Marathon Nextgen Realty Ltd (NSE: MARATHON) Q4 2025 Earnings Call dated May. 22, 2025
Corporate Participants:
Chetan R. Shah — Chairman & Managing Director
Samyag M Shah — Director
Unidentified Speaker
Analysts:
Kanav Khanna — Analyst
Harmish Desai — Analyst
Ravi Gupta — Analyst
Mihir Desai — Analyst
Priyam Shah — Analyst
Ishita Lodha — Analyst
Rajan Mehta — Analyst
Girish Gulati — Analyst
Unidentified Participant
Dave Ajmera — Analyst
Jignish — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4 and FY ’25 Earnings Conference Call of Marathon NextGen 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. 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. I now hand the conference over to Mr Kanna from EY. Please go-ahead.
Kanav Khanna — Analyst
Thanks, Pujab. Good afternoon to all the participants on the call and thanks for joining in the Q4 and FY ’25 earnings call of Marathon NextGen Realty Limited. Please note that we have mailed out the results to everyone and you can also see this on your — on our website and it’s been uploaded on the stock exchanges as well. In case if you’ve not received the same, you can write to us, we’ll be happy to send it over. And before we proceed to the call, let me remind you that the discussion may contain some forward-looking statements that may involve known and unknown risks, uncertainty and factors. It must be viewed in conjunction with our business that could cause future results, performance or achievement to differ significantly from what we have expressed or implied by such forward-looking statements. To take us through the results of this quarter and full-year and-answer to all our questions, we have the management of Marathon NextGen represented by Mr Shah, Chairman and Managing Director; Mr Shah; Vice-Chairman; Mr Kevin, Director; and Mr Sameer Shah, Director. We’ll be starting the call with a brief overview of the quarter and year gone past and then we will follow it up with question-and-answer. And with that being said, I transfer the call to Mr Chetan Shah. Over to you, sir.
Chetan R. Shah — Chairman & Managing Director
Thank you very much. Good afternoon, everyone, and thank you for joining us today. Just for the clarification, public numbers are in lakhs, but for the ease of this call, I will be using rupees in crores. Friend, we are proud to report that in FY ’25, the company has delivered the highest full-year profit-after-tax in the history at INR190 crores, registering 13% growth year-on-year. This achievement reflects the resilience of our business model and the strength of our team, achieving four consecutive years of profit after growth at a compounded annual growth rate of an average of 48% is a testament to our long-term vision, our disciplined execution and our unwavering focus on sustainable value-creation. It also reinforces our commitment to deliver growth while navigating a dynamic and challenging real-estate environment in Mumbai.
Our portfolio of projects are located in some of the Mumbai’s high-growth micro markets and they are designed to fit-in today’s urban lifestyle. We are pleased to share that construction is progressing rapidly across all our sites with a sharp focus on quality and timely delivery. Print, this year, we have received occupation certificate OC in four buildings namely, Triton and Nexon, Wing B of Neo Square at and South, our prestigious project aiming up to 64th floor at Baikala. This has translated into growing customer confidence and satisfaction, which is our top priority. We have substantially reduced our debt by more than INR200 crores during this year. This is a significant 28% reduction in the net-debt figure from FY ’24. This has resulted in a healthy and sustainable capital structure as reflected in our low net-debt to equity ratio of 0.46. This is in-line with our long-term strategy of reducing debt. I’m also happy to report a reduction in our cost of debt in response to consistent feedback from the investor community, we set-in process a move to merge the assets and projects of the promoter entities with our company.
On 31st March 2025, the Board approved a composite scheme of amalgamation. This includes 205 acres of land at, 83 acres of land in Dombiwali, 130 acres of land in and some ongoing projects as well as ready assets at our Marathon office building in Lower. The scheme is subject to necessary regulatory and statutory approvals under applicable laws, including the sanction of the jurisdictional NCLT, National Company Law Tribunal and such other relevant authorities. Details of the scheme are available in the earlier press release and any further queries related to this will be made available on such sanctions being received by the company. The scheme apart from the usual benefits of merger and demerger includes reduction in number of legal entities, simplification of group structure, reduction of managerial overlap, avoiding duplication of administration work will also lead to advantage of the public shareholders of the company as all the high-net worth projects of promoter group entities will now come under the umbrella of the listed entity, thereby resulting in a win-win situation for all involved in the scheme, including the public shareholders of the company.
I will now take you through consolidated financial statements for quarter-four FY ’25. Friends, the total revenue is at INR188 crore for the quarter, EBITDA is at INR80 crores and PAT for the quarter was at INR54 crores. I will now take you through the operational highlights for FY ’25, the whole year, the total area sold during FY ’25 stood at INR2,65,376 square feet. The total booking value achieved was INR605 crore. Collections as for the year stood at INR523 crores. Moving to the consolidated financial performance for the financial year ’25, our total revenue stood at INR676 crore. The EBITDA for the year is INR269 crore and profit-after-tax, that is a PAT is at INR190 crore. Right. Now on the balance sheet and liquidity position, as of 31st March 2025, the net-debt stood at INR542 crore, our net-debt to equity ratio, as I mentioned earlier is reduced to 0.46 times friends, with this being said,
I now open the floor for questions-and-answers.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on your touchstone telephone. If you wish to remove yourself from the question queue, you may press. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles you. The first question is from the line of Hamish Desai from PhillipCapital. Please go-ahead.
Harmish Desai
Yeah. Good afternoon and thank you for taking my question. Sir, my first question is if you can help us with the pre-sales outlook for FY ’26.
Chetan R. Shah
Hello. Yeah. The pre-sales for FY ’26, that is actually a future looking statement and we won’t be able to answer that right now. Anything related to the year FY ’25 we can answer?
Harmish Desai
Sure. Sure, sir. Sir, regarding the merger, how will this merger affect the promoter and minority shareholders in terms of dilution?
Chetan R. Shah
Again, regarding the merger, we all talk about it after the approval of the merger.
Harmish Desai
Got it. But sir, are there any known legal or regulatory hurdles that could delay the?
Chetan R. Shah
Yeah. So the merger steps are very well listed online. So there are multiple authorities and multiple sanctioning authorities that we have to cross and post which the merger is sanctioned, so that it does take a while. So yes, it goes through approvals.
Harmish Desai
Got it, sir. But sir, do you have any expected timeline for receiving these approvals? Anything that you must-have thought about.
Chetan R. Shah
So usually it takes 12 to 15 months. I’ve seen it online somewhere, except you know the unusual process, it does take that much time. But again it based on its scheme to scheme, every scheme is different. So it may take longer or shorter.
Harmish Desai
Understood, sir. Understood, sir. So that is all from my side. Thank you so much.
Chetan R. Shah
Yeah. Thank you.
Operator
The next question is from the line of Ravi Gupta, an Individual investor. Please go-ahead.
Ravi Gupta
Thank you, sir for taking my question. My — I have a couple of questions. One is, you know, as far as your construction is concerned, you know, how do you monitor quality out there? Is it like any third-parties involved or you know or some other independent, you know person does it?
Samyag M Shah
Yes. Yeah. Samir here. So in terms of quality of construction, you know, obviously, we try and ensure the best quality that you know that and for that, we need the right number of people. So a lot of times we compare the number of people we actually am on-site with many other competitors and we tend to have a lot more than them and maybe that comes at a cost. But for us, that’s very paramount. And off-late, we’ve actually been using a lot of software. There are quality development softwares where a lot of checklists get updated online. We try and monitor it over dashboards, we try and monitor the work of our contractors through that. And so those are some of the new things we are doing.
Chetan R. Shah
And regarding the older things, we have — a lot of our sites have batching plants where we can monitor the production of concrete. So it’s just-in-time the concrete is delivered. So the travel time of the concrete RMC trucks usually changes the quality of the concrete. So that is one. As Samik mentioned, the app, there are apps on which we take regular updates. These are internal apps between the contractors and our engineers who keep monitoring the progress of micromanage, the progress of each and every project are you in terms of structural design, we all get involved very heavily to make sure that it’s the design is perfect and as per the code as well. So from all aspects, I think we are all engineers over here, including Chetanbai, Maurbai,, we are a very — you know, we get involved too much in the construction aspect and we pride ourselves in terms of construction.
Unidentified Speaker
Just to answer that macro-level, all constructions are done in-house in the sense that all material is brokered, the subcontracting is given for labor contractor and various agencies. And every function of the construction is coordinated by our people.
Ravi Gupta
Okay, great. Thank you. Next question is, you know, I can see that your revenue has been almost flat in the past one year, but you know the PAT has grown. So just want to understand, you know, can you just give color on, you know on what has been driving this PAT?
Chetan R. Shah
So PAT is a product of, you know, construction as well as sales. So this year, we have dramatically increased the pace of construction. Also our — if you look at our debt, debt has reduced by around INR200 crores. Hence that does impact the PAT as well. So these are some of the instances how PAT has increased from last year. While the trend, like you mentioned, the revenue being a constant. Sales realization has gone from that.
Samyag M Shah
So just another aspect to this is sales realization in a few of our projects, when we are comparing year-on-year, we’ve been able to increase the rate up to 10% as well. However, that has a lot of other factors of completion of the project and overall supply in that micro-market. So that has also contributed to a better fact.
Unidentified Speaker
And one extra reason is in the top-line, the turnover. We have sold investment assets at Marathon FutureX about INR103 crore. These assets were already in investment. So right now in the turnover numbers, only the profit of that INR103 crore is reflected and not the total turnover. So that way the top-line is lesser by about INR55 crores in that sense that we have sold and only the profits have.
Ravi Gupta
Okay, got it. Sure. Thanks for answering my question. Thank you.
Operator
Participants who wish to ask questions may press star one. The next question is from the line of Mihir Desai from Desai Investments. Please go-ahead.
Mihir Desai
Thank you for giving me the opportunity. Sir, I have few questions regarding the financials. So if we — the follow-up from the earlier participants, sir, definitely, if we see the the profits have gone strong, but while if you see the operating cash-flow, it is in a negative position. So can you please throw some light on this?
Chetan R. Shah
I think the operating cash-flow is not negative at all. So where are you getting those numbers? In fact, we have reduced the debt. So operating cash-flow has resulted in our being able to make the payment of debt to the extent of more than INR200 crores.
Mihir Desai
Okay. Okay. And sir, secondly, I just wanted to ask on the other income. So if you see the other income compared to quarter-on-quarter and Y-o-Y has seen a significant jump. So do you think — first of all, what is the reason for this? And do you think this kind of number is sustainable going ahead?
Chetan R. Shah
Yeah. So the other income is reflecting a substantial amount of profit from our investment asset that we have sold. Like I mentioned in the answer to previous questions that INR103 crore of investment assets have been sold. Investment assets are assets which were completed earlier and either kept for leasing or converted into a finished inventory as investment and not just as inventory. So that gets reflected directly as a profit into the other income, an amount of about INR55 crores is reflected as a cost of this and about INR48 crore of profit is reflected in the other income.
Mihir Desai
Sure. Sir, one question on the industry front. So sir, as we are seeing more supply in the market, but what is the demand scenario on-the-ground level, which you are seeing and how is the customer reaction on the new projects, on the bookings? So if you can throw some light just to have it on.
Chetan R. Shah
Marathon is really focused in a few very strong micro markets, if you see our positioning. And each of those micro markets, we are in a top four to five constantly on a sales and booking and sales and we understand that micro-market very well. And we are seeing continuous growth in those markets and we position ourselves in each of those segments. If you look at our portfolio, we are also having affordable, we have a luxury, we have a commercial office. So we understand that particular market’s growth in-demand very well and that’s how we’ve been able to sustain our continuous growth in that particular market. Otherwise, in general, if you want me to say the market, particularly, we feel that if the interest-rate continues to reduce, which going to happen during this year, that will really again boost the real-estate market. We are estimating maybe the drop of 0.25 to 0.5% on the reported and that will definitely give further filling to the real-estate market.
Mihir Desai
Got it. Sir, lastly, on the realization front, do you think the current realizations will be sustainable?
Chetan R. Shah
Yes, if you see over the period of time, the realization has been growing year-over-year year-on-year, if you see the — compared to the last year — this year, the growth has been at various projects between 5% to 10%. So it is sustaining. Every time for last three, four years, if you see, every quarter people ask the same question whether this market is sustainable, but the kind of population growth that is happening and ability for people to buy the houses, the aspirational values the houses are attached to in one’s life, that segment is, you know growing and more — add more to it that lot of outside Mumbai people want to come and stay-in Mumbai. So all this migrant population and family growth and ability to buy houses, that is sustaining the momentum, right.
Mihir Desai
Thank you, sir. Thank you for taking my questions.
Operator
And all thank you may have you participants to ask a question, you may press R one the next question is from the line of Priyam Shah from Value Equity. Please go-ahead.
Priyam Shah
Thanks for the opportunity. So I just need further details on your existing projects. And for the one which you have a land parcel in. So with regards to existing projects, if you can touch — touch on the points at which stage that the projects are and where-is the land parcel located?
Chetan R. Shah
So I can tell you about the existing projects where they are. The is not in the listed entity, so I won’t be talking about that. Existing portfolio has a project going on in Baikala. The project is called Monte South. It has four residential tower and one commercial tower. Then there is Nexon, which is a project in Panvel it’s around 25 acres. In totality, it has 19 buildings and four proposed in future. Bandup, we have around two clusters, one is around 5.8 acre cluster and there is another cluster, which is 14 acre cluster. There are four buildings that are ongoing in either of these in totality in these both — in both these clusters. There is a project called Millennium in, it’s a commercial project. In totality, it has around 1.7 lakh square feet carpet. There is a futureX, which is in Parel, which is a built project already, OC ready building. And this is the whole portfolio. If you look at the total in the ongoing projects that we have is so that we’ll all mention in the — you know, in the press release that we’ll be following soon in terms of specifics of every project.
Priyam Shah
Okay, okay. Thanks for the detailed answer. And if you can highlight what is the — this is particularly with regards to the debt or that is short-term and long-term, do we have any refinancing plans?
Chetan R. Shah
This — as a business, we keep on refinancing whenever the cost-reduction opportunity is available. So we have done that in the past and we continue to look for such opportunity. If you see our debt — average cost of debt has reduced during this financial year and the overall debt also has reduced by more than INR200 crores. So the position of debt-to-equity is less than 0.5, it is actually at 0.46. So that is the — how we are managing. We are a very well-placed to be able to borrow if we wanted to borrow more.
Samyag M Shah
A part of our net portfolio is also lease-rent discounting. So that is also a part of our debt. Also most of that debt is covered with the assets it’s construction finance debt.
Priyam Shah
Okay. Okay. Thanks and that was helpful. And I wish you all the best. Thank you. Thank you everyone.
Operator
Thank you. Ladies and gentlemen, in order to ask a question, you may press R&1 now. The next question is from the line of Ishita Lodha from Swan Investments. Please go-ahead.
Ishita Lodha
Hi, sir. Thank you for the opportunity. Just a clarification, the INR605 crores of is entirely the share of the company or does this also include the JV share.
Chetan R. Shah
So this is of the company only. This is excluding the JV share.
Ishita Lodha
Okay. And is it possible to share the area I mean the region-wise breakup, how much was from Bandu, fund, how much was some bike lot.
Chetan R. Shah
So we’ll be putting out a presentation soon that will cover everything.
Ishita Lodha
Okay, thank you so much.
Chetan R. Shah
Yeah. Yeah. Thank you.
Operator
The next question is from the line of Rajan Mehta from AMS Investments. Please go-ahead.
Rajan Mehta
Hi, good afternoon. Am I audible?
Chetan R. Shah
Yes, you are.
Rajan Mehta
Thank you. I have a couple of questions. Firstly, can you help me understand behind that there has been a revaluation in per share price to I think 575 rupees can you just help me explain how, how has this been arrived? I mean, what was the reason for you valuation and this is as per Indian independent valuer or I guess the own valuation.
Chetan R. Shah
So the valuation is at 553, the independent directors and the Board felt that the exchange should be done at 575 INR575. So although the value was 553 in the interest of our public shareholders, the same was agreed by the Board to be kept at 575.
Rajan Mehta
Okay. Okay. Understood. And just one question regarding the merger that we are considering that is about to go through. Will there be any goodwill accounting goodwill that will take place over here?
Chetan R. Shah
See, we have already clarified that merger-related queries will be answered post the approval of NCLD. So we don’t want to comment anything on that now.
Rajan Mehta
Okay. Okay, sure. And just one thing, internally, when the team looks at how they want to be compared to other peers, do you look at something like current net-debt to equity levels or what are the key parameters that you would be looking at?
Chetan R. Shah
So we have always focused on the bottom-line that is profit — profit-after-tax, what is the distributable profit that is available, which gives the great value to shareholders everywhere. So if you will see in terms of the size of the company of the listed companies, maybe we are in the top 35 companies and all. But if you have find out the market cap and profit ratios, those will be different and it is much favorable for the company if you look at the average industry parameters.
Rajan Mehta
Okay, understood. Understood. Yeah. That’s it from my side, sir. Thanks a lot and all the best. I’ll get back-in queue for any further questions. Thank you.
Chetan R. Shah
Thank you. Thank you.
Operator
Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Girish Gulati, who is an Individual Investor. Please go-ahead.
Girish Gulati
Good afternoon, sir. I hope I’m audible.
Chetan R. Shah
Yes, yes.
Girish Gulati
I really congratulate the management on such a treacherous merger. I think it would have taken years to come to this point. And I know it has not been easy, so no questions at all, just the you know congratulations to Chetan, and the entire young team also. Thank you so much for this. I think this was long-awaited by all the shareholders as you mentioned and should be win-win for everybody. That’s it from my side, sir. Thank you.
Chetan R. Shah
Thank you,. You’ve been a well wisher and I’m happy you are in this journey with us together and hoping that the journey goes on for a very long-time. Thank you. Thank you, everyone. Thank you.
Operator
Thank you. We’ll take our next question from the line of Vanj, an individual Investor. Please go-ahead.
Unidentified Participant
Hi. Hi, hello. Hi, am I audible?
Chetan R. Shah
Yes.
Unidentified Participant
Good, congratulations for such a fabulous performance in the history of the lifetime of the company. What I want to understand is the incoming land. What, what I understand that few land parcels in, and Handup are incoming in the company. I would want if you can throw some light on maybe what kind of development is the company is looking at there because it would — we — we feel that it can result in a significant value unlocking for the company as well as the investors. So if you can briefly speak with the land which is incoming and the developable area for that land.
Chetan R. Shah
Yes. Once, like I mentioned in the opening remarks also that these are yet to be approved and sanctioned by various authorities. So we would not like to comment on it till all these approvals are in-place. So these locations are something and overall size of the land-bank is what we have already shared, Bandu, and. These are the three locations and the size of the land also I gave in my speech. But beyond that, we will have to, you know, wait for the sanction and we’ll come out with a detailed analysis on that.
Unidentified Participant
Okay. But can you throw some light on the area under development for the existing projects or maybe the area that would come under development for the incoming lands, maybe in the proportion of maybe two times, three times. Can you throw some light on that?
Chetan R. Shah
Okay. So just to give you what is available on the public domain that around 205 acres of land in is going to come — will come in post sanction and post everyone’s sanction, all the authority sanctioned 130 acres of Bandu, 83 acres of and a few projects in Lord. So these are — these are some of the things that will be coming in other — with the approval. Beyond this, there is — it’s difficult for me to say anything. Other than that, our existing portfolio is, you know, very strong. We have a lot of work carried out for us at Monte South at FutureX in terms of sales. At, existing portfolio, we have around 14 plus 5.8 which is almost 20 acres. So while we are excited about all of this, we also have a lot of work carved-out in our hand in the existing portfolio. And that is what we’ll be sharing in our presentation, which will follow in a few days.
Unidentified Participant
Sure. Hope to see that in the presentation. Thank you. Yeah.
Operator
Thank you. Ladies and gentlemen, who wish to ask questions, may please press char and one. The next question is from the line of Devaj Mehra, who is an investor. Please go-ahead.
Dave Ajmera
Thanks for the opportunity. Am I audible?
Chetan R. Shah
Yes, you are there.
Dave Ajmera
Congratulations for the fantastic result, sir.
Chetan R. Shah
Thank you.
Dave Ajmera
Thank you. Sir, I just wanted to inquire why is there a promoter pledge of 91.5%? So the pledge. Yeah, see this.
Chetan R. Shah
So can you repeat your question?
Dave Ajmera
And why can you why that is a promoter pledge of 91.5%?
Chetan R. Shah
There is no such pledge. That is a misinformation. The — what is happening is when you take a standard loans for construction purposes, the bankers would want a non-disposal undertaking, which is known as NDU, non-disposal undertaking, meaning you will not sell your shares because the loan is being given with this company as a face of it or this promoters as face of it. So NDU is generally signed in a normal way whenever you are borrowing money and to exchange. And that recently have been started being informed to the exchanges also. So one of the loan that we have borrowed has an NDU or kind of a arrangement with the bank that we will not dispose of the ownership of the shares in the company.
Samyag M Shah
So just to clarify, it’s not a pledge, it’s an NDU. And clarification of this specific thing is already uploaded on the exchange, so that there is no doubt in anyone’s mind.
Dave Ajmera
Okay, okay. Thanks a lot, sir. Thank you so much. Absolutely.
Operator
Thank you for participants in order to ask a question you may press R&1 I repeat to ask a question you may press R&1. The next question is from the line of Jignesh who is from Jeeva Capital. Please go-ahead.
Jignish
Yeah, thanks for taking my question. Sir, wanted to understand since most of our projects would be in the affordable segment, so in the micro markets you are present, and since last Six-Month, how much compared to last year has you seen slowdown in the number of sales of your apartments
Chetan R. Shah
So there is no slowdown of sales, but in all these projects many times the sales happen towards the end-of-the project when the delivery is scheduled or the progresses at advanced-stage. At foundation level, the sales are slow. So if you have noticed in my opening remarks, I mentioned about occupation received of the four different projects, two in, one in Baidala of our 64 store in-building and one in Bandu. So while we are delivering the occupation, most of the money would have received by us and we are just finishing off the work. So that way, depending on the quarter-to-quarter, that would be a differences. That’s why I keep on telling everybody that on an average, a real-estate company should be evaluated by a three-year moving average turnover, not three months or six months or nine months or even 12 months. It should be last three years average turnover and you keep on rolling it over and you see how the company is growing.
Jignish
Right. And sir, if we consider in terms of the apartment prices, would — apart from Baikola everything would be affordable segment, right? Or Baikola can come in luxury segment in some of the towers.
Chetan R. Shah
Yeah, is a luxury space segment because it’s 65 storage buildings and three towers. We also have a commercial building which is Marathon FutureX, which is at Lower, which is also a high-value transaction. And we have, if you see a lower-value offices also is available in millennium. So it’s not just a the affordable residential that we are talking about.
Jignish
Okay. Right. Thank you very much and wish you all the best. Thank you.
Chetan R. Shah
Thank you.
Operator
Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for closing comments. Thank you.
Chetan R. Shah
Thank you very much for participating in this conference call. I — there is lot of learning that we are getting, how investor looks at the company and how they are also supporting us with various comments that some of the participants have made. Just one clarification I wanted to give was, there is not a single share led by the company. It is an NDU and such clarification has already been given. So I’ll just repeat that. And thank you very much for all participating.
Operator
Thank you. On behalf of Marathon NextGen Realty Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.