Runwal Enterprises Limited (RUNWALENTR) Q1FY27 Concall Transcript - Jun-2026 Qtr
Danish: Ladies and gentlemen, good day, and welcome to Runwal Enterprises Limited Q1 FY '27 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. Vikas Verma from EY LLP. Thank you, and over to you, Vikas.
Vikas Verma (EY LLP): Thank you, Danish. Good afternoon, everyone, and thank you for joining us on this call. We are pleased to host the maiden earnings conference call of Runwal Enterprises Limited following its listing on the stock exchanges. To discuss the company's quarter 1 FY '27 performance and answer your questions,
Vikas Verma (EY LLP): We have with us Mr. Subodh Subhash Runwal, Chairman and Managing Director, Mr. Pradyuman Kanodia, Director, and Mr. Shashi Bhushan, Chief Financial Officer. Before we begin, please note that some statements made during this call maybe forward looking in nature. These statements are subject to risks, uncertainty, and other factors that may cause actual results to differ materially from those expressed or implied. The discussion should be read together with the risks and other disclosures contained in the company's filing with the Stock Exchanges. The company does not undertake to update any forward- -looking statement except as required by law. I will now invite Mr. Subodh Subhash Runwal Runwal to share his opening remarks. Over to you, sir.
Subodh Subhash Runwal (Runwal Enterprises Limited): Thank you, Vikash. Good afternoon, good afternoon everyone and welcome to the first earnings call of Runwal Enterprises Limited as a listed company. On behalf of the company and the entire Runwal team, I would like to thank our shareholders for the confidence placed in us. Listing is an important milestone, but we see it as the beginning of a new phase. As a listed company, our focus will remain on disciplined execution, transparent communication, and long-term value creation. Since this is our first maiden earnings call, I would like to give a brief introduction to our business followed by an update on the quarter and our priorities for the years ahead. Our business and operating platform. The Runwal brand has been present in Mumbai real estate since 1978. Runwal Enterprises is focused primarily on residential development across Mumbai and the wider Mumbai Metropolitan Region. Our portfolio spans affordable, mid-income, and luxury housing, along with select commercial and retail developments. Our development capabilities cover standalone projects, gated communities, and large integrated townships. We undertake projects through a mix of o- owned land, redevelopment, joint development arrangements, and joint ventures. This gives us flexibility in capital deployment and allows us to pursue growth opportunities across different micro markets and customer segments. We have a total portfolio of approximately 88 million sq. ft., of which around 20 million sq. ft. is ongoing and 56 million sq. ft. is upcoming. This provides us with a substantial development runway for the next decade and gives us the visibility to sustain growth over the long-term. The total developable area is approximately 88.4 million sq. ft., of which about 74.6 million sq. ft. related to residential development and approximately 6.37 million sq. ft. of commercial development. Residential development remains the core of our business with a balanced pre- presence across affordable, mid-income, and luxury segment. Even though we are predominantly a residential developer, we are on the path to build a portfolio of annuity assets as well. These include Runwal BKC, a Grade-A commercial development with a gross leasable area of approximately 0.31 million sq. ft. and Nexus Runwal Garden City Mall with a gross leasable area of approximately 0.75 million sq. ft. Our two large integrated township platforms in Dombivli are a key part of this portfolio. These developments combine housing with schools, retail, commercial spaces, open areas, and community infrastructure. The township model provides a long development runway, multiple launches opportunity, and the ability to serve customers across different price points. We also have built a strong position in the Eastern Suburbs and Kalyan-Dombivli. Based on the industry research, Runwal was ranked third in Mumbai for new residential launches on sales between calendar year '23 and the first quarter of calendar year '27. We were also ranked first in Eastern Suburbs in terms of sale and first in Kalyan-Dombivli in terms of new launches over the same period. Our brand, local market knowledge, customer reach, and execution capabilities have been built over several years. We have delivered more than 13,500 units and over 14 million sq. ft. of area. Our ability to sell through the construction period and in several projects, command a premium to the relevant to the relevant micro-market is an important strength of the business. With that, I will now hand the call over to our Director, Pradyuman Kanodia, to take you through the operating performance for quarter 1 FY27. Over to you, Pradyuman.
Pradyuman Kanodia (Runwal Enterprises Limited): Thank you, Subodh ji, and good evening everyone.
Pradyuman Kanodia (Runwal Enterprises Limited): The growth priorities for Runwal Enterprises is something which I want to summarize. Looking ahead, our strategy is to bu- build around four priorities. First, we will continue to deepen our presence in Mumbai and the MMR area where we are establishing operating exper- where we have established operating experience and brand recognition. The Mumbai Metropolitan Region is a deep and resilient real estate market supported by strong underlying demand and diverse customer segments. While there may be concerns around rising supply and oversupply in certain micro-markets, we believe that quality inventory from established developers, such as us, with strong track record of execution, will continue to attract demand, particularly as cu- customers increasingly value timely delivery and reliability. We see opportunities in the southern part of Mumbai and the western suburbs. Second, we will continue to improve our presence towards luxury housing. Our entry into South Mumbai through 7 Mahalaxmi has marked our presence in the luxury segment in South Mumbai. Third, we will pursue capital-efficient growth through redevelopment, joint development, and partnership models. We will evaluate each op- opportunity based on location, customer demand, project economics, approval visibility, and return on capital. Fourth, we will remain focused on execution, collection, and balance sheet discipline. The proceeds from IPO strengthen our ability to reduce debt, support ongoing construction, and selectively invest in growth opportunities. We have an active launch pipeline for the next 12 to 15 months. The timing of individual launches will depend on approvals and market conditions, and we will maintain a disciplined approach rather than pursue growth at the cost of returns or cash flows. As Subodh ji informed earlier, we are developing annuity assets in partnership with players of international repute. With that, I will now hand over the call to Shashi Bhushan, our CFO, to take you through the financial performance of Q1 FY '27. Over to you, Shashi.
Shashi Bhushan (Runwal Enterprises Limited): Hello. Thank you, Pratham ji. This is Shashi Bhushan. I'm the CFO with the group. I'll be very happy to take you all through a brief commentary covering our operating performance and the financial performance. But before we get into the numbers, before we start looking at the trend, it becomes imperative for me to make you all familiar with the accounting policies and the revenue recognition policy of the company so that we are able to figure out the variability and trends. So, at the company, we currently follow revenue recognition on the basis of project completion. In fact, it's a bit more stringent than that. We recognize revenue only when the project receives occupation certificate, customers come ahead and take possession of their units, because that's when the control of the unit actually gets transferred in favor of the customer. Having said that, our revenue, EBITDA, profit margins, all of them should be seen in light of this recognition policy. It may happen that on quarter-on-quarter basis or on an annual basis, we show significant variability, but all of them will be primarily on account of the revenue recognition policy which I just explained. For this reason, we therefore encourage our investors to look at our operating metrics as well. Say, for example, presales, collections, average selling price, how many million square feet we are launching or delivering in a particular quarter or in any particular time period. We believe that this, along with the financial performance, they all give a complete and healthy picture of the overall organization. With that background, let me take you through a quick commentary on the numbers. So, if I look at the operating performance in Q1 of fiscal year 2027, during Q1, we recorded presales of close to 4,835 million square feet ₹4,835 million, which is close to 5% jump in comparison to 4,600 million that were reported in the corresponding quarter last year. Collections were also up from 4,993 million in Q1 of last year to around 5,754 million in this particular quarter. We have sold close to 0.35 million square feet in this quarter. This translates into an average selling price of close to ₹14,200 per square feet, which is again a significant jump in comparison to the quarterly selling price that we have achieved in the same quarter last year. This is happening primarily because we are now diversifying more into the luxury segment, and the average selling price will continue to remain on uptick from here onwards. We also ended up
Shashi Bhushan (Runwal Enterprises Limited): close to 1 million square feet. When we talk about the area that we are delivering, we are essentially reporting the figures against the developable area of those towers or phases where we have got the occupation certificate. So, on an total basis, all the running projects that we have currently, they have cumulatively achieved the sales of close to 150,542 million, and against that, we have a collection done already so far, which is roughly 114,280 million. So, this leaves us with a close to rupees 36,000 million of collectibles from the sold area. This provides a visibility in the future collections and the revenue recognition as we progress with the construction milestone in the quarters and the years to come. Looking at the financial performance, so revenue from operations stood close to INR 3,400 million lower in comparison to the figure of 4,462 million that we have reported in the same quarter last year. As reported earlier, the revenue recognition is again a function of the towers or the phases that have got occupation certificate and ordinary customers come ahead and take possession. Total income for the quarter was close to INR 3,760 million, EBITDA stood at roughly slightly ahead of rupees 1,000 million, the profit after tax was close to 497 million. So, financing cost for the quarter was INR 257 million. As the benefit of debt reduction will will progress, especially in quarter three, because our IPO proceeds were realized in the first week of October, the benefits of the interest rate reduction and the the benefits of the interest reduction and the benefits of debt reduction will be visible more from quarter three results. As of now, we have used the proceeds of roughly 325 crores from the IPO to repay the debt. Apart from that, we have also converted the CCDs that were outstanding from HDFC Capital, along with the accrued interest by then. So, already around 500 to 600 crores of debt reduction has already happened. Those numbers will become visible, especially at the end of quarter three, and the reduction in debt will translate into close to 50 to 60 crores of annual saving in terms of interest. Our debt-to-equity ratio, which was close to or slightly ahead of 3 in at the end of fiscal year '26, has already come down to close to 1.5 at the end of after accounting for all the debt repayment that we have done using the proceeds of the IPO. With this, I just want to conclude saying that our focus the focus of the group and the team here remains on five areas. That is to maintain the sales momentum, improve the collections, deliver projects on schedule, execute the launch pipeline and calibrate it to reflect what market is looking for, and of course, deleverage the balance sheet further and strengthen it. Since this is our first quarter as a listed company, we are putting in place a consistent disclosure framework. We intend to communicate our operating and financial performance in a very clear and transparent manner to build a long-term relationship with all our stakeholders, shareholders, analysts and the wider investment community. So, with this, I will conclude my speech, and thank you very much for joining us today. We'll now be very happy to take your questions one-by-one. Yeah.
Danish: Thank you so much, sir. Ladies and gentlemen, we will now begin with 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 remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. A first question comes from the line of Bhaskar Choudhury, an individual investor. Please go ahead.
Bhaskar Choudhury: Hi, thanks. Thank you so much, and many congrats to the management for successful listing. I just had a couple of questions. First of all, now that we are listed, just wanted to know
Danish: Mr. Choudhury, sorry to interrupt you, but if you can just speak a little louder. Thank you.
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