Raymond Realty Ltd (RAYMONDREL) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Your passcode has been confirmed. Please wait while you are joined to the conference. The conference is now being recorded.
Moderator: Ladies and gentlemen, you have been connected to the Raymond Realty conference call. Please stay connected, the call will begin shortly. Participants, you have been connected to the Raymond Realty conference call. Please stay connected, the call will begin shortly. Thank you.
Moderator: Ladies and gentlemen, good day and welcome to the Raymond Realty Limited
Moderator: to 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Akhil Dalchandani from Antique Stock Broking Limited. Thank you, and over to you, sir.
Akhil Dalchandani (Antique Stock Broking Limited): Thank you. On behalf of Antique Limited, I would like to welcome all the participants to the Q2 and H1 FY27 conference call of Raymond Realty Limited. Today, we have with us from the senior management of Raymond Realty Limited Mr. Rakesh Tiwari, Group CFO; Mr. Harmohan Sahni, MD and CEO; Mr. Ankur Jindal, CFO; Mr. Sameer Bagwe, Group Head of Investor Relations; Mr. Amit Agarwal, Head of Investor Relations. Without taking further time, I would like to hand over the call to Mr. Harmohan Sahni. Over to you, Harmohan.
Harmohan Sahni (Raymond Realty Ltd): Thank you. Good morning, everyone, and thank you for joining us today to discuss our financial and operational performance for the second quarter of financial year 2027. So, guided by our 'Go Beyond' ethos, we have successfully carried out the scaled execution and with strategic clarity from last year, we have walked into the first half of FY27. Our performance this quarter reflects strong operational momentum, validating our execution capabilities and deep trust home buyers place in our brand. I would now like to share the operational and financial updates for the quarter Q2 in detail. We achieved a landmark milestone this quarter by nearly doubling our quarterly presales without any new launches, driven entirely by robust sales velocity and steady price realizations within our existing product portfolio. Total income for Q2 FY27 grew at a steady 7% year-on-year to 757 crores, and through an optimized product mix and disciplined cost management, our EBITDA also rose from 14% to 115 crores, with margins now at 15% as compared to 14% in the corresponding quarter. While our margins naturally fluctuate by project phase due to upfront marketing and construction setup cost, they are expected to normalize progressively as more of our projects go in mid-stage as this year progresses and moves into next year also. So, we are firmly on track to meet our full-year FY27 EBITDA margin guidance of 17% to 19%, and you will start seeing further improvements in the balance year. Our booking value contribution mix for the period reflects a well-balanced portfolio, with projects outside of our legacy Thane land contributing 57% and Thane, which is our own land, which started the business, contributing 43%. And this ratio will keep getting skewed more and more towards projects which are outside because most of the growth will come from outside of Thane. We also witnessed a 67% surge in customer collections to 682 crores. This highlights our intense focus on cash flow efficiency and operational rigor. For the first half of the year, our cumulative collections have reached 1,233 crores and booking values increased by 111% year-on-year to 1,602 crores. So, this quarter has been a standout operational achievement for us, and one of the features of that was receiving the occupation certificate for Address by GS 1, Tower B in Thane, which comprises 270 units and almost 3.5 lakh sq ft. And this also has been delivered ahead of RERA completion timeline, as has been our tradition for all our projects. We have delivered well before the timeline committed to the market and customers.
Harmohan Sahni (Raymond Realty Ltd): so so as a result delivering ahead of schedule stands as a testament to our strong execution capability and operational efficiency. Our total portfolio now stands at an impressive GDV of approximately 52,000 crores which includes what we have added in H1 of approximately 8,500 crores in Parel so this year itself we have added 8,500 crores to reach this level of 52,000 crores. So this reflects a diversified and high growth asset base across MMR and it as of now represents a prudent mix of own land and asset light JDA projects. If you look at the Thane land parcel which is a 100 acre parcel, that remains the launchpad on which this business started and it carries a 25,000 crore revenue potential. Out of this, approximately six 65 acres is currently under development, which represents about 6.7 million square feet of RERA carpet area and a revenue potential of 16,500 crores. So, out of this 16,500 crores, 9,770 crores has already been sold over the years and collections have reached 7,977 crores till date from st- from the initiation of the business. Now, driven by our strategic pivot towards asset light model, if we look at the JDAs, JDAs now account for approximately 52% of our total GDV portfolio, which represents a revenue potential of 27,000 crores at current prices. Now, within the JDAs, if you look at all the projects, four projects which are the Bandra project, the BKC project, Wadala, and Sion have already been launched and they are progressing rapidly. And they have already generated for us over the last two and a half, three years that we have, you know, launched this JDA based model. They've already generated a sales value of 3,432 crores and a collection of 857 crores till date. And this will keep on growing as we go on. So, if you look at our booking value contribution mix for the period, that also reflects and follows a very similar pattern of the GDV, where non-Thane JDAs have contributed 57% of the presale value and Thane has contributed 43% of the sale value. So, while while there is a mix, if you see, 25,000 crores versus 27,000 crores in terms of GDV, but the sale contribution of JDAs is higher as compared to the Thane land, because they are distributed across various micromarkets, and the potential to grow over there is much higher. Now, let's if you look at our balance sheet, we maintained a highly disciplined approach to capital allocation. We closed the quarter with a net debt of 912 crores and and a gross debt of 1,200 odd crores with a healthy debt to equity ratio of 0.8 x. If you look at the net debt to equity ratio, which it will be closer to 0.5. So, which remains comfortably well below our 1:1 ceiling and gives us ample headroom for growth going forward. Now, backed by 300 crores liquidity the liquidity buffer and a stable cost of debt at 9.6%, we are comfortably funded for our construction requirements over the current year. Additionally, total interest cost for Q2 FY '27 is 44 crores, which includes interest on bank borrowings of 27 crores and 7- 17, 1-7 crores of interest to government authorities for various approval payments which are which get paid over a period of time, particularly agencies like BMC, TMC and MHADA, where the approval costs get paid over a period of time, and on the balance, the government charges a nominal interest without any documentation. Regarding our cash flows, if you look at we have also shared a detailed break down of our first half FY '27 cash
Harmohan Sahni (Raymond Realty Ltd): as a part of our investor deck, you can refer to slide number 23 of our investor presentation. You will see that our existing mature projects continue to deliver strong operating cash flows which is being reinvested into recently launched and new yet to be launched projects. The reason we have broken it up is because it gives you a better insight and it will help you understand in greater detail how the cash flow cycle for various projects move as they move from early stage to mid stage and then late stage. And as is typical for any new JDA project it remains cash flow negative for the first 2 years due to upfront investments and then becomes cash flow positive from third year or middle of third year onward and then so it goes on towards positivity after that. So all our projects have very healthy IRRs and strong underlying cash flows. Therefore, as these projects mature we shall see the cash flows improving. Once we reach a steady state in terms of 8 to 10 projects outside of Thane which will be throw which will be under execution, start throwing out cash and Thane is already net cash positive you can see. So between these two I think within I mean, my estimate is that within a period of 2 years we will reach that steady state and and you will start seeing much more stability in cash flows, much more stability even on quarterly quarter-on-quarter numbers because the hyper growth phase will start to stabilize in the next 2 years. Just now in the last 6 years and we are continuing in that hyper growth phase which requires a lot of capital, and we have done this growth profitably. It's always a challenge to display a profitable growth but happy to share with you that your company has managed to grow in a profitable manner and yet maintain the financial discipline of not exceeding 1:1 debt equity. One more thing I think which which I have heard echoes of which I want to address just now is that a lot of people have asked me that your interest charge has gone up and the debt level has gone up which is a fact. But if you compare it with last year, the last year the debt level was extremely low because a lot of new projects had not launched and only mature or very early stage one or two projects were there in the anvil. But last year towards the end of Q4, we launched a a lot of new projects and as a result of that, all these projects are in early stage and they require capital to begin with. And because of that the debt level has gone up and if you look at a steady state debt level, 1:1 debt equity is a very healthy norm. Of course, we are our endeavor is to stay well within that and this debt level will also stabilize. So if debt level stabilizes, let's say at this 1,200, 1,400 crore level then next year's comparison will not give you this kind of a delta which you see because last year the average debt was about 300, 400 crores in that zone, and this year the average debt is higher, but it is still at a very healthy level. So moving on, as mentioned in our earlier conference calls, our endeavor has always been to attract institutional capital with a focus to enhance scalability. We are also very happy to share that Raymond Realty's subsidiary company has raised 210 crores from AIF which is promoted by ICICI Prudential AMC Limited and this is part of our ongoing process of addressing the cap table. At the same time, since I alluded to all the interest cost. Apart from that, the promoter himself has committed about 400 crores of equity that he's infusing and the first tranche of that is going to be received shortly as per the schedule, and balance will be as has been approved by the shareholders in their in the EGM. And with this strategic collaboration with ICICI, our subsidiary will get 210 cr
Harmohan Sahni (Raymond Realty Ltd): as part of the peak investment which would represent almost 60% of the peak investment that that project particular project needs. So, this is this joint equity investment will directly fund a high value redevelopment project in one of Mumbai's very premium micro markets and this transaction actually validates a very disciplined asset light expansion strategy where we continue to spread our risk as the project moves on and accelerate, and we keep the risking ourselves and share the risk with other market participants. It allows us to accelerate project timelines, it allows us to grow even faster than we have grown in the past. And also, the most important part is it keeps our capital efficiency at an optimum level, which is what the endeavor is. So, by leveraging this institutional capital, we can scale across premium micro markets without over leveraging our balance sheet, ensuring strong project delivery and enhanced returns. That's the conclusion of working on the cap table. Now looking ahead, if you see, we are accelerating our growth trajectory over the next two quarters. So, H2 will see two launches from us. Both of these launches are going to be in Mahim. The combined GDP of these projects is about 4,100 crores approximately. Now, so with a clear strategy and the land parcel that we have in Thane and a GD JDA pipeline which is already signed up plus there are more JDAs which are in the pipeline, which we will be signing going forward. Along with that, our operational intensity of committing to timely delivery and everywhere so far, we have maintained before time delivery and going forward also all our projects are currently on time or ahead of schedule. We see no significant challenge in maintaining that track record going forward as well. So, as a result of that, we remain firmly on track to achieve our full year guidance of 20% minimum presales growth, a return on capital employed of 20%, and our EBITDA margins for the year will range between 17 to 19%, and the PAT margin will be 9 to 10%. This has been our earlier guidance. We are maintaining that guidance. And as of now, everything is on track to deliver this performance that we have promised you. So, with that, thank you once again for your continued confidence in Raymond Realty, and I would now like to open the floor for questions.
Moderator: Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Moderator: The first question comes from the line of Rutool Shah with Anubhuti Advisors LLP. Please go ahead.
Rutool Shah (Anubhuti Advisors LLP): Yeah. Good morning, and thank you for the opportunity. So my question was with respect to the investment that, we have received from ICICI AMC. So, what is the amount of stake that the fund, would be received, in the 10x subsidiary, for this 210 CR?
111 more turns of this transcript: log in to Stocksigma to read the full call.