Embassy Developments Limited (EMBDL) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Q4 and FY26 earnings conference call hosted by Embassy Developments Limited. As a reminder, all participant lines will be in the listener-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-down phone. I now hand the conference over to Mr. Aditya Virwani, Promoter and Managing Director from Embassy Developments Limited. Thank you, and over to you, sir.

Good morning, everyone, and welcome to Embassy Developments Limited Q4 and FY26 Earnings Conference Call. I am joined today by Sachin Shah, our CEO and Executive Director, and Rajesh Kaimal, our CFO and Executive Director. Our investor presentation has been uploaded to the stock exchanges and is available on our company website. FY26 has been a landmark year for Embassy Developments Limited, operationally, strategically, and institutionally. It marked the first full year of the Merge platform following the integration of NAM Estates and the erstwhile India Bulls Real Estate Limited under the Unified Embassy Developments brand. I'm pleased to report that Q4 FY26 was the strongest quarter in our company's history. Q4 pre-sales stood at 2,632 crores. Up 89% quarter-on-quarter. FY26 pre-sales increased to 4,631 crores, up 128% year-on-year. Q4 FY26 collections stood at 577 crores, reflecting a 39% quarter-on-quarter growth. An FY26 collection from operations. were 1,673 crores. During FY26, we launched projects with a cumulative GDV of approximately 16,300 crores across six different launches. We achieved approximately 93% of our FY26 It's free sales guidance of 5,000 crores. The marginal shortfall was attributable to approval delays of one planned project in Bangalore that has now shifted to Q1 of FY27. I will now talk about the two launches that we had in Q4. The two launches, which were Embassy Citadel and Embassy Verde Phase 2, were the two launches that drove the Q4 performance and one launch called Embassy Eden from Q3. Embassy Citadel, our entry into South Mumbai luxury segment. A 1 million square foot development with an estimated GDV of over 8,800 crores. The pre-launch achieved in Q4 was 797 crores at roughly 8% of inventory absorbed. Validating that both the product positioning and the pricing strategy is in what is one of India's most competitive luxury markets. And just to note, we only brought this product out in mid of February, giving us only 45 days to clock almost 800 crores in this project. Embassy Verde Phase 2 at Embassy Springs delivered an 87% absorption within the quarter, generating Q4 pre-sales of 588 crores. Together, these two projects contributed to 1,385 crores. Pre-sales. Led by Embassy Eden, our luxury villa development at Embassy established a clear strategy, a clear category leadership position. Our Bangalore launches This really showcases embassy strength in the luxury segment in Bangalore. On the legal and regulatory front, the company secured favorable outcomes in two significant legal and regulatory matters. First, the Honorable NCLT, by order dated 4th May 2026, set aside the earlier NCLT admission order in the Section 7 application filed by Canra Bank, thereby squashing the CIRP proceedings in entirety. The NCLT held inter alia that no deed of guarantee existed and that the application was barred under Section 10A of the IBC. Following this, the company exited the AFM framework and resumed normal trading on both BSE and NSE effective 6th May 2026. Second, the Honorable High Court of Karnataka set aside the KIDB resumption order relating to 78 acres at Kadugudi, Bangalore, held by Embassy's Business Park, based on the company's undertaking to comply with the lease-come terms and obtain KIDB's NOC prior to any third-party interest creation. Both rulings were delivered on merits, reinforcing the company's legal position and governance framework. Our reported P&L for FY26 reflects an accounting loss of $872 crore at the PATH level. I would like to provide context for these numbers as they are structural in nature and rather than operational. This is largely a function of real estate revenue recognition accounting policy, under which income is recognized only on project completion and handover, and reflect past project performance. Given that most of our projects will have target OCs from FY28 onwards, revenue recognition from these projects will flow primarily through FY28 onwards, as constructed progressively, meaningfully. What you are thereby seeing in FY26 is a cost structure built ahead of the revenue curve. We expect this profile to progressively normalize as projects move towards completion and revenue recognition accelerates. FY27 outlook, based on our launch pipeline, ongoing inventory sales, and market momentum, we're providing the following FY27 guidance. A pre-sales of 6,000 crores from our own projects, representing a 30% year-on-year growth, along with an additional 2,000 crores from the DM projects, totaling 8,000 crores. Collections of approximately 3,000 crores, reflecting around 75% year-on-year growth, driven by the milestone-linked inflows from existing launches and ongoing projects. New launch GDV of approximately 19,400 crores across 11 owned projects and along two DM projects, Juhu and Sky Terraces in Bangalore. With a combined GDV of DM projects is approximately 6,100 crores. This launch pipeline, together with sustained demand for Embassy Citadel and our Bangor portfolio, underpins our FY27 outlook. To sum up, FY26 has been a transformational year. We have delivered record quarterly pre-sales and built a launch pipeline that we believe is industry-leading for our scale. Another significant milestone undertaken was our brand evolution, shifting from a legacy-led identity to a more forward-looking brand with renewed philosophies, values, and visual identity. Our priorities for FY27 are clear. Deliver on the launch pipeline, accelerate construction progress to drive collections, and reduce financing costs through refinancing. Sachin, who will take you through the operational performance in detail.

2,626 was a year of clear, sequential ramp-up in operating performance as we accelerated launches and increased pre-sales and collections over the quarters. To provide perspective on this trajectory, quarterly pre-sales increased from $198 crores to $409 crores to $1,392 crores over the first three quarters of the fiscal year before we finally closed at an impressive $2,632 crores in Q4. Quarterly collections increased steadily from 322 crores in Q1 to 577 crores in Q4. The area sold increased from 206,000 square feet in Q1 to 1.78 million square feet in Q4. As construction milestones progress on these projects, we expect a meaningful contribution in operating cash flow generation in FY27 and FY28. Construction spent during FY26 stood at 1,182 crores, representing approximately 71% of collections, reflecting a capital deployment that's disciplined. During Q4, we made progress on delivering our projects as well. We submitted the OC application for 109 Phase 1 in Gurgaon, and we received partial OC for Gulf City Savaroli Phase 1. Our OC Receipt Portfolio is now 98%. FY26 pre-sales of 573 crores and collections of 645 crores from this portfolio, reflecting a healthy monetization of completed inventory. Across our ongoing projects, construction and delivery timelines remain broadly on track. Embassy parodies to at Embassy Springs. It's 100% sold, 80% complete, with target OC in FY27. Embassy East Avenue in Whitefield, Bangalore, 94% sold, 73% complete with Target OC in FY28. Embassy Verday at Embassy Springs in North Bangalore, 90% sold, 17% complete with a Target OC in FY29. Embassy Edge at Embassy Springs, 74% sold, 66% complete with a Target OC in FY28. Embassy Park in Punvale, 74% sold, 41% complete, target OCs in between FY28 and FY30. Embassy Greenshaw at Embassy Springs, 63% sold, 8% complete, target OC in FY31. And lastly, Embassy Eden, 49% sold, with a target OC in FY31. Across the launch and under-construction portfolio, FY26 pre-sales aggregated to 4,058 crores, 27.5% of the unsold inventory value of 14,728 crores, allowing for sustenance sales to continue into the fiscal year and providing substantial visibility for future monetization. Looking ahead, our FY27 launch program consists of nine projects which are owned with a cumulative GDV of 13,300 crores, and this is supplemented by two DM projects taking a total launch GDV to approximately 19,400 crores. The key headline launches over the coming months include Embassy One North Tower in Bangalore, adjacent to the Four Seasons Hotel, where we have 400,000 square feet to sell and a GDV of approximately 1,400 crores. Embassy Knowledge Park Villas and Apartments in North Bangalore, with a combined GDV of approximately 4,500 crores and strategically located adjacent to the Embassy Riding School in North Bangalore. Front parcel villas and apartments at Embassy Springs, where we have 1.7 million square feet in area to sell, and a GDV of 1,900 crores. And our newly acquired Whitefield JDA project, where we have 1.7 million square feet, and a GDV of 2,000 crores, where Embassy has a 68.5% share. Plot A at Embassy Hub in Hebel, Bengaluru, where we have 1.2 million square feet to sell, and a GDV of approximately 2,100 crores. And lastly, 109th commercial in Gulgaon, where we have a GDV of 800 crores across half a million square feet. The two DMs with a total GDV of 6,000 crores are in addition, where this year we plan to launch a super-exclusive and ultra-luxury Jhoo project, where we expect to receive our IOD shortly, and Sky Terraces in Bangalore, where we expect to have a robust demand at launch. This pipeline is geographically balanced across our three core markets, Bangalore, MMR, and NCR, and is weighted towards product categories where we have demonstrated strong absorption, which is luxury residences and villas, premium apartments, and lifestyle second homes. A planned project pipeline beyond FY27 carries a further 20.4 million square feet with an estimated GDV of approximately 23,500 crores. Combined with our 3,250-acre fully paid land bank, it gives us a multi-year revenue visibility and the flexibility to face launches in line with market conditions. In summary, FY26 has been a year of growth, solidifying our operations, integrating and building our teams, and executing in a disciplined manner while managing cash flows effectively. This has led to sales velocity and accelerated launches in the second half of the year. We enter fiscal 27 with strong momentum and a healthy inventory pipeline across ongoing projects. With that, I will hand it over to Rajesh, who will walk you through the financial performance and the balance sheet position. Thank you.

Thank you, Sachin, and good morning, everyone. I will take you to the financial performance for the quarter and the full year ended March 31st, 2026. The reported P&L for FY26 reflects the timing mismatch inherent to the development business model and additionally carries the accounting consequences of the reverse merger treatment from the NAMM-EDL combination. Reported numbers for FY26. Revenue from operations stood at $1,732 crore versus $2,180 crore in FI 25. Total income of $1,905 crore versus $2,547 crore in FI 25. EBITDA, a negative $300 crore versus $531 crore positive in FI 25. As Aditya mentioned earlier, the reported numbers must be read in context of the following two points. First, the real estate revenue for RARA registered projects under India's 115 is recognized on completed contract basis. The revenue from sale of residential units is recognized only on receipt of OC and offer for position to the customers and not at the point of pre-sale. Over 80% of our FI26 pre-sales were concentrated in H2, predominantly from launches such as Embassy Citadel, Embassy Greenshore. In the respective years, Thank you. The largest shareholders of NAM became the largest shareholders of the company, and the transaction was accordingly featured as a reverse merger, with NAM as accounting acquirer and KDL as accounting acquirer. As this fair-valued inventory is sold over time, the accounting profit margin reported in the consolidated P&L is reduced to the extent of the differential between historical cost and the fair-value step-up. Importantly, this does not impact the underlying cash flows on these assets. Cash flow for FI26. On the cash flow side, the year was characterized by ramp-up in operating cash flows, disciplined investing activity, and a positive financing inflow driven by warrant conversions. With over 80% of FI26 pre-sales concentrated in H2, the corresponding Mindstone link collections will largely flow through FI27 and FI28. This is the principal reason why FY26 collections of 1,673 crore were marginally lower than FY25 collections of 1,852 crore, even as pre-sales grew 128% year-on-year. The pre-sales to collection conversion is a structural lag and not an operational issue. We expect FY27 collections to grow approximately 75% to around 3,000 crores as construction milestones are achieved in H2 FY26 launches. Debt position. As of March FI 26, our gross institutional debt stood at approximately 4,100 crores, with cash and cash equivalents of around 1,100 crores, resulting in net institutional debt of approximately 3,000 crores. Our net debt liquidity ratio stood at 0.3x, while gross debt liquidity was at 0.4x. In addition, we carry shareholder debt of approximately 1,121 crores. Upcoming launches and strategic projects are expected to generate meaningful cash flow surpluses, supporting a structured reduction in institutional debt while also funding future growth. In closing, FY26 has been a transition year marked by integration of the merge entity, an accelerated launch program, and the resolution of legal overhangs. The reported P&L reflects the mismatch of revenue recognition timing and merger accounting, but the underlying operating fundamentals point to a platform with strong fundamental visibility and cash flow generation. We enter F527 with confidence in the strength of our launch pipeline, a strong balance sheet positioned to support our 6,000 crore pre-sale guidance and a 3,000 crore collection target. With that, we would be happy to take questions.

We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on your touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use Answers 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 Mohit Akanwal with IIFL Capital. Please go ahead.

Yeah, good morning, everyone, and thanks for the opportunity. My first question is on the launch pipeline, and if you could give some color around the launch timelines. So, let's say the larger projects like Embassy One, Knowledge Park, the White Field, and the Embassy Springs project. Yeah, that's my first question.

Hi, Mohit. Good morning. Are the projects that you referred to?

Yeah, no, I'm saying the larger ones, like the Knowledge Park, Villas and Apartments, Embassy Springs, the Whitefield Project and Embassy 1, Norta. These are the larger projects. What are the, like, if you could put it into quarters, which quarter do you expect them to get launched?

Sure. So I'll just give you a flavor. The pipeline that we have of roughly 11 projects, 19,000-plus crores in GDV, is pretty scattered across the entire year. And we've seen one north tower, we've actually already got our building plan, so we are going to launch this project this quarter. And Embassy Knowledge Park, which is quite a big project, would probably be towards the end of this quarter or might spill over to Q2. Juhu will be Q2. Sky Terraces will be end of Q1 or Q2. And I'll just name, you know, the white, the Embassy Springs front parcel will be probably Q2 or maybe Q3.

Okay, so bulk of the launches seems to be in the first half or probably the early second half. Is that understanding correct? That's right. Okay. Now, on your guidance of around 6,000 crores pre-sales for next year, I just wanted to understand such a two-part question. Firstly, if you could share your thoughts on what has been the response in the Worley project, Citadel project, because obviously these numbers, fourth quarter numbers, obviously is towards the fag end, so it doesn't reflect the momentum. So, could you explain how's the momentum, and also, like, in your 6,000 crores of pre-sales number, what is the implied assumption, let's say, for this year, or what is the kind of expectation you have for this year pre-sales for the Volley project?

Yep. So if you look at our unsold inventory, including the Worley project, we roughly have... We have 12,000-odd crores of GDV. If you take out the commercial asset, because that's an asset that we'd like to build out and monetize towards closer to OC, I would say we have close to 10,000 crores of unsold inventory. We are factoring in around 2,000 crores from the 10,000 that we will sell out of the 6,000 guidance we're giving, and 4,000 from the new launches. Embassy Citadel has been received pretty well, and, you know, given that we only had 45 days in Q4 to launch this project and collect our sales, to do 800 crores then is quite commendable. We're quite proud about it, and we feel Q1 as well, we're going to, we already have some decent momentum on it. We believe that, you know, Citadel should contribute to 1,000 crores of the 2,000 from the existing stock.

Understood. And my last question is on this entire cash flows and net debt number. This year, FY27, you will see a marked improvement in your collections at about 3,000 crores. How do you see the construction cost and then the resultant impact on net debt levels? Would we start to see the leverage levels coming down? And what is the timeline for the leverage levels, if you would give some color on that?

Hi, Mois. It's Sachin here. So while we are expecting collections of roughly 3,000-odd crores this year, we also want to spend approximately 2,500-odd crores on construction. So we want to really, you know, use our collections to keep pushing construction, get those milestone link payments to keep coming in. And so we might not see a huge reduction in debt for this year, but what you'll see as, you know, you'll see the company in a much stronger position by the end of this year as we kind of move forward to be able to kind of, you know, receive more inflow next year and then pay down debt probably over the course of the next kind of, you know, 24 months.

Okay. But is there a comfortable level of net debt, let's say, 3,000 crores? Where do you see the net debt levels comfortable at? Or, let's say, in the next three years, you want to go, you know, net debt free? Any target internally around that?

Hi, Moj, this is Rajesh here. So, we want to keep our net debt levels to 0.5x or less. And as Aditya said, this year we want to spend all the collections or most of the collections on construction, so not a great reduction in the net debt numbers. But starting from the next financial year, there will be progressive reduction. Comfortable with the net debt levels of 0.3x because we want to spend on construction as well as spend on new projects over the next two to three years. So, I would guess, in a short term, a 0.3x net debt is a comfortable number for us.

Okay. Great. Those were my questions. Thanks a lot and all the best.

Thank you.

Thank you, Mohit.

The next question comes from the line of Ryubin. With equity intelligence, please go ahead. Hi, good morning.

Could you just help me understand this revenue recognition across the, we've got now three different business models in NDC. You have the legacy India Bulls projects, that seems to be on the completion and handover basis. And then you have the development management, that appears to be more on percentage of completion method, right? So I want to understand, did you just mention that the newer Bangalore and Mumbai projects would be, how would that revenue be recognized? And I'm just trying to understand when will that start reflecting in the P&R.

Yeah, so the legacy projects, this is Radhisha, the legacy projects of the Earthquartal India Bulls Real Estate is coming up for completion, and as we get OC, we recognize the revenue. That is not only true for the legacy projects, the legacy projects of empathy, as well as India Bulls Real Estate. The current launches, where we just started construction, most of the projects got launched in Q3 and Q4 of last financial year. It's something that we get recognized from 28 onwards as we attain OC, give position to our customers, and do substantial collection. That's when we recognize the revenue and the corresponding cost. The DM projects is only a fee income that will be recognized over a period of the construction. As we progress in construction and as we collect the fees, that revenue will be recognized at that point in time.

Okay. Okay, so maybe is there any estimate on the revenue guidance in by 27-28, or would you like to refrain?

We would refrain from giving our revenue guidance. We have already given a pre-sale guidance and collection. I think we'll stick to that at this point.

Fair enough. Just a few questions on the land. So, see, we've got like 500 acres in the north, but NCR is, we all know, it's very dominated by a few large players. So, have you considered maybe monetizing that land if a good valuation comes along? Because wouldn't that help the P&L and balance sheet? And so, what do you expect the market value of that land to be?

Right. So this is Sachin. Look, of course, every time when we get an offer for a land parcel that's not core and strategic to us, we always consider whether we should monetize it or not. As you've seen in our balance sheet and in our P&L for the last two years, we have been doing that. And, you know, wherever we have land parcels which are not mutated or scattered or, you know, the aggregation was not done by the Aswar India Bulls, we are definitely looking at monetizing that. We do have 500-plus acres in north on Sonar Road. A lot of this land today sits as forest land. We could probably develop 75 acres of that land. And so, yes, we are looking at seeing if, you know, someone comes along, looking at a different type of development out there. Of course, we would look at, you know, monetizing that. But we don't have a... It's kind of an estimate of market value for as of now, yeah.

Okay, fair enough. And one last question on the SEC. Could you give us an update of what's happening there? Is there any development plans for the next 12 to 24 months, you know, and what are the projects that you're envisioning? If you could just guide us on the SEC update.

So the, as you know, we had a legal issue going on with MITC on which we've received a stay. The next year, indeed, is on June 12th. At the same time, I'd love to say that we have approached the authorities, and we are trying to find a way that we can settle this between us and them so we can develop this land. The most likely use of this land will be small. I don't think it's well-suited today for SEZ use, nor is it well-suited for warehousing. So, again, it would be an industrial plotted play that we would look at for this transaction once we've settled our issues.

Okay. Okay. Thank you. I'll get back in the queue. Thank you so much.

The next question comes from the line of Akhil Khotari with Hathra Capital. Please go ahead.

Hello. Good morning. Thank you so much for the opportunity. So, my questions are regarding the Embassy CETAIL project. So, for the CETAIL project, as I can see in the presentation, the completion date has been moved from 2032 to 2035. So, what's the reason for such a three-year push?

So, you know, that is just for our RERA filings. Our target date is 31 or 32, but we like to keep a little bit of a buffer also given that this is a large tower, our first large asset in Mumbai. And actually, it's also in line with the market norms. If you look at most 300-meter towers, they give a generous buffer on the RERA dates.

Oh, okay, okay. But it is nothing as such there is lack of interest, right? The interest is really good, right, in this project?

It is really good, and honestly, if I have to tell you about, you know, Worley and all the supply there, we are positioned as a value proposition there. Also, given that the ticket size is intentionally smaller, and from a pricing point of view, we are coming in much lower than what I think the top developers are. We're just being a little bit humble about it, that we are conscious we need to build our brand, build the same luxury. Moat that we have in Bangalore in Mumbai that will take some time, and therefore we're not shying away from discounts. So I really think that this is an outlier product in Worley, and I'm also happy to say that we have... More or less closed on closing Latent as a contractor. I think Latent is the best contractor in the country, probably a notch even higher up than L&T. And, you know, we have just engaged them, and, you know, we feel comfortable about the timeline that we have.

Okay. So we have not officially launched the budget yet, right?

We have launched the project. Execution is going on, and it's well underway.

Okay, understood. And just one last question. What is the construction spend in such huge projects?

Yeah, so the total spend in Citadel, including all approvals, FSI, everything is 3,000 crores. So we have a generous, you know, 5,000 to 6,000 crore plus surplus in this project.

That's it for my stay. Thank you.

The next question comes from the line of Sanjay Shah with Alpha Line 12. Please go ahead.

Yeah. Good morning, gentlemen. Thanks for the opportunity. So my main question was to really understand our company that what are the top three milestone investors should track over next 12 to 18 months, whether embassy transformation is succeeding or not?

Yeah, so I think the top milestones that investors should focus on is the pre-sales, is also backed by collections, and is the eventual reduction of cost of capital will eventually come down, you know, so when we borrowed this money to launch all these projects, and I hope everyone appreciates that we launched 16,000 crores last year, we're launching close to 20,000 crores this year. Now, all that pipeline is on comparable terms of the largest listed developers in the country, and to do that, we needed a decent amount of equity to do it. So, the raising of financing at slightly higher rates were what I term as a one-and-done exercise, and that will start graduating to cheaper financing and less debt as we start selling, as banks start seeing receivables. So I would say the top three are pre-sales, collections, and cost of debt, and debt in general coming down over the next 12, 18 months.

The question was regarding we have entered when really there is a rise in construction cost, finance cost, and the sale of real estate are getting bit slower. That is what market update we get. How do we highlight upon that?

You know, to be honest with you, we're not seeing that yet. There's a lot of noise about real estate slowing down, and we appreciate this is a cyclical industry. But if you just look at the Q4 launches, Verday, which sold out 80 plus percent, Embassy Eden, which in Bangalore, is a 20 crore plus ticket size. The 20 crore in Bangalore is as high as you can get. We have sold 48 percent in six months. So actually, we're still seeing pretty robust. Traction on ground. And I think the top developers just stay on top of that funnel. You know, while the market slows down, that consolidation only happens more. And we are actually coming back into this whole residential game in a big way, where our consolidation and eat-up market share, we're coming off lows. This brand is very, very strong, especially in Bangalore. We're going to bring that same strength into Mumbai. And I think that's going to help us have some tailwinds to continue eating market share. Even if the market slows down and contracts a bit, I still feel we will be a bit of an outlier and grow market share. So we feel pretty good. Also, if you look at the FY27 pipeline, you know, it's actually a great balance between the luxury, the ultra-luxury where we have Juhu, Sky Terraces, and Embassy One. But beyond that, it's actually a very fast-moving mid-segment product. Which we feel is a perfect hedge to have as well going into this stage of the cycle. So we feel pretty good. Costs have gone up a little bit. We do feel they will come down. We have a great procurement strategy where we've delayed non-crucial items, but at the same time not stopping construction. But because we have fully paid up land and high gross margins in all our projects, we hardly have any JDs. I think we actually benefit the most from this because our pressure will sustain the most. Most are the developers who have A land cost, a J-D ratio that they have to share will find the cost increase hurting them a lot more. I think we actually are in a very comfortable place, even if costs go up a little bit, and really say there's a hedge on inflation, you know, we also feel pricing will go up to catch up to that. Maybe it will play catch up, but eventually it will catch up to the price increase that the country will face given the energy shocks.

Really helpful, and thanks for your confidence. Good luck to you, sir. Thank you very much.

Thank you.

The next question comes from the line of Kevin Gandhi with CapGro. Please go ahead.

Hello. Just a good question. Second one, at this price level, are the promoters thinking of upping their stake or buying from the open market? Thank you.

The current cost of debt is around 14.8%, and as I mentioned, our endeavor is up in the next 12 to 18 months to bring this cost of capital down, as all our projects start seeing.

The question was that at this price level, are the promoters thinking of upping their stake in the company or buying from the open market?

The price of shares today is still low, and we have our shareholder debt today, along with Blackstone, we have a shareholder debt of 1,100 crores, which we will convert to equity over a period in time, but we are waiting for the market to correct, both the market to correct as well as our share price to correct, which will take a little more, a few more months maybe, and then we will up our equity in the company along with Blackstone.

Okay. Sir, just my last question of the cost of debt. So, like, how much decrease are we expecting from the current levels across 24 months?

Our expectation is to bring it to 10% over a period of time, but this will be a gradual decrease over the next 12 to 18 months.

Okay, sir. Those were my questions.

The next question comes from the line of Kapil Agarwal with Dakhshan Associates. Please go ahead.

Yeah, my question is regarding the land bank in Sohana. So whether that is located within Masterplan area or it's outside Masterplan? And what is the plan for this land?

So, as I was mentioning before, the land is in the Aravalli, closer to the Aravalli Hills. Part of the land is forest land. Part of the land can be cultivated and be developed. We believe approximately 75 acres can be developed of this land. So we're working towards that, and we're putting a plan together on how we do that. But right now, with respect to kind of in our investor deck, we've just shown it as land because we're focusing on other high-priority projects right now.

So I just asked because Sona market is going very well right now. So it said we can say peak, the rates and everything, demand, everything is good. So why we are not, we can say, taking up this project? Any particular reason for this thing?

So, even on the 75 acres, we have to do, actually, three seasons of cultivation before we can actually develop farmhouses. So, there's a whole process. It's not that it's being ignored.

So, sir, we've started the land conversion process. So, that is underway. As Sachin said, it does take some time for this to get done. So it is in the back of our mind, but if I have to be completely honest, the pipeline that we have launched and will launch this year and what we have actually for FY27 is very exciting. It does take a little bit of a priority. At the same time, we are evaluating options of even disposing this land because only 75 acres of... We can consume here. So while the land size is high, management does not feel that there's a whole lot of value attributed to that. But we just want to reaffirm that we are not saying that there's no work happening. We are moving along the conversions and entertaining any offers that come around.

Okay. And we have... Having interest cost of approximately 550 crore in this financial year. So why it should not be catalyzed to the projects? Why we have expensed out in the P&L?

So whatever we could capitalize to the projects we have capitalized, this is the cost that we have taken to P&L because these are OC received projects which we have deployed on OC received projects. As we said in the previous earnings call, our priority in the first six to eight months was complete the legacy projects, make our customers happy. So we deployed capital to complete all legacy projects, sort out all the finishing of all the legacy projects, and because it was OCBC, we couldn't capitalize it.

So, actually, our total borrowing is in the range of 5000 crores. So, taking 14% cost of that, total, we can say, interest cost for the year should be 700 crores. Out of that, you are saying 550 is for the OC project?

Yes. Most of it has been deployed in OC projects and in corporate expenses. Whatever we could capitalize, we have already capitalized. Also, the 5000 crore debt is including the shareholder debts. The institutional debt is only 4100 crores.

That's why I was surprised that on 4000 crores, like the total debt is for the OC project, there is no debt for the new project. Are you getting my point? So, interest cost at the rate of 14% which we are saying it should be 560 crore for the year. So, this entire amount we have expensed out in the P&L. So, this is the question actually.

So, actually, maybe clarify that a little bit. So, while, you know, we borrow sometimes against our OC projects, so the money becomes kind of our GCP funds, we, for example, have used that to pay for the premium approval charges for blue. So, what happens is that allows our blue project to get going. So, it's really kind of, maybe not like how you said, apples to apples comparison, but, you know, whatever we could expense, sorry, capitalized, we capitalized, the rest has been expensed.

Thank you. The next question comes from the line of Rohit Chaudhary with Integrity Capital. Please go ahead.

Yeah, hi. I have a question regarding your court case with KIADB, which says that the lease-cum-fail agreement ends in June 6, 2029. A year back, embassy sold 25 acres parcel land. Do LAM research from the same entity? What happens to this deal if the lease is not extended? Do we end up losing that revenue?

So firstly, we didn't sell land to LAM Research. We subleased a portion of the land, 25 acres to them. So just to clarify that. And mutually, we will go and seek an extension, which is very normal in KIDB. In fact, we have seek extensions before on the same land. So LAM Research is well aware that the current term ends in 29. If their project is not done by then, and they are investing over a billion dollars into a very high-end R&D fab. So if it's not executed by that timeline, we will mutually seek an extension from KIDB, which is common practice.

Question for you. I'd like to pick up on that question that, you know, you just answered that you will convert the debt from BlackRock at a suitable time. Does that mean you still feel that this is, that the share price is overvalued? I didn't understand your comment on that.

No, we actually think it's undervalued, which is why us and Blackstone would not like to convert our shareholding now because it will be diluted. So we feel what's happened in the last few months has been a factor of two legal overhangs that the company has had. Now that those two overhangs are gone, the company has performed really well in that time. The overall market, yes, has corrected, especially the realty market, but we feel that given a few months that the stock should come back and, you know, maybe we will revisit this conversation with Blackstone on the share conversion at the appropriate time.

The next question comes from the line of Amish Kanani, known by the Investment Managers. Please go ahead.

Hi, sir. Sir, congrats on a good launch and pre-sales. So, my question is, you know, on the EBITDA margin steady state, I understand that, you know, we will recognize the revenue when the OCE is received. So, the question is, given the pipeline, you know, surplus is looking at, you know, more than 50% of the GDV on a steady state, say, from FY28 onwards. Sir, how do we look at EBITDA margin, if possible, some range, you know, because right now it's negative and, you know, last day was 21%. A good, you know, real estate company does. Given EBITDA margin in the range of you know anywhere between 35 to 45 percent. So, if you can give us some range on a steady state EBITDA margin given the kind of premium launch that Hello.

Yeah. Hi. Yeah. So, look, I'd like to, again, maybe, you know, EBITDA is the P&L item. And it, again, depends on what your revenue for that, you know, quarter or the year might be, which is, again, based on revenue recognition and as projects get built. I like to change your focus a little bit to the net cash flow margin that we will produce, you know, net surplus margin that we'll produce from our projects that we've launched and as we go into the future over the next two years. And we expect that to be close to 50% over the course of the next, you know, several years as these projects get delivered. And so we're really focusing on that kind of cash coming into our system that will eventually help us to, you know, do more projects, do more BD, as well as kind of service our debt.

So, you're saying cash flow at some stage should reflect 50% kind of a number, is what you're saying?

Yes, and net surplus margins will reflect that sort of a number.

Sure, sir. And, sir, if you can explain us one, you know, you've done quite a bit of detailed, you know, presentation and, you know, explanation, you know, by DM projects and, you know, launch date with CC and all. Only thing, you know, on the DM projects, at least we'll start to, you know, kind of recognize the... I think one of the reasons why the share price is affected is because of the losses and, you know, apparent thing. The point is, you know, if you can give us some sense of how the DM projects will get executed, where probably revenue and EBITDA will be recognized up front, that will be helpful, maybe for future presentation, that is a suggestion. And if you can explain us, you know, how was the receivables sold, you know, being, you know, it's a dumb question, but how does our balance sheet gets affected with receivables sold being, you know, converted into debt and, you know, at the time of possession, how does it get, you know, if you can explain that, that will be helpful. If it's long, maybe I can take offline, but, you know, very briefly if you can.

Yeah, no, I'll try and explain that. So, as far as DM projects are concerned, as and when the project sells and we progress in construction, this billing will be raised on a quarterly basis and the revenue and the cost will be recognized in that particular year. So, you're right, it's upfront and we don't have to wait for OC for these projects to recognize revenue in a DM project. That will show, you know, an uptick or reduction in the losses and an uptick in the revenue over the next two to three years, both for Jhu project and the Sky Terraces project will show, because the construction is over the next three to four years, this revenue will come in periodically every quarter over the next three to four years. That's the first part of the question. As far as sold receivable is concerned, while if it is... It's an OCREC project, which are few today. That will go into revenue as we hand over position. But if it is still an OC to be received project, this will continue to come as liability as an advance receipt from customer, and once the OC is received is when we will recognize this as revenue. But this cash flow surplus, the collection which we will do over a period of time, over the next three, four years, as we do milestone completion and we keep collecting from the customer, this will be used, A, first for construction, and second will be to service this debt. So, it doesn't have to wait for OC received or something like that to basically pay down the debt.

Sure, and that's right. Thanks a lot, and all the best. And one last question was, if possible, the promoter's leverage, sir, I think is one of the reasons why probably, you know, share price is affected. If you can give us some sense of, you know, if at all, there is some plan of how to slowly reduce promoter's splash. I know it's not a company-related question, it's a promoter-related question, but if you can give us some clarity, that will be really, really helpful, sir.

So, I'll give on the promoter pledge. I'll give a broad perspective. See, the promoter pledge had pledged about 47% of the promoter's shares as pledged before this entire NCLAT matter came up. And because the share price dipped, we had increased that 47% pledge to 68% pledge. And no additional debt was taken, mind you. The promoter had not taken any additional debt. It was only because the share price fell that additional shares were pledged. And now that the share price is moving up, this will come back to the old levels, to 48%. And then what we understand from the promoters is they plan to pay off this debt over a period of time. Maybe in the next two to three years, this pledge will keep reducing and the shares will be completely unpledged.

Sure. That's helpful. Thanks a lot.

The next question comes from the line of Raghav with Veera Equities. Please go ahead. Hello.

Hello.

Hello. Yeah.

Am I audible?

Yeah.

Yeah, congratulations on a good set of results and positive legal outcomes. My question is regarding the NASPIC-assisted land for which the case is going on, and if there's a positive outcome of the land, then how are we able to monetize the property?

The first thing would obviously to have a positive outcome with MIDC and the government on this. The second thing that we are in the process of doing is basically doing a de-bonding exercise. So converting the land from SEZ to, you know, not having an SEZ status out here. We have that done. We may be doing industrial plotted out here for small and medium-sized manufacturing companies. We think there's a lot of demand out there, and that's in our belt for companies that are looking for land to do light manufacturing, to put it to industrial use. So we actually do believe there's quite a bit of demand out there, but not as SEZ status. So we do have to remove that to be able to sell the land.

Okay. Thank you, sir, for the answer. And one more question was regarding this NCLT issue. So, are there any legacy regulatory agreements which are not closed yet? So, in case any future similar things happen, like for the India Bulls group, so are those agreements, old agreements closed apart from this?

Look, we don't know of anything else that's out there today that can harm the company and harm the stock. It did catch us a little bit by surprise, but I think we've overcome it, and we're looking forward out here, but there's nothing else out here.

Okay, thanks for the answer.

Thank you. Ladies and gentlemen, due to time constraint, that was the last question for today. I now have the conference call over to the management for closing comments.

In closing, FY26 has been a transition year marked by the integration of the merged entity, an accelerated launch program, and the resolution of legal overhangs. The reported P&L reflects the mismatch of revenue recognition, timing, and merger accounting, but the underlying operating fundamentals point to a platform with strong forward visibility on cash flow generation. We enter FY27 with confidence in the strength of our launch pipeline and the strong balance sheet position to support our 6,000 crores pre-sales guidance and our 3,000 crores collection target. With that, I'd like to close today.

On behalf of MPC Developments Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.