Nirlon Limited Q2 and H1 FY27 Earnings Conference Call Summary

Financial Performance Highlights

Q2 FY27 Results:

  • Total Income: Rs. 174 crores, representing 3% year-on-year growth
  • EBITDA: Rs. 137 crores with 3% year-on-year growth
  • EBITDA Margin: 78.4%
  • Profit After Tax (PAT): Rs. 72 crores
  • PAT Margin: 41.3%

Note on PAT Comparison: The year-on-year change in PAT is not directly comparable as Q2 FY26 had a one-time impact of re-measurement of deferred tax liability due to the company moving to the new tax regime from Q2 FY26 onwards.

H1 FY27 Results:

  • Total Income: Rs. 347 crores, registering 3% year-on-year growth
  • EBITDA: Rs. 270 crores
  • EBITDA Margin: 77.88%
  • Profit After Tax: Rs. 141 crores

Operational Performance

  • Average occupancy across portfolios (NKP and Nirlon House): 99.8% during Q2 FY27
  • NIUM India Private Limited renewed approximately 37,000 square feet of space at Nirlon Knowledge Park during the quarter, which was originally due for renewal in FY28

Financial Position and Debt Management

  • Cash and bank balance: Rs. 345 crores at the end of the first half
  • Rs. 57 crores moved from long-term borrowing to short-term borrowing due to HSBC loan repayment schedule
  • HSBC loan repayment will start from May 2027 onwards
  • Management confirmed principal repayments will be as per the scheduled terms of the facility agreement with HSBC, with no prepayment plans

Dividend Policy Update

The company modified its dividend distribution policy to include the possibility of declaring dividends out of accumulated profits of any previous financial year if circumstances require. Management noted:

  • Dividend increased from Rs. 26 in FY25 to Rs. 30 in FY26 (approximately 15% increase)
  • No specific plan finalized for FY27 dividend as of November 2, 2026
  • Historical consistency in dividend payments referenced as guidance

Portfolio and Asset Management

Nirlon Knowledge Park (NKP):

  • 290,000 square feet coming up for renewal in FY28
  • Management actively monitoring renewal discussions with existing licensees
  • Target rental escalation: approximately 5% annually (moving from historical 15% every 3 years)
  • Confidence in strong GCC demand in the micro market to support commercial terms

Nirlon House:

  • Management initiated process to evaluate potential commercial value for as-is-where-is sale
  • Decision based on complexities of dealing with multiple owners (14 individual owners) as a listed entity
  • Not considered primary revenue asset due to ownership structure complications
  • Redevelopment challenges cited as primary reason for exploring sale option

Market Outlook and Demand Environment

  • Management expressed confidence in stable GCC (Global Capability Center) market demand
  • Believed GCC market will continue to be stable and consistent in coming years
  • Noted limited inquiry volume due to practically full occupancy across portfolio
  • Confident in ability to license space at commercially beneficial terms if vacancies occur

Other Income

  • Healthy growth in other income attributed primarily to interest income earned on surplus cash flows
  • Management confirmed sustainability of this income stream

Participant Details

The conference call was attended by:

  • Mr. Rahul V. Sagar, Chief Executive Officer & Executive Director
  • Mr. Manish B. Parikh, Chief Financial Officer and Vice President (Finance)
  • Mr. Ashish Bharadia, Vice President (Business Development and Investor Relations) of Nirlon Management Services Pvt. Ltd.
  • Mr. Jasmin K. Bhavsar, Company Secretary, Vice President (Legal) & Compliance Officer

The call was hosted by Valorem Advisors, represented by Ms. Purvangi Jain.