Ladies and gentlemen, good day, and welcome to the Sunteck Realty Limited Q2 FY '27
Earnings Conference Call. Today, we have with us Mr. Kamal Khetan, the Chairman and
Managing Director of the company; and Mr. Prashant Chaubey, the Chief Financial Officer.
Please note that this call will be for 30 minutes and all participants for this duration will be in
the listen-only mode. This conference call is being recorded, and the transcript for the same may
be put on the company's website. After the management discussion, there will be an opportunity
for you to ask questions during the question and answer session. We request you to restrict
questions to two per participant. Should you need assistance during the conference call, please
signal an operator by pressing star then zero on your touchtone phone.
Before I hand the conference over to the management, I would like to remind you that certain
statements made during the course of this call may not be based on the historical information or
facts and may be forward-looking statements, including those related to business statements,
plans and strategies of the company, its future financial condition and growth prospects. These
forward-looking statements are based on the expectations and projections and may involve a
number of risks and uncertainties and other factors that could cause actual results, opportunities
and growth potential to differ materially from those suggested by such statements.
I now hand the conference over to Mr. Kamal Khetan from Sunteck Realty Limited. Thank you,
and over to you, sir.
Kamal Khetan:
A very good evening to everyone, and thank you for joining us for our earnings conference call
for second quarter and first half of FY '27. I will keep my remarks brief and focused on the key
developments of the half. I am pleased to share that Sunteck has delivered a strong performance,
reflecting our continued growth momentum of operational excellence and commitment to
creating long-term value for our stakeholders.
We have delivered a strong first half with growth across presales, collections, cash flows,
revenue and profits, sustaining the CAGR of 25% across all major operational and financial
parameters over the last 5 years. On the business development, during the quarter, we have
acquired a new land parcel of 4.5 acres at Borivali West through an outright purchase.
This takes our assembled landholding at Borivali West from 7 acres to 11.5 acres, and with an
estimated GDV value of INR80 billion. This will further enhance the project scale, development
potential and set the benchmark for uber luxury living in that micro market. With this addition,
our total GDV stands at INR469 billion, of which INR260 billion is already launched or to be
launched, providing us several years of launch visibility.
We continue to evaluate further business development opportunities, several of which are at
advanced stage. Our approach remains focused, disciplined and capital-efficient. Every new
acquisition must clear the same filters we have always applied, a high IRR, a high equity multiple
and a minimum project level EBITDA margins of 30% to 35%. We will continue to do our
acquisition across all models, such as capital-light JDA JV, redevelopment and outright
purchases.
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Now on Nepean Sea Road, this is one of our most significant project in our uber luxury portfolio.
Approvals are at advanced stage, and once the construction is underway, the project will be a
meaningful contributor to both presales and collections. Since now we don't see the visibility in
terms of Dubai project -- now since we don't see the visibility to launch the Dubai project in next
1 or 2 quarters in spite of we being launch-ready for the Dubai project to keep the GDV number
more realistic, we have moved the Dubai project from to be launched GDV to upcoming forlaunch GDV.
And this has been explained properly by us in the Slide 10 of Q2 and H1 FY '27 investor
presentation. However, our conviction in the project or its economics continues to remain very
bullish.
Our launch pipeline for FY '27, excluding Dubai, stands at INR70 billion and the second half is
weighted towards launches. The key launches planned for H2 are Sunteck Belvedere Park at
Mira Road on the Western Express Highway, which we are confident will be our second half -second successful project at Mira Road after Sunteck Sky Park and our residential project at
Andheri along the Western Express Highway.
Finally, on sustainability. We have retained our GRESB Green 5-star rating for second
consecutive year, with our score improving to 98.8 in 2026 from 98.6 in 2025, even as GRESB
average declined to 86.2 from 88, widening our lead over the benchmark.
During the quarter, 4th Avenue at Sunteck City also achieved the EDGE Advanced certification
from Green Business Certification, GBCI, with over 50% saving in energy, water and embodied
carbon and estimated CO2 saving of 1,100 tons annually. This recognition reflects our focus on
resource efficiency and sustainable construction and keep us rated among the best in the global
real estate.
I shall now hand over the call to Prashant Chaubey to take you through the financial performance
for Q2 and H1 FY '27 in greater detail.
Prashant Chaubey:
Thank you, sir. Good evening, everyone. Our results and investor presentation are available on
our website and the stock exchanges. The CMD has covered the developments of the half. I will
focus on what is driving the numbers.
The key operational and financial highlights are as follows: presales stood at INR824 crores in
quarter 2 of FY '27 and INR1,611 crores in H1 of FY '27. The segment mix of our presales
remains well balanced in quarter 2. Uber luxury contributed 25%, premium luxury, 51% and
aspirational luxury, 25%.
This mix carries a high embedded EBITDA margin on both our FY '26 and H1 FY '27 presales,
which will flow through to reported profitability as projects reach revenue recognition.
Collections stood at INR371 crores in quarter 2 and INR780 crores in H1 FY '27. As recent sales
are weighted towards early stage projects where milestones-linked collections are back-ended.
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On reported financials, in quarter 2, revenue grew 27% year-on-year to INR3.2 billion, EBITDA,
13% and PAT, 17%. In H1, revenue grew 16% to INR5.1 billion, EBITDA, 23% to INR1.6
billion, with an embedded EBITDA margin expanding 160 bps to 30% and PAT, 20% to INR1
billion. At the halfway mark, EBITDA and PAT already stand at substantial levels of FY '26
numbers. And with the second half, typically our strong half, we are well placed for a strong
year. Reported margins will continue to converge towards the embedded EBITDA margin of
our presales.
On cash flows, our net operating cash flow surplus for H1 grew 27% year-on-year to INR3.5
billion, which is 63% of FY '26 record full year surplus, and 45% of collections, up from 40% a
year ago. On a trailing 12-month basis, the surplus stands at INR6.3 billion. This surplus was
delivered investing INR3.9 billion in business development during the half.
Finally, annuity income is running at an annualized INR86 crores against INR76 crores in FY
'26 on -- FY '26. Thank you. With this, we open the floor for questions.
Moderator:
Thank you. The first question comes from the line of Harsh Pathak with Motilal Oswal. Please
go ahead.
Harsh Pathak:
My first question is on the launch pipeline for H2, like you highlighted there is INR7,000 crores
of pipeline coming up in H2 and the 2 projects you highlighted for Mira Road and Andheri. So
what would be the respective GDV of these projects? And any other phases of existing projects
that we are planning to launch?
Kamal Khetan:
Harsh, yes, so I will first tell you, take you through all the launches which we have from the
existing project and the new projects. So what we are looking at Sunteck Belvedere Park, which
is in the Mira Road 2, the next project at Mira Road. This is one launch. And another one, which
is on the Andheri Western Express Highway, again, a residential redevelopment project. Third
is we are looking at a new tower at Sunteck City, ODC, the Altavia project, which we launched
Tower 1. Now we are looking in H2, the Tower 2.
And Borivali West, one phase, which we have recently acquired and added to the 7 acres existing
land parcel. That also we are looking to do it in H2, plus the new tower at Sunteck Beach
Residences, which is our SBR, one more new phase or new couple of towers in Sunteck World
and a couple of new towers in Sunteck Crescent Park.
So all these put together makes a total of INR7,000 crores. And when it comes to the new launch
in Mira Road 2, you specifically asked what is the GDV. We are looking at close to INR1,200
crores to INR1,400 crores GDV from there. And Andheri West, the new project once again on
the Western Express Highway. There, we are looking at a GDV again, close to similar INR1,250
crores to INR1,500 crores.
Harsh Pathak:
Understood. Thanks for the details. My next question is on the sales mix. I think this quarter, we
have seen some improvement in sales on the affordable housing segment. So how are you seeing
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the traction in the respective segments, luxury, mid-income and affordable housing? And how
do you expect the overall annual presales to be for this year?
Kamal Khetan:
So we have seen that, obviously, in the last quarter also, we said, we are seeing uptick in our
aspirational luxury segment. And that's what we are seeing that percentage of growth we are
seeing in at least both the projects where it is Naigaon and plus the Kalyan project. When it
comes to uber luxury segment, we have been doing, obviously, sales from whatever we do at
BKC and the Nepean Sea Road.
Obviously, the inventory at BKC is now diminishing. So that's where we will see a much bigger
run coming from the uber luxury segment from Nepean Sea Road. And in the premium luxury
segment, obviously, our sales mix has been 50%. So now when it comes to the mix, I would say
uber luxury segment did 27% and premium luxury segment did 50% and aspirational luxury
segment did 23%.
Harsh Pathak:
Understood, sir. So how should we look at the...
Kamal Khetan:
Sorry?
Harsh Pathak:
Yes. I was just trying to know what is the presales we should be expecting for the entire year?
And also if you can give some color on the collections part also.
Kamal Khetan:
Yes. So we are very clear. We have been always maintaining that we are looking at a growth of
25%, which we are, again, very confident because H1, there was no major launches and still we
could achieve a 19% year-on-year growth in H1. And we have a new launch pipeline, as I
mentioned earlier, INR7,000 crores, due to which we are very, very confident that our guidance
or our expectation of 25% year-on-year growth in the full year of FY '27, we will be able to
maintain easily.
Moderator:
The next question comes from the line of Pritesh Sheth with Axis Capital.
Pritesh Sheth:
Congrats on a steady growth performance. First question is on the Borivali, this new land that
we acquired, is it within the same location where we had earlier land as well? And in terms of
launch pipeline, while you mentioned that the new one will get launched this year. Any update
you want to provide on the older land parcels, which we anyways had?
Kamal Khetan:
No, no. So what we said is we have added 4.5 acres. That does not mean that new one will be
launched first. It will be together, consolidated. So I mentioned in the speech that this will only
make us -- in fact, more -- I mean, this will increase the size of the project. And obviously, it
will give us the more strength. It will be one of the largest project in that micro market because
11.5-acre land parcel. And that will only give us more -- a better project designing and better
thing, better product in that micro market. So we're not saying that it will be consolidated land
parcel. So it is touching the boundary of this 7 acres. So it will be total one project of 11.5 acres.
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Pritesh Sheth:
Got it. Got it. Great to see some progress there. Second, on the commercial project, ODC, any
update you want to provide in terms of construction where we are on design? When can we see
some progress on construction? And what would be the delivery timelines there?
Kamal Khetan:
So in ODC, 5th Avenue is a part of our residential project, Altavia, and the commercial project.
We have already started the execution because this is a one contiguous land parcel. So obviously,
the commercial building is coming separately. The construction has started and the residential
building is coming separately. One tower of residential has already started.
And in H2, we are looking to launch another tower of residential, which is Altavia 2, whatever
we call it. And that also will be launched. And the construction for that also, we are looking to
start in H2 itself. And the construction for commercial also has started. We have started all the
entire 5th Avenue construction, you can say, have started.
Pritesh Sheth:
Interesting. Got it. Okay. And just one last. I think since we now have a very sizable pipeline,
pretty diverse as well across different micro markets within MMR, what should we consider as
a focus from here on? I mean, should we -- would we keep looking at such business development
opportunities while we are launching the projects which we have already signed? Or for now, at
least for the next couple of years, the focus would be to bring these projects online and not too
much on the business development side?
Kamal Khetan:
No, no. We are very clear. If you see, in fact, we have last -- looking at our strong cash flows
and our strong balance sheet, our net debt is only 0.09. We -- and you must have seen in the last
2 years, last year, we spent almost close to INR800 crores in business development. And in H1,
we have almost spent close to INR400 crores.
And because our balance sheet is so strong and so strong cash flows, net cash flow surplus, we
will continue to aggressively keep looking at more business development opportunities. And to
mention, we are already on advanced stage of 1 or 2 business development deals. And we will
continue to see this momentum in a similar manner without compromising on our filters, not to
compromise our EBITDA margin of less than 30%, 35%. And all those filters will continue to
remain and disciplined. That's all.
Moderator:
The next question comes from the line of Abhinav Sinha with Jefferies Group.
Abhinav Sinha:
Sir, a couple of questions. So firstly, on Nepean Sea Road project, can you tell us where we
exactly are in terms of approval process? And can we expect the launch with RERA by March
'27?
Kamal Khetan:
So Abhinav, we are very confident. Obviously, we know that is a very important project of us.
Although it represents till now only INR3,000 crores of GDV, but for us, that is a very -- like a
crown in our portfolio, and we are looking to launch with RERA as early -- definitely before end
of FY '27. And on ground, work has commenced. So when we said last quarter that we have
already demolished one complete building, the demolition of the second building has also
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started, and I think it will be finished within the next 10 to 15 days. And we are looking to start
because there are a couple of buildings, as you know.
So we will very soon even start in the next few days, the demolition of the third or fourth building
also. So that's how -- we are very clear. We want to definitely with the RERA, we want to launch
properly before the end of FY '27.
Abhinav Sinha:
Okay. And sir, secondly, again, going back to the Borivali project. So now you have 2 projects
or 3 projects because there used to be one in some no development zone. Can you please help
me here?
Kamal Khetan:
Already, there is a -- just to make you know, it already has a resort running there and a club
running there. So it is not exactly, exactly NDZ zone or something. So we are very clear that we
are confident that we will be able to launch that project. Hence, we have accumulated another
4.5 acres of land parcel and that we have purchased to make it bigger and better project. And
hence, that's why we have taken that. And we will be launching -- we are looking to launch very
soon even that project.
Abhinav Sinha:
Okay. So this 4.5 acres acquired this quarter, this sort of is adjoining to the previous one?
Kamal Khetan:
Yes. Previous land parcel. This will make the land parcel bigger and better.
Abhinav Sinha:
Great. And the one which we had announced in the last quarter, that is a separate location
altogether.
Kamal Khetan:
Last quarter, we didn't announce any Borivali project.
Abhinav Sinha:
The quarter before, sir, because...
Kamal Khetan:
Last quarter, we announced maybe the Mira Road project. We have taken up from the -- we have
taken -- removed from -- we have moved it in GDV. We have moved it in the GDV. So it was
not in the GDV because last quarter itself, we started getting feelers that we will be able to get
the approvals -- we are near to the approvals. Hence, we must have moved that. So that is the
same project, old project, which we were not showing in GDV till now.
Moderator:
The next question comes from the line of Vasudev with Nuvama Wealth Management.
Vasudev:
Congratulations on a great set of numbers. Sir, if I'm not wrong, we've done a new phase launch
in the Sky Park project. So is it possible to give details like what is the area and GDV that you've
launched here and sold in the same quarter?
Prashant Chaubey:
Vasudev, Prashant this side. So till now in Sunteck Sky Park, we have launched 3 towers, of
which Tower 3 was launched just a few months back, and it has done pretty well for us. Our
total GDV for that tower is close to around INR750 crores, and we are also -- we are also going
to get some extra area also in that project going forward. So yes, out of that, we have been doing
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sales in quarter 1 and quarter 2 both. And in quarter 2, we have done a sales of almost INR200
crores.
Kamal Khetan:
Just to correct, Vasudev, it's not exactly Tower 3. It's a higher floors of Tower 1, Tower 2 and
Tower 3, which we launched, and that launch is equivalent to one new tower. This is the extra
FSI, obviously, due to the new policy, which we have got. So we are -- we have increased the
number of floors on all the towers. So there are total 4 towers, which are supposed to be there,
out of which already 3 towers were launched. And now what we launched the higher floors of
Tower 1, Tower 2 and Tower 3 and -- which total, if you put it together, is equivalent to one new
tower. That's what. Okay, Vasudev.
Vasudev:
Sure, sir. That was helpful. And secondly, sir, if you can give us the list of projects that we're
expecting to complete in FY '27, which should contribute to our P&L revenues?
Kamal Khetan:
So Vasudev, yes, so we will be doing more recognition, obviously, from Sunteck One World
Naigaon project completion, more revenues coming from there. And then Sunteck ODC City,
Avenue 1, we have got higher floors, which we are constructing, we will complete. Then 4th
Avenue, we have got very large number of floors. We were waiting for that height. We have
started construction there also. That also we will complete in FY '27 itself.
And then ODC, we have this commercial project, Sunteck Pinnacle, which will get completed
now recently. And then all the ready inventories, what we are looking from our BKC and other
projects, that will all give us a good revenue and that we are very confident that, that will give
us -- our H2 good momentum and results numbers from there.
Moderator:
Ladies and gentlemen, that was the last question for today. I would now like to hand the
conference over to Mr. Kamal Khetan for the closing remarks.
Kamal Khetan:
Thank you all for taking the time out of your busy schedules to join us today. If any of your
queries have been left unanswered, please feel free to reach out to us. We truly value your
continued support and looking forward to strengthening this relationship. Thank you once again.
Moderator:
Thank you, sir. Ladies and gentlemen, on behalf of Sunteck Realty Limited, that concludes this
conference call. Thank you for joining us, and you may now disconnect your lines.
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