Operator: Ladies and gentlemen, good day, and welcome to the Oberoi Realty Q2 FY27 earnings conference call. We have Mr. Oberoi, the Chairman and Managing Director of the company, and Mr. Saumil Daru, Director of Finance of the company, with us for the call. Please note that this call will be for 30 minutes, and for the duration of this conference call, all participant lines will be in the listen-only mode. This conference call is being recorded, and the transcript for the same may be put up on the website of the company. After the management's discussion, there will be an opportunity for you to ask questions. Should anyone need assistance during the conference call, you may signal the operator by pressing star then zero on your touchtone telephone.
Operator: Before I hand the conference over to the management, I would like to remind you that certain statements made during the course of this call may not be based on historical information or facts, and may be forward-looking statements, including those relating to general businesses, statements, plans, strategy of the company, the future financial condition and growth prospects. The forward-looking statements are based on expectations and projections and may involve a number of risks and uncertainties and other factors that could be caused actual results, opportunities, and growth potential to differ materially from those suggested by such statements. I now hand over the conference call to Mr. Oberoi, the Chairman and Managing Director of the company. Thank you, and over to you, sir.
Vikas Oberoi: Thank you. Good morning, good afternoon, good evening to all of you as per the time zone from which you have logged in, and welcome to the conference call Q2 FY27 Results and Business Update. Firstly, thank you all for taking time out to attend this call. To begin with, we started our quarter by marking our entry into NCR market with our first project launch. At Oberoi Realty, we've always believed that great developments are built long before they are launched through careful planning, design, and an uncompromised focus on quality. This response from NCR was truly exceptional, surpassing our expectations and underscoring the strong response of Oberoi Realty brand in that region. It was the first chapter of a long and exciting growth story that we intend to write in NCR. During this quarter, we entered into development agreement with one more society at Malabar Hill.
Vikas Oberoi: This actually is the third project in Malabar Hill vicinity. As we speak, over 15 towers rising beyond 60 floors are under construction across our development, underscoring the scale, execution capability, and the growth ambition of the company. We continue to steadily increase occupancy across our annuity portfolio while actively strengthening the tenant mix and premier brands. You will be happy to know that all three assets Oberoi Garden City has, which is Commerz I, Commerz II, Commerz III, the Sky City Mall, all of them are today near 100% occupancy. Sky City is in Borivali, but even that is ramping up really well. With this, now I open the floor for question and answer, and both Saumil and I will be happy to take your questions. Thank you.
Operator: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and One on their touchtone telephone. If you wish to remove yourself from the question queue, you may press Star and Two. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Puneet from HSBC. Please go ahead.
Vikas Oberoi: Hi, Puneet. Good afternoon.
[Analyst] (HSBC): Hi, good afternoon, and congratulations on a great start in Gurugram. My first question is if you can also guide on what is happening on Gurugram. There has been some developments on litigation front. What does that do to your plan for the second phase?
Vikas Oberoi: Firstly, the matter is sub judice, so I do not want to comment on that, but there is no restriction on us with regards to construction. As you all know that even prior to the court intervention, we had already done sales of a little over INR 8,000 crores, so that continues. In fact, the first phase was sold out. Yeah, so that is where we are. Sorry, what was your second question?
[Analyst] (HSBC): I mean, what do you do for your
Vikas Oberoi: Sorry, phase 2.
[Analyst] (HSBC): Second phase.
Vikas Oberoi: Yeah. Second phase, we are waiting for some additional approvals on the second phase. As soon as that comes, we hopefully will be able to start with that. But again, we do not want to immediately rush into that. We want to make sure that we are ready with our experience center. We want people to get a glimpse of what we are intending to build, because what we are building is really exceptional. We will get the advantage of once people see that, they will really know what we are building and probably help us push our prices higher as well.
[Analyst] (HSBC): What is the plan for launches for the second half for this fiscal year?
Vikas Oberoi: Again, we had a bunch of projects that we were originally wanting to launch. Probably they will just slide over a quarter here and there. We have Aurelius at Pedder Road. We have Tower A at Thane in Jardin that we want to also look at. We have another tower in Forestville again. Alibaug is one. We are looking at a commercial building in Mulund, a commercial building in Sky City Mall. We have a new project in Mulund, the Rally Wolves project that we did, even that approvals are in a very advanced stage. Frankly, lots happening, some part of redevelopment also likely to come up.
[Analyst] (HSBC): Adarsh Nagar, not likely this year?
Vikas Oberoi: No, again, we are awaiting certain approval clearances. Ready with our design, everything, just waiting for certain clearances. Really knocking the door, but it is taking a little longer than what we thought.
[Analyst] (HSBC): Understood. What about the Ivan Burleigh project?
Vikas Oberoi: That work has physically started. Then again, like I said, that we are not really selling anything there. It is a mall, office, and a hotel. So it is being built as planned.
[Analyst] (HSBC): Okay. But work has started, contractor assigned.
Vikas Oberoi: Yeah. Yeah.
[Analyst] (HSBC): excavation on the ground.
Vikas Oberoi: Excavation on ground has started. There is some additional pile work required, which we are doing as we speak. We have hired Samsung to do the project monitoring there. It is a marquee project for us, so Samsung comes back.
[Analyst] (HSBC): Okay.
Vikas Oberoi: We have signed it with them. Yeah.
[Analyst] (HSBC): Understood. That is all good. Thank you so much, and all the best.
Vikas Oberoi: Thank you, Puneet.
Operator: Thank you. We take the next question from the line of Murtuza from Kotak Securities. Please go ahead.
Vikas Oberoi: Hi, Murtuza.
Murtuza Arsiwalla: Hi, sir. This is just a quick question actually more for Saumil. On the balance sheet, we saw some expansion both on current assets and liabilities. Anything specific to read the balance sheet? Because on the board side, cash generation is obviously very strong in this quarter. So how should we read that balance sheet, please?
Saumil Daru: Hi, Murtuza. So very simple. The biggest thing during the quarter was the launch for Gurugram. As you would know, when we bought the land, a part consideration for the land was in cash, and a part of the consideration was in area.
Murtuza Arsiwalla: Okay.
Saumil Daru: This was to meet the obligations of the earlier sales and all of that.
Murtuza Arsiwalla: Yeah.
Saumil Daru: So, in the quarter in which you will launch, we have to basically fair value the obligation of giving that much area. So that is why you are seeing that expansion on both sides. It comes as an addition to inventory on one side, and it goes out as a provision on the other side. So that's all to it, nothing else. So it's just an additional-
Murtuza Arsiwalla: Okay. So you just fair value
Saumil Daru: accounting angle to it.
Murtuza Arsiwalla: both the asset and liability for the
Saumil Daru: Correct
Murtuza Arsiwalla: area which has to be given.
Saumil Daru: Yeah. For the non-monetary consideration. Yeah.
Murtuza Arsiwalla: Okay. Fantastic. Just checking, Ritz-Carlton, the hotel, when should we expect the commissioning?
Vikas Oberoi: So maybe Q1 next year.
Murtuza Arsiwalla: Okay.
Vikas Oberoi: Another six to nine months too.
Murtuza Arsiwalla: On Gurgaon itself, again, yes, we have to deal with the legal issues right now. How much is the pending sales value out there? When you look at, let's say, FY28 sales beyond the next few quarters, could we see Gurgaon still making a meaningful contribution next year as well, assuming the legal troubles are behind us?
Vikas Oberoi: Frankly, even if you open our booking and sell the rest of the inventory, we will easily achieve that. Like I said, we frankly do not give any forward-looking statement. Let's see how it plays out.
Murtuza Arsiwalla: Okay. Fantastic. Thank you, Vikas. Thanks so much.
Saumil Daru: Thanks.
Saumil Daru: Thanks, Murtuza.
Operator: Thank you. We take the next question from the line of Gaurav Khandelwal from JPMorgan. Please go ahead.
Gaurav Khandelwal: Yeah. Hi, good evening. Thanks for taking my question. So if you look at 360 North, if my understanding was correct, we had mandated 20% of amount to be paid within 90 days of booking. But during the quarter, we have received INR 835 odd crores, which is about 10%, 11% of the net sales value. So how do I reconcile both those numbers? Are we yet to get the next 10%, the remaining 10% in this quarter, or how does it work?
Saumil Daru: Yeah. Gaurav, hi. Saumil. The launch happened in the first week of July. So technically, your 90 days will end in the first week of October. So that is why it will spill over into the next quarter. So for the last quarter, what you saw was rightly around 10% of the billing, which was done on booking. That is what got collected. For the rest of them, you will see that impact in the next quarter.
Gaurav Khandelwal: Got it. Thank you. Those were all my questions. Thanks.
Saumil Daru: Thanks.
Operator: Thank you. Participants who wish to ask a question, please press star and one. We take the next question from the line of Pritesh Sheth from Axis Capital. Please go ahead.
Vikas Oberoi: Hi, Pritesh.
Pritesh Sheth: Hi, Vikas. Hi, Saumil.
Saumil Daru: Hi, Pritesh.
Pritesh Sheth: So just a couple of questions. I am not sure if it was discussed earlier, but status on RLDA and Ivan, when are we starting construction, when are we launching? Specifically on RLDA, have we decided on the mix of how much would be strata sold and how much would be developed for lease?
Vikas Oberoi: So RLDA also, we are in the process of getting our approvals, and we are planning, obviously, offices and a small hotel and some bit of retail there. We have not really decided whether we will be selling and leasing or only leasing. So that bit, we are still holding that decision. Really, there is no reason either/or for one or the other strategy, but just have not made up our mind. So first, we want to ensure we are working on the design. The designs come up really well. So we want to now firm up on the design and then take a call.
Pritesh Sheth: Sure. Construction commencing next year? Approvals expected next year or this year?
Vikas Oberoi: Yes.
Pritesh Sheth: Excellent.
Vikas Oberoi: Yes.
Pritesh Sheth: Okay.
Vikas Oberoi: Easy.
Pritesh Sheth: For Ivan?
Vikas Oberoi: Ivan, like I said, work has already begun. Again, there is no intent to sell as such as yet.
Pritesh Sheth: Sure, got it. An update on the other two hotels that we are building in Borivali and Thane. When are we expected to commission that? Borivali, we can see it is much in advanced stage in terms of completion versus Thane. Just timelines on those two would be great.
Vikas Oberoi: Correct. Borivali, we are done with our building. We are actually already with our interiors. I think 1 year from today, we should safely be done. Borivali, the target is end of next calendar year, I would say. End of next calendar year, next Diwali and around. Thane, we are yet to start work there, so that is a good 4 years away because it is also integrated with the mall. It is integrated with a mall and a club that we intend to build.
Pritesh Sheth: Got it, fair enough. Just one last. While I think our MMR pipeline looks good now for growth for next couple of years or 2, 3 years, just you can share some insights on NCR. How is the BD pipeline building up? Are we looking at, for now, Gurugram? Only Gurugram because we now have a project there, or Noida, Delhi, et cetera. These are the markets which are also open and where the deals are also flowing in. Just an update on business development in NCR.
Vikas Oberoi: No, so you are absolutely right. We are open to all the three NCR, Noida, Gurugram, and Delhi. Open to looking at projects everywhere, including JDs or outright. So happy to use this medium to tell all landowners that we are interested. If they have good land parcels, we are open to doing either or, buy the land or do a JV.
Pritesh Sheth: Sure. That's really helpful. Thank you. That's it from my side. All the best.
Vikas Oberoi: Thanks.
Operator: Thank you. We take the next question from the line of Harsh Pathak from Motilal Oswal Financial Services Limited. Please go ahead.
Vikas Oberoi: Hi, Harsh.
Harsh Pathak: Yes. Hi, Vikas. Hi, Saumil. Good afternoon.
Vikas Oberoi: Hi. Very good afternoon.
Harsh Pathak: Many congratulations on the super performance in NCR. My question is on the cash flows. In slide 3, I think in the current quarter in Q2 our cash margin is close to around 80%. Was this mainly because of the higher pickup in 360 West? Is it because of that? What is the steady state margins that we can look at?
Saumil Daru: Hi, Saumil. 360 North technically, not 360 West. If you look at it, in one of the questions earlier also, it was referred that the collections in 360 North are somewhere in the region of about INR 830 crores. That is the one which is contributing very well to the cash flow. Obviously, in that one, there is no revenue recognition or anything. That is where you are seeing that whole bit of cash coming in. That is what explains what those numbers are.
Harsh Pathak: Sure. So what is the construction outflow that we should be working on for this year?
Saumil Daru: Construction outflow in terms of, so for what? For the ongoing project?
Harsh Pathak: Yes, for the ongoing projects.
Saumil Daru: Should be in the region of about. When you are saying for this year, for the whole year?
Harsh Pathak: Yes, for the whole year.
Saumil Daru: For the whole year will be in the region of about INR 1,000 odd crores.
Harsh Pathak: Okay. Understood. Any updates on the forthcoming commercial assets, except for the Ivan project that we are working on. So for Sky City office asset that we are working and the other in Thane.
Saumil Daru: Thane, there is no office asset. If you are looking at the annuity portfolio, Thane is the mall, the hotel, and there is a club attached to it. Then there is a school. Obviously, all of these costs are going to get spread over about four years. So that will be one thing. As far as the Borivali asset is concerned, again, something where the cost will get spread over four years. We will have to work that out. That is close to about 8 to 10 lakh square feet in terms of area. So that will again get spread out over a period of four years. Did I miss any of the assets that you mentioned?
Harsh Pathak: No, I think, Saumil, broadly it was covered.
Saumil Daru: Yeah.
Harsh Pathak: Just one last thing. Wanted to check on the demand in the luxury market, because I think this quarter we have seen some uptick in 360 West also, apart from the super performance 360 North. How are we looking at demand, and are we able to take some price appreciation at the current assets?
Vikas Oberoi: Just one second. Hi. I think luxury market is very well-placed. I would rather continue to sell than push prices higher.
Vikas Oberoi: I think, yeah, that's what I would leave it at. I don't intend to push pricing. I'll just give you an example. Oceanic, we started with INR 150,000 a square foot, pushed it to INR 170,000, INR 180,000. So wherever there is headroom and there is progression on the project, there is natural appreciation. But other than that, luxury market's very well-positioned. We'd rather let it be where it is.
Harsh Pathak: Understood, Vikas. Thanks a lot for taking my questions. Thanks, Saumil.
Vikas Oberoi: Thank you. Thanks. Thanks a lot.
Operator: Thank you. We take the next question from the line of Karan Khanna from Ambit Capital. Please go ahead.
Karan Khanna: Yeah. Hi, Vikas. Hi, Saumil.
Vikas Oberoi: Hi.
Karan Khanna: Hi, good afternoon, and thanks.
Saumil Daru: Hi, Karan.
Karan Khanna: Hi, thanks for the opportunity, and congrats on the Gurugram success. Vikas, while you briefly touched upon the luxury market, my first question is actually on the pricing and the macro backdrop. If I look at projects like 360 West, while you have seen a sharp price increase in the past six months, compared to FY26, the sales volume has seen a considerable decline. You had 10 units sold in FY26 versus three YTD in FY27. Similarly, Elysian has seen a very sharp price increase, though that has come with lower sales velocity. Compared to that, when I look at both Jardin and Forestville here, which are the sub INR 30 million ticket sizes, you have seen a very solid sales velocity, but the pricing growth has not been there.
Karan Khanna: Are you seeing any trends in Mumbai where premium segment is doing well, perhaps, but luxury and super luxury segments are seeing softer uptake overall?
Vikas Oberoi: Not really, I would say. Like I said, Oceanic is a luxury product, and we have been able to increase price. Similarly, when you see 360 West, it also depends on what floor has been sold. If it is a higher floor, then you obviously sell it at a premium, and if it is a lower floor, then it sells cheaper. That is one part of it. Thane, very clearly, we have enough inventory and you will see a price increase in Thane also in a bit because there is an input cost increase. So we obviously are contemplating that within ourselves also. Overall, I am just saying that there is no resistance in any specific area. If, let us say, there is a change in. Let us see, even in Thane now, some of these buildings have topped up, some of these buildings now are shaping up well.
Vikas Oberoi: People in the local vicinity now see, oh, this is really turning out to be the way they thought, and hence we see velocity in Thane as well. So very project-specific. There is no market-specific, I would say, indicator that whether one should or should not increase price. They are very micro market-driven, and in fact, even further, they are more driven by the cyclicality of that project. If that project has now got all approvals and it is topped up, confidence of people in terms of deliverable, delivery is much higher, and all of that. So I think we base our prices on so many more factors than merely market. Market get driven by the emotions play with, and other week we do that with.
Vikas Oberoi: If I increase my price in Thane, everybody will say, "Oh, Thane market is appreciating." But that is more to do with where my project is.
Karan Khanna: Sure. This is helpful. Secondly, on BD. Historically, your BD to launch conversion has averaged around 3 and a half years. With the existing pipeline, you have a very strong visibility for both FY27 and FY28, but it has been a year and a half since you announced Bandra RLDA and about 6 month plus since you announced both Aram Nagar and Pedder Road. On BD, if you can give some color, at what point in next 6 to 12 months do you expect to close sizable opportunities similar to these and Gurugram? Also, when you spoke about NCR, are you only evaluating residential projects here, or are you actively evaluating anything annuity opportunity too in this market?
Vikas Oberoi: We are open to buying land for malls, for offices, even any other annuity asset in NCR. With regards to the BD, I cannot tell you what I am negotiating for because that will be such a giveaway. Obviously, BD efforts are on, and as soon as we close, we will let you know what we bought, but cannot tell you what we are buying.
Karan Khanna: Sure. Lastly, on Mulund. Eternia's price is up 22% YOY to about INR 36,500 plus, and Enigma only has 76,000 square feet. That is about 38 units left. Is the next Rallye Wolf launch being priced at INR 38,000 to INR 40,000 per square feet, and can it realistically launch in Q4?
Vikas Oberoi: Frankly, thank you for pointing that out. We are internally debating as we speak what should the price there be. Again, like Mulund also now the building is so well-received. We have not only made a building but created a community. In fact, I had some members coming here, and I was telling them with so much pride that people who live in the building eventually make the community. Once the building is ready, all the price appreciation happens because people who have not bought now want to buy into that building for two reasons. One, for the quality of the work we have done, but also for the fact the community that now lives in. Buildings that are ready actually end up commanding that kind of appreciation of price. The same thing, I would say, is applicable to Sky City also.
Vikas Oberoi: The kind of people who bought into that building, now they are living there. The community that got created is actually now attracting people, and hence, there is a price rise. Just to probably tell you why prices go up. There are so many factors that drive pricing to go up.
Karan Khanna: Sure. Then just one short question. Given the success of 360 North and the kind of 360 West, is a product like 360 South under consideration at some point in the near future, or you think that entering the South India luxury housing market is too far fetched at this point?
Vikas Oberoi: No, you can never count that out, ever. But I cannot give you a guarantee of when. So I have been offered land parcels. In fact, now there are landowners who approach us by telling us that, "Why don't you do a 360 West or a 360 North kind of product?" So yes, unintended, but 360 has become a brand, and people are really wanting us to build that many more in other cities. So yes, very excited, very happy. It just happened. But yeah, we will be more than happy to explore.
Karan Khanna: Great. Thank you. Those were my questions. Thank you, and all the best.
Vikas Oberoi: Thank you.
Operator: Thank you. Ladies and gentlemen, we take that as the last question and conclude the question and answer session. I now hand the call over to Mr. Oberoi for his closing comments.
Vikas Oberoi: Thank you all for taking time out for this call. We look forward to hearing from you on an ongoing basis. Please feel free to reach out to us or our investor relation team as and when you have a question. Thank you once again. I also want to tell you that tomorrow we complete 16 years of us listing on the stock exchange, and all this would have never been possible without your support. So thank you again, and happy Diwali and happy Dussehra to everyone. Thank you.
Saumil Daru: Thank you, everybody.
Operator: Thank you, sir. On behalf of Oberoi Realty, that concludes this conference call. Thank you for joining us. You may now disconnect your lines.
