Ganesh Housing Ltd Q2 FY2026 Concall Summary

Key Takeaways

• PAT guidance cut, profit flat YoY: Earlier 25-30% PAT growth for FY26 is off the table; management now expects to maintain last year's ~₹600 crores profit, with final guidance in Q3.
• Demand momentum returning: After a muted nine months, buyer confidence and sales velocity picked up from August 2025, driving ~15% QoQ revenue growth and setting up a stronger H2.
• Million Minds Phase-1 nearing completion: Construction finishes this quarter, lease rentals start Q1 FY27, and 100% LOI completion is targeted by March 2026, marking the beginning of the annuity income stream.
• Land bank strategy paying off: Godavari land prices are ~20% above earlier projections at ₹35,000/sq m, and the low-cost land bank lets the company time project launches for optimal market conditions while staying debt-free.
• What to watch next quarter: Final FY26 PAT guidance, Phase-1 detailed costing and rental terms, Phase-2 commercial launch timing, and whether the H2 demand pickup sustains through project launches.

Profit Warning & FY26 Outlook

• Guidance withdrawn: The 25-30% YoY PAT growth target given earlier is no longer achievable; management now aims to maintain last year's profit of nearly ₹600 crores, with final guidance to emerge in Q3 results.
• Why the miss: FY25 was an exceptional year and real estate stayed muted for almost nine months of this calendar year, reflecting slow offtake of land deals; the YoY revenue decline of ~30% captures that base effect.
• No top-line guidance: Management has always guided on bottom line, not top line, because revenue can swing depending on which area development is happening, especially land monetization.
• Long-term guidance deferred: Guidance for the next 2-3 years will be given only after FY26 ends, around April end, when the situation will be clearer.

Ravi: "the guidance given of 25% to 30% year-on-year growth in PAT does not look possible. At this point in time, we trust we may be able to maintain the last year's numbers."

Demand Recovery & Market Context

• Inflection in Q2: Renewed momentum began in Q2 FY26, with improvement in demand and buyer confidence from August 2025 onwards, aligning with earlier guidance that sentiment would improve meaningfully in the second half of the calendar year.
• Revenue pickup: QoQ revenue growth of ~15% was driven by pickup in demand as project execution and leasing activity ramped up.
• October traction: Malabar Retreat residential project saw a lot of booking and enquiries after Diwali and the Gujarat new year period, supporting the H2 recovery narrative.
• Ahmedabad cycle: Ahmedabad grew very well in the earlier four years when other cities were not growing as well; now other cities have picked up while Ahmedabad has seen a small one-year or nine-month slowdown, which management frames as a temporary downside in a market that has delivered strong upside.
• Property appreciation tailwind: Property values are expected to appreciate by about 10-15% annually, driven by genuine end-user demand, investor inflows, and corporate leasing.

Ravi: "We are in Ahmedabad only as you know... And the market of Ahmedabad even in the earlier years, the four years where the other cities were not growing as well, Ahmedabad really grew very well. So, we reap the benefits of that. Now, while the other cities might have picked up, there is a small one year or nine-month slowdown in this. I think when we see the upside, we also should be tolerating the downsides for a temporary period."

Million Minds SEZ: The Annuity Engine

• Phase-1 timeline: Construction started in Q3 FY26, expected to be completed by Q4 FY26, with lease rentals to commence latest by Q1 FY27.
• Leasing target: Management expects 100% LOI completion and leasing done by March 2026, with the major part of entire rentals and escalation terms frozen by 31st March 2026.
• Phase-1 outperformance: Phase-1 has done far more than earlier envisaged; cost and realization are showing a better picture than previously indicated, though detailed costing will be provided only after project completion next quarter.
• Phase-2 launch: Phase-2 of commercial at Million Minds is getting announced and likely to start very soon, commencing in the next couple of months or at least in Q4 FY26; construction to complete in two years flat, with lease rentals starting about two years from then.
• Yield indication: Management stated the yield on Phase-1 is in double digits, but declined to benchmark it against GIFT City commercial assets or give a percentage of total EBITDA contribution over the next three years.
• Residential deferred: Residential development at Million Minds was to start later this year but is now planned for next financial year, with 5-6 phases; residential will provide cash for Phase-2 construction, keeping the company debt-free.
• New commercial project: Another project with ₹2,100 crores of commercial development to be announced, starting next quarter.

Land Bank & Monetization

• Godavari Phase-1 progress: 33 acres (66% of 50 acres) sold, with ~12 acres monetized in Q2 alone; the remaining 17 acres should be done in these quarters itself.
• Land price appreciation: Godavari land price is now ~₹35,000 per square meter, almost 20% higher than the earlier projection of ₹30,000, because land in that area is appreciating due to extremely good development.
• Next phases on hold: Godavari next phases will be developed after current developments in the area crystallize more and requirements are frozen; for FY26-27, management will wait until year-end to see new developments frozen around there, needing about 4-5 months to assess what is emerging.
• Land bank maintained: Despite monetization, the company continues to acquire land on an ongoing basis, maintaining the land bank at around 550 acres, with addition of about 5-10% of existing land bank on an ongoing basis.
• Acquisition cost undisclosed: Management declined to disclose the average cost of new land acquisitions relative to the legacy land bank.
• Strategic patience: The low-cost, fully paid land bank allows the company to time project launches for when the market is ripe, rather than announcing and waiting for bookings with cash flow problems.

Ravi: "the rate in land always pays, waiting always pays. So, today, that's what we had projected at 30,000 is around 35,000, almost 20% higher than what we had told you earlier."

Project Pipeline & Execution

• 191 Thaltej commercial: Planning and approvals in final stages; construction set to commence shortly in H2 FY26; will be the flagship commercial development over the next 3-4 years, on an outright sale basis providing additional cash flow.
• Timeline pushback: Management acknowledged 191 Thaltej was delayed about six months but argued the delay was "for the good" because commercial space traction has risen; they pushed back on the analyst's claim that planned projects have consistently extended by years.
• Phase overlap strategy: Phases may overlap; the company does not have to wait for one phase to complete to announce the next, allowing faster pipeline conversion.
• RMC regulation: AMC regulations banning RMC on physical sites to reduce air pollution have no significant cost impact because the company mostly uses prefabs.
• FAR and TDR: Current planning only uses available FAR; any addition from regulatory changes would be net addition; TDR from Godavari might not be required if authorities give fungible FSI.

Financial Position & Margins

• Margins strong: EBITDA margins remained strong and stable at ~85%, underscoring continued strength of the business; PAT margin expanded 40 bps sequentially.
• Debt-free commitment: The company expects to remain debt-free even after commencement of 191 Thaltej and through FY26 and FY27; enough cash exists without debt, and residential at Million Minds will fund Phase-2 construction.
• Cash flow visibility: Commercial project 191 on outright sale basis and residential at Million Minds will provide cash flows; no debt needed in the next couple of years.
• Phase cost variation: Variation in cost between phases is not expected to be very significant, except for inflation.
• Transition period: The next few years will mark a transition from hyper-growth to consolidation as well as continuous growth.

Ravi: "To sum up, the next few years will mark a clear transition from hyper-growth to consolidation as well as continuous growth actually for Ganesh Housing Limited."

Guidance & Commitments

Key Metrics