Arihant Superstructures Limited — Q1 FY26 earnings call

Call held 13 Aug 2025

Management summary

Arihant Superstructures reported a strong Q1 FY26, with significant revenue, EBITDA, and PAT growth driven by robust sales bookings and improved realizations. The company expanded its land bank with strategic acquisitions for premium villa and hotel projects, reinforcing its focus on high-margin segments. Management expressed confidence in future growth, supported by a strong launch pipeline and the resolution of environmental clearance issues, particularly in the high-potential Navi Mumbai region.

Highlights

  • Consolidated operating revenue for Q1 FY26 stood at INR121 crores, a 44.05% year-on-year increase from INR84 crores in Q1 FY25.

  • EBITDA for Q1 FY26 increased by 236.36% to INR37 crores, up from INR11 crores in Q1 FY25, with EBITDA margin improving significantly to 30.5% from 12.6%.

  • Profit after tax for Q1 FY26 was INR15.9 crores, a 695% increase compared to INR2 crores in Q1 FY25.

  • Achieved sales bookings of INR151 crores (2.01 lakh square feet) from 192 units, with average price per square foot increasing by 48% to INR7,493.

  • Strengthened capital base by raising INR37.6 crores through warrant conversion to equity, and strategically acquired 12.5 acres of land for future projects.

Concerns

  • Anticipated high competition in the Mumbai MMR market may lead to slightly lower margins, though the company's strategy focuses on unique premium offerings to mitigate this.

  • Experienced a temporary labor shortage in April and May, which has since been resolved with operations back on track from June.

Key financials

  1. Operating Revenue ₹121 Cr +44%YoY
  2. EBITDA ₹37 Cr +236.4%YoY
  3. EBITDA Margin 30.5%
  4. Profit Before Tax ₹21.2 Cr +715.4%YoY
  5. Profit After Tax ₹15.9 Cr +695%YoY
  6. Net Worth ₹421.9 Cr +29.7%YoY

What they filed

Q1 FY27: revenue up 8.8%, net profit down 38.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue112 151 153 121 123 +10%126 −16%181 +18%132 +9%
EBITDA29 43 22 37 30 +4%29 −32%30 +37%28 −25%
Net profit16 25 11 16 10 −38%8 −68%12 +6%10 −39%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

₹151 Cr

as of 2025-06-30 quantified

Inflow this quarter

₹151 Cr

Pipeline

other

Good lineup of launches coming in Q2, Q3, Q4.

The company achieved strong sales bookings for the quarter, driven by premium housing and increased realizations, with a focus on maintaining sales velocity without aggressive price hikes on under-construction inventory.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹500 Cr
    • Residential development construction ₹450 Cr
    • Annuity assets development ₹50 Cr
    So the planned construction capex for FY '26 is around INR450 crores with respect to construction. This is towards the residential development. And towards the annuity assets, we should be spending somewhere around INR50 crores in this financial year.
  • Debt Debt disclosed Cost 12.5%
    • New borrowing Expected additional debt for Gymkhana and hotel development (annuity assets). ₹150 Cr
    Blended cost of borrowing is around 12.5%.
  • M&A Land at Chouk Manivali Acquisition · Closed · Consideration ₹[object Object] (undisclosed)

    Expanded development footprint for Project Town Villas, increasing total project size to 88 acres.

    On the business development front, the company expanded its development footprint with the acquisition of additional 11 acres at Chouk Manivali, which is for the Project Town Villas. And the total project size has now increased to 88 acres. ... The 11 acres will be around INR18 crores.
  • M&A Land for 5-star hotel Acquisition · Closed · Consideration ₹[object Object] (undisclosed)

    Acquired land for a 5-star hotel under development by wholly-owned subsidiary, Dwellcons Pvt Ltd, increasing total hotel land to 10 acres.

    Apart from this, we also acquired additional 1.5 acres of land, which will be utilized towards the 5-star hotel, which is under the development in the wholly-owned subsidiary, Dwellcons Pvt Ltd. With this now, the total hotel land will be at around 10 acres... The 1.5 acres, which was the hotel land that is somewhere around INR4.8 crores.

Guidance & targets

Sales

  • Presales Value Sales · FY26 · High confidence INR1,100 crores
    Yes. FY '26, we are looking at around INR1,100-odd crores with respect to presales.

    — Parth Chhajer

  • Presales Value Sales · FY27 · High confidence INR1,500 crores
    FY '27, we will be looking at around INR1,500 crores of presales.

    — Parth Chhajer

Profitability

  • EBITDA Margin Profitability · Ongoing · High confidence 30-33%
    So yes, we have been saying that we'll be able to achieve around 30%, 33% EBITDA margin.

    — Parth Chhajer

  • Return on Equity (ROE) Profitability · Long-term · High confidence 20-25%
    With respect to ROE, we'd like to be at 20%, 25% of the total in terms of ROE, that's our target.

    — Parth Chhajer

Capex

  • Construction Capex Capex · FY26 · High confidence INR500 crores
    So the planned construction capex for FY '26 is around INR450 crores with respect to construction. This is towards the residential development. And towards the annuity assets, we should be spending somewhere around INR50 crores in this financial year.

    — Parth Chhajer

Debt

  • Additional Debt Debt · Next 1.5-2 years · High confidence INR150 crores
    So we expect an additional INR150 crores of debt to increase because of the development of the Gymkhana and the hotel.

    — Parth Chhajer

Project Timelines

  • World Villas Completion Project Timelines · From now · Medium confidence 4.5-5 years
    We just started off with the World Villas project like a few months ago, full swing in construction. And we expect that project to take around 4.5 to 5 years.

    — Parth Chhajer

  • Town Villas Construction Start Project Timelines · April 2026 · High confidence April 2026
    Town Villas, we have expected that by April 2026, we'll start construction, and it will take 5 to 6 years from there to complete it.

    — Parth Chhajer

  • Hospital Project Work Start Project Timelines · October · High confidence October
    Work will start from October onwards, and we expect the asset to be ready in 3.5 to 4 years.

    — Parth Chhajer

Regulatory

  • Environmental Clearances Regulatory · December 2025 · High confidence All ECs by December '25
    So safely, I think we can say by December, we should be having all the environmental clearances for the projects, Arihant Avanti at Shilphata, Arihant 7 Anaika at Taloja.

    — Parth Chhajer

What to watch in Q2 FY26

Environmental Clearances for Key Projects

next quarter
Current Supreme Court cleared matter, processes starting this month-end
Target All ECs for Arihant Avanti and Arihant 7 Anaika by December 2025

Why it matters

Resolution of ECs is crucial for commencing construction and revenue recognition for significant projects from Q4 FY26.

So safely, I think we can say by December, we should be having all the environmental clearances for the projects, Arihant Avanti at Shilphata, Arihant 7 Anaika at Taloja.

Risks & concerns

  • High competition in Mumbai MMR

    medium

    High competition in Mumbai MMR may lead to slightly lower margins, but the company's focus on unique premium offerings in specific micro-markets aims to mitigate this.

    Management acknowledged

  • Labor availability

    low

    Experienced a temporary labor shortage during April and May due to workers returning home, but operations are back on track from June.

    Management acknowledged

Q&A highlights

8 direct
Planned Capex for FY26 and GDV Alignment Direct
So the planned construction capex for FY '26 is around INR450 crores with respect to construction. This is towards the residential development. And towards the annuity assets, we should be spending somewhere around INR50 crores in this financial year.

This question clarified the company's capital expenditure plans for the current fiscal year, distinguishing between residential and annuity asset development, which is crucial for understanding future project pipeline and funding needs.

Asked by Parth Patel

Drivers of EBITDA Growth and Sustainability Direct
And in this quarter, because Arihant Aalishan was completed, so the estimates had to be corrected for the projected costs, and that has resulted in better margins coming in this quarter.

The analyst probed into the significant EBITDA growth, and management's response attributed it to project completion and cost corrections, providing insight into the quality and sustainability of margin expansion.

Asked by Parth Patel

Inventory Management and Pricing Strategy Direct
Our strategy is that we keep selling, don't take significant huge price rises, but still stagnantly take a 5%, 7% price rise as per the market situation and yet not affect the velocity of the sales.

This question addressed the strategy for managing unsold inventory and pricing in a competitive market, revealing the company's approach to balancing sales velocity with price appreciation.

Asked by Parth Patel

Sales Targets for FY26 and FY27 Direct
Yes. FY '26, we are looking at around INR1,100-odd crores with respect to presales. ... FY '27, we will be looking at around INR1,500 crores of presales.

The analyst sought specific forward-looking guidance on sales, and management provided clear presales targets for the next two fiscal years, offering key indicators for future revenue.

Asked by Amit

Debt Levels and Cost of Borrowing Direct
The debt will increase in the coming 1.5 years, 2 years because debt is majorly going towards the making of the annuity assets. So we expect an additional INR150 crores of debt to increase because of the development of the Gymkhana and the hotel. ... Blended cost of borrowing is around 12.5%.

This question provided crucial information on the company's debt strategy, including expected increases for annuity assets and the current blended cost of borrowing, which impacts profitability.

Asked by Amit

Project Completion Timelines for World Villas and Town Villas Direct
We just started off with the World Villas project like a few months ago, full swing in construction. And we expect that project to take around 4.5 to 5 years. Town Villas... we'll start construction, and it will take 5 to 6 years from there to complete it.

Understanding the long-term development timelines for these significant premium projects is vital for assessing future revenue recognition and cash flow generation.

Asked by Devyash Shah

Update on Environmental Clearance Issues Direct
The Supreme Court has now cleared the matter and environmental clearance processes will start from this month end. ... by December, we should be having all the environmental clearances for the projects.

This update on regulatory hurdles is critical as it signals the removal of a significant bottleneck, allowing construction to commence on key projects and enabling future revenue recognition.

Asked by Suyash Bhave

Details on the Hospital Project Direct
We are in the phase of finalizing the agreement. So post finalization of the agreement, we'll be happy to come back to the markets and speak about it. The design is done. We have completed the approval process also. Work will start from October onwards, and we expect the asset to be ready in 3.5 to 4 years.

This question provided an update on a new annuity asset, the hospital project, detailing its current status, expected start of work, and completion timeline, indicating future diversification and revenue streams.

Asked by Amit Agicha

2 min read 6 chapters

Detailed narrative

Strong Q1 FY26 Financial Performance

Arihant Superstructures delivered a robust financial performance in Q1 FY26, with consolidated operating revenue growing by 44.05% year-on-year to INR121 crores. EBITDA saw a significant surge of 236.36% to INR37 crores, leading to an improved EBITDA margin of 30.5%. Profit after tax also witnessed substantial growth, increasing by 695% to INR15.9 crores, reflecting strong operational efficiency and project execution.

Robust Sales Bookings and Collections

The company achieved strong sales bookings of INR151 crores, representing 2.01 lakh square feet from 192 units during the quarter. This was accompanied by total collections of INR126 crores. A notable highlight was the 48% increase in average price realization per square foot, reaching INR7,493, primarily driven by a higher contribution from the premium housing segment. Unsold inventory stood at 94 units, valued at INR21 crores.

Strategic Land Bank Expansion and Project Development

Arihant Superstructures strategically expanded its land bank by acquiring an additional 11 acres at Chouk Manivali for Project Town Villas, increasing its total size to 88 acres. Furthermore, 1.5 acres were acquired for a 5-star hotel under its wholly-owned subsidiary, Dwellcons Pvt Ltd, bringing the total hotel land to 10 acres. These acquisitions are integral to the company's focus on premium developments like World Villas and Town Villas, which are expected to offer over 1,800 villa units with a combined GDV of INR3,750 crores.

Capital Allocation and Debt Strategy

For FY26, the company plans a construction capex of INR450 crores for residential development and INR50 crores for annuity assets, totaling INR500 crores. The blended cost of borrowing is approximately 12.5%. Management expects an additional INR150 crores of debt in the next 1.5-2 years, primarily to fund the development of annuity assets such as the Gymkhana and the hotel, aligning with its long-term growth strategy.

Positive Outlook for Navi Mumbai MMR and Market Strategy

The company maintains a positive outlook for the Navi Mumbai MMR region, citing major growth drivers like the upcoming Navi Mumbai International Airport (expected to start operations by October 2025) and the operational Atal Setu. These infrastructure developments are anticipated to create 10 lakh new jobs, fueling residential demand. Arihant's strategy involves leveraging its first-mover advantage in micro-markets like Chowk (Panvel) with unique premium villa offerings to ensure higher margins despite increasing competition.

Regulatory Headwinds Cleared and Project Timelines

A significant positive development was the Supreme Court's clearance of environmental clearance issues, with processes expected to commence this month-end. The company anticipates securing all necessary environmental clearances for projects like Arihant Avanti and Arihant 7 Anaika by December 2025, enabling construction to start from Q4 FY26 and revenue recognition from the next financial year. Key project timelines include 4.5-5 years for World Villas and 5-6 years for Town Villas (from an April 2026 construction start), with a new hospital project expected to begin work in October and be ready in 3.5-4 years.

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