NIRLON LTD (NSE: NIRLON) Q3 2026 Earnings Call dated Feb. 11, 2026
Corporate Participants:
Unidentified Speaker
Rahul Sagar — CEO & Executive Director
Analysts:
Unidentified Participant — Analyst
Purvangi Jain — Analyst
Amoksh — Analyst
Satinder Singh Bedi — Analyst
Laksh Jain — Analyst
Laksh Jain — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q3 and 9 months FY26 conference call of Nirlon Limited. As a reminder, all participant lines will be in the listen early 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. I now hand the conference over to Ms. Purvangi Jain from Valorum Advisors. Thank you. And over to you, ma’a m.
Purvangi Jain — Analyst
Thank you. Good afternoon everyone. My name is Parvangi Jain from Valorum Advisors. We represent the investor relations for NIL Unlimited. On behalf of the company, I would like to thank you all for participating in the company’s earnings call for the third quarter and nine months 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 V. Sagar, Chief Executive Officer and Executive Director. Mr. Manish B. Pare, Chief Financial Officer, VP Finance. Mr. Jasmine K. Bhavsar, Company Secretary, Vice President Legal and Compliance Officer and Mr.
Ashish Bharadia, VP Business Development and Investor Relations, Nilon Management Services Private Limited. Without any delay, I request Mr. Rahul Bisagar to start with his opening remarks followed by financial and operational highlights of the company. Thank you. And over to you sir.
Rahul Sagar — CEO & Executive Director
Hi. Good afternoon everyone and welcome to our earnings conference call to discuss the performance of the third quarter and nine months of the financial year 2026. Now let me first take you through the financial performance of the company. For the third quarter. The company reported a total income of 173 crores which grew by around 6% year on year. The EBITDA was reported at INR 135 crores which grew by 1% year on year. And EBITDA margin stood at 77.93% profit after tax for the quarter was INR 69 crores with bank margins at 40.04%. For the first nine months of the financial year the company reported a total income of INR is 509 crores which is which grew by around 5%.
Year on year, the EBITDA was reported at INR 400 crores representing around 3.5% growth. Year on year, EBITDA margins were about 78.53%. Profit after tax stood at 275 crores and fat margin stood at 54.1%. On the operational front, the average occupancy rate for the company as a whole comprising NKP and Nizal house stood at 99.7. For the quarter as on 30 December 2025, approximately 7,800 square feet area was vacant at both NKP and Mills on House. During the quarter, approximately 25,000 square feet has been renewed by Citi. Please note that the company has moved to the new tax regime for FY26 onwards from Q2 FY26 onwards.
Accordingly, tax expenses based on the new concessional rate from Q2 FY26 onwards. Lastly, comma, the board has declared an interim dividend of INR15, 150% per share for FY26. We understand that the company has a sufficient cash balance available and any change in the dividend policy or model decided after the end of the financial year in the final dividend. And before we move on to the Q and A session, we would like also to proactively inform you that there has been no further update regarding any restructuring plans. Hence, we would appreciate it if the focus of the questions on this conference 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. Open the floor to questions. 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 Touchstone telephone. If you wish to withdraw yourself from the question queue, you may press enter. Two participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Amoksh, an individual investor. Please go ahead. Your line is unmuted. Please go ahead with your question. Yes, sir. Please go ahead.
Amoksh
Yeah.
operator
Sorry to interrupt. Ramosh, could you please use your handset? And there’s a lot of background noise.
Amoksh
Hello, Am I audible now?
operator
Yes, please, go ahead.
Amoksh
Yeah, so my question was that given. That only 8,000 square feet remains vacant, how does the company plan on increasing the rental income?
Rahul Sagar
Sorry, how does the company plan on increasing the rental.
operator
Could you please repeat your question?
Amoksh
Yeah, so my question, given that only. 18 square feet remains. How does the. Company plan against the rental income going forward?
Rahul Sagar
Okay, thank you. We can. Now we understood the question. We could hear you. We could hear you better the second time around. So basically, as we have said in the past, as we have said in the past, since we have practically 100% occupancy in NKP, which is the primary asset of Lillon, the increase in income is primarily going to come through contracted escalations. And as and when there are vacancies, we have the potential opportunities for hire to re license at higher rates. But that is potential. But basically the increase in income will come through contracted escalations in the license agreements.
Thank you.
operator
Does that answer your question? Mr. I would request you to please join the queue. Again, we can’t hear you. The next question comes from the line of Ashok Jain, which Ayush Capital. Please go ahead.
Unidentified Participant
Yes, sir. Am I audible?
Rahul Sagar
Yeah, a little bit better. A little bit better. Thank you.
Unidentified Participant
Okay. Okay. Thank you. Good afternoon, sir. Congratulations on a good quarterly set of numbers. So my question is the recent union budget has reduced buyback tax on corporate promoters, whereas in complete contrast, it has increased it for individual promoters. Now, given that you are an individual promoter with a small holding, are you eligible for reclassifying yourself into the public category of shareholders from the promoter category that you’re currently in? Hello? Hello.
operator
Yes. You’re audible?
Rahul Sagar
Ashok.
Unidentified Participant
Okay. Yeah. Yes. Yes, sir.
Rahul Sagar
Yeah. Okay. I think the company will continue to evaluate this in more detail with our advisors and then come to a decision. At present, no such decision has been. Has been taken. If there’s anything significant or as always, if there’s anything significant in this area, we’ll keep you well informed.
Unidentified Participant
But, but, but, but. Rahul sir, since you yourself are the shareholder, you’re. Are you eligible or not? I. I was, I was not asking whether you’re good or not eventually. But are you eligible to reclassify yourself? Hello. Hello. Am I audible?
Rahul Sagar
Sir, let me, let me just understand this in more detail and come back to you. I can come back to you in the next meeting also. Let me just understand this in more detail. You’re asking whether I’m eligible on a post?
Unidentified Participant
Yeah, yeah. Personally, if you’re eligible or not?
Rahul Sagar
Yeah. Okay. I’ve not checked anything personally, but I’ll check in due course. Thank you.
Unidentified Participant
Okay. All right, I’ll move on to the next question. Sir? Yeah. The extra cash on the balance sheet is usually earmarked for dividend distribution as per headlaunch policy. However, the interim dividend was constant and the cash was not even used to repay our existing loan. So do we intend to distribute the extra cash over and above the regular dividend that is going to hit us sometime, you know, in the next couple of months?
Rahul Sagar
Yeah. So we don’t want to speculate on exactly how much dividend we are going to pay or whether we are going to pay more. But this, as you know, for 25, 26 is an interim dividend. And of course there will be a final dividend in September 26 as there has been for the past few years. And yeah, so basically we’d like to say that this is not the final opportunity. If there is an opportunity for further distribution based on the cash balances at that point in time. Of course, it’s a very valid point. It’s a very valid point that you raise.
It’s a valid point. But as you know, this is not the final. This is not the final dividend for the year. This is the interim dividend. And let’s just see how we close out the year and things going forward. And of course, we have an opportunity to do the final dividend in approximately six to seven months time once more.
Unidentified Participant
Okay. So we are not wrong in affording to be optimistic.
Rahul Sagar
I mean, we are all, we are all. We always like to be optimistic. Everybody likes to be optimistic. That, that, that’s really up to you. But thank you for your time. Thank you for your kind words.
Unidentified Participant
Okay. Okay. All right. Thank you, Rahul sir. Thank you very much.
Rahul Sagar
Thank you.
Unidentified Participant
Yeah.
operator
Thank you. The next question comes from the line of Satyinder Singh with E on Infotech limited. Please go ahead.
Satinder Singh Bedi
Yes, thank you. And congratulations for a very fine quarter. So my questions are around one is the while I understand there’s hardly any area available for leasing, but like other REITs have indicated that Bombay has seen a lot of traction and the rentals have gone up maybe double digit in the last six months or so. So have we seen that kind of a traction in our latest lease that we did okay, or renewal that we did so just a flavor on the rental rates. And connected to that, One of the REITs has talked of trying to reduce now their efficiency from 78% down to 70%.
We are at 80%. So do you see that as a lever going forward. And if that exists, when does it come up? Does it come up in FY28 when we have some renewals coming up or whatever or expiry is coming up.
Rahul Sagar
Okay, so thank you. So firstly we, on the first question we’d like to say that as you can see also from the numbers and from the investor presentation and the quarterly presentations over the past few quarters, the space vacated by Morgan Stanley had given the company an opportunity to re license our of this space. As you may have seen, the general trend is for rents increasing to some extent consistent increases as well as annual escalations. As you can probably see in majority of the cases with regard to efficiency, you know, it’s not something that we put a lot of importance on because at the end of the day it’s very easy to do a calculation on carpet area, etc.
Etc. So reductions in efficiency and increases in efficiency, of course various Companies and various REITs etc. Can have different strategies, but it’s not, we don’t really see that as, I mean it’s not something very significant which we want to. Which we feel is. Can be a significant catalyst for increase or decrease of license fees because Carpeteria calculations frankly are very easy to do. And all the licensees whom we are dealing with equally experienced and very seasoned licensees in various office IT commercial spaces over India for the past 10, 20 years. So they are very experienced as well.
So. Yes, thank you.
Satinder Singh Bedi
Yeah, okay. And on the you said so. I just want to understand the contract. So when you say renewal options, so clients have renewal options, let’s say every three years or five years, is the rent reset at that time to the market rent or is it also already enshrined in the, in the original contract the percentage of increase .
Rahul Sagar
That differs from contract to contract, that differs from contract to contract. What I meant was to some extent, say for example when Morgan Stanley left, we had some opportunity to increase license fees in some of those spaces when there is a final renewal with no inbuilt excavations, etc. Etc. We have the opportunity to increase license fees or decrease license fees as the case may be. So in general it’s very specific, it’s case to case. And yeah, what we have done though to some extent is that we are trying to of course incorporate annual escalations wherever possible.
And this has been successful to some extent in some of the new licenses we have signed.
Satinder Singh Bedi
Yeah, no exits. Mr. Sagar, I understand at the time of exit when you have a new tenant coming in obviously, okay, the rents will get reset to the market but for a nine year contract with the renewal every three years. So typically, I understand again it might be contract to contract but typically after this, let’s say first, let’s say three years. Okay. And there’s a renewal option. Do the rents typically reset to market or is the increase predetermined and enshrined in the original contract?
Rahul Sagar
As you know, the entire period is contracted in the agreement with the. The entire, entire rentals are contracted in the agreement. And the ability to reset your rentals, whether up or down, whether you’re resetting to market, whether it’s higher or lower, realistically can happen only when there is a pure vacancy within the parameters of the contract. It’s not really possible to rent set anything to market whether it’s an increase or a decrease.
Satinder Singh Bedi
Okay, fine, I get it. Okay. And on the finance cost, so when we look at the cost for this quarter, the all in cost works out to almost about 9.7%. So if you look at the 1150 crores loan and the total finance cost annualized, this works out about 9.7%. Our understanding is that the actually the borrowing is at 90 day T bill plus 233 bps which works out about 7.7. So. So how can we reconcile this? Suket, please.
Unidentified Speaker
Actually this is indefinite impact. We have to discount the security deposit at its present value. So that cost goes as a finance cost in the P and L. So that’s why it shows an increase.
Satinder Singh Bedi
Okay, but otherwise the, the cost to the what we pay to the lender is. Is 90 day T bill plus 2 233. Is that correct?
Unidentified Speaker
No, it’s one month table 30 days table plus 233.
Satinder Singh Bedi
Okay. And how often is it reset please?
Unidentified Speaker
Every month.
Satinder Singh Bedi
Every month. Okay. Okay. Thank you. Thank you. I think this answers my questions. Thank you. All the best.
Rahul Sagar
Thank you.
operator
Thank you. The next question comes from the line of Amit Agicha with HD Hawa. Please go ahead.
Unidentified Participant
Yeah, thank you for the opportunity and congratulations for good set of numbers. So my question was like connected to like the any company remains to remain a single asset platform or scale into multi city IT park operator. Is there any possibility of vertical expansion like redevelopment potential of nkb?
Rahul Sagar
Is there any possibility of vertical
Unidentified Participant
vertical ex pansion of the mkp?
Rahul Sagar
You mean on the existing structures?
Unidentified Participant
Yes. Yes.
Rahul Sagar
On the physical structures you mean?
Unidentified Participant
Yes. As well as the language we have.
Rahul Sagar
Okay, so I think this, this point we have discussed in the past people have asked and there is no, at this point in time there is no proposal or plan for any significant further increase in volume. Of course if that happens, we will let you know in due course. But at this point in time there is nothing, no significant plan for any increase in volume in nkp.
Unidentified Participant
And neither. Sir, any other city are you targeting. Any other city where you want to expand to?
Rahul Sagar
Not right now. There’s no significant plan or no significant proposal that we are considering at this point.
Unidentified Participant
Can you put some color on like, what is the like NKP rental compared to BKC or Sipawai?
Rahul Sagar
Well, I mean you know it’s. It’s. You’ve seen in the numbers what really the approximate rentals are, what the average license fees are the approximate average license fees are. And we don’t really want to compare to any other micro markets. Of course, BKC is a completely different micro market with regard to the profile of the space, volume of the space, etc. Etc. Location. Hawaii could possibly be more similar, could be a more similar profile to nkp. But we’re not exactly. We don’t really want to comment whether somebody else’s license fees are higher or lower than ours.
Our endeavor is always to try to get the best possible commercial terms with the best possible licensees in terms of credit worthiness profile, etc. Etc. So it’s a little bit of. It’s not such a straightforward comparison and we don’t really want to comment on comparatives with other micro markets and other commercial parks etc. Because it’s not just a comparison of black and white of a particular of a single number. Also it’s a variety of factors as you will appreciate. Thank you.
Unidentified Participant
Thank you Sarah. Joined by you. Thank you.
operator
Thank you. The next question comes from the line of Laksh Jain, an individual investor. Please go ahead.
Laksh Jain
Hello. Am I audible, sir?
Rahul Sagar
Yes.
Laksh Jain
Yeah. Yes. My first question, sir. So what is our current cash and bank balance? Sir.
Rahul Sagar
1 minute.
Unidentified Speaker
This is approximately 325 crores.
Laksh Jain
I. I missed that. So how much? Sir, sorry.
Unidentified Speaker
325 crores.
Rahul Sagar
Approximate.
Laksh Jain
325 crores. This is as for December 31st as on the 31st.
Unidentified Speaker
As on the 31st. — December 31st January.
Laksh Jain
31St January. Okay. Okay. Despite having such high balance, we decided to distribute only 135 Cr for as interim dividend. Is there some expansion plans we are planning, sir, on the remaining excess cash. We have.
Rahul Sagar
Significant to say at this, at this point in time. This is the interim dividend for 2526 as you know. And there is over the Past few years you’ve seen there’s an interim dividend and a fine and a final dividend as well. So yes, this is the internal dividend for now. Thank you.
Laksh Jain
Okay. Okay. So sir, we can expect a special dividend, sir, in the near future?
Rahul Sagar
No, no, no, I’m absolutely not. I’m absolutely not saying that. I’m saying that if you see over the past few years there has been an interim dividend and a final dividend. So this is the interim dividend which is consistent with the previous years as well. And we will, we will take a call with regard to the performance of the company and the numbers, etc. Etc. At the point in time when we have to pay the final, final dividend. But that is.
Laksh Jain
Yeah. Why I asked this question. Because historically we were distributing more than our EPS. Last year it was 24, we distributed 26. Before that was 22, we distributed 26. So this time, even if we take a conservative basis, despite of having higher eps, higher cash, it comes to. On a conservative basis is coming 34, sir. That is why this question has raised. Distributed for the like. Historically we have been distributing more than our EPS activities and this time, despite us having a lot of tremendously higher cash, we stick to our old record.
Rahul Sagar
This is, as you know, this is the interim dividend and we look at the performance and the numbers at the end of the year at that point in time, and we will take a decision at that point in time. Your point is well noted. The increase in the EPS is also significantly due to the change into the new tax regime as well from Q2 20. 2020, as you are well aware.
Laksh Jain
Yes, all right. All right, sir. Okay. My next question, sir. Yes, sir. Is it sad to assume, sir, that we won’t see any increase in rental income till FY27 as there is, renewables are negligible. So market rate renewal will also be negligible.
Rahul Sagar
Well, I mean, whatever is contracted. We are very confident that whatever is contracted in our license agreements is going to happen and should should reflect in the, in the numbers. As of this point, there are no significant potential vacancies to report as and when there are potential vacancies to report. Let’s see, let’s see what happens. So for now, we continue to. Go. As per the licensed agreements that we have with all of our licensees for approximately 99 to 100% of NKP.
Laksh Jain
Okay. Okay. My next question, sir. So what is the gap between our rates and the market rates are present on an average, how much room we have, sir, how much is the gap? How much more room we have to reach at least near above the market rates.
Rahul Sagar
In terms of license fees.
Laksh Jain
No rental per square feet, sir.
Rahul Sagar
Yeah, in terms of license fees per square feet. But you know, we can’t comment specifically how much gap we have in to reach the market whether we are above or whether we are below. Specifically we feel that we have good, consistent a grade licensees with consistent license fees coming in. And we want to progress, we will progress. As for the existing license agreements, we can’t really make a comment as to whether there is a gap or no gap compared to the market because every micro market has a different set of parameters. And license fees of course are not just a black and white number.
There are various other significant commercial points which one has to take into consideration as well as the credit rating, etc. Of the licensee. So yeah, we are just doing what we feel is best for nkp and we don’t want to comment on any perceived gap or any other. We don’t want to comment on any perceived gap with the market. Thank you.
Laksh Jain
Okay. Okay, the next question, sir, now we be shifted to the new tax regime. Is my reading right if I say that REIT option is completely ruled out as we no longer would enjoy tax efficiency which an SPV would enjoy being in an old region, sir.
Unidentified Speaker
Mr. Jain, there are two parts to it. One is there can be a FPV under a new tax regime as part of the reit. So there’s no regulatory. Requirement where it. Says it can’t be done. Second, we agree that the benefits in a REIT are largely when companies are under the old tax regime.
Laksh Jain
Yes, sir. Okay. Okay. But the possibility is still there, but the purpose will not be valid method. So it, it won’t be reasonable for someone to convert it because being in a new tax regime, the whole purpose of the read gets disturbed.
Unidentified Speaker
Point taken. Point taken.
Laksh Jain
All. All right. All right. So last question, sir. Now being buyback being more lucrative after the budget changes, can we thinking like thinking from a minority shareholder point of view as well, can we expect buybacks to also be in our radar apart from dividend because dividend gets taxed at 35% at minority health.
Unidentified Speaker
So Mr. Jain will evaluate this in more detail. Primarily as of now, what we understand is there’s a condition of book value debt equity to be less than 2. 2 is to 1 which the company does not meet.
Laksh Jain
Okay, okay.
Unidentified Speaker
But we are evaluating this with our advisors and if such things are there, will, will and anything will keep everyone Updated.
Laksh Jain
Thank you sir, that was helpful. Sir, as my last question, so what was the previous city rental rate? Sir? I mean the city bank which got renewed, what was the previous rate and the new rate? Sir, The 25,000.
operator
Hello, sir.
Laksh Jain
Yes, sir.
Rahul Sagar
So I think the new renters you can possibly, you can see on all these various CRE metrics, etc. Etc. It’s possibly out in the public domain. There has been a significant increase in the rate per square foot. There has been some increase in the rate per square foot, of course. As well as annual escalation. Yeah, as well as annual escalation. So as we said earlier, it’s going in what we think is the right direction if you take all the important commercial parameters.
Laksh Jain
No, sir, what I asked was what was the change in the rental rates per square feet? What was it before and what is the new renewal rate?
Rahul Sagar
Yeah, so that’s exactly what we are saying.
Laksh Jain
Hello. Hello.
Rahul Sagar
As we said that I don’t want to speak of specific numbers on this call as always, but there is a significant increase. It is also one must look at the other parameters such as annual excavations, etc. Etc. You can really find all these details very easily. If you look at what the new numbers are, it’s north of. Approximately north of 185. And the previous numbers, the previous renders for this particular space was. I don’t have that in front of me, but from what we can recollect was not in that micro range at all. So that you can say, if you like, you can interpret it to say that there is some increase.
But I don’t want to discuss specific numbers in a out of context. But yes, there is. It is north of 185 with annual escalation. Etc. So as we said, we feel this is. There is some increase. Yes.
Laksh Jain
So it is not a money. It’s a new ratio today. Sorry, this north of 185 which you are telling sir, that is, you are talking about the new renewal rate.
Rahul Sagar
Yes, yes, yes.
Laksh Jain
Okay, okay, okay. Okay. Thank you so much, sir. Thank you, sir. All the best. Thank you.
Rahul Sagar
Yeah, yeah. Thank you.
Laksh Jain
Thank you.
operator
Thank you. Ladies and gentlemen. If you wish to ask a question, please press star and 1. The next question comes from the line of Satyinder Singh with EON Infotech limited. Please go ahead.
Satinder Singh Bedi
Yes, thanks for the follow up. So any update on Nedlon House? Any progress on that piece?
Rahul Sagar
Yeah, so that’s a. That’s a. That’s a fair question. Thank you. Look, I mean we’re not going to tell you unless there’s something very significant to say. Okay. If there’s something very significant, we will definitely keep you informed. But as you know, and as we’ve said in the past, it’s a strata owned building. There are multiple owners, the volume is not so large. So it has its own complexities and challenges. It has something very significant. We will tell you.
Satinder Singh Bedi
Thanks. Okay. And just one final suggestion. Okay. It’s obviously for consideration of the board. The suggestion is like you did mention one possible hurdle regarding buyback. So the only suggestion it’s obviously for consideration and decision at the board level is please do consider buyback because it’s one more tax efficient second, it will help support the share price which we feel is undervalued for the, for the intrinsic value. So it can serve both the purposes. Okay. So. So please do, do consider the possibility of that when you plan your final dividend payout or whatever. I think. Yeah.
Rahul Sagar
Thank you for your suggestion.
Satinder Singh Bedi
Thank you. Thank you. Thank you. All the best.
Rahul Sagar
Thank you. Thank you.
operator
Thank you. A reminder to all participants that you may press star N1 to ask a question. As there are no further questions from the participants, I now hand the conference over to Mr. Rahul Sagar for closing comments.
Rahul Sagar
Thank you all for participating in this earnings con call. I hope we were able to answer your questions satisfactorily and at the same time offer insights into our business. If you have any further questions or would like to know more about the company, please reach out to our investor relations managers at Belarum Advisors. Thank you. Thank you once again for your interest and your questions. It’s greatly appreciated. And thank you very much, everybody. Thank you.
operator
Thank you. On behalf of Nirlon Limited t hat concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.