Summary
Keystone Realtors Limited - Q3 FY26 Earnings Call Summary Wednesday, February 04, 2026 4:00 PM
Event Participants
Executives 4 Boman Irani (CMD), Chandresh Mehta (ED), Percy Chowdhry (ED), Sajal Gupta (Group CFO)
Analysts 4 Abhir Pandit, Krish, Pritesh Sheth, Sumit Kumar
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Presales (Q3) | ₹837 crores | Tracking in line with expectations to meet annual targets. |
| Presales (YTD) | ₹2,676 crores | +23% YoY; Represents steady growth trajectory toward ₹4,000 Cr FY26 target. |
| Revenue (Q3) | ₹266 crores | Consolidated revenue from operations for the quarter. |
| Revenue (YTD) | ₹1,039 crores | Cumulative 9-month revenue performance. |
| Gross Margin (YTD) | 35% | +300 bps YoY from 32% in FY25; driven by value transformation in premium segments. |
| Operating Cash Flow (YTD) | ₹229 crores | Lowered by increased construction spend and heavy launch activity in Year 1 cycles. |
| Construction Spend (YTD) | ₹718 crores | +18% YoY; reflective of increased site activity across 5 new launches. |
| Gross Debt | ₹625 crores | Debt-to-equity ratio remains low at 0.22:1; significant headroom for growth. |
| Liquidity | ₹717 crores | Free cash position as of Dec 31, 2025; Company remains net cash positive. |
| Completions (YTD) | 1.98 Mn Sq. Ft. | 3 projects completed (Belle Vue, Paramount F Wing, Crown Tower C). |
Geographic & Segment Commentary
- Redevelopment & Clusters: The company added its 4th major cluster project in Q3 (Lokhandwala), bringing the total cluster GDV to ~₹12,500 crores. These projects (Lokhandwala, GTB Nagar, Dindoshi, Malad West) focus on creating gated communities with superior amenities and higher incentive FSI under Regulation 33(9).
- Commercial Segment: Strategic expansion into Grade A commercial spaces is underway with the launch of “33Fifteen” in Bandra West (GDV ₹950 crores, 18% sold). Future pipeline includes Prabhadevi (GDV ₹1,150 crores) and a 1.8 million sq. ft. walk-to-work development at the Urbania township in Thane.
- Premium Housing (MMR): Focus remains on the Western Suburbs and South-Central Mumbai (Sewri/Prabhadevi). The company has added 26 projects since FY23, of which 21 are in premium segments, capturing value through urban consolidation.
Company-Specific & Strategic Commentary
- Asset-Light BD Model: Management maintains a strict 10% upfront equity-to-GDV threshold for new projects, targeting 35% gross margins.
- Execution Velocity: Go-to-market timelines have been compressed to 8-12 months from Development Agreement (DA) to launch (e.g., Stella at 8 months, Panorama at 11 months).
- Market Share & Positioning: The company has nearly doubled its market share this year and secured a credit rating of A+ (Positive) from India Ratings.
- ESG Integration: Achieved Net Zero Carbon awards for Belle Vue and initiated GRESB pre-assessments, aligning with a vision for sustainable “future-ready” communities.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Presales | ₹4,000 crores (FY26) | Confident in achievement following Q4 launch of high-value Sewri and Bandstand projects. |
| Growth Trajectory | 25% YoY (FY27) | Management targets consistent 25% annual growth while maintaining cautious forecasting. |
| Business Development | ₹850 - ₹1,000 crores (FY27) | Estimated spend on new project acquisitions, funded via 40% debt and 60% internal accruals. |
| Operating Cash Flow | Upward trend (H2 FY27) | Expected to pick up as Year 1 launch investments stabilize and collections from new projects mature. |
Risks & Constraints
| Risk | Context |
|---|---|
| Regional Pricing Resistance | Projects like Balmoral (Chembur) face slow initial absorption as market “digests” new premium price benchmarks. Management is relying on sample flat completion and competitor launches to validate pricing. |
| Execution Complexity | Cluster redevelopments are inherently more complex than standalone buildings. While they offer higher margins, they require extensive multi-stakeholder management and high-power committee clearances. |
| Cash Flow Timing | Heavy front-loading of construction and approval costs for 5+ launches has temporarily constrained OCF. Sustained performance depends on maintaining a 75-80% collection-to-presales efficiency. |
Q&A Highlights
Cluster Redevelopment Strategy
- Question: What distinguishes cluster redevelopment (33(9)) from normal society redevelopment (33(7)(B))? (Sumit Kumar)
- Answer: Cluster development provides higher incentive FSI for developers and larger rehabilitation areas for residents. It allows for gated communities with 5-6 acre layouts vs. standalone 2,000 sqm plots, improving car parking and amenity efficiency (Chandresh Mehta/Boman Irani).
OCF and Collection Efficiency
- Question: Why has OCF seen a sharp reduction this quarter despite stable revenue? (Ritwik Sheth)
- Answer: Year 1 of a new project typically does not contribute to OCF due to upfront costs. With 5 launches totaling ₹5,835 crores GDV, construction and approval spend has increased significantly. OCF is expected to normalize by H2 FY27 (Sajal Gupta).
Pricing at Balmoral (Chembur)
- Question: Is sales progress slower at the Balmoral project due to price points? (Pritesh Sheth)
- Answer: Market absorption for these premium prices takes time. Management expects traction to improve once the sample apartment is ready and after other premium developers launch nearby, validating the micro-market’s price elevation (Boman Irani).
Growth and Funding
- Question: How will the company fund ₹1,000 crores in BD spend for FY27 if cash is deployed? (Ritwik Sheth)
- Answer: Funding will be a mix of roughly 40% debt and 60% internal accruals. The company maintains a conservative 0.22x leverage, providing significant headroom to borrow if necessary (Chandresh Mehta).
Key Takeaway
Keystone Realtors (Rustomjee) delivered a steady Q3 FY26, characterized by ₹837 crores in presales and a strategic pivot toward large-scale cluster redevelopments and marquee commercial projects. The company has surpassed its annual business development guidance by 1.44x, adding ₹8,650 crores in GDV YTD. While heavy upfront investments in 5 new launches have temporarily constrained operating cash flows, the balance sheet remains robust with a net cash positive position and a low debt-to-equity ratio of 0.22:1. Management remains committed to a 25% annual growth trajectory, supported by a transition to high-margin (35%) premium projects and improved go-to-market speed. For FY27, the focus shifts to maintaining execution momentum at the Lokhandwala and Thane clusters while capitalizing on the infrastructure-led demand in the MMR region.
Want more insights like this?
Subscribe to get deep dives delivered to your inbox.
More Earnings Summaries
Explore more Q3 FY26 earnings call analyses: