Raymond Realty Ltd Q1 FY2026 Concall Summary

Key Takeaways

• Q1 was a planned trough, not a miss: Revenue fell to ~₹400 cr from ~₹500 cr YoY because bumper prior-quarter sales depleted launch-ready inventory; management says this was "completely in line with our expectation."
• The launch engine is now reloading: Two Thane towers (~₹1,100 cr inventory, ~318 units) launch this week, and the company targets 3-4 more launches by March 2026, setting up a back-half-weighted year.
• Full-year growth and margin commitments held firm: Management reaffirmed minimum 20% booking value growth and a 20% blended EBITDA margin for FY26, with recovery concentrated in H2.
• The market is in "prove it" mode: Management acknowledged the stock's ~40% post-listing decline and peer discount, attributing it to the market waiting for a track record on new JDA launches over the next one to two quarters.
• What to watch next quarter: Whether the two new Thane towers sell through at pace, any further clarity on the Bandra 2 and Wadala 1 H2 launch timelines, and whether Q2 revenue stabilizes near Q1 levels as guided.

Revenue & Launch Cadence

• Inventory depletion drove the Q1 drop: 91% of Thane inventory and 50% of Bandra inventory were already sold entering the year after "bumper quarters" in Q3 and Q4 FY25. Reintroducing supply requires fresh approvals and RERA registration, which takes time.
• Q2 stays subdued by design: Management guided that Q2 will follow a similar trajectory to Q1 because most new JDA launches are slated for Q3 and Q4. Activity from the newly launched Thane inventory will be present but not enough to shift the quarter materially.
• H2 is where the year is made: Management is "quite optimistic" the second half will deliver on full-year guidance, citing pent-up demand, the Thane launches this week, and a pipeline of at least 3-4 additional launches by March 2026, with 1-2 more in Q1/Q2 of next fiscal year.
• Construction ahead of schedule: All projects are running ahead of schedule, with timely delivery and high-quality standards maintained, supporting the launch timetable.
• Seasonality reinforces the skew: The first half is structurally weaker due to summer vacations, monsoon, auspicious days, and the festive period; the trajectory improves as more projects come onto the plate.

Harmohan Sahni: "Q1 numbers are what they are, and they are completely in line with our expectation and Q2 will also follow a similar trajectory as Q1 because most of our launches which are the new JDAs which we would be launching are all in Q3 and Q4."

Margins

• Q1 margin dip was mechanical, not operational: EBITDA margin fell because mature, higher-margin projects are tapering out while two newly launched Bandra towers carry lower initial margins; launch expenses hit early and benefits accrue later. Negative operating leverage from the ~₹100 cr revenue drop added to the effect. No cost overruns were cited.
• Full-year 20% margin commitment reaffirmed: Management expects blended margins from Thane and JDA projects to land around 20%, and stated the business may do "slightly better than underwriting" given current market conditions.
• Scale is the margin unlock: Once scale builds toward the end of this fiscal year, margins should improve from next year onward. Steady-state operating margins are pegged at about 20%, adjusting for new project launches.

Harmohan Sahni: "So, for that I would request you to give us some time because we are also very young compared to the names that you took. They have been in the business 25-30 years. And we've been in the business 5-6 years. We have built our team. Our scale is still building up. And once we hit a scale which will be towards the end of this year from next year onward, we will start seeing improvement in that."

Project Pipeline & Approvals

• Thane launches imminent: Two buildings launch this week with approvals and RERA registration secured, representing ~₹1,100 cr of inventory across ~318 units.
• Bandra 2 on track for early H2: The launch is "completely on track" and will be early H2, not later H2.
• Wadala 1 confirmed for H2: Management gave a "definite yes" for an H2 launch; the project was late-stage when entered, so significant approvals are already in hand.
• Time-to-market claimed as fastest in industry: From signing a new project to launch, the company does not exceed 18 to 24 months, which management states is faster than peers who often take three to five years.
• No delays anticipated: As of now, management is not anticipating any delays in project launches; everything is on track.

Harmohan Sahni: "From signing of the new project to the launch, we don't go beyond 18 months to 24 months, which is the fastest in the industry than other players. And very few players are actually able to achieve that."

Strategy & Capital Allocation

• Asset-light JDA model is the future: All future exposures will be under the JDA model; the legacy Thane land is historical with a very low book value and not material on the balance sheet.
• Segment and geography are deliberately narrow: The company focuses on mid-to-premium housing, avoiding ultra-high-value and affordable segments, and is currently limiting itself to MMR and Pune markets only.
• Capital stays in projects, not buybacks: Management argued capital is better spent launching JDAs and signing new projects yielding 20-25% IRRs rather than pursuing a buyback, which they called tax-inefficient for an organization this young. Annual JDA signing targets are ₹6,000 cr to ₹10,000 cr worth of projects on average, with potential bumper years.
• ROCE commitment above 20%: Management stated the business will continue to deliver more than 20% ROCE going forward, with new JDA project IRRs in the 20-25% range.

Management: "So long as we are getting 20%, 25% IRR projects, we would rather allocate capital there than trying to sort of buyback or something like that to do a re-engineering of share price."

Market Positioning & Valuation

• The discount question was met with a "prove it" thesis: Asked why the stock trades at a 40-50% discount to peers on EBITDA multiples and whether governance concerns exist, management declined to answer directly but offered a personal hypothesis: the market is waiting to see whether the company can replicate its track record on new JDA launches.
• No litigation overhang on land: Management stated there is no litigation on the Thane land or any JDA contracts, though it did not provide a specific land bank valuation figure when asked.
• Thane Supreme Court judgment is neutral: A recent clarificatory judgment lifts an injunction on environment approvals and shifts authority to the state government for projects between 20,000 sqm and 1,50,000 sqm. None of Raymond Realty's projects fall within 5 km of eco-sensitive zones, so the ruling carries "neither additional benefit nor any detriment."
• Collection efficiency remains high: Monthly collection ratios are almost 97-98%, with barely any outstanding amounts.

Harmohan Sahni: "My hypothesis would be that it's a question of market waiting to see how our track record builds today... market is waiting to see how we launch them. Whether we will be able to maintain the same track record which we have. And that could be a reason why they are looking at a discount just now. Because they want us to prove ourselves and rightly so."

Operations & Subsidiaries

• Rayzone maintenance entity is in early build: A 100% subsidiary of Raymond Reality, Rayzone currently services only projects the company is handing over (five buildings in 10X Habitat so far, one more this year) and does not take on third-party projects. Margins are capped at 10-11%; the entity is breaking even now and is expected to stay at breakeven for the next one to two years before generating margin.
• Technology and ESG infrastructure in place: The company uses AI for marketing and sales, SFDC for customer management, and S/4HANA for accounting, with a SAP system upgrade planned soon. A dedicated ESG cell focuses on keeping products ecologically sensitive and the carbon footprint as close to zero as possible. A Chief Customer Experience Officer ties together post-delivery departments.

Harmohan Sahni: "...post-delivery experience is the moment of truth. That's where the rubber hits the road."

Guidance & Commitments

Key Metrics