Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Keystone Realtors Ltd (NSE: RUSTOMJEE) Q2 2026 Earnings Call dated May. 12, 2026
Corporate Participants:
Sajal Gupta — Group CFO and Head Corporate Strategy
Chandresh Mehta — Executive Director
Analysts:
Rashid Shah — Analyst
Rushab Shah — Analyst
Pritesh Sheth — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Keystone Realtors Limited Q4FY26 investors conference call hosted by Access Capital 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 this conference, 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.
Rashid Shah from Access Capital. Thank you. And over to you sir.
Rashid Shah — Analyst
Hi. Good evening all. Welcome to the earnings call of Keystone Realtors for Q4 and full year FY26. The management is
Operator
Represented by Mr. Bommal Irani, Chairman and Managing Director, Mr. Chandrash Mehta, the Executive Director Mr. Pasi Chaudhary, the Executive Director and Mr. Sajal Gupta, the Group CFO. Without further ado I hand over the call to you. Thank you.
Rashid Shah — Analyst
Good afternoon everyone. I am Baman Irani, Chairman and Managing Director of Keystone Realtors Limited. Welcome to our Q4FY26 and full year FY26 earnings conference call. I thank you all for taking the time to be with us today. Let me begin by saying or giving you our headline numbers. They tell a story much better than any words that I can use. The pre sales that we have done this year are 4022 crore rupees. This is an up of about 33%. Q4 presales are at 1346 crore rupees which is a 58% year on year jump.
This has also been our highest ever quarterly pre sales. Our BD has done extremely well and we are at about 1.74 times the guidance that we had given. We are a net cash positive company and this has been our position throughout the year. Our gross debt to equity ratio is at 0.261. We have recently been given a rating of AA minus with a stable outlook by Crystal indicating sound financial health of the company. I want these numbers to sit with you as this is the backdrop for everything that I’m going to say here on.
When we got listed we had made a set of commitments to all of you. We said we will tell you what we can do and then we will do it three years on. I am happy to state and very very keen to tell you that we have kept our word all through year after year, quarter after quarter, across pre sales, across collections, across project launches with business development, keeping debt disciplined and making sure to optimize cash flow Operating cash flows. We have always met or surpassed every single guidance metric that we have shared with you.
This is the result of a deeply disciplined organization having a resilient brand and a culture of accountability that runs from the boardroom to all our sites construction and building. Otherwise, I want you to hold on to these thoughts again because this is the lens through which I will tell you all that I am going to Today we’ve said before the Keystone Realtors are inflection point. Some of you have nodded politely accepting our statement Today I invite you to look at the operational performance that we are reporting.
These numbers will make the case far more elaborately and eloquently than I can. Our pre sales have grown 2.5 times in just three years. You remember we were at 1604 crores in FY23 and today we are at 4022 crores in FY26. That is a CAGR of 36%. Our market share in the MMR has doubled. We are at approximately 2% of the market of MMR in the last three years. Now these are hallmarks of a company that is structurally gaining ground. Our legacy project overhang that weighed us, weighed down on us on our reported financials are now substantially behind us.
You can expect us as an organization to improve our reported margins going forward. Our financial performance will truly begin to mirror the operational strength we have been building. Let me walk you through some of the key metrics for the year. Full year Pre sales for 4022crores. Like I said, 33% increase over FY25. This is bang on in line with our guidance. In Q4 alone we recorded 1346 crores. Like I said, remarkable 58% year on year growth that reflects both the quality of launches and sustained appetite for our brand ustamji across the MMR our total collections in FY26 stood at 2,622 crores, again a 13% increase.
Year on year Q4 collections interestingly were at 853 crores up 14% year on year. Our operational cash flows for FY26 stands at about 715 crores. We remain one of the very few listed companies, real estate companies, that has maintained a net cash positive status throughout FY26. Our gross debt to equity ratio remains comfortably within the guidance of 0.266 to 1. This is a reflection, like I mentioned, of the financial discipline and it becomes increasingly valuable in an environment where the cost of capital continually matters.
With two project launches in Q4FY26 we have launched projects of GDV3978 in that quarter. Our total of aggregate seven projects launched in FY26 was a combined estimated GDP of about 9813 crores. This is 1.4 times the guidance of thousand crores and a 96% growth year on year. Abidi has done extremely well.
Operator
Ladies and gentlemen, the line for the management seems to have disconnected. Please stay with us while we reconnect with the management. Ladies and gentlemen, we thank you for your patience. We have now reconnected with the management. Over to you sir.
Rashid Shah — Analyst
I’m so sorry about that. I’m not sure where we got cut off as you have to hear some repetition. Please bear with me. We have two projects launched in Q4 FY26 making it a GDP of 3978. That’s almost 4000 crores in the last quarter. And the total seven projects that we launched in FY26 had a combined estimated GDP of 9813 crores. That’s about 1.4 times our guidance of 7000 crores and a 96% growth year on year. Our business development has done extremely well. We’ve added five projects with total estimated GDP of 10,400 plus crores in FY26.
This is 1.74 times our guidance which was 6,000 crores and 118% growth year on year. Since FY23, we have added 25 projects totaling 27,800 plus cross crores GDV. Notably 21 of these are redevelopment and 18 serve in the emerging premium and premium housing segments. Each project is underwritten at approximately 35% gross margins with upfront equity capital capped at approximately 10% total project GDV. This asset light margin first approach ensures that every project we add strengthens our balance sheet.
Now let me tell you about what we have done and what we are about to do. You are aware that we have more than doubled our stake in the sales of the city. But recently at our open house, we have made and presented to our entire team a roadmap where we have identified that our company Keystone Realtors will achieve and be in the 10,000 crores pre sale club by FY30. This is not wishful thinking. This is not just an aspiration, but this is a target that we are fully prepared organizationally and individually to achieve.
Our pipeline, our brand equity, our balance sheets, our teams, all of us are calibrated towards this one North Star. At least 10,000 crore pre sales by FY30 I’d like to say is our commitment to our growth. We’ve delivered about 4,000 crores in FY26. FY27 guidance is 5,000 crores. That’s approximately a 25% growth. From there we need to compound at approximately 26% annually to reach this target of 10,000 crores by FY30. The rate is lower than the 36% CAGR over the past three years that we have already shown.
This is possible with our cluster redevelopment, our plotted development commercial annuity portfolio. Like I say we are going to improve our scale, our velocity and improve stability of our company. The scale multiplier will be achieved by the large cluster development newer type of developments that we do. Velocity will happen due to the added cities or towns that we will increase our foothold or our presence in. And the stability will come through the wide range of commercial portfolios that we are now beginning to assess and start.
The path to 10,000 crores begins. The first step is this year will be a Pre sale of 5000 crores. Project launches will be about 8000 crores this year and our acquisitions will be roughly about 8,000 plus crores. Our gross debt to equity will still be capped at 0.751. I want to say this to all of you. The Indian real estate and specifically the MMR real estate is probably at its early stages of structural multi decade demand cycle. We are probably the fastest growing large economy of the world. Urbanization as we mentioned before is accelerating.
Aspirational middle class and affluent consumer base is expanding rapidly. Premium and luxury housing once considered niche and out of reach has now become mainstream. There is a strong demand in this category. The post Covid behavioral shift towards home ownership, larger living spaces and quality first choices has proven super durable. What we have witnessed in FY23, 24, 25 and even 26 is not just a flash in the ban. It is as a matter of fact the beginning of what is to come. We are operating in a very attractive urban real estate market.
And we are one of the trusted developers in this market. Redevelopment opportunity in Mumbai alone is about a lakh and 30,000 crore by 2030. This has been quantified in the Knight Frank report. And Rustamji without question is the most preferred and most trusted redevelopment partner in the MMR region. A three operational initiative for us is the deployment of advanced precast construction technology. Let me tell you, we are working on a 360 degree approach wherein we’ve even identified that in the future quality Manpower availability will be continuously reducing and towards that somebody took its own first step to build a precast plant for its own captive consumption.
We’ve partnered with Robin Village of Singapore who are providing us the technical, engineering and supervision support for the precast systems that are being implemented. This will allow us to get our quality right and create the kind of product that is being created in Singapore which probably is a very high end development and it’s something that we can all be certain of. Our major infrastructure and housing developments will continue to increase the pressure on labor and execution capacity. Therefore, by entering into construction in a controlled factory environment, precast will enable better quality, faster execution, superior finishing consistency and mostly reduce the material wastage by almost 30%, lower the workman requirement by 40% by increasing the machine requirement and will have almost 1.5 times greater precision and durability.
And like I said, with markets like Singapore and Japan already adopting precast construction at scale, we will bring these global best practices into our development. On the ESG front, we’ve always been proud of our milestones and with clear targets of 100% green certified portfolio by 2030 we want to say that we are in the top 10 GSS rating and full transition towards a Green Certified Critical building materials by 2035 is on our charts. We have 22% women participants in the workforce by 2029.
Bustamji Crescent has been recently awarded the IGBC Gold Pre certification and the Bellevue Kassara project has been given the IGBC Net Zero Carbon Design Award. Reflecting our people first philosophy, we are developing further labor accommodation at Balmoral Rustamji Balmoral in Chembur which will house about 500 plus workers in ventilated rooms following the Apnagar model at Rustamji Urbania. Beyond compliance, the facility ensures safe living, organized cooking, sanitation and life safety features reinforcing our belief that our workforce deserves to be well taken care of and our productivity, our efficiency, our sustainability and long term growth depends on them and we will create greater value for all our stakeholders by taking care of everyone that works with us.
On the financial performance, our revenue from operations in Q4 FY26 stood at 1596 crores and for FY26 at 2635crores. Our OCF stands at 715 crores. In this context I’d like to highlight our transition in the accounting policy from project completion method to percentage of completion which is the POCM method, a change that will allow all our financial statements to truly and transparently reflect upon the revenue and margins being earned in real time. This transition combined with the fact that the legacy low margin project overhang which has historically weighed us down is largely behind us now marks a genuine turning point for us at Keystone Realtors.
As our new high margin pipeline matures and revenue recognition begins to flow through on a progressive basis, our financial performance will increasingly mirror the operational execution strength we have been steadily building over the last three years. Our construction spend has accelerated from 829 crores in FY25 to 997 crores. That’s almost 1000 crores in FY26. This reflects our commitment to deliver velocity. As of 31st March 26th our gross debt stood at 755 crores with a gross debt to equity ratio being 0.266 to 1, which is very comfortably within the guidance.
We ended the year with free cash, about 818 crores. I’m delighted to share the company’s credit rating. Like I have already mentioned, Bicrystal ratings have awarded us a rating of AA minus with a stable outlook. This is a clear market endorsement of our financial profile, our project pipelines, our capital allocation discipline and one of the most. This is one of the most objective external validation of the journey that we’ve been on to close. I want to say we delivered in FY24, 2526 and we stand here today with complete conviction that we will deliver in FY27 2829 and reach our target of 10,000 crores pre sales by FY30.
At Rustandri we have built homes, we have built trust, we have built communities and we have built futures. We intend to keep doing exactly that. Only this time faster, better and bigger than ever before. The best of Rustamji is ahead of us. I look forward to sharing this journey with each one of you for the long run. Thank you for your trust, your partnership and your continued confidence in us. I look forward to your questions now. Thank you.
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 their touchtone telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Rushab Shah with bugle drop pms. Please go ahead.
Rushab Shah
Hi, thanks for the opportunity sir. In slide number 30 the sold receivables in all the residential
Operator
Categories is significantly lower than the cost to complete. Could you explain me how do you generally go about selling the project? Which projects do you have higher IRRs. Although we have huge amount of unknown inventory left in all the residential categories.
Rashid Shah
Thanks for that. I’ll let Sajal take this query.
Sajal Gupta
Yeah, thank you. I think you will have to appreciate that we have had a big huge pipeline of the launches last year. Our launches have been close to about 10,000 crores. So when we speak of about 12,000 crores of the unsold goods which is there a good portion of that almost about 8000 crores is out of the launches which has been done in the last year. So fundamentally number one that 49% of our inventory is already sold of the entire pack that we have including the launches of the last year. Number two, that this basically demonstrates the cost to complete.
Demonstrates basically the cost to complete for the recently launched project which is in the last year. And with the 5000 crores of a target that we have taken this year over pre sale very soon basically we will have a good amount of financial coming out of debt from the sold receivable out of the pre sales that we will be doing in this year.
Operator
So the reason for asking this question was that suppose we launch a project in a year so what type of the sold inventory or let’s say cost to complete we targeting because these are like in the good times we would get the pre sales and the sort receivable. In the bad times we would like how would we defend ourselves? Because the cost to complete might be more than the sold receivables.
Sajal Gupta
Yeah. So number one that. May I draw your attention to the slide number 40 which truly reflects our sales philosophy and the pattern of sales that we look at. I think in all our previous interactions we have been maintaining that we sell about 35% till the time the flint comes which is generally the first year of the launch. During the sustenance we sell another 40 odd percent taking to 75% the last 25% a portion of that we sell while the building is fitted out. That is let us say out of 25% of 15 odd percent basically 15 to 20% by the time the OP comes and the last 5 to 10% post OCA.
So this is typically the pattern we followed and the right hand side of this slide 40 if you look at that whatever we launched in FY 2024, 66% of that has already been sold. When I say already been sold the status as of March 2026 2025, whatever we launched, the 49% of that has already been sold. And 2026, since we launched during the whole of the year. And when I say that we sell 35 to 40%, it is throughout the year, typically we should sell about 15 to 20%. We have already sold 17% thereof in the FY26 only.
So fundamentally this is a trajectory we follow. This allows us a steady cash flow. This allows us to make sure that we have basically a coverage towards the post to complete. And also this allows us basically in the situation like now when there are inflationary tendencies that we can reprice the unsold goods to cover further inflation, input cost inflation. So this is a philosophy largely that we have been following in terms of sales typically in most of our projects. And this is what we will do.
And if there is any small mismatch during this period, we have the financing lines, the construction finance lines, which are well intact. And that allows us to draw the money for any kind of mismatches or the shortfall at any point over time. Over the last two years. Our experience is that we are not required to draw on the construction finance lines as much as that we have contracted for, given the good amount of sales. To answer your question, basically in case there is any reduction in the sales or there is any change in the situation, which of course we don’t foresee, then our construction finance lines have that kind of a buffer built in.
Operator
Okay. And so my second question was if you see a PPT slide number 16, the fourth forthcoming projects as measure of premium and emerging premium segment. Just wanted to know, is this the segment where we are seeing a major shift happening and do these segments have the highest return ratios or margins for us as a keystone as a whole?
Sajal Gupta
So look, emerging premium. I think we have given the labels also on the slide 16 itself. The emerging premium starts from 1 to 3 million, 10 to 30 million, 1 crore to 3 crore. And largely our township project in the Thane fits into this emerging premium. And then thereafter basically 3 to 7 and 7 to 15 crores. And you are right, basically the 94% of our forthcoming pipeline is into the emerging premium to the premium to super premium. But then that only allows us to have the product in our category.
We have a sort of emerging premium which is 1 to 3 crores. 3 to 7 crores is typically the sweet spot. We see the larger chunk of basically the demand. And also basically these are the projects where there is a good sale and then there is a good demand and traction and the margins are also good. So that is how fundamentally we are present across the price points.
Operator
Okay, third question is you write in a PPT that the redevelopment is a low investment and a high IRR kind of business. So just wanted to know what, what are the key risks according to you? You see in a redevelopment business,
Rashid Shah
Actually we were one of the pioneers of redevelopment and we’ve been doing redevelopment since the year 2000. If you’re asking a general question, what are the risks? Plenty people don’t know what redevelopment is all about. But everybody is getting on this gravy train only because it looks very, very attractive. What are the risks related to Rustamji? I think very, very limited because with a 25 year track record of putting together more than 2,500 families in their new homes, I think we are one of those who have made a proper SOP on the entire redevelopment front.
And like I mentioned in my presentation that a 1:30,000 crore opportunity only exists in redevelopment by 2030. And we believe that given the consolidation in the market, which again I kind of presented, that we’ve moved from 1 to 2% and we’re looking at 5% of the total market size of MMR as it exists today for our company. So basically I think we are probably one of the most well poised to take advantage of this entire growth. And in the short term, if you ask me, we’re doing extremely well with five cluster redevelopments in our portfolio and with a lot of redevelopments that we are taking nowadays, we are moving towards the larger ones because they allow for us to be able to engage our ability and creativity to a much greater fold.
Yeah, I’m done.
Operator
Thank you. Ladies and gentlemen, if you wish to ask questions, you may please press star and one. Our next question from the line of Ronald Sione with ICICI securities, please go ahead.
Chandresh Mehta
Hello sir and thank you for the opportunity and congratulations and good set of numbers. Sir, on the commercial and annuity front, what is your aspirations like what is the current lease income you are generating and what kind of income you are targeting or say medium to longer term from the annuity. As you said that you are going to build an annuity portfolio.
Rashid Shah
Thanks, thanks. How do you feel? So I told him I am on top of the world because of all the, all the, all that we have achieved in the past. And you know, if you really look at it backed up with what we have done in the past and what we have planned for the future, where the entire team is aligned, we’re talking about becoming a 10,000 crore pre sales company. And in that the stability part, which is where we want to kind of be our aspirations is to rise to about 100 crores. I know it’s a small number but 100 crores to start off with by 2030.
And sorry Ronald, if I may just add further. See we don’t want to put any kind of pressure on our balance sheet or increase our debt and you know, commercial as we all know is a hugely debt funded, you know, product. So what we want to do and this is the strategy that we want to engage is that at least as far as the costs are concerned, we want to kind of, you know, recover them from the assets that we develop and then hold on to what it is that would be forming a part of our profit or if you want to keep some equity engaged in it and then holding on to that part of the asset for the longer term.
So that’s how it’s going to be, only $100.
Chandresh Mehta
So you mean to say the partial would be a sale component and partial would be annuity generating or is it like that that some portion would be a strata sale and some portion would be leased.
Rashid Shah
So your first part was absolutely right. Some part we will sell but slightly different. We want to sell to probably larger funds or larger HNIs which we will do by actually managing the property. So we want to do some pre leases and on the basis of which, on the back of which we want to go ahead and find a larger investor to be able to hold on to some part of that asset so that when we want to reach it out in the future we are in a much better position than trying to recover strata sales. Having said that, would we do strata sales?
We are doing some strata sales already in the commercial project that we have. But going forward this is the kind of new strategy that we want to undertake. And you can just wait to just add.
Sajal Gupta
Yeah, like currently Ronald, these estimates are based on the commercial projects we currently have. At the moment we have 3315 which has already been launched last year, which Bhavan has mentioned that we are doing some onto our status or we are doing a status sale. In addition to that we have 2 million square feet coming up in Thane in phases. Of the 4 and a half million is 4 and a half million my debt 4 and a half lakh square feet basically is expected in the next financial year. The third project that we have is at the Dhruvadi which is in the pravadevi.
So this 100 crores estimate we are speaking about is Based on the estimate of what we are going to retain into these projects, we are consistently working in terms of augmentation of our pipeline on a commercial side. And these estimates will continue to stand revised as we basically build up the further pipeline.
Chandresh Mehta
And secondly on, you know sir, if you can explain, since we have backed quite a four to five cluster redevelopment projects, so what is the cash outflow visa vis, you know, compared to a single redevelopment building and you know, cluster redevelopment, you know, apart from the timeline which it gets to close, a cluster redevelopment would be much larger but at the in terms of the outflows. So does it. Is it the same with respect to individual redevelopment or is it some different with respect to cluster redevelopment?
Rashid Shah
Thanks, thanks for that also Rohan. You know, basically, fortunately for us, without calling it cluster, we’ve already done cluster redevelopments. So our seasons was about 200 odd members, 168 to be precise. Members who are already there along with on consumer society. And it was about 15,000 meters. Our Anderi which is at Elements was about 480 members and about 20,000 plus square meters. So we have already done this and I think our investment philosophy stays the same. We are talking of 10%, 11%, whatever or thereabouts being the investment.
If it’s a very large project like the one that GDB is, where it’s about 11.5 acres, we have the option of doing it in two phases. So then each phase would have an investment and then kind of going forward, equity should not be, should not be more than 10 or 11% of the project. GDV is the way we’ve kind of programmed ourselves. And again we are very selective in the kind of locations as well as the type of project that we take. And we’ve been extremely fortunate to identify the right projects and have the ability to acquire them at the right price.
Chandresh Mehta
Very good sir, and thank you and best of luck for the future. Thank you.
Rashid Shah
Thanks Ram.
Operator
Thank you. Our next question comes from the line of Ritvik Sheikh from Oneup Financial. Please go ahead.
Rushab Shah
Hi, good evening sir and congratulations on a great set of numbers. So, couple of questions from my
Operator
End. So firstly, you have presented a very interesting slide in your presentation on the margins front between the legacy projects and the new projects. So just wanted to understand what is the definition of legacy projects here and how many projects are pending in this bucket. Hello? Hello. So please go ahead. You are audible. Yeah,
Sajal Gupta
Yeah, sorry, I think I was on mute when I was speaking. So I, I hope Ritwik, I am audible now.
Operator
Yeah, yeah, yes, you are audible.
Sajal Gupta
So I think legacy projects are typically the projects fundamentally like Crown that we have been mentioning virar that we have done basically affordable housing in partnership with the HDFC. HDFC of course got the exit in 2020. These are the ones which are legacy. We have, as we have been saying, that overhang of the legacy project is largely over in the current year. If you look at my revenue bifurcation, 62% of our revenue is coming from the legacy projects and 38% only is coming from the current projects.
In the FY27 all my legacy projects would have been over. And my revenue profile in the FY27 is expected to be 12% from the legacy and 88% from the current projects. And the current projects as we have been maintaining, they follow the margin trajectory wherein 35% gross margins, 20% EBITDA margins after taking out alcoves is the kind of a margin profile we expect. So fundamentally these are the counted ones. There is one or two projects, but that is going to form part of only 12% of the anticipated revenue in the next year which will be attributed towards the legacy.
And 88% will be the current projects.
Operator
Right. So FY27 will be the last year of these low margin projects. And FY28 will be all the projects at 35% cross margin and 20%. Yeah,
Sajal Gupta
But I will say that it will be at number one, that you are very right that it is a lot. FY27 is going to be a last year and that to be that to the insignificant part in the revenue pie.
Chandresh Mehta
The second
Sajal Gupta
Part is that after that I will not say all the projects necessarily have to have the 35% gross margin. It is a blended gross margin. Right?
Chandresh Mehta
Right. We have
Sajal Gupta
Always maintained that the projects towards the affordable and mid side are more tending towards 30 and towards the luxury and super premium side more tend towards the 40. But the blended margins, you’re right in saying that it will be about 35%.
Operator
Right. Just one follow up on this. What is the kind of inventory we have in Crown and other legacy projects?
Sajal Gupta
So Crown, my total inventory is about 180 crores. Means like we are in the last leg and over the next two quarters we would have sold basically whatever this was last leg of the residual inventory is there. And I’m also hoping that this inventory is not going to contribute to the low margins because we will be selling them at the current rates. Right. Apart from that we have about 450 crores of the sold receivable in the Crown So coupled with the sold receivable of 450 crores and about 180 crores of the inventory to be sold by and large over the next next two quarters, which means the current quarters and over the next two quarters, that is by December we expect almost basically a complete exit from the crown in terms of the cash flows as well as the sales.
Operator
And just probing on the margins part further, will this have an impact on the OCF in the future from FY27 onwards?
Sajal Gupta
So look, FY27 OCF, we have not got a chance to speak about that. As a part of the discussion earlier. We are expecting the OCF in FY27 close to about 1000 crores. Hopefully it will be little over 1000 crores. So all the OCF because last year was a heavy year in terms of launches. Now it is like the virtual cycle. Every year we are launching, every year we are basically progressing. Every year we are selling and every year we are collecting and completing. So this one time pickup in the launches is in FY25 and FY26 is over.
Now I will say it will be a continuous, the continuous basically throughput and the continuous output. So thereby basically the OCF will continue to improve as we go forward. This year we have generated 700 crores. Next year I expect it to be little over thousand crores. But I would like to guide it at about thousand crores.
Operator
Okay. And sir, one question. On the 10,000 crore pre sale target in FY30, what would be the split between residential and commercial? Would commercial be a significant part?
Sajal Gupta
I think BMAN has already mentioned that in the commercial we will be selling about let us say 60 odd percent or 65 odd percent to meet the cost of developing a commercial. So fundamentally if you look at the total GDV of the commercial in my forthcoming pipeline and in my ongoing pipeline. Let us say that on the ongoing pipeline the total unsold is about 835 crores. And on the forthcoming side it is 6500 crores. Right. So it is roughly about 7500 crores. I will say that this forthcoming we may not be launching everything over the next four years.
We may be assuming that we will be launching half of it over the next four years. It is about 4,000 crores that we are looking at over the next four years.
Chandresh Mehta
So
Sajal Gupta
Roughly about 80% of that. About 3,000 odd crores basically over the about 1,000 crore you can take on an average basically is a contribution coming from the commercial as it matures basically in terms of both Thane and druvadi and 3315 to be launched fully and further and further.
Rashid Shah
So basically around 10.
Operator
Sorry to interrupt real quick. We request you to please rejoin the queue if you have any further questions. Thank you. Ladies and gentlemen, you are requested to please restrict your questions to two per participant. If you have any further questions, you may please rejoin the queue. Our next question is from the line of Sourabh Gilda with JM Financial. Please go ahead. Yeah, thank you for the announced disclosures on margin candidates. I just have one question. On slide 48 the emerging and non premium segments have significantly lower margins in the sold bucket compared to what they’re expected to achieve in the unsold inventory.
So can you please explain this gap? And since these projects have close to 30 billion revenue recognition, do you think this can still act as a drag for TNM performance?
Sajal Gupta
I think you are referring to the slide number 47, am I right?
Operator
Yes, yes
Sajal Gupta
And I’m sorry, you said that which segment basically that you had a emerging
Operator
And mass
Sajal Gupta
Emerging and mass premium. Basically we are saying that we have a 10% EBITDA on the sold side and 13 on the mass market side emerging premium. As I told you that it’s largely reflective of the Thane township that we have. And a mass market is a combination of what we are doing at Dombevili as well as what we are doing at Virar. I think in our previous interaction we told that Virar we have signed up the JDA with the fellow developers over there by virtue of which we have got certain amount of the one time deposit and the revenue share ranging from 25 to 30% it has just started this year.
The contribution of the revenue shares from the Viraj Adas is very insignificant. But as we progress out of the 6.2 billion that is 620 crores, about 200 crores basically is coming out of the Virar DDS and that contributes about 60% EBITDA because fundamentally my cost is only the accrual cost and that helps it to take this margins from the 13% up to 29% on Thane side. I think the contribution on the sold receivable is more from the inventory which has been sold closer to the launch. And as basically we are progressing we expect basically pricing to readjust to the market reality and thereby allowing us to realize the better margins from the unsold inventory.
And that is what explains basically the higher margins coming out of the unsold inventory.
Rushab Shah
Okay, thanks. So Much.
Operator
Thank you. Our next question is from the line of Akash Gupta from. Please go ahead.
Chandresh Mehta
Hi. Am I audible?
Operator
You are audible, sir. You may proceed.
Chandresh Mehta
Yeah. Hi sir. So my first question is
Operator
From the residential demand perspective with ongoing the crisis in the Middle east are you seeing any changes in footfalls or conversions? That’s my first question. What’s your thought on that?
Rashid Shah
So Akash, I can only rely on what has happened so far. And going forward we are all discovering. So our last quarter like we mentioned was a 1346 crore was the highest pre sales that we’ve done in a quarter.
Sajal Gupta
And
Rashid Shah
Obviously the last quarter of the year, if you see cyclical nature of our business quarter is always the best. And then the first quarter always peters off and generally becomes a lot slower. Yes, we do see that there’s a lot more push right now that needs to be done. Especially in the segments where you have the one to three crore rupee homes. But having said that we’ve not seen any slowdown in the premium premium and luxury. We are also seeing a good enough interest and the pipeline seems to be robust for let’s say buyers to come and visit and see the site.
Obviously the buying decisions could take a little longer. Like I told you in the first quarter of the year we’ve always seen that happen.
Operator
Understood. My second question is your presence in the super luxury redevelopment space. So in the last quarter I think Oberoi closed three redevelopment deals in Nipancy Road, Malabar Hill etc. And I see your forthcoming projects, I don’t see. I don’t think I see any super luxury presence. So what’s your thought there? How are we going to expand our presence there? So just wanted to know your thoughts on that.
Rashid Shah
So without giving names I can tell you that because the DA is still under finalization or under signing.
Operator
I would
Rashid Shah
Not like to give names but just tell you that we are very active in the super premium. Whether that be in the city, whether that be in Bandra. So we are definitely there. And we believe that of the five names that are known to do high end developments in Mumbai we are definitely one of those that is sought after. And I think closer to quarter three of this year you will hear from us a little more.
Rushab Shah
And by the way
Rashid Shah
In our ongoing, we have plenty of them. Aakash,
Rushab Shah
We have Cliff,
Rashid Shah
We have Bandstand, we have Panorama, we are present. All these range from you know, I would say 8 to 10 crores. Going all the way up to 150 crores also.
Operator
Understood sir. That’s the question I had. Thank you so much.
Rashid Shah
Thank
Operator
You. Once again ladies and gentlemen, we request you to please limit yourselves to two questions only. You may rejoin the queue if you have any further questions. Our next question is from the line of Pritesh Cheddar from Lucky. Please go ahead
Pritesh Sheth
Sir. On the slide 36 comments in terms of the collection efficiency, how should we look at it? Because it’s deteriorating everywhere.
Sajal Gupta
One way to look at that it is deteriorating and other way to look at is that we are launching well. And you know that as the composition of the newly launched products in the overall pre sales is higher, the collection efficiency will look lower. Last year we have launched about 9800 crores. The year before that we lost about 5000 crores. And the year before we lost 3400. So fundamentally year before last we grew at 70%. Last year we have grown about 100%. So as basically the launch pipeline is increasing the larger share of the pieces coming from the newly launched products.
The collection efficiency appears to be low. But believe me that we are able to collect well most of the projects. Basically our collection efficiency is good. I think I tried to explain through the other chart also that how the. How the pieces trajectory and so is the collection. My expectation is that from this year onwards the collection efficiency should be in the range of 75 to 80%.
Pritesh Sheth
It’s because your launch number becomes flat, that’s why, right?
Sajal Gupta
No, it is not small. Even this year also I think the guidance Mr. Irani has given his 8,000 crores. So it’s a flatter
Pritesh Sheth
Number. Right? So you had about 9, 8 to 9,000 crore last year. You have a similar number this year.
Sajal Gupta
Yeah, last year there was a one of bigger number in the launches. We launched the bandstand which was 3100 crores. And that was one of the reason that the trend of the number to 9,800 crores. But this year 8,000 crores is like X bandstand. We are still growing
Pritesh Sheth
And how should we look at the.
Sajal Gupta
I think the net debt historically now for the last three years we have been in a negative territory means that we are the net cash company. Obviously the debt will grow as we launch more projects and as they mature basically there will be more dispersals coming from the construction finance lines that we have tied up. But having said that we have always guided that. Earlier we used to guide that our debt to equity ratio will be one is to one. And then we have further raised the bar for ourselves and we have been saying that we will be now 0.75 is to 1.
My expectation is that we will be well within the guidance that we have been giving.
Pritesh Sheth
Can you share a peak debt number at least for 2 years?
Sajal Gupta
Peak debt number I can tell you means like just keep the commercial part aside. It should not cross about 13, 1400 crores as far as FY27 is concerned and FY28, I will speak to you more towards the beginning of the FY28000. Now
Pritesh Sheth
This 1300 is net debt or gross debt number.
Sajal Gupta
Everything I speak is in the gross debt. This is basically
Pritesh Sheth
So. Basically versus 800 crores. 1300 crores.
Sajal Gupta
Yeah. 800726 crores. Going to about 13 to 1500. Course. Yes.
Pritesh Sheth
Okay. Thank you.
Operator
Thank you. Our next question is from the line of Rishit Shah from Access Capital. Please go ahead.
Rashid Shah
Yeah. Thank you for the opportunity, sir. So your thoughts on the business development? So for the incremental BD that we are targeting,
Operator
Any segmental preference as to you are looking more at luxury or premium or rather a mix of mid aspiration made affordable as well. And relating to the same with your 10,000 crore target that you have, how do you see the mix developing and how does it affect our margin outlook?
Rashid Shah
So let me just go back to what I said earlier. To achieve the 10,000 crores which is a four year target from now 2030 we will have to do three or four things. One is the scale multiplier by improving the redevelopment in the clusters which is the larger development that we do. Because those will allow us to kind of build and generate more from one single location at the same point of time. Also improve the number of type of projects that we have. So senior living could be added on plotted developments will increase velocity multiplier will happen as we enter various other towns or cities.
Right. Because today we do a run rate of about 1000 crores from one township development. Imagine us having a township in three or four different locations which may or may not have the same value. But even if they do manage to do a 600, 700 crores presale in each or thereabouts we’ll be touching about 2000 crores from them. And then of course stability multiplier which is more related to commercial etc. Leasing assets which we already mentioned, we on our BD usually have a fair mix of what it is that we target.
And like I said the premium and luxury is something definitely that we continue to keep working towards. But a very large part of our BD continues to be in the 1 to 3 crore or 1 to 4 crore rupee kind of segment price because that is the largest part of the market that is continually on an upswing and also allows developers to go ahead and make money unlike affordable which is probably the largest. But we do not see much happening on that front as such time as the government comes up with a reasonable ability to allow developers to make money out of doing affordable housing.
So we will not focus over there
Operator
Offensive and secondly on the sales or the pieces that we have done this year. If you can just give me a mix of how much was from new launches and how much was from sustenance.
Sajal Gupta
So out of the Total sales of 4022crore 1620crores is from the new launches and the balance 2400crores is from the pre existing pipeline that we had at the start of the year.
Rashid Shah
Okay, great. Thanks for all the answers. All the best.
Operator
Thank you. Our next question is from the line of Krish Patia from Anandrathi. Please go ahead.
Rushab Shah
Thank you for taking my question. And we have another quarter. Mine is more in the macro so.
Operator
A little better. Yes.
Rushab Shah
Yeah. So potentially volatility improve in commodity prices. Are you seeing any early signs of pressure on input costs? Steel, aluminum, glass and most of the current and forcefully project pipeline has cost inflation, production, building.
Rashid Shah
So Krish, what an amazing question. Yes, yes, yes. So obviously given the present situation there are two things that are happening. One is obviously costs are going up in terms of the material supply but there’s also a shortage if I may say of availability of materials. Right. So anything that we are reliant upon internationally other than of course gas and you know oil and gas et cetera are also creating huge amount of delays. And if the dollar continues to spike then that will be a further increase in the cost.
Fortunately for us at our strategy of selling about 35% of the stock in the first year and then about 40% of the stock as the project continues allows us good amount of shock absorbing with regards to the increase in cost. If you ask me what the cost increase today are they are roughly in the region of about 8 to 13% but but not overall 8 to 13% in certain items et cetera which leads to an overall cost increase of about 5%. But we are well insulated because we have as you can see from our unsold already launched stock.
We will continually keep selling and this will allow us to absorb whatever increase in costs take place.
Rushab Shah
Thank you. That answers my question and all the best for the future.
Rashid Shah
Thank you.
Operator
Thank you. Our next question comes from the line of Rajakumar Vaidyanathan from RK Invest. Please go ahead.
Pritesh Sheth
Hello. Can you hear me?
Operator
You are audible. So you may proceed.
Pritesh Sheth
Yeah, thanks for the opportunity. So just couple of questions. So first one, you mentioned that you’re pivoting to percentage of completion method. Is it effective financially at 27 or you already done it in
Chandresh Mehta
Q4?
Rashid Shah
Yeah.
Sajal Gupta
Rajkumar. So Rajkumar, we adopted the percentage of completion method for accounting the revenue from 1 for 2025. And I will tell you the transition plan how we adopted it. As on the 1st 4th, 2025 there were ongoing projects. All those ongoing projects at that point of time or majority of the ongoing projects that we were having at that point of time. We continued with the completion method and all the projects which were launched, let us say in the last six months or so and all the subsequent launches.
We have adopted the percentage completion method. By virtue of this, this year revenue of 2600 crores. 80% of the revenue has been accounted for by the CCM method. That is a completion method. And only 20% has come from the percentage of completion in the FY27. This ratio will reverse in the sense that the 80 will become basically 40%. Only 40% will come from the residual completion method. And the 60% over revenue in the FY27 will be coming from the percentage of completion. And from the FY28 onwards 100% of the revenue will be in the percentage of completion method.
I would have completed the full transition.
Operator
Okay. Okay. Got it, sir. And how much acceleration will happen in terms of your sales because of this change?
Sajal Gupta
And look, exploration. You may not be able to see a significant exploration. There could be some exploration. Because you have to also appreciate and understand that in the completion method I am getting a one time pickup in the revenue in the year of completion. Like in this year. Basically under the completion method. Basically I have got a one time basically revenue recognition of almost. About. Almost. About basically 2000 crores. So exploration will start basically from maybe little exploration next year.
But fundamentally the exploration in the revenue will start from FY28 onwards.
Operator
Okay. Got it, sir. So the second question is you mentioned you are targeting 20% EBITDA from the new projects. So I just want to know how much of this. I mean what would be your kind of guidance on your ROCE and the written of equity for FA27 and 28?
Sajal Gupta
We will provide that we may like at this point of the time. We have not basically come up with a number to guide on. Guide on we have given a guidance in the margins, we have given a guidance in the revenue. But on the ROE roc, we will. We will basically guide on. At the moment we have not been guiding on this parameter.
Operator
Okay. And sir, can you guide on the finance cost? This current quarter you had a 33 crore finance cost. So what. What would be your guidance for FY20?
Sajal Gupta
So look, my current debt is 755 crores. I am saying that at peak, basically at the end of the year, it may go to 1400 crores. So if you take on an average basically for the whole year, it is about 1000 crore. And taking the average cost of debt at about 9 and a half percent for the whole year, it should be about 95 crore. Just like that will be the mathematics.
Pritesh Sheth
Okay, sir, thank you so much.
Rashid Shah
All the best.
Operator
Thank you. Our next question is a follow up from Ritvik Sheikh from Oneup Financial. Please go ahead.
Rashid Shah
Hi, sir, just one
Operator
Question. How was the response for the bandstand project? Bandstand comma.
Rashid Shah
It’s been very good. Wait for the operational results of the quarter. So as it happens, that’s a very exclusive project, Ritvik. We have only 27 apartments of which we’re almost about. I would say close to 30% sold
Operator
Out of the. Okay, 30% of the GDV is sold already.
Rashid Shah
I would like to say more or less. Yes.
Rushab Shah
Okay, sir, thank you. And all the best for FY25.
Rashid Shah
Thank you. Thank you.
Operator
Thank you. We have no further questions. Ladies and gentlemen, I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Rashid Shah
Thank you everyone. You know, you’ve been with us on this journey and we look forward to many more exciting, growing times in the future. Thank you for all the trust and faith you have in us. You can count on us on a continual basis to keep working towards making all our dreams come true once again. Thank you. Have a lovely evening.
Operator
Thank you on behalf of Access Capital Ltd. That concludes this conference. Thank you all for joining us. You may now disconnect your lines.