Modis Navnirman Ltd Q3 FY2026 Concall Summary

Key Takeaways

• Earnings doubled, margins held: 9M FY26 revenue grew 103% YoY to INR137 crores, with PAT up ~105% to INR24.77 crores, already surpassing full-year FY25 earnings. EBITDA margins improved to 22.32%.
• Project completions drove the quarter: Timely delivery of Rashmi Vasudeo (90 flats) and near-completion of Rashmi Celestia and Signature pulled revenue forward, aided by an accounting standard change on migration to the main board.
• Pipeline is filling, but revenue will lag: Two projects launched in Q4 (Icon, Avenue) plus a new INR250-crore GDV redevelopment mandate in Borivali West; revenue from the Q4 launches won't book until H2 FY27 under the 25% cost-incurred rule.
• Debt-free model shapes everything: No interest costs, no pre-sales pressure, and no institutional fundraising plans. Management credits this for margin resilience and pricing discipline, though it also limits the pace of scale-up.
• What to watch next quarter: Whether the FY27 revenue target of INR200–230 crores firms up as Signature and Celestia close out, and whether the Q4 launches convert to booked revenue on the promised H2 FY27 timeline.

Project Delivery & Revenue Recognition

• Three projects near the finish line: Rashmi Vasudeo delivered on time in Borivali West (90 flats, 100% sold out). Rashmi Celestia completed in January with only 4 units left and OC expected within 10–15 days. Rashmi Signature expected delivered by year-end, contributing INR28–30 crores of recognized revenue.
• Accounting change amplified reported revenue: Migration from GAAP (project completion method) to Ind AS (percentage of completion plus sales) meant revenue from additional areas sold to old flat owners in redevelopment was recognized from day one, not deferred. Combined with Vasudeo and Celestia completions, this created a sharp jump in yearly figures.
• Revenue recognition rule creates a lag: Under Ind AS, revenue is recognized only when 25% of project cost has been incurred. Rashmi Icon and Rashmi Avenue, both launched in Q4, have not yet booked any revenue. Management expects recognition post-H1 FY27, likely in Q3.
• Gross profit margin dipped on mix, not stress: The dip came from high revenue recognition on the fully sold-out Vasudeo project plus the accounting change, not from cost overruns or discounting. Construction input costs have stabilized, with only minor increases in metals and copper, and management says volatile factors are priced into project acquisition.

Mahek Modi: "At Modi's Navnirman Limited, we just don't build walls, we create homes."

Pipeline & Launches

• Two Q4 launches, no pre-sales: Rashmi Icon launched February 9 with a Bhoomi Pujan and no sales meetings. Rashmi Avenue expected to launch within a month of the call date. The company does not pre-sell because its debt-free balance sheet removes the need for channel partner events or early cash flow.
• New Borivali West mandate: Secured a redevelopment project, Rashmi Sheetal, with an estimated GDV of INR250 crores. Management expects margins similar to the current run rate and a launch timeline around Q3/Q4 FY27.
• Pipeline beyond the quarter: Rashmi Paradise is in BMC approval stages, targeting a launch post-rainy season or during the rainy season. Rashmi Gold and Rashmi Sheetal both expected in Q3 or Q4 of FY27. Ongoing projects in Kandivali, Borivali, Malad, Goregaon and Dahisar are progressing steadily.
• Pricing discipline as a differentiator: Management holds sale value without initial discounts, unlike debt-funded peers who start low and raise prices toward completion. Average cost runs around INR27,000 per sq ft, and the company does not "maintain the average" by discounting early buyers.

Mahek Modi: "We are a debt-free company, so we don't have to do channel partner events and all the events and then pre-sell the property."

Margins & Capital Structure

• Margins benefit from zero leverage: EBITDA margin reached 22.32% and PAT margin 17.9% in 9M FY26. Management attributes high margins directly to the debt-free model: no interest costs and no fixed financing charges.
• Target range set at 22–25%: Going forward, management expects EBITDA margins in the 22% to 25% band, supported by a continuous cycle of project completions and launches. Margin protection remains a stated priority.
• No institutional capital on the horizon: The company is not looking to bring on any institutions or funds, and has no plans to raise debt. Expansion will be funded through internal accruals and disciplined capital allocation.
• Stock liquidity is not a management focus: When asked about barriers to better trading volume, management deflected, saying it focuses on delivering results and suggested low volume may reflect long-term holder confidence.

Mahek Modi: "I just focus on delivering the results. The volume is just what we think is people have confidence in us so that is why they don't come out to sell their stocks."

Market & Demand Outlook

• Mumbai prices seen as stable to upward: Management does not expect prices to decline in Bombay, citing sustained demand. The only risk flagged: flat owners have choices, so success depends on delivering good flats in good locations.
• No construction disruptions flagged: The company took all measures required by government and BMC guidelines; there were no stop-work orders, only guidelines to follow.

Mahek Modi: "The demand is going to be good. I don't see any prices going down in Bombay. Prices either will be stable or upward trend."

Corporate Developments

• Main board migration completed: The company successfully migrated to BSE and NSE main boards, enhancing governance standards, improving visibility among institutional investors, and strengthening overall market credibility.
• Subsidiary merger closed: The merger of wholly owned Shri Modis Navnirman Private Limited into the listed entity is complete, aimed at operational alignment, balance sheet strengthening, and long-term scalability.
• ESG foundation established: Modis Navnirman Foundation was set up in January 2026, reinforcing the company's stated commitment to ESG values and community development.

Guidance & Commitments

Key Metrics