Summary
Suraj Estate Developers Limited - Q3 FY 2026 Earnings Call Summary Thursday, January 29, 2026
Event Participants
Executives 2 Rahul Thomas (Whole-Time Director), Shreepal Shah (Chief Financial Officer)
Analysts 5 Diyvansh Singh (DS Broking), Jiya Shah (Wealth Investments), Rahil (Sapphire Capital), Rajat (Fortune), Ravi Shah (VRS Capital), Rajendra (Individual Investor)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Income (9M FY26) | ₹460 crores | +11% YoY; driven by steady sales and commercial traction. |
| Total Income (Q3 FY26) | ₹182 crores | +6% YoY; supported by strong launch momentum in commercial segment. |
| EBITDA (9M FY26) | ₹171 crores | -2.8% YoY; slight moderation compared to ₹176 crores in 9M FY25. |
| EBITDA (Q3 FY26) | ₹55 crores | +14.6% YoY; margin improvement attributed to operating leverage. |
| PAT (Q3 FY26) | ₹25 crores | +25% YoY; growth from ₹20 crores in the previous year’s quarter. |
| Sales Value (Q3 FY26) | ₹253 crores | +137% YoY; significant jump due to the mixed contribution of residential and commercial products. |
| Sales Volume (Q3 FY26) | 51,826 sq. ft. | +211% YoY; primarily driven by the launch of Suraj One Business Bay. |
| Collections (Q3 FY26) | ₹124 crores | +48% YoY; reflecting stable cash flow from ongoing projects. |
| Net Debt | ₹500 crores | Currently less than 0.5x of total equity base. |
Geographic & Segment Commentary
- South Central Mumbai (SCM): The company’s core micro-market where it maintains a dominant foothold through historical land parcels and brand recall. Management is focusing on SCM for both value-luxury residential (1-2 BHKs) and Grade A commercial projects, citing stable demand and high investor interest.
- Bandra: Strategic focus for future luxury expansion where management is currently aggregating land parcels (recently added 1,760 and 906 sq. meters). Launch for this luxury cluster is anticipated in FY27, with revenue impact expected by FY28 as realizations command a premium (₹1 lakh to ₹1.5 lakh per sq. ft.).
- Commercial Segment: Emerged as a significant growth driver with “Suraj One Business Bay” achieving ₹200 crores in sales (40,000 sq. ft.) within 45 days of launch. The total GDV for this specific project is estimated at ₹1,200 crores, with 14 office floors catering to diverse corporate occupiers.
Company-Specific & Strategic Commentary
- Pagdi Redevelopment Opportunity: Management highlighted a proposed Maharashtra government framework targeting 19,000 legacy Pagdi buildings. This move is expected to unlock high-value land parcels in SCM; current project margins already factor in tenant rental costs, minimizing IRR risks.
- Product Mix Strategy: The company is pivoting towards a balanced mix of “Value Luxury” (₹2-3.5 crore range) and Commercial “Build-to-Sell” to maintain steady cash flow. Luxury inventory (e.g., Ocean Star, Palette) is nearly exhausted, making the upcoming Bandra cluster the next major luxury play.
- Operational Efficiency: Received the Euromoney Real Estate Award for India’s Best Residential Developer, reflecting a 4-decade execution track record and brand strength in Mumbai.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Pre-sales (FY26) | ₹600 crores | Management maintained the target, aiming to overperform despite potential project spillovers. |
| EBITDA Margin | 35% to 40% | Blended average of 35% expected; commercial margins (25-28%) offset by high-margin residential (38-40%). |
| Project Launches | Q1 FY27 | Some residential launches may spill over from H2 FY26 due to regulatory approval delays and plan changes. |
| Bandra Sales | FY28 | Sales visibility expected a year after the FY27 launch as luxury buyers typically wait for sample flats. |
Risks & Constraints
| Risk | Context |
|---|---|
| Funding Gaps | Potential non-receipt of ₹50 crore warrant balance due to current stock price variation relative to commitment price; warrants expire around March-May 2026. |
| Project Delays | The “Palette” project RERA date was extended to September 2026 (9 months) due to delays in importing high-speed elevators. |
| Regulatory Dependencies | Upcoming pipeline and land unlockings (Pagdi buildings) are highly dependent on evolving state government policies and timely issuance of OCs. |
Q&A Highlights
Commercial vs. Residential Strategy
- Question: What is the target commercial share of GDV over the next 3-4 years? (Diyvansh Singh)
- Answer: Commercial will have a majority contribution in the pipeline; specific numbers will be clarified in the March call, but One Business Bay already represents ₹1,200 crore GDV. (Rahul Thomas)
Bandra Project Economics
- Question: What will be the margins for the Bandra project? (Rahil)
- Answer: Bandra commands a premium realization of ₹1 lakh to ₹1.5 lakh per sq. ft., while construction costs remain stable, leading to higher-than-average margins. (Shreepal Shah)
Capital Structure
- Question: Will the remaining warrant funds of ₹50 crores come in? (Rajender)
- Answer: Given the current price variation compared to the commitment, management does not expect the balance to come into the system before the expiry. (Rahul Thomas)
Project Execution (Palette)
- Question: Why was the Palette project timeline moved out? (Jiya Shah)
- Answer: Delay was caused by a shipment lag for 4 imported high-speed elevators; however, interior fit-outs for customers have already commenced. (Rahul Thomas)
Key Takeaway
Suraj Estate Developers reported a steady Q3 FY26, characterized by a significant 137% YoY surge in quarterly sales value to ₹253 crores, driven largely by the successful launch of Suraj One Business Bay. While net debt remains healthy at under 0.5x equity, management is maintaining a conservative FY26 pre-sales guidance of ₹600 crores. The strategic focus is shifting toward commercial assets in South Central Mumbai and land aggregation in Bandra to drive future premium realizations. Despite a slight delay in the Palette project and uncertainty regarding warrant funding, the company maintains a strong blended EBITDA margin outlook of 35%. Looking forward, the company’s growth hinges on the FY27 launch of the Bandra luxury cluster and the potential unlocking of high-value land through the new Pagdi redevelopment framework.
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