Lodha Developers Limited (NSE: LODHA) Q3 2026 Earnings Call dated Jan. 29, 2026
Corporate Participants:
Chintan Parikh — Co-Head of Investor Relations
Abhishek Lodha — Managing Director & Chief Executive Officer
Shaishav Dharia — Director, Lodha Green Digital Infrastructure and Chief Executive Officer, Townships & Rental Assets
Ayush Raghuvanshi — Investor Relations
Analysts:
Akash Gupta — Analyst
Puneet Gulati — Analyst
Kunal Tayal — Analyst
Abhinav Sinha — Analyst
Murtuza Arsiwalla — Analyst
Pritesh Sheth — Analyst
Parikshit D. Kandpal — Analyst
Parvez Qazi — Analyst
Gaurav Khandelwal — Analyst
Presentation:
operator
Ladies and gentlemen, good afternoon and welcome to the Lodha Developers Q3FY26 earnings conference call. As a reminder, all participant lines will remain in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing Star then zero on your touchstone telephone. Please note that this conference is being recorded.
I will now hand the conference over to Mr. Chintan Parikh, Co Head of Investor Relations for opening remarks. Thank you. And over to you.
Chintan Parikh — Co-Head of Investor Relations
Thank you Ram and good afternoon everyone. Welcome to Lothar Developers Q3FY96 conference call. Today we have with us Mr. Abhishek Lotha, MD, and CEO Mr. Shushil Kumar. Modi, Executive Director, Finance Mr. Sanjay Chauhan, CFO and Mr. Shaishav Darya, Full Time. Director and CEO for Extended Eastern Suburb, Thane and Annuity Assets.
Now I would like to invite Abhishek to make his opening remarks. Over to you Abhishek.
Abhishek Lodha — Managing Director & Chief Executive Officer
Thank you Chitna. Good afternoon everyone. Wishing all of you a very happy new Year. Thank you for joining us today. Before I get into company specific overview, a quick context of where we are in terms of the Indian economy and the industry. Over the last few months we’ve seen a clear focus from the Indian government to improve the economic outlook. Whether it was the GST cuts or many other measures, including the recently signed trade deal with the eu, the Indian government is focused on ensuring higher levels of economic growth and job creation in our country. This is an important and positive development both for the larger economy as well as in particular the real estate sector.
This is reflected of course in terms of the GDP growth numbers that we’ve seen from India in the course of the last few quarters and also the outlook that various important institutions are suggesting for India’s GDP growth going forward. A modest area of concern is the fact that inflation is quite low and therefore nominal GDP growth has been much lower than in previous years. However, we believe that as the overall economic momentum picks up, demand impulses will also strengthen in the economy and inflation will find a reasonable level going forward. We look forward to the Union budget which will happen this weekend and are hopeful that there will be further impetus given to India’s growth journey in context of the housing market in India.
We continue to see in the markets that we are predominantly operating in, I.e. mumbai, Pune and Bangalore, that the demand from end users for good quality product from the top brand continues to remain robust. We see that the economic Activity in terms of job creation as well as likely wage growth for the upcoming fiscal year is also likely to remain quite strong. Overall, while there are some challenges of being in the fifth year of a growth spurt in the real estate market, we find that the overall outlook continues to remain constructive. Now coming to the highlights of the quarter from the company’s perspective.
We achieved our best ever quarterly pre sales performance in this quarter with 56 billion growing more than 25% year on year. With this our nine month presale stands at about 146 billion which is 70% of our full year guidance and we remain on track to deliver our Pre sales guidance of 210 billion for the year. It is important to highlight that this is the first time that the company has crossed 50 billion in quarterly pre sales and also highlight that the performance in Q1, Q2 and Q3 has been the best ever for those respective quarters and that shows the underlying strength of the brand as well as of the markets that we are operating in.
The embedded EBITDA margin for the quarter was approximately 32%. This has been achieved in spite of very modest contribution from land sales in this quarter which reflects the strong underlying profitability of the business. So far for the nine months of the fiscal year we’ve delivered 4% price growth on a YTD basis and we are on track to deliver the 5 to 6% price growth for the full year which is in line with our strategy to have disciplined price growth below wage growth and to keep making sure that affordability is strong and getting better. Based on the embedded EBITDA margin, our pro forma PAT for the quarter is approximately 12 billion and that implies a PAT margin of approximately 21% and a ROE of approximately 20% on a TTM basis, very much in line with our medium term outlook of approximately 20% ROE.
I would like to highlight that this quarter we added about 340 billion worth of GDV through business development of new projects, including two projects in our pilot phase in NCR. With this we are approximately reaching almost 600 billion of GDB added this year and that gives us significant long term visibility of growth. Our overall pipeline of projects which we can develop in the next five years is now approaching more than 2 lakh crores and this is in addition to the significant land bank that would be developed post 5 years in Palawa and Upper Thane. This gives us not just visibility of where growth will come from and the fact that the growth is visible across the different markets, but it also gives us the ability to significantly improve our cash generation over the next few years because the incremental land investment that we may need to do may be much more modest.
Our performance in this business development suggests and underscores the ongoing consolidation within the sector, not just on the demand side but also on the supply side, especially in terms of joint development. Landowners today are far more discerning in their choice of partners, prioritizing transparency, integrity, execution capability and speed of monetization. In spite of this very significant investment in business development land, our net debt stood at about 61.7 billion, which is 0.28 times equity, well below our ceiling of 0.5x. Our average cost of funds for the quarter stood at approximately 7.9%, down 10bps for the quarter.
For this quarter I’d also like to reflect on our expansion into the ncr, the National Capital Region of Delhi, Gurgaon, Noida and surrounding areas. As we’ve noted in the past, our entry into any new market follows a two step process, the first stage being the pilot stage wherein we focus on starting a limited number of projects, ideally on a capital light joint development model, learning about the marketplace, building a strong independent team on the ground and showcasing the product differentiation and service differentiation that are the hallmarks of the Lothar way of real estate. Once we are able to do this and establish that the market is right for us both from a brand as well as a profitability perspective, we can then scale up in what we call growth phase.
We saw this in Bangalore over the last three years wherein we were in pilot phase for approximately two and a half years and now in the first year of growth phase we expect that full year sales from Bangalore will be in excess of 25 billion INR and that showcases how scale up can happen pretty quickly in a new market. Once we lay the initial grounds in the pilot phase once since the pilot phase in Bangalore has been completed and now we are in growth phase, we are now starting the pilot phase in NCR. We have signed up two locations with a total GDV of about 33 billion and we expect to start the sales of this project over the next 12 months.
With this we are able to reach about 80% of the home sales by value by being in the four markets of the Mumbai metropolitan region, Bangalore, Pune and ncr. As we scale up and the business continues to perform well, we equally continue to remain focused on the do good part of our do good do well philosophy. We in this quarter made a number of contributions in further giving back to society through the Lodha foundation we have intensified our decarbonization efforts across the board including materials, energy and design. We hosted in this quarter a steel decarbonization convening in collaboration with RMI India MBMTC to mobilize a buyers coalition and assess market readiness for low carbon steel.
In parallel, we launched a pilot program to evaluate battery energy storage systems aimed at maximizing the efficiency and reliability of our renewable energy power supply. We published a comparative study on embodied carbon across building heights, establishing a critical benchmark to inform low carbon choices in the Indian real estate sector. This quarter we were once again ranked Amongst the top 100 great places to work in the nation with more than 2,000 companies participating and this was the highest ranking amongst the real estate companies under our LODA Genius initiative. We launched a new collaboration with ICER in Pune which again focuses on identifying strong talent, especially around STEM and grooming them to achieve their fullest potential.
For 75 slots there were more than 2000 applicants which showcases the desirability of this program that has been built up over the last three years. Through our UNATI program, we continue to partner with the most needy families across the communities that we operate in and more than 2,000 families currently receive support from under the Unity Program to improve their livelihood. The Lodha Mathematical Sciences Institute successfully concluded its inaugural thematic program with more than 50 researchers from across the world. The program was led by fears metallurgist Dr. Manjul Bhargav and the institute is led by Dr.
Kumar Murthy who was formerly the Director of the FEARS Institute. Finally, we now manage over 60 million square feet of green certified buildings and have renewable PPAs exceeding 10 megawatts. In terms of additional performance updates, our collections for the quarter came in at about 35.6 billion which is down by 17%. This reflects the fact that in the same quarter last year we had significant proceeds from sale of land and therefore we had higher collections in the last quarter. We remain focused now to further significantly improve our collections profile and you are likely to see a significant pickup in collections over the next 12 months.
In this quarter we launched new projects with estimated GDV of about 96 billion and have a strong launch profile of over 120 billion of launches for Q4. I’d like to now highlight about our large landholdings what we call our extended Eastern suburbs portfolio of the townships at Palawa and Upper Thane which represent a key strand of value creation for our organization. The infrastructure connectivity at both these locations is now approaching full completion and we expect operationalization for the Palawa Aeroli Mulung Freeway to happen in the next three to four months and similarly the Mumbai Nasik highway which connects Upper Thane will also the last leg of that will also likely to be operational in the next four to five months.
With this we see a significant upgradation in the connectivity profile of these locations and given the other strengths of the quality of development, social infrastructure and various other measures, we expect that the next 12 to 18 months will see significant uptick in both perception as well as sales in Palawa and Upper Thane. The recent inauguration of the Navi Mumbai International Airport will be another reason why Palawa will further move up in the context of Mumbai’s most desirable suburbs. The bullet train project which connects Palawa to BKC is rapidly progressing and we expect that the connectivity from BKC to Palawa, a single stop, will be less than 20 minutes before the end of this decade once the bullet train is operational.
In context of these infrastructure upgrades and the large land holding of about 4,000 acres that we hold in these locations, we have been focusing on the residential side on consciously premiumizing the location. We have launched various projects including landed villas as well as mid rises and high rises which are at a price premium of up to 50% compared to the existing mid income locations and we expect this upper mid income and premium segment to contribute almost 50% of sales in Palawa by the end of the decade compared to about 20% in fiscal 25 which will both lead to expansion in value but also expansion in the underlying margins.
At Palawa, we continue to progress in a significant manner on building one of India’s largest and most significant data center parks with almost 400 acres of land and about 3 gigawatts of of power earmarked for it arrangement and MoU with the government of Maharashtra under its Green Data center policy which leads to significant benefits for occupiers in this location. And given the overall demand growth for high quality data centers, especially in the Mumbai region which is the financial services hub of the country and also hosts most of the large corporates, we find that demand for data centers is growing and accelerating.
We already have two anchor customers, Amazon Web Services AWS as well as STT which is a Tematech subsidiary who are progressing work on their data centers at this location. We expect that we will have additional COLO or hyperscaler players sign up for this location or over the next 12 to in the course of the next 12 to 18 months. Additionally, as part of our strategy, we also expect that we will be starting construction of build to suit boxes for end users and have that to generate long term rental income for our company in the years to come.
In terms of the underlying land value, while the last transaction for the data center land happened at about rupees 21 crores per acre, we now expect that land values will move up in a gradual but consistent manner and over the next three odd years we expect the number to be reaching as high as 50 to 60 crore rupees per acre. My colleague Seshav Dharia will provide a deeper dive into this opportunity later in this call coming to our.
operator
Ladies and gentlemen, Ladies and gentlemen. Ladies and gentlemen. Ladies and gentlemen, please stay connected while I reconnect the management. Thank you. Ladies and gentlemen, we have the management reconnected sir. You may proceed.
Abhishek Lodha — Managing Director & Chief Executive Officer
Thank you. It appears that there was noise we were not audible for the last couple of minutes. I’ll just repeat my remarks around data center that our 400 acres, approximately 3 gigawatts of power is rapidly gaining prominence as one of India’s most important data center locations. In addition to Amazon Web Services and stt, which is a TEMASEC subsidiary, we are seeing increasing interest from a number of other Colo and hyperscale scalers to set up their parks here and we expect some firm signings happening in the course of the next few quarters. In terms of land value, while the last transaction happened at about 21 crore rupees per acre, we we expect a significant and consistent growth in value reaching 50 to 60 crore rupees per acre over the next three years.
We have started also in parallel, the company will be starting to provide build to suit boxes for end users on a powered shell model which will enable the company to leverage its current capabilities around basic construction and and the land holding that we have and generate significant rental income in the years to come. My colleague Sesha Dharya will provide more detailed overview of this opportunity later in this call. Before I conclude I’ll just highlight the on the PN we have since April 2023 been on the percentage completion methodology of revenue recognition and we expect over the next 12 months that we would have fully transitioned to the percentage completion methodology of revenue recognition.
In terms of our performance for this quarter, our revenue from operations came in at about 46.6 billion, which is a growth of approximately 29% year on year. This excludes any impact of the lumpy land sales which happened in Q3 of fiscal 25. Our adjusted EBITDA came in at 14.9 billion, which is a growth of approximately 23%. The adjusted EBITDA was approximately 32% for the quarter and the PAT for the quarter was approximately 9.5 billion. In terms of our guidance for the rest of the fiscal, as I mentioned earlier, we remain on track to achieve our guidance of approximately 210 billion of pre sales for the full year with an embedded EBITDA margin of approximately 33% and therefore an ROE on a pro forma basis of approximately 20%.
We’ve already met and well exceeded our business development targets for the year and therefore that gives us a lot more bargaining power as we evaluate other opportunities and also gives us the opportunity to further strengthen our balance sheet in the next few quarters. And on net debt we of course continue to remain very disciplined at about zero point to remain well below our ceiling of 0.5 times net debt to equity and we are hopeful that we will further moderate this ratio in the coming few quarters.
With this, I now hand over to my colleague Seshav Dharia, full time Director and CEO of our extended Eastern Suburbs business and and the annuity assets, to speak about the data center opportunity in greater detail. Thank you.
Shaishav Dharia — Director, Lodha Green Digital Infrastructure and Chief Executive Officer, Townships & Rental Assets
Hi, thanks Abhishek. Can everyone hear me?
operator
Yes, please go ahead.
Shaishav Dharia — Director, Lodha Green Digital Infrastructure and Chief Executive Officer, Townships & Rental Assets
So I think as Abhishek said, this has become a very significant opportunity for us. We had started work as we described earlier almost five years ago to where we have reached today, where we earmarked 400 acres of land with approvals already in place and believe based on all the work and effort we’ve been able to put in, we have probably the most reliable infrastructure for an AI data center in the country today around three critical elements. One, land with approvals. Second is the most reliable power network. Most locations struggle with power or the quality of power.
You have the ability to provide 3 gigawatts of power from five different circuits. It’s probably the only such location in the country providing significant reliability almost at a tier 4 DC level which is the highest in the world. Thirdly, a critical element of a data center is how do you get sufficient amount of water for the cooling towers which cannot be portable. We are already advanced. We will advance progress to secure almost 100 billion liters of water from a nearby industrial park which dramatically reduces the cost and improves efficiency of cooling for any AI data center.
And lastly, more than five optic fiber routes which can scale up to potentially 10. So all of this has made this infrastructure of the data center park amongst the most reliable. Last year in September we signed the Green DC Park MOU with the State of Maharashtra which gave us significant benefits. Based on the progress we were making and in alignment with the vision of the state, we were comfortable to expand it as Abhishek explained to from 30,000 to an incremental 100,000. So totally 130,000 crores between Lodha and all the clients and their own equipment within the data center park.
But with this we obviously got significant fiscal and monetary benefits that Abhishek talked about. So potentially clients today can see a capex reduction in setting up a data center by up to 15%. So if you take what we call a turnkey data center which is basically a powered building with just the cooling towers and the chillers, forget the chips and the servers, what globally costs about 8 to 12 million dollars per megawatt, we can probably now in Palawa get it down all the way to $6 million. Secondly, the operating cost which is primarily driven by electricity.
Because of this MoU and the green DC policy we can reduce operating cost by up to 30% for clients. And more importantly they can now source 90% of their power from green renewable sources. So the two negatives of a data center being not environmentally friendly, both in water as well as in power, we’ve taken care of. More importantly, power cost can be approximately $0.06 per kilowatt compared to 10 to 12 kilo per kilowatt currently in the US. So all of this was already was a lot of this was actually after we signed our first two clients, Amazon Web Services and Singapore Telecom.
Of course because of all of this part we started seeing even more significant demand both for what Abhishek said, land, powered land or a built to suit solution. Because in many cases clients want to accelerate their development and we believe getting up to that 50 to 60 lakh rupees 50 to 60 crore per acre over the next three years is very much possible on the land side. And creating a very sizable business through the powered shelves on rent can be another significant income creator for us. So let me stop there and see if there are further questions.
operator
Sir, should we begin with the Q and A session?
Shaishav Dharia — Director, Lodha Green Digital Infrastructure and Chief Executive Officer, Townships & Rental Assets
Yes.
Questions and Answers:
operator
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue you may press star and two participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Ladies and gentlemen, a reminder. If you wish to ask a question, please press star and 1, We take the first question from the line of Aakash Gupta from Nomola.
Please go ahead. Akash, your audio is not clear. Could you please use your handset and proceed with your question?
Akash Gupta
Am I audible now?
operator
Yes. Please go ahead.
Akash Gupta
Yeah. Hi sir. Congratulations on a great performance and thank you for taking my question. So my question is primarily related to your thoughts around the demand in Mumbai. How are you seeing the footfalls and conversions right now? And has that view changed from the beginning of the year when we were thinking about footfalls and conversions? That’s my first question.
Abhishek Lodha
Hi Akash, thanks for your question. In terms of where we see the demand environment in Mumbai and in terms of footfalls and conversions, let me sort of split demand into its two component portions because I think your question is related to both which is supply as well as demand. On the demand side we see footfalls and conversions remaining steady through the course of the last few quarters and in line with what we would have expected at the start of the year. On the reasoning for it. Because one hears about the fact that there is in pockets of Mumbai, lots of redevelopment happening and therefore the fact that oversupply could be happening in pockets.
I think it really is underlining the fact that our sales performance as well as these walk ins and conversions are all driven by the strength of the brand and the execution capability to deliver good quality product on time. We believe that while there are pockets of oversupply in Mumbai, the demand for the kind of product that we do and the lifestyle standards that we offer is really strong. And we expect that this consolidation in the marketplace of the better quality product and the best brands winning out is likely to continue. Thank you.
Akash Gupta
And so from like a two year perspective I think we have been doing roughly 20% kind of presale growth over the last two to three years. Considering we have such. We have done very strong business development of roughly 600 billion. Hi sir, am I audible?
operator
Hello, Akash, please go ahead.
Chintan Parikh
Your voice is breaking.
Akash Gupta
Okay. I just wanted to. So my second question was on the growth expectation for the next two years we have done very strong BD of roughly 600 billion along with an inventory of roughly 450 billion. Is it reasonable to expect the similar level of growth rate or roughly 20% CAGR over the next two years similar to the past year? Hello.
Shaishav Dharia
Hi Riyan, can you hear the question? We. At our end we are seeing the voice breaking.
operator
Aakash, I would request you to please join back the queue as your audio is not clear to the management.
Akash Gupta
Understood. Thank You.
operator
We take the next question from the line of Puneet Gulati from hsbc. Sure. Sir, we take the next question from the line of Puneet Gulati from hsbc. Please go ahead.
Puneet Gulati
Can you hear me? Hello? Can you hear me?
operator
Yes, Quinith, please go ahead.
Puneet Gulati
Okay, great. Yeah, thank you so much for the opportunity. My first question is, you know, given that the scale of business is improving and other developers. Hi. Yeah, so given that the scale of business is increasing and other developers are also ramping up construction, how are you managing your construction related risk so that projects get completed on time? Are you employing new technologies or new methods of construction?
Shaishav Dharia
Sorry, sorry.
Puneet Gulati
Hello.
operator
Puneet, I would request you to please stay patient, ladies and gentlemen. We have lost the line of the management. Please stay connected while I reconnect the management. Thank you. Thank you for your patience, ladies and gentlemen. We have the management reconnected. Puneet, if you could please repeat your question for the management.
Puneet Gulati
Yeah, sure. Yeah. So thank you so much for the opportunity. My first question is if you can talk a bit about, you know, how are you thinking about potential construction related issues given that everybody is ramping up construction and there is noise around slowness in construction activity, what are you doing in terms of technology or any new construction methodologies that you are looking to employ?
Abhishek Lodha
Hi, Puneet. That’s an important question and one which we are very much focused on. While technologies, the use of not just construction technologies, but also digital technologies as well as also use of AI are all kinds of things that one does. It really fundamentally goes down to having a base of vendors and contractors who are aligned to support your growth plans because you have good strong relationships with them and their willingness and ability to pay the labor force. The fair wages on these two areas is where most of our focus is on and that enables us to make sure that we are delivering our projects within the timelines as we have specified in our agreement, sometimes with delay of a few months, but always very close to the timeline stated in the agreement. So we measure our success in terms of the percentage of units which are delivered within six months of our agreement stated timeline. And we are able to do a very, very high percentage in that timeline, which really is the end proof of the construction capabilities.
Puneet Gulati
Okay, that’s helpful. And secondly, in your opening comments you talked about increase in collections into next few quarters. Can you talk a bit about what’s really changing which will allow you to increase the pace of collections?
Abhishek Lodha
Yes, I think the sales momentum for this year, as you note, has been sort of more concentrated in the second half. And as a consequence the overall collections for the full year will be lower than our initial estimate because obviously the collections follows a cycle of from when the sales is done. I think the combination of the scale the sales stepped up this year, but more importantly, the significant focus that we put on construction starting from on improving our construction efficiency will drive the pickup in sales. In the last nine months, nine to 12 months, we had a significant impact from the environmental clearance issues which held up. As our collections. With that issue now having been closed and resolved, we are quite focused on making sure that we make up for some of that lost time and therefore also the collections step up as the construction speeds up.
Puneet Gulati
Okay, that’s very helpful. Thank you so much. And lastly, on your Palawa and Upper Thane you Talked about potential 4,000 acres of which you now want to allocate 400 acres for data center. Would it be fair to assume the rest is now for residential or do you also have plans for warehouses and office space there?
Abhishek Lodha
So Puneet, we have land which is zoned for multiple uses based on and we therefore allocate basis the market’s demand and the best value use. Currently the two best value use are residential including ancillary. So residential includes things like retail or health care or even office space which we all sort of see as urbanization which is residential led. And the second significant use case is data center. So those are the two that we are most focused on. Other than the warehousing park which is already under development. We don’t expect to do more warehousing at this location. Just given the underlying land values are not supportive of warehousing at this location.
Puneet Gulati
Thank you so much and all the best.
operator
Thank you. Ladies and gentlemen, in the interest of time and fairness to others, we request you to respect to two questions per participant. We take the next question from the line of Kunal Tayal from Bank of America. Please go ahead.
Kunal Tayal
Great, thank you. A couple of questions from me. First one, Abhishek, an often asked question these days has been that as you’re looking at some cool off in the pace of price increase in the sector, but the land values have probably stayed stubborn.
operator
Kunal, are you there? Kunal?
Kunal Tayal
Hi, I just wonder, am I audible now?
operator
Yes, please go ahead.
Kunal Tayal
Okay, great. So just to repeat my first question, Abhishek, and this has been an often asked question. We have seen that as the pricing trajectory in the sector has faded some bit and land prices have arguably stayed stubborn, could the next set of projects that are being signed up have lower profitability versus the last three years. So do you see any truth in that sort of an assumption? And second associated question is, is it comfortable to assume that your intended pricing strategy of four to five years should continue into the next few years as well?
Abhishek Lodha
Hi Kunal, very important questions regarding the industries economics. As we’ve often stated, our focus has been on having modest price growth below wage growth and therefore this 5, 6, 7% price growth level that is a deceleration for many other of our peers is really the price growth that we’ve targeted and have delivered over the last few years in terms of the value and the profitability of lands. We on the contrary believe that given the land business development that we’ve already done and the very disciplined model of underwriting for land that we follow, which is driven by our target return metrics, not driven by trying to aggregate GDV or anything like that, we actually believe that going forward the land market will turn more favorable to us given our scale, our balance sheet as well as our ability to command a premium in the marketplace.
So obviously as the market was getting sort of good for everybody in 23 and 24 and part of 25, you had a lot more competition for land. We maintained our discipline, we did what we had to do but always at the margins that we target. And now as some of this froth sort of is let off, we’ll probably get more opportunity in land. Having said that, our focus will remain on generating higher cash flow and even further strengthening our balance sheet. Because we, as I mentioned in my remarks are sitting on very significant available supply. Almost 2 lakh crores of GDP available for us to sell in the next five years.
Kunal Tayal
Got that? Thanks Abhishek.
Abhishek Lodha
Thank you.
operator
Thank you. We take the next question from the line of Abhinav Sinha. Please go ahead.
Abhinav Sinha
Abhishek. First question on business development. We have seen a big spurt this year. So how do you plan next year or you know, are you looking to moderate the pace?
Abhishek Lodha
Hi Abhinav, as I alluded in some of my earlier responses, we have front loaded business development and that will give us the opportunity to be more profit focused when we do newer business development. And hopefully that is margin enhancing. We also, the other side of the same coin is probably are not going to spend as much money on business development in the next 24 months as we’ve done in the last 24 months. And therefore hopefully we are further strengthening our balance sheet over this period.
Abhinav Sinha
Okay. Secondly question to sesha, Sesha on the data center side so when you’re talking about PowerShell or Turnkey, will you wait for a client signing before you start work here or. We are looking to start work immediately. And what is the cost thing going to look like?
Shaishav Dharia
Yeah, no thanks. I think we would basically be looking at discussion with clients because ultimately the specifications are quite specific to a client. So we would be pursuing that route before we start the, you know, as we are doing the build to suits. Second is on the costing. Again it’s very client dependent. But what’s I think important is India in general is competitive on the capital side but with the MOU signed and the benefits, the abilities to ensure that the overall cost reduction comes down by 15%. So as I said, a turnkey today with the benefits can come down to maybe 6 million USD per megawatt which is, you know, much lower than what you used to be or global standards of 8 to 12 million dollars per megawatt.
Abhishek Lodha
And our model, our model is focused on the building the power shells on a BTS basis and the cost for the power shell will Approximately be at about 3 million per megawatt including the land value.
Abhinav Sinha
Okay, that’s very helpful and maybe you.
operator
Know, Abena, I would request you to please join Pythagore for follow up question.
Abhinav Sinha
Thank you.
operator
Thank you. We take the next question from the line of Murtaza Rcwala from Kotak Mahindra. Please go ahead.
Murtuza Arsiwalla
Yeah. Hi Abhishek, thanks for taking my question. Just two questions on my side. The base year of its FY25 had a lot of land sales that also bumped up the collections. We’ve not seen the same kind of traction at least in the nine months on land sale. Is there anything that could be in the offering in the fourth quarter? Or maybe this is not the year which you have the bumper land sales. Also on the collections, you know, the drop, is it largely attributable to, you know, the base quarter having a lot of land sales or is there some moderation in execution this quarter because of which maybe milestones were not reached? Anything to read on that in that direction or it was just, you know, we’re comparing the year on year where there was a lot of land collections and this year there’s just not.
Abhishek Lodha
Hi Mutsa. In terms of, you know, whether we’ll have significant land sales in this quarter or not. Very difficult for us to forecast that. There are ongoing transactions and discussions in relation to land sales but when they will structify, you know, we’ll only know when it happens. So maybe this Quarter, maybe next quarter. Unknown in terms of the causes. Why the Q3 collections on a wireless. The landfills component is one significant component of that and the second is what I had mentioned earlier that the environmental clearances for the stalled locations only started coming through towards mid November and onwards. So you know, picking, restarting construction, re mobilizing labor and then getting the construction done and raising the demands that all is a cycle. So we lost, you know, on a few locations on account of that. But that’s all behind us now, so it’s fine.
Murtuza Arsiwalla
Just as a follow up, you know there is a remark in your presentation on the OCF guidance. Is there still a chance that he could meet it or you think you’d probably be more around the 70 billion mark as opposed to the 77 previously. Could you play catch up in fourth quarter or.
Abhishek Lodha
At this time we think that it is the 70 billion that we are looking to. Like I mentioned to you, some of the delays on account of the environmental clearance and some other factors happen have pushed things out by you know, four to six months. So that has some impact on the OCF generation. So we will probably be at that 70 billion plus minus 5% number, not the 77 billion.
Murtuza Arsiwalla
Sure, sure. Thanks so much.
operator
Thank you. We take the next question from the line of Pritesh Sheth from Access Capital. Please go ahead.
Pritesh Sheth
Yeah, a couple of questions. So first one on you know how you read this quarter’s performance because most of the sales came from, I would say a couple of projects concentrated in one market which is not generally how we obviously operate. It’s more driven by sustenance and regular sales across markets. So first one on that and second on the business development side, while we had a good year, but again most of the projects are concentrated in South Central. Was it just a conscious effort to build that pipeline or. We are probably looking directionally towards where demand is more stronger and hence focusing on those markets. So your thoughts on that? Yeah.
Abhishek Lodha
Hi Pritesh. In terms of our sales mix, we as I’ve mentioned in previous calls, we look at two metrics. The sales coming from our non launch weekly sales and then of course those coming from launches. Our non launch weekly sales at about 3 billion per week were quite consistent throughout the quarter except for the last 10 days where because of Christmas things slow down. And that was distributed of course widely. The launches that we did in this quarter were more focused in South Central Mumbai and therefore the residual value beyond that 36, 37 billion came largely from the launches in south and Central Mumbai.
In terms of your question on business development, I think we have obviously we look closely at where we find the pockets of demand combined with the margins that we target and that combination influences the transactions that happen. Obviously there is some element of what closes in a given quarter in these numbers. So I won’t read too much into it. But yes, we are sort of, you know widely distributed in terms of our available supply of land and product to construct across, you know, a large swath of the, of the market.
Pritesh Sheth
Sure. And just one last, if you can elaborate this large project that we have signed up this quarter, you know almost 20,000 crores, 2 million square feet, you know 1 lakh square feet kind of a rate on the sellable area. So just you can you know put some thoughts on what the project is about.
Abhishek Lodha
Yeah. Yeah. So Pradesh, I think there is some misunderstanding in terms of your assessment of the, of the. The value being one lakh rupees a square foot on saleable. It is over the life cycle, one lakh rupees a square foot on carpet area, not unsalable. And the location of that project is on at Worley next to 360 and Beaumont.
Pritesh Sheth
Sure. In presentation it was mentioned to me sellable area in 21,000 crore. So that’s where. No. Got it. Ali, I’ll get that clarification separately. Thank you.
operator
Thank you. We take the next question from the line of Parikshit Khanpal from HDFC Securities. Please go ahead.
Parikshit D. Kandpal
Yeah. Hi Abhishek. Congratulations on a decent quarter. So my question is are you seeing any signs of elongation in the sales cycle and you did mention that footfalls continue to remain consistent. So any color on whether the clients are taking some more time to decide closure or the pace continues to remain same.
Abhinav Sinha
Hi Parishit, the answer, I think the same similar question was asked in a different mode. So so far we’ve seen that conversion rates which is really a different way of measuring the duration to convert have remained, have remained pretty steady. So we haven’t yet seen that there is any downward pressure on that.
Parikshit D. Kandpal
Okay. Second one is on the embedded margin. So we have seen a substantial jump in commodity prices off late. So any color on your historical embedded margins do you see any pressure on cost side which may result in margin contraction as these projects come for revenue recognition.
Abhinav Sinha
So far you know the increase in commodity prices and we published the data pretty regularly about the overall construction cost base that we have. The increases primarily around copper and silver have very little impact. We have very little sensitivity to those two categories. In Our overall construction cost probably, you know, less than 1% of our construction cost is exposed to both of those elements. So while we, you know, key commodities that we are sort of, our costs are driven by, including steel and cement have been quite reasonable. So we haven’t yet seen any reason to worry that, that our construction cost estimates will overshoot our what we budgeted. We in fact have significant contingencies in our budget and more often than not end up having some of that contingency left over which is margin positive. But at this stage, no, nothing that is causing us to worry about a pressure on our budgeted costs.
Parikshit D. Kandpal
Sure. Thank you. Those were my questions and wish you all the best.
operator
Thank you. We take the next question from the line of Parve Qazi from Nuvama. Please go ahead.
Parvez Qazi
Hi, good afternoon. Thanks for taking my question. So two questions from my side. First is what was the contribution of launches to previous list quarter? And secondly, while we are obviously doing well, we are on track to meet our sales guidance and delivering healthy sales growth at the industry level. We have seen weakness in volumes over the last year. So just wanted to get your thoughts on it and what is the way around it. Thank you.
Abhishek Lodha
So thank you for that question. Our contribution from new launches for nine months is at about 1/3, about 33%. We tend to be in that range of about 30 to 35%. This quarter was higher but for the nine month period it is at about 33%.
Parvez Qazi
Sure. And your thoughts on the volume weakness in the industry?
Abhishek Lodha
Sorry Parvez, I’m. I’m not able to follow that question. May I request you to please repeat.
Parvez Qazi
Over the last year we have seen weakness in sales volume at the industry level. I mean whether we look in terms of number of houses sold or volumes in terms of million square feet getting sold. I mean while we are obviously continuing to do well, but I mean in, in our main markets of Mumbai and Pune now volumes have been declining for last two or years. So just wanted to get your views on it. I mean what as an industry what, what is the way around it?
Abhishek Lodha
Very difficult for me to sort of, you know, have a response in terms of what is happening and what are the lead causes of the, and I have not studied what the causes of the decline in volume at the industry level. For us volumes are up about 24% in square feet terms for the first nine months. Hence my sense is that it’s the two forces which I think have been often talked about. One very clearly is that the market is moving towards the best placed players because consumers who are buying want the assurance of getting a high quality product and from the best brands.
I think the other side is that at the very bottom end of the market, homes below 75 lakhs, I think there has been a decline in both supply as well as in sales in that sort of entry level affordable housing segment. So I think again from a square and that used to be a big driver of volumes, not of value which is the reason why you’re seeing that value is continuing to move up. But volumes have moderated at an industry level because we have consciously sort of moved away from that segment over the last two to three years. We haven’t seen the impact of that but there is definitely moderation in that segment.
Parvez Qazi
Thank you.
operator
Thank you. We take the next question from the line of Gaurav Khandelwal from JP Morgan. Please go ahead.
Gaurav Khandelwal
Hi, good afternoon gents. I just wanted to understand the expenditures on construction this quarter. So we are at 8.6 billion of construction spends which is the lowest in last seven quarters if I’m not wrong. And my understanding was that some quarters of last calendar year we were stuck with environmental issues which is behind us now. So ideally construction expenses should have moved up in quarter ending December whereas the number actually came down. So can I just understand this better? Thank you.
Abhishek Lodha
Gaurav. Hi. So I would more look at the nine month number because you know, when things are billed and when they are paid out that a quarter is too short a period to judge that. We definitely are looking, you know, we’re about just under 30 billion of spend on construction for the nine months which is below our desired level and we do expect to push that up. As I mentioned in my earlier remarks over the next few quarters, both the quarterly run rate as well as an equivalent nine month period which in turn will have a significant improvement for us. Also in terms of collections for the current quarter, we expect that number to be about 12 billion or thereabouts.
Gaurav Khandelwal
Got it. Thank you. But is it fair to assume that the construction momentum has increased since last quarter as in third quarter onwards.
Abhishek Lodha
The construction momentum has started moving up from November end onwards as these environmental issues got debottlenecked.
Gaurav Khandelwal
Got it. Thank you. Those were all my questions.
Abhishek Lodha
Thank you.
operator
Thank you ladies and gentlemen. With that we conclude the question and answer session. I now hand the conference over to Mr. Ayush Raghavanshi Co head of Investor relations for closing comments.
Ayush Raghuvanshi
Thank you everyone for joining the call. I hope we’ve been able to answer all your questions. If you have any further questions or need any information, you may connect with the investor relations team. Once again, thank you all for joining the call today.
operator
Thank you on behalf of Lodhar Developers. That concludes this conference call. Thank you for joining us. And you may now disconnect your lines.