Arvind SmartSpaces Limited (NSE: ARVSMART) Q3 2026 Earnings Call dated Feb. 11, 2026
Corporate Participants:
Amit Sharma — Investor Relations
Kulin Lalbhai — Chairman
Kamal Singal — Director – Strategy & Investments
Priyansh Kapoor — Managing Director & Chief executive officer
Analysts:
Isha Savla — Analyst
Shreyan Mehta — Analyst
Varun Jolly — Analyst
Amit Agarwal — Analyst
Rithvik Sheth — Analyst
Harsh Pathak — Analyst
Dhananjay Mishra — Analyst
Ronald Siyoni — Analyst
Akshay Raghunath Shetty — Analyst
Presentation:
operator
Ladies and gentlemen. Good day and welcome to the arvind Smart Spaces Limited Q3 and 9 month FY26 post results earnings Conference call. 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 this 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. Amit Sharma from AD Factors. Thank you. And over to you sir.
Amit Sharma — Investor Relations
Thank you, Mark. Good afternoon everyone and thank you for joining us on the Q3 and 9 month FY26 results conference call of Arwen Smart Spaces Limited. Today on the call we have with us Mr. Kulin Lalbhai, Chairman Mr. Kamal Singhal, Old Time Director, Strategy and Investments Mr. Priyansh Kapoor, Managing Director and CEO Mr. Amit Chamaria, Chief Financial Officer and Mr. Vikram Rajput, Head, Business Development, MMR and Investor Relations.
Please note that a copy of the disclosures is available on the investor sections of the website of Urban Spa Spaces Limited as well as on the stock exchanges. Please do note that anything said on this call that reflects the outlook towards the future should be construed as a forward looking statement and must be reviewed in conjunction with the risks that the company possesses. I would now like to hand over the call to Mr. Kulin Lalbhai for his opening remarks. Thank you. And over to you sir.
Kulin Lalbhai — Chairman
Thank you. Good afternoon and a very warm welcome to everyone present on this call. Thank you for joining us today to discuss the operating and financial performance of Arvind SmartSpaces for the quarter ended December 31, 2025. From a broader perspective, the residential real estate sector remains on a strong and well balanced footing as we look ahead into 2026. Demand continues to be predominantly end user driven supported by favorable structural factors such as urbanization, rising disposable incomes and lifestyle LED upgrades. Inventory levels across key markets remain healthy and new supply continues to be calibrated reflecting a more disciplined and mature market environment.
I am pleased to share that the strategic initiatives we put into motion are now beginning to show tangible results. Over the past few quarters our focus has been on strengthening the organization, enhancing our leadership depth, decentralizing execution and building sharper accountability at the city level. We are encouraged by the early benefit of these efforts reflected in improved execution momentum, a stronger project pipeline and increasing organizational readiness to scale. Importantly, we believe these initiatives will continue to deliver incremental benefits as we move forward. I would now like to address an important leadership transition at Arvind SmartSpaces.
After successfully leading the company through a phase of significant growth and consolidation, Kamal Bhai will be stepping down from his role as Managing Director and taking over a broader role in the group. For over 15 years his name has been synonymous with this company. I remember the early days in 2008 when ASL was just a budding vision which has now become one of the most exciting platforms in the real estate space under his able leadership. The defining moment was the pivotal demerger in 2015 when he steered ASL into becoming a stand alone listed company with its own identity and purpose.
It was a move that reshaped our future by carrying forward the 128-year-old Lalbhai legacy of integrity. ASL has not only built projects but a Pan India brand anchored in trust, quality and values. From our roots in Ahmedabad to our growing presence in Bengaluru and mmr, Kamal Bhai has scaled ASL with strategic clarity and deep personal commitment. While he steps away from his role of Managing Director, it is deeply reassuring that we will continue to benefit from his wisdom and guidance as whole time Director overseeing strategy and investments. He will also work on a broader group level mandate with the promoters.
As we look ahead, I am very excited to announce that Priyansh Kapoor will be taking over as our new Managing Director. With his proven execution capabilities, extensive experience and deep understanding of the real estate business, he will build on this strong foundation and will further scale the company to the next orbit in the coming years. In a short period of time he has settled in wonderfully into our culture and has worked to bring a new momentum to our growth strategy. With this, I would now like to invite Kamal Bhai to share a few thoughts on his journey at Arvind Smart Spaces and his perspective as we move to the next phase. Kamal Bhai, over to you.
Kamal Singal — Director – Strategy & Investments
Thank you Kulin Bhai and good afternoon everyone. Sitting here today along with this team. It feels like just yesterday that we were sitting in a small room dreaming of what a real estate company born out of Arvind DNA could look like. It is with a heart full of memories and a deep sense of fulfillment that I stepped down as Managing Director. Reflecting on this 15 years journey, it is deeply humbling to see how far we have come. What began as a modest extension of Urban Limited gradually evolved into a distinct identity Shaped by purpose, resilience and conviction.
The Demerger was not merely a structural decision, it was a defining leap that tested our results to ultimately validate that ultimately validated our belief that Lal Bhai Legacy of Integrity could flourish into real estate sector. Watching ASL grow from those early foundations into a nationally respected platform has been the most fulfilling chapter of my professional life. As ASL is poised for a promising future, I look forward with enthusiasm to contribute at the Board level. Working closely with Kulin and Priyansh, I as I transition into the role of full time Director, strategy and investments, I do so with complete confidence and peace of mind knowing that ASL is in exceptional hands.
Priyansh brings with him a sharp strategic insight, contemporary leadership and a clear vision for the future. In passing on this responsibility, I’m not merely handing over an organization, but entrusting a culture built on excellence, discipline and deeply held values. I am certain that under his leadership, ASL will scale greater heights while remaining firmly anchored into the principles defined. Define that. Define Arvind Ethos to the entire team. Thank you for every brick that we laid together. The legacy is in safe hands and I’m sure that the best is yet to come. Thank you and over to you Priyansh.
Priyansh Kapoor — Managing Director & Chief executive officer
Thank you kamalwai Good afternoon to everyone present on the call. Thank you to Kulin and Kamalji and the entire Board for the trust that you placed in me over the past six months as whole time Director and CEO I have had the opportunity to work closely with the Board and the leadership team and I’ve gained deep understanding of the group’s brand and legacy, the company’s strength and the opportunities that are ahead of us. As I assume the new role, my focus continues to be on building a strong project pipeline, strengthening our execution capabilities so that we can delight our customers.
I continue to remain committed to build a strong foundation laid by Kamarji and the team driving sustainable and long term growth for all stakeholders. Coming to the performance, I am pleased to share that we have carried the momentum from the first half of the year into quarter three. We have reported our highest ever nine month bookings and collections in this year. Nine month bookings improved by 5% year on year to 938 crores. Sales momentum during the quarter remained healthy with bookings of rupees 331 crores, a growth of 48% on a year on year basis. A notable highlight of this quarter was the continued traction in sustained sales across several of our projects.
This is in line with what we communicated during our last con call about our focus on driving sustenance performance. This reinforces our ability to maintain sales velocity well beyond the launch phase and reflects sustained customer confidence in our product pricing and delivery capabilities. Sustainance sales are increasingly becoming a meaningful contributor to our overall bookings which add stability and predictability to our sales and our cash flows. We reported our highest ever 9 month collection in FY26amounting to rupees 744 crores up 2% on a year on year basis reflecting strong cash conversion and disciplined follow through on receivables.
Quarterly collections were also the highest ever which increased to about 38% year on year to Rs. 317 crores. On the business development front, we continue to expand our portfolio in a calibrated and selective manner aligned with our focus on high quality micro markets and disciplined capital deployment. Our cumulative new business development top line potential for the year stands at approximately rupees 2,510 crores which includes two new projects in Bangalore and one each in Ahmedabad and Varodara. In Q3 we added a residential high rise project in Vastarapuramdabad with a top line potential of rupees 400 crores and sellable area of 3.6 lakh square feet.
In quarter three we also added a premium residential high rise project in Nalura Halli area of Whitefield in Bangalore with a top line potential of rupees 550 crores and salable area of 4.6 lakh square feet. Very recently in January 2026 we have added a premium residential high rise project in Sarjapur Bengaluru with a top line potential of rupees 860 crores and salable area of 6.8 lakh square feet. All these projects have augmented our vertical development portfolio. Our business development pipeline remains robust and we are actively evaluating multiple opportunities across our core markets of Gujarat, Bangalore and Myanmar.
Now moving from operational updates to the financial highlights, in nine months we have reported revenue of Rupees 4409 crores as against Rupees 550 crores in the last year. Nine month EBITDA stood at Rs. 100 crores as against Rupees 150 crores last year and PAT amounted to Rupees 59 crores as against Rupees 97 crore last year. In Q3 we reported a revenue of Rs. 166 crore as against Rupees 210 crore last year while on sequential basis it grew 16% Q3 EBITDA stood at Rs. 44 crores as against Rupees 60 crore last year and an increase of 30% quarter on quarter.
SPAC for the quarter amounted to Rupees 29 crores against Rs. 50 crore last year and a growth of 38% quarter on quarter. Our balance sheet position remains very strong despite expanding operations with a net debt of Rs. 79 crore as on December 31, 2025. A crucial parameter in real estate reflects the underlying performance quite well is the operating cash flows. Operating cash flows during the quarter and nine month period remained robust underscoring the strength of our business model, the quality of our project portfolio and execution. I would like to highlight the quarterly operating cash flows were the highest ever.
Operating cash flows in Q3amounted to rupees 169 crores, a 128% year on year growth and for nine months it amounted to Rs. 321 crores, a 16% year on year growth. We estimate an unrealized operating cash flow exceeding Rs. 4581 crores coming from the current pipeline of projects. This is expected to be realized over the next four to five years. Looking ahead, the residential real estate market remains on a strong and balanced footing. We are steering Arvind Smart Spaces towards an era of unprecedented scale. Yet our DNA remains uncompromisingly rooted in our high capital efficiency and robust cash flow generation.
We will continue to deliver the Arvind experience to our customers while maintaining the financial discipline that creates long term value to our shareholders. As we look towards the final quarter of FY26, we look forward to launching our projects across our targeted markets. End the year on the strong note. Thank you. We can now open the floor for questions and answer session.
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 the Touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Isha from Access securities. Please go ahead.
Isha Savla
Hi, good morning and thank you for the opportunity. The first question would be Can I just know what is the GDV of the launches in nine months? FY26 and what is the kind of sales at launch proportion that we are seeing on these launches?
Priyansh Kapoor
Right, Isha. So Isha, so far among the new launches that we have done, we did Everland as you know, which was launched actually in quarter two. So that was about 500 crores of inventory. And so far in nine months we have had about 450 odd crores of sales. So if you see we Launched Everland in three months we have been able to sell 90% of the inventory in that project. Other than that, all our other launches are actually now lumped in this quarter four. So what we are looking forward to is now launching our Baroda project.
And we’ve also got approvals in quarter four in the month of January we got approvals for Orchards Phase 2. So we are working on launching Baroda Orchards Phase 2. And we are also at an advanced stage of approvals for our industrial project which is coming up in Ahmedabad. And we continue to work on the Bangalore project. So so far what we have launched actually in the first nine months in terms of new project is everland which was 500 crores. But we are having a very strong pipeline now which is going into quarter four right now.
And for Baroda we will be launching about 400 crores of inventory. That is what we are looking at which is the first phase of the 700 crores of total inventory in the project for industrial, we will be getting approval for our first phase which is targeted in this quarter. That is approximately 600 to 650 crores of inventory. So these are the two large inventories which are coming in. Other than this, we already got approval for Orchard Phase 2 which is a smaller quantum of inventory. And we are working on the two Bangalore projects.
Isha Savla
So the total inventory that will be launching in quarter four, if I’m not wrong, will be around 1500 crores. Am I right?
Priyansh Kapoor
That’s correct. That’s correct.
Isha Savla
And what is the kind of sales at launch that we’re expecting for these projects going forward? Like 90% is something which is an euphoric distinct. Like what is the sustainable rate that we are seeing going forward?
Priyansh Kapoor
Generally if you see all our guidance and all our project underwriting, we do that 30 to 40% in the launch. That is what we do. Fortunately we’ve been selling lot more than that. But today I would say I think we should look at what is the general underwriting norms in the market. That is about 40, 50%. That is what I would say will be a fair way of assessing the absorption. And second, it will also vary by the type of asset class. So something like an industrial probably will be slightly lower. Residential might be slightly better.
Isha Savla
Correct. And my last question would be on Sustainance sales run rate. What is the kind of run rate like we are seeing good subsidiary for the quarter that is gone by. So what is the kind of run rate that we’re seeing? Are we looking at a 300, 350cr going forward as well?
Priyansh Kapoor
So if you see last quarter we did almost 280crores which came from sustenance excluding the Everland spillover of the launch volume. So we are actually doing quite well on the sustainance number. And I think going forward we have a reasonable chance that we can maintain this 200 crore kind of guidance on the sustainance numbers. It’s also a function of the amount of inventory we are able to replace and get in terms of launches. But I think this is almost a 200 crore kind of a number. Seems fair.
Isha Savla
Got it, Got it. Okay, that’s it from my side. Thank you for asking. All the best. Thank you.
operator
Thank you. The next question is from the line of Shreyan Mehta from Aquisis. Please go ahead.
Shreyan Mehta
Yeah, thanks for the opportunity. So just to you know, just a follow up on the previous question. So how should one look at the pre sales, you know we had guided for closure to 1600 and you know looking at a thousand odd crores and assuming 70, 80% so it seems, you know we’ll easily surpass our guidance is that you know on top of it we’ll be also having the sustainance sales. So a how should one look at it? Second question is on the BD, you know BD we were closer to 5000 odd crores and guidance and right now we are at 50%. So how should you know one look at that. And in terms of outright deals, how should one look at bd? Will it be more towards gv, GDA or you know towards outright. These are the two questions on my side.
Priyansh Kapoor
Right, thanks. Thanks Shant. So Shant, on sales we are maintaining our guidance which like you said was about 1600, 1700 crores largely because I said we have different asset classes and we are also getting our industrial project which is going to come in. So with our absorption ratio on residential and industrial expected to be slightly slower because of the longer lead time of conversion in that particular asset. So we expect we still want to maintain our guidance on sales right now coming to the BD. So we have done a GDV of about 2,510 crore and last time we mentioned that we are aiming for about close to about three and a half to 4,000 crore in terms of our BD guidance.
We remain on track, the pipeline is very, very healthy. But like we mentioned last time on BD it’s always binary. So we of course want to lock the right kind of deals today. We feel quite confident that we should be able to meet our guidance with the kind of project pipeline that we are seeing on the BD front. On your question on the mix of bd so the last few acquisitions have been outright. That is primarily to balance the portfolio because we’ve been saying we will largely be 60, 70% JD on our strategy. So currently we were actually more and last few assets were quite lucrative. So the Bangalore projects that we have done, they are on an outright basis. But largely we expect to be in the same range of doing 60 to 70% of our GDV on BD on I would say a medium term basis.
Shreyan Mehta
Sure. And one last question from my side on the industry. You know we’ve been hearing a lot of noise that there’s been some slowdown. Some of the participants have also lowered their guidance. So how should one look at industry and secondly Bangalore per se, you know we had planned a few launches but you know in the remarks you’ve not mentioned so Bangalore. So is it because approval related issues or is it because of some demand slowdown which you’re seeing in Bangalore?
Priyansh Kapoor
Right. So on overall slowdown I think we. Yes. When we are also looking at I would say secondary data. Yes, we do believe, I think the markets are not showing further euphoric growth from the base of the last financial year. Having said that the markets really expanded in this last four, five year cycle. So at our base the opportunity that we have in all the markets is still very, very huge even with stabilized market. And generally what we are also noticing that there is some amount of growth coming in terms of the value growth of the market.
While the volumes could be flattish but the values are still growing. And the segment that we are focusing on, I think we feel fairly confident those segments are actually doing very, very well. So we are not seeing any worry with respect to the kind of portfolio and the markets we are in with respect to any slowdown of assets approvals in Bangalore. Yes, we have actually been slower than expected. I think like you mentioned there were some changes in the Bangalore regulatory environment and the processes are getting streamlined from a long term basis with multiple municipal corporations and authorities getting created we believe, I think that will start showing long term advantages in the way approvals will move.
But in the short term it has actually brought in some, I would say unpredictability for us or A slight slowdown in terms of the pace of approvals. But now our understanding is a lot of these processes and the new we are working in Bangalore is stabilized and these GBAs are getting operational. So we expect to start seeing momentum now over the next coming months on the approval front as well.
Shreyan Mehta
So just to hop on it, so you feel you know Banargatta or any other Bangalore project could you know come into 4Q or probably we are looking at towards next year only.
Priyansh Kapoor
Currently when we are actually looking at our launch guidance we are considering that we should be able to bring one project from Bangalore to the market. So we’re working on in parallel on two approvals as you know in Bangalore. So we are hoping one of those will actually come to the market by the end of the current financial year.
Shreyan Mehta
Got it. Got it. That’s it. From my side. Thank you and all the best.
Priyansh Kapoor
Thank you.
operator
Thank you. The next question, it’s on the line of Varun July sorry from 361 Capital. Please go ahead.
Varun Jolly
Yeah. Hi. Thank you for the opportunity sir, just wanted to check like earlier we were guiding for you know 2500-3000 crore of launch for this quarter. So you know, I mean what is the reason for you know the number going down to 1500 crore now.
Priyansh Kapoor
So sorry, can you just repeat the question now?
Varun Jolly
Earlier we were aiming for 2500 crore to 3000 crore of launches for this. I mean now we are seeing 1500 crore of launch for the fourth quarter. So.
Priyansh Kapoor
Right. We were actually aiming for about 2500 crore for the year. You’re right actually and we had done only 500. So it meant that we should have at least launched about 2000 crore of inventory in the in the last quarter. So one reason like I said is in Bangalore out of the two projects that we were thinking that we will get in the current year we are going to probably get one of those. That’s our current best estimate on the approval front. Second, we had also mentioned earlier that the industrial project may come in parts.
And Baroda also we are launching in phases. So Baroda we are doing phase one. We are expecting we are putting about 400 crores of inventory and industrial we are getting approval for the first phase. Like I said that is about 600 to 700 crores of total top line potential in the industrial. While the total project of industrial is actually close to about 1500 crores. So it’s also a function of this phase wise approvals, phase wise strategy that we have taken on execution that the inventory quantum is slightly lower. Having said this, with the same inventory quantum we are maintaining the sales guidance that we are actually given for the year.
Varun Jolly
So the launches which we mentioned we are very sure to launch this. I mean there’s no risk for a spillover to next quarter.
Priyansh Kapoor
I would say fairly confident we are working on this but regulatory approvals difficult to exactly pinpoint a date and we have almost about two months to go in the year. We’ll hope we’ll assume that will come in the year. But I would say whether you can be absolutely 100% confident on a regulatory approval on the exact date slightly difficult. But we are I would say reasonably confident that one of these projects in Bangalore is in the current year.
Baroda Industrial we see the risk is very low because Baroda we’ve already got the approval. It’s now in our hands to our prelaunch activities are on and we are actually looking at launching in the current quarter Orchard Space 2 in Bangalore. Like I said we secured the approval already. So I think the only uncertainty remains on the two projects in Bangalore out of which most likely we will get one of those in the current year.
Varun Jolly
Okay, as for next year sir, what is the kind of launch?
Priyansh Kapoor
So next year we will be discussing that guidance probably in our next call. What are we looking at? But I think largely with the BD momentum being quite strong we are quite confident we will be looking at a strong pipeline of launches in the next year as well.
Varun Jolly
Okay. And sir, anything on the redevelopment opportunities that we were exploring? Have we come across anything that we probably at active stage of approve. I mean consideration.
Priyansh Kapoor
So you’re talking specifically Mumbai.
Varun Jolly
Yeah, Mumbai.
Priyansh Kapoor
Mumbai. Our pipeline remains quite strong and includes redevelopment projects and we mentioned some projects were at very very advanced stage and we are again seeing good momentum taking slightly longer because again multiple stakeholders that we have to deal with in terms of locking those. But the quality of the assets and the kind of pipeline we have built, we are very excited about it. So Mumbai, our pipeline of projects has really moved quite well over the last few months. Gives us confidence that we should be looking at some decent amount of closures over the next two, three months.
Shreyan Mehta
And sir, on the BD which we have done for the year is there any other like land payment or capex which is pending for the current BD which we have already concluded.
Priyansh Kapoor
So, so, so is one land I think but we can give you the details offline if you want. What is the exact. So Vastarpur is the land which we have already lost some payments that we need to Continue to make. So that is one project. I. Other than that I think otherwise. I think Vikram can share the details offline with you. There are nothing very significant, I would say.
Varun Jolly
Okay. Okay, sir, that’s it. From my side. Thank you.
operator
Thank you. Ladies and gentlemen. If anyone wishes to ask a question, you may press star and one on your touchstone telephone. The next question is from the line of Amit AGI Cha from Edgy Hawa. Please go ahead.
Amit Agarwal
Yeah. Good afternoon sir. I’m audible. Yeah. Thank you for the opportunity and congratulations for good several members. Sir, so my question is like what is the percentage marketing cost compared to the bookings?
Priyansh Kapoor
So thanks Amit. And so your question is on marketing and the marketing cost as a percentage of the total top line, right?
Amit Agarwal
Yes. Yes.
Priyansh Kapoor
Okay. So. So generally as a thumb rule while there could be cotton quarter project level variation but as a thumb rule pure marketing costs will be close to about 1 to 1.5% including brokerage. Typically what we might be incurring on our portfolio might be closer to about 3.5 to 4%. So marketing and support activities, everything added about 3.5 to 4% is what we must be spending.
Amit Agarwal
Sir, would it be possible for you to give the number? Like what would be the percentage digital bookings?
Priyansh Kapoor
We can come back to you offline on this, Amit. We don’t have the exact number but digital is something that has been moving up now as a share of our booking value. But I would still say channel partner, that is that remains the most significant part of our business in general.
Amit Agarwal
And sir, last question from my side. Sir. In Mumbai, like especially in Maharashtra, any leadership changes like you must have done any new, any new appointments you’re saying.
Priyansh Kapoor
From our own internal team perspective.
Amit Agarwal
Yes. Yes.
Priyansh Kapoor
Okay. So yeah, so Mumbai, we continue to strengthen our team as we are now getting a strong pipeline of projects that we are working on on with these various term sheets and various discussions which are very active. So we continue to strengthen our team on all fronts whether it is sales, marketing, execution, legal, all fronts. So we are in process of actually scaling up and adding more and more members. So that’s something which is happening on a very regular ongoing basis. And now the urgency like you said is of course much higher because we are seeing a strong traction on the pipeline of projects.
Kamal Singal
Amit Kamal here on team building. Maybe we can put a little special focus here. And it’s a great question to ask at this point in time the way the team looks today as compared to how it used to look maybe one month back. And Then two months back and then three months back. I think this is one area where Priyansh has really taken off and we have gotten some very, very senior levels and some very talented people, people across functions in the business. And this is one change which is very, very visible in the organization.
So this is one area where a lot of effort, lot of focus all of us have gone into. Priyansh has had a very, very special kind of effort on this that he has put in. Even Kulinbai has been. This is one agenda that he has been personally driving and team building, adding newer people, making the team future ready which is imminent as such is happening on ground and it’s very clearly visible on ground.
Amit Agarwal
Thank you sir. I appreciate you answering my questions and all the best for the future. Thank you.
Priyansh Kapoor
Thank you.
operator
Thank you. Participants who wish to ask a question may press star and one on the Touchstone telephone. The next question is from the line of ritvik Seth from 1up. Fina, please go ahead.
Rithvik Sheth
Hi, good afternoon sir. So couple of questions. So firstly, what is the update on the Karjat project?
Priyansh Kapoor
Please speak loudly.
Rithvik Sheth
Sorry.
Priyansh Kapoor
Can’T hear you very clearly. Possible to be slightly louder.
Rithvik Sheth
Is this better?
Priyansh Kapoor
Yes, much better.
Rithvik Sheth
Yeah, yeah. What is the update on the Karjat project?
Priyansh Kapoor
Okay. So Hrithik, that’s a project you’re talking about. The Mumbai Pankapoli project. That’s there. So that’s a project where we are working on our approvals right now. So we are actually looking at getting the approvals in the next few months. Most likely it’s a launch that will come in the next financial year. But our approvals are moving very well. Now our process readiness, pre readiness, I think all that is on track. So expecting to launch that project in the next financial year.
Rithvik Sheth
Okay. And Surat would also be in FY27.
Priyansh Kapoor
So Surat actually it is. We have given an update. It is status quo as the last update we gave. So we don’t see I would say a launch at least in the next couple of quarters and we are talking to a partner there. We should hopefully have greater clarity by the next quarter. And if you recall last call we had mentioned that because Surat was going slow, that was the reason why we added Varodhara because we wanted to really play the Ahmedabad 1 opportunity in the Gujarat market. So Baroda, we were able to add in record time. We’ve been able to turn around approvals very, very quickly. So we believe, I think at least we got a good project from a immediate replacement perspective and Next couple of quarters I think we should be able to give more clarity on how we are going about it.
Rithvik Sheth
Got it. And sir, if we look at one of your slides where you mentioned the total operating cash flow and there is an inventory of upcoming inventory of about 10,000 crores which the projects we have acquired over the last couple of years. So what would be internal timeline to launch these projects? Would 3 years would be a reasonable internal timeline to launch these projects or so what is our internal estimates for that?
Priyansh Kapoor
So you’re talking about the projects that the entire inventory that we have actually listed, right?
Rithvik Sheth
Yeah, yeah. The upcoming yet to be launched inventory.
Priyansh Kapoor
So most of these projects they are work in progress and some of these are very, very large projects. So there is a possibility some of the phases of these projects will come in over the next one 1.5 years. But largely when we are looking at that kind of inventory, we are looking at monetizing most of these assets over the next four to five years from a launch selling and construction perspective. So that is the duration we are looking at launch depending on I would say because some of these, this is still quite Ahmedabad heavy from an inventory perspective. The launch may be also a function of the kind of opportunity where we see. But over I would say 18 months we will expect most of this inventory to start coming into the market.
Rithvik Sheth
Okay. Wow. Okay. So basically FY27 and 28, that’s what.
Priyansh Kapoor
Yeah, that’s the timeline. But like I said for large projects it could be increases.
Rithvik Sheth
Sure, got it. And just one clarification. You mentioned four projects we plan to launch in Q4. What would be the GDV for these four projects if all were launched so.
Priyansh Kapoor
Close to about 1500, 1600 crores of GDP. Because like I said, we are launching part of the industrial and part of the Baroda project. So about 1500-1600 crores from these four projects that we are bringing in. And orchard is also a phase. So when I’m saying four, it includes Orchard which is.
Rithvik Sheth
Each would be about approximately 400 odd crores of GD purchase.
Priyansh Kapoor
Phase two is close to about 100 crores. So it’s not a very large phase.
Rithvik Sheth
Okay. And Baroda you said is 450 crores.
Priyansh Kapoor
Baroda is close to about 400, 450 odd crores in that range. That is the size of the first phase that we have.
Rithvik Sheth
And the industrial park is, sorry,
Priyansh Kapoor
industrial. Will be between 600 to 650 crores of inventory. That is what we’re getting approval for in the first place. Got it.
Rithvik Sheth
Okay. Okay. Okay. This is helpful. Thank you. And all the best, Priyansh, for your new role. And thank. Thank you, Kamalji. And all the best.
Priyansh Kapoor
Thank you so much.
operator
Thank you. The next question is on the line of Harsh Parthak from MK Global. Please go ahead, sir.
Harsh Pathak
Yeah. Hi team. Good afternoon. So my first question is on your project mix. So when I see your slide 24, you know even X of NMR, when your project getting added in Gujarat and Bangalore market, your mix has moved. Your horizontal mix used to be 80%. That has, you know moved to around close to 70%. So even act of MMR, how are we thinking of this project mix over the medium term? If you can please highlight some of your strategy.
Priyansh Kapoor
Right, Right. So overall from a medium term four to five year guidance, what we’ve been saying that vertical will be 60 to 70% of our portfolio. So gradually the shift that you’re noticing in the portfolio where horizontal is coming down, this shift is something that you will structurally see over the next three, four years. So something which is part of our strategy. And of course as Mumbai comes in as a part of the portfolio it will automatically be able to also augment the more vertical development. Considering the booking value is a single purchase are very large.
Harsh Pathak
Right. Understood. And even your share of luxury segment has moved up. I think it earlier used to be around 10%. Now it’s slowly and gradually moving up. So what are the dynamics you are seeing on ground and how do you intend to pivot your portfolio across segments?
Priyansh Kapoor
So harsh if I can believe, I don’t know. We will still say that we are not focused on luxury as a segment too much. So when we define our customer segment we focus on what I would say from mid income to the higher income segment the most. So that is how we have defined our strategy. So mid to higher income portfolio. I think. So that gives us enough flexibility and enough market size to play with. So currently we are not focused I would say on what we traditionally would want to define luxury as a market.
Harsh Pathak
Understood. Understood. As a final question from my side, the 4,000 crore of BD that you highlighted for this fiscal. So does that include any incremental projects from the MMR market or that would be over and above this in terms of pipeline.
Priyansh Kapoor
We have pipeline actually in all the three cities that we work in. And we are quite hopeful that as we are currently at 25 and as we we are looking at adding further 1000 to 1500 crores in the current year, we are quite hopeful that Mumbai will contribute. But it’s A function of which of those deals that are in the pipeline is able to be fructified first. But I would say the basis of the pipeline today gives us confidence that Mumbai should be contributing to the GDV in this year.
Harsh Pathak
Understood? Yeah, that’s it from my side. And all the best for your new role cmd.
Priyansh Kapoor
Thank you Harsh.
operator
Thank you. The next question is on the line of Dhananjay Mishra from Sunidi Securities. Please go ahead.
Dhananjay Mishra
Yeah. Am I audible so cognates on adding on BD side high rise and that is also on outright basis. So we have done significantly in this quarter. My question is that as you said that the quarterly subsidences would be about 200 crore and now we are targeting close to 1500 GDV to be launched in Q4. So if I assume 30% or 25%. So can we do close to 500 presales in Q4 or if everything goes on that?
Priyansh Kapoor
Yeah. So like I said, I think if you see today we have done about 9:38 crores to be close to our guidance what we need to do close to about 700, 750 odd crores. What we have to do in the current quarter with the inventory and the absorption ratios we are talking about and with sustainance, I think we are largely in that particular range. So it’s a function of which launches come in, what exact date we get the approval. But largely I think if you see the math that is where it is adding to right now.
Dhananjay Mishra
And next year how do you see launches? It will be more H2 driven launches or you will see fairly distributed in H1 as well as H2.
Priyansh Kapoor
So if we look at the next year, see whatever BD we are doing in the current year and also the past projects that we have logged, we are actually quite sure that we are building a very decent pipeline for launches in the coming financial year. Slightly difficult to be able to predict the exact quarter at this particular stage where we would be doing the launches. But our guidance is saying we will continue to grow our presales at about 25 to 30. With the kind of BD we are doing. We remain quite confident that is something which is quite achievable for us.
So that is what we will be looking at. We are hoping that eventually we will be able to go away completely from the cotton level vagaries. But in my own understanding it’s been something which has been slightly tough in the real estate business. I think the only way is building enough options by getting right kind of land acquisition in multiple markets which is what we are currently focused on. So we feel quite good about the next year when we look at the pre sales opportunity for us.
Dhananjay Mishra
So can we expect 30% growth on FY26 pre sales growth?
Priyansh Kapoor
Yeah. So Dhanja, I think like we say we’ve guided for the next three, four years that this is the kind of run rate we want to maintain over the next four years about a 25 to 30. And next year also also we are looking at that. Having said this, like I said approval is the only ambiguity that you factor in. But today feel quite confident that this kind of growth rate is something that we can maintain.
Dhananjay Mishra
In terms of total investment what is the. I mean till now I think in the presentation we can see 265 crore for the land to be seen. So what will be total investment capital investment for this financial year?
Priyansh Kapoor
So Dhanojit, when we are talking about the BD pipeline there are quite a few projects which are actually either JD or many of the projects which are outright. So the number on capital for a quarter basis could just significantly shift basis the nature of the deal. We had commented last time that over the medium term we are looking at investing about 700 to 1000 odd crores. So that number is something that we are continuously monitoring. And this is the kind of BD investment that we are going to see over the next few quarters. From our end if the outright mix is slightly more in the current year then you might actually see a larger outflow in the current quarter. Otherwise those outflows will come in the next two or three quarters.
Dhananjay Mishra
Okay, thank you and all the best.
Priyansh Kapoor
Thank you so much Anandjay.
operator
Thank you. The next question is from the line of Ronald Cioni from ICICI Securities. Please go ahead.
Ronald Siyoni
Thank you sir for the opportunity and congratulations on strong collections and sustainance sales. So firstly sir, on these four projects which we have done like three were outright. So if you can shed some light, you know what kind of EBITDA margins and you know land cost structures were there in this project. So this new business development how it compares with the older ones say over the last trailing one year which we have been doing. So this new project acquisitions are at what kind of return ratios or margin profile they would be having.
Priyansh Kapoor
Right? Ronan, Our average margin that we target is about EBITDA margin is between the range of 22 to 25%. Because the project that we have done are what we have done recently are on outright basis. So the margin might be slightly more than 25%. But I would say at the portfolio level still because we have JD projects also in the pipeline. So I would say considering that, considering that average of 22 to 25 will probably be more appropriate because some of these individual deals can, will probably be higher basis the amount of investments going in.
So these outright projects might be slightly higher. But we have a JD pipeline. So we will come back to that average of 22 to 25 on IRR basis. Also we are actually looking at similar returns, so we continue to clog 25% IRR, which is what we were also seeing for our historical deal. So we continue to maintain the same. So with outright project probably the margin is slightly more, but IRR terms similar. That’s what we are currently looking at.
Ronald Siyoni
Okay, great. And on this cash flow front we, what we have noticed is, you know, there was one launch during nine months and still you, you know, your collections velocity has improved, your construction velocity has improved over the trailing two quarters. So is there some, you know, structurally you have done in terms of execution improvement or efficiency that has changed or if you can set some light on your execution capability skill Understood.
Priyansh Kapoor
Good question. And we’ve actually been focusing a lot, like Kamal Bhai also mentioned, we’ve been focusing a lot on strengthening teams. So over the last few quarters and we mentioned the last call, we had a new CEO coming on board. So the amount of energy coming in from a lot of new team members who started coming in, augmenting, bringing all the effort. So execution is one area where we are putting in a lot of extra effort. So the amount of effort going in in terms of scaling up our COC spends, ensuring that we are able to construct faster and that of course improves the collections and cash flow from the customers as well.
Second thing which also helped the collections is also that the proportion of our sustenance sales has been slightly higher. And sustenance typically allows you more billing opportunity because as you know, the project would have been launched in the past and billing percentages are higher. So. So that has also helped us actually in terms of our collection mix. So both execution and sustainance sales, where we are focused on capabilities, is helping drive better connections and better operating cash flows.
Ronald Siyoni
And lastly sir, on the leverage part, like we have taken about 110 or 100 loan drawdowns to pay for the outright purchases. So now what kind of do we have any particular, you know, guidance in terms of the leverage that parameter that we would not surpass that parameters in terms of say net debt to EBITDA or net debt to equity? Something of that sort. So you know, leverage would not go beyond this point.
Priyansh Kapoor
Right. So Ronald, on the debt equity fund, while today we are actually still very low. So we are not seeing any worry or any concern on that front. We are at 0.13. And when we have internally drawn up our plans we are quite clear that we want to keep this debt equity below 1:1. So that is what we want to be operating below at. Having said this, that even when we are looking at a pipeline our sense is I think we probably will not get close to this mark for a reasonable time at this particular stage. Because the mix of JD projects and outright still continues in favor of jd at least in terms of the future.
Ronald Siyoni
Okay. So. Yeah. Thank you very much. Thank you very much.
Priyansh Kapoor
Thank you.
operator
Thank you. The next question is on the line of Akshay Shetty from Mirai Assets. Sher Khan, please go ahead.
Akshay Raghunath Shetty
Good afternoon sir. Thank you for the opportunity. My question is regarding the new labor codes. So do you expect the implementation of new labor code is expected to have any like impact on the cost of profitability going forward?
Priyansh Kapoor
Amit, I request Amit to take this.
Amit Sharma
Yeah, thank you Akshay for the question. So right now as you know the labor codes got implemented from November onwards. So we have done an assessment on our side. And we have taken a provision of. 2.59 crores in our numbers for December for quarter ending December. And we continue to monitor this space. And implement the guidelines as they crystallize even further. And the impact of this on our P and l is about 1.5% for the quarter. And the numbers are what we discussed earlier. 2.59 crores for this present quarter.
Akshay Raghunath Shetty
Okay, thank you. That was helpful. All the best.
Amit Sharma
Thank you.
operator
The last question is a follow up question from Amit Agicha from at Jihawa. Please go ahead.
Amit Agarwal
Sir. My question is that with this it slowdown as well as overall the stock market not so do we have a plan B as to how we will conduct the selling for our under construction projects? And generally we have seen that real estate recession last for many years. So will we then at that moment be amenable to cut prices but yet keep on selling or we will wait for the prices to come to our level.
Priyansh Kapoor
This is a very good macro question today. When you look at our position, I think we are slightly, I would say in a very unique position because one, we are diversified across three markets as a company. So we are looking at Gujarat, we are looking at Mumbai, we are looking at Bangalore. So one, we have a Market diversification, second in assets also we are doing again multiple assets. So we are doing vertical as well as we are doing plotted. So in the customer segment, the kind of job in the back background that these customers will come from for different asset classes are actually probably I would say getting their income from different sources.
So this gives us one natural edge. Our JD strategy also puts I would say less pressure on us to worry about cash flows too much if at all. There was a very tight situation. And also most importantly having said this at our scale when we are with our brand, when we are actually going to any market, the response that we are getting is still very very strong. So while these questions have been in and around with AI coming in, what is going to happen? But when we are actually going to the market and testing our product acceptance and customers willingness to buy with us, I think we are still getting a very, very strong response.
And all the three markets that we sit actually at that we are looking at are very, very large. And considering there, I think the share that we might be talking about for the next two, three years as a share of the these markets still will be a very small percentage. So I think with a good brand, with a good pedigree, having strong execution and design skills, we feel, I think we are reasonably protected on this particular front.
Kamal Singal
I’d like to just add to this, if you just step back and look at Arvind Smart Spaces as a strategy over a decade plus and which continues to be our guiding force moving forward is that we are very, very focused on selling first home ownership and land ownership to the middle class. And I think this is a very structural story in India. It is underpinned by various macro forces, one being the financialization of our economy where EMI as a tool for home ownership is so fundamental. There’s so much of India that still doesn’t, you know, where people still don’t own their first home.
So with this focused 1 crore to 2 crore ticket size product I think this market is not really a volatile stock market linked. It is a very structural home ownership financialization backed middle class lifestyle upgrade story. And we will ensure that that is the core of this company. And that’s a very robust multi decadal story in our view.
Amit Agarwal
But my question still remains that if there is a drying up of incomes overall, will we, will the custom, will the custom. Will the company strategy be to just complete a project, sell it out totally and move on? Even if it means cutting prices a bit? Because if I buy a stock or a company like Urban Smart Spaces. I’m buying it for three, four years outlook. So I need to know as to what strategy the company will take place in view of different probabilities.
Kamal Singal
Yes. So we have always been, as you.
Amit Agarwal
Know, all the points that you have made and they are very valid and good arguments but they are more with the past in mind. Whereas the future, you know, looks like a lot of the old structures of employment may be broken.
Kamal Singal
No. So we have always, as you know, been a very cash flow focused company. We believe in velocity. Our mantra is velocity. We are not the variety to bank land and wait for market and prices to inch up. That has never been the DNA of this company. It has always been IRR and cash flow. So if you are in any cycle, we will always look to having velocity of cash flow over, you know, looking at banking and just protecting, you know, value of the land bank. That is not the way we think.
Amit Agarwal
That was exactly the answer I was looking for. And second, sir, is there, even though it’s overall a commodity space, but we have a strong corporate logo. Is there any other way that we could differentiate the product in terms of marketing strategy or something which there is some to and fro within the company about?
Kamal Singal
We as a group, we have come, our roots have come from being a product company. You know, the reason we also focused on felt there is a space for us in this real estate business beyond trust, integrity and connect with the brand is that in whichever business we have been in, we are obsessed on product. And therefore, even if you look at our tagline in real estate or our positioning, it’s around design designed to inspire. We believe your home and the spaces you live in really opens up your mind and, and releases the right sort of energy thought process.
So design is something which we believe is a space which is very unique, which we want to operate in. And the other is customer obsession. We’ve been in the consumer business also in our other group companies. So for us being a very obsessed, NPS focused, customer focused thought process again, I feel this is a white space in real estate. It’s one of the most important products a person buys.
And the experience of real estate still is not best in class in our country. There is a lot more we can do to improve the experience of buying a home and owning a home. So I think design and customer obsession are the two spaces which underpin our entire way of operation and our worldview. And we hope as we progress in this business we keep redefining except excellence even for ourselves on these two dimensions.
Amit Agarwal
And do you see Proptech helping us really selling these spaces easily or do you see any kind of like, you know, other verticals like co living or adult living, sorry senior living or even for example student living coming through or we adopting those models to sell our properties.
Kamal Singal
See, I think many models are going to evolve as the market matures. We want to remain core to what we do. One of the things this company has done very well is focus. So we will continue to focus on the structural areas we are in. But if your question is around technology, I think there is no business in India today which does not have to reinvent itself using technology. The technology we are using to manage our projects and velocity at I feel we are working on some amazing new age approaches on how we look at project management.
I think there are technologies around construction, even the whole online digital sales as a percentage of turnover. I think Arvind Smart Spaces remains one of the leaders in our entire digital lead generation management. That skill set we borrowed from our other businesses. We are also very, very clear that AI is going to play a role in various use cases in real estate. We’ve started projects on that as well. So I think as a group we gravitate to technology pretty easily and well. It’s been a strength and we’re bringing that in this business as well.
Amit Agarwal
Sir, I really appreciate your answering my questions so well. Thanks a lot for your time sir.
Priyansh Kapoor
Thank you.
operator
Thank you. That was the last question. As there are no further questions, I now hand the conference over to Sir Priyansh for the closing comments.
Priyansh Kapoor
Thank you everyone for participating in this earning call of urban smartspaces. I hope we have been able to address most of your queries. However, if there is anything missed out on any of your questions, kindly reach out to Vikram and he will connect with you offline and clarify and give further information as may be required. Looking forward to interacting with all of you in the coming quarter. Thanks for your time.
operator
Thank you on behalf of Arvind smartspace limited that concludes this conference. Thank you for joining us. You may now disconnect your lines.