Operator: Ladies and gentlemen, good day, and welcome to the Sobha Limited Q2 FY 2027 Earnings Conference call hosted by ICICI Securities 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. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded.
Operator: I now hand the conference over to Mr. Adhidev Chattopadhyay from ICICI Securities Limited. Thank you, and over to you, sir.
Adhidev Chattopadhyay: Hello. Good evening, everyone, and I would like to welcome everyone on the Sobha Limited call today. From the management, as always, we have with us Mr. Jagadish Nangineni, the Managing Director, and Mr. Yogesh Bansal, the Chief Financial Officer. I would like to hand over the call to the management for their opening remarks and comments. Over to you. Thank you.
Jagadish Nangineni: Thank you, Abhidev. Good evening, everyone, and thank you for joining today's call for Q2 and H1 FY27 earnings. I extend a warm welcome to all our investors, analysts, and stakeholders. I will briefly highlight our business performance and key developments before I hand over to our CFO, Mr. Yogesh Bansal. H1 FY27 was the strongest half-year in Sobha's history, with a sales value of INR 5,862 crores, a strong 47.2% year-on-year growth. We sold 3.76 million square feet across 2,260 units, with sales volume growing at 32.4%. Sobha's share of sales value also reached a record of INR 4,874 crores. In Q2 FY27, this is our second highest quarterly sales of INR 2,206 crores with a growth of 16% year-on-year with 1.42 million square feet across 828 units. Average price realization improved to INR 15,522 per square feet in Q2 from INR 13,648, representing 13.7% growth.
Jagadish Nangineni: For H1, realization increased to INR 15,604 per square feet compared to INR 14,028 last year, reflecting our strong product positioning and favorable sales mix. From a city performance point of view, Bangalore remained our largest market, contributing INR 3,385 crores or about 58% of first half of sales and NCR of about INR 1,974 crores, which is again about 34%. Kerala at INR 357 crores, which is about 6%, and remaining cities at 2.5%. Following significant launches in Q1 and Q2 witnessed healthy sustenance sales, particularly from our launched project in Q1, Sobha One World and Sobha Neopolis in Bangalore, and Sobha Crescent and Sobha Aranya in Gurgaon. This demonstrates sustained customer demand beyond the initial launch phase. Overall, we are on track for our guidance and hopefully exceed in terms of sales for the entire financial year. Coming to new launches.
Jagadish Nangineni: During this quarter, we launched two projects, which is Sobha Boulevard, which is a plotted development project in Mysuru, and Sobha Bellevue, a high-rise and apartment project, about 4.3 acres, 298 homes of about 0.83 million square feet in Kozhikode. Overall, for the first half, we launched five projects across Bangalore, Gurgaon, and Kozhikode aggregating to 7.91 million square feet with an estimated sales potential of close to INR 11,200 crores. Our forthcoming launch pipeline remains robust at 20.42 million square feet across 18 projects. We are quite confident of launching at least nine projects exceeding 11 million square feet during the remainder of FY27. As of 30 September 2026, our unsold inventory stood at approximately 15 million square feet, providing a healthy growth visibility. On execution front, we completed 720 homes covering 1.49 million square feet across 9 wings and blocks in Q2.
Jagadish Nangineni: H1 completion stood at 1,391 homes covering 2.56 million square feet across 17 wings. Coming to cash flows and financials briefly. Our balance sheet continues to be our key strength. We maintain a net cash position of about INR 322 crores with a competitive borrowing cost of 7.75% and remaining focused on sustaining a zero net debt position throughout FY27. We achieved our highest-ever cash inflows both for the quarter and half year. Q2 collections reached more than INR 2,000 crores at INR 2,084, and our net operational cash flow was INR 422 crores. This financial strength supports our future investments while maintaining prudent capital allocation. As of end of this quarter, we had INR 22,040 crores of revenue yet to be recognized from units already sold.
Jagadish Nangineni: We expect while the quarter level margins appear lower, as we continue to recognize lower margin projects, and as we recognize future projects, which we are on course for completion and handovers. We are quite confident that our margins will significantly improve, and we should be able to deliver at least 50% growth of PAT over last financial year by the end of this financial year. During Q2, our contract manufacturing and retail businesses generated about INR 225 crore, an increase of 31% quarter-on-quarter, and the external order book stood at INR 540 crore. Our commercial rental portfolio contributed INR 24 crore in income during the quarter. We expect these businesses to maintain steady performance and with a scope for marginal growth.
Jagadish Nangineni: Also, in this quarter, as part of our plan to deepen our expertise in terms of execution, we have acquired a small business of fire and safety from Sobha Projects and Trade Private Limited, SPTL, and this would enable us to execute fire protection services across all our projects as we scale towards a larger volume delivery. With these remarks, I would conclude my opening remarks, and then I would hand over the forum to our CFO, Mr. Yogesh Bansal, for his remarks on the financial performance.
Yogesh Bansal: Good evening, everyone. Let me take you through the key financial highlight of Sobha's performance for Q2 and H1 FY27. The H1 has been marked by strong operational cash collection, continued investment in project execution and expansion of our development pipeline while maintaining a healthy balance sheet. We recorded our highest ever half-yearly operation cash inflow of INR 409 crore, generated positive operation cash flow of INR 755 crore, and closed September with a net cash position of INR 322 crore.
Yogesh Bansal: Coming to cash flow, operational cash inflow for the quarter stood at INR 2,084 crore compared with INR 2,046 crore in the corresponding quarter last year. Real estate collection contributed INR 1,922 crore. Again, this operational outflow was INR 1,642 crore, resulting in positive operation cash flow for INR 42 crore for the quarter. For the H1, operational cash inflow reached INR 4,009 crore with positive operations cash flow of INR 755 crore.
Yogesh Bansal: Construction expenditure continued to be an important area of cash deployment. During the quarter, real estate project related outflows stood at INR 826 crore, while sales and marketing expenditure was INR 103 crore. We have made land payment amounted to INR 617 crore during Q2 and INR 987 crore for the H1. These payments are aligned with our objective of strengthening the development pipeline while continuing to fund existing projects. After accounting for land payments, CapEx, and financing related moments, the overall net cash moment was -INR 337 crore for Q2 and -INR 486 for H1. Our operation continued to generate positive cash flow while we deployed capital towards existing projects and further growth. Moving to our reported financial performance, total income for quarter stood at INR 1,017 crore compared with INR 1,469 crore in Q2 of the previous year.
Yogesh Bansal: Real estate revenue contributed INR 749 crore, while contractual manufacturing and retail operation contributed INR 225 crore. Quarterly EBITDA stood at INR 119 crore, representing a margin of 11%, while profit after tax was INR 33 crore. For the H1, total income stood at INR 2,347 crore. EBITDA was INR 249 crore and profit, that amounted to INR 284 crore. Our gross debt as on 30 September 2026 stood at INR 1,505 crore against cash and cash equivalent of INR 1,827 crore. Our debt-to-equity ratio stood at -0.07, while our average borrowing cost was 7.75%. Maintaining financial discipline remains a key priority. We continue to focus on optimizing borrowing costs, maintaining adequate liquidity, and balancing investment in new opportunity with the funding requirement of ongoing projects. Looking ahead, our existing portfolio provides meaningful visibility on future cash flow and revenue.
Yogesh Bansal: As on 30 September 2026, receivable from sold unit together with sale value of unsold inventory stood at INR 31,814 crore against estimated remaining project cost of INR 1,997 crore. This represents projected project level marginal cash flow INR 12,517 crores. Including forthcoming projects, the projected real estate project level marginal cash flow increased to INR 19,748 crores. This figure provides visibility on the potential of our existing development portfolio. To conclude, our priority remains clear, sustaining operating cash generation, progressing project execution, maintaining balance sheet strength, and ensuring disciplined capital allocation. We remain committed to delivering sustainable growth, strengthening financial performance, and creating long-term value for our shareholders. Thank you. We can now take your questions.
Operator: Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then 1 on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and then 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again to register, please press star and 1. Your first question comes from the line of Parikshit Kandpal with HDFC Securities. Please go ahead.
Parikshit Kandpal: Yes, sir. Hi. Congratulations on the great pre-sales for the Edge Fund. My first question is, in this quarter, we have seen very strong gross margins, almost 48%, maybe I think recent quarter highs. Is it right to understand now that the legacy low-margin projects may be behind us and as the deliveries improve from here on in the coming quarters, if this level of gross margin is maintained, we can see a sharp uptick in the EBITDA margins from Q3 onwards?
Jagadish Nangineni: Good evening, Parikshit. The EBITDA margin as we go forward, like I said, the remaining, the entire revenue to be recognized is close to INR 22,000 crores. It has got excellent EBITDA margin, and we believe that we will be able to maintain our costs and be able to deliver those margins as we progress forward. Increasingly, you will definitely see increased margins, and whether they are going to come from Q3, Q4, yes, they would. Like I mentioned in the opening remarks, as of now, we estimate that from a PAT point of view this financial year, we will be able to deliver at least 50% of growth over the last financial year. From the next financial year also, it is going to be even better.
Jagadish Nangineni: Overall from a P&L standpoint, we are quite confident considering what we have done in terms of pre-sales, the sales value that we achieved, and the pace of development that we are doing on the handovers, the visibility that we have. We believe that it is going to be an uptick from now on. Also, in the previous quarters, I had guided that from Q3 onwards, this financial year, it should start looking better. We should be on track for that.
Parikshit Kandpal: Okay. Thanks for that elaborate answer, Jagdish. That is my second question. In this H1, we have spent a significant amount, almost INR 987 crores on the land outgo. If you can help us understand how much was this for this current year new acquisitions, and how much GDV we have added corresponding to this land purchase?
Jagadish Nangineni: Yeah. This financial year, in the H1, we did spend the cash outflow for land has been significant. Close to about 30% of that cash outflow was towards settlement of old dues for our existing projects, which is now fully complete, and any new cash outflow that would go from now on will be for addition of new lands. That is number one. Number two is, in the H1, we also added three more lands in Bengaluru, and we have started procurement of lands, and as and when they reach the approval stage, they will become visible in the project pipeline. I believe that it will take about a year and a half for them to show up in that. One more in Gurugram. Overall, we have not given specific GDV for the investment that we have done.
Jagadish Nangineni: But we have done significant progress in terms of adding new projects in Bengaluru, in NCR, and we had purchased one land in Mumbai. All put together, and remaining parts, that is about another 50%. Remaining 25% has gone towards existing lands, where we had to do consolidation and remaining payouts to the landowners.
Parikshit Kandpal: Is it right to view, like what million square feet of GDV? I mean, it will be close to about INR 9,000-10,000 crores in one Edge?
Jagadish Nangineni: We will be able to provide that estimate separately, Parikshit. I do not have that GDV right now.
Parikshit Kandpal: This is the last question on the launch pipeline for Q3 and Q4, if you can help us understand how much. You did quantify in terms of million square feet. In terms of projects and sizes, if you can help us and split this into Q3 and Q4, that will help.
Jagadish Nangineni: Yeah. Q3 and Q4, we have tentatively about, like I said, about 8 projects that we are looking at launching. 3 in Bangalore, 1 in Hyderabad, 1 in Chennai, 1 in Gurugram, 1 in Greater Noida, and 1 in Thrissur. All of them put together, they will be about 12-million-odd square feet, and that might be about a value of close to about INR 18,000 crores.
Parikshit Kandpal: In Q3 specifically, if you can call out some large projects in Q3, which are the ones that you can name or call out, and also on the radar, what is the status for these projects?
Jagadish Nangineni: Yeah. These are highly time-sensitive in terms of approvals. We are on track for some of them, but you never know what's the next surprise that we might get. While Q3, we are confident of doing at least 2 to 3 projects of these. I am hoping that it can be higher and probably half of this in Q3 and half of this in Q4, but they are very tight in terms of timelines. Any slip-up here and there, because of any reason, they might quickly go towards Q4. That is number 1.
Jagadish Nangineni: Number 2 is, even while we might get all approvals, we might choose not to launch them for better preparation and better response. And hence, for example, this time, even though we got the plotted development approval for Sobha Boulevard in Q1, but we actually chose to launch it in Q2 so that we can have a slightly better preparation. It is a smaller project, but at the same time, the same approach we would take for the larger projects and also the new launches. So while approvals are one aspect of launching a project, some preparation for that also is required. So Q3, Q4, in both these quarters together, we should be able to do these launches. And we are fairly in advance stage in terms of all approvals for all these projects.
Parikshit Kandpal: If there are any specific projects that you can call out, that will be helpful. I think Sobha Crystal Meadows was one which was pending for quite some time, so if you can name some projects for Q3. I mean, where you have high visibility on getting approvals and launching. So that would be helpful for our analysis.
Jagadish Nangineni: Yeah. We can give those details separately.
Parikshit Kandpal: Okay. Sure. Thank you, sir. I will join back.
Jagadish Nangineni: Thank you, Parikshit.
Operator: Thank you. Ladies and gentlemen, we request participants to limit to two questions each, and rejoin the queue for any further follow-up questions. Your next question comes from the line of Parvez Qazi with Nuvama Group. Please go ahead.
Parvez Qazi: Yeah. Hi, good evening, and congrats on the great sales numbers. My first question is, you mentioned about INR 11,200 crore as the GDV of launches in H1. Ballpark, what would have been the sales in H1 from these INR 11,000-odd crores?
Jagadish Nangineni: From our sales of about INR 5,800 crore, what we have done in the first half, about 70% has come from the new launches.
Parvez Qazi: Sure. The second question is, you have also given a segment-wise breakup of our H1 sales. Roughly 36% has come from ticket size above INR 5 crore, and I think that ties in with the general trend of premiumization in the industry. Looking towards H2 and the 11 million square feet of launches that we are looking at H2, in general, what would be a segment-wise split of these 11, 12 million?
Jagadish Nangineni: Good question, Parvez. I would not generalize like that because it is heavily dependent on the project mix and the kind of product that we initially launch. The sales value that we are achieving in the last few quarters, majority of the sales is coming through new launches. Considering the mix of the new launches, it typically varies. For example, you can see even in Q2, the mix from about 36% of the total overall H1, you can see that greater than INR 5 crore is only 26.2%. There are certain projects that do contribute to higher ticket size, but the launches we are going to do in the future, there is a huge mix of all across ticket sizes, mainly between, I would say, between INR 2 crore to INR 5 crore.
Jagadish Nangineni: Hence, whenever you see a spike in terms of in the higher ticket sizes, that might be because of good traction in that particular segment in that quarter. Overall, if I look at, again, the inventory that we have, so majority of that inventory would lie between INR 2 crore to INR 5 crore. I would assume it is more than 70%.
Parvez Qazi: Sure. Last question, fair to assume that this INR 5 crore plus ticket size would largely be in the NCR?
Jagadish Nangineni: Yes. You are right. Most of the units that have contributed to more than INR 5 crores are from Gurugram, specifically. We have one odd project in Bengaluru and, of course, what we have in Mumbai as well. But you are right, majority comes from our NCR or Gurugram sales.
Parvez Qazi: Thanks and all the best.
Jagadish Nangineni: Thank you, Parvez.
Operator: Thank you. The next question comes from the line of Girish Chaudhary with Avendus Spark. Please go ahead.
Girish Choudhary: Yeah. Hi, good evening, Jagdish.
Jagadish Nangineni: Good evening.
Girish Choudhary: So you have seen strong sustain in sales. Right? On that, specifically, if you could give some more details on the Hoskote project, what kind of sales you have seen this quarter, and how and when are you thinking about the phase 2 launch?
Jagadish Nangineni: Well, good evening, Girish. The Hoskote, the entire project is a very large one. We have overall value of about INR 7,500 crore, and we have done over INR 2,500 crore till now. That too, we have not launched all the towers in the project. But the response to the project and sustenance of that is quite good. Similarly, in our projects in NCR as well, what we have launched in Gurugram, specifically Sobha Crescent and also Sobha Aranya, that is where we have been doing the project for the last 2 years. So the sustenance sales have been good. Also this quarter, the sustenance sales in one of our projects, Sobha Neopolis, which was quite flat for the last one and a half years or so, has picked up quite well after we started completing our towers and handing over to the customers.
Jagadish Nangineni: The sustenance sales are again, quite steady, and we see that as a positive sign for projects where we have launched and also seeing steady traction.
Girish Choudhary: Got it. Any thoughts on phase 2 launch of Hoskote?
Jagadish Nangineni: When you say phase 2 launch, what exactly do you mean?
Girish Choudhary: I believe the total GDV of the project is INR 7,000 plus crore, right?
Jagadish Nangineni: Yes.
Girish Choudhary: Yeah.
Jagadish Nangineni: In this quarter itself, we launched one more tower, so that will take us to almost 65% of the total inventory being released. As we progress towards more inventory getting released and also consumed, we will keep releasing based on two factors. One is on the extent of sales that we are seeing, and second is the development plan that we have. Based on both these parameters, we will keep releasing the inventory. It is not that we have specifically phase 2 as a separate launch that we would do. We would do tower-wise launches going forward.
Girish Choudhary: Got it. That is helpful. My second question, on the acquisition of Sobha Projects and Trade, if you could give us more details around what is the profitability debt of this company, and also, going ahead, how do you see the numbers? Does this require any CapEx? If you can just give some details of how should we look about this acquisition.
Jagadish Nangineni: Sure. Sobha Projects and Trade, we are acquiring the fire and safety business of it. Essentially, the fire and safety business has been delivering about 70% of its business for Sobha itself. They have an order book of about INR 180 crores now, of which, again, 70% of that is Sobha's projects. As we scale, we believe that both from a strategic and financial point of view, it makes sense for us. Strategically, it will just help us increase our ability to coordinate better and also deliver faster for our projects. That is number 1. Number 2 is, from a cost standpoint, it would reduce our cost because there is a GST benefit that we currently lose. There is a certain ability to procure better through our scale of operations and some of the synergies that we might bring in.
Jagadish Nangineni: With that, some cost reduction can happen, and hence, that will help us. Overall, we think that it is quite strategic and advantageous for us to have this business within our own operations. From a revenue standpoint, they have been doing roughly about INR 60 to 65 crores a year. As we scale our own delivery, this is going to significantly increase from here on. From a margin point of view, there is not going to be no CapEx involved because it is a services business, and whatever CapEx is already there, that is good enough. Going forward, if at all there is any working capital requirement, that we will have to fund it, but otherwise there is no additional incremental investment that needs to be done apart from what we are doing at the time of acquisition.
Girish Choudhary: Got it. Thank you.
Operator: Thank you. The next question comes from the line of Biplab Debbarma with Emkay Global. Please go ahead.
Biplab Debbarma: Yeah. Hi, Jagdish. Good evening, and congratulations on the strong quarter. We see that in the forthcoming projects you have now three MMR projects. Last quarter it was one. Just wondering, what would be the, where you have acquired these two new projects? And overall, what would be estimated GDV of these three MMR projects?
Jagadish Nangineni: Biplab, I think there is a slight confusion there. We should have corrected it. Actually, three is actually two. One is additional FAR or let's say saleable area that we would load into the existing one after what we have already released in Inizio, which is an ongoing project. Second is the new Chandivali project. So actually, that addition of that new FAR is coming in two stages and hence we counted it as two, and plus one is the Chandivali project, three. So that's a clarification for that project.
Biplab Debbarma: So you have added Chandivali projects?
Jagadish Nangineni: Yes. Our land acquisition for Chandivali is complete, and now we are at the design stage and going forward for the approvals.
Biplab Debbarma: How big would that project be in terms of GDV? INR 1,000 crores or INR 800 crores?
Jagadish Nangineni: Yeah. About INR 1,000 crores is what we estimate.
Biplab Debbarma: Okay. My second question is on the margins. You have guided the margins will see uptick from Q3 onwards and will be very healthy in FY28 onwards. Could you give us some insight like when we see uptick? Currently it is in single digits. Should we expect, say, in the second half or third quarter, fourth quarter onward, something like 15% consolidated basis to EBITDA margin? What range the margin would be? FY28 onwards steady state, what kind of consolidated EBITDA margin should we expect?
Jagadish Nangineni: For the second half of FY27, I think the EBITDA margin should fairly be much higher than 15% for the whole of FY27. From FY28, of course, I have been mentioning in the previous calls also that it will go towards 20% and beyond. See, one of the main reasons for us, probably I have mentioned it previously in the previous call, these current lower margins are, or at least it is visible like it is lower margins, is because of four to five factors. One, particularly if you see this quarter and the last quarter, or specifically this quarter, what we could recognize as the revenue itself has been lower because handovers that we could do and also the completions that we did.
Jagadish Nangineni: It is a part of cyclicality in terms of in some quarters there will be more and some quarters it might be less, but over a period of time they would normalize. Whenever we recognize a lower revenue, however our fixed cost in terms of overheads and also the elevated sales and marketing cost will continue to be there, and hence you can see a lower margin. As the new scale of revenue that we will start recognizing, those would normalize. That is one. Second is also is that some of the projects that we would recognize in future are the ones where we have our own land and there the margins would still be far superior than typical projects that we do. Those will also start contributing much higher.
Jagadish Nangineni: Third is we still have some of the old projects where the margin is lower and till the time we completely recognize those will pay down on the overall margins. That I think in the next two quarters also, those will reduce quite a bit. The effect of the higher margin projects will start looking up from next two quarters. Also, as I mentioned earlier, it would be an upward curve in terms of overall margins and should stabilize over about 20% plus in terms of EBITDA.
Biplab Debbarma: You have done exceedingly well in H1 in terms of pre-sales, almost INR 5,800 or 900 crore. Considering seasonality, that is what we see, the trend H2 does always better than H1. Does it mean that simple arithmetic will cross INR 12,000, INR 13,000 of pre-sales in this financial year considering we have seen decent sustainable sales and also we have a healthy launch pipeline? What is your thought on it?
Jagadish Nangineni: Yes. Both factors, like you mentioned, the club can contribute to a good sales number. Hence, we would hope and also we would work towards exceeding what we have given as a guidance from a sales point of view. If all of the factors come through, then definitely we should be seeing much better than what we have guided at the beginning of the year. Both factors, which is sustenance sales being strong and new launches being successful, we should do much better than what we have guided.
Biplab Debbarma: Okay. Thank you, and all the best.
Operator: Thank you. The next question comes from the line of Murtuza Arsiwalla with Kotak Securities. Please go ahead.
Murtuza Arsiwalla: Hi, Jagdish. Just a question on your segment sort of financials. When we look at the numbers, there is another unallocated expense, which is reasonably large, generally across quarters between 7% to 10%. How should we think of it when we think of EBITDA margins, the other unallocated expenses? What is the nature of these expenses where they cannot be apportioned to either the RESI or the contract manufacturing segment? That's my first question.
Jagadish Nangineni: Good evening, Murtuza. So these expenses, what you are talking about is, can you help me, what numbers are you looking at?
Murtuza Arsiwalla: So if I look at the reported financials, for instance, in Q2, we have other unallocable expenditure in the consolidated segment report of INR 977.57 million. Right? Which on a net revenue of about INR 9.6 billion. So it's about 10% in the current quarter.
Jagadish Nangineni: Yeah, that's essentially the overhead expense, which is a fixed expense for us on a quarter-on-quarter, which is essentially including our own staff and overheads, and also part of marketing and incentive that we pay out. It has two components. One is a fixed component, which is for fixed overheads, which is inflationary or probably slightly lower than the growth that we are experiencing. Second part of it is directly proportional to the sales that we will end up doing.
Murtuza Arsiwalla: Shouldn't we allocate the sales-related expenses to part of either real estate or contract manufacturing jobs with you? I'm just trying to appreciate that when we look at your segment results, which is a few lines above that, it obviously shows a slightly better margin than when you look at the consolidated, which is the combination of the real estate and contract manufacturing, where the margins may appear even weaker because one takes into consideration the other unallocable expenditure. I'm just trying to understand how do we better appreciate this particular dynamic.
Jagadish Nangineni: Sorry, you are right. In this part, I would like to clarify again. Sales and marketing expenditure would remain in the real estate segment. This unallocable expenditure is largely the overheads that we see. That should be quite flat or, let's say, inflationary in nature.
Murtuza Arsiwalla: Okay. The second question is, generally when I think of your business mix, what proportion of your projects would be through a joint development agreement, where there is a share of revenue to the landowner versus projects which are doing 100% sort of outright purchase of land, and there is no share of payment to the landowner because of the outright purchase itself? Is it an 80-20? Is it a 70-30? What's the mix between, generally speaking, not a particular quarter or a particular year?
Jagadish Nangineni: Sure. On an aggregate level, Murtuza, out of overall sale or the inventory that we have, roughly 82% to 85% is what is our share. In the sense, typically, as an overall example, 50% is, let's say, own projects, and the remaining 50% are joint development projects. The joint development, let's assume it's a 35% landowner share, then it's roughly 17.5%, so about 82.5% is what we take as our share.
Murtuza Arsiwalla: So in terms of projects, it would be roughly 50-50. Half the projects that you would do are through joint development mechanism, half would be 100% kind of model.
Jagadish Nangineni: As of the current land bank—
Murtuza Arsiwalla: Yeah.
Jagadish Nangineni: —and the outlook of the projects that we plan to launch, yes, that's the case. At an aggregate level, it is about 82%, 83%.
Murtuza Arsiwalla: Yeah. That I get. All right. Thank you so much, sir.
Jagadish Nangineni: Thank you, Murtuza.
Operator: Thank you. The next question comes from the line of Pritesh Sheth with Axis Capital. Please go ahead.
Pritesh Sheth: Yeah, hi. Thanks for the opportunity, Jagdish, and congrats on a good sustenance quarter. Just couple of questions. One, continuing the previous question on the unallocable expenses. So that has increased considerably versus last year. Last year, full year, we had INR 200 odd crore. In H1 itself, we have done INR 190. Reasons for that, and when you talk about 30% as the project level EBITDA margin, should we then exclude another 10%, which would be the corporate overheads, and hence your EBITDA margin should be around 20% for the RESI segment? How should we look at, or some insights on that.
Jagadish Nangineni: Good question, Pritesh Sheth. I do not have the exact details of that. Can we get back to you?
Pritesh Sheth: Sure. No worries. I will take it offline. Second question on the launches. I think when we talked about the contribution of launches in H1, that was 70% of the current sales. We would have done roughly INR 4,000 crore from the launches, which are around INR 11,000 crore of total GDV. We have sold 40%. But in this we had one large project that was Sobha One World, which would have, obviously in terms of proportion, would have done lesser. Wanted to understand if there are any such large projects planned in H2 which have a GDV of more than INR 3,000 crore at the launch time itself. Just trying to understand, how should we think about the velocity that way?
Jagadish Nangineni: Right. When we do a launch of the project, we typically do take the entire value of the project as part of the launch value instead of taking what has been released. Hence, you would tend to see that it is a smaller portion of the overall, and specifically like you mentioned, for a larger project, it is more prominent. Some of the projects that we, the project pipeline that we have, which is over INR 3,000 crore, we have one such project in Bangalore, which we plan to launch in the second half. That should be also of similar size, similar or slightly lower than the Sobha One World project. That is one. Second, there is one more project in Bangalore which we plan to launch towards the end of the year. That also will not be maybe INR 3,000 crore, but towards INR 2,500 plus.
Pritesh Sheth: Sure. So two projects of large size in second half.
Jagadish Nangineni: That is right.
Pritesh Sheth: Sure, okay. Just one last on the approvals. While I think it is business as usual for most of the cities, specifically checking for Chennai. After the new government came in, any delays in terms of approvals that you are noticing, considering they have just come in and trying to settle down. What are the timelines for Chennai launch that you are seeing now?
Jagadish Nangineni: We have very limited presence in Chennai. We are planning to launch one project in this next half. We have just completed one project in Sobha Arbor. Most of the approvals, even after the new government has come in, has been quite swift. We have not experienced any kind of delays. In fact, it is quite quick in terms of transition and business as usual.
Pritesh Sheth: Got it. Fair enough. Okay. That is it from my side. Thanks, and all the best for the second half. Yeah.
Jagadish Nangineni: Thank you, Pritesh.
Operator: Thank you. The next question comes from the line of Parikshit Kandpal with HDFC Securities. Please go ahead.
Parikshit Kandpal: Yeah, Vidhi. Thanks for the follow-up. Just to clarify, when you said 15% margins, EBITDA margins, was it for FY27 or H2 FY27?
Jagadish Nangineni: H2 FY27.
Parikshit Kandpal: Okay. Another question is, what is the deliveries plan for H2 FY27? If you can help us quantify in million square feet or in value. How much deliveries you are looking for second half?
Jagadish Nangineni: So overall, our plan for deliveries this year is about 6 million square feet. Which would mean, again, we have already done close to 2.56 million. So about another 3.5 million is what we plan to do in the second half.
Parikshit Kandpal: This will come in, that means almost INR 10,000 or INR 11,000. So it will be about INR 3,000 to INR 4,000 crores of revenues for second half.
Jagadish Nangineni: Yes. In that we will have to take which is our share. That will be one. Second is, while we complete this, does not necessarily translate into handovers, at which point we actually recognize the revenue. So there might be some inconsistencies there, but largely what you are saying is our ballpark numbers.
Parikshit Kandpal: Okay, got it. Just the last thing, if you can, given what is happening on the geopolitics, on interest rate increase, macro. How are you looking at your macro markets? Surprisingly, Gurugram has been holding up despite everyone, all the analysts calling out that will be the first market to go down. It's been holding up quite well. Developers are reporting good sales, sustainable sales has been strong. Just, wanted to pick your brain, next couple of quarters or three to four quarters, how do you think the macro market will behave?
Jagadish Nangineni: It's very difficult for me to comment on what exactly is going to happen on macro. But clearly there is a certain caution related to what's happening in terms of interest rate increase and combination of geopolitics and AI. There are several factors which can lead to, let's say, someone being a little cautious. But when we look at the data in terms of what's the interest levels that we are seeing on a leading indicator basis, which is our inquiries and visits to our marketing offices, they seem to be quite steady. Like you're seeing, sustenance seems to be quite good. If there is any further worsening of it, then it might be different or any positive thing also will turn to be even better for us.
Jagadish Nangineni: I see it quite positively in the sense that even in spite of these negative so-called negative sentiments playing out, most of the leading indicators seem to be quite steady and what we are seeing on the ground seem to be quite good. Interest levels are high, and that's quite positive. Which in fact means that if there is any kind of positive events that can turn out from here on, then things can be even better than what we are seeing today.
Parikshit Kandpal: You are seeing good demand across your markets, like NCR, Bengaluru, Mumbai to spawn. The key markets, I mean, the demand continues to remain quite strong on the ground for you?
Jagadish Nangineni: Yes, we see that it is quite good. There might be pockets, some of the projects where we have one project, cities. There it might be specific to micro market, specific to project. Otherwise, overall, I would still think that the overall demand seems to be quite steady.
Parikshit Kandpal: The Noida project is doing well now. I mean, the one which we have launched in Q1, I think towards just about when the geopolitics started, the war started. Are you seeing good momentum on the sustenance side there?
Jagadish Nangineni: Sobha Rivana, it started out well. I would not say that we have seen a rapid start. Post that, we launched the project in March of last financial year, which is in the midst of just the war has begun and there was quite a bit of caution in the air. So it started out a little slower, but the interest levels are quite good and sustenance is the demand and the walk-ins that we are seeing is quite robust. Hence, we have started to make good progress at the site as well. So I would say it is an end user market specifically for that project, and I believe that it is going to be a very steady project in terms of sales and overall completion of the project.
Parikshit Kandpal: Okay, thank you.
Jagadish Nangineni: Thank you, Parikshit.
Operator: Thank you. The next question comes from Biplab Debbarma with Emkay Global. Please go ahead.
Biplab Debbarma: Just one small clarification I wanted. I think I missed that part. So in the second half, what is your pipeline in terms of GDV and million square feet? I missed that part.
Jagadish Nangineni: Yes. Biplab, we have about eight projects that are lined up, and say about 12 million square feet should at the same average price of about INR 15,000, it is about INR 18,000 crores.
Biplab Debbarma: Okay. Thank you.
Operator: Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Over to you.
Jagadish Nangineni: Thank you, everyone, for joining today's call. Wish you and your families a very happy Vijayadashami. I hope we have answered most of your queries. For questions where we said we will have to revert to you, we will do so very quickly. For any other further questions, please reach out to us. We will be happy to clarify those. Thank you, everyone, and wish you the best.
Operator: Thank you. Ladies and gentlemen, on behalf of ICICI Securities Limited, that concludes this conference. Thank you, everyone, for joining us and you may now disconnect your lines.
