Q1 2027 Marathon Nextgen Realty Ltd Earnings Call
Speaker #1: Realty Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.
Speaker #1: Should you need assistance during the conference call, please signal an operator by pressing star, then 0 on your touchstone phone. I now hand the conference over to Mr. Chetan Shah, Chairman and Managing Director from Marathon Nextgen Realty Limited.
Speaker #1: Thank you, and over to you, sir.
Speaker #2: Good afternoon, everyone, and thank you for joining us for Marathon Nextgen Realty Limited's Q1 FY27 earnings call. I'm Chetan Shah, Chairman and Managing Director of Marathon Nextgen Realty Limited.
Speaker #2: I'm joined here today by Mr. Mayur Shah, Vice Chairman and Director and Promoter Group, Kaivalya Samyag and Parmesh. We also have our Group CFO, Suyog Bhise, present here.
Speaker #2: We have uploaded our Q1 financial results on the stock exchange, and on our website, I hope everyone has had the opportunity to review them.
Speaker #2: Before this call, ladies and gentlemen, we have started FY27 on a good note with a total income for the quarter standing at 217 crores, which is a multi-quarter high, while EBITDA stood at 66 crores, and profit after tax at Rs.
Speaker #2: 52 crores. We continue to maintain healthy profitability while making steady progress on execution across our development portfolio. Friends, this quarter reflects the strength of our diversified portfolio, with contributions from premium residential, affordable housing, and commercial segments, supported by a strong balance sheet and growing development pipeline.
Speaker #2: During the quarter, on our existing portfolio, we sold approximately 38,000 square feet, with a booking value of 86 crores, and collection of 118 crores.
Speaker #2: 118 crores. This is considering MNRL's 40% stake in Montes South project, and not 100%. Including the merged portfolio, area sold stood at 46,000 square feet, booking value was 108 crores, and collections were 146 crores.
Speaker #2: Let me briefly touch upon some of the key project-level developments. Friends, our Montes South project: our joint venture project with 4 residential, 65-storey towers, and commercial towers, Montes South, is located at Baikala, and continue to see healthy customer interest with approximately 35,000 square feet sold during the quarter.
Speaker #2: Generating a booking value of 125 crores, and collection of 140 crores. The sustained sales momentum at Montes South is particularly encouraging, as we continue to see robust demand for well-located premium residential developments.
Speaker #2: We also benefit from having ready-to-move-in inventory in our Tower A and B, which sell at a premium. As we have seen, over the past several quarters, the project has demonstrated consistent sales velocity, giving us confidence in the underlying demand.
Speaker #2: On execution, Tower A, as you already know, we have received occupation certificates while Tower B has achieved RCC completion up to 65th floor terrace, and it is also having part occupation certificates.
Speaker #2: Up to 45th floor. The occupation certificate for remaining parts up to 65th floor is expected during this financial year. Tower C has also progressed rapidly, with RCC work completed up to 28th floor.
Speaker #2: Coming to our next project, Marathon Nextgen, Next Zone, our 25-acre 19 towers development, Marathon Next Zone in Panvel, we sold 14,000 square feet during the quarter, with a booking value of 17 crores and collection of 43 crores.
Speaker #2: Importantly, we achieved full occupation certificate for the Cedar and Daffodil towers. Enabling customer handovers and supporting collections. The project is well-placed to benefit from the continued transformation of the Panvel micro market.
Speaker #2: The Navi Mumbai International Airport is now operational, Atal Sethu has significantly improved connectivity, and the broader Panvel-Kerjat corridor is progressing with the deadline being December 2026.
Speaker #2: With this, the peripheral areas of Panvel, which was connected by road, will now be connected by Mumbai local trains as well. We believe these infrastructure developments are strengthening Panvel's position as an important growth corridor within the MMR and redefining the city center.
Speaker #2: Coming to our Bhandup projects, our Bhandup portfolio is progressed as per schedule. Neo Park and Neo Square together contributed 8,000 square feet of sales, with a booking value of 14 crores, and collection of 9 crores.
Speaker #2: Neo Square, as you know, has already received its occupation certificate, while construction at Neo Valley and Neo Park continues as planned. The underlying market outlook for Bhandup is encouraging, the micro market is benefiting from improving connectivity.
Speaker #2: In June this year, more than 350 slump-dwelling families were rehoused by government to pay way for the construction of Goregaon Mulund Link Road, GMLR, project Queen Tunnels Twin Tunnels have started for Mulund.
Speaker #2: The GMLR will further strengthen connectivity between the eastern and western suburbs. Friends, Marathon's commercial portfolio: at Marathon Futurex, on a combined basis, including the post-merger position, we sold approximately 4,000 square feet during the quarter, with a booking value of 19 crores, and collection of 23 crores.
Speaker #2: Millennium sold over 1,000 square feet, with a booking value of 3 crores, and collection of 1 crore. Futurex: as you know, has already received its occupation certificate, while construction at Millennium continues as planned.
Speaker #2: Our commercial portfolio remains an important part of the overall platform. We continue to be well-positioned through established assets such as Futurex and Millennium. At Futurex, we continue to see strong demand across both leasing as well as outright sales.
Speaker #2: With limited supply of comparable quality space, friends, with the recently planned Montes South commercial being 5 minutes drive from Futurex, it gives us good confidence to launch this commercial project in the vicinity by leveraging our existing relationship and capitalizing on the limited supply of commercial Grade A space in the vicinity.
Speaker #2: As we look beyond the current quarter performance, we have significant value as well as a visible pipeline of future development. Our upcoming projects are as follows: Montes South commercial, with an estimated GDV of 3,400 crores, Montes South residential Tower D, with an estimated GDV of 1,600 crores, and in Bhandup, Marathon Neo Series represents an estimated GDV of approximately 2,800 crores.
Speaker #2: Another area where we see meaningful potential is redevelopment. In the last few months, we added two strategically important opportunities: one in Varsova and one in Sivri.
Speaker #2: At Varsova, through our subsidiary, Sunset Phases, we entered into a development agreement for the redevelopment of an existing residential society spread across approximately 1.5 acres, with an estimated GDV of over 450 crores.
Speaker #2: This is an important milestone for Marathon, as it marks our first major entry through society redevelopment. The project is being planned as a relatively low-density residential development with greater emphasis on open and landscape spaces.
Speaker #2: We believe this gives us an opportunity to bring our development and execution capabilities into an established land-constrained micro market. The next one is at Sivri.
Speaker #2: We entered into a joint development agreement for a cluster redevelopment project spread across approximately 7,500 square meters, with an estimated GDV of around 450 crores.
Speaker #2: Sivri's improving connectivity strategic south-central Mumbai location and stunning waterfront views and relative affordability compared to established neighborhood areas enhance its long-term appeal as a residential destination.
Speaker #2: Together, these two projects, Varsova and Sivri, demonstrate our approach of entering redevelopment selectively. Focusing on locations where we see strong underlying demand and where our execution capabilities can create differentiated projects.
Speaker #2: Friends, we are excited by the opportunities in Mumbai, our approach to growth remains selective. We will continue to evaluate opportunities based on location, project viability, approvals, the structure of the transaction, and most importantly, capital efficiency.
Speaker #2: Our balance sheet gives us considerable flexibility in pursuing this strategy. Following the successful QIC of Rs. 900 crores, we remain in a net cash position with approximately 200 crores of acquisition capital available for new acquisition and a debt-free balance sheet.
Speaker #2: This provides us with the capacity to selectively pursue attractive new opportunities. The proposed merger is another important part. It is designed to consolidate and optimize the group's real estate assets that were not part of a listed entity.
Speaker #2: The consolidation will bring over 400 acres of land, several ongoing projects, and some ready inventory at Futurex into the company's portfolio. Friends, our existing portfolio has an estimated unsold GDV of approximately sorry, estimated GDV approximately of Rs.
Speaker #2: 8,000 crores, while our broader land bank, which is coming through the consolidation, provides substantial visibility for future development. Looking ahead, our priorities for FY 27 are clear.
Speaker #2: We will remain focused on execution across our ongoing projects in MMR, driving sales, and collection, bringing the next set of projects to market at the appropriate time and selectively adding new development opportunities for future.
Speaker #2: We want to build a balanced, sustainable development platform with a mix of premium residential, affordable housing, commercial, and redevelopment opportunities. While maintaining disciplined capital allocations, as per our strategy, we will continue to balance our projects across city suburbs and extended areas of MMR.
Speaker #2: The broader MMR environment remains supportive. Infrastructure is progressively bringing peripheral markets closer to the established city. While redevelopment is creating opportunities within mature Mumbai micro markets, at the same time, demand for quality residential and commercial assets remains very healthy.
Speaker #2: We believe these are durable trends rather than short-term opportunities. Friends, for Marathon, the opportunities particularly attractive, because we are participating across both sides of this market, established locations such as Baikala and Bhandup, as well as growth corridors such as Panvel and Dhobyvalli.
Speaker #2: With a strong liquidity position, a sizable development pipeline, and in-house capabilities across land acquisition, design, and engineering, we believe we have the foundation to execute the strategy with greater control and certainty.
Speaker #2: We enter FY 27 with a stronger platform and a deeper pipeline, and multiple avenues for growth. Our focus now is to convert these opportunities into consistent execution healthy cash generation and sustainable long-term value creation.
Speaker #2: Friends, with this, we open the floor for questions. Thank you very much.
Speaker #1: Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may please start, and one on their touchstone telephone.
Speaker #1: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question.
Speaker #1: Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question comes from the line of Nihir Shah with MP Securities.
Speaker #1: Please go ahead.
Speaker #3: Am I audible?
Speaker #1: Yes, ma'am, you are.
Speaker #3: So, sir, yeah, I take 900 crores of redevelopment GDV in Varsova and Sivri. So what is the launch timeline and how much additional redevelopment GDV can be added over the next 12 to 24 months if you can show some light on that?
Speaker #2: So the total GDV, as mentioned, is about 8,000 crores. The two new acquisitions that we have done in this last quarter are going to add about 900 crores, each project Sivri is 450 crores, and Varsova is also 450 crores.
Speaker #2: So this 900 crores is the additional GDV during the quarter that we have raised.
Speaker #3: Yes, thank you, sir. That's all.
Speaker #1: Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on their touchstone telephone. You can come from the line of Karan Mehra with Mehta Investments.
Speaker #1: Please go ahead.
Speaker #3: Hi, thank you for the opportunity, sir. Sir, so in Q1, the bookings were around 108 crores. What is the business outlook for FY 27, and which projects are expected to drive the acceleration?
Speaker #2: So the numbers of this year, of course, I mean, I won't be able to answer in terms of future-looking things, but then in terms of our demand, especially in commercial as well as Montes South, we're seeing good demand.
Speaker #2: Our Montes South project has in terms of footfalls have dramatically increased. And if you, you know, in the next few quarters, you shall be seeing much better result than what we have already performed.
Speaker #2: In terms of Bhandup, we have recently launched a, you know, an additional phase of an existing project. So that itself is also showing good numbers.
Speaker #2: The booking value of that will be seen in the next following quarters, considering we show booking only on registration. Panvel also, we have launched.
Speaker #2: So again, those numbers you shall see in the following quarters to come. That being said, the outlook of this year seems positive. And yeah, so it looks much positive than last year.
Speaker #3: Understood. And if we look in terms of collections, which were around 146 crores in the quarter, so can you throw some light, how should we think about the collection trajectory over the next two to three quarters, particularly following the recent OCs?
Speaker #2: So collections are a lot of our projects have ready-to-move-in inventory. So from that perspective, if we sell that ready-to-move-in inventory, the collections are directly 100%.
Speaker #2: So for example, our future X, whatever sales happen from that project, the collection of that comes within a tad of around three months. Similarly, Montes South, we have in Tower A and Tower, we till 45th floor, our whatever we sell are the tad of that also is around three months.
Speaker #2: So the ready-to-move-in inventory will augment our collection, number one. Number two, the rest of the collections are basis on percentage completion. And in including Tower C, if you notice off Montes South, we've already reached 28th slab.
Speaker #2: So from that perspective, you know, we're around 40% odd collection, which is again, that's the maximum collection where you'll become you'll come from. So these are some of the projects where collections are so again, our collection this year will be slightly on the heavier side.
Speaker #3: Understood. Sure. Sure, this answers my question. I will join back the queue for follow-ups.
Speaker #2: Yeah.
Speaker #1: Thank you. Ladies and gentlemen, if anyone wishes to ask a question, may press star and one on their touchstone telephone. Reminder to all the participants, if you wish to ask a question, you may press star and one.
Speaker #1: Next question comes from the line of Dev Ajmera and Individual Investor. Please go ahead.
Speaker #3: Hello, sir. Congratulations for the quarterly results. Am I audible, sir?
Speaker #2: Yes. Yes, thank you, Dev.
Speaker #3: So why is there a reduction in the other income for this quarter?
Speaker #2: So the other income actually has an investment property of future X. And in this quarter specifically, that specific, you know, floor where the investment property is, is not sold.
Speaker #2: Hence, there is a reduction in the other income.
Speaker #3: Okay. And once, sir, a follow-up question. Sir, in the September, this is the first NCLT hearing or this is the final NCLT hearing? For the amalgamation.
Speaker #2: So the first hearing the dates for the the public shareholder meeting has been asked to convene. So the convening of all the meetings of public shareholding is been planned in September.
Speaker #2: Post that, the second hearing will take place. Just to add to that, you know, all the stakeholders' meetings some of the meetings have been waived by secured creditors.
Speaker #2: And other meetings whatever were planned are supposed to be done in the first week of September, including the shareholders' meeting of our company. So these are the, you know, meetings after that there will be a second hearing and then the merger would proceed.
Speaker #3: Sir, mostly the amalgamation would complete by December or it would enter 2027 also?
Speaker #2: We are we are not sure about that because that depends on the NCLT's and processes that NCLT follows of the benches are all heavily loaded with a lot of work.
Speaker #2: So getting these dates were also a challenge. But we were luckily able to get these dates.
Speaker #3: Thank you so much, sir, for passionate answers. Thank you.
Speaker #1: Thank you. Ladies and gentlemen, anyone who wishes to ask a question, may press star and one. Our next question comes from the line of Manav Jan with MJ Investment.
Speaker #1: Please go ahead.
Speaker #4: Hello, sir. Thank you for the opportunity. Sir, I just wanted to know how large is the current redevelopment opportunity pipeline beyond the 900 crores that is recently added?
Speaker #4: Are you seeing any increase in opportunity in Mumbai? And what is your framework for selecting the projects?
Speaker #2: Yeah. So the redevelopment opportunity is very huge in Mumbai because you can see all the buildings that were constructed more than 40 years, 50 years ago, are coming for redevelopment.
Speaker #2: And the revised FSI calculations and others make them financially be viable. Let Parmit tell you more about these two opportunities that we have already acquired, one in Varsova and another in Shivli.
Speaker #2: Yeah, Parmit. So yeah, you know, the Varsova and Shivli opportunities, you know, they thought of reflect our work that we have done over the last year or two.
Speaker #2: On the redevelopment front, and of course, we are still actively looking for many opportunities. And this has thought of helped us build a team and gain some experience in the entire redevelopment process.
Speaker #2: And the opportunities are really big. In fact, you know, this you know, we are actually very selective about the opportunities that we get involved in because and you know, some of the biggest criteria being prime locations, you know.
Speaker #2: So we want to enter into locations where you know, which is really in the heart of you know, the suburbs or particular cities and which are really sought after locations in the micro markets.
Speaker #2: In the local micro markets. So that is really one of the most important criteria the opportunities are many. But we are being very selective in the opportunities that we get involved in.
Speaker #2: You know, because that is what will translate into you know, high velocity of sales. And a high pricing you know, so that is how we are approaching it.
Speaker #2: And yes, you know, we are considering many other opportunities you know, so yeah.
Speaker #4: Okay, sir. Just a follow-up on that. Like, what is your view on the current redevelopment deals that are happening? As some of the deals are on the face of it looks very pricey.
Speaker #2: Sorry, is the question will look very pricey?
Speaker #4: Yeah.
Speaker #2: All right. So yeah, see, again, there is a very complex matrix frankly. The way we approach it, you know, because I mentioned one aspect which is the location being prime.
Speaker #2: But of course, there is a lot of financial metrics that we look at, you know, in each and every project. You know, and of course, there are a lot of examples where you know, developers are offering very high percentages and you know, so but yeah, for us, the financial metrics, we are very strict financial metrics.
Speaker #2: And you know, expected profit margins you know, for each project. So definitely, you know, we are only taking up opportunities where we see those profit margins.
Speaker #2: You know, and you know, yeah, and not sort of entering you know, any and every deal. So yes. So there is a lot of you know, background work that goes into it before we even show our interest in a particular project.
Speaker #3: Important thing to note here is when the offers are very high, we have seen so many of redevelopment projects that get stuck later on.
Speaker #3: So it is a good idea to have a financial balanced approach. Even from the perspective of the occupants, that if you seek very high amounts and pricey deal, there is a chance that those deals will not go through.
Speaker #3: Then that we have seen in many of these instances. In suburbs and city.
Speaker #4: Okay, sir. Got it. Thank you and all the best.
Speaker #2: Thank you.
Speaker #1: Thank you. Ladies and gentlemen, anyone who wishes to ask a question, may press star and one. Our next question comes from the line of Prateesha Shah with Syed Advisories.
Speaker #1: Please go ahead.
Speaker #5: Oh, hello, sir. I'm an audible property.
Speaker #1: Yes, sir.
Speaker #2: Yeah, go a little louder. Yeah.
Speaker #5: Sure. So thank you for giving me the opportunity. So my first question is with the company mostly remaining debt free, how much capital do you expect to deploy towards new projects in FY27?
Speaker #5: Also, I wanted to understand at what return thresholds are you targeting?
Speaker #2: See, we have always had our EBITDA margins of 30, 35 percent as a target for acquiring projects. For your question about deploying the capital, most likely the surplus capital that we have currently will fully be deployed in next this financial year, altogether.
Speaker #2: So that's about 200 crores of capital that we will deploy. In new projects.
Speaker #5: Okay, okay, understood. And sir, I also have one more question. That if you can tell us, like, or you can provide more color on the PTC sales vertical, its current pipeline expected sales or like the insights on the business over the next two to three years.
Speaker #2: Yeah. So the reason the region that we are working on in is Bandung. And Bandung is actually a very strategically located, you know, suburb where PTC sales actually cater to the western side, as well as central side, which is Mulund, all the way to Ghatkopar.
Speaker #2: And some parts of Chembur. And on the western side, actually they cater to the southward, which is possibly around Malad. Area. So the area caters to all of these.
Speaker #2: Now, what does PTC stand for is permanent transit camp, where essentially developers sell that area to a fellow developer in those neighboring wards. In lieu of FSI.
Speaker #2: So this is a vertical that we just started after our acquisition in Q4 of FY26. Of the Bandung land. Sorry, of the Kanzurmark land.
Speaker #2: Now, in this, we are seeing a, you know, a huge demand considering that, you know, our considering that in the neighboring wards, there are lots of redevelopment that is going on.
Speaker #2: And for redevelopment to get more viable to become more viable, they require this PTC area. So you know, especially in the newer deals, people are actually initially coming to us and seeking this area.
Speaker #2: So we in the next few quarters, you might even see some pre-sales from PTC area.
Speaker #5: Okay, sir, understood. Thank you for this.
Speaker #1: Thank you. Ladies and gentlemen, anyone who wishes to ask a question, may press star and one. Reminder to all the if you wish to ask a question, may press star and one.
Speaker #1: As there are no further questions from the participant, I would like to end the conference over to the management for the closing remarks. Thank you and over to you team.
Speaker #2: Thank you for participating in this conference call. And we would be happy to answer any other questions. Please do stay in touch with our IR people.
Speaker #2: And we have everything uploaded on the website. Do stay in touch. Thank you very much.
Speaker #1: Thank you, sir. Ladies and gentlemen, on behalf of Marathon Nextgen Realty Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
