This article first appeared on GuruFocus .
Release Date: November 03, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
Pre-sales surged 109% year-on-year to INR2,762 crore in Q2 FY27, with sales volume of 2.38 million sq ft and average price realization up 32% to INR11,607 per sq ft.
-
Customer collections grew 24% year-on-year to INR1,301 crore in Q2 and 31% to INR2,500 crore in H1, supporting construction progress and reducing funding needs.
-
Net debt reduced by INR470 crore to INR2,366 crore, with net debt-to-equity at 1.26x and average cost of debt declining to 10.94%.
-
The company delivered 977 homes in Q2 and 1,722 homes in H1, demonstrating consistent execution and timely handovers.
-
A robust launch pipeline of 14.5 million sq ft with estimated GDV of INR22,600 crore, plus new business development of INR14,100 crore GDV across Bangalore, Mumbai, and Greater Noida, supports future growth.
Negative Points
-
EBITDA margin for H1 FY27 declined to 15-16% from ~16% last year, partly due to higher other expenses (22% of revenue vs. 16% earlier) related to approval costs and marketing for upcoming launches.
-
Launch delays due to approval challenges, such as the upgradation of the approval system in Bangalore, which may push some project launches to the next fiscal year.
-
Pre-sales growth was partly driven by the one-time commercial asset sale (Purva GenTech) of INR626 crore, which may not be recurring and could impact future growth comparisons.
-
The company's FY27 sales guidance of INR11,200 crore is ambitious, with only 37.5% achieved in H1, requiring a strong H2 execution amid approval uncertainties.
-
Despite debt reduction, gross debt remains high at INR3,763 crore, and the company may need to balance debt reduction with business development investments, potentially limiting further deleveraging.
Q & A Highlights
-
Warning! GuruFocus has detected 9 Warning Signs with BOM:532891.
-
Is BOM:532891 fairly valued? Test your thesis with our free DCF calculator.
Q: With H1 FY27 pre-sales at only 37.5% of the INR11,200 crore guidance, how confident is the management of achieving the full-year target given the launch delays? A: The MD stated that the guidance remains intact and includes INR650 crore of commercial revenue. While some launches in Bangalore faced approval delays due to system upgrades, key projects like Windworth 3 in Cochin and Kanakapura Road are expected to receive RERA approvals shortly. In the West, the Pali Hill launch is confirmed for this quarter, and Devanar Bagh is targeted for Q4. Although one project (Kapare) might slip to the next financial year, the management is confident of reaching the stated guidance.
Q: What are the minimum return thresholds (IRR, project margin, or ROC) targeted when evaluating new land acquisitions? A: The MD explained that the company typically looks for a gross profit margin of at least 25% for outright land purchases. For joint development agreements where the company does not take capital risk, the threshold can be slightly lower, around 20%. All new deals are underwritten based on these margin requirements.
Q: Can you provide details on the estimated surplus from the commercial project, including assumptions on occupancy and capitalization rates? A: The CFO clarified that the estimated surplus refers to the completed Purva Aero City asset. The calculation capitalizes the rental income of INR65 per square foot at a cap rate of 7.75%. Regarding leasing timelines, the CEO of West and Commercial Assets added that they are targeting 100% leasing of the asset within a period of six to eight months.
Q: What is the expected annual rental income from the commercial portfolio over the next three to five years, and what is the CapEx required to achieve it? A: The CEO of West and Commercial Assets stated that the two annuity assetsAero City and the new Hebbal projectare expected to generate approximately INR330 crore in annual rental income once fully ready and leased. The CFO added that Aero City is nearly complete with 95% of CapEx invested, while the Hebbal project will require around INR700 crore for construction. Total construction finance for these assets is estimated at INR1,150 crore over the next four years.
Q: How should we view the decline in EBITDA margins in the first half, particularly the rise in other expenses? A: The CFO explained that at a project level, the weighted average EBITDA margin is around 30%. The reported EBITDA margin of 27% this quarter is healthy. The increase in other expenses is attributed to sales and marketing costs and approval expenses for the 12 planned launches in the South and 4 in the West, which are clubbed under that category as per accounting regulations.
Q: What is the rationale behind the entry into the NCR market, and what is the expected launch timeline? A: The CEO of West and Commercial Assets noted a gap in top branded developers in the Noida market, presenting a growth opportunity. Puravankara has acquired land directly from the Greater Noida Authority. The company is in the process of submitting design approvals and aims to launch the project within the next six to eight months, targeting end of Q4 or early Q1 of the next financial year.
Q: What are the expected margins for redevelopment projects in Mumbai compared to greenfield projects? A: The CEO of West and Commercial Assets stated that redevelopment margins depend on the location, typically ranging from 30% in South Bombay to 22-25% in suburban markets. He noted that greenfield opportunities in Mumbai city are scarce and expensive, but in the MMR region, greenfield margins would be similar, between 20% to 30%.
Q: How were the proceeds from the Purva GenTech sale utilized, and what is the outlook for net debt reduction? A: The CFO stated that the proceeds were used to repay INR250 crore of debt associated with the asset and other loans, contributing to a net debt reduction of INR470 crore this quarter. The remaining funds were used for working capital and acquisitions. The MD added that debt reduction is a strategic choice; while the endeavor is to reduce debt, funds may be deployed into business development if good opportunities arise.
Q: What is the company's strategy regarding land acquisition versus joint development agreements for future growth? A: The MD explained that the choice depends on the specific opportunity and margin profile. Outright purchases are preferred if the area has strong price appreciation potential, while joint development agreements allow for larger GDV with less capital investment. The company evaluates deals on a case-by-case basis, having already added approximately INR14,000 crore of GDV this year.
Q: What is the demand environment like in the Mumbai and Bangalore residential markets? A: The CEO South noted that demand in the South is driven by job generation and rural-to-urban migration, with no signs of a slowdown. He believes consolidation benefits listed players like Puravankara. The CEO of West added that their strategy in Mumbai is to cater to all segments to ensure even growth, and they expect to maintain their recent CAGR despite some segment-specific slowness.
Q: What is the breakdown of the Q2 pre-sales growth between volume, realizations, and new versus existing launches? A: The MD attributed the growth to a combination of factors, including the company's brand value and strong products. He highlighted that Bangalore and Mumbai were the largest contributors, performing well on the back of strong local economies and sales from both new and sustenance projects.
Q: How much of the launch pipeline is expected in the second half of FY27 versus FY28? A: The MD stated that of the planned INR21,000-22,000 crore launch pipeline, at least INR15,000-16,000 crore is expected to be launched this year. Some projects may slip to the next year, but the pipeline for FY28 is expected to be even stronger due to the INR14,000 crore of business development already completed this year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
