EFC (I) Ltd (EFCIL) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator: Ladies and gentlemen, good day, and welcome to EFC (I) Limited Q2 and H1 FY27 earnings 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 touch-tone phone. Please note that this conference is being recorded. To discuss this quarter's performance, we have from the management, Mr. Umesh Sahay, Chairman and Managing Director; Mr. Nikhil Bhuta, Whole-time Director; Mr. Uday Vora, Chief Financial Officer; and Mr. Aman Gupta, Company Secretary. Before we proceed with this call, I would like to mention that some of the statements made in today's call may be forward-looking in nature and may involve risks and uncertainties. For more details, kindly refer to the investor presentation and other filings that can be found on the company's website and stock exchanges. I now hand the conference over to Mr. Umesh Sahay for his opening remarks. Thank you, and over to you, Mr. Sahay.
Umesh Sahay (EFC (I) Ltd): Thank you. Thank you. Good morning, everyone. Thank you for joining us for EFC quarter two financial '27 earning conference call. I would like to begin by thanking our shareholder, investor, customer and business partner for their continued trust and confidence in EFC. I am pleased to share that we have continued to maintain encouraging business momentum during the second quarter supported by our enterprise relationship, execution capabilities and the growing strength of our integrated business model. Our three business vertical leasing, design and build, and furniture manufacturing continue to provide us with complimentary growth opportunity
Umesh Sahay (EFC (I) Ltd): recorded approximate 68 66 million square feet of absorption during the first 9 months of '26. in design and build, growing office demand, expansion of GCC global capability centers, and investment in data center. same time, India furniture, approximately 25 to 29 billion is expected to grow steadily with increased preference for organizing and quality focus manufacturer. This trend reinforce our confidence in the long-term growth potential of our business. An important trend we are witnessing is that enterprise are increasingly prioritize flexible, efficient and speed of execution in their workspace decisions. Business today want to ability to expand, consolidate, or reconfigure their office requirement without significant upfront capital commitment. This creates a strong opportunity for professional managed workspace. EFC asset-light leasing models, which does not depend on ownership of the underlying real estate, allow us to address these evolving requirement while maintaining a focus on scalability and capital efficiency. Our design and build capability further strengthen our ability to deliver high-quality commercial space efficiently while furniture manufacturing expand our participation in the broader interior and furnish furnishing market. Together, these business position EFC as an integrated workspace solution provider, rather than merely a conventional office leasing company. During the quarter, we have also taken important strategic steps, including our proposal, our proposed corporate struct structuring and the acquisition of Ultrafresh. This initiative are aligned with our broader objective of building a more focused, integrated, and scalable organization. Nikhil will elaborate on these developments shortly. As we look ahead, our priority prioritize remain clear: strengthening our enterprise relationship, maintaining execution excellence, improving capital efficiency, and pursuing profitable, sustainable growth. Our ambition is not simply to build a larger EFC, but to build a stronger, more competitive, and more valuable EFC, one that deliver consistent performance and create long-term value for all stakeholders. I remain confident in the opportunity ahead, in our team ability to execute our strategy. Thank you, once again, for your continued support. With that, I would now like to invite Mr. Nikhil Dilibhai Bhuta to take you through our key business developments and strategic initiatives. Thank you. Nikhil Bhai.
Nikhil Bhuta (EFC (I) Ltd): Thank you, Umesh Sir. Good morning to all all our investors, analysts and stakeholders. Umesh sir has spoken about our performance during the quarter and the larger vision that I would like to take this forward and discuss three important aspect of our business. First, how our individual businesses are progressing and contributing to the overall platform. Second, the strategic decisions we have taken, particularly the proposed corporate restructuring and acquisition of Ultrafresh. And third, how these initiatives are helping us build a stronger, competitive position and create opportunities for sustainable growth. Business performance and operational progress can be briefed as under. Let me begin with our business performance. During Q2 FY '27, we continued to focus on strengthening our operation across leasing, design and build, and furniture manufacturing. Starting with our leasing business, this remains the foundation of our platform and an important source of recurring revenue. We continue to benefit from our established presence across multiple cities and our relationship with the enterprise customers. What is encouraging is the changing nature of our customer demand. Large enterprises and GCCs are increasingly looking for partners who can offer not only quality office infrastructure, but also flexibility, consistent services, and ability to support their expansion across locations. Our experience in operating managed workspace and understanding enterprise requirements puts us in a good position to address this opportunities. Our focus is not simply on adding more seats. It is on improving utilization, strengthening customer relationship, and ensuring that every center contributes meaningfully to the overall business. Now coming to design and build turnkey contracting solution segment, this business continues to be an important part of our growth strategy.
Nikhil Bhuta (EFC (I) Ltd): Over the years, we have developed capabilities and commercial in commercial interior design, turnkey executions, project management, and MEP services. Today, these capabilities allow us to participate in wider range of opportunities, including enterprise offices, institutional projects, and multi-locational assignments. An important aspect of this business is that it is increasingly developing independently of our leasing operations. We are not relying with external customers and participating in larger execution like opportunities. This is important because it allows us to address a much wider market, while also spending the execution capabilities of our overall platform. Being a project-driven business, the timing of execution and project milestones can influence performance between the quarters. But our focus remains on maintaining a healthy pipeline and delivering projects on time and protecting execution quality. Now, moving to furniture manufacturing vertical, this is the business where we see considerable long-term potential. Through big design, we have been building our manufacturing capabilities, expanding our product portfolio, and strengthening our presence in institutional and customized furniture solutions. Our strategy has been to develop this as an independent manufacturing business, while also supporting the requirement of our leasing and design. As scale, capacity utilization, procurement efficiency, and products make product mix will also be an important drivers of profitability. We believe that the investments we are making in this vertical can help us create a stronger and more diversified manufacturing platform over time. Our CFO will cover the financial contribution and performance of each this vertical in a greater detail. Our integrated business strategy that I would like to little dwell upon, now I would like to explain how we look at this business strategically. At EFC, we have always believed that the growth should come from building capabilities that strengthen each other. Let me give you a simple example. A company may initially approach EFC for managed office space. As that company expands, it may require a larger office, a customized fit out for or furniture solutions. Because we have capabilities across these areas, we have been opportunity to serve that customer at multiple stages of it its growth. Similarly, a customer who first engages with us for a design and build project, may subsequently become a customer for our managed office or furniture business. This create a opportunity for cross-selling, deeper customer relationships, and a better better utilization of our resources. And, importantly, it allows to grow independently while benefiting from the capability of our larger group. That's the real advantage of our model. We are not dependent on a single business or a single source of growth. We are building multiple businesses that can create opportunities for one another. This integrated approach also helps us improve execution control, procurement efficiency, and customer service. I'd like now to, you know, look at little on the, you know, the corporate restructuring that we have proposed through the demerger that is filed with the NCLT. Coming to one of our important strategic initiative, that is this proposed demerger and corporate restructuring, I would like to explain the thinking behind this decision because we believe it is an important for the investors to understand its long-term relevance. As our workspace business has grown, we have developed two distinct operating models. The first is our leased premise managed office business, where our focus is on managing workspaces, service serving enterprise customers, and generating recurring operating revenue. The second is our owned property business, where we identify suitable commercial properties, acquire or develop them, improve their utilization, and operate them as an income-generating assets. Both businesses have attractive opportunities, but their capital requirement and return characteristics are different. Our view is that, as these businesses become larger, they should have a structure that reflect their respective operating and capital requirement. Under the proposed arrangement, the leased premises managed office operation will be housed within EFCI Limited, that is a standalone listed company, while the owned property operation will remain within EFC Limited, the wholly owned subsidiary of EFCI Limited. The objective is very straightforward, greater business focus, clearer capital allocation, and improved accountability. We believe this will allow us to manage the asset-light operating business and the property ownership business with greater clarity. It also supports our longer-term approach towards asset management and real estate monetization. For example, when we identify a commercial property with
Nikhil Bhuta (EFC (I) Ltd): potential, but lower capital current utilization, our experience in managed workspace can help us reposition these assets, attract suitable enterprise customers, and improve its income-generating potential. In such cases, we may be able to create value not through, not only through workspace operation, but also through improvement in underlying property commercial value. The proposed restructuring is intended to provide a more suitable framework for pursuing these opportunities while maintaining financial discipline. We also believe that a clearer capital business structure will help investors better understand the economics, capital requirement, and value drivers of our different activities. Of course, the proposed scheme remains subject to applicable approvals and implementation requirements, but we are very confident that, you know, the proposal will soon go through the NCLT, receive the NCLT approvals. Ultrafresh acquisition, which is another important strategic milestone which is strengthening our manufacturing platform. The second important strategic development, this, which is this acquisition of Ultrafresh modular solutions, I would particularly like to highlight why we see this acquisition as a strategically important. When we started building our furniture manufacturing business through Ek Design, we were clear that we wanted to create a business much larger than simply supplying furniture to our managed offices. We wanted to build capabilities in institutional furniture, customized products, OEM manufacturing, and other market opportunities. However, as we evaluated the next phase of growth, we recognized that manufacturing capacity alone is not sufficient. To build a successful manufacturing business at scale, you also need product capabilities, design expertise, distribution, customer relationships, and market access. This is where Ultrafresh fits into our strategy. Ultrafresh brings an established presence in modular furniture solutions, particularly kitchens, wardrobes, and other customized home furniture products. It also brings manufacturing infrastructure at Nalagarh, at Himachal Pradesh, an established brand, design capabilities with an existing network of studios and customer touch points. For us, this acquisition is not merely about adding revenue. It is about acquiring capabilities, market access, and established operating platform that would otherwise take considerable time to develop organically. We see these multiple opportunities from this combination. First, manufacturing optimization. We can evaluate how best to utilize the combined manufacturing infrastructure, improve production planning, and strengthen procurement and supply chain efficiencies. Second, geographical expansion. Ultrafresh presence in North India compliments our existing manufacturing footprint and creates opportunity to serve customers across a wider market. Third, product diversification. While Ek Design has been developing its institutional and commercial furniture business, Ultrafresh gives us access to modular home segments. And fourth market, is the market access. Ultrafresh brings an established customer-facing network and brand presence which can support our broader manufacturing ambitions. Our immediate focus would be on integrating the business effectively, identifying operational synergies, and improving the efficiency of the combined platform. We are also conscious that an acquisition creates value only when it is integrated and managed properly. Therefore, we intend to approach this with discipline, preserving the strength of the acquired business while using the larger EFC ecosystem to support its growth. We see Ultrafresh as an important step in building a more diversified furniture and modular solution business. How our strategy is strengthening our competitive position? Now, if you look at these developments together, there is a clear strategic direction. Our leasing business provides long-term enterprise relationships and recurring revenue opportunities. Our design and build business expands our participation in commercial infrastructure and execution. Our furniture manufacturing business strengthens our supply chain while creating independent growth opportunities. And the Ultrafresh acquisition expands our manufacturing capacity, product portfolio, and market reach. Our proposed corporate restructuring is intended to bring more efficiency, more focus, and to our workspace operations and owned property activities. These are not separate or unrelated initiatives. Each one is intended to strengthen a different part of the overall EFC platform. We believe this approach can give us an important competitive advantage. In the managed office workspace industry, company often compete on location, pricing, and capacity. In commercial interiors, the competition is often around execution capabilities, timelines, and project costs. And in furniture manufacturing, success depends on product quality, manufacturing efficiency, and distribution, and
Nikhil Bhuta (EFC (I) Ltd): At EFC, we are bringing capabilities from these different business verticals together. This allow us to offer customers a more comprehensive solutions, gives us opportunity to improve efficiency across the group. We believe this is one of the reasons our business model has been able to develop and grow across multiple verticals. However, we also recognize competitive advantage is not something that we can be established once and taken for granted. It has to be earned continuously through execution, customer satisfaction, operational efficiencies, and responsible decision making. That remains our focus. Execution priorities and outlook. Looking ahead, our priorities are clear. In leasing, we will continue to focus on enterprise relationships, occupancy, customer retention, and us- asset productivity. In design and build, our emphasis will be on expanding external business opportunities, strengthening execution capabilities, and maintaining project discipline. In furniture manufacturing, we believe focus on capaci- capacity utilization, product diversification, operational efficiency, and integration of Ultra Fresh. At the corporate level, we will continue progressing with the proposed restructuring and evaluating opportunities that can strengthen our business while maintaining discipline in capital allocation. We also recognize that, that as EFC grows, working capital management, project execution, cash flow generation, and operating system will become increasingly important. Our objective is to ensure that the growth is supported by a stronger operational and financial foundation. I would like to conclude with one thought: our strategy is not to grow by simply adding more businesses or making more acquisitions, it is to ensure that every business we build and every strategic decision we take makes the overall EFC platform stronger and stronger. We believe that this approach can help us sustain our growth, improve our competitive positions, and create long-term value for our stakeholders. With that, I would like to invite our CFO, Mr. Uday Bhoda to take you through the detailed financial performance for the quarter including our segment-wise results, profitability, and other key financial metrics. Thank you so much.
Uday Vora (EFC (I) Ltd): Thank you Nikhil sir. A very good morning to all our investors, analysts and stakeholders joining us today. As Umesh sir and Nikhil sir have explained, EFC continues to make progress in building an integrated business platform across managed office leasing, design and build, and furniture manufacturing. I will now take you through our financial performance for the second quarter and first half of FY27, highlight the contribution from our individual business verticals, and share our key financial priorities as we move forward. Let me begin with our consolidated performance for the quarter ended September 30, 2026. I am pleased to share that we have delivered another quarter of healthy growth both in terms of revenue and profitability. Our consolidated revenue from operations stood at 332 crores compared with approximately 255 crores in the corresponding quarter last year, representing a year-on-year growth of 30%. Our EBITDA stood at approximately 134 crores, registering a year-on-year growth of 21% while our profit after tax increased to approximately 77 crores compared with 57 crores in the corresponding quarter last year, reflecting a growth of 36%. Our EBITDA margin for the quarter stood at approximately 40%, while our PAT margin was approximately 23%. What is important to highlight is that our revenue growth continues to be supported by contributions from all three business verticals while profitability reflects the operating strength of our integrated platform. Moving to our performance for the first half of the financial year, for H1 FY27, we reported consolidated revenue of approximately 650 crores compared with 474 crores in the corresponding period last year, representing growth of approximately 37%. Our EBITDA increased from approximately 213 crores to 257 crores, while profit after tax increased from approximately 103 crores to 148 crores. This translates into PAT growth of approximately 43% for the first half. Our earnings per share for H1 FY27 stood at approximately 10.11 compared to ₹7.09 in the corresponding period last year. These numbers demonstrate our ability to expand our business while maintaining healthy profitability. Let me now briefly discuss
Uday Vora (EFC (I) Ltd): the performance of three our three business verticals. Our leasing business continues to be the largest contributor to consolidated revenue and an important driver of our recurring operating income. During Q2 FY '27, the leasing segment reported revenue of approximately 168 crores, compared with 129 crore in Q2 FY '26, representing growth of approximately 30%. For H1 FY '27, leasing revenue stood at approximately 322 crore, compared with 252 crore in corresponding period last year. This performance reflects the scale of our managed workspaces operations and the continued contribution from our enterprise customer relationships. From a financial perspective, our focus in this business remains on improving assets productivity, optimizing operating costs, and ensuring that incremental capacity translates into sustainable returns. Coming to my D&B segment. This segment reported revenue of approximately 129 crore during the quarter, compared with 112 crore in the corresponding quarter last year, representing growth of approximately 16%. For the first half, revenue stood at approximately 230 crore, compared with 196 crore in H1 FY '26. As explained, this business is expanding beyond the requirement of our internal workspace ecosystem and increasingly participating in external commercial and institutional projects. Being a project driven business, quarterly performance can vary depending on execution, schedules, and contractual milestones. From a financial management perspective, our emphasis remains on project level profitability, milestone-based billing, timely collections, and disciplined working capital requirement. Our furniture segment reported revenue of approximately 35 crores in quarter two FY '27 compared to 14 crores in the corresponding quarter last year, representing growth of approximately 149%. For H1 FY '27, revenue stood at approximately 63 crores, compared with 27 crore in the corresponding period last year. This segment has demonstrated strong revenue growth from a relatively smaller base. Our focus going forward will be on improving capacity utilization, procurement efficiencies, inventory management, and operating leverage as the business scales. The acquisition of Ultrafresh further expands our manufacturing platform, and we intend to pursue integration and operational synergies in a financially disciplined manner. Looking ahead, our financial priorities remain closely aligned with our broader business strategy. We continue to focus on profitable revenue growth, disciplined capital deployment, and strengthening our balance sheet. With leasing, our emphasis will remain on occupancy, asset productivity, and returns from our operating portfolio. Within Design and Build, our priorities will be project execution, discipline, billing efficiency, and working capital management. Within furniture manufacturing, we will focus on improving utilization, managing inventory, and realizing operational efficiency as the business expands. At the consolidated level, our objective is to strengthen cash flow generation, maintain financial flexibility, and ensure that our investments and strategic initiatives are supported by sound financial fundamentals. To conclude, our Q2 and H1 FY '27 performance demonstrates the progress we are making in scaling EFC's integrated business model. We have delivered healthy revenue growth, maintained strong profitability, and continued to strengthen our presence across all three business verticals. While we remain optimistic about the opportunities ahead, our approach will continue to be guided by financial discipline, operational efficiency, and responsible capital allocation. Our objective is not merely to achieve growth in reported numbers, but to ensure that this growth translates into sustainable earnings, stronger cash flows, and long-term shareholder value. On behalf of the company, I would like to thank our shareholders, investors, and analysts for their continued trust and support. With this, we would be happy to take your questions. Thank you.
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