Raymond Realty Ltd Q4 FY2026 Concall Summary

Key Takeaways

• Strategy validated, portfolio transformed: FY26 pre-sales bookings surged 139% YoY and the JDA share of bookings hit 54%, achieving the targeted 50-50 own-land to asset-light mix a full year ahead of schedule.
• Margins are cyclical, not linear: Q4 EBITDA margin spiked to ~20%, but the full-year blended figure was 16%. Management warns against extrapolating the Q4 run rate and guides to a 16%-18% blended range for FY27.
• Growth requires negative cash flow: The company will be cash negative for the next two years as internal accruals are reinvested into building the balance sheet and growing the portfolio, with a firm cap of 1:1 debt-to-equity.
• Thane is a steady, not a growth, engine: Annual Thane sales are expected to remain at INR 1,300-1,500 crores, limited by intense competition and volume-driven rather than price-driven growth.
• What to watch next quarter: The pace of sell-through at the newly launched Sion and Wadala projects, the signing of two planned JDAs, and whether the Mahim project launches stay on track for Q3.

Portfolio Transformation & The JDA Pivot

• Asset-light shift delivered early: The share of non-Thane pre-sales bookings rose from 22% in FY25 to 54% in FY26, hitting the 50-50 mix target one year ahead of the original FY27 deadline. This was achieved entirely through JDAs.
• New launch blitz in Q4: Address by GS Wadala and Address by GS Sion launched in the quarter, with a combined GDV of approximately INR 6,400 crores. TenX District 9 and Park Street retail also launched in Thane.
• Sion is an insular micro-market test: The project launched only on 24th March, capturing just one week of sales in FY26, so the 4% sell-through is a starting point, not a verdict. Management describes the micro-market as having very little migration, with demand driven by local residents.
• Mahim pipeline is the next catalyst: Two projects in Mahim are at very advanced approval stages and management commits they will "definitely" launch by Q3 FY27.
• JDA pipeline remains strong: Some deals have spilled over into FY27 and management expects more announcements, with two JDAs planned for the year. The average project timeline from deal signing to launch is 15-18 months, though some take up to two and a half years.

Harmohan Sahni: "But very happy to report that we have achieved this milestone one year ahead of schedule in FY26 itself."

Margin Mechanics & Profitability Outlook

• Project-level margin cycle: A newly launched project operates at single-digit EBITDA margins for the first six months, then margins creep up, ending at 20%+ on a blended basis. The company signs no JDA below a 20% EBITDA margin.
• Blended margin depends on mix: The company-wide margin is a function of how many projects are mature versus newly launched. It will stay in a range, not rise continuously.
• FY26 margin walk: The full-year blended EBITDA margin was 16%, improving from 13% in the first nine months as Q4 alone hit ~20%. Management explicitly cautions against extrapolating the Q4 run rate forward.
• FY27 guidance is flat to slightly up: Blended EBITDA margin is guided to 16%-18%, with projects launched in Q4 FY26 maturing over the next 12 months. FY28 is expected to look even better.
• Commodity cost risk is manageable: A 3%-4% construction cost impact is expected only if war-driven commodity price escalation persists for a long period. If it subsides in 2-3 months, there is no significant impact. The company has absorption capacity and will pass on cost increases, with no foreseen hit to EBITDA margins.
• Ceramic supply disruption is not material: Suppliers continue at contracted rates despite Morbi plant shutdowns. Only a sustained gas supply constraint would create a lasting cost impact.

Harmohan Sahni: "It will be in a range. It will never be a specific point or you will not be able to plot and say oh, it'll keep growing, keep growing, keep growing, and then one day it'll hit 100%, that's never going to happen."

Thane: The Steady Anchor

• Volume growth, not price growth: Thane has seen intense competition for 20 years and most developers lack pricing power. Growth is therefore limited to volume, with annual sales of INR 1,300-1,500 crores achievable and not expected to change significantly.
• Deep end-user market: The market is 90%-95% actual users, not investors, with 80%-85% of buyers taking loans. The buyer base consists of salaried people and local businessmen from Bhiwandi and Kalyan.
• Inventory position has normalized: Unlike Q1 and Q2 of last year when inventory was very low, the company now has enough GDV to serve for the next six months, with two more Thane launches planned during FY27.
• Commercial development on the horizon: The area is master-planned and earmarked for commercial development. Management says "that time doesn't seem to be very far" but has not yet pressed the button.

Growth, Cash Flow & Capital Discipline

• Minimum 20% growth guided: Management commits to at least 20% growth in pre-sales and top-line for FY27, and says it will "definitely do better than that."
• Cash flow will be negative for two years: Internal accruals will keep growing but will be fully reinvested into building the balance sheet and growing the portfolio. Management frames this as the price of growth.
• Debt-to-equity capped at 1:1: The company will not exceed this threshold, providing a hard guardrail around the negative cash flow period.
• Revenue recognition is smooth: The company uses the percentage completion method consistently, so revenue is recognized based on progress and sales, not in lumpy bursts.
• Seasonality persists: Q1 and Q2 are typically light due to exams, the inauspicious period, and the Bombay monsoon. Q3 and Q4 are stronger, driven by the festive season and better weather.

Harmohan Sahni: "So, the short answer to your question is going forward for the next two years, we will be cash negative on an overall basis but internal accruals will keep on growing and we will keep reinvesting them in building the balance sheet and growing our portfolio because growth has a price to be paid and cash flow is that price you have to pay."

Market Focus & Geographic Strategy

• Western Suburbs are the priority: The primary focus micro-market is the Western Suburbs, with multiple projects around BKC, a strong employment hub. The Eastern Suburbs are a secondary focus.
• Affordable luxury is the sweet spot: The product positioning targets this segment across the focused micro-markets.
• South Bombay entry will be cautious: Management will only enter if the deal structure and returns make sense, implying no urgency to deploy capital there.
• Retail is a recurring strategy: Retail launches have been part of the strategy every year for the last 3-4 years and will continue going forward.
• Bandra project upside: Address by GS Bandra is now expected to "definitely do better" than the originally guided top-line of approximately INR 2,100 crores.

Guidance & Commitments

Key Metrics