Raymond Realty Ltd Q3 FY2026 Concall Summary

Key Takeaways

• Defining quarter for JDA pivot: The second JDA launch (Invictus by GS, BKC) landed with overwhelming reception and a ₹2,000 cr+ revenue potential, while JDA share of pre-sales hit 22% in FY25 en route to a 50% target by FY28.
• 20% growth commitment reaffirmed: Management is firmly committed to 20% YoY growth in booking value and on track to meet full-year guidance, with four launches teed up for Q4.
• Margin story is accounting noise, not business erosion: Reported EBITDA margin of 13% reflects post-demerger cost allocation and a JDA accounting standard that books rehab revenue at a presumptive 5% margin; underlying project margins sit at 18–20%, and the exit rate is already improving. [12–13]
• Mumbai conviction runs deep: Management calls Mumbai the best risk-adjusted market in India, backed by record 1.5 lakh calendar-year registrations and a secular flight-to-quality trend that favours branded developers.
• What to watch next quarter: Whether the four Q4 launches (Wadala, Sion, two Thane projects) convert as budgeted to deliver the ₹1,300 cr needed for the full-year pre-sales target, and whether reported EBITDA margin ticks decisively toward the 17–20% guided range.

The JDA Model Transition

• Strategic intent: The company is aggressively pivoting to an asset-light JDA model, targeting 50% of annual pre-sales from JDAs by FY28, up from 22% in FY25. Two of six signed JDAs are now launched, two more (Wadala and Sion) are expected in Q4 FY26, and the remaining two will follow in 12–15 months.
• Capital allocation discipline: Every JDA is stress-tested on multiple of peak investment, ROCE and IRR. Capital deployment is milestone-linked to approvals, leasing and construction progress, and the preference is for asset-level structures that minimize balance sheet strain and protect group ROCE.
• Why the model works in Mumbai: The market offers both volume and pricing discipline, and JDA projects command 1.5x to 2x the pricing of Thane projects, which supports margin recovery as these projects mature along their hockey-stick pricing curves.
• Growth visibility: Signed projects already secure two years of 20% growth, and management is currently working on year-three and year-four growth. The pipeline is expanding into three new micro-markets where the company was not previously present.

Sahni: "even if there is less water, I will create a craft or a ship which can navigate shallow water also. So our market share will grow even when the market is not doing so great because of the things that we have set out to achieve."

Margin Mechanics

• Three reasons margins look compressed: (1) Post-demerger, common corporate costs that were never debited to the division now get realistically distributed across entities, overstating the pre-demerger base. (2) JDA accounting standards require rehab portions delivered to land providers to be captured as revenue at a presumptive 5% margin, pulling down the blended average even though project margins are 18–20%. (3) New JDA launches carry launch expenses and lower initial margins due to the hockey-stick pricing curve. [12–13]
• The rebound path: Q4 will show a better margin than the 13% reported for nine months. Full-year EBITDA margin is expected between 17% and 20%, and FY27 is targeted at 20%. Stripping out the accounting standard effect and the averaging drag, the business would already be very close to 20% by year-end.
• Customer-first trade-off: Management is explicit that when customer interests and margin preservation conflict, the customer wins, a stance that tempers the pace of margin expansion but builds the franchise.

Sahni: "Actually you are not receiving that revenue, you are not making that margin, but the accounting standard says so, so you have no choice but to do it."

Launch Pipeline & Q4 Execution

• Q4 is the busiest launch quarter: Four major launches are scheduled: two JDA projects (Wadala, already launched in Q4; Sion, expected mid-to-late February) and two Thane projects (one 2BHK community, one high-margin retail project). This brings the total project count to 13 and opens three new micro-markets.
• Sion revenue already trickling in: ₹108 cr was recognized from Sion in Q3 before the formal launch because existing residents purchased additional area beyond their entitlement at market rates with definitive documents registered. This is a genuine sale to existing residents, not a general launch. [14–15]
• Confidence in the ₹2,800 cr target: Management is confident of delivering ₹1,300 cr in Q4 to meet the full-year pre-sales target, citing no softness in any project and behaviour exactly as predicted and budgeted.

Sahni: "I don't know the market reports and whatever, because I have got four different market reports, and all four say different things. But I will rather go with my own data and what my experience has been on our projects, because that is what is more relevant as far as we are concerned."

Balance Sheet & Capital Structure

• Lean and self-funded: Net debt stands at a modest ₹230 cr, with ₹1,210 cr in collections over nine months. The real estate products are designed to be self-funded over the cycle, and there is no capital requirement at this stage.
• Group capital allocation solved: Demergers have given each business its own balance sheet and independent capital-raising capability. No further corporate support is being provided to any group company. Promoters have already invested ₹1,400 cr and can decide on further investment if a requirement arises, but none exists currently.
• Collections are milestone-driven, not linear: Collections depend on construction milestones achieved and the percentage linked to those milestones. At the time of pre-sales, maximum collection is only 5–10%, so period-to-period comparisons between collections and pre-sales growth can mislead.

Tiwary: "risk management is the most important critical role or the critical point, which we take into account while allocating the capital."

Market Context & Demand

• Macro setup remains supportive: The repo rate cut to 5.25% has improved home loan affordability and buyer sentiment. Domestic consumption for large-ticket purchases remains resilient despite global uncertainties, and FY27 is expected to be equally good or better than FY26.
• Flight to quality is structural: Homebuyers now prioritize quality, transparency and reliability, a shift that decisively benefits established branded developers. Mumbai recorded 1.5 lakh registrations in the calendar year, with a secular trend of end-user demand especially in premium segments.
• No softness detected: Management is not experiencing any softness in any project. The October dip in Mumbai registrations was a high-base effect from the earlier festive season; November and December surged.

Sahni: "Bombay has a lot to offer. It is a very, very healthy market not only in terms of volume, but also in terms of pricing discipline. So, I mean risk adjusted is the best market to be in the country today."

Guidance & Commitments

Key Metrics