customer buys and look at the overall interest burden through the whole of a cycle.

Speaker #2: It more or less works out to be safe. So now with the more educated customers, they have started looking at the product. They have started looking at opportunity.

Speaker #2: And the influence of the interest rates on the buying decision is forming a smaller proportion of the overall buying decision making.

Speaker #1: Okay. Got it, sir. So you have a you have a done any sensitivity around this, or you think it's not a big deciding factor?

Speaker #2: We have done a sensitivity is look, this company is now 30 years old. So obviously that we have also gone through various interest rate cycles.

Speaker #2: And then we have and then since you also know that we are a we have a good amount of portfolio into the premium segment, super premium segment, the luxury segment.

Speaker #2: And this segment generally is less sensitive to the interest rates. And extremely affordable segment, less than 1 crore rupees, that is more sensitive. And progressively, our stake in that segment is going down is what you can observe from the overall pipeline.

Speaker #1: Okay. Okay. Got it, sir. So the second question is on the P&L for this quarter. So it looks good. The margins are really looking very nice.

Speaker #1: So just wanted to know whether all your low margin crown projects are all done, or will be taking hit somewhere in the upcoming quarters?

Speaker #2: No, it is not all done. As I said, that some portion of the revenue recognition from the legacy project is still in the work.

Speaker #2: But having said that, the proportion of the revenue recognition out of the legacy projects is going to be insignificant as large portion has already been recognized.

Speaker #2: In the current year of the total revenue profile, we are expecting 15% of the revenue to be contributed by the legacy projects, and 85% to be recognized from the current projects.

Speaker #2: And as you know, on the current projects, our margin profile is good, 35% gross margins, 20% 20% PBT. So large portion of the revenue is going to be contributed from the current projects.

Speaker #2: And this year should logically be the last year of the legacy project. And that too insignificant portion in the overall revenue profile.

Speaker #1: Okay. So which means the margin profile will look good go forward.

Speaker #2: The margin profile will continue. Margin profile, I would like to summarize it like that. The margin profile will continue to improve quarter by quarter.

Speaker #2: And as we move, that it will be more in sync with the guidance that we have been given.

Speaker #1: Okay, sir. Thank you so much. All the best.

Speaker #3: Thank you. The next question is on the line of Ronald. From ICICI Securities, please proceed.

Speaker #4: Yeah. Thank you, sir, for the opportunity. And congratulations on a good sales run rate and collections. On the collection front, sir, I wanted to ask, like, we have increased our ads with respect to 1090 schemes.

Speaker #4: So is it for a selected few projects, or are we going to do this for the whole bucket of projects? And whether that should although it would help you a lot in terms of completing the projects much earlier and earlier cash flow recovery.

Speaker #4: But the collections might get affected in the interim. Is it or is there some takeaway from this?

Speaker #2: So Ronald, thank you very much for the question. I think you asked this question to me offline also. And I'm happy now to answer this question for the benefit of everyone.

Speaker #2: So most of this 1090 plan that you look at, these are the plans which are generally backed by the banking plan simultaneously. These are not the open plans wherein the customer pays 10% today and he has to forget about making any payment for the life.

Speaker #2: Maybe customers need not to make the payment. But these are simultaneously tied up with the bank subventions plan, wherein bank is giving us the money with the progress of the work at every stage.

Speaker #2: And the customer EMI, of course, starts after the completion of the project. So 90% or I will say about 85% of the situation that these plans are simultaneously backed up with the bank tie-up, wherein we are able to get the progressive payment as we move.

Speaker #2: In maybe 15% of a situations for the specific projects, which are nearing completion, and for the specific inventory, and for a very limited period, we may give the payment plan.

Speaker #2: But generally, for all the regular projects, that these are the bank backed payment plan.

Speaker #1: Also, Ronald, just to add to that, what we have observed is when we offer such schemes, not more than 30% of our buyers would generally opt for it.

Speaker #1: Most of them continue to opt for construction-linked payment schemes itself.

Speaker #4: Just to secondly on, sir, this cluster redevelopment opportunities, are we we have been adding lands in the cluster projects which we already have. So going ahead also, we should be looking at further enlargement on those projects, or are we also looking at newer clusters or newer projects?

Speaker #4: So would you prefer to add in a already backed cluster redevelopment project, or you would prefer a new cluster to redevelop? So and does this have any impact on margins?

Speaker #4: Should it get better margins with additions? And does that project can that can impact the launch, or the launch would happen timely only the newer additions that portion would get at a get launched at a much later date?

Speaker #1: Okay. So three questions is what you're asking, and I'll answer the last one first. Can these affect launch dates? No, because what really happens is project gets launched, and 33.9 allows you to add more to it.

Speaker #1: Of course, there are certain guidelines the cluster has got to have 20% to 25% of the new area that is added to it as a minimum criteria.

Speaker #1: So it does not affect any timeline launches. What we have to examine is when you are in a particular locality, and you're able to get more plots added to the cluster, it actually gives you a higher return than going in for a cluster as a whole new cluster.

Speaker #1: Again, not really a direct answer to you, but each one is a specific case in its own. And we keep observing which one works out better for us.

Speaker #1: But in light of making better development or making the area better, for the development that we have already started, we readily welcome more and more plots to join us.

Speaker #1: And once they cross the criteria, of the 20% or 25%, then we take them for the HPC clearance, and then we take them for the approvals.

Speaker #5: Just to Ronald, just to add on to this, the additional area that we look at is definitely we look at equivalent or better commercial terms compared to our earlier cluster.

Speaker #5: So that's one of the criterias we look at. And also, qualitatively, does it have a potential to improve the overall planning and overall layout and the overall customer experience that we intend to deliver?

Speaker #5: So these are the two criterias under which we allow any additional area to be added onto the cluster over and above the criteria as permanent mentioned.

Speaker #5: Secondly, we are not averse to looking at newer clusters because we believe that this is where our competitive advantage lies. Compared to standalone development or smaller developments, especially in the redevelopment space.

Speaker #5: So this is where looking at our history and track record of doing redevelopment across various locations and across various sizes of land development, I think we are best suited for cluster redevelopment.

Speaker #5: And government of Maharashtra is, of course, giving additional benefits for larger cluster development. So all in all, it's a win-win for everybody, win-win for the original residents of that location.

Speaker #5: Win for the customer because he gets a better and a bigger layout, and definitely for the developer because it improves the margin profile of the cluster that we are undertaking.

Speaker #1: Yeah.

Speaker #4: Thank you very much, sir, for the detailed answer. And best of luck, sir.

Speaker #5: Thank you.

Speaker #1: Thank you.

Speaker #3: Thank you. That was the last question for today. I would now like to hand the conference over to the management for the closing comments.

Speaker #3: Over to you, sir.

Speaker #1: So thank you again, one and all, for joining us on this Q1 FY27 earnings call. On behalf of the Rustamji Management, I thank you for joining us.

Speaker #1: And should there be any further queries, please feel free to reach out to us, and our team will respond to it immediately. Have a lovely day, and a great year ahead.

Speaker #1: Thank you.

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Q1 2027 Keystone Realtors Ltd Earnings Call

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