Raymond Realty Limited Q2 FY27 Earnings Conference Call Summary

Financial Performance Highlights

Q2 FY27 Financial Results:

  • Total Income: INR757 crores (7% YoY growth)
  • EBITDA: INR115 crores (14% increase from corresponding quarter)
  • EBITDA Margin: 15% (vs. 14% in corresponding quarter)
  • Interest Cost: INR44 crores (INR27 crores bank borrowings, INR17 crores government authority payments)
  • Net Debt: INR912 crores
  • Gross Debt: INR1,200 crores
  • Debt-to-Equity Ratio: 0.8x
  • Net Debt-to-Equity Ratio: ~0.5x
  • Liquidity Buffer: INR308 crores
  • Cost of Debt: 9.6%

H1 FY27 Operational Performance:

  • Cumulative Collections: INR1,233 crores
  • Booking Value: INR1,602 crores (111% YoY growth)
  • Customer Collections: Surged 67% to INR682 crores in Q2

Portfolio and Project Updates

Overall Portfolio:

  • Total GDV: ~INR52,000 crores (includes INR8,500 crores added in H1 from Parel)
  • Booking Value Contribution Mix: 57% from non-Thane JDAs, 43% from Thane

Thane Land Parcel (100 acres):

  • Revenue Potential: INR25,000 crores
  • Under Development: 65 acres (6.7 million sq ft RERA carpet area)
  • Revenue Potential of Developed Area: INR16,500 crores
  • Already Sold: INR9,770 crores
  • Collections to Date: INR7,977 crores

JDA Projects:

  • JDA Contribution to GDV: 52% (INR27,000 crores revenue potential)
  • Launched Projects: Bandra, BKC, Wadala, Sion
  • JDA Sales Value: INR3,432 crores generated over 2.5-3 years
  • JDA Collections: INR857 crores to date

Project Delivery:

  • Received Occupation Certificate for Address by GS 1 Tower B in Thane (270 units, 3.5 lakh sq ft)
  • Delivered ahead of RERA completion timeline
  • All projects currently on time or ahead of schedule

Fundraising and Capital Structure

ICICI Prudential AMC Investment:

  • Amount: INR210 crores raised by subsidiary
  • Structure: Through OCPRS (Optionally Convertible Preference Shares)
  • Capital Contribution: ICICI contributes 60%, Raymond Realty contributes 40%
  • Execution Fee: 5% of total project turnover charged to ICICI
  • Profit Sharing: 50-50 after capital returns and fees
  • Timing: First tranche expected in next 30 days, full amount by March 2027
  • Purpose: Funds high-value redevelopment project in premium Mumbai micro-market (Mahim)

Promoter Equity Infusion:

  • Amount: INR410 crores committed
  • Status: First tranche to be received shortly as per schedule
  • Approval: Shareholders approved in AGM

Guidance and Outlook

FY27 Guidance Maintained:

  • Pre-sales Growth: Minimum 20%
  • EBITDA Margins: 17-19%
  • PAT Margins: 9-10%
  • Return on Capital Employed: 20%

Future Launches:

  • H2 FY27: Two launches in Mahim
  • Combined GDV: ~INR4,100 crores
  • Product Mix: One Invictus project, one Address project

Long-term Targets (5-year outlook):

  • Pre-sales CAGR: ~20%
  • Additional Equity Requirement: INR500-600 crores
  • Annual GDV Addition Target: INR8,000-10,000 crores

Cash Flow Analysis

Project Level Cash Flow:

  • Current Portfolio Cash Flow Potential: INR14,375 crores
  • After Expenses (5-6% marketing, 5% overhead): ~INR10,000+ crores pre-tax cash flow
  • Mature Projects: Generate strong operating cash flows reinvested into new projects
  • New JDA Projects: Cash flow negative for first 2 years, become positive from third year
  • Steady State Target: 8-10 projects outside Thane under execution within 2 years

Market Strategy and Risk Assessment

Geographic Focus:

  • Primary Focus: MMR (Mumbai Metropolitan Region)
  • Segment: Mid-market and above (ticket size INR1.5 crores to INR20 crores)
  • Market Share: Minimal in INR2.5 lakh crores annual Bombay real estate market

Interest Rate Sensitivity:

  • Management view: 25-75 basis point rate hike unlikely to significantly impact demand in their segment
  • Rationale: Higher ticket size customers less sensitive to EMI changes

Growth Strategy:

  • Asset-light JDA model preferred over land acquisition
  • Opportunistic approach to new markets beyond MMR if meeting financial criteria
  • Business development target: INR8,000-10,000 crores GDV addition annually

Investor Relations Initiatives

Coverage Expansion:

  • Current Coverage: 1 institutional broker
  • Target: 4 coverage providers by end of FY27
  • Outreach: Focus on smaller cap-focused mutual funds and institutional participants
  • New Hire: Ammeet Sabarwal as Head of Investor Relations

Q&A Session Highlights

ICICI Deal Structure: Confirmed economic interest through OCPRS with 60% capital contribution from ICICI, 40% from Raymond Realty, with 5% execution fee and 50-50 profit sharing.

Promoter Equity Rationale: Explained as necessary for growth while maintaining debt discipline, with debt levels expected to stabilize at INR1,200-1,500 crores range.

Luxury Segment Performance: Addressed slower sales in certain towers due to pending aviation approvals for upper floors in BKC project, with strong pipeline waiting for approvals.

Cost Inflation: Acknowledged construction cost pressures but noted fixed-price contracts for ongoing projects with built-in contingencies, with future projects factoring in cost increases through pricing.