Shriram Properties Ltd (NSE: SHRIRAMPPS) Q1 2026 Earnings Call dated Aug. 12, 2025
Corporate Participants:
Unidentified Speaker
M. Murali — Chairman and Managing Director
Ravindra Kumar Pandey — Chief Financial Officer
Deepak Poddar — NA
Analysts:
Unidentified Participant
Raj Mehta — Analyst
Rakesh Kumar — Analyst
Rajesh Agarwal — Analyst
Presentation:
operator
Ladies and gentlemen, you have been connected to Sriram Properties Limited Q1FY26 earnings conference call. Please stay connected. The conference will begin shortly. I repeat ladies and gentlemen, you have been connected to Sriram Properties Limited Q1FY26 earnings conference call. Please stay connected, the conference will begin shortly.
operator
Ladies and gentlemen, good day and welcome to Sriram Properties Limited Q1FY26 earnings conference call. 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 this conference call, please signal an operator by pressing10.0 on your Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Murli, Chairman and Managing Director from Sriram Properties Limited. Thank you. And over to you sir.
M. Murali — Chairman and Managing Director
Thank you. Good evening everyone and thank you for joining us on our Q1 FY26 earning call. I am pleased to report that Sriram Properties has started the year on a very strong note, delivering record operational performance and robust financial results while maintaining a. Healthy growth trajectory for the remainder of the year. We achieved our highest ever Q1 sales volume of 0.8 million square feet up by 17% year on year valued at 441 crores. This was supported by healthy demand across our key markets particularly in the mid and mid premium housing segments. During the quarter we successfully launched our maiden project in Pune under the codename Superstar. Post quarter end we also formally launched. Sriram Songs of Prayer at Electronic City Bangalore. Collection stood at 388 crores, up 5% year on year and are expected to gain further momentum in the coming quarters. Construction progress remains very strong enabling healthy handovers. Over 700 and plots in Q1 alone have been handed over. Building on the record deliveries of FY25 on the financial trend, total revenues were 262 crores aided by healthy handover trends. Gross margin remained healthy at 34% and we delivered an EBITDA of 46.5 crores. We reported our highest ever Q1 net profit since listing at 20.6 crores. Our outlook for the rest of Financial 26 and beyond remains encouraging.
With nearly 80% of our ongoing projects already sold. We are prioritizing faster execution to accelerate cash flows while actively expanding our project pipeline. Supported by India’s strong macroeconomic fundamentals and resilient demand in our core segment, we believe we are well positioned to deliver sustained growth and long term value for our stakeholders. I would like to thank all our customers, partners and shareholders for their continued trust and support. With that, I’ll hand it over to. Mr. Navindra Kumar Pandey, our CFO to walk you through the detailed financial performance.
Ravindra Kumar Pandey — Chief Financial Officer
Thank you sir. Good evening everyone. My name is Ravindra Pandey. I’m CFO of Sriram Properties. Thank you for taking time to join us today as we present the performance highlights for Q1FY26. We have uploaded the presentation on the website Stock Exchanges and I hope you all have access to it. Over the next few minutes I will walk you through the operational and financial performance of the company for the quarter gone by on strategic priorities and growth roadmap for FY26. I am referring to the presentation which has been uploaded. Slide number three we have started FY26 on a strong footing.
Q1 delivered a record first quarter across several key metrics robust sales momentum, highest ever Q1 collections, accelerated construction, disciplined cash deployment and strengthening pipeline. Typically, Q1 is a lean quarter for the sector and for the company. However, the strong momentum from Q4 last year carried through and delivered an impressive start to FY26. End user demand in our core markets remain resilient, especially in the mid market and mid premium segment that anchor our portfolio. Customer decision cycle has shortened and booking velocity have improved. Bangalore sustained its strong performance and Chennai exhibited a clear revival in momentum.
We had a remarkable success in our Pune market entry. We are entering a new market after few years. Our metal project in Pune codenamed Superstar received an exceptional market response and created a strong brand visibility in the city. Our success in Pune can be seen in the context of project’s micro market absorption. A market which has annual absorption of around 1500 units. We could sell around 150 units during the first four weeks of launch. This is not just a sales milestone, it’s a reaffirmation of the brand’s strength in market beyond our build off. This launch has created a strong budge and put Pune on track to become our next growth engine.
Early success now boosts our confidence in accelerating pipeline addition over the next few quarters. I will explain the Pune project performance in subsequent slides on launches. Momentum improved materially following successful launch in Pune. We commenced pre launch activities in new project at Bangalore. Launched under the code name Dhawan, this project was launched during the first week of July and has received very strong response. Coming quarters are likely to be even more exciting. Our Calcutta new project has received approvals and gaining five P2 launches. On the business development front, our focus effort has now started showing results.
We added one project in Bangalore with GDV of rupees 200 crores during Q1. Several deals are nearing closer and significant new project additions likely during Q2.1 Q3. Our focus remains on doubling the upcoming pipeline and is supported by ongoing evaluation of multiple projects with over 20 plus million star set of development potential. We will explain this more in detail in later slides referring to the slide number 4 KPI snapshots. Operationally and financially this has been our best ever first quarter Q1 sales volume reached 0.82 million square feet up 17% year on year. In value terms we achieved sales value of rupees 441 crores again by 17% up year on year.
Q1 collections at 338 crore is the highest in any given so far and and is driven by healthy sales handover and milestone entities. Over 740 units have been handed over to customers, again highest ever Q1 number for STL. Our revenue grew 24% year on year to 262 crores. We reported gross profit of 82 crore reflecting 70% year on year increase. Our operating margins have remained strong at 34% demonstrating healthy project profitability. Our net profit is at new Q1 high of rupees 21 crores up 18% year on year. These operational strengths reflect our disciplined execution, strong demand in core markets and our ability to monetize inventory effectively.
Higher sales, strong collection, accelerated construction and disciplined execution set a solid foundation for FY26. Slide number 5 Looking at operational performance highlights, we achieved our Q1 sales in SPL60. The growth was broad based with sustainable sales coming from ongoing project and our Madden Poly launch added meaningful uplift validating the brand in new market. Sales volume of 0.82 million is perfect and sales value of rupees 441 crores reflect both healthy demand and stable pricing in our micro market. The 17% year on year growth on both metrics underscores consistency and scalability of our mid market Strategy. Collections at rupees 338 crores were supported by robust milestone billing and TB handovers.
With scheduled handovers and launches in Q2 and Years 2, we expect collections to extend them further. We accelerated the construction expense in Q1 to pull forward execution. This enables accelerated milestone, faster collection and earlier position. Our focused efforts are to remain on or ahead of schedule. Staying ahead of RERA commitment is a key driver for rotation, referral and lower cost handover industries. Looking at project Execution Highlights Sriram Part 63 Phase 2 at seminary with 0.5 million square feet area received OC daily. 21 supporting revenue recognition and improved handovers we handed over more than 740 units our best ever first quarter performance that directly supports revenue recognition, collections and customer bookings.
Roughly half the handovers were in JV BM projects which means the earning impact party accrues to our share of JV profits rather than consolidated top line revenue recognition. Momentum remained strong in our recently completed project during Q4, FY25 and Q1 FY26 extending the momentum we saw in Q4 of last year shifting focus to financial performance. On the top right box, revenue growth of 24% year on year reflects strong handovers and milestone achievements even though Q1 is typically a leaner season for the sector. Margin discipline, product mix and cost control Translated into a 34% gas margin.
Gross profit of rupees 82 crores up 70% year on year demonstrates inherent project profitability and operating leverage. We delivered a record Q1 pack of Rs 21 crores up 18% year on year reflecting a strong operating income, lower finance cost and contribution from GV profits. On the cash flow front, operating cash flow remains healthy in deep 77 crores during Q1 and we invested 75 crores into new project attributions efforts to see future growth. Lastly on the project pipeline front we added rupees 200 crore GD project in Bangalore. The project is already in approval progress mode and are targeting to launch Bvs2.6 project with around 3 million are at an advanced stage of diligence and documentation their closer likely in Q2 Q3 five more projects with additional 3/ million square feet potential are at last leg up their commercial closure and should more move towards closure during H2.
These project conversions are expected to expand our FY26 27 launch and sales Runway. Further projects with 20 plus million various stage of evaluation across core markets. This wider funnel provides optional value and a multi year Runway allowing us to stay selective while still aiming to double the upcoming pipeline over 18 to 24 months. Referring to slide number 6 FY26 launches our Pune debate in May with court name superstar delivered an exceptional response and demonstrated bond acceptance. Q2 launches are on track in Bangalore. Our new project under 4 name, the one was launched during July. A strong pre launch buildup in Q1 likely translates into robust booking in Q2 in Kolkata.
Approvals for Shira Misting field are in place and the recent pre sales effort have received overwhelming response and is being launched shortly. Further approvals for upcoming Binars and commercial areas in Calcutta are also received. Radar filing underway setting the stage for a step up in sales velocity. This launch pipeline combined with ongoing projects underpins our collections and sales eligibility for the remainder of opportunity. Referring to slide number seven Coordinate Superstars here, we are showcasing one of our most exciting milestone of the quarter, the grand launch of Ceramic Spectrum in Pune. I am pleased to share that it has been an overwhelming success.
The event saw strong participation from customers, channel partners and stakeholders underlying the high level of interest and confidence in SPS branch as we step into this new geography. The project itself is spread across 14 acres overlooking the scenic Sadri Hills and offers over 60 curated amenities. It also features Pune’s first ever downtown retail making it a unique proposition in the market. With two grand clubhouse and its location in the heart of an educational hub, it appears stungary to both end users and investors. The image on the slide captures the energy and scale of the launch, which eventually translates to 150 plus bookings and represents 36% of the supplies opened for sale in the project.
With the strong start, ESPL is well positioned to accelerate its pipeline in Pune and strengthen its foothold in the city in the coming quarters. Referring to slide number eight, code name Dhawan, in July we had the grant unveiling of the project codenamed Dhawan in Bangalore and the response was nothing short of phenomenal. This project is statically located just 15 minutes from the electronic city toll, making it a compelling choice for the professionals and families seeking both convenience and quality living. It features signature 213 base care residences starting at an attractive price point of 92.99 lakhs, making it highly competitive in its segment.
We saw a tremendous freelance response in Q1 with interest levels far exceeding expectations. Importantly, this early momentum has directly translated into a strong booking in Q2, setting a positive tone for the project sales trajectory going forward. This launch further reinforces SPS ability to create high impact market entries, combining strong location advantages, appealing product design and targeted marketing to drive immediate results. Referring to slide number 9 FY26 project completion during Q1 we have deliberately increased execution expense to facilitate faster deliveries ahead of committed timelines. Our project part 632B consisting of 316 units reached the OC milestone in Q1.
In Q2 two projects are scheduled for OC SRIRAM. The speed is about 0.2 million. Its profit has received OC in August 25 and C RAM Solitaire, about 0.3 million square feet has received fire NOC already and awaiting OC. Faster execution and delivery remain a priority. This will drive both revenue recognition and customer connection. Reference to slide number 10 FY26 project pipeline we are actively working towards our mission strategy of doubling the project pipeline over the next two years. We have made reasonable progress and the momentum is visible raising our confidence level. During Q1 we added one project in Bangalore with GDD of rupees 200 crores within short period of acquisition.
Approval process has started ahead and it is expected to launch initially. FY26 projects totaling 3 million square feet are nearing closure. Five projects totaling around 3 million plus square feet of projects are at an advanced stage of commercial closure. Several other opportunities with 20 plus million square feet of development potential are under various stages of evaluation. The pipeline extension is strategically distributed across various development models including own, jda, JV and em. This diversified approach allows us to optimize resources and maximize returns. We are confident that these efforts will contribute significantly to achieving our mission 11234 targets.
By FY28 referring to slide number 11 honors and accolades. We continue to receive a strong industry recognition winning awards for marketing excellence, product design and segment leadership. These accolades enhance brand visibility, build customer trust and reinforce our positioning in the mid market housing segment. Referring to slide number 13 and 14 Financial Highlights Revenue from operations stood at Rupees 242 crores 57% year on year supported by the momentum in project handover Trend continued from Q4FY25 Our total revenue grew 24% year on year to 262 crores. This growth was primarily driven by handovers in recently completed projects Park 63, pristine estate, Liberty Square and Ganglon.
Accordingly our gas Profit is high at 82 crore reflect robust 34% margin and a healthy 70% year on year growth. EBITDA is stood at 47 crore with an 18% margin. EBITDA growth mooted to higher other operating income during Q1FY25 on account of reacquiring the economic interest of 15 estates GV estate from ESK. Our GV portfolio also contributed meaningfully with a profit share of over 5 crores representing 46% of total handovers in Q1 coming from GV. Project finance cost declined 16% year on year and interest expenses declined 11% year on year supported by lower interest expenses and reduced non cash charges related to non competency in Kolkata.
Other expenses were slightly higher due to new project luncheon related costs. All of this translated into a healthy net profit of rupees 21 crores making an 18% year on year growth overall following the strong rebound we saw in Q4FY25, our revenue and profitability momentum has carried forward into Q1 and with the new project reaching OC stage, we expect this robustness to continue in the coming quarter. Referring to slide number 15, consolidated cash. Flow. Operating inflows improved to 221 crores up from 163 crores last year. We deployed rupees 111 crores into construction and 75 crores into new project investment. Debt repayment during the quarter amounted to rupees 77 crores reflecting our council’s strategy to channel cash into construction and growth investment to secure future revenues and earning, resulting in negative free cash flow for the quarter. Cash and cash equivalents remain robust at 187 crores reflecting strong liquidity even after substantial loan repayment and new project deployment. Referring to slide number 16 debt profile gas which stood at rupees 567 crore down from 646 crore in March 2025 with a net debt of 380 crores.
Our net debt to equity ratio of 0.28among the lowest in sector. The cost of Debt remained at 11.3% with potential to reduce further in the coming quarters. The majority of our debt is construction link aligning with revenue generations. Referring to slide number 18 mission 1, 23 4. You have seen this slide in our earlier discussions, but it is worth bringing back as a reminder of the delicious mission we set for ourselves. This is not just a target on paper, it’s a roadmap we are actively executing and I’m confident we are firmly on track to deliver it by FY28 and our entire management attention is aligned toward this end.
FY26 outlook guidance referring to slide number 19, we continue to maintain our FY26 guidance as previously shared. To summarize before I end the presentation, first quarter has set a clear benchmark for the year. We delivered our strongest opening quarter on Ricard marked by Ricard collections, robust revenue momentum, healthy profitability and meaningful deleveraging alongside calibrated investments for future growth. Launches in Pune and Bangalore validate our portfolio strategy and Kolkata is launch ready. Execution is ahead of plan cash discipline is intact and the business development funnel is deep and progressing. On behalf of the management team, I reaffirm our commitment to governance, customer experience and value creation.
Thank you. I now hand over the call back to the operator and myself along with our CEO and CMD will be glad to answer all your 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 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 Deepak Podar from Sapphire Capital. Please go ahead.
Deepak Poddar
Hello. I’m audible, sir.
M. Murali
Yes sir.
Deepak Poddar
Yeah.
M. Murali
Yeah.
Deepak Poddar
Thank you very much for the opportunity. So just wanted to understand. I mean this entire year we are talking about 3300 to 3600 kind of a unit handover. I mean generally as a policy we. We book revenue only post post delivery, right? Hello. Yes sir, can you hear me?
operator
Yes.
M. Murali
Yeah. Now, now sir, we can hear you.
Deepak Poddar
Yeah. Yes, we book revenues. We are allowed to do income recognition only on handover registration and handover of department. Sure. So can you just give us some breakup in terms of that 3,300 to 3,600 units handover. So some I think you are targeting from solitaire or mistake. Right. So around 400, 450 units handover we are expecting to do maybe in second quarter, third quarter. So can you throw some light on the breakup? I mean where this 3300 unit we are targeting for handover.
M. Murali
Yeah, that’s doable.
Ravindra Kumar Pandey
Out of the 3800 units there are as I see 8, 9 projects are there. In all we have about 9 or 10 projects account for this 3800 units. Big part will come from Kolkata. 1200 units and which is sunshine one. And then Bangalore will have about 18,800 units will come from Bangalore and rest is in Chennai.
Deepak Poddar
So, so out of the 3300 units is from Kolkata and 1800 units is from Bangalore. Okay. And, and, and, and the OC of these projects when we are expecting to get. I mean this for example these two project you mentioned the OCS in second quarter.
M. Murali
It will spread across different quarters.
Deepak Poddar
Okay. Okay.
M. Murali
It’s. It’s spread across different quarters.
Ravindra Kumar Pandey
Yes.
Deepak Poddar
Okay. Understood. Understood. And, and something on the debt part. How should one look at that? So I think around 650 to 700 crores. Kind of a debt level we have. So how should one look at debt outlook for next two years?
M. Murali
So debt currently is 567 crore is a gas debt. Net debt is 380 crores. And going forward we are not looking at a significant jump in the debt. So mostly we have been borrowing Debt for the construction finance the new project launches. We may borrow for that. But we are continuously repaying the debt of the ongoing projects as well.
Deepak Poddar
So you were now audible. Your voice cracked. Can you just repeat?
M. Murali
We are seeing the current debt is 567 crore. Our net debt is 380 crore. We are not looking for any significant movement in the debt from the current level though we will continue to borrow the new loans for our construction financing needs. But from the ongoing projects, whatever the collections are coming, we will continue to repay also the construction debt what we have already taken. So we are not looking for any significant jump in the deadline. Okay. Because. Because we repaid around 77 crores right during this quarter from the cash flow.
Deepak Poddar
Okay. Yes, fair enough. Now. Yeah, that would it from my side. All the very best you. Thank you so much.
M. Murali
Thank you.
operator
Thank you sir. Ladies and gentlemen, to ask a question please press star and one now. Participants who wish to ask questions may please press star and one at this time. The next question is from the line of Raj Mehta from Raj Mehta and Associates. Please go ahead.
Raj Mehta
Good evening sir and thank you for the opportunity. So I wanted to ask few questions. First one is related to the cost of debt. Since the repo rate has been reduced and RBI in last 12 months I have tried to lower the rates. But still I think our cost of debt is on a higher side. We have not got got that advantage. So what is your view on that? And in future is it we are going to refinance the debt at a lower end or it will remain at the same level.
M. Murali
So current currently our debt date is 11.3%. And the first RBI the rate cut, what was done by the RBI the first rate has already been passed on to us. And if you look at that our debt rate has come down to 11.3 in March 25 itself from 11.6. Now recently we have been written to all the lenders to reduce the debt cost. But what is happening that most of the debts what we have that is the. They have the revision cycle. So every quarterly they will rise rates. So now the revision has to happen.
And going forward we are looking at the borrowing cost may come down. Whatever the new borrowings that we are doing that are the much much lower level, they are less than 10%. Going forward we are expecting that these rates will come down further.
Raj Mehta
Okay, less than 10 means on lower between 9.5 to 10 or 10.5 to 11.
Ravindra Kumar Pandey
So if I can just clarify. These are construction finance on de risk projects. You tend to get a lower rate there will be 97510 and so it is not going to be a weighted average cost of debt is going to go down to 10%. I see a limited potential from current levels. Maybe a few basis points can go down but it is safe to assume our cost of debt will be hovering around 11% give and take 5, 10 basis points here and there, both sides we will not be in a blended cost of 10% is very difficult to achieve given our current loan portfolio.
Raj Mehta
Okay, and so second is with respect to. I wanted to understand regarding the industry structure. Since the RBI has done everything with what they can do and they have pushed the rates down so the affordability has increased. But on ground the demand scenario is not so resilient or so strong that we. If we see the other real estate companies also the momentum has been lost which was there in last year. Maybe. So how do you feel? How are the micro markets which we operate in say in Bengaluru and Pune which we entered recently. What is your view on those markets where the demand scenario, whether it has been on a slower and.
And we have to give some schemes for the payout so that we can create that demand and push the sales or it is coming by natural and the conversion is happening on a higher end.
Ravindra Kumar Pandey
Thank you Raj. But we have a slightly different view compared to the view expressed by you. Underlying demand remains strong. I don’t think a huge loss momentum loss is there at least in our core markets of Bangalore, Chennai, even in Pune that we have seen. We see a continued. In fact it has picked up. Chennai’s absorption or sales velocity has actually come back during the last quarter, the April, June quarter we have seen a recovery. It’s unusual for the current season. It’s a lot of inauspicious period lean season for the industry at least in South India.
And in that period we have seen a reasonable bounce back or reasonable momentum even in Chennai. But also we have seen a reasonable pickup both in launches and in absorption in Bangalore as well. As you may recall, we had reduced supplies like Lambda. Launches were very few in Bangalore during Q3 last year and to some extent in Q4 last year it was a more supply driven lower absorption which was seen in the last year. That trend has actually changed. We have seen a lot of new launches coming through and absorptions have been fairly satisfactory. In fact stronger year on year compared to last year first quarter.
You cannot compare Q4 versus Q1 seasonally. Q4 is the peak for the sector Q1 and to some extent Q2 are the lean period for demand in South India only after the Ganpati and Diwali sets in the auspicious period starts and you’ll see a big momentum. So I think market wise it’s doing well. The top end of the market has seen a little bit of choppiness because I guess that’s what you are all referring to and that’s why you say what you said because top end of the market is dependent on investor demand, investment demand rather you know that investment demand tends to get little bit choppy when alternative source of capital like capital markets tend to be choppy.
Whereas the end user driven demand which is the mid market mid premium where people buy for their own stay not as an investment that demand has remained reasonably strong actually and with the declining interest rates and therefore we should see barring any global big negative news impacting jobs at certainty otherwise we should see a fairly steady growth in underlying demand from end user segments, end use customers.
Raj Mehta
Yeah, my only concern was because the IT companies have started layoff and Bengaluru and is the major hub where the most of the IT companies have their premises, have their offices. So. One news article I’m just trying to clarify to you that the same papers you have seen that TCS has gone on record to the Karnataka Labor Commission we have not identified it’s our CEO statement. We don’t know. We don’t have the exact number of people that is one part, right?
M. Murali
We don’t know.
Raj Mehta
Some of these are economic times CNBC creations as well. Second part of the story is very simple. The GCC market which is the global capabilities has picked up a lot of momentum in Bangalore, Hyderabad according to again the same CNBC story Hyderabad have become big hubs and Chennai is closely following. There’s a third big hub of GCC in south India and Pune being on national scale. Pune is another big market which is coming up apart from few other cities that they have talked about. So GCC market is growing tremendously. A small shrinkage in IT programming side of the job should get compensated according to whatever I’m reading from the research, I’m not an expert whatever I’m reading from the public domain there is a compensatory reasonable strength in headcount addition in other sectors.
So we don’t think unless the entire IT collapses and increments don’t happen, people get fired then there will be a confidence crisis in the minds of customer and that might lead to. But as of now as we speak I don’t think we have reached we have seen any signs of those at this stage. But we never know what Trump will do.
Ravindra Kumar Pandey
But are we able to increase our average realization or that is becoming a stagnant and we are focusing on volume driven.
M. Murali
As I said in my earlier earnings call, I don’t think we will see a big price hike during this year. The era of double digit price hike that we saw post Covid till last year. I think that might not happen. Developers have realized at some stage you are going to compromise demand if you go on increasing 15% a year. And that’s a benefit of consolidated industry, right? Everybody, practically every developer. We have seen. We have seen the pricing for launches and advertisements that we are monitoring. Prices have almost stabilized during the quarter. We would have seen about a couple of basis point a couple of percent increase 1 or 2% in some micro markets and 2 to 3% in another micro market.
So the prices are not going anywhere this year. But that’s fine. We have moved up in a price curve in a big way. So with the stable prices rising demand should really get good traction for the developers.
Raj Mehta
One last thing on this the new. Launches are attracting good pricing momentum. For example, as Mr. Pandey pointed out, we launched a project called the code name called B1, which is what will be eventually called as Sriram Songs of the air about 10 minutes away from Electronic City. The project has delivered at least 600 rupees more than our initial expectation we had while buying this land about a year ago. So the launch moment and we keep revising the price during the launch. We keep revising the price or refining the price for every 50 units. And when we see those weekend allocation weekends when we sit and see the what in your in your capital market language book, building order book as the book builds nicely, we keep refining the price and that that trend of new project price momentum is encouraging.
I may I will ask one question related to thing. If we are if we are going to invest in the new projects in coming years and there is a stoppage in price appreciation or maybe there will be a very less price appreciation and we are focused more on demand driven. So in that case if the demand suddenly due to any external factors goes into a toss then are we able to convert any project and make profit? Do we have that much of gap in case any any demand worsens and there is a break even or not even break even or we can make a sufficient ROE on that project? How are you taking these things into mind when you are going into new deals or new land acquisitions or new JVs?
M. Murali
Very interesting perspective you’re throwing. I want to clarify. We are not an FMCG company and so we will have our own volatility like you have in stock market. We will have our own ups and downs on the demand and pricing. And the pricing of any new land acquisition is not done based on today’s price. It is about very cautious view we take. And as you know, we have, as you can see from the finances, we have about 34, 35% gross margin potential. Project land cannot be acquired. Nobody is going to underwrite a selling price for you.
I wish somebody is underwriting me on a Sensex while I enter. I don’t think it ever happens in life. FMCG is the only one. That’s why they get what they get in the multiples. All of us, rest of us industry in the world are all prone to cycles. What all I can say is housing demand is here to stay for some more years. It’s not reached the peak of the cycle and price volatile. All of us did not complain when prices went up 14, 15% including the customers were still running and chasing. So at some stage it has to stabilize as you call it, the consolidation of the pricing.
Like it happens in index and capital markets. It will happen here as well someday. You have to consolidate. And once the market consolidates it will start moving either way depending on how the demand trends are. So if the prices become uncompetitive, then we have to slow down. We cannot keep on growing at a loss, right? Everybody does it. If the pricing is not viable, then projects don’t take off. Land prices will correct automatically. That does not mean that what we are securing today will be under return by some third party. We have to underwrite ourselves.
Raj Mehta
Okay. And so last question. Since the IPO we have been doing a wonderful job from a loss making to a profit making company. But the actual impact has not been reflected in the market capitalization. Can you throw some thoughts on that? And all the best for the future quarters.
M. Murali
I would hear your thoughts on it because you guys are determining the stock price, not me. We keep doing our work, we keep delivering volumes and earnings and our PE keeps going down. We are one of the lowest PE companies in the listed space today as we speak. And price to cash, price to sales value, price to whatever you want to compare. So I would like to hear some of the more knowledgeable people on this call to help us understand what else that company needs to do to revive or to get a fair valuation in the market.
But we don’t really like to focus on Stock price. Yes. We want shareholder value to be appreciating. But we don’t want to play to the capital market. We want to do our job correctly, deliver our earnings and results. And I’m sure market will one day appreciate the the consistency of our earnings, consistency of our delivery and more importantly, meeting our promises most of the time.
Ravindra Kumar Pandey
So one advice, if you can do investors conferences in particular areas and you can attract the investors, foreign investors, our mutual funds, DIIs and family offices, then it might, we might be on the better side.
Raj Mehta
Thank you good sir, we will try to follow.
operator
Thank you sir. The next question is from the line of Amit Mandalay from Robo Capital. Please go ahead.
Unidentified Participant
Thanks. Thanks for the opportunity. My first question from the handover again, you know I think we are planning to handle about 3,300, 3,600 units. How much of that you know we are planning to do in Q4.
M. Murali
Q4 of this year? Q4, 25% or more handovers will happen in Q4.
Unidentified Participant
Okay. And for these 3400, 500 typically. What would be the revenue if we manage to deliver all the units?
M. Murali
What will be the revenue if you. What will be the revenue if you hand over all the 3,000 so roughly? I difficult for me to bet roughly. Yeah, some ballpark number, I would indicate maybe around 1200,000. 300 crores of revenue minimum.
Unidentified Participant
Right. Thank you. And my next question is on the EBIT now. You know we are looking to sell, you know, close to 3000 crores again and why you know, for this, what are we targeting at the company level, not at the project level.
M. Murali
You’re not audible clearly. Repeat the question.
Unidentified Participant
Yeah, so for the current ticket that we are doing on a quarterly basis and we are planning to sell about 3000 crores plus for FY26, what type of EBITDA margins are we looking at? And a bit at the company level, not at the project level.
M. Murali
We have consistently maintained that quarter to quarter volatility will always be there depending on the revenue recognition.
Unidentified Participant
Yes sir. I’m not looking for accounting. Sir, sorry to interrupt. I’m accounting number. I’m looking for project level profitability. I mean you know, when you, when you’re selling the project, what type of project level ETA we have and then I what type of net. Do you see?
M. Murali
Sorry, I don’t think I follow your question. Are you saying what is the EBITDA likely? Are you saying what is the accounting treatment or. I am sorry, I’m not able to follow.
Unidentified Participant
I’m not talking about accounting. I’M just asking for the current pre sales. What type of EBITDA do we are we targeting currently as we are selling?
M. Murali
That’s what I was answering and since you said you had a clarification, that’s why I stopped. As we are consistently maintained in our business, EBITDA quarter to quarter will be volatile depending on how much unit recognition you have and what is the portfolio of the project that you are income recognizing. Therefore, I will talk about a average annual EBITDA margin. We have consistently maintained over the years that we will aspire and will continue to drive towards EBITDA gross margin of 30%. EBITDA margins of about 25%. PBT margins are what, 8 to 11%. And I think we have, most of the times we have been in that range.
Unidentified Participant
Okay, perfect. Thanks. And that’s it for my. Thank you.
operator
Thank you. Sir. The next question is from the line of Rakesh Kumar from Right Shopping Private Limited. Please go ahead.
Rakesh Kumar
Yeah, thanks for the opportunity. My question again is on the handover guidance. Again you are targeting a handover guidance which will grow by 14% in 26. In that case, should we presume that the top line for 26 will grow by 14%?
M. Murali
It could be slightly higher than that.
Ravindra Kumar Pandey
As we said just now, it will be more than that because the nature of the project, when we gave the guidance, we did go bottom up. And I believe we will most likely be upwards of 1,200 50,000.
Rakesh Kumar
Okay, my second question is about the JVA. How much handover this year you are targeting under JVA?
Ravindra Kumar Pandey
Out of the 3,300, 3,600 we would have close to 1,000 roughly about give and take some thousand. Roughly about 1,000 units will be in JV.
Rakesh Kumar
Okay, my last question is about your income tax provision. I think in this quarter there is a quite less income tax provision. What is the reason for that?
Ravindra Kumar Pandey
So that assessment is done, that assessment done on a quarterly basis based on wherever there’s a. Is there any other deferred tax provision reversals? Because we keep, as you know, we take three years to complete a project. Right. So during the period life of this project there would have been some provisions made at different points of time. Because initially we incur loss and we incur profit towards the end of the project. And so those deferred tax provision, if there are any created in the past based on the projected profitability of each project that gets reversed at some point of time.
So it’s a. It’s a very volatile number on a quarter to quarter basis.
Rakesh Kumar
Okay. And my last comment on that, shareholding, you know, value or the market capitalization. I think what I see when comparing your company with all other companies, your ROE is quite low, which is I think roughly about five and a half last year. Whereas I see all other companies, they are in the range of, you know, tension. So yeah, that is one. Just one point that I wanted to.
M. Murali
I just want to. I just want to submit some publicly available data.
Rakesh Kumar
Right.
M. Murali
I will look at it. We will look at that very closely. In most of the southern regional players that we keep comparing ourselves to.
Rakesh Kumar
Okay.
Ravindra Kumar Pandey
Superior valuation as we speak. Brigade, which has a RoC of 13 and RoE of 14.8%. All other companies have single digit ROC and ROE at this point of time. Prestige 7.69, 3.5 ROE. Shobha 6.44, 2.68 ROE. Purvankara 6% rock -10 ROE. Godrich Property 6.5% ROCE 8.91 ROE. Lodha and Obra of course have a very high double digit number. 15 and 14%.
M. Murali
Yeah.
Ravindra Kumar Pandey
Compared to it we have 1025. We had 9.98% ROCE and a 6% ROE. So it’s not that different. But maybe you have a point. Maybe that is some people are looking at between national players versus us. We’ll work towards it a couple of years for our ROE to improve. If you may recall from our earlier conversation, we expect to be in a double digit or mid teen ROCE in the next 24 months. By FY28 we would have a mid teen ROE as well. But we’ll work towards it. But I’m not sure whether others are getting other numbers are significantly superior.
I don’t know. But they all have a very high earnings multiple.
Rakesh Kumar
Right? No, that’s great. That’s all for my side. Thank you.
operator
Thank you sir. Ladies and gentlemen, to ask a question please press star and one now. Participants who wish to ask questions may please press star and one at this time. The next question is from the line of Rajesh Agarwal from Moneymore. Please go ahead.
Rajesh Agarwal
How do we look at our three sales? How do we quantify that? How do we look at our three sales?
M. Murali
How do we look at our.
operator
Sorry, interrupt. Rajesh, can you please use your handset? You are not.
Rajesh Agarwal
How do we look at our pre sales? How do we quantify that?
M. Murali
Our pre sales are quantified based on confirmed booking by the customer.
Rajesh Agarwal
Okay.
M. Murali
And supported by the advances.
Rajesh Agarwal
Supported by.
M. Murali
We don’t consider anything as a booking unless there is a meaningful upfront contribution which is at least 2 lakh rupees of cheque for 2 bedroom house and 3 lakh for a 3 bedroom house. And without that we don’t take 10,000 rupee bookings and all. And from the booking time that’s how we count our pre sales. And we don’t take eyes and all that. And from the time of booking we do kycs and all the verification. If booking being a T T plus 30 they should have paid 9.9 T plus 60. They should have paid 9.
They would have signed the agreement and paid 20%.
Rajesh Agarwal
So then what is the current sales now? Value? Total value?
Ravindra Kumar Pandey
Current pre sales value is the presentation at 441 crores.
Rajesh Agarwal
And so do we have people who are backing out anything over 80 percentage or people 1% or 2% after that or they back out.
M. Murali
People back out. People do back out. Customers are customers. Right. So after, after signing confirmation then they 1 lakh, 2 lakh. The 2 lakh and 3 lakh which is given is non refundable.
Rajesh Agarwal
Okay.
M. Murali
If they back after the 9.9 then there is a preset withholding which is already in the forms. And we hold that number and pay the balance after agreement to sell is signed. Because in Bangalore and Chennai both we don’t sign sale deed like Bombay till the OC is received. So therefore is registered. And so when this after the sign agreement and if they cancel again there’s a withholding amount which is usually very preventive, prohibitive number. So we see a very low cancellation post 20 payment cancellation. Some extraordinary cases where family issues, health issues, those kind of things.
Generally we don’t see a big cancellation after agreement is signed and 20% is paid.
operator
Thank you sir. The next question is from the line of Raj Mehta from Raj Mehta and Associates. Please go ahead.
Raj Mehta
Yeah. Hi sir. I just wanted to ask one question. Whether Aurum Real Estate which invested in us whether we have started getting any benefit or it’s a pure, pure investment and that platforms have not. We have not been benefited from the platforms or from the company’s insights or the company’s advice. How is it, how is the relationship with the Aura Real estate as of now?
M. Murali
Yeah. Just to correct the fact Aurum Real Estate is an unlisted their private company. They have not invested in us. The buyer, the investor in US is called Aurum PropTech which has about eight or nine investments are purely a property and property technology investment company. All belong to the same group. So your question is Crystal Valley we don’t have. They are very small operations. They are very small operations in Bombay. They are not a big developer. So I doubt whether we will have significant exchange of knowledge between both of us. But. As an investor, as a member on the board, we learn a lot from Mr. Ashish Diwara’s insights in terms of managing the project, in terms of cost controls and systems and process and so on and so forth. So as of now, if you look at. If you are talking about any business partnership or an alliance that we have, we don’t have one and we are not sure whether we will have anything anytime soon. If at all we try to do anything from partnership activity, it has to be approved by the shareholder because they will be a related party.
As of now, I think we are only benefiting from their investment as an there it is true strategic investment by them in our company and they are one of the largest shareholders for us and also a member on the board of the company. Beyond that the relationship doesn’t go okay.
Raj Mehta
And how is the relationship with ASK growing since we have completed many projects and whether we have we got any future investments from ask?
M. Murali
Yeah, Ask, we are committed. We have only one, one more project scope left in the platform that we have signed up. But like as well as a few other brand names we’re working with in terms of creating new capital because they all commit capital from a particular fund and then they have to raise a new fund to be able to commit further money. ASK is already in the conversation for additional limits, additional similar platforms. We are working on it but we already have at least scope for another130,540 crores of investment that can be made from the existing platform itself.
We are working towards deploying that soon and then we will enter into an additional similar platform with Ask as well as others.
Raj Mehta
Okay. And with respect to the government royalty, can you just guide us? What’s the status now?
M. Murali
As I said in my may call, we think we have made a meaningful progress. The final decision outcome is expected as is with any government. It is expected anytime but it has not come through for last couple of quarters. So I would probably reserve my estimate on timeline but I think the path is fairly clear. It has been signed off by a lot of people in the government and therefore we believe, we believe we should be on a right track.
Raj Mehta
So how much reversal can we do in our P and L if we. If the. If the order goes in our favor then how much reversal or how much PAD can increase because of that?
M. Murali
That I’ll stay away from estimating that for now. But it is an exceptional one time entry so it will not have a. It should not be seen as part of a path because it will be a below the line as an exceptional item because it will be a one time, one time gain.
Raj Mehta
And sir, last question was related to how much savings are being made now since we are not using we are not going to pay the royalty to the Srirang.
M. Murali
We have annually we have incurred about 5% of PBT in the past which is about 4, 4 crore or something. That was the number that annual run rate we had in the past couple of years. To that extent we will save during this year and we currently still use a member of Sriram Group as a tagline. When that stops that IIT contribution will stop permanently.
Raj Mehta
So as of now we are paying royalty because we are using that tagline.
M. Murali
We will not pay the full royalty because we have stopped using the brand identity and we will stop using this member of Sriram Group in the foreseeable future or in the near future. And we haven’t really committed any royalty flow on the member of Sriram Group usage. So therefore for all practical purposes entire royalty say would be saved during the current financial year.
Raj Mehta
Okay and so if it’s possible then since you yourself know how much undervalued is our company then is there any chance of increasing promoter shareholding to a certain extent and gives the investor the confidence of the same. Thank you.
M. Murali
There is no immediate plan to increase promoter holding as you know there’s a transaction which is already approved by SEBI and it is in the working in terms of intracell promoter transfers only. When that project is complete then we will think about any other thing. But as of now you should assume there’s no promoter increase in increase in promoter shareholding from the market purchase. Thank you.
Raj Mehta
Okay. Thank you.
operator
Thank you sir. As there are no further questions from the participants I now hand the conference over to the management for closing comments.
M. Murali
Thank you everyone for being part of this call and it has been a good quarter, good start to the financial year and we are happy to see you coming up turning up in a large number to listen to our perspective on the earnings and the performance and outlook. And thank you once again for being on the call and we are happy to answer any queries that you may have at any point of time directly through SGA or you can approach us directly. Either way is fine. Thank you once again for being on the phone.
operator
Thank you sir. On behalf of Shriram Properties limited that concludes this conference call. Thank you for joining us and you may now disconnect your lines.