Modis Navnirman Ltd Q4 FY2026 Concall Summary

Key Takeaways

• Revenue surged 84% YoY on project completions and sales conversion, but margins compressed as construction costs rose and new projects entered early, high-expense stages.
• Two projects completed and handed over: Rashmi Vasudev and Rashmi Celestia received OCs, converting their sales into recognized revenue and validating the execution engine.
• War-driven cost pressure is contained: only two projects at a raw-material-heavy stage absorbed the hit, and management expects margins to bounce back to prior levels in FY27.
• Demand is resilient but selective: footfalls are converting in Borivali-Kandivali-Dahisar, and a reverse NRI trend is adding buyers, yet supply is high and buyers have become choosy, favoring amenity-rich projects.
• What to watch next quarter: whether Rashmi Signature bookings accelerate toward the 75% target, the pace of margin recovery as Rashmi Square nears completion, and any concrete move into premium central Mumbai markets like Khar or Dadar.

Project Execution & Pipeline

• Completed and handed over: Rashmi Vasudev (Borivali West) and Rashmi Celestia (LT Road, Borivali) received occupational certificates and were handed over to societies, driving Q4 revenue recognition.
• Near-term deliveries: Rashmi Square delivery targeted in FY27; Rashmi Signature handover to society targeted in Q1 FY27.
• Under-construction projects: Rashmi Delight and Rashmi Manorath both targeted for completion in FY27.
• New starts: Rashmi Icon (4,500 sqm, Borivali) started in February; Rashmi Avenu (4,900 sqm layout, Dahisar) started in March, both contributing upfront costs that weighed on margins.
• Pipeline awaiting approval: Rashmi Paradies and Govind Dalvi Nagar are under approval stage; Rashmi Paradies execution expected to start in Q1 or Q2 FY27.
• Premium expansion in motion: the company is in final stages of a project in Khar and has bid for projects in Parla, targeting western and premium Bombay; also in talks for a project in Dadar, aiming at South Bombay.
• Township ambition on hold: management wants a township outside Bombay but is searching for a good location with clear title and is not moving fast; no land pipeline for FY27.

Mahek Modi: "Our profitability growth continues to be backed by actual project execution and sales conversion, not financial engineering."

Margins & Cost Structure

• Margin compression drivers: EBITDA and PAT margins fell in FY26 due to increased construction input costs from the war and two new projects started in Q4 that incurred high upfront expenses without corresponding revenue.
• Raw material impact is narrow: only Rashmi Square and Rashmi Signature absorbed material cost increases because they are at a construction stage requiring those inputs; other projects were unaffected, and the overall impact is low given the current execution stage.
• Recovery thesis: management expects margins to bounce back to previous levels in FY27, supported by high profit margins from Rashmi Signature and Rashmi Square that will be internally utilized for execution.
• Capital allocation stance: no structured debt is needed for Rashmi Icon or Rashmi Avenue; the company says it is on the verge of being debt-free.
• Dividend deferred: the board prefers to focus capital on projects; dividend has not been keenly considered.
• Cash flow visibility limited: when asked about cash flow return on the ₹80–₹90 crore capital employed, management declined to give a clear picture on the call.

Sales & Demand Dynamics

• Booking traction varies by project: Rashmi Delight has seen good traction; Rashmi Manorath has seen less, prompting internal policy changes and more channel partner hiring.
• Rashmi Signature lag explained: only 57% booked because management prioritized project completion over sales and was initially hesitant to build sample flats; sample flats created in Q3/Q4 improved conversion, and management is hopeful bookings will reach around 75% in Q2 and Q3 FY27.
• ASP trajectory is upward only: management targets Rashmi Square pricing at ₹27,000–₹28,000 as the project nears completion in the next 4–6 months, and stated average selling price will not go downwards.
• Location-driven demand: demand in Borivali, Kandivali, and Dahisar is good, with people wanting to shift to better locations offering amenities, bigger flats, or the ability to combine flats; no slowdown observed.
• Supply is high but amenity-rich projects win: buyers have become choosy; all Modis projects include open play areas and children’s play areas, which management says helps on the demand side.
• Seasonal note: Q1 (December to mid-January) is slow due to the shrad month; conversions and bookings made in that period will reflect in Q1 FY27 results.

Mahek Modi: "If there is a supply of 100, there is a demand of 100, but everyone earlier only the big developers... were into making larger projects... people have started going on that side wherein we need projects with amenities... people have become choosy."

Geopolitical Tailwind: The Reverse NRI Trend

• War as a demand catalyst: the war situation has made India a perceived safe area; people who had flown out of India are returning or reshuffling, and people from Dubai are booking flats.
• Footfalls converting: footfalls are translating into bookings, with management citing a specific example of two brothers based in Dubai who booked two additional flats in Rashmi Avenu as a safety hedge, saying their family is in India and they want a place to return to if a war situation arises.
• Broader trend confirmed: Indian people situated abroad are now more interested in buying properties in India; a reverse trend has started.

Mahek Modi: "They were an old member, they both were staying in Dubai only. They are like my family is here, I'm taking two flats more so that in future anything a war situation comes in, we can come here and, you know, be safe."

Corporate Developments

• Platform migration: the company announced migration from the BSE SME platform to the BSE Main Board and NSE Main Board.
• Merger completed: the merger of a private limited entity into the listed entity was successfully completed, with post-merger consolidation of flats sold contributing to Q4 revenue.
• Ind AS adopted: Indian Accounting Standard was adopted in Q4 FY26, with FY25 financials restated accordingly.
• CSR arm established: Modis Navnirman Foundation was set up as the company’s CSR arm.

Guidance & Commitments

Key Metrics