Shriram Properties Limited

Operational Performance Highlights

  • Record Q1 Sales: Achieved highest-ever Q1 sales of ₹484 crores, up 10% YoY, with sales volume of 0.85 million square feet, up 4% YoY
  • Collections: Strong collections of ₹365 crores, up 8% YoY
  • Handovers: 690 units handed over during the quarter
  • New Launches: Three launches during Q1 totaling 0.9 million square feet:
  • Shriram Stellar, Chennai (0.3 million sq ft) - Premium residential segment entry
  • Shriram Southbrook, Kolkata (0.4 million sq ft) - Branded plotted development
  • Green Meadows, Chennai (0.2 million sq ft) - New phase
  • Launch Response: Premium Chennai project saw 20% sold in first weekend; Kolkata plotted development saw 55% inventory sold within 30 days

Financial Performance (Q1 FY27)

  • Revenue: ₹271 crores, up 4% YoY
  • Gross Profit: ₹56 crores
  • EBITDA: ₹42 crores
  • PAT: ₹11 crores
  • JV Loss: ₹4 crores, primarily from higher selling expenses at 122 West project
  • Margin Impact: Lower margins due to product mix (40% from lower-margin legacy Kolkata projects: Grand One and Sunshine One)
  • Other Operating Revenues: Included reversal of constructive obligations and fair value gains on projects including 122 West, Sapphire, and Swargam

Cash Flow and Balance Sheet

  • Operating Cash Flow: Remained healthy supported by collections and execution
  • Free Cash Flow: Generated ₹135 crores before new project investments
  • New Project Investment: ₹88 crores invested in new projects
  • Net Free Cash Flow: ₹47 crores positive
  • Cash Balance: Closing cash improved to ₹219 crores
  • Debt Position: Gross external debt ₹651 crores, net debt ₹432 crores
  • Leverage: Net debt-to-equity at 0.29x, considered very healthy
  • Cost of Debt: Approximately 11%, benefiting from reduction in benchmark rates
  • Equity: ₹1,471 crores
  • Credit Rating: CRISIL A- (positive)

Project Pipeline and Business Development

  • Current Pipeline: 33.7 million square feet total
  • Ongoing projects: 16 million sq ft with unsold GDV of ₹1,970 crores
  • Upcoming projects: 17.7 million sq ft with GDV potential of ₹11,560 crores
  • Total GDV Potential: Approximately ₹13,530 crores
  • Advanced Stage Pipeline: 7.3 million sq ft with GDV potential over ₹6,000 crores likely to be added in next 3-6 months
  • Pipeline Expansion Target: Nearly double upcoming project pipeline over next 18-24 months
  • Q1 Business Development: Added 0.7 million sq ft with estimated GDV of ₹650 crores

FY27 Guidance and Outlook

  • Guidance Maintained: Confident in achieving full-year targets
  • Sales Growth: 40-50% growth expected, targeting ₹3,300-3,500 crores
  • Collections: Expected ₹2,100-2,200 crores (26-30% growth)
  • Launches Planned: 7 million sq ft potential launches with 6 million sq ft planned for FY27 across Bengaluru, Chennai, Pune, and Kolkata
  • Q1 Launches: Already launched 0.7 million sq ft across 2 projects

Revenue Recognition Visibility

  • Pent-up Handovers: 410 units with ₹400 crores unrecognized revenue from recently completed projects
  • Q2 Handovers: 2 projects with 400+ units and ₹160 crores revenue potential targeted for OC
  • H2 Handovers: 5+ projects with 2,100+ units and ₹1,000+ crores revenue potential scheduled for OC
  • Total H2 Visibility: Over 2,900 units representing ₹1,560+ crores revenue potential scheduled for handover

FY28 Mission Targets

  • Revenue Target: ₹2,500 crores annually
  • PBT Target: ₹250 crores (approximately 10% margin)
  • EBITDA Margin Target: 22-24% by FY28
  • Basis for Confidence: 8.8 million sq ft already launched and sold to be recognized over next two years (₹4,800 crores revenue potential)

Kolkata Strategy Update

  • Land Bank: 105-110 acres developable land after government handover
  • Development Strategy: Evolving toward mixed product development (apartments, villas, plotted) based on successful test launches
  • Monetization Potential: Estimated ₹1,200-1,400 crores free cash flow over 5 years
  • Approved Projects: 2.3 million sq ft apartment approvals already obtained, to be launched in phases
  • Plot Development Success: 55% of inventory sold within 30 days, delivering ₹6.5-7.5 crores net contribution per acre

Market Demand Assessment

  • Market Sentiment: Underlying demand remains strong across core markets (Bangalore, Chennai, Pune, Kolkata)
  • Pricing Trends: 4-5% annual price increase in sustenance sales, sufficient to cover cost inflation
  • Segment Performance: Mid-market self-use home demand continues strong; upper end may see some slowdown
  • Conversion Rates: No material decline observed in customer conversion rates

Q&A Highlights

  • Margin Explanation: Historical EBITDA margins were 22.5% (FY23), 22.6% (FY24), 18.4% (FY25), 13.5% (FY26) when including other operating revenues
  • Debt Outlook: Gearing may temporarily increase to support growth, with long-term comfort zone at 0.5x
  • Collection-Sales Disconnect: Explained by back-ended launch timing and project progress-linked collection patterns
  • Project Approvals: Multiple projects at advanced stages of approval across Bangalore, Pune, Chennai

Management Reaffirmation

Management reaffirmed commitment to delivering FY27 targets, with stronger quarters expected in H2 driven by scheduled completions and launches. The business remains on strong trajectory with benefits of current investments expected to become increasingly visible through H2 FY27.