Raymond Realty (NSE: RAYMONDREL) Q1 2026 Earnings Call dated Aug. 06, 2025
Corporate Participants:
Harmohan Sahni — Managing Director and Chief Executive Officer
Unidentified Speaker
Analysts:
Chetan Mahadik — Analyst
Naresh — Analyst
Dixit Doshi — Analyst
Pushpendra Chand — Individual Investor
Udit Gajiwala — Analyst
Shashi Ranjan — Analyst
Sucrit D. Patil — Analyst
Jagdish B — Individual Investor
Siyaram — Individual Investor
Madhav — Emerge Capital
Akshay — GM
Ujwal Lal — Individual Investor
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Raymond Reality Limited Q1FY26 earnings conference call hosted by Systematics Group. As a reminder, all participant lines will be in lesson 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 and zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Chetan Mahadic from Systematics Group. Thank you. And over to you, sir.
Chetan Mahadik — Analyst
Thank you. Bhavya. On behalf of Systematic Group, I would like to welcome all the participants in the Q1 FY26 earnings conference call of Raymond Realty Limited. Today we have with us from the senior management of the company Mr. Amit Agrawal Group. CFO Mr. Harmon Sani, M.D. cEO Mr. Ankur Jindal CFO Mr. Jatin Khanna Head, Corporate Development and Mr. Sunny Reza, Head Investor Relations. Without taking further time, I would like to hand over the call to Mr. Harmohan. Over to you, sir.
Harmohan Sahni — Managing Director and Chief Executive Officer
Thank you. Good evening everyone. Thank you for joining us on the call today. I presume that everyone’s gone through the financial results and our investor presentation which has also been uploaded on stock exchanges as well as our company website. I’m also pleased to share with you that the listing of real estate business happened on 1st of July 25th. Post the demerger the scheme became effective from 1st of May 25th and the record date was 14th of May 2025. And for the purpose of determining the eligible shareholders of Demerge company the equity shares in the resulting company would be allotted. The exchange ratio is one is to one as you are all well aware, coming to our quarterly performance, our results have been in line with our expectation. The previous year Q3 and Q4, which is FY25 were really bumper years, bumper quarters for us. And we got more than expected sales in those two quarters. So when we started the year we already had achieved about 45% growth in the last year while we had budgeted for only 2025% growth. So as a result of that, when we started the current year we had very low inventory levels. And as you know, to reintroduce inventory we have to get approvals and registration done. And that is the situation we were in.
In Thane, 91% of our inventory was sold out when we started the year in Bandra, 50% of our inventory was sold out when we started the year. So As a result, Q1 numbers are what they are and they are completely in line with our expectation. And Q2 will also follow a similar trajectory as Q1 because most of our launches which are the new JDA’s which we would be launching are all in Q3 and Q4 and I will share a little more of that in detail a little later. And in the current fiscal year, what we have planned for the second year is we will have at least three to four launches which will be by March, which will happen then one to two more launches will be in Q1 Q2 of next year. So there is a lineup of new launches and projects that we’ve got. Even in Ghana we would be introducing more inventory. In fact, this week itself we are launching two more buildings. We’ve got the approvals as well as the RERA registration done. So that’s about 1,100 crores worth of inventory, about 318 units we will be introducing in the market. So we have a significant amount of pent up demand where people are waiting and we didn’t have enough inventory as well as the choice of apartments to offer to customers.
So quarter two while it will be in line with Q1 but it will have activity in terms of new inventory that we have got. So we are quite optimistic that in second half we will remain firmly on track to achieve all the guidance and the commitment that we have given to all of you for the full year. The market remains strong for MMR and Thaneh both. They continue to be high growth corridors as well. As you know our demand patterns have not changed from the last year, year and a half and they continue to be strong. The construction momentum across all our launch projects both in Thane and Bandra is progressing well. We are ahead of schedule in all our projects as has been our track record from the time we started this business. So we will continue to underwrite timely delivery and adherence to high quality standards. So going forward we remain quite optimistic that this growth in the real estate market will continue and as a result we will be beneficiaries of this growth in the market as we have been and our track record will keep bringing us good results that we’ve been showing and our project pipeline is quite strong. Several developments are slated for Q3 and Q4 in the upcoming quarters and we will continue to follow our strategy of asset light business model through the JDA rule and we hope to deliver a 20% year on year growth for booking values and this is our minimum commitment and we are on track to deliver that for the current year also. With that I thank you for joining for the call and we will now open the line for 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 remove yourself from the question queue, you may press STAR and 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. The first question is from the line of Naresh from Systematics group. Please go ahead.
Naresh
I want to know clarification in the current page. Result for full year FY25 we have mentioned 565 cr revenue and if you see the last quarter March quarter result on page number 14 you have mentioned 2351 cr so just want to know why there is so much difference.
Harmohan Sahni
Can you repeat the question? It was not very clear in
Naresh
The current page number eight you mentioned for full year FY25 revenue was 565 crores. And last quarter March 2025 you have mentioned on page number 14 the total revenue is 2351. So want to understand why there is so much detail in there? Yeah, just.
Harmohan Sahni
Just give us a.
Unidentified Speaker
The difference is because you know last year in Roman reality published results we only had results of the subsidiary which is 10x reality because it was not a demerged separately demerged entity. So if you want to really see like to like results you have to refer the investor presentation that we have issued. The statutory results do not have the undertaking or the division which was part of Australia Raymond Limited on a consolidated basis included. So therefore your reference point is not correct. Actually you know, so. Yeah, so you have to. One second. So that’s where. That’s why we have also published in under those. No, this is quarter only and they are talking about the full year number. Okay, so we haven’t published in this. But, but, but what you see in the investor presentation for page number 22 is a like to like. So the 2351 crore which you are referring to that on a quarterly basis is the Q1FY25 on page number 22 of our investor release. Yeah. 48488 crore.
Unidentified Speaker
That’s a like to like number.
Naresh
Okay, thank you.
Operator
The next question is from the line of Dixit Doshi from Whitestone Financial Advisors Private Limited. Please go ahead. Hi, thanks for the opportunity.
Dixit Doshi
One question is regarding the future potential of the than a line. So there was judgment for the approval process EC approval yesterday from Supreme Court. So how does that you know impact or benefit us and whether the future EC will be now done through state government for our projects or it will go to central government.
Harmohan Sahni
Yeah. So that judgment which came out yesterday is more clarificatory in nature. It does not bestow any additional benefit to anyone because there was an injunction earlier on any environment approval which you needed for certain projects. And the confusion was whether you had to go to center or you had to go to state. And both were referring to each other. So that has been clarified because the injunction has been lifted now. So all the projects which have been pending approval will go to the state government and which has been the process right from the beginning. So essentially it restores status quo for all the projects in the state of Maharashtra and in mmr. And for us there is no neither additional benefit nor there is any detriment. So we remain in the same place.
Dixit Doshi
Okay. And just one clarification on this. So some of the newspaper articles today mention that it goes to state government if the project falls between 20,000 square meter to 1 lakh 50,000 square meter. So our land size is much larger.
Harmohan Sahni
Yeah, but all approvals will be from the state level itself. Only ones, only ones which go to center are. Which are within 5km of ecosensitive zone that falls in the purview of central government. And we none of our projects are like that.
Dixit Doshi
Okay, okay, okay. That’s it for my side. Thank you.
Operator
Thank you. Before we take the next question, we would like to remind participants to press STAR and one to ask a question. The next question is from the line of Mr. Chetan Mahadek from Systematics Group. Please go ahead.
Chetan Mahadik
Yeah, hi. Thank you for the opportunity. My question is on our margins. So our EBITDA margin dipped in Q1, say due to mature projects tapering out. Apart from this, were there any cost overrun during the quarter? And as new projects scale up, where do you see a steady state EBITDA margin stabilizing? Will it be around 20% or higher than that?
Unidentified Speaker
Definitely we are going to achieve the same because in the initial period the EBITDA margin are low. But as the project is progressing, the EBITDA margin is going up. So we will make up. So the 20% margin, what we have committed will align with that.
Harmohan Sahni
So if you see the previous year, also from Q1 to Q4, the trend, if you see as the projects start to mature, the pricing and percentage completion changes and also the benefit of all the launch expenses starts to accrue later. Because what happens is whenever we launch a project so the margin goes down and then because in this quarter we had two towers of our Bender project which were launched and the benefit of that will continue to accrue for rest of the year. So 20% margin, what we have achieved in the previous year, you can expect a similar margin in this year also from us.
Chetan Mahadik
Okay, so got it. Thank you.
Operator
Thank you. A reminder to the participants, you may press star N1 to ask a question. The next question is from the line of Pushpindra Chandra, individual investor. Please go ahead.
Pushpendra Chand
Am I audible now? Hello.
Operator
Yes, you’re audible.
Pushpendra Chand
Yeah. So the question is in couple of interviews what I heard from Mr. Singhania is that he was saying we are expecting to grow on a top line of 20% and around the same 20% plus in our margin also. So that would be the annual growth projection what he was talking in some of the interviews. So after this tepid Q1 on a yearly basis, are we still holding the same guidance for the complete year? That is the first question.
Harmohan Sahni
Yeah, absolutely. We are completely holding. Like I mentioned in my opening remarks that this is the Q1 is as per our expectation. There is no surprise as far as we are concerned. Maybe markets are doing a comparison with the corresponding quarter and there is going to be a settling in period relating to that. But as far as we are concerned, we are completely on track of achieving 20% growth rate for the year.
Unidentified Speaker
See you have to see this in context of the performance because if you see in quarter one of last year we were at about 500 crore. This year we are at about 400 crores revenue. So. So obviously that 100 crore revenue which has dropped has resulted into your negative operating leverage. But like Halmohan said that we have a lot of launches coming in Q3 and Q4 so automatically the business momentum will pick up. We have more projects coming up in Ghana also which we spoke about in the next week or so as the year progresses you will see margin coming back.
Pushpendra Chand
Sure. Yeah, I think that’s much, much comforting for the shareholders because when we compare it we see a lot of deep in this. And then yeah, the second question is how do you see the JDM experience now? This is more like a transition years for us we are moving from self owned land to a more like in JD model, JDA model. So the proportion of JDA will increase. So how do you see the blended margin moving forward? So Thane plus JDA putting together?
Harmohan Sahni
The margins put together on a blended basis will be in the region of 20% and that’s how we have underwritten all the JDA’s. And as of now with the market the way it is, we will probably do slightly better than our underwriting. It will be around 20%.
Pushpendra Chand
Sure. Thanks. And another thing, when I was comparing with our peers like were into the redevelopment project, likes of say Arcade or probably the Suntech Realty and all I see their margin sir, it may vary but it’s more close to 25 plus percentage. Are we doing something different that our margins are relatively lesser than our peers when we compare it with Lodha or Arcade or some of our peers. Any thought on this, Mr. Harmohan?
Harmohan Sahni
Yeah. So for that I would request you to give us some time because we are also very young compared to the names that you took. They have been in the business 25, 30 years and we’ve been in the business five, six years. We’ve built our team, our scale is still building up and once we hit a scale which will be towards the end of this year from next year onward we will start seeing improvement in that.
Pushpendra Chand
Right. And one comparative study. When we are doing companies usually one of the parameters that has been used for evaluation is EBITDA which varies for most of the companies in the range of 6 to 20. When we check with Raymond’s Realty we are operating at or trading rather at maybe 8, 9 within that band. So a gross maybe 40 to 50% discounting is what market is offering to Raymond’s Realty. I’m not sure what the reason but is there any corporate governance related issue or anything like that? I mean I’m not sure what’s the reason for so much of a discounting that market is offering whichever valuation parameter we take and we compare it with any other peers. So any thought on this Mr. Mohan?
Harmohan Sahni
So see that’s really a question for the market participants and not for me. But I will still attempt it. My hypothesis would be that it question of market waiting to see how our track record builds today. I mean currently in the current year because what so far we have shown our track record on our Thana Land and one JDA project, which is the Bandra one, and which has been pretty good, even though I’m saying it. But when I talk to market participants, they tell me the same thing. And we have almost five other projects which are waiting to be launched. And out of that three, four will be launched this year. So my hypothesis is that market is waiting to see how we launch them, whether we will be able to maintain the same track record which we have. And that could be a reason why they are looking at a discount just now because they want us to prove ourselves, and rightly so. I mean, that’s my two bits. But really, this is a question market participants cannot answer better.
Pushpendra Chand
Fine, fine, I think. Thank you, Mr. Harmon, for answering the questions patiently. I’ll join back in the queue. Thank you.
Operator
Thank you. Thank you. Participants. To ask a question, you may press star N1. The next question is from the line of Udit Gala from ES Securities. Please go ahead.
Udit Gajiwala
Yeah, hi sir, thank you for taking up my question. Can you just elaborate in terms of pricing for the MMO market and what kind of escalation or you may see some pause happening now for a couple of years since we have seen a decent uptake already, which has happened. So just your view on the pricing for this market, please.
Harmohan Sahni
You know, the markets that we are in currently and the ones we are tracking are of course the Thana market, where we have our substantial land and the Bandra market and now the new exposures that we have taken, which is Wadala, Saiyan and Mahim around that area. So around BKC and Thana is where we are currently. We’ve got our exposure and those are the markets we are actively tracking. And we have not seen any crazy price increases in the last year or so. In all these markets there have been price increases, but there have been more in. So let’s start with Thana. Thana, in the last year we saw a price increase of about 6,7%. In the current year also we see about 6% to 7% price increase and nothing more than that. So it’s been pretty healthy. And when I look at Bandra, Bandra also has given us a similar 7, 6, 7% increase in the last year. Current year we probably see a 5% increase in Bandra and not more than that. At least that will be our endeavor because we want markets to remain healthy and we are quite disciplined when it comes to pricing while we are opportunistic in taking exposure. But we want to make sure that wherever. However, we have exposure. We are there for the long term and don’t go crazy on the pricing. And it takes just one or two players to be disciplined for the entire market to remain disciplined. And the other markets where we are cyan as well as Wadala and all there also the pricing is quite stable and we have seen similar kind of price increases. Not more than 5 to 7%.
Udit Gajiwala
Got it, sir. Thank you for answering. Thank you.
Operator
The next question is from the line of from Anandan Capital. Please go ahead.
Shashi Ranjan
Good evening, everyone. Thank you for the opportunity. The question I have is two in number. First one is what is the current value of the land bank held under Raymond Reality? What is the percentage of this is under litigation, if any.
Harmohan Sahni
Actually the value of the land that we hold is going to be relevant only from the point of view of the Khana land that we have. Rest of our all our exposures are JDA and there is no real value of land that we have over there. Because these are all performance contracts that we that we have. And none of the land that we hold has got any kind of litigation in Thana. And even the JDA is where we have contracted. There is no pending litigation which is there. And the Thana land is historical land. So it virtually has very low value. It is not even worth mentioning on the balance sheet. I mean I’m not talking about market rate, I’m talking about book value.
Shashi Ranjan
So this is clarification on this that I assume that most of the business Raymond Reality will be getting into will be through JDA model.
Harmohan Sahni
That’s right. In fact that’s our stated strategy that we want to remain at Applied going forward. And all our exposures going forward will be under the JDA model.
Shashi Ranjan
Thank you for the clarification. I’ll get back in queue. Thank you sir.
Operator
Thank you. The next question is from the line of Sucrit D. Patil from Eyesight FinTrade Private Limited. Please go ahead.
Sucrit D. Patil
Good evening to the management. My question is telescopic view. So with 40,000 crores in GDD and a strong pipeline of GDA, how is Raymond Realty planning to evolve with brand identity and customer experience over the next five to seven years? And beyond scale, are there specific designs, sustainability or tech led innovations that could position Raymond Realty as a differentiated player in the premium real estate? Yeah, that’s it. Thank you very much. Thank you for the question. I’m
Harmohan Sahni
I am really glad that you asked that question because there is a lot of work we are doing in all the areas that you mentioned. In fact, we are one of the few real estate companies who have a dedicated function to customer experience and we have a chief Customer Experience Officer who actually ties up all the various departments and makes sure that the customer experience is going to be stellar going forward and in the present. So that’s that as far as customer experience is concerned. Use of technology also is one big focus area for us currently. If you see we are using all the cutting edge tools which are available, including the use of AI for marketing and sales that we do for customer, we use SFDC and for accounting and all the other, we are currently using S/4HANA, and we will be upgrading very soon on the SAP system. So we will remain cutting edge as far as technology is concerned on the ESG front. In any case, being a listed entity, there is a lot of onus on us to meet all the ESG requirements. But beyond that, also within our operations we have an ESG cell which really focuses a lot on environmental issues as to how to keep our products, which are ecologically sensitive, forward in the future as well as all the current products. So that neutrality in terms of carbon footprint is as close to zero as possible.
Sucrit D. Patil
Yeah, I think that answers my question. Thank you very much and best of luck for all your future business ventures. Thank you. Thank you.
Operator
The next question is from the line of Jagdish B, an individual investor. Please go ahead.
Jagdish B
Hi sir. Am I audible?
Operator
Yes, yes you are.
Jagdish B
Yeah, thanks for taking my question sir. Since you mentioned about the market is well and good and the bookings also happening fine. And since RC is very new company compared to RP’s and yeah and we have a lot of land bank and GD value as well. So the, I mean launching, the project delay, I mean uh, delays in the launching, uh, project. Right. Would it really uh, put us in backward compared to our competitors or. Yeah, so I mean we are, we are a new company and we want to achieve more. Right. So we should be doing with the planning and launching the project in time. That would. Yeah. So that, I mean what is your intake on that? Like should we. How are we planning to have the launches of the projects in line without any delays compared to the market competitors?
Harmohan Sahni
Yeah, that’s a great question. In fact that’s. That’s one of the things that we set out to solve in the industry when we started this business. So two, three things that we are trying to tackle. One is of course the quality product which is there improve the quality. Second is timely delivery to the customer. And the third is that we want to create a business which is high on IRRs and cash flows and that would necessitate that the projects we take on the time to market is the shortest possible. And so far we have achieved that in all the projects that we have taken on and very happy to share that we have one of the shortest possible times to market for all the projects that we have signed. So there is an acute focus on launching projects on time. And from signing of the new project to the launch we don’t go beyond 18 to 24 months which is the fastest in the industry that other players are also and very few players are actually able to achieve that. A lot of players take three years to five years to launch a project from the time they sign. But yes, we are one of the quickest in terms of launching the project. And your question is very astute and sharp question.
Jagdish B
Thank you for that. Thank you sir. And should we expect. I mean there is won’t be any delays in the H2, right? Like what what we are intended to launch. Will it go as planned or is there any possibility that it will be pushing towards H1 of this financial year, sir?
Harmohan Sahni
So as of now we are not anticipating any delays in launch of projects. So everything is on track.
Jagdish B
Yeah. Thank you sir. That’s it for my. Thank you.
Operator
The next question is from the line of Siyaram, an individual investor. Please go ahead.
Siyaram
Yeah Hello. My question is with regarding to the JDA projects that has been given in the presentation about 14,000 crores. My question is that how much is the Raymond Realty share in those that is first one it’s
Harmohan Sahni
About 11,500 crores approximately.
Siyaram
And by how much time do we expect to complete this project? Like in how much time in timeline?
Harmohan Sahni
Yeah, all the projects cumulatively between five and six years. Thank you.
Operator
Thank you. The next question is from the line of Pushpendra Chand, an individual investor. Please go ahead.
Pushpendra Chand
Yeah, thank you for the follow up. Another question that I was asking is Bandra two launch are we expecting in H2 of this financial year? Any thought on this?
Harmohan Sahni
So one Bandra is already in the market. The second Bandra, we are quite advanced in terms of approvals. So it is completely on track for an H2 launch. In fact it will be early H2 and not later H2
Pushpendra Chand
The Wadala one where the size of the opportunity is INR5,000 crores, also getting launched this year
Harmohan Sahni
Yes, it is. It is, in fact there also we are very advanced in terms of approvals and planning and everything. Some of the significant approvals we already have in hand because it was already a late stage project when we got into it. So our time to market there would be quite early compared to some of the other projects because of the stage that we got involved into it. So it is a definite yes for a launch in H2.
Pushpendra Chand
All right. Okay. And in some of the interview I have found you are saying that usually Q1 and Q2 is when there are no launches because being a lean period. So henceforth we expect that our Q1, Q2 would continue to be weaker and it will more be heavy sided on H2. Will that be trend or will we achieve some kind of a linearity also going forward as we move on in more number of projects?
Harmohan Sahni
See, it will definitely improve from what it is today when we have more number of projects on the plate with us. But this seasonality in the business will remain and it is there with all the players. If you see, because it involves auspicious day, it involves festive period. So the first half essentially of the year, you have summer vacations, you have monsoon in Bombay. So all these factors play a role. So the number of launches are also less as well as people’s propensity to buy is also very different because of the factors that I mentioned, auspicious date as well as the festive season. So there will be some kind of a trend which will continue in terms of seasonality. But it will improve from what you see now because the number of projects will be more okay.
Pushpendra Chand
And very recently two of your peers got listed likes of Kalpataru and Lotus, and their margin bankers are valuating them as I said last time, also 16 to 20 within that band, do we need to do something differently so that at least we get our fair valuation in the market? Your opinion on this?
Harmohan Sahni
Like I said, it’s very difficult for me to opine on and this is really a question for the market participants. But we have to stick to our knitting really if we continue to show growth with healthy margins. And our game is really an ROCE game and the IRR game today, if you see we have the highest ROCE of all the players put together. I mean so far cumulatively we have delivered 26% ROCE going forward. Also we will continue to deliver more than 20% ROCE. Once the market sees this consistently over a one year period, about six quarters or so, automatically, I think it will be difficult for the market to ignore us.
Unidentified Speaker
Also with so many launches coming up in H2 and maybe one or two in H1, there is a very strong growth momentum which you will see in the business. So obviously one is the return ratio, other is the growth momentum. When both of that play out and as investors you start seeing it automatically the undervaluation will disappear.
Pushpendra Chand
Yeah, because we have already seen the way market have been responding and the way the company has been treated in the markets. And so that’s where the worry is because it got at INR1050 and then continuously it is falling. Now it is close to around almost 40. I think 40% value has already been gone away. While the valuations are everything is attractive. Do we need to do something differently so that at least the kind of brand and name that we have, a market reckons about it. So that was the concern which I raised from a shareholder point of view.
Harmohan Sahni
Do you have any suggestions?
Pushpendra Chand
Honestly, I don’t. Because
Unidentified Speaker
As an organization we can give you two things. One is good growth, second is good return. Now return ratios are unparalleled. I mean our ROCE is highest in the entire real estate industry. At the same time we are set for a very strong growth given the. There are five projects being launched on top of, you know, let’s say, I would say three locations. I mean broadly, you know, two locations and there are five different locations being launched. So now the business is set for strong growth, return ratios are strong. It’s a matter of time that market sees through it and therefore starts give you the right value.
Harmohan Sahni
I think market is just waiting to see how it plays out for the next one or two quarters.
Pushpendra Chand
Yeah, probably I think the margin volatility is also something which I think that can be also a reason. So we’ll wait for subsequent quarters where things will improve from here on. And best of luck to all of you. Thank you. Thank you so much. Thank you.
Operator
The next question is from the line of Madhav from Emerge Capital. Please go ahead.
Madhav
Hi. Thank you for taking my question. Hi, sir. Just a couple of things. First, do you see any issues with respect to the pending collection?
Harmohan Sahni
None whatsoever. Because we barely have any outstanding amount. You know whatever is due gets collected on an average. When we review it on a monthly basis the collection ratios are almost 97, 98%. So there is no concern at all there.
Madhav
Understood. Secondly, to understand what kind of segment are we targeting? Is it like the mid segment or premium segment or ultra luxury segment that we stated strategy has always been and we’ve stuck to it.
Harmohan Sahni
Mid to premium is the segment that we are targeting and that is what we’ve been doing. We are not going for ultra high value and we are not going for affordable bottom of the pyramid as well.
Madhav
And the last in a long term view where geographically where do we see us growing? It going to be in that Maharashtra region or do we plan to expand elsewhere?
Harmohan Sahni
So we are currently looking at MMR and Pune and these are the only two markets we are limiting ourselves to.
Madhav
Thank you for that. That’s all. Thank you.
Operator
The next question is from the line of Akshay from GM. Please go ahead.
Akshay
Hi sir. So my question is on your JDA projects and your guidance on the ROCE. Like currently we are doing an ROCE of 26% and you are guiding for a 20%. So just wanted to understand from the JDA projects what ROCE are expecting and just wanted to understand you know for this 14,000 crore potential how much will be our. investment in working capital and how much net profit can we expect from these six existing projects? Yeah
Harmohan Sahni
See, our margin profile guidance that we have given is about 20% now and going forward also. And you should look at it on an annual basis and that’s what we have delivered in the past and we’ll continue to deliver that. So, so that should give you an idea on all the margins that we’ve got. As far as the ROCE is concerned. We are saying that you can expect a minimum 20% ROCE from us. All the new projects that we have signed, the JDA project, are all in the range of 20 to 25% IRR. So the ROCES will be in line with that. Is there anything I missed out or.
Akshay
Okay, okay. That’s it. That’s it sir. Thank you. Thank you
Operator
The next question is on the line of Ujwal Lal, an individual investor. Please go ahead.
Ujwal Lal
Hello. Thanks for the opportunity. So my first question is how much incremental JDB are we targeting to sign annually through JDA?
Harmohan Sahni
See our annual targets are between 6 to 10,000 crores worth of projects. We should be signing on an average each year and that should be enough for these markets. And there could be some bumper years also. But yeah, that’s what we are targeting for.
Ujwal Lal
Okay, thank you. And just another question on capital allocation. Like do you think given that we are generating significant cash from projects and the valuation at which our stock is currently trading it would be prudent to do a buyback as it would also signal confidence and aid shareholder returns. Any thoughts on this?
Harmohan Sahni
So see, we are such a young organization. The business itself is five years old and it got listed only few months back. So I don’t think buyback is something we are considering. In any case, buyback is not tax efficient from the shareholder’s point of view or the company’s point of view in any case. So you would see very few companies taking that route in anyhow. But for us it’s really early days. We have to reinvest everything into the business and make the business grow because there is a huge opportunity for this business, our country. Currently it’s about 7% of India’s GDP, this industry and it is slated to grow and double in the next 10 years to 12 years because of the economy growing. And the affluence growing and the rate of that. So there is a huge opportunity that we have to tap into.
Unidentified Speaker
Also you know, if you see a capital, you know from a capital allocation standpoint we have five projects coming up in the next one year. So you know our capital is better spent to actually launch those GDAs. Like you know said that we could find another 6 to 10,000 crore projects every year. So our capital is currently better spent there. And you know, so long as we are getting 20, 25% IRR projects would rather allocate capital there than you know, trying to sort of buy back or something like that to do reengineering of share price. I think from a confidence standpoint to my mind, you know, I mean frankly if you see most of the listings post demerger, you see a, you see a drop initially and then you see autistic growth in the share price. The business is strong, return ratios are strong. So I don’t think so we should allocate our capital into financial engineering versus the business which can give us very good return.
Ujwal Lal
Yes, thank you. That answers my question. Best of luck for your future endeavors. Thank you. Thank you. Thank you.
Operator
The next question is from the line of Shashi Ranjan from Anandan Capital. Please go ahead.
Shashi Ranjan
Thank you for the follow. Thank you for the second opportunity. Any plan of Raymond Realty getting into maintenance business after the completion of this project?
Harmohan Sahni
Well, we already have an entity which looks after maintenance after the handover of the project and it can continue to do so if society desires that. But for the first two years in any case we are doing it with that entity. So that’s already in existence because that part of our customer experience initiatives that we have taken on because post delivery experience is the moment of truth. That’s where the rubber hits the road. So it’s very critical for us and that’s why we’ve got this entity. It’s called Rayzone. It’s 100% subsidiary of Raymond Realty.
Shashi Ranjan
Just a clarification and follow up on this. So what is the. I understand that Raymond Reality is this five to six years old. So this Ray Zone that you mentioned, they are into this maintenance business from last. What is the experience that this Ray Zone holds when it comes to maintenance?
Harmohan Sahni
So. So for the time being it is only going to do the projects that we are handing over and we are not taking on other people’s projects for the time being till we have a sizable portfolio which gets built in Ray Zone. So, we’ve got five buildings which have been handed over in one of our projects, Ten X Habitat. And this year, we’ve got another project which is getting handed over which will be managed by Rayzone.
Shashi Ranjan
When I try to understand the margin of Rayzone and Raymond Reality separation then which one has got the better one — better margin? This is my last question.
Harmohan Sahni
Rayzone is a service provider. And in the first two years, three years, we’ll be happy if it breaks even. And the margin, of course, it’s not a loss-making entity. But it is currently breaking even with these few contracts that it has. And maybe for the next one year or two years, it will break even. And after that, it will have margin. But it’s a service organization. The margins in this business are not more than 10%-11%.
Operator
The next question is from the line of Akshay Jawahar, an individual investor.
Akshay
Hi. I just had one clarification that I wanted. The FY ’25 revenue was about INR2,300 odd crores and are we expecting a 20% growth in that number, or have I got that wrong?
Harmohan Sahni
No. That’s correct.
Akshay
And on a steady-state basis, the operating margins would be about 20%, of course, adjusting for any new project being launched, right?
Harmohan Sahni
Right.
Akshay
Okay. One last question. On the Q2 numbers that — we’re basically expecting it to be in line with Q1 ’26. So, would that broadly be a ballpark number of INR400-odd crores, or would it be plus or minus 10%? How much?
Harmohan Sahni
See, that will be a forward-looking statement, and we don’t have a policy of commenting on that. But, yes, I’ve already said enough on this.
Operator
Ladies and gentlemen, this was the last question. I now hand the conference over to Mr. Harmohan Sahni for the closing comments. Thank you and over to you, sir.
Harmohan Sahni
Thank you so much for being on the call and going through the entire process and look forward to seeing you in the next quarter’s call.
Operator
On behalf of Raymond Realty Limited, we conclude this conference. Thank you for joining us and you may now disconnect your lines.