Raymond Realty Ltd Q2 FY2026 Concall Summary

Key Takeaways

• H1 flat, H2 back-end loaded: Booking value of ₹455 crores in Q2 was in line with an internal plan that banks on a launch-heavy H2 to deliver the full-year commitment.
• 20% growth commitment reaffirmed: Management "completely and unequivocally" stands by its minimum 20% pre-sales growth target for the year, with H2 launches carrying a combined GDV of roughly ₹5,000 crores.
• Margins are in a hockey-stick trough: New launches depress blended margins early in their lifecycle; management concedes full-year reported EBITDA may not hit 20%, but expects a retail-led bump in Q4 and holds the blended annual guidance.
• Balance sheet is built for the launch pipeline: The company is net-debt-free with a ₹48 crore cash surplus, and the bulk of the H1 cash outflow has already funded approvals and construction ahead of the H2 launches.
• What to watch next quarter: The pace of sales absorption on the Bandra and Wadala launches, and whether the Q4 retail launch in Thane lifts blended margins as promised.

Booking Performance & the H2 Bet

• Q2 was a holding quarter: Booking value came entirely from existing inventory at Ten X Era and Address by GS in Bandra, with no new project launches contributing.
• H1 was flat by design: Management describes H1 as a planned transition from the low-inventory period after a strong Q4 last year, with resources directed toward preparing the H2 launch pipeline.
• Registration lag understates sales: The investor presentation shows lower booking percentages (5% and 12%) because it reports only registered units where stamp duty has been paid; actual sales have been strong, with booking amounts already received and registration taking 30 to 60 days to flow through.
• H2 launch cadence is aggressive: Two projects in Q3 (Bandra and Wadala), followed by four in Q4: two JDA projects in Sion and Mahim, plus two more in Thane, one of which is a 2 BHK project addressing near-zero inventory in that configuration.
• Demand priming is underway: The Bandra and Wadala market has been primed with channel partners; the area benefits from a well-developed ecosystem, seamless extension to Sion, Mahim and Bandra East, and strong employment-driven footfalls with BKC as the central hub.

Harmohan Sahni: "You should join our team. You are as good at recognizing the pattern and strategizing. So, in Q4, one of the projects that we are launching is a 2 BHK project and you rightly noticed that we are low on inventory on that. In fact, we practically have no inventory left on 2 BHK."

Margin Trajectory & Product Mix

• Q2 margins improved sequentially: The lower utilization issue that depressed Q1 margins is being partly addressed, and Q2 showed an upward trend.
• Product mix creates quarterly noise: The corresponding quarter last year included a retail project absent this year; management advises comparing margins year-to-year rather than quarter-to-quarter because launches and matured projects create a bumpy impression that evens out annually.
• New launches compress blended margins: Margins follow a hockey-stick pattern: at launch, margins sit below the project average, then pricing grows at least 10% per annum over a 4-to-5-year lifecycle, lifting margins toward the 20%-25% average by project end.
• Full-year 20% margin unlikely: Management agreed with an analyst's assessment that reported full-year numbers might not show a 20% EBITDA margin, though FY27 could reach that level on reported figures.
• Q4 retail bump expected: A retail portfolio planned for Thane in H2 is expected to lift margins by Q4.
• Stability is a portfolio-size problem: Raymond Realty is a young company launching many projects with few matured ones; the bunching of launches this year depresses margins, an effect that should even out as the portfolio grows to 10-12 running projects with consistent replacement.

Harmohan Sahni: "Your assessment is very close to how it will play out."

Launch Pipeline & GDV

• Combined H2 GDV of roughly ₹5,000 crores: The ballpark value of projects hitting the market in the second half.
• Q3 launches: One project each in Bandra and Wadala, both imminent and with the market already primed.
• Q4 launches: Four projects: two from the JDA portfolio (Sion and Mahim) and two in Thane, including a 2 BHK project currently under approval.
• Project durations: Thane projects will run over approximately seven years; JDA projects other than Wadala should finish within five years.
• GDV upside from pricing: Current GDV estimates use today's values; management expects prices can rise significantly over the project life.
• Three to four additional JDAs in six to nine months: Beyond the H2 slate, more JDA projects are scheduled for rollout over the subsequent 12 to 18 months, though none have been signed yet and will be disclosed only upon signing.

Balance Sheet & Funding

• Net-debt-free with cash surplus: The business held a cash surplus of ₹48 crores as of September 2025.
• H1 cash outflow was launch preparation: The bulk of the increase in the balance sheet reflects approval costs and construction spend for new projects lined up for launch; cash starts flowing back after launch, a trend that continues for the first year to year-and-a-half of a project.
• Bulk of launch costs already funded: Most expenses for upcoming launches have already been paid for, and unpaid amounts have been funded with ready funds in place.
• Future funding mix: A combination of internal accruals from Thane projects and bank debt; the Bandra project, now two years old, has started contributing to operating cash flow.
• Debt is growth-only: All debt on the balance sheet is tied to project launches; the company carries no non-growth debt.
• Leverage guardrails: Management commits to not exceeding a 1:1 debt-to-equity ratio at any point, and to maintaining ROCE at 20% or more.

Market Context & Demand

• Macro support from rates and consumption: The RBI's accommodative stance, with repo rates held at 5.5% and a downward trend on interest rates, is making home loans more affordable and positively impacting buyer sentiment, while domestic consumption on large-ticket purchases remains firm.
• Flight to quality: Buyers are increasingly prioritizing quality and moving toward branded developers, a structural shift benefiting organized players.
• Mumbai market momentum: The city registered roughly 10,600 property deals during Navratri and Ganesh Chaturthi, a roughly 23% jump year-on-year, signaling strong end-user confidence and sustained demand for large and premium homes.
• Bandra-Wadala demand drivers: The area is well-developed with strong channel partner presence; BKC serves as the central attraction hub, employment is strong, and footfalls are healthy.

Guidance & Commitments

Key Metrics