Eldeco Housing & Industries Ltd Q1 FY2026 Concall Summary

Key Takeaways

• Bookings explode as launch logjam breaks: Booking value surged to ₹220 crores in Q1 after Eldeco Hanging Gardens and Eldeco Skywalk finally launched, unlocking pent-up demand. The prior bottleneck is now resolved.
• EBITDA margin collapses on mix and launch costs: Margins fell to 17.6% because recognized revenue came from low-margin EWS units while marketing costs for the two big launches hit the P&L immediately. Management expects normalization to 30-40% when core project revenue recognition begins.
• Revenue recognition is years behind sales: The booking surge will not translate into reported revenue for three to four years, though Imperia Phase-II should start contributing in H2 FY26. FY27 is when numbers "start looking very good."
• Lucknow is the entire story now: With Solano Gardens (₹1,000+ crore GDV) launching this year and other locations being tied up, management says its hands are full in Lucknow for the next couple of years. The Bareilly experiment is being unwound.
• What to watch next quarter: Whether the relaunched Trinity project gains traction, progress on unwinding the Bareilly transaction, and any land aggregation news management hinted at.

The Launch Unlock & Booking Surge

• Bottleneck resolved: Eldeco had been unable to launch significantly for several quarters. That changed in April 2025 when both Eldeco Hanging Gardens and Eldeco Skywalk received RERA registration and launched within weeks of each other, releasing pent-up demand for the Eldeco brand.
• Booking sustainability: Management believes the current booking level is sustainable now that the launch pipeline is unlocked, pointing to strong brand recognition and execution trust in the market.
• Cannibalization within portfolio: Latitude 27 bookings dropped to ~4,500-5,000 sq ft from ~35,000-40,000 sq ft in prior quarters because the newer, slightly lower-priced Eldeco Skywalk in the same Eldeco City drew buyers away. Management expects Latitude 27 to sell out by completion.
• Trinity sluggishness: Sales have been slow for several quarters. The company deliberately went slow while building a show home and plans to relaunch next quarter, expecting much better numbers afterward.
• Cancellations from defaulters: Some cancellations occurred when chronic defaulters were pressed for payment and could not pay, temporarily reducing booked area while increasing available inventory.

Pankaj Bajaj: "It is not something which has changed suddenly. It was just that we have not been able to launch significantly in the last some quarters. But now, that has got unlocked."

Margin Mechanics: The 17.6% Quarter

• Two drivers of the collapse: First, the mix of projects recognized for revenue this quarter was largely low-income housing and EWS units that are statutorily required, carrying thin margins. Second, the two big launches incurred marketing expenses treated as period costs in Q1, while the associated sales revenue will be recognized only in future quarters.
• Normalization path: Management expects EBITDA margins to reverse to the normal 30-40% range when revenue recognition begins in a big way, rather than recognizing only scattered inventory while front-loading period expenses.
• Construction cost ramp-up: Execution cost was ₹30 crores in Q1 and is expected to increase gradually each quarter, stabilizing at about ₹50-60 crores per quarter by the end of FY26. Construction expenditure had lagged because it follows launches, and the prior three years saw a launch bottleneck.

Pankaj Bajaj: "We will go back to that when we start recognizing revenue in a big way. Right now we are recognizing revenue only for scattered inventory and expensing many of the costs as period expenses. So, it looks pretty low, but actually they are in the range of 30%-40%, this will start coming soon."

Revenue Recognition: The Three-to-Four-Year Lag

• The accounting gap: Bookings translate into revenue recognition with a three-to-four-year lag because revenue is recognized only when risk and rewards of property transfer to the allottee. The sales uptick began in FY24 (₹388 crores), continued in FY25 (₹337 crores), and Q1 FY26 hit ₹220 crores, but most of this sits in the future revenue pipeline.
• Q1 recognizing projects: Revenue this quarter came from Regalia, Twin Towers, EWS Saksham, and Eldeco Imperia Phase-I. Last quarter included Regalia, Luxa, other old inventory, Uday, Twin Towers, Saksham, and Eldeco East End at Shaurya.
• H2 FY26 inflection: Imperia Phase-II will apply for a completion certificate in a couple of months, with the certificate expected a couple of months after that. Once possessions are offered, revenue should be recognized in Q3 and Q4 of FY26 itself. FY27 onwards, numbers should start looking very good.
• Average realizations: ₹6,500 per sq ft is described as the "new normal" and is not expected to move much higher in the coming year.

Pankaj Bajaj: "Generally, it happens that your booking numbers start translating into your revenue recognition with a lag of three to four years."

Lucknow Concentration & Market Opportunity

• Market size and share: The Lucknow market is approximately ₹5,000 crores per year, and Eldeco holds less than 10% share. Management believes the market can expand sharply as supply gets de-bottlenecked, framing the constraint as a lack of proper supply rather than demand.
• Solano Gardens as flagship: The upcoming integrated township on New Jail Road spans 50 acres with plots, villas, and multi-storied apartments, carrying a GDV over ₹1,000 crores. The first phase (plots and villas, ₹300-400 crore GDV) is expected to launch within FY26, and the full project will run about five years.
• Hands full in Lucknow: With Solano Gardens and other locations being tied up, management says its hands will be full for the next couple of years and the immediate focus should be on the Lucknow market. The company will also try the Gorakhpur market soon.
• Market position: Management expects Eldeco to be in the top two or three players in Lucknow but could not confirm its exact rank.

Pankaj Bajaj: "I think not because of lack of demand, it is because of lack of proper supply. But as supply is getting de-bottlenecked, I expect the market size to expand sharply."

Bareilly Unwinding & Capital Recovery

• Project outcome: The Bareilly investment took longer than expected, land issues emerged and were resolved, and a completion certificate was received for part of the project. Eldeco Infrastructure provided a minimum guaranteed return, but the unlimited upside did not materialize.
• Unwinding in progress: The company is in talks with the Bareilly entity to unwind the transaction and expects to get its money back with the minimum committed return. The unwinding is expected to happen in the next couple of quarters.
• Related party loan: A loan to a related party is expected to get unbound in the next couple of quarters; the money has not been received back yet but is expected.
• Land aggregation slowdown: There has been a temporary slowdown on land aggregation, but it is getting unlocked. The process is time-consuming, especially when farmer holdings are small. Management hopes to have much better news next quarter.

Pankaj Bajaj: "We had a floor return and then we had unlimited upside. That upside did not come through."

Disclosure & Transparency Gaps

• Management declined to provide a specific construction spend number when an analyst asked about ₹50-60 crores per quarter, saying it would come back with real numbers.
• Management declined to declare GDV numbers, stating it discloses saleable area only and does not like to put a price it wants to sell at because pricing is subject to many variables.
• Management declined to give a revenue recognition waterfall or guidance on when higher revenue recognition would be seen, citing a policy against giving out numbers.
• Management could not answer why booked area in square feet did not decrease but value decreased for Latitude 27 and Imperia Phase-II, and said it would get back to the analyst.
• Positive disclosure step: Management agreed to insert a disclosure on recognized versus non-recognized inventory in the presentation format going forward.

Guidance & Commitments

Key Metrics