Summary
Embassy Developments Limited - Q3 FY 2026 Earnings Call Summary Tuesday, February 10, 2026 11:00 AM IST
Event Participants
Executives 3 Aditya Virwani (Promoter & Managing Director), Rajesh Kaimal (CFO & Executive Director), Sachin Shah (CEO & Executive Director)
Analysts 8 Amish Kanani, Deepak Purswani, Gaurav Khanna, Kevin Gandhi, Niteen S Dharmawat, Rohit Chaudhary, Roshan, Rusmik Oza
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Pre-sales | ₹1,392 crores | +240% QoQ; Driven by new launches in Bengaluru and premium plotted formats. |
| Collections | ₹415 crores | +15% QoQ; Cumulative 9M FY26 collections reached ₹1,100 crores. |
| Total Income | ₹264 crores | Q3 FY26 figure; 9M FY26 income stands at ₹1,495 crores. |
| EBITDA | (₹107 crores) | 9M FY26 figure; Negative due to high COGS on legacy Indiabulls projects (Vizag/Thane). |
| Net Debt (Institutional) | ₹3,000 crores | Net debt-to-equity at 0.29x; excludes ₹1,058 crores in shareholder debt. |
| Construction Spend | ₹868 crores | 9M FY26 figure; reflects 79% spend-to-collection ratio. |
| Project Surplus | ₹28,000 crores | Management estimate of net operational cash margin at 47%. |
| Total GDV | ₹52,000 crores | Includes all active and future pipeline projects across the platform. |
Geographic & Segment Commentary
- Bengaluru: Remains the core growth engine and the group’s home market. The company saw strong absorption in luxury plotted developments (Embassy Paradiso) and premium villa projects (Embassy Eden), with residential pre-sales reaching ₹804 crores within five days for the Greenshore launch.
- Mumbai (MMR): Strategic entry marked by the “Mumbai campaign” in January 2026. Three initial projects in Worli (Embassy Citadel), Juhu, and Alibaug represent a combined GDV of over ₹12,000 crores, with the Worli project serving as a marquee 300-meter luxury tower.
- Commercial Segment: Currently represents 20% of the portfolio with 7.4 million sq. ft. Construction has commenced at Embassy East Business Park (Whitefield), with Phase 1 covering 2.7 million sq. ft. targeting institutional-grade tenants and GCCs.
Company-Specific & Strategic Commentary
- Merger Integration: Calendar year 2025 marked the completion of the merger between Indiabulls Real Estate and NAM Estates. The company has focused on delivering 6 delayed legacy projects (3,300+ homes) to restore institutional credibility.
- New Launch Pipeline: Plans to bring ₹41,000 crores of GDV to market over the next three years. Four new launches are scheduled for Q4 FY26, including the premium “Embassy Citadel” in Worli and managed residences in Alibaug.
- Asset-Light Expansion: Management is pursuing high-IRR Joint Developments (JD), such as a recent Whitefield residential deal where a ₹50 crore deposit is expected to generate a ₹450 crore surplus.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Pre-sales | ₹5,000 crores (FY26) | Confidence based on ₹19,000 Cr GDV launches and Q4 momentum in Worli/Bengaluru. |
| Profitability (PAT) | Positive in 4-6 Quarters | P&L currently impacted by legacy project accounting; new high-margin projects to shift mix. |
| Cost of Debt | 10% Range (End of FY27) | Current average is 14%; new construction finance is being raised at sub-9% rates. |
Risks & Constraints
| Risk | Context |
|---|---|
| Insolvency Litigation | Canara Bank initiated Section 7 proceedings regarding a ₹372 crore legacy guarantee for Sinnar Thermal Power. Management obtained an NCLAT stay and remains confident in legal merits. |
| Legacy Asset Drag | Legacy Indiabulls projects (Vizag, Thane) continue to depress EBITDA due to historical mismanagement and high cost-to-complete. Profitability is decoupled from current cash flow strength. |
| Land Bank Monetization | The 1,500-acre Nasik land faces MIDC eviction notices. While a stay is in place, the company is seeking an amicable settlement to convert SEZ land into industrial plots. |
Q&A Highlights
Legacy Issues & Litigation
- Question: Are there other legacy issues beyond Canara Bank that could haunt the company? (Rohit Chaudhary)
- Answer: Extensive cleanup was done over two years prior to the merger. Management is aware of ongoing NSE discussions regarding the past but expects no new surprises (Sachin Shah).
- Question: Why are P&L losses continuing if sales are strong? (Roshan)
- Answer: Current P&L reflects the “sins of the past” as legacy projects reach OC. Accounting requires recognizing historically low-margin sales now, though new projects have 45-60% margins (Aditya Virwani/Rajesh Kaimal).
Project Execution & Sales
- Question: How will you reach the ₹5,000 crore pre-sales target given only ₹2,000 crore achieved in 9M? (Gaurav Khanna)
- Answer: Launches are backend-heavy; ₹19,000 crores of GDV is hitting the market in Q3/Q4. December 30th RERA for Worli and upcoming Bengaluru launches provide the necessary volume (Aditya Virwani).
- Question: What is the strategy for the Worli project given high supply? (Deepak Purswani)
- Answer: Positioned uniquely with 1,800 sq. ft. starting units and more competitive pricing than peers. A show suite opening in April/May will drive premium brand positioning (Aditya Virwani).
Capital Structure
- Question: What is the plan for the ₹1,100 crore shareholder debt? (Amish Kanani)
- Answer: Management is contemplating converting the debt held by Blackstone and Embassy Property Developments into equity (Rajesh Kaimal).
Key Takeaway
Embassy Developments (EDL) has completed its landmark merger, transitioning from a legacy-laden entity to a high-growth residential and commercial platform. While 9M FY26 EBITDA remained negative at (₹107 crores) due to accounting recognition of legacy Indiabulls projects, operational momentum is strong with Q3 pre-sales surging 240% QoQ to ₹1,392 crores. The company is pivoting toward a ₹41,000 crore three-year GDV launch pipeline, underpinned by a 3,100-acre land bank and a strategic entry into the high-value Mumbai market (₹12,000 crore GDV across three projects). Management maintains an FY26 pre-sales guidance of ₹5,000 crores and expects to refinance high-cost debt (14%) to sub-10% levels as new projects gain RERA status. Despite the shadow of a ₹372 crore legacy insolvency claim (currently stayed), the platform’s ₹28,000 crore estimated project surplus provides significant liquidity for execution. EDL is positioned to achieve P&L profitability within 4-6 quarters as higher-margin “Embassy” branded projects begin recognizing revenue.
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