Ganesh Housing Ltd (GANESHHOU) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, you have been connected for the Ganesh Housing Corporation Limited conference call. The call is expected to begin in 4 minutes. Please hold the line, do not disconnect. Thank you.
Moderator: Ladies and gentlemen, good day and welcome to Ganesh Housing Corporation Limited's Q2 FY27 earnings conference call hosted by Go India Advisors. 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. I now hand the conference over to Mr. Rajat Gupta from Go India Advisors. Thank you, and over to you, Mr. Gupta.
Rajat Gupta (Go India Advisors): Yeah, thank you, Michelle. Good afternoon everyone and welcome to Ganesh Housing Limited earnings call to discuss the Q2 FY27 results. We have on the call with us today Mr. Anmol Patel, Whole-Time Director, Mr. Rajendra Shah, Chief Financial Officer, Mr. Neeraj Kalawatia, Vice President - Finance, and Mr. B. Ravi, Corporate and Financial Advisor. We must remind you that the discussion on today's call may include certain forward-looking statements, and must be therefore viewed in conjunction with the risks that the company faces. I now request Mr. B. Ravi to take us through the company's business outlook and financial highlights, subsequent to which we will open the floor for Q&A. Thank you and over to you, sir.
B. Ravi (Ganesh Housing Limited): Thank you, Rajat, and good afternoon, everyone, and a warm welcome to Ganesh Housing Limited Q2 FY27 earnings call. You all must have seen the performance and the detailed presentation we uploaded on the site. First, let me take through the results and then we can talk about the other projects and various other interesting matters that which would like to bring to your notice. Revenue for Q2 was Rs. 121 crores, consisting all of project land sales. EBITDA stood at 98 crores, with an EBITDA margin of 80.7%. PBT was 89 crores, and PAT was 67 crores with a PAT margin of 55.1%, and an EPS of Rs. 8 and 2 paise. Let me put this in context to enable proper comparison, both sequentially and YoY. Sequentially, the PAT rose 59% from 42 crores to 67 crores, and the EBITDA margin recovered from 39.3% in Q1 of FY27 to 80.7%. While the EBITDA margins really have risen, I should explain that, as I told you in July, Q1 carried a land with a high cost basis inherited through the 2020 amalgamation, and a one-time tax charge on the sale of 191 Thaltej land. Q2 shows the business at its normal margin without that differentiation and therefore that PAT decrease or increase what you see is due to that. On a year-on-year basis, the PAT and the revenues have fallen slightly. Q2 FY26, as you know, was a high base with revenues of over 174 crores and a PAT of 108. So as compared to that, Q2 of FY27 has been slightly lower. But I would like to clarify that in our business, reported quarterly numbers depend on which project reaches completion and under Ind AS 115 as you know, it can be only recognized on completion. For that matter, Malabar Retreat is 87% complete, but we cannot recognize the revenue till it is completed, which will happen in Q4 of this year. For the first half, revenues stood at about 402 crores, EBITDA at 208 crores, and PAT at about 109 crores. We expect a much different and better performance during H2
B. Ravi (Ganesh Housing Limited): for FY27 of Rs.1000 to 1200 crores revenue, and 300 to 325 crores PAT is reaffirmed. Now, let me talk to you about the market environment quickly before I turn to the project. Over the last 3 months, India's real estate market has been consolidating rather than retreating. In housing, Knight Frank's data for the for the month July to September quarter, shows sales across the eight major cities at about 86,800 units. Broadly, flat year-on-year. While ANAROCK's top seven cities data shows sales up 3% to over just 1 lakh units with prices up at about 7%. Supply, however, is running ahead of demand. Launches have now exceeded the sales for 16 consecutive quarters on Knight Frank's count. And ANAROCK says the launches rose 18% in the quarter and unsold inventory is up by 12%. Demand is also moving up the value curve. Homes above Rs. 1 crore are now 55% of the sales, while the affordable segment continues to shrink. Offices remain the strongest part of the market, leasing held steadily at about 66.7 million sq ft in the first 9 months of 2026 calendar. Global Capability Centers, that is GCC, took 41% of it, up from 37% a year ago. And flexible operators took another 24%. That is precisely the occupier base to which we are leasing. The new factor is the cost of money. On the 7th October, RBI, as you know, raised the repo rate by 25 basis points to 5.5%. It's first increase since February 2023. And it also changed its stance to calibrated tightening. Home loan rates will not fall from here and that will weigh on stretched balance buyers as well as on leveraged developers. Our balance sheet, on the other hand, is almost debt-free, so a rate cycle that squeezes others gives us room to be selective. Ahmedabad, as a city, has held up better than most. In the first 9 months of 2026, the city recorded about 14,300 housing sales, up 2%, and its best January to September performance since 2018. With launches of about 16,700 units, also at a post-2018 high. Price appreciation has stayed measured with the weighted average up about 3.7% to 4,837 per sq ft. And homes above Rs. 1 crore, which are following the you know, India trend, now make up 27% of the sales against 24% a year ago. Knight Frank describes this as a end-user demand rather than speculation and that matches what we see at our Malabar Retreat project. The caution is supply. Unsold inventory has risen slightly to around 38,700 units and the city's quarter-to-sales has lengthened to about 8.2 quarters. Ahmedabad also remains India's most affordable large market with an EMI-to-income ratio of about 18%, which cushions buyers through the rate cycle. On offices, Ahmedabad leased about 1.3 million sq ft in the first 9 months, up 7%, with flexible workspace operators driving much of the growth. But new completions also rose to about 3.4 million sq ft and rental growth at 3% was the lowest of the eight markets. We should be honest that in a market with that kind of a supply, pre-leased Grade A space is what wins. And that is why we are having more than 2/3 of our tower 1 Million Minds project let before rentals begin. This is the right space to be in. The longer-term case is fast. Industry estimates put occupancy costs in the Ahmedabad and GIFT City corridor to 30% to 35% below the metro, major metros. One recent study sees room for about 40 to 50 new GCCs and 4 to 6 million sq ft of Grade A demand. And Gujarat's GCC Policy for 2025 to '30 targets more than 250 centers and investments of about 10,000
B. Ravi (Ganesh Housing Limited): curve. On the infrastructure side Metro phase 2 was completed in January this year linking Ahmedabad and Gandhinagar and GIFT City. In June the Union cabinet approved the airport extension phase 2A and with 2030 Commonwealth games we are seeing reported plans to speed up metro links towards the South-West Ahmedabad sports arena at Godhavi and towards Sanand. We will watch this closely because Godhavi, as you know, is where our largest land parcel sits. On the ongoing project, let me take you through that starting with Tower 1 at Million Minds. When we spoke in July, I said that we are entering a phase where years of patient investment would begin, begin to turn around into tangible opportunities. Three months on, I can tell you that Million Minds has not has just stopped being a pip, plan on paper. It is now a place that tenants are walking through, and that is the story of this quarter. As you know, it was inaugurated last quarter by our honorable Union Minister, Home Minister, and it's now in its final stretch of fit-out, landscaping and beautification. In July, I told you that about 43% of the leasable area was covered by executed LOIs and that about 60% was under active discussion. Today, 68.4% of the leasable carpet area of Tower 1 is let across 15 deals. And the quarter has just, which just went by, was the strongest the building has seen. What I find particularly encouraging is not only the pace, but the profile of the occupiers. In this quarter, we have executed new letter of intents with Airtel, with Qwanga software, a US based software company, with Flaggler Health, an AI health tech firm and with iBase-t, an aerospace and defense software company. That is telecom, enterprise software, health tech and aerospace space and defense, all under one roof, alongside the global capability centers, hybrid workspace providers and technology firms we spoke about earlier. It tells us that Million Minds is being chosen for what it offers, the largest floor plates in the region of 42,000 sq ft of carpet area, 100% power backup and a platinum rated green building, the first IGBC platinum IT building in Ahmedabad. The quality of income has improved as well. Co-working's concentration is falling. The three operators, DevX, IndiQube and Opulence, hold about 1.21 lakh sq ft, which was around 36% of all space let a quarter ago, and now is only 28.7. All three new deals are direct corporate tenants. The occupier base is what the campus was built for. Airtel, Myntra, VVDN, Searce, Volsec, NeurobIA AI, Invictium, Qwango software, Flaggler Health, iBase-t, technology products, IT services, professional services and now defense, software and health AI. That is the composition of the tenant in Million Minds. Of the 6.16 lakh square feet of leasable carpet, 4.21 lakh sq ft is now let. The three deals signed this quarter add about 84,000 sq ft at an average rent of 122.4 per sq ft of carpet a month. And two of them landed on the upper floors, at the highest rent the building has achieved. Rents have risen with every cohort, from about 90 for leases signed in 2025, to about 115 in 2026, to above 122 this quarter, and now the building's average rental stands at 110 rupees, 20 paise per sq ft. All three new deals are direct corporate tenants, as I said, and the and this is likely to continue. And we expect that 90% of it would be let out by March '27. The signed book gives us a contracted rent roll of about 55.7 crores already. There are nine year leases with built in escalation and across those nine years, the average rent is about 29% above the first year rent. An uplift that is already contracted. What remains to be let,
B. Ravi (Ganesh Housing Limited): a building that can take a single large occupier. And we are deliberately holding it for one or two large transactions rather than letting it out in piecemeal. To give you an understanding of the rentals, if the balance, which is yet to be rent, is let out even at just ₹120, which is where our recent deals have been, a fully let Tower 1 would earn about ₹84 crores a year. And our timeline, as I said, remains unchanged. Fit outs are progressing and we continue to expect these rentals to commence from Q4 of FY '27. Now turning on to the Malabar Retreat project, which has progressed very well. Almost 87% of that is complete. Bookings now are almost 50% that is a 76 units and which is by 50% by units, but on a carpet area it is 53%, up from 72 units which we had told a couple of months back. Collections to date are ₹132 crore and expected receivables, booked and unbooked, are ₹305 crores. It is priced at the top of the the micromarket without a single rupee of discounting. It is on course for possession intimation on 15th and of January 2027 with the BU expected mid-February 2027. It has got such inventory and attractive pricing in a ready building that no competitor in the belt can ever of offer before 2029. Our two ongoing projects together carry an expected sales value of about 100 ₹1,500 crores on a capitalized basis. And our planned pipeline of roughly 28.8 million square feet carries about ₹21,000 crores. Malabar Exotica and Malabar County 3 are both fully booked and delivered, which is the history behind us. And this is the history which we have with which we are launching new projects. Now onto the new projects. Our next phase of Million Minds Phase 2. With all the development which I've just told, the second tower, the plans of 6.6 lakh square feet of leasable carpet on roughly 14.5 lakh square feet of construction, has been finalized and submitted for approval. We are targeting the bhoomi pujan, as we say, the inauguration for construction, on or around Dev Diwali, which is 24th of November, which is Q3, as promised before. Tower 2 is the same product as Tower 1, on the same campus, built by the same precast contractor, so the design, the construction method and the occupier proposition are all proven next door in Tower 1. Within the same 70 m height, it adds one more floor, giving it 7.5% more leasable area than Tower 1. We expect an 18 to 24-month build with a ready with the tower ready for fit-outs between May and November 2028 and pre-leasing opening from late 2027. Our target rent is about ₹118 per square feet, which would mean ₹94 crores of annual rent at full occupancy. Together, the two towers will give us ₹170 crores and above a year of rental income. And these are only two of the seven office space phases planned on the campus. The residential project, Phase 1, is on schedule, and it's expected to be launched in Q4 of FY '27, that is this year. Beyond these two projects, as you know, the master plan for 64-acre Million Minds SEZ is on is in place. It is planned for about 18 million square feet across seven office phases, alongside residential, retail, hospitality and around 63,000 jobs at maturity. About half the campus is the processing zone, which carries the office phases launched in sequence. The other half carries the residential towers in phases, the first one starting next quarter, and a commercial pocket that brings together a mall of about 4.5 lakh square feet, a hotel and convention center of about 5 lakh square feet and serviced apartments, built as one connected development, followed later by members club house. The offices and the commercial pocket are being built to be held as rental assets as the campus stabilizes. It give us the option for a REIT, also. The residential phases on land which we already own and have been fully
B. Ravi (Ganesh Housing Limited): paid for will generate the cash that funds out the build-out. On the land front, our fully paid land reserves are now at 513 acres. That includes about 405 acres at Godhavi, about 65 acres at Million Minds, and the balance parcels located in and around Ahmedabad. In addition, new parcels, including some exceptionally large ones, are under negotiation and/or under acquisition, with partial payments already having been made. And these are not included in the 513 acres I mentioned above. As a departure to the normal earning calls, I would like to add some more specific points. There were certain questions that were asked in the last call, so I would like to close the loop on those questions. Let me take them one by one. In July, several of you asked some questions. First, on the gross development value and cash flow disclosures, not just reported revenues. This quarter's presentation shows expected sales value and expected free cash flows across completed, ongoing, and planned projects. About ₹2,680 crores of sales value have been delivered, with about ₹840 crores of free cash flows generated. Ongoing projects carry about ₹1,500 crores of sales value and ₹600 crores of expected free cash flows. The planned pipeline carries about ₹21,000 crores of sales value and ₹12,500 crores of expected free cash flows. The second question was on Million Minds rentals. I just described to you the entire details of who all are there. The run rate at this was indicated at that time at 70 crores a year. The signed book, as I said, is around already 56 crores and on fully leased out would be 84 crores. That is 20% higher than we had initially estimated, that is of 70 crores, so now it is 84 crores instead of 70. Third, you had asked about Godhavi. The township plan remains a mix of development, plotted development, and land sales. Given the infrastructure announcements I mentioned, we are carefully watching the timing, and we remain on course to tell you our monetization plans towards the later part of this year. We have just highlighted all the developments which are happening in and around that place, which is this Southwest Ahmedabad Sports Arena. All that has proven that our plan and strategy to wait for the developments in that area are all proving to be right. The fourth one also was, the question was on FY28 guidance. I mentioned then and I'd like to reiterate that the intention to put a year-on-year guidance is still there, and therefore the guidance for FY28 would be there in the fourth quarter of FY27 or the first quarter of FY28. Hence, in entire things, we have answered those questions which you had were asked earlier, and we have given you the entire developments which have happened already and which are likely to happen in the near future. So, thank you once again for the trust in, and now it's open for question and answers.
Moderator: Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask questions may please press star and one on their touch-tone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. We will wait for a moment while the question queue assembles. You may please press star and one to ask questions. The first question is from the line of Sahil from Ventura Securities. Please go ahead.
Sahil (Ventura Securities): Hello, am I audible?
B. Ravi (Ganesh Housing Limited): Yes, you are. Yes, Sahil. Yes.
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