Ladies and gentlemen, good day, and welcome to the Q1 FY27 Earnings Conference Call hosted
by Horizon Industrial Parks Limited. As a reminder, all participant lines will be in the listenonly 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 the operator by
pressing star, then zero on your touchtone phone. I now hand the conference over to Ms. Prapti
Zaveri from Horizon Industrial Parks Limited. Thank you, and over to you.
Prapti Zaveri:
Good evening, everyone, and thank you for joining our first earnings call. Before we proceed,
I'd like to highlight that the management may make certain statements that may constitute
forward-looking statements. Please be advised that our actual results could differ materially from
these statements. Horizon Industrial Parks does not guarantee these statements or results and is
not obligated to update them at any point of time.
Specifically, any financial guidance and proforma information that we share on the call are
management estimates based on certain assumptions and have not been subject to audit or review
examination procedures. You are cautioned not to place undue reliance on such information, and
there can be no assurance that we'll be able to achieve the same. Joining me on the call today are
our CEO, Urvish Rambhia, and our CFO, Kunal Shah. Over to you, Urvish.
Urvish Rambhia:
Thank you, Prapti. Good evening, everyone. Let me first begin by acknowledging what has been
a defining milestone in Horizon's journey. In August, we successfully completed our IPO and
raised INR4,250 crores of fresh primary capital. The proceeds have been deployed for
deleveraging, which brings our net debt down to INR2,500 crores, proforma as of end-June or
12.5% of enterprise value. More importantly, the IPO fundamentally changes Horizon's growth
profile. Today, we operate with a substantially stronger balance sheet, access to capital markets,
and ample financial flexibility to pursue growth opportunities while maintaining financial
prudence.
Stepping back, logistics has been a high-conviction investment theme for Blackstone for a very
long time. Blackstone, as most of you know, is one of the largest owners of logistics assets
globally, owning and managing over a billion square feet of logistics assets. Earlier in this
decade, we saw a similar opportunity emerging in India, driven by GST-led supply chain
formalizations, the growth in e-commerce, and the demand for institutional-quality
infrastructure. With that conviction, Horizon was established in 2020 to build industrial and
logistics infrastructure at scale and become an enabler of India's growth story.
Six years later, that vision has translated into very, very tangible outcomes. Horizon has achieved
a remarkable sixfold expansion, growing to 61 million square feet, making us India's largest
industrial and logistics real estate platform. Today, our business spreads across 9 states, 10
markets, and 46 assets. We own 2,300 acres of land. We serve over 120 customers and are
rapidly building India's largest last-mile network.
Our evolution mirrors the evolution of the Indian economy. When we started in 2020, the most
compelling opportunity was enabling the rapid growth of organized e-com. India was witnessing
accelerating digitization, rising online consumption, and overall sophistication of the supply
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chains. We built large-format fulfillment centers that enabled leading e-com, retail, FMCG, and
3PL companies to scale their nationwide distribution networks efficiently.
As India's manufacturing ecosystem gathered momentum, supported by PLIs, the Make in India
initiatives, and broader global supply chain diversifications, customer requirements started to
evolve beyond just traditional warehousing. Businesses increasingly sought modern plug-andplay infrastructure that could support assembly, manufacturing, processing, and value-add
operations. Recognizing this shift very early, we expanded our offering beyond just the logistics
infrastructure and established a very strong presence in the industrial segment.
More recently, another opportunity emerged: the exponential rise of quick commerce and
hyperlocal fulfillment created demand for infrastructure located much closer to the end
consumers. At the same time, there was no institutional-grade in-city logistics infrastructure at
all. As you know, creating such assets is very difficult given alternate land use in dense urban
areas. And we recognized this gap also very early.
We built our in-city platform, which today spans 17 assets across 7 major cities and provides
access to more than 20 million consumers within a 30-minute driving distance. This combination
of proximity, scale, and the Grade-A infrastructure that we are creating here is creating a very,
very differentiated platform that remains extremely difficult to replicate.
Today, Horizon serves large blue-chip corporates, which are fueling India's consumption and
manufacturing growth. With consumption in e-commerce, we enable companies like Amazons,
and Colgates, Unilever, Zara, amongst others, to create large-scale distribution fulfillment hubs,
which serve millions of consumers every single day.
Within industrial and manufacturing, we provide plug-and-play infrastructure for companies
such as Schneiders, the SIGs, the Lumax of the world, the Tatas, the Vestas, and many more
such global manufacturing leaders that use our facilities to manufacture, assemble, and distribute
products across India and international markets.
We are not only supporting customers across renewables, EVs, and automotive, but also
customers from the sunrise sectors like data centers, semiconductors, aerospace, defense, and all
of this collectively represents today nearly half of our portfolio. At Horizon today, we are serving
nearly every sector of the Indian economy, and a rapidly growing customer family is today
already exceeded 120 partners.
Let me now briefly touch upon our operational and financial performance for this quarter. Q1
has been our strongest ever quarter. We delivered revenue of INR200 crores, representing 23%
year-on-year growth, EBITDA of INR161 crores while maintaining a very healthy EBITDA
margin at 80%. Our contracted revenue run rate today continues to grow strongly and has
reached nearly INR970 crores as of end June.
On the operating side, we leased 1.9 million square feet across 13 transactions. We onboarded
nine new customers and added INR65 crores to our contracted revenue kitty. Notably, threefourths of our leasing during this quarter came from the industrial customers.
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On the development side, we are on track to deliver 6.5 million square feet leasing for FY27,
which will translate nearly to about a 30% growth compared to the last fiscal.
Coming to the development activities, that also remains very, very robust. This quarter, we
delivered 1 million square feet and are on track to achieve our 6 million square feet completion
target for this fiscal. This will enhance our operational area to nearly 35 million square feet. On
the in-city as well, our development is also progressing very, very well, and we are on track to
achieve our first delivery in Pune by the fourth quarter of this fiscal.
I will now hand it over to Kunal to walk us through the quarter's financial and operating
performance in further details.
Kunal Shah:
Thank you, Urvish. Good evening, everyone. FY27 has begun on a strong note. We have
delivered our strongest operational performance thus far. In Q1 FY27, our revenue reached
INR200 crores, up 23% year-on-year. Our EBITDA reached INR161 crores, up 36% year-onyear, and our EBITDA margins expanded to 80%.
Moving to profitability. While we reported a net loss for the quarter of INR12 crores, this
continues to be impacted by non-cash depreciation and interest expense. It's important to
appreciate that our cash depreciation in business is negligible given our new assets, and there
will be significant interest savings post the INR3,900 crores of deleveraging.
Adjusting for these, our pro forma cash PAT stands at a healthy INR116 crores. Our strong
internal accruals, combined with significant balance sheet headroom, position Horizon to
continue to reinvest in opportunities and maximize shareholder value. Thank you. Over to you,
Urvish, for closing remarks.
Urvish Rambhia:
Thank you, Kunal. As we look ahead, we believe we are entering perhaps the most exciting
phase in Horizon's history. Horizon today possesses all the building blocks of a high-growth
platform, including a fully-paid land bank, which will deliver 30 million square feet of further
development. Financing and approvals are materially in place, and we also have a 240 member
of high-caliber people who are driving our operating platform.
This, along with the multiple levers of growth that we have, I believe places Horizon in an
extremely, extremely unique position. The way we are thinking about our growth strategy, it's a
4-pronged growth strategy, which includes, the contractual 5% rent escalations and the
embedded mark-to-market opportunities in our existing leases.
2, the continued development expansion of our big format parks. This will double our
operational capacities over the next 4 to 5 years.
3, the rapid expansion that we are seeing in our in-city strategy. This will deliver 6 million square
feet over the next 3 years. And the more exciting part of this is that this attracts nearly 2 to 3
times rentals compared to the big format parks.
And 4, the expansion of the value-added services, including our rooftop solar, the worker
accommodations, the hospitality, and many new such ventures that we are incorporating in our
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everyday ecosystems. This will deliver nearly 5% to 10% of our revenues in the next 5 years. In
closing, Horizon, I believe, has never been better positioned.
We have the largest platform in the sector, a fortress balance sheet, significant embedded growth
through our development pipeline, and exposure to perhaps the 3 most relevant megatrends
which are today shaping India's economy.
With that, I will hand it over to the moderator for the Q&A. Thank you.
Moderator:
Thank you very much. Your first question comes from the line of Mohit Agrawal with IIFL
Capital. Please go ahead.
Mohit Agrawal:
Good evening, everyone. And congratulations to the team on your listing and your maiden
conference call and results. My first question is looking 3 to 5 years view on demand, your slide
13 actually gives some color that you'll be doing 6 million square feet of large format parks and
then 2 million square feet of in-city.
So is it fair to say that, let's say roughly about 8 million square feet on a base of 30 million square
feet, so we are talking about 25% volume growth for the next, let's say, 3 to 4 years because you
already have about 30 million square feet of land bank available, and add about 5% annual
escalation, so are we talking about a 30% revenue growth CAGR, let's say, for about 4 years?
Is that broadly a correct conclusion? And if yes, then from a volume growth perspective, how
do we look at the building blocks as in between industrial and logistics, e-commerce? If you
could give some color around how do you see this 25% volume growth for 6 million square feet.
Also a little bit color on that 2 million square feet actually between these sectors, how do you
see that shaping up for the next 3 to 4 years? That's my first question.
Urvish Rambhia:
Sure. Great question, Mohit. So let me just break this, as you said, simply for you. So, the way
we are thinking of our growth is, as I said earlier in my opening remarks, this is effectively like
delivering from 4 engines here. One is the contractual growth that we continue to get on our
existing 29.5 million square feet of operational network.
So, we have nearly 5% annual contractual rent escalations in all our leases. But more
importantly, Mohit, what we've seen and what we demonstrated in our first quarter is also that
we have now started to see very healthy re-leasing spreads come through as well. The market
has been much ahead of the 5% escalation that we have.
So we saw 12% re-leasing spreads in this quarter, and so in the past also we've seen 12% to 15%
re-leasing spreads when these leases have come up. With a WALL of about 7.1 years, this will
be one big, large growth opportunity for us.
Second is the continued development of our large parks. We have 25 more million square feet
to go, where land is already in place, fully paid for, not a single rupee to be paid on that.
Approvals and financing is also in place in most of the places. Our annual throughputs have been
between 5 million square feet to 6 million square feet over the last 12-18 months, as you would
have noticed.
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This tells me that over the next four years, or four to five years, we'll develop this and double
our large park development footprints. So, that's one growth. The other growth comes from what
you alluded to: our in-city developments. This is the newest vector of growth for Horizon. This
is something that has not been present in our last five years of growth.
We have India's largest in-city network today of 6 million square feet. Significant progress has
been done, as you can see from the pictures in the presentation as well, on the strategy, on the
development, on the approvals, etcetera. So, this to me delivers over the next 24 to 36 months,
so that's roughly call it annually about a couple of million square feet.
But the more exciting part to this is, Mohit, that the rental per square feet here will be almost 2.5
to 3 times that of the big box or the big-format parks. And one thing that we keep missing is the
fact that over the last four, five years, we also continue to invest significantly on creating this
big, large ecosystem, creating these renewable energy solutions at our parks, the staff
accommodation that we've now started to work on.
By the way, be happy to tell you that today we're pouring concrete on nearly 6,000 to 7,000
worker accommodation beds, which will be delivered over the next 12 to 18 months. We are
building India's first on-site residential hotel, which will be delivered in the next 18 to 24 months.
So, my sense is that between rooftop solar, between the staff accommodations, between the
hospitality solutions that we are bringing, the skill center, this will perhaps drive another, call it
5% to 10% of the revenues in 4 to 5 years. So, this is how we are thinking about it.
Let me know if you want me to expand on any of this in more details. But coming to the 25% or
40%, the way to think about it is 29.5 million square feet already operational. 6 million square
feet will continue to build through our large-format parks going forward. And the couple of
million square feet in in-city, you'll start seeing the fruits of that strategy over the next 12 to 18
months as we start getting phased, we start doing phased deliveries on that.
Mohit Agrawal:
Yes. Just one clarification on this double-clicking on this in-city two to three times rentals.
Quickly, while the rentals would be higher because of the land cost, right, how would the
economics be different between a large park and in-city, if you could quickly touch upon that as
well?
Urvish Rambhia:
Great question. Largely same, but in our case, this will be significantly better because, Mohit, if
you realize and if you remember, we've entered largely in this strategy through our partnership
with Central Warehousing Corporation, which was effectively on a revenue share, right? So,
even after sharing the revenue share with CWC, we'll be tracking close to 13% to 14% yield on
costs on our in-city assets, whereas we've been going on a 11% to 12% yield on cost on our bigformat parks, which is a mix of industrial and warehousing.
Mohit Agrawal:
Okay, understood. My last question is again on your slide 7, where you have given forward
visibility of contracted revenue run rate of INR967 crores. Building a 80% margin, that would
be almost INR770 crores, INR780 crores of EBITDA. How does the translation to reported
EBITDA flow? So, let's say, today what is contracted, by when could this be a part of your
reported or delivered financials?
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Urvish Rambhia:
Sure. So, let me just break this down for you a little bit more. So, of this 29.3 million square feet,
26.9 million square feet is on our operational area today, which you will start seeing nearly full
realization over the next 12 months, right? The balance 2.4 million square feet is our pre-leases,
where we are currently pouring concrete.
So, that you will start seeing on an average between, the completion is happening between, say,
6 to 9 months from now, add another 3 months for the stabilization of this building. So, between
9 to 12 months, you start seeing the revenue flow from the other 2.4 million square feet. But this
is as of today, at 30th June.
What will happen, Mohit, also is that over the next 9 months, we are also delivering 5 more
million square feet of buildings. Our current target is to deliver close to 6.5 million square feet
of leasing. So, you'll see another, call it 4 million square feet to 4.5 million square feet of
incremental leases that we will sign over the next, call it 9 months.
Some of that will be in our existing assets, some of that will be in an under-construction asset.
So, by the time you go towards the end of the fiscal year, our sense is that you will be tracking
about a 34 million square feet, 35 million square feet of operational assets. And nearly, we look
to keep our occupancies in this nearly high-90% zip codes.
So, the INR967 crores, Mohit, that you see is the contracted revenue run rate as of date. This
will obviously continue to evolve over the next 9 months. About 80%, 85% of this is on, as I
said, on our existing assets, that you start seeing materially nearly full 12 month of revenue in
this over the next 12 months, and the other 2.4 million square feet that is mostly, call it on an
average, about a 9-month stabilization period.
Mohit Agrawal:
Perfect. This is clear. That's all from my side. Thank you, and all the best.
Moderator:
Thank you. The next question comes from the line of Pritesh Sheth with Axis Capital. Please go
ahead.
Pritesh Sheth:
Yes. Thanks for the opportunity. A couple of questions from my end. Firstly, on the leverage
part, good to see it coming down, obviously after listing. But how should one think of the
annualized capex and leverage from here on? And also, since now we are a listed company, any
sort of rationalization in terms of cost of debt that we can expect from here on?
Urvish Rambhia:
Thanks, Pritesh. So, on the leverage, as you would have noticed, our proforma net debt today
stands at about a INR25 billion or INR2,500 crores as of 30th June. The build-up of this is, I'll
just break it down in two parts. One is this deleveraging also means, and the fact that there is a
on the face of the P&L nearly INR75 crores of book depreciation, once you give impact to both
of those, you'll see that we have nearly drawing about INR115 crores, INR116 crores of
proforma net cash from the last quarter also.
So, my point, Pritesh, here is that in the next 12 months, you'll also start seeing material internal
accruals also emerge in the portfolio. The way we are trying to now think is effectively this and
the growth headroom that we have in the company effectively funds your capex going forward.
Our capex requirements over the next 3 years are more or less in the INR1,500 crores to
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INR2,000 crores zip code, which we look to roughly manage 1/3 internally and 2/3 with
incremental debt. And on your question on the rationalization on cost, maybe I'll just have Kunal
answer that.
Kunal Shah:
Thanks, Urvish. Hey, Pritesh. So, Pritesh, of course, now that we are our current debt cost is
somewhere about 8.2%. Post this deleveraging, we expect our credit ratings to significantly
improve, and thereby, we expect to bring the cost down anything between 40 basis points to 50
basis point.
Pritesh Sheth:
Sure, got it. Thanks for that. Second, on the in-city part, right, I think there are a couple of assets
which are, or rather one asset which is going to get delivered this year. Any sort of pre-leasing
activity that we already started? Any traction there, and the rental expectations that we are
working around with on that part would be helpful, Yes.
Urvish Rambhia:
So, Pritesh, before we get into the what we are developing in Pune, so we already have three,
call it mid-mile assets, not exactly last-mile, more mid-mile, which are fully developed today
and leased, that we are getting rents in the INR65 to INR70 zip code. Coming to this in-city
multi-story asset that you see on page 11 of the presentation, this, you are right, we are gearing
towards delivery for this by end of this fiscal year.
In terms of leasing traction, we've had numerous, multiple conversations on this, and in the next
couple of quarters, we'll come and announce this to the market, of course. But, in terms of
revenue, in terms of rentals, I think we should track a very similar zip code.
Pritesh Sheth:
Sure, got it. And just one last, while there is a huge -- I mean there's a good development pipeline
which is lined up in front of us, and there is a potential to also further deleverage. How are we
also trying to balance out the future growth beyond whatever we have already signed up? So,
will the focus be for next couple of years to just take care of the execution of the current pipeline
that we already have, or we can still opportunistically look at new acquisitions, both on
industrial, warehousing side as well as in-city vendors?
Urvish Rambhia:
So, Pritesh, in the last 5 years, as you would have seen from our own growth trajectory, we've
grown from 10 million square feet to 60 million square feet in 6 years, and we've had
opportunities on both, consolidating some of these sub-scale platforms, but also, we've acquired
greenfield land parcels. I think that 100% will continue to be at the center of our acquisition
strategy going forward. But more importantly, what you said, today where we stand, we already
have enough raw material to kind of continue to execute over the next 4 to 5 years.
So, effectively, the growth strategy is two-pronged here. One is put your head down and execute
on what's already on hand and get to the 61 million square feet in the next 4 to 5 years. But yes,
as soon as the -- we're already continuing to develop our acquisition pipeline as well, so that's
something our track record, we have a team in place, we've done that in the past, and no reason
why we should not continue, and with the amount of growth headroom that we have in the
company today, no reason why we shouldn't continue to explore opportunities.
Pritesh Sheth:
Anything to quantify there, like. any targets in terms of annual addition on new opportunities?
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Urvish Rambhia:
Tough to say that today.
Pritesh Sheth:
Okay, fair enough. That's it from my side. All the best, and congratulations to the team for the
listing. Yes.
Urvish Rambhia:
Thanks, Pritesh.
Moderator:
Thank you. The next question comes from the line of Samreet with Investec. Please go ahead.
Samreet:
Hi, team. Hope I am audible.
Urvish Rambhia:
Yes, Samreet.
Moderator:
Sir, sorry to interrupt. Sir, you are sounding slightly muffled. If you are using a speakerphone,
may we request you use the handset, please?
Samreet:
Sure. Just a single question from my side. In terms of your expiries, how much of area currently
is expected to expire in next 4 years?
Urvish Rambhia:
So, this year, we have about, as I said, we had about 300,000 square feet that expired, which we
re-leased at a 12% spread in the first quarter. In the next 9 months of this fiscal, we'll have about
1.4 million square feet coming up for expiries, which we are tracking very, very closely and
having a very, very good conversation. Next fiscal, we have about 2.2 million square feet.
So, both put together, next 21 months, about 13% of our portfolio comes up, which is about, say,
call it about 4-odd million square feet. Our current just to add, our current wall, our current wall
is about 7 years.
Samreet:
Okay. Just one add-on question, in terms of new area that you are, new developments that you
are adding on, what's the expected period to ramp up to a stable occupancy at a single-asset level,
and how much of area is pre-leased whenever you are coming up with a new development?
That's all from my side. Thank you.
Urvish Rambhia:
Thanks, Samreet. So, typically it takes us about 9 to 12 months to -- our build cycles are between
9 to 12 months. We typically have about, even if you look at -- if you look today, we have about
2.4 million square feet of pre-leases, so we typically manage between 20% to 30% of our
development cycle through pre-leases. The balance, call it 70% to 75%, half of it gets leased
during construction, and the other half we always like to keep stock-in-trade.
So, even if you look at our current platform as of 30th of June, of the 29.5 million square feet,
we have stock-in-trade of about 1.6 million square feet. I think this is how we will continue to
manage our operational network.
Samreet:
Got it. Thank you.
Moderator:
The next question comes from the line of Hriday Choksey with Indus Equity Advisors. Please
go ahead.
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Hriday Choksey:
Hi, good evening. Thank you for opportunity, and congratulations on your listing. Sir, a quick
question. Can you just elaborate on what are the plans for Blackstone eventually on this one?
Because eventually the promoter underlying is a PE fund. So, can you give us some color as to
what the fund is looking at? And how many years are they expected to hold onto the investment,
or can we expect further dilution from the promoter's end? Some clarity there, please.
Urvish Rambhia:
Sure. So, Hriday, as you would as you would appreciate that I obviously represent the company,
not the shareholders, so I won't be best placed to answer this, but I can directionally tell you that,
you know, we raised INR4,250 crores of total capital between December and August this year,
and Blackstone didn't sell a single share.
Globally, as I alluded to in my opening remarks earlier, they own this is the highest conviction
team for them globally. They're the largest owners of these asset class with over a billion square
feet of assets. So -- and India for them is just only started, right?
The overall hold period for them in this company is not even 5 years, significantly less than 5
years, right? And traditionally, they've been known to own some of their investments in India,
you know, for periods over a decade.
So, you know, sorry, but I won't be able to direct -- I won't be able to give you a direct answer
for this because, you know, Blackstone will be best placed to answer on how they are thinking
about their exit, but this is, you know, directionally, how – you know, what I have personally
noticed about them in this market.
Hriday Choksey:
No, completely understandable. Thank you for answering that. And my second question would
be on our future growth trajectory. I understand we are already live at 30 million, scaling to 60
million, but this presence is entirely centered around the Top 10 cities and markets. Can you
give us some sort of color as to, are we looking at expansion beyond these 10 cities and markets,
or will our next set of expansion be within the same geographies?
Urvish Rambhia:
Sure. So, Hriday, as you would have noticed in the past also, right? A lot of the real estate
companies have effectively grown being, you know, at most like a couple of cities. You know,
most of them have been single-geography, you know, companies focused on single location.
A company with only 5-year-odd of operational history has already expanded to 10 markets and,
you know, these are probably the deepest industrial and consumption micromarkets in the
country today. They drive close to 60% to 70%, or maybe who knows, perhaps slightly even
more, of the overall throughput and the material and the goods movement that's happening in
the country today, right?
So, Hriday, from our perspective, two ways we are thinking about this: as you would have seen
in the past also, we're not shy of entering newer markets. We've entered markets like Nagpur,
we've done Goa, we are in Nashik today.
You know, so we will continue to explore some of these very, very lucrative, call it Tier 1-minus
Tier 2 markets. But today, there is so much more scope for us to continue to increase our market
share in in our existing Tier 1 markets itself.
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As I was alluding to at the -- in my earlier remarks, that, you know, the one big, large megatrend
that we see today in the market is this whole institutionalization of the -- of not only, the
formalization of the economy, but also of this particular sector, where today, you know, more
than 90% of the stock today sits in this fragmented, non-compliant, poor-quality assets.
And, you know, with supply chain sophistication, with the infrastructure improving, there is a
lot of need in these in these deep markets to continue to have institutional-grade supply. So, you
know, we are very, very focused to continue to gain market share in our existing markets. But
yes, as you said, very, very opportunistically continue to evaluate some of these markets.
Hriday Choksey:
Understood. And if I may just ask one quick last question with respect to the in-city portfolio.
So, at the IPO meet, you all shared that we have about 17 assets, which constitutes about 7
million square feet within the in-city portfolio, and at peak, this should contribute 25% of the
revenue. So, this seems to be an interesting model we're building on, and are we looking at
further expansions here? And can you just elaborate a bit more about this specific part of the
portfolio?
Urvish Rambhia:
That's right. You know, if you think about this, this is 7 million square feet of the 61 million
square feet, so that's, say, slightly about 10% from an area perspective. But as I said, you know,
the rentals here are nearly 2.5 times to 3 times of that of the big box.
So, you know, when fully completed, you're absolutely right, this should be nearly 25% of our
top line when fully completed, and we continue to explore opportunities to expand this. You
know, we were at, call it 3-4 assets; today we are at 17.
No reason why, you know, with the absolute dearth, you know, while there is dearth of, you
know, quality Grade-A large-format parks, in-city has negligible institutional, you know, stock
today. So, no reason why we should not be -- you know, in fact, me and my entire management
team today, from a focus perspective, this is one area that, you know, we are materially spending
our time.
Hriday Choksey:
Understood. Thank you so much, and all the best for the future.
Urvish Rambhia:
Thanks, Hriday.
Moderator:
Thank you. The next question comes from the line of Girish Choudhary with Avendus Spark.
Please go ahead.
Girish Choudhary:
Yes. Hi, thanks for the opportunity. Just a few questions largely on the industry side. I mean
firstly on the rental pricing, how are you seeing market trends move across your key micromarkets? Are we seeing the rental increases keeping pace with the construction cost inflation or
even land price inflation? And just as a follow-up, you also alluded that the institutional supply,
right, with a lot of capital coming in, how should we think about the competitive intensity?
Urvish Rambhia:
Sure, Girish. In a first question, rental growth, we published some of that data in our prospectus
as well, but we have seen high single-digit market rent growths in some of our deeper markets,
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September 11, 2026
right? And that's perhaps one of the reason why you are starting to already see re-leasing spreads
materialize.
We saw nearly 15% re-leasing spreads in the re-leasing that we did last year, and in this quarter
as well, we did about 12% re-leasing spreads, which is effectively over and above the 5%
compounding contractual escalation that we have. So, I think we are seeing high single-digits
here very, very easily.
On the competition front, Girish, as I was answering one of the earlier questions, there is so
much more to do in this that more competition is actually welcome in this. The market today can
take tens of Horizons today, effectively.
This is very similar to what we saw in the commercial and the residential sector of the early
2010s, right, where there is -- we went from negligible Grade-A stock to about a billion square
feet in commercial. Here, our entire Grade-A stock today is not even 500 million square feet.
A Chicago market, just to give you perspective, a Chicago market alone has over a billion square
feet of Grade-A stock, right? And in our country, nobody has done the math, but Grade-B,
Grade-C stock could be in fives, or tens of billions of square feet. So, as I said, this market can
perhaps take more competition, but today we are seeing some institutional capital do come
through, but you could perhaps take even more.
Girish Choudhary:
Got it. Thank you. Those were my questions.
Moderator:
Thank you. The next question comes from the line of Naman Bhansali with Chamaria Group.
Please go ahead.
Naman Bhansali:
Good evening, sir. Many congratulations on the listing. Sir, I had two questions. Number one,
in the FY26, net loss came at around 3.5% more than their own forecast. What specifically drove
that overrun, and what gives you the confidence that 2027 will be better?
Urvish Rambhia:
Sorry, Naman, I missed that. Can you just say that slowly and repeat that question once more
for me, please?
Naman Bhansali:
Yes, sir. Sir, so FY26 net loss came at around 3.5 times worse than the forecast. What
specifically drove that overrun, and what gives you that confidence that 2027 FY would be
better?
Urvish Rambhia:
So, our quarter 1 fiscal '27 net loss is at about INR12 crores, and if you go through our
presentation, this effectively from a management perspective, the way we are looking at this is
very different to our -- the PAT loss on the face of a P&L. And I alluded to this earlier in the
call as well. Once you take impact of the non-cash book depreciation, once you factor in the
potential interest savings that we will have from the debt paydown.
By the way, we are repaying 39 billion of debt, or materially paid down large part of that 39
billion of debt. For this particular quarter 1 of fiscal '27, our proforma cash PAT is nearly INR116
crores, right? So, Yes.
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September 11, 2026
Naman Bhansali:
Okay, sir. That clears out. And sir, second question is, there is a Delhi High Court case going,
which is challenging the tender for your 13 in-city warehouses. What is the status of that case,
sir?
Urvish Rambhia:
That's sub judice, so I will not be able to comment much more on that. But we remain very
confident on our position, and we are spearing ahead with our strategy and plan on those assets.
So, we remain very confident on delivering large part of those assets over the next 12 months to
24 months. As you would have seen in the deck also, the Pimpri asset is the first one which we
look to deliver in the fourth quarter.
Extremely excited with the way that product has come along. India would not have seen a
product of this quality, of this stature, this nature. The construction technology that we put in
here is absolutely top-notch global standards. So very excited to have a facility like this being
delivered at this scale in such a record time with ramps, with aprons. This will redefine how
people look at in-city infrastructure and real estate for logistics and industrial in the country.
Naman Bhansali:
Thank you, sir. Thank you for the opportunity. That clears out my doubt.
Moderator:
Thank you. The next question comes from the line of Sushil Choksey with Indus Equity
Advisors. Please go ahead.
Sushil Choksey:
Congratulations for IPO and successful listing. Urvish, you have responded to most of the
participants. I just want a simple breakup. We have 55% as manufacturing companies or
companies which have opted to come to India and the PLI. What kind of tenures are these assets
signed up for on our first tranche, and how many additional years they would opt for? And
second thing, what are the rent differentials between such manufacturing entities, you
highlighted the packaging company or Schneider or any other multinational, to a city Amazon
or the delivery or any other delivery centers?
Urvish Rambhia:
Thanks, Sushil ji. So on this, given the amount of investments that some of these very deep
industrial companies do in our But before I go there, let me just take a little bit of back step.
From the infrastructure and the real estate that we are creating, Sushil ji, this is effectively very,
very agnostic today. We do not have dedicated industrial or warehousing parks today. It's
effectively coexistence of all of these within the same parks.
It's effectively the common infrastructure and a common real estate which gets leased to them.
But the investment that they do inside the building themselves are sometimes so substantial that
they do merit having slightly longer leases. So, they take over 9 to 15-year leases, give us similar
lock-ins on these buildings.
And to your second question, if I look at my existing data, today we are sitting on an in-place
base rent plus CAM of about INR27.20 per square feet. But if I give you a little bit of guidance
and split that, industrial segment in that is almost 20% above the about the standard bare-bone
warehousing, which is at about, call it INR24 and industrial buildings today are being leased at
a little above INR29. So, Yes, we see that 15% to 20% on an average better rentals.
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September 11, 2026
Sushil Choksey:
And do they sign up with some kind of a extra deposits because they have long tenure? Do they
commit yield on a yearly increase higher, and what kind of additional facilities year-on-year you
are tracking in terms of from the start? Let's say, you have completed 2 years. What kind of
additional services are they seeking from you, like solar power or maybe solid waste or whatever
facilities are you offering?
Urvish Rambhia:
Yes. So if I allude you to again my earlier part of my remarks, the value-added services that I
mentioned, Sushil ji, this is largely being driven by these industrial customers only. Their power
requirements tend to be, much larger to your standard warehouses. So, if you would have
noticed, today our rooftop solar presence has reached nearly 38 megawatt which 20-odd
megawatt is already operational, another is 17 megawatt to 18 megawatt is getting
operationalized, right?
So, that is largely going towards these industrial customers, right? And we get very, very healthy
yield-on-costs on these because, as you can imagine, I do not need to buy more land, I do not
need to invest into grid infrastructure, etcetera. This is effectively on the roof and captively
consumed by this customer.
Also, the large part of your worker accommodations, the hospitality, the skill center that we are
working on today, Sushil ji, is effectively being driven by these deep industrial customers only,
who are effectively we are helping them create this entire business ecosystem for them on our
existing parks only.
And all of this, incrementally, because I do not need to buy additional land to set up all of these,
I do not need to have FSI expenditure, these also tend to, generate accretive yield on cost for us.
So, you are right. We need to look at these strategically way beyond just the base rentals and the
CAMs.
Sushil Choksey:
A question along the same line, the city centers like Pimpri or any other location, Mumbai,
Vashi, which you'll come up with, what would be a comparable construction cost between
standard industrial facility to the city warehousing cost, and what kind of rent difference will
be? Can it be 100% higher, 150% higher compared to them?
Urvish Rambhia:
Yes. So on the rent difference, we're almost seeing this being at about 2.5x to 3x of our standard
big box parks. In terms of construction cost, Sushil ji, we are probably 500-odd bucks more than
your standard industrial galas, but that's because of our architecture and of our strategy also,
right?
If you can see the picture in the presentation also, these are assets with two ramps, the aprons.
The quality of assets that we're creating today are effectively something that India hasn't seen.
So, if I give you a direction, this will be at roughly about INR4,500 a foot on construction cost,
but rentals, as I said, will be probably 2.5x to 3x more than your big-format parks.
Sushil Choksey:
29 should be taken as somewhere around INR90 or INR75?
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Urvish Rambhia:
INR70, INR75 is a good guidance today, and we will continue to update the market as we gun
ahead with the construction and the leasing of these. But sitting today, I would say guide towards
INR70, INR75.
Sushil Choksey:
And this 7 million would comprise average size for each occupant, 100,000 square feet, or there
would be more of 10,000 square feet? What kind of parcels are you creating?
Urvish Rambhia:
Yes. We'll have a good mix of both of those. We also are seeing because, as I said, kind of this
product doesn't exist in the city today, we will also be a consolidator for a lot of occupiers. So, I
won't be surprised that if you -- that you actually start seeing actually larger sizes here as well,
like the 50,000, 100,000 square feet. But you're right, this will definitely not the 300,000
400,000, 500,000 million square feet typical big-format leases that we do. This will be in the
10,000 to the roughly the size that you mentioned.
Sushil Choksey:
So, those should fetch you higher than the larger parcel, right?
Urvish Rambhia:
Yes, that will be our endeavor, Sushil-ji.
Sushil Choksey:
Except that you'll have to churn some part of portfolio on a regular basis depending on each
businesses. My last question is based on the reply you gave us, so INR30 million, you would
have spent somewhere in the vicinity of INR7,000 crores plus for the construction cost, which
is sitting in your balance sheet today. I'm not seeing the exact number. And your acquisition of
land for 2,300 acres should be in the vicinity of INR5,000 crores. Have you ever done a current
valuation on a replacement basis of acquisition? What is the land value, and what will be the
construction cost?
Urvish Rambhia:
Yes, too early, Sushil ji, for us to go down that path, but I can give you a guidance that the yield
on capex, the incremental capex that we have to spend on these, call it 25-odd million square
feet going forward, I think to us, this looks like more in the 13% to 14% zip code as we go ahead.
And as the product mix moves more towards industrial, as we start seeing the fruits, we start
seeing the in-city start bearing fruits, you'll see some of these yield on capex improve even
further.
Moderator:
Thank you. Before we take the next question, a reminder to all the participants, if you wish to
register for a question, please press star and then one. Your next question comes from the line
of aunak with Visioner Please go ahead.
Raunak:
Good evening, sir. Hello?
Urvish Rambhia:
Hello, Raunak-ji.
Raunak:
Good evening, sir. When would company start to report profit?
Urvish Rambhia:
I would say, Raunak ji, if you see your Q1 loss also on the face of the P&L, that's also now at a
very marginal number. We're at about INR12 crores. My guidance would be Q2, Q3, you start
seeing even your P&L also turn black. But as I alluded earlier in the discussion also, Raunak ji,
we as management have been looking at these numbers very, very differently. You have to look
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through some of these aspects of the book depreciations. You have to do pro forma impact for
the debt paydown. And we've been in a very, very comfortable zone over the last four, five years
also, right? So -- but to your specific question, Raunak ji, you'll start seeing second quarter, third
quarter onwards, you'll also start seeing our P&L turn black.
Raunak:
Okay.
Moderator:
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference
over to the management for closing comments.
Prapti Zaveri:
Thank you, everyone, for joining this call.
Moderator:
Thank you. Ladies and gentlemen, on behalf of Horizon Industrial Parks Limited, that concludes
this conference. Thank you everyone for joining us, and you may now disconnect your lines.
Thank you.
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