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Ajmera Realty & Infra India Ltd

| Q3 FY26 Earnings Conference Call

BULLISH SENTIMENT

Report Source

⬤3rd Feb 26

Summary : Ajmera Realty achieved record sales and collections in 9M FY26, significantly expanded its Wadala project's GDV, and secured new asset-light developments, demonstrating strong growth despite some project approval and launch delays.

Management Perspective positive : Management expressed being 'very, very happy' about achieving highest ever sales and collections, and 'very confident' about future momentum and project additions. They stated they are 'not too worried about the sales velocity' despite market challenges.

Concall Report Analysis & Insights

Business Overview

  1. Q3 FY26 sales doubled to Rs. 603 crores, with collections reaching Rs. 333 crores.
  2. 9M FY26 sales grew 72% Y-o-Y to Rs. 1,431 crores, and collections surged 70% Y-o-Y to Rs. 787 crores.
  3. EBITDA margin stood at 30% and PAT margin at 15% for 9M FY26.
  4. Debt-equity ratio is 0.58x, with a weighted average cost of debt at 11.59%.
  5. Total revenue visibility is Rs. 5,600 crores, including Rs. 4,000 crores from available inventory.

Future Growth Prospects

  1. Strategic revision of Wadala Boutique Office master plan increased FSI from 6 lakh to 16 lakh sq ft, boosting GDV from Rs. 1,800 crores to Rs. 5,300 crores.
  2. Total Wadala project value is projected to unlock Rs. 16,000 crores over the next 4-5 years.
  3. Secured new asset-light business development projects worth Rs. 2,000 crores (Rs. 1,500 cr in Mumbai, Rs. 500 cr in Pune).
  4. Upcoming launch pipeline is expected to contribute Rs. 1,500 crores.
  5. Estimated cash flow generation of Rs. 2,316 crores from OC received and ongoing projects.

Management Insights

  1. Real estate market is strengthening, showing steadier volume growth, disciplined pricing, and increased selectivity.
  2. Redevelopment is a primary source of new supply in Mumbai, reshaping the urban fabric.
  3. Ajmera Solis at Vikhroli saw exceptional demand, selling 84% of inventory in 48-60 hours, validating asset-light strategy.
  4. The company is poised to surpass its full-year sales guidance of Rs. 1,600 crores.
  5. Wadala micro market is emerging as a preferred commercial hub due to connectivity and government initiatives.

Signs of Skepticism

  1. Kanjurmarg project launch timeline remains uncertain due to complex approval processes.
  2. Delays in Andheri and Ghatkopar projects highlight potential challenges in redevelopment and land acquisition.
  3. Slowdown in Manhattan 2 sales velocity in Q3 raises questions about sustained demand at higher price points.
  4. Management's confidence in meeting project additions relies on closing ongoing discussions for 2-3 properties.
  5. The cost implications for the increased FSI in Wadala are still being worked out.

Risk Factors

  1. Kanjurmarg project approvals (EC, RERA) are facing delays, making Q4 FY26 launch a 'touch-and-go situation'.
  2. Andheri redevelopment project delayed due to renegotiation with tenants, now expected next financial year.
  3. Ghatkopar project launch pushed due to legal issues with plot owners.
  4. Potential increase in market competition and supply post-Supreme Court EC approval ruling.
  5. Manhattan 2 sales velocity slowed in Q3, though management expects recovery.

Good To Know

  1. Strong structural tailwinds include RBI's pro-growth policy, GST rationalization, and ECB reforms.
  2. India's GDP is forecasted at 7.3% for the current financial year, supporting cash flow stability.
  3. Ajmera Eden in Ghatkopar received its occupation certificate and was delivered ahead of schedule.
  4. Ajmera Manhattan Phase 1 has achieved 89% sales, with construction nearing completion for next financial year.
  5. Bangalore projects, Ajmera Iris and Ajmera Marina, show strong performance with 76% and 68% sales respectively.

Key Drivers

  1. Wadala FSI revision boosts GDV.
  2. New asset-light projects secured.
  3. Strong sales velocity in new launches.
  4. High revenue visibility for future.

Key Analyst Discussions

Competitive Environment

  1. Questions on how increased supply post-Supreme Court EC approval will impact demand and competition.
  2. Discussions on the overall market conditions and micro-market operations in Mumbai and Bangalore.

Market Trends & Consumer Behavior

  1. Inquiries about the general market sentiment and any lull observed, especially during holiday seasons.
  2. Discussions on the rising demand in Mumbai's micro markets due to connectivity and government initiatives.

Financial Highlights

  1. Inquiries about the cost and margin impact of the increased FSI for the Wadala Boutique Office project.
  2. Questions regarding the slowdown in unit sales for Manhattan 2 in Q3 and management's guidance.
  3. Concerns about meeting the incremental project additions target for FY26 Q4.
  4. Clarification on the sales price per square foot for Manhattan 2.

Product Composition

  1. Questions about the nature of the Wadala Boutique Office project (commercial/mixed-use, office/retail).
  2. Inquiries about the potential launch timelines for uber-luxury residential projects in Wadala.

Strategic Considerations

  1. Detailed questions on the Kanjurmarg project's approval status and realistic launch timelines.
  2. Elaboration on the reasons for removing Andheri and Ghatkopar projects from the launch pipeline.
  3. Discussions on potential JV partners or stand-alone development for the Wadala commercial project.
  4. Questions about potential partnerships and milestones for the 55-acre Kanjurmarg land parcel.
Ajmera Realty & Infra India Ltd (AJMERA) Concall Report Analysis & Insights | Dhanarthi