NIRLON LTD (NSE: NIRLON) Q1 2026 Earnings Call dated Aug. 12, 2025
Corporate Participants:
Unidentified Speaker
Rahul V. Sagar — Chief Executive Officer and Executive Director
Manish B Parikh — Chief Financial Officer and VP of Finance
Analysts:
Unidentified Participant
Purvangi Jain — Analyst
Ashok Jain — Analyst
Satinder Bedi — Analyst
Presentation:
operator
Ladies and gentlemen, you have been connected for Milan Limited Q1 FY26 earnings conference call. Please stay connected, the conference will begin shortly. Ladies and gentlemen, you have been connected for Nilan Limited Earnings conference call. Please stay connected, the conference will begin shortly. Ladies and gentlemen, good day and welcome to the MIblon Limited Q1 FY26 Earnings Conference Hall. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone.
Please note that this conference is being recorded. I now hand the conference over to Ms. Purvangi Jain from Velorem Advisors. Thank you. And over to you ma’.
Purvangi Jain — Analyst
Am. Thank you. Good afternoon everyone. My name is Purvangi Jain from Valerim Advisors. We represent the investor relations for Nilon Limited. On behalf of the company, I would like to thank you all for participating in the company’s earnings call for the first quarter of the financial year 2026. Before we begin, let me mention a short cautionary statement. Some of the statements made in today’s earnings call may be forward looking in nature. Such forward looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Such statements are based on management’s belief as well as assumptions made by and information currently available to the management.
Audiences are cautioned not to place any undue reliance on these forward looking statements in making any investment decisions. The purpose of today’s earnings call is purely to educate and bring awareness about the company’s fundamental business and financial quarter under review. Now let me introduce you to the management participating with us in today’s earnings call and hand it over to them for their opening remarks. We have with us Mr. Rahul B. Sagar, Chief Executive Officer and Executive Director. Mr. Manish B. Pares, Chief Financial Officer of VP Finance. Mr. Jasmine K. Bhavsar, Company Secretary, Vice President, Legal and Compliance Officer and Mr.
Ashish Bharadia, VP with Business Development and Investor Relations, Nilan management services private limited without any dealing. I request Mr. Rahul Bi Sava to start with his opening remarks followed by financial and operational highlights of the company. Thank you. And over to you sir.
Rahul V. Sagar — Chief Executive Officer and Executive Director
Thank you. Good afternoon everyone and welcome to our earnings conference call to discuss the performance of the first quarter for the financial year 2026. Let me first take you through the financial performance of the company for the first quarter, the company reported a total income of rupees 167 crores which which grew by around 6% year on year. The EBITDA was reported at 132 crores representing around 8% growth year on year. EBITDA margins were about 78.93%. Profit after tax for the quarter stood at around rupees 58 crores which grew by 17% year on year while back margin reported at 34.95.
On the operational front, the average occupancy rate for the company as a whole comprising NKP and Lillian house stood at 97.5% for the quarter. As of 30 June 2025, approximately 280,000 square feet was vacant at both NKP and Lizon House combined, out of which approximately 269,000 square feet at NKP has been licensed or agreed to be licensed by Deutschlande, Barclay, Nufg, Citi and EY. Additionally, Accenture has licensed approximately 28,000 square feet at NKP and Citi has exercised its option to renew 196,000 square feet at NKP as well. The board has, in its May 2025 meeting proposed a final dividend of Rupees 11 per share for financial year ending 2025, subject to approval by the shareholders in the forthcoming AGM.
Lastly, before we move on to the Q and A session, we would also like to proactively inform you that there has been no further updates regarding any restructuring plan. Hence, we would appreciate if the focus of the questions on this phone call are about the operations and the financials of a quarter under review. We assure you that as and when any definitive decision is taken on these matters, we will inform our shareholders. With this, we conclude our opening remarks and open the floor to questions. Thank you.
Questions and Answers:
operator
Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all participants. If you wish to ask any questions, you may press star and 1. We have our first question from the line of Ashok Jain from Ayush Capital.
Please go ahead.
Ashok Jain
Yeah, good afternoon. Am I audible?
Rahul V. Sagar
Yes.
Ashok Jain
Okay. As of 30th March 2025, I.e. the fiscal year end, approximately 92,000 square foot was vacant at NTP and around 6,000 at Mildon House. This figure went up to 2 lakh. 71 thousand at NKP and 9,000 at Till On House. As of the end of Q1, I.e. 30Th of June 2025. What in Q1 of this fiscal, for. How long was this 2 lakh 80,000 square foot space vacant? Sir?
Rahul V. Sagar
Okay, so we just, I’m just going to give you a summary of what it actually was. So essentially this space was, the majority of this space was the space that was being vacated by Morgan Stanley, as we know. Okay. So what we want to say is that the space vacated by Morgan Stanley has been licensed and committed with security deposit loi as on date. And whatever vacancy there was was essentially interim, was the interim period between the old licensee vacating Morgan Stanley and the new licensee slash license fees coming in. So essentially as of 30 June 2025, all the spaces vacated by Morgan Stanley have either been licensed, license has commenced and all serious commitments with Lois have been, have been signed.
So there’s no real issue there, there is no space, there is no space right now vacated by Morgan Stanley which is vacant without an loi flash.
Ashok Jain
Okay, so.
Rahul V. Sagar
Vacated at different times, it was not a one, one time thing, not a one shot thing. It was a periodic thing. Some spaces needed some work to be done. So there were larger gaps between the new licensee coming in and licensee going out. Some spaces there were very, very small gaps of just a few days or weeks. So that, that’s really what it is. But in a nutshell there’s no committed unlicensed space vacated by Mohammed Ali.
Ashok Jain
Okay, but as for the majority, I understand the dates were you know, staggered around the quarter, but I can assume that for the majority of the quarter we lost two like 80,000 square foot rental income. Right. So majority of Q1.
Rahul V. Sagar
No, no, not for the majority of Q1. That’s not a correct statement to say because a lot of actually 180,000 square feet was vacated by Morgan Stanley. I think around the 18th or 22nd of June, or 18th of June or sometime in the second half of June. So you know, as I said, there are different dates for different, different areas being vacated by Morgan Sandy, but we cannot that the majority of the space was office 279,000 was vacant.
Ashok Jain
Okay, but all of, all of it has been relicensed now and the rental income for the entire about 2.7 lakh square foot has commenced. Right. It’s going to show up in Q2, right?
Rahul V. Sagar
Yes, I mean, basically what has not been real licensed has been committed. However, the proposed license commencement date have been finalized. In some cases the gap is very, very small between Morgan family vacation and the new license fees coming in. So I think you too will see some of these licenses and license commencement date and license fee commencement both.
Ashok Jain
Okay. Okay. And the new leases were being signed at what rental rate per square foot per month, including the license fee at 80% efficiency?
Rahul V. Sagar
Essentially we want to say that some of these new leases have of course been signed at with annual expiration at higher rates than what we had in the past. Okay. Especially the leases for the last building vacated by Morgan county in the second half of June 2025. The rates were higher, of course, going in and going increasing as well.
Ashok Jain
How much? Figure how much
Rahul V. Sagar
as well as with annual escalation. So essentially we can say that we signed at 180 plus. Plus.
Ashok Jain
Okay.
Rahul V. Sagar
At about 180, 185 as well, something in the 170s with annual escalation as well. And also we should also look at the gap between the day that Mohan Sandee left and the day on which the license and license fee commencement begins. That’s a very important gap as well. In some cases, as I said, the gap was very, very small, even less than a month. In some cases even hardly 15 days, frankly. So we have to look at everything together. But basically we have signed licenses in the region of 180 to 185 with annual expirations as well.
So yeah, it’s not really anything uncommitted, unlicensed.
Ashok Jain
Right, right. I understand that. Tremendous demand for NKP. So on a bio, on a yoy basis, how much do you think is this 180 comparable to on a staggered basis? If you may just give me a ballpark percentage, that should be fine. Sir. Hello.
Rahul V. Sagar
I mean, we don’t want to comment specific specifically on this yoy because there are different commencement date, there are different entries.
Ashok Jain
I understand, I understand.
Rahul V. Sagar
Yeah, you can see, you can see if you follow the IR report and if you follow the financials of the last one, yeah, Few years and few quarters, you can see the growth. In. The license fees, license revenue, whatever you want to call it. And yeah, it is what it is now. And it’s been, I don’t know what you want to call the growth, whether it’s a steady growth or a consistent growth. But I mean the numbers are there and you can really decide how you want to classify this.
Ashok Jain
Okay. Because despite the occupancy rates going down from 99.8 in last fiscal Q1 to 97.5. This fiscal Q1 we have actually shown a yoy rental income growth of 4.5%. So is it fair if I say high single digit annual growth in rental income? Should that be fair? Sir?
Rahul V. Sagar
Sorry, what was that?
Ashok Jain
Despite the occupancy rates going down, you know, from 99.8 and Q1 of last fiscal to 97.5 of Q1 of this fiscal, we’ve actually shown a yoy rental income growth. Right. Despite the occupancies being down by about 2.5%, we’ve shown a rental income growth of around 4 and a half percent. So can I assume that the 180 is more like high single digit growth on a yoy basis? Is it fair? Because this is very complicated as the data staggered like we cannot make apple to apple comparison. But would a high single digit growth in rental income be a fair assumption for the future?
Rahul V. Sagar
We don’t want to comment on the specific number like this which is extrapolated with various assumptions. But you can see the quarterly financial performance in the annual report and it’s fairly clear. You should also keep in mind VISA is basically based on India’s which is straight lined. So Galvano, the effect of the of the straight line is also captured in the quarterly numbers as well. But I think you should look at the next two quarters as well. And whatever we are seeing now, and whatever the answers you’re looking for, hopefully you see them in the numbers in the next Q2 and Q3 as well.
Ashok Jain
Okay, so in Q2 we should have the entire relicense space and results, right?
Rahul V. Sagar
Well, I mean you’ll see it. It’s exactly like we said that we are not really short of any.
Ashok Jain
Since our MAD credit now has been completely exhausted. The final call on the tax regime to choose for, you know, in the future. The old tax regime or the new tax regime. When will this call be taken? By the end of this fiscal or are we doing it any sooner?
Rahul V. Sagar
So theoretically one has until September, approximately September 26th to decide. But as you know, we are acutely aware of this issue and once any decision is taken in this regard, we will communicate that to you. That’s really what we want to see for now.
Ashok Jain
Okay. And sir, is our TDR monetizable in the future?
Rahul V. Sagar
Sorry, what is that?
Ashok Jain
Our td, Our tdr, Developmental Rights. Is a. Is our TDR monetizable in the future? No, it’s not. Okay. Why so sir.
Manish B Parikh
Actually we don’t have a tdr. You have an eligibility of how much you can build on the land.
Ashok Jain
Okay.
Manish B Parikh
You can go and monetize it TDR when you hand over something like a road, etc.
Ashok Jain
Okay. Okay. So it’s not as if we can GIC can use this TDR for another location or something. It has to be for NTP or not used at all.
Manish B Parikh
We don’t have any tdr.
Ashok Jain
Okay,
Manish B Parikh
just to clarify. From the eligibility.
Ashok Jain
Eligibility. Okay, okay. But we are eligible for tdr but we don’t have possess any asset of TDR right now.
Manish B Parikh
No. So. Okay, just to clarify, we are eligible to develop a certain quantum of FSI. On any piece of land.
Ashok Jain
Okay. Okay.
Manish B Parikh
Irrespective of what your eligibility is, you can use lesser than that, which is what our case is. TDR is a completely separate thing where you generate TDR when you give something like a road area or an amenity. We don’t have any that is pending for us. We have no generation, so to speak.
Ashok Jain
Okay. Okay. Okay. Okay. And
operator
sorry to interrupt you, Mr. Ashok. Can you please join the Q?
Ashok Jain
It’s one last question, sir, from my side and then I’ll be done. Should I go ahead or should I wait? Okay. Okay. Thank you. Thank you, Rahul sir. Thank you. As of 31st March 2025, we had about 173 crores of cash and cash equivalent. And the expected part for this fiscal looks like around 230 to 240 crores. And then we have about 55 crores of depreciation. So all going well. As of the end of this fiscal, that is 31st March 2026, we will be sitting on a cash pile of about 450 crores. So would you mind sharing our growth plans for the future? Or maybe we make a balloon payment on our outstanding loan of 1150 crores.
Because we have 450 crores, we are paying interest on one hand and getting interest on the other hand. So would you mind sharing what do we do with this cash pile? Maybe we buy the other stakeholders of Nirlon House and own it 100%. Or maybe we, you know, make a balloon payment on our loan. Or maybe we have some other growth plans. I would appreciate because the trial is huge, but it’s never happened in the launch.
Rahul V. Sagar
Whatever cash surpluses are there. We don’t want to confirm the number you said right now. We don’t want to. As we have been saying and as we have been doing, the company will endeavor to maximize its distribution to shareholders using a surplus cash flow after providing for contingency okay.
Ashok Jain
Okay. So. Okay. So the dividends may go up. That’s, that’s great news, sir. Thank you very much. Thank you. Okay. Thank you sir. Thanks a lot. All the best. Thank you. Great.
operator
Thank you. A reminder to all participants, if you wish to ask any questions you may press star and 1. Anyone who wishes to ask a question may press star and 1. On the Touchstone telephone we have our next question from the line of Satyinder Singh Bedi from e on Infotech Ltd. Please go ahead.
Satinder Bedi
Yes, good afternoon. Congratulations for the quick leaseback of the decade by Morgan Stanley. So as Morgan Stanley fully exited from the expiry profile it seems we’ve got only 34,000 left to expire in FY26. So is it a corrective assumption that Morgan Stanley has fully existed now?
Rahul V. Sagar
Morgan Stanley has fully exited and as we said, the space occupied by Morgan Stanley has been licensed or committed with loi. Security deposit to new licensees. Licensees. In the majority of the cases the licenses have commenced and license fees have commenced and. Yeah, that’s really what we can say.
Satinder Bedi
Yes, no, understood. I think that’s a great outcome.
Rahul V. Sagar
As we explained earlier that because of the difference you’re seeing some of these numbers going up and down. But we can, we can say what we said in the previous question as well as this.
Satinder Bedi
What I understood, sir. On cost of capital, the spread has increased from 200 to 233 pips. So any views on how do we plan to optimize this going forward? Okay. Given that this is one of the largest components of cost. So any plans on this. Okay. Or any prepayment penalties that we suffer and okay, I’ve got a resource. Any views on this?
Rahul V. Sagar
Essentially if you see our interest rate now is approximately 7.6, 7.68. So regardless of what the spread is, this is our interest rate at this point in time. Of course we will continue to discussed with the lender to. For reduction of spread as well.
Satinder Bedi
Okay. Any prepayment penalty clauses that we had on this loan, sir?
Rahul V. Sagar
Well, we don’t really want to get into it.
Satinder Bedi
Okay. And any problem?
Rahul V. Sagar
Yeah, we don’t really want to get into that, but it is. I don’t want to comment on that agreement right now without having the agreement in front of me. But if we are doing any repayment or anything, of course we will have to keep you informed.
Satinder Bedi
Okay. Any progress on the house that would be shared, sir, in the last important.
Rahul V. Sagar
No. Nothing significant.
Satinder Bedi
Okay. Okay. Okay. And on this ssi, so what is the currently eligible ssi? For our partial. So what is eligible SSI and what is it that we’ve used based on our built up area?
Rahul V. Sagar
So I just. So I just explained to you what it is and since we are it, our FSI eligibility will be approximately 5 + fungible depending on the always on the road width. Okay. Not just for us but that as for the, as for the policy which we fall under and currently we have used approximately 2.7 FSI. It could be plus minus a few percentage points but approximately 2.7 2.75 somewhere there 2.8 maybe.
Satinder Bedi
Okay, and this one 8085 that on whatever 170 to 185 that we signed. What was the average rental reversion that we achieved on these leases? Sorry, the average rental rental reversion. So the new rent over the exit rent. Okay, so what is the kind of rental reversion we achieved on this?
Rahul V. Sagar
So the more than 10 spaces were at various different license fees because of different periods of signing the license agreement and different most of them had different commercial terms, etc. What we can say is that we have some annual restoration for Morgan Stanley spaces vacated which were basically 15% every three years in the past. So that is really a very significant change from previous license agreements. And the exact, the delta between the spaces vacated by Morgan Stanley would be be different. So it’s a little hard to give specific numbers on that. As you can see at about 185 comes to about 230 approximately on carpet.
So you can compare with other comparable assets in the micro area as well as in various other locations as well.
Satinder Bedi
Okay, fine. Thank you. And the notice for the AGM has come out yesterday. The annual report is not a part of that notice. Okay, so when do we expect that? And nor is it on the website yet.
Rahul V. Sagar
I think, I think we are going to send it out as always within the stipulated time period. You will get it in the near future. Well, in time. As per our regular annual.
Satinder Bedi
Thank you very much and congratulations once again on the great lease up of the located space. Thank you.
operator
Thank you. A reminder to all participants, if you wish to ask any questions you may press Star and one. Anyone willing to ask a question may press Star and one on their touch tone telephone. A reminder to all participants, you may press Star and one to ask a question. A reminder to all participants, if you wish to ask any question you may press star and 1. As there are no further questions from the participants, I now hand the conference over to Mr. Rahul Sagar for closing comments. Over to you sir.
Rahul V. Sagar
Thank you all for participating in this earnings phone call. I hope we were able to answer your question satisfactorily and at the same time offer insights into our business. If you have any further questions, I would like to know more about the company. Please reach out to our investor relations managers at Belaram Advisors. Thank you once again from all of us at Nil Law. Thank you. Thank you.
operator
Thank you sir. On behalf of Nilol Limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines. It.