NIRLON LTD (NSE: NIRLON) Q3 2025 Earnings Call dated Feb. 14, 2025
Corporate Participants:
Nupur Jainkunia — Investor Relations
Kunal Sagar — Director
Unidentified Speaker
Analysts:
Dilip Jain — Analyst
Satinder Singh — Analyst
Unidentified Participant
Presentation:
Operator
Hello, ladies and gentlemen, good day and welcome to Q3 and Nine Months FY ’25 Conference Call of Nirlon Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing start, then zero on your touchstone phone. Please note that this conference call is being recorded.
I now hand the conference over to Ms Nipur Jain Kunia from Valorem Advisors. Thank you and over to you.
Nupur Jainkunia — Investor Relations
Thank you. Good afternoon, everyone. My name is Nipur Jan Kunia from Valorem Advisors. We represent Investor Relations for Limited. On behalf of the company, I would like to thank you all for participating in the company’s earnings call for the 3rd-quarter and nine months of the financial year 2025.
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 beliefs as well assumptions — assumptions made by information currently available to 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 preview.
Now let me introduce you to the management participating with us in today’s earnings call and hand it over to them for opening remarks. We have with us Mr Rahul Sagar, Chief Executive Officer and Executive Director; Mr Kunal Vi Sagar, Director, Nilan Management Services Private Limited; Mr Manish V.parik, Chief Financial Officer of VP Finance; Mr Jazmeen K., Company’s Secretary, Vice-President, Legal and Compliance Officer; and Mr Ashish, VP, Business Development and Investor Relations, Nilan Management Services Private Limited.
Without any further delay, I request Mr Kunal to start with his opening remarks, followed by financial and operational highlights of the company. Thank you, and over to you, sir.
Kunal Sagar — Director
Thank you. Thank you. Good afternoon, everyone. It is a pleasure to welcome all of you to our earnings conference call for the 3rd-quarter and nine months of the financial year 2025.
Let us first take you through the financial performance of the company. For the 3rd-quarter, the company reported a total income of INR164 crores, which grew by 7% year-on-year. EBITDA was INR133 crores, representing a 10% growth year-on-year. EBITDA margins were at 81.39%. Profit-after-tax for the quarter stood at approximately INR58 crores, which also grew by 12% year-on-year, while PAT margins were 35.57%.
For the nine months ended as the financial year 2025, the company reported a total income of approximately INR484 crores, representing a growth of 7% year-on-year. EBITDA stood at INR386 crores, an increase of 8% year-on-year and EBITDA margins was 79.74%. Profit-after-tax was INR165 crores, an increase of 7% year-on-year and PAT margins was 33.99%.
On the operational front, the average occupancy rate for the company as a whole, that is NKP and House combined was at 99.5% for the 3rd-quarter of the financial year 2025 and as on 31st December 2024, approximately 15,000 square feet at NKP and 6,200 square feet at Nirong House was vacant. In other updates, Morgan Stanley has given notices to vacate approximately 449,000 square feet of space with the last notices for about 176,000 square feet received in December 2024. These spaces will largely be vacated in-quarter one financial year 2025 and quarter one of financial year 2000 — sorry, sorry, will be — let me repeat that. These spaces will largely be vacated in-quarter four 2025 and quarter one 2026. Of this, around 230,000 square feet has already been relicensed to BNP Pariba, ANY, ICICI Prudential and Glob SS&C with discussions going on for the remaining space.
Additionally, BNP has renewed approximately 156,000 square feet at NKT. Further terms have been finalized for relicensing of approximately 60,000 square feet of space coming up for renewal in financial year ’25. Lastly, we are glad to inform you that the Board of the company has approved an interim dividend at INR15 per share for 2024-’25 in the meeting held on 13 February 2025.
With this, we conclude our opening remarks and open the floor to questions.
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 R and one on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press R&2 two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We’ll take our first question from the line of Dilip A Jain from Ayush Capital. Please go-ahead.
Dilip Jain
Yeah. Good afternoon, sir. I just have two questions. My first question is, for the first-nine months, we have paid approximately INR45 crores tax on a PBT of INR254 crores. This works out to about 17.5%. You had explained in the previous con-call that this lower tax outgo is mainly due to accumulated MAT credit, which might get over by the year end. I request you to give me the figure for 31st December for the balance accumulated MAT credit, which we are going to use for Q4 of this year.
Unidentified Speaker
Just a second, please. Yeah. The credit that was available to the company will get fully utilized by March 2025.
Dilip Jain
Okay.
Unidentified Speaker
Because we are in the old tax regime, we are able to carry-forward the and that matter is getting utilized. So it is utilized on an annual basis. So we can’t give you the number for utilization up to December.
Dilip Jain
Okay. So how much — how much has been assumed to be utilized this year like.
Unidentified Speaker
Across INR223 crores.
Dilip Jain
20 crores INR23 crores. And once this INR23 crores gets extinguished, there’s nothing that’s left at the end of this fiscal.
Unidentified Speaker
Correct. Yeah.
Dilip Jain
Okay. Okay. So we wouldn’t be getting that tax advantage anymore at the end of this fiscal, am I right? Okay.
Unidentified Speaker
Yes.
Dilip Jain
Okay. All right. All right, sir. Okay. And I’ll proceed to my second question, if you may permit. As per Page 7 of our investor presentation, Morgan Stanley has given us a notice to vacate 449,000 square-foot in Q4 and Q1 of next fiscal. And as Mr Kunal explained Harti congratulations have already begun relicensing and have relicensed almost INR130,000. So since we have — my question is, since we have already commenced relicensing of the area that will be vacated. What is the average rental rate per square-foot per month of the relicensed area? That is one part.
And the second part, sir, is strategic media reports indicate a huge demand for Grade A commercial spaces in our micro-market with vacancies perpeted to be at an all-time low. So in a rising rental rate scenario, will it be a better alternative to wait to relicense at higher rental rates of six months or nine months down the line, then to pre-book tenants right away. Would like to know your thoughts on both the parts of the question. Thank you.
Unidentified Speaker
Okay. So the first — so the first part of the question, with regard to the rates after Morgan, with regard to the rates that we are getting for license fees for the spaces vacated by Morgan, we can say that they are fairly positive and showing a higher trend going-in the right direction, approximately between 160% to 180 at 80%.
Dilip Jain
160 to 180, sir, at 80% efficiency.
Unidentified Speaker
Approp.
Dilip Jain
Okay, okay. Okay.
Unidentified Speaker
So essentially, we can say that the trend is in the right direction at this point in time, it’s an increase in trend. And to answer your second question as to whether we should wait, we don’t usually want to speculate and take these type of decisions as to waiting for license fees to get higher, we want to basically license as soon as possible to the best possible license fee with the best credit, which will also give us the best credit at the best possible terms. So yeah, it’s — that’s really what we want to do. Thank you.
Dilip Jain
That’s nice. However, you know, the market is at an all-time high and that’s what we assume it to be because the vacancies are so low. So aren’t we losing out on that 20% 25% extra differential that we might have gotten had we waited a bit longer? I mean, I just want to know from a strategic point-of-view.
Unidentified Speaker
So we don’t — we don’t really think so.
Dilip Jain
Okay. Okay. So these are good enough, 160%, 180 at 80% is good enough as per as per your research.
Unidentified Speaker
Yes.
Dilip Jain
Okay, all right. All right, sir. Thanks a lot. All the best. Thank you.
Unidentified Speaker
Thank you.
Operator
Thank you. Ladies and gentlemen, to ask a question, please press RN1 on your phone now thank you. Participants who wish to ask a question, please press RN1 on their phone now. We’ll take our next question from the line of Satindar Singh from Eon Investments. Please go-ahead.
Satinder Singh
Yeah, thanks and congratulations for another stable quarter and the quick. So anything to report on the Nirlan House, any progress on Nirlan House.
Unidentified Speaker
Nothing significant to say in that regard we are in various discussions and if there is anything significant to say we will update you.
Satinder Singh
Okay fine and yeah. Okay. Thank you. I think that’s for the moment. Thank you.
Operator
Thank you. Before we take the next question, we’d like to remind participants to press to ask a question. The next question is from the line of Chalasani, an independent analyst. Please go-ahead.
Unidentified Participant
Good afternoon. Thank you for the opportunity. Since the trade will be exhausted this year, would we be changing to a new tax regime in the following year? Thank you.
Unidentified Speaker
The company is analyzing that in a lot of detail and — the company is analyzing that in a lot of detail and will be in a position to take a decision in the next month or two in this regard.
Unidentified Participant
That explains. Thank you.
Unidentified Speaker
Yeah. Thank you.
Operator
Participants may please press RN1 to ask a question. We’ll take our next question from the line of Daksh Jain, an Individual investor. Please go-ahead.
Unidentified Participant
Hello. Yes, good afternoon, sir. Am I audible?
Unidentified Speaker
Yes.
Unidentified Participant
Yes. I have just one question. The interest — the repo rate has been reduced by the government. And has there been any changes in the discussion or our progress towards REIT, sir, because it benefits the REIT sector. Has there been any acceleration towards the progress towards REIT or what any new discussion changes happening or is it more like positive and has the progress accelerated, sir?
Kunal Sagar
Let me just understand your question. Are you asking about the interest-rate or the REIT? You mentioned two things. So it was a little confusing to know exactly what you want to know.
Unidentified Participant
The form in interest is favorable to the REIT industry. So has there been any acceleration in our process after the change in interest rates towards the direction towards the REIT?
Kunal Sagar
So I think of course, as we understand, I think what we’d like to say is that the progress towards the REIT is something that if I may say, so you are assuming that we’ve been speaking about the REIT. What we want to mention is that we’ve been looking at an appropriate restructuring, whether it’s in the form of a REIT or something else is something that we’ve always mentioned that we are in the process of analyzing and looking at every possible structure that might be the most beneficial to the company. So that’s just something I would like to — we’d like to clarify. Since you definitively mentioned REIT, in that context, the discussions that have been ongoing and the various analysis that has been ongoing are continuing, there’s nothing specific different from the last-time that we want to say on that. Would that answer your question?
Unidentified Participant
Yes, sir. Yes, sir. Okay. And sir, one more request, sir. As we have been telling for various quarters, can we expect a key person from GIC to sit in the con-call and to give a little bit more, you know, a specific reasoning behind the development on the REIT side or whatever the structure is, sir because we have been requesting this for a lot of con-calls now.
Kunal Sagar
Noted your point, Mr Jain. Thank you.
Unidentified Participant
All right. All right, sir. Thank you.
Operator
Thank you. Ladies and gentlemen, to ask a question, please press R&1 on your phone. We’ll take a follow-up question from the line of Satindal Singh from Eon Investments. Please go-ahead.
Satinder Singh
Yeah, thanks for the follow-up. So out-of-the 449K that Morgan Stanley is vacating, about INR200K we believe has already been realized in. So what kind of a pipeline do we have for the balance 250 and how confident are we that by the time these get vacated in 1Q ’26, we should be wrapping up most of these.
Unidentified Speaker
Well, we can say that for the balance approximately 200 odd, the pipeline is very strong and positive and we will hopefully be concluding in the next few months as well. As I said, we want to do it at the best possible commercial terms to the most appropriate licenses as soon as possible. — Yeah. As I said, as we said, as we said earlier, we want to relicense as soon as possible on the best possible commercial terms to the licensee whom we feel is most appropriate for NL, for NKP and we believe we have a very strong in this regard and we’ll be looking to finalize this soon as possible in the next few months.
Satinder Singh
Thank you. Okay. No. Thanks a lot. And I must use this opportunity to complement the management. I think you’ve done a great job in first building the asset out like you, okay? And then thereafter maintaining the occupancy. I think it’s incredible the level of occupancy that you maintained over the years. So compliment to your management okay on this. Okay. And sir, finally, sir, if I’m to read this correct, one of the responses. So are we saying that will on the — on the tax regime be taken in the next couple of months or is the decision on the structure going to get taken in the next couple of months itself?
Unidentified Speaker
Okay. Is that decision on the tax regime will be taken in the next couple of months?
Unidentified Speaker
Which has essentially gone, which will essentially be in ’25, ’26. Yes.
Unidentified Speaker
Just to clarify, for FY ’25, we need to decide by the time of filing the return, which happens in September of ’25 and for FY ’26, we need to decide by the time of filing the returns for FY ’26, which is September of ’26. So therefore, for FY ’25, as of now, it’s been decided to be in the old tax regime. And for FY ’26, the timeline for the decision is before you file the returns. You can decide at any time till then.
Satinder Singh
Yeah, fine, fine, get it. Thank you. Thank you very much. Thank you.
Kunal Sagar
Thank you, Mr Singh. Thank you.
Operator
Thank you. Ladies and gentlemen, to ask a question, please press on your phone now as there are no further questions, I now hand the conference over to Mr Kunal Shagar from Limited for closing comments. Over to you, sir.
Kunal Sagar
Thank you. Thank you all for participating in our earnings call. We hope you were able to answer your questions satisfactorily. If you have any further questions or would like to know more about the company, please reach-out to our Investor Relations Managers and — thank you very much.
Operator
Thank you, members of the management team. On behalf of Niron Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.
Kunal Sagar
Thank you. Bye.