Arvind SmartSpaces Ltd Q4 FY2026 Concall Summary

Key Takeaways

• Record bookings, revenue lag: FY26 bookings hit an all-time high of INR1,550 crores (+22% YoY), but revenue declined to INR564 crores from INR713 crores due to timing of revenue recognition on certain projects.
• New launches are the engine: Nearly 60% of annual bookings came from newly launched projects, with Bengaluru alone contributing INR485 crores (31% of the total).
• Mumbai entry is now material: A post-year-end high-rise project added an estimated INR2,400 crores of top-line potential, transforming the company's presence in India's largest real estate market.
• Cash flow normalisation ahead: Operating cash flow as a percentage of collections sits at an elevated 36-37%, but management expects it to drift down toward the 25-30% range over the next few years as the portfolio mix shifts.
• What to watch next year: Whether the 6 planned launches (3 Bengaluru, 2 Mumbai, 1 Ahmedabad) stay on schedule, the pace of sales activation at Forest Trails once the site experience is ready, and any movement on the INR4,000-5,000 crores business development target.

Bookings & Revenue: A Tale of Two Metrics

• Record quarter, record year: Q4 FY26 was the highest ever quarterly booking and collection period, with bookings crossing INR600 crores for the first time. The full-year booking value of INR1,550 crores was also a record.
• New launches dominated: Newly launched projects contributed nearly 60% of annual bookings (approx INR930 crores), reflecting healthy market demand and strong customer confidence in the company's product and execution.
• Bengaluru as the growth anchor: Bengaluru contributed INR485 crores, or 31% of annual bookings, built on strong operating capabilities and deep understanding of micro markets.
• Revenue declined despite bookings surge: FY26 revenue fell to INR564 crores from INR713 crores, primarily due to the timing of revenue recognition on some projects. This disconnect between bookings and recognised revenue is a function of project stage and accounting rules.
• Sustenance sales turning a corner: Sustenance sales improved meaningfully in Q4, reflecting growing customer confidence in product quality, pricing strategy and execution track record. Management expects sustenance to grow about 15% over FY26.
• Launch success validates demand: Arvind Skycrest in Bengaluru saw 53% of inventory booked within a week; Arvind Greenfields in Vadodara booked 42% of launched inventory. Both reinforce underlying end-user demand and the ability to execute differentiated products across diverse markets.

Kulin Lalbhai: "The foundations have been built carefully and we believe the next orbit of growth for Arvind SmartSpaces has only just begun."

Mumbai: The Big Bet

• Largest-ever project signed: Post year-end, the company signed its largest ever high-rise project in Mumbai with an estimated top-line potential of approximately INR2,400 crores. This transforms the company's presence in India's largest real estate market.
• Disciplined, partnership-led approach: The company's approach to MMR remains asset-light, focused on redevelopment opportunities and micro markets where demand visibility, capital efficiency and execution feasibility remain strong.
• Goregaon JV identified: Oxford Sigma Group is the partner for the Goregaon project under a profit-sharing agreement. The partner manages site and approvals to a certain stage, after which Arvind SmartSpaces handles development, design, sales and construction.
• Launch sequencing: Of the two Mumbai projects expected to launch this year, the plotted project in Pen-Khopoli is ahead in approvals. Either Santacruz or Goregaon is expected to launch in the current year. Pen-Khopoli will likely be broken into three phases, with the first phase at INR500-600 crores subject to approvals and construction logistics.
• Deal pipeline remains strong: Many deals are coming in, but the focus is shifting to bringing already-logged projects to market while evaluating new deals selectively. The sweet spot for deal size in Mumbai is INR500-1,000 crores, plus or minus 20-25%.
• Surat project dropped: The company decided not to proceed with the Surat project due to technical and legal complexities. Surat remains an attractive long-term market and will be evaluated for future opportunities selectively.

Launch Pipeline & Growth Outlook

• Six launches planned for FY27: One in Ahmedabad (Vastrapur, likely H1), three in Bengaluru, and two in Mumbai (most looking closer to H2). Guidance assumes the H2 pipeline will be stronger than H1.
• Inventory to be deployed: INR3,000-3,500 crores of inventory will be put out across these six launches, with some of the larger launches brought in phases.
• Growth guidance: Management sees a chance to deliver about 35-40% total sales growth in FY27, with launches growing faster than sustenance. Long-term guidance is for a 25-30% CAGR over four to five years.
• Revenue recognition caveat: Management expects strong revenue growth over FY26 but declined to give exact guidance, citing binary approval outcomes that directly impact revenue recognition timing.
• Forest Trails activation pending: Sales at Forest Trails have been slow by design. The company consciously chose to create a site experience (show villa, landscape) before strong sales activation. That work has taken several months and is expected to be ready over the next 3-4 months, after which stronger sales activation will begin.
• Market demand stable, not euphoric: Markets have become more stable. The euphoria of the last four-to-five-year cycle is not at the same level, but management sees no major worrying signs because structural demand remains strong. Bannerghatta absorption of 50%+ in one weekend shows interest is still robust.

Priyansh Kapoor: "But today, at least our interpretation is that markets have become more stable. So maybe the euphoria of the last 4, 5-year cycle, the level at which the market was growing probably is not definitely at the same level. But we are not seeing, I would say, any major worrying sign because of the structural demand being quite strong from our perspective."

Cash Flow & Margins

• Elevated OCF is temporary: Operating cash flow as a percentage of collections currently sits at 36-37%, higher than the long-run expectation. This is because the plotted portfolio is a large part of the offering and the recent pricing cycle has provided an advantage.
• Normalisation path: In the long run, OCF as a percentage of collections is expected to be closer to the margin profile of 22-25% EBITDA. For the next few years, management expects to be in the 25-30% range.
• FY27 OCF expected flat: Management expects OCF in FY27 to be largely flat in absolute numbers compared to FY26, reflecting comfort with the current construction speed.
• Mumbai vs Bengaluru OCF difference: Bengaluru recent acquisitions were outright in nature, while Mumbai projects are joint development or redevelopment, hence OCF numbers are lower for Mumbai.
• Unrealised cash flows: Estimated unrealised operating cash flows exceed INR4,970 crores, expected to be realised over the next four to five years.
• EBITDA margin maintained: Management sees no margin risk in Q1 and expects the EBITDA margin trajectory of 22-25% can be maintained even in the current year.
• Commodity cost watch: Pre-war vs post-war, there has been almost a 4% increase in the costing of the product offered to the customer. Budgeting has taken a sufficiently large cushion in contingency and inflation. Management is not worried about passing costs on to the customer currently but will watch closely over the next few quarters.

Priyansh Kapoor: "We will be quite happy if we are able to maintain the same number actually. So because that will reflect that our construction speed has also been at a level that we are comfortable with."

Business Development & Capital Allocation

• FY26 BD performance: Added projects with estimated cumulative top-line potential of INR3,140 crores. Entered the Mumbai residential apartment market through a premium redevelopment project in Santacruz, expanded the Bengaluru footprint through acquisitions in Sarjapur and Whitefield, and strengthened the Ahmedabad presence with a high-rise development in Vastrapur.
• FY27 BD target: Management aims for a BD lock-in of about INR4,000-5,000 crores GDV for the financial year.
• BD spend trajectory: FY27 BD spend will be slightly more than INR600 crores, but not a "very drastic shift" from current levels.
• HDFC Capital platform extended: An extension of the existing INR600 crores platform was signed. INR350 crores has already been used from the current platform. The new platform will backfill and create additional capital available on call, not specific to any product type.
• HDFC structure clarified: HDFC is a partner in three projects via an OCD (Optionally Convertible Debenture) structure, disclosed in slides with project-wise details and economic interest.
• NCD option available: The company has taken internal sign-off on NCDs as an available option for capital raising.
• Debt-equity discipline: Net debt-to-equity ratio will not exceed 1:1. Management will always try to keep it below that threshold. It is "very unlikely" to reach the 1:1 threshold in the current financial year; equity infusion will be evaluated in subsequent financial years if needed.

Organisation & Talent

• Team rebuild underway: Almost 50% of the team working directly with the MD has joined in the last one year. The quality of talent is reflecting in organisational building.
• Building for the long run: Talent additions are steps to build the organisation for the long run, strengthen execution ability, and "change completely the orbit" in subsequent years.
• Construction spend accelerating: Construction spends caught "very good speed" in Q3 and Q4 FY26, a pace that will continue in FY27.
• Sustenance sales engine strengthening: Measures taken include strengthening the team, ensuring the right tools, focus on digital tracking, lead management and lead generation. Results are "quite visible" in the strong Q4 sustenance performance.
• Forest Trails cancellations contextualised: Cancellations at Forest Trails are part of regular business. For sustaining-stage projects, cancellations are not visible outside because fresh sales from new sourcing offset them. Forest Trails had no large activation in FY26; once the site experience is ready and new sales start, the negative will not be visible in FY27.

Priyansh Kapoor: "The quality of talent is bringing in the foundations first for the organization. And this, of course, in the subsequent years will allow us to change completely the orbit also that we are trying to aim as an organization."

Guidance & Commitments

Key Metrics