Modis Navnirman Limited (MODIS) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Moody's Navnirman Ltd. Q2F527 on its 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 the conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. I now have the conference over to Ms. Saluni Naghekar from Mathpactessia. Thank you, Anut Imam.

Good afternoon, everyone, and welcome to Modi's Namirman Limited Q2NS1 FY27 Earnings Call. On behalf of the management team, I would like to thank you for joining us today and for your continued interest in the company. We are pleased to have with us Mr. Mehak Modi, full-time director and chief financial officer of Modi's Navnirman Limited, who will take you through the company's financial and operational performance for the second quarter and half, first half of FY27, along with the business development and outlook ahead. And with that, I would now like to hand over the call to Mr. Mahesh Modi for his opening remarks. Over to you, sir.

Good afternoon, everyone, and thank you for joining the Q2 and H1 FY27 earnings call of Modi's Nirmar Limited. Today, I will take you through a performance for the second quarter and the first half of FY27 before sharing an update on our sales momentum, widget, exhibition, and development pipeline. I want to begin with what continues to guide our decisions as company. Since the founder, Dinesh C. Modi, established Modi's Ravnirma in 2009, we have had on a simple belief, we don't build walls, we build homes. For us, redevelopment is not more about creating a new building. It is about working with housing society, honoring the trust the families have kept in us, and delivering homes that are thoughtfully designed and built with care. That philosophy shapes the locations we choose, the way we execute our projects, and the relationships we build with our stakeholders. Our results for the first stop of FY27 shows that its purpose-led approach can go hand-in-hand with business growth. We have delivered growth across revenue, EBITDA, and profits while spending, things, and continuing to advance our project. Now, I would like to take you to the Q2 quarterly performance of FY27. Revenue from operations stood at 59.38 crores, which was up from 58.26 crores in Q1 FY27. Total income for the quarter was 69.54 crores. EBITDA has increased 25% quarter on quarter to 14.5 crores, compared to 11.65 in the previous quarter. Our EBITDA margins, including other incomes, improved to 20.96, which was an up from 20 in the first quarter. Profit after tax grew to 10.54, compared to 8.54 in Q1 of FY27A. Our past margins have improved to 15.16 from 15.54, with the basic earning per share has also

increased from 5.34.

The quarter-on-quarter progression in revenue, EBITDA, and FAT reflects the operating momentum we have carried in the second quarter. We remain focused on sustaining that momentum throughout discipline and execution, cost management, and the financial decisions which we take. The FY27 grew around overall the matrix of the FY21 I will give. The revenue from operations grew 53% year-on-year to 127.64 crores compared to 83.39 crores which was done in the first half of FY26. Abilita has increased 63% to 26.19 crores from 59.05 crores in the previous S1 of FY26, and Profit After Tax, which is a major portion, has increased to 19.08 crores from 12 crores which was done in S1 of FY26. These results represent year-on-year increase of 44.25 crore in revenue, 10.14 crore in EBITDA, and 7.08 crore in profit after tax. Importantly, the growth has been accompanied by improvement in profitability, EBITDA margins have increased, and the PAD margins have also increased. For us, the quality of growth matters as much as the headline numbers. The improvement in margins alongside higher revenue reflects our continuing focus on operational efficiency and disciplined project execution. Now, I would like to take you through the sales momentum and revenue. Our operating performance is also supported by strong sales. During F126, H1, F527, we sold around 78,560 square feet. The sales value of all these have reached to 202 crores, and the realization has improved, basically per square feet realization has also improved, and the per realization, our per realization as of now is 25,724 crores. The presentation includes 156 crores of revenue yet to be recognized from committed sales alongside an estimated 505 crores of potential value from unfold units. So, overall, if you will see the total revenue from the current project, which is unfold, and the revenue recognition from the committed sales, which we have already done, that goes to around 661 crores across the current project which is going on. In view, this as a measure of revenue visibility rather than a guarantee of timing, actual recognition will depend on project progress, applicable accounting requirements, and fulfilling of relevant conditions. Our priority is to convert this visibility through steady construction, growth, customer confidence, and timely execution. Now, I would like to take you to the project portfolio which we have. We continue to build scale in a focused manner. Our portfolio comprises of 25 residential commercial projects across Bombay and adjoining regions. 14 projects have been completed, covering 7.22 lakhs square feet. Six projects are ongoing, that is around 12.11 lakh square feet going on, and the five upcoming projects represent around approximately 10.5 lakh square feet. In total, the portfolio covers approximately 29.83 lakh square feet. Our six ongoing projects are Rashmi Square, Rashmi Signature, Rashmi Delight, Rashmi Monorat, Rashmi Icon, and Rashmi Avenue. During H1, construction across these developments with Rashmi Square being at 80% completed, Rashmi Signature 51% completed, Rashmi Delight 55% completed, Rashmi Manorot 51% completed, as we have given in the investor presentation. Rashmi Icon and Rashmi Avenue were both started in the H1, so those are completed at around 7.5% to 9% completed as of September 20 and 26. The changed data also shows participation across projects at different stages. Rashmi signates a recorded sales of 18.5 thousand square feet in H1, while Rashmi Icon did 22,000 square feet. Rashmi square did around 13.5 thousand square feet. These figures reflect the contribution of multiple projects to our overall thing. Our upcoming project pipeline includes the Rashmi Paradise, Rashmi Sheetal, Rashmi Royal, and Rashmi Aurea, and Goal Dalvinagar. The addition of these projects can be in our forward pipeline and supports our strategy of expanding collectively in the markets

where we have established new development experiences. So, our approach in terms of

redevelopment, why we, you know, choose redevelopment. So, our approach remains rooted in redevelopment, especially with housing societies and institutions, rather than MANA and SRA, where it is a different strategy where you have to acquire large land banks from open markets or through mergers with MANA and SRA. So, this keeps us right in our approach to manage land-related capital expenditure, and we direct our resources more towards completion, construction, and execution, and delivery of timely forms. We have built our presence in micromarchets, including Kandevili, Mohrini, Maldar, Goregao, Desar, and we have responded in Thar as well. Our familiarity with these neighborhoods together with readers and experience provides a foundation for evaluating opportunities in selectively and maintaining highly disciplined growth approach. To conclude, H1-FY27 has been a strong half-year for MOLI. Revenue has grown 53%, EBITDA grew 63%, and PAID grew 59% year-on-year. Sales volume and sales also recorded a significant growth while our portfolio continues to provide a foundation for future development. We see these results as progress, not a reason to become confident. Our focus remains on consistent execution, improving operating performances, and building long-term trust. We are not seeking growth simply for the sake of scale. We want to build a trusted redevelopment brand, one society, one family, and one home at a time. Thank you, sir.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star L2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

Our first question comes from the line of

Chandi Shah with Shair India Securities. Please go ahead.

Congratulations on the Q2 numbers. I just have two questions to start with. First, being on the industry side, on how do you see the,

like, for your company, how do you see the personal demand coming in since

you're already at the end of October? So, like, is it better than H1? How is it panning out? And the second question is on the side of your project cost. Since you have given the metrics of the revenue from each of the project, I would like to spend on each of them. Specifically, on two-three projects like Manorata Signature,

which is at the end of the cycle, it will be completed very slow.

So, how much more money do we have to spend on that side, and will our

upcoming

collection cover for the same, or will we have to input more money on that side?

Your first question regarding the festive things and what it is in compared to the H1. So, the third quarter of FY27 is also going strong. The festive season has picked up post-Navaratri and everything. So, we are going for a strong Q3 results as well because the traction which we are getting through, the momentum of sales and everything has been good. So, we will be expecting a better Q3 result than FY26. Then, the second question regarding your, in terms of the cost, it was regarding the cost, right?

Yes, yes.

So, the cost and everything, we are, the three projects, we are on completion stage. Rashmi Square is nearly completed, so, the inventory is also less and the cost is also supplied, so, Rashmi Square, we have no issues. Rashmi Signature also, the project is also completed. We are targeting next year by March, you know, to complete the project. So, the Kaleshwaram from that is going to be majorly in the fourth quarter.

Thank you.

The next question comes from the line of Urmish Shah with Money Visers. Please go ahead.

Yeah, hi. Thank you for the opportunity. My first question is, you know, could you just help me understand which projects aided the exponential growth in terms of sales value that we have, you know, clocked 273% growth in FY27. So, could you just give me a color on which projects really aided that growth and how do you see the full year going forward?

See, for SLC project-wise sales, Rashmi Signature was a major growth factor. Then, Rashmi Icon and Rashmi Avenue were the two projects which we started this year. So, both of that also has gone into, you know, expanding it because initially what we sold off in both the projects, so all those were converted when we started the project. So, the momentum of these two projects which we started and Rashmi's signature has done exponentially well in this H1.

So, these three projects have been a major factor. Right. So, but in Rashmi, Icon and Avenue, it's a mix of residential and commercial. I'm still in the playing stage. But still, you were saying that it aided the growth.

Yeah, because the, I'll tell you, whatever sale we had initially, what the members had purchased, what I'd given extra flight to members, I'd done sales flight to members, to the commercial All three units and everyone, those were not booked till now. So, the whole project when we started, I had to book everything now. So, the whole booking of the entire project, the start of the entire project, which the booking was done, was done in H-127. Because we started the project now.

Okay. So, that's what my question is. Now, it's at plain stage. Now, obviously, your construction timelines are quite healthy that way. So, you know, till the year end, once we, you know, once this FY27 ends, you know, what is the expectation from these two projects, you know? Because we have booked, as you are saying, we have booked quite a good number.

So, you know, we have estimated, we have just booked, probably, Russian icon, we have not even booked around, we have booked, probably, if you can say, we have booked around 25-30%.

Okay.

But that 25-30% is of the GDP of that project is around, what, 180, 180 to 180, if I'm not wrong. So, I have booked around 25-30%, so the balance is still left for me, you know.

Okay, yes.

So, both the projects are that way. The initial only just, you have booked around 20-25%. So, that 25% is left, you know, for the remaining quarters.

Right. And in terms of realizations, you know, could you just help me with the differentiation in what is the difference between a residential and commercial project compared to the standpoint of pure residential project, which presses more in terms of realizations and what is the reason for that?

See, what happens is, once it is a purely residential project, the sales is going to be the same, but realization from the inventory is going to take a two-year, two-and-a-half-year timeline, probably. And in commercial, we complete the project, the commercial part in probably six months, eight months, ten months, maximum of a year. So, realization over there is fast. The money which I can take. So, that helps me also in, you know, my sales also, the project cost also, everything, that changes a bit. So, always getting commercial is beneficial.

Okay. So, but going forward the projects that are going to come up, will you go for a residential come commercial or a pure residential?

All of the five projects which are upcoming are residential commercial projects only.

Okay, okay.

I tend to keep commercial so that my sales is done initially.

Yeah, that is what I wanted to understand. All five upcoming projects

are residential commercial projects.

Okay, and in terms of O.C., you know, have you applied for any O.C. or so, and is that due?

No, I'll be applying for O.C. probably in the month of December for Rashi Square.

Okay.

My whatever O.C. and everything, we have to come, all of us.

Okay.

Okay, thank you. I'll join back. Yeah, sure.

Thank you. Participants?

Anyone who wish to ask a question may press star and 1. The next question comes from the line of Rajendra Thakkar, an individual investor.

Please go ahead. Thank you. First of all, congratulations on a very good set of numbers. Thank you.

Now, one question is like these five new projects, the agreements have already been signed with them and whether these are high-grading projects Sorry, I could not. The Russian Paradise agreement has been done. Other city projects, we are on the verge of finalizing the development agreement. So, post Diwali, we are going to sign all the development agreements of all the projects.

Yeah, my question was whether these development agreements are in the same area, because you are evaluating Khar to Gatko.

So, Rashmi, I will tell you, Rashmi Aurya is in Khar, Rashmi Sheetal is in Borigli, Rashmi Royal is in Kandibli, and Rashmi Paradise is in Malaga.

Okay, and anything, any development going in Gatko for that area?

See, there are stops and everything going, developments are going, but nothing concrete, I mean, nothing on the finalization stage.

So, car will yield more than this

Boregaon to Borevili Belt, or it is the same kind of margin field at all? Margins are going to be the same. And what will be the kind of threshold for us to get the projects? In a year, we will be signing only 5 projects or 10 projects. We have good capacity. We can do five projects also. Our procurement and average GDV, probably yearly, we are going to go in the range of around 500 crores, upwards of 500 crores of GDV projects. Every year, we are going to procure their minimum. That is our target. Oh, that's good. That's good to know.

Congratulations on all the best again.

Thank you so much, Rajinder.

Thank you. The next question comes from the line

of Shani Shah, which is in their securities. Please go ahead. Ms. Shani, your line has been unmuted.

Please go ahead with your question. Can you hear me?

Okay. So, I'm saying that we always are a debt-free company, but if we want to scale to a certain level, how are we going to do that? Can you give us more like a roadmap to how we are looking in the future, let's see, four years down the level on number of projects that we want to do, the square footage, the size of it, and with no debt, then what scale can we go to at this level with the current task force that we are getting from the current project?

So, for being debt-free, I can assure you that the five projects which we have and which we are going to start, we are not going to raise any debt for it. We are going to be self-sufficient on all the five projects. So, being in terms of the 5 projects which has a GDP of around 900 crores, we are not going to require any debt. The debt is majorly required in terms of when you are, have cash flows and everything is good, we have no debt. So, what has happened is, for debt, we have not thought for it. Debt is going to be mainly used if we purchase any big land parcel or anything. Okay. That, then it might require a debt or something. Till there, I don't see us going into debt, requirement of any debt. And threshold for others, like I told you, around, upwards of 500 crores every year, we can add up. So for that also, I don't think we'll require any debt.

Okay. Thank you. On the margin side, do we see the margin improvement happening at the...

I can't hear you, your voice is, your voice is, sorry. Yeah.

I'm saying, on the margins front, now that the raw materials have been stabilized, do we see an improvement on that side?

The margins, margins will increase. Margins will increase. Because what has happened is all the projects are on completion stages. So, you know, my sale per square foot is also going to increase a little. Yes. So, margins will be better. We will be targeting more than this EBITDA. Our EBITDA for this year was around 26, right? We will be going better on this one.

Just on the next two questions, one question is, basically, the launch that we're targeting, Paradise, when do you see that happening in the coming month, and the realization, what would be the rate that will be coming out on the launch date? Would it be the same bandage of around 25,000 or more?

Yeah, the sale rate. So, probably, Rashmi Paradise will be launching this month we are targeting. So, probably 30th of October is our planned date for launch. So, the project will be launched on that day. My concern of the project will be getting launched on that day, and the bandwidth of that project is going to be upwards of around 27,000 to 30,000 per week.

Okay. So, that will take our average realizations a bit higher. Up first, yeah. So, I think for our company, we can say that the margins are also in realizations are also moving towards an upward trend, and the growth is, like the pipeline is as on date. Like, whatever you had planned, is it going forward?

Yeah, yeah, it is as on date. Everything is going after what we have planned. So, we are happy with what is in our hands, what we are completing, and what we are going to start.

Thank you very much for answering your question.

Thank you.

Thank you. The next question comes from the line of Mayra Vittal with Vittal Investments. Please go ahead.

Hi sir, thank you for the opportunity. Sir, just wanted to understand that we have reported negative operating cash flows for H1. So, what would be the main reason for this?

So, for the negative cash flows, our majorly cost is, you know, going into the projects and everything. So, the cash flow is majorly into what you will say, the projects which we have done, the realization which is still left, and the inventory which we have. So, that is why our cash flow is negative because of those reasons.

Okay, so when can we expect that the money that we have invested in the ongoing projects is when it will start coming back into the business?

The inventory which we have is the current project which we have started, Rashmi Icon and Rashmi Avenue has major inventory. If of course I can say those two projects only are at 300 crore which we have just started. The unfilled inventory which we have. So, majorly, that project has inventory.

Probably next, an FY27 will be cash flow positive. FY28, sorry.

Okay. And so, just one more question. Sir, how are the established developers and the small regional developers competing for redevelopment opportunities?

So, I will tell you, everyone is competing in this market. Being a big developer or a regional developer, everyone is competing. So, regional, there are categories, there will be small scale developers who do small projects, then there will be medium scale projects, and then there are large scale developers. So, large scale developers usually do on the southern Bombay So, they are competing, we are competing with them on the bigger land parcels on the western side. Whatever, if you may say, we have around all the projects which are Tulrashni Signature, Icon, Avenue, all are 5000 square meters plus. So, it is more than an acre project which are there. So, the competition is there on all these land parcels. Smaller than these, there are the big developers don't come. So, you know, we are, you know, fighting with the big developers for good projects.

So, sir, are you, like, being selective about new projects or how it is, like, you are taking up, how you decide on taking up the project?

So, no, we are being selective because, you know, a lot of potential is there in Bombay for redevelopment, but you can't do, you know, all projects which are coming up. We have to be selective. We have to see good locations. We have to see per square feet yield which we will get, what only margins we might get on these projects.

So, you know, we are being selective in procurement of the projects.

Okay. Thank you.

Thank you.

Thank you. The next question comes from the line of Manu Das, an individual investor. Please go ahead.

Hi. Good afternoon, sir. Congratulations on the number. So, primarily, I have two questions. One, what would be the major cost components of our redevelopment projects? And second would be that, what would be the key factors that could affect our EBITDA margins over maybe soon next, around two to three quarters?

Sorry, I didn't get your question, sorry.

So, my first question is that, what would be the principal or the major cost component for our redevelopment projects? And the second question is that, what are the key factors that could affect the EBITDA margins? So, next, say, let's, two to three quarters.

So, the major, I'll answer your first question. The major component goes into two major parts. That is, the government cost, the government statutory approvals, which we have to take. So, major cost goes into that. Then, the second major cost is the construction cost. So, initially, these are two major cost components which we incur in terms of a reduction project.

Okay, sir.

And second was, your EBITDA margins are going to increase. What was your question, EBITDA margin rules?

Yes. So, how EBITDA margins can be affected in the next two to three quarters?

Sir, the EBITDA margins are not going to get affected. It is going to be on a better side from now on because whatever affecting to the EBITDA margins was to be done is already done in terms of, you know, when the war started and everything, the cost of materials and everything went up high. So, that time our EBITDA margins got impacted. As of now, EBITDA margins will not be impacted. It will be on the upward scale, if I'm not, if I think.

Okay, sir. Thank you, sir.

Thank you.

Thank you. The next question comes from the line of Manaswani with Akhil Investments. Please go ahead. Manaswani, your line has been unmuted. Please go ahead with your question.

Hello. Hi. Hi. I hope I'm audible. The company reported a negative operating cash flow of approximately 16.51 crores in H1FY27, despite generating actually very healthy profits. So, what would be the key reasons for this diversion?

So, like I told you, we are building up inventories. Our major negative cash flow, the major reason is the inventory which we have. That is one of the major reasons, because once everything, the inventory gets sold out and everything is done, so we'll be cash flow positive.

That makes sense. Any approach, Simon, as to, like, when the management expects for this to happen or, say, like, an increase in other assets to translate into cash inflows?

Probably F5-37 will be seen because we are targeting the completion of all our major three projects this year, before March, 21st March. So, you know, those lines are margins might be better, and the inventory will be sold off, so our, you know, cash flows will be better.

All right, sir. That makes sense. Thank you.

Thank you. Thank you. Participants who wish to ask a question, may press star and one. The next question comes from the line of Divya Ratti, an individual investor.

Please go ahead.

Yeah, hi, hello. Congratulations, sir, on the side of numbers.

Thank you, thank you.

I will ensure you know that what would be the expected revenue contribution from the project that are scheduled for the H2, for completion and H2?

See, completion in H2.

I can give you an approach. You will need an approach number.

It will be in the range of 200 TR.

Okay, sir. And may I know what would be the major execution risk for that? That may prevent the company from meeting its objectives.

See, there is no hurdle because the projects which I am talking about already are on the verge of completing. Before we are targeting to complete the revenue for this which I told you, approximately 200 CR, the projects are going to be completed by 31st March. That is what the target is, to complete the project. So, I don't think there are any challenges we are going to face.

Just, we are very positive on, you know, achieving this number.

Okay. Thank you so much, sir. Wish you all the best, sir.

Thank you.

The next question comes from the line of Manas Mani with Oracle Investments. Please go ahead.

Thank you for giving this opportunity again, sir. I wanted to ask you, are margins materially different across our various redevelopment projects, like across different projects, do the margins differ?

Yeah, somewhat. But if you take a blatant scale, then it is going to be the same. Somewhat it differs me in terms of realisation from that area, you know, or what government benefits are there on that area, what the ready return rate is there. So, overall it depends on that, but we maintain healthy margins what we think we need to achieve. So, around, if you see, the average, it will be 19-20. Only Greece average will be, not 19-20%. Some places, if the average margin will be a little better, sometimes it will be a little less.

Okay, okay, that sounds good, that makes sense. Also, if you could just, yeah, sorry.

Yeah, it depends on the average realization, you know, what kind of sales, you know, velocity is there for sales. If there are, you know, multiple sales inquiries and that project is hot, that area is hot, so you can get better sales per EBITDA margin as well.

Right, okay. Okay, that makes sense. If you could just give me a few key factors that could affect our EBITDA margins, say, over the next two, three quarters, or the rest, other half of the year, if there are any specific factors that could affect our EBITDA margins?

No, no, no, none, any factors are going to affect our EBITDA margins, our EBITDA margins will be, you know, improving, going to improve from year on.

Perfect. That sounds amazing. Also, have you observed any delays in project execution or cost tolerance that could then affect our profitability?

No, no, no. There are no delays going on in any of our projects. Whatever we have submitted, whatever timeline, what we have thought, we are on that line only. So, over there, we are not taking any hit. Our major institute No cost overruns either, right? Sorry?

No cost overruns, right?

No, no, no, no cost overruns.

Okay, then that sounds amazing. Thank you. Thank you, sir. Thank you. Congratulations.

Thank you so much.

The next question comes from the line of Amit Ramhe with Patel Investments. Please go ahead.

Hi, am I already?

Yes.

Thank you so much for the opportunity. So, my question is, we have done a sales booking of approximately 202 crore in S1, with around 78,560 square foot sold during the first start. Could you help us understand the key drivers behind this performance, and how much of the

I told you that the major factor was, the driving factor was the two launch of the two projects, Those projects held around in terms of percentage, if you will see, that went into 40% of it came from there, and 60% was from the ongoing projects. If you take around more or less that range, you can say.

Okay. And so, as the company executes multiple projects simultaneously, what are the main factors that could influence the construction timeline? Approval, contractor availability, labor, material costs. What are the, like, milestones that we should track, and what measures are in place to keep projects on scale? We see a lot of supply coming in in development projects. So, could you give us a look at the analysis as well as the timeline that we could have?

In terms of project milestones, you just have to see when is the start date? When are you starting the project? Because before that, none of the financials, everything come into play. So, one is your major is your launch or when you start the project. After that, if you have to, you know, maintain or you have to track the record, you have to see how many floors are getting completed. Those are the milestones which you have to see for a project, any project. And in terms of, you know, the supply is there in Bombay. That's all right.

You're saying, sir.

Sorry. Yeah. So, in terms of, you know, you are asking, there is a lot of supply in Bombay. So, see, I'll tell supply is there in Bombay, but Bombay being the financial capital, it has an appetite for all the supply. So, you know, as of now, what has happened, as of now, what has happened, a lot of people are doing projects, so they are getting completed also. Just a second, please forgive me. Hello.

Yes, Mr. Ahmed, does that answer your question?

Yes, that does.

Okay.

Thank you so much.

Thank you. Ladies and gentlemen, due to paucity of time, we will take this as a last question. If you have any questions, reach out to Saloni Nangvaker from MathFactors for any queries. With that, we conclude today's conference call on behalf of Modi's Nangderma Ltd. That concludes this conference. Thank you for joining us, and you will now disconnect your lines. Thank you.

Thank you.