Arihant Superstructures Limited — Q4 FY25 earnings call

Call held 27 May 2025

Management summary

Arihant Superstructures reported a mixed Q4 FY25 with a 5% YoY decline in operating revenue to INR 153 crores and a 37% drop in EBITDA to INR 22 crores, primarily due to project clearance delays and increased costs. However, the company achieved strong FY25 sales bookings of INR 889 crores and an 8% YoY increase in collections to INR 545 crores. Management remains confident in future growth, targeting 20-25% annually, supported by a robust land bank and upcoming project launches, despite current regulatory hurdles.

Highlights

  • FY25 Sales Bookings value of INR 889 crores from 1,568 units and 14.61 lakh sq ft.

  • FY25 Collections increased by 8% YoY to INR 545 crores.

  • Q4 FY25 average price per square foot grew by 20% YoY to INR 7,462.

  • Strong land bank of 307+ acres for future launches.

  • Confidence in achieving 20-25% growth in coming financial years.

Concerns

  • Q4 FY25 Operating Revenue decreased by 5% YoY to INR 153 crores.

  • Q4 FY25 EBITDA decreased by 37% YoY to INR 22 crores.

  • Q4 FY25 EBITDA margin declined to 14.55% from 21.74% in Q4 FY24.

  • Delay in project clearances (Arihant Anaika, World Villas, Avanti) impacting revenue recognition and growth.

  • Increased interest costs and employee costs impacting margins.

Key financials

2 periods

Q4 FY25

  • Operating Revenue
    ₹153 Cr
    YoY -5%
  • EBITDA
    ₹22 Cr
    YoY -37.1%
  • EBITDA Margin
    14.6%
  • PAT
    ₹11 Cr

FY25

  • Operating Revenue
    ₹499 Cr
  • EBITDA
    ₹104 Cr
  • EBITDA Margin
    20.9%
  • PAT
    ₹255 Cr

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

₹889 Cr

as of 2025-03-31 quantified

Inflow this quarter

₹186 Cr

Composition

Mix 2 periods
  • Q4 FY25 ₹186 Cr 17.3%
  • FY25 ₹889 Cr 82.7%

Share of order book by period, derived from disclosed amounts

Pipeline

other

307+ acres of land bank in hand and upcoming launches

Cancellations & deferrals

  • deferred: Few projects stuck in environmental clearances (Arihant Anaika, Arihant World Villas, Arihant Avanti) impacting start of construction and revenue booking.
Management expects sales momentum to pick up for World Villas in Q1/Q2 FY26 and anticipates 5-7% price increases in key micro-markets due to infrastructure development.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹650 Cr
    So we want to keep it restricted, say, and be very conservative about it. We expect to grow at 20%, 25%, but there should be surprises. And with respect to capex for construction, our target is to do construction of around INR650 crores for the financial year.
  • Debt Net ₹685 Cr
    So as of now, we are at around INR685 crores of net debt and we'll be comfortable with the debt going to around INR750 crores, INR800 crores. So out of this INR685 crores, INR300 crores is unsecured loans, which is payable when and able. So balance the net debt, which is secured debt is only INR385 crores.
  • Liquidity Liquidity disclosed Total collections for FY25 stood at INR 545 crores, an 8% YoY increase, indicating healthy customer collections.
    Total collections for the year stood at INR545 crores, which is an 8% year-on-year increase. One of the important metrics in the real estate business is customer collections, which continues to remain very healthy for ASL.

Guidance & targets

Other

  • Overall Growth Other · Coming financial years · Medium confidence 20-25%
    We'll stick to the guidance of 20%, 25% growth.

    — Parth Chhajer

Realization

  • Average Price per sq ft (Quarterly) Realization · Coming quarters · Medium confidence INR 6,500-6,700
    So our average pricing, which is at a year-on-year basis around INR6,000 will shoot up to INR6,500, INR6,700 in the coming quarters.

    — Parth Chhajer

  • Average Price per sq ft (Annual) Realization · FY26 · Medium confidence INR 6,500
    It will be around INR6,500, INR6,700 on average so on a year-on-year basis. So this year, we did INR6,084 per square feet, which we expect it to go to around INR6,500 on a total financial year basis.

    — Parth Chhajer

Capex

  • Construction Capex Capex · FY26 · High confidence INR 650 crores
    And with respect to capex for construction, our target is to do construction of around INR650 crores for the financial year.

    — Parth Chhajer

Debt

  • Net Debt Comfort Level Debt · Future · Medium confidence INR 750-800 crores
    So as of now, we are at around INR685 crores of net debt and we'll be comfortable with the debt going to around INR750 crores, INR800 crores.

    — Parth Chhajer

Profitability

  • EBITDA Margin Profitability · FY26 · Medium confidence 24-25%
    Yes, we should be able to sustain at around 24%, 25% in the coming quarters once the new projects start contributing, which we have acquired over the last 2 years. They will have higher EBITDA margins. So then we expect it to grow around 26%, 27% once those projects also start contributing to the revenue. No, I'm not saying Q1. We expect the whole financial year to be that way.

    — Parth Chhajer

What to watch in Q1 FY26

Environmental Clearance Resolution

Next 2-3 months (Q1 FY26)
Current Stay in effect, impacting projects like World Villas, Anaika, Avanti.
Target Stay overturned, clearances received.

Why it matters

Crucial for unlocking revenue recognition and project construction for several key projects.

So 5-kilometer radius is all having a stay as on today, which we expect that it should be overturned over the next 2, 3 months.

Risks & concerns

  • Environmental Clearance Delays

    high

    Project delays and inability to book revenue due to Supreme Court stay on environmental clearances for projects within 5km of eco-sensitive zones, impacting Arihant Anaika, World Villas, Avanti.

    Management acknowledged

  • Increased Costs

    medium

    Rising interest costs from land investments and higher employee costs impacting profitability and Q4 EBITDA margin.

    Management acknowledged

Q&A highlights

8 direct
World Villas sales performance and outlook Direct
We agree that quarter 4 was not so good when it came to World Villas sales. Obviously, there were external factors, which led to postponing of decisions from the clients... But Q1 onwards, we started gaining momentum, and Q2, we'll really be able to cover up a lot...

Addresses a specific project's underperformance and provides a recovery timeline, attributing slowdown to external factors.

Asked by Suyash Bhave

Competitive landscape for World Villas Direct
So at our product level, there is no direct competition. Everybody, whoever is making villas also, their villas are below par to what we are making and to what our designs are. Ours is a very unique concept...

Highlights the company's perceived competitive advantage for a key project due to its unique concept and offerings.

Asked by Suyash Bhave

Drivers of increased average realization per sq ft Direct
Yes. So we saw great sales happening or sorry, better sales happening at Arihant Advika. We sold around 23 units, which is around INR53 crores in value. So that led to the price per square foot going above INR7,000...

Explains a positive trend in realizations for Q4 FY25 and identifies a successful project (Arihant Advika) as the driver.

Asked by Suyash Bhave

Adherence to growth guidance and reasons for slowdown Direct
We'll stick to the guidance of 20%, 25% growth. This year, why we couldn't achieve it is because few of our projects are stuck in the environmental clearances...

Addresses a key investor concern about growth targets and provides specific reasons for current challenges, primarily regulatory delays and increased costs.

Asked by Suyash Bhave

Micro-market pricing and future blended realization Direct
So at Panvel, we have Arihant Aspire, which is our project. We are selling at around INR7,100 per square foot... For Taloja, we have prices across the projects ranging from INR4,800 to INR5,200... In Kharghar, we are able to achieve prices of around INR8,600 per day on saleable...

Provides granular detail on current pricing strategy and market outlook for key micro-markets, expecting future price increases.

Asked by Kriya Agarwal

Environmental clearance delays and revenue recognition impact Direct
So we expect it to be cleared by, say, Q2 or maybe October, basically, which is Q3. So once that is done, recognition can start in 1 or max 2 quarters. So we expected that recognition should happen from Q4 of FY '26.

Clarifies the timeline for resolving a major operational hurdle (environmental clearances) and its financial implications for revenue recognition.

Asked by Siddhant Mayecha

Debt management and funding for new projects Direct
So as of now, we are at around INR685 crores of net debt and we'll be comfortable with the debt going to around INR750 crores, INR800 crores... Also, the debt coming forward is going to be utilized for majorly the annuity assets that we are creating, which is the Gymkhana and the hotel.

Provides clarity on debt strategy, comfort levels, and capital allocation for funding future annuity-generating assets.

Asked by Harsh

Scope and expected resolution of environmental clearance issues Direct
So there is a stay on certain locations. I mean, entire MMR is affected because any property, which is in a 5-kilometer radius, from any eco-sensitive zone... So 5-kilometer radius is all having a stay as on today, which we expect that it should be overturned over the next 2, 3 months.

Provides crucial context on a significant regulatory risk, clarifying its scope and management's expectation for its resolution.

Asked by Suyash Bhave

3 min read 7 chapters

Detailed narrative

Q4 FY25 Financial Performance and Key Operating Metrics

Arihant Superstructures reported a Q4 FY25 operating revenue of INR 153 crores, a 5% decrease YoY from INR 161 crores in Q4 FY24. EBITDA for the quarter stood at INR 22 crores, down 37% from INR 35 crores in the prior year, resulting in an EBITDA margin of 14.55%. Despite this, the company achieved sales bookings of INR 186 crores from 2.49 lakh square feet, with the average price per square foot increasing 20% YoY to INR 7,462.

Full Year FY25 Annual Performance and Collections Growth

For the full financial year 2025, the company recorded an operating revenue of INR 499 crores and an EBITDA of INR 104 crores, with an EBITDA margin of 20.91%. Profit after tax for FY25 totaled INR 255 crores. Total sales bookings for the year reached INR 889 crores from 14.61 lakh square feet across 1,568 units. Collections for FY25 grew 8% YoY to INR 545 crores, demonstrating healthy cash flow.

Regulatory Hurdles and Project Delays

A significant factor impacting the company's growth and revenue recognition in FY25 was the Supreme Court's stay on environmental clearances for projects within a 5-kilometer radius of eco-sensitive zones. This stay, in effect for about a year, has halted construction and revenue booking for key projects such as Arihant Anaika, Arihant World Villas, and Arihant Avanti. Management expects these clearances to be overturned within the next 2-3 months, with revenue recognition potentially resuming from Q4 FY26.

Rising Costs Affecting Profitability

The company experienced margin compression in Q4 FY25, with EBITDA margin declining to 14.55%, primarily due to increased interest costs and higher employee expenses. Investments of approximately INR 300 crores in land over the past two years, funded through internal accruals and debt, contributed to the rise in interest costs. Additionally, the hiring of professionals for sales and engineering departments led to increased employee costs, impacting the profit after tax.

Strategic Growth Initiatives and Upcoming Launches

Arihant Superstructures maintains a positive outlook, targeting 20-25% growth in the coming financial years. The company holds a substantial land bank of over 307 acres, supporting future launches. Planned new phases for FY26 include the third tower at Arihant Avanti in Shilphata, launches at Arihant Aspire Panvel (pending August approvals), and the final towers for Arihant Aloki at Kharghar, alongside future phases for Arihant Anmol at Badlapur.

Debt Profile and Capital Allocation for Annuity Assets

The company reported a net debt of approximately INR 685 crores, with INR 385 crores being secured debt. Management expressed comfort with net debt levels up to INR 750-800 crores. Future debt will primarily be utilized to fund annuity assets, specifically the development of the Gymkhana and a 5-star hotel, which are part of the World Villas project. The company plans a construction capex of around INR 650 crores for FY26.

Improving Realization Trends and Micro-Market Dynamics

The average price per square foot for Q4 FY25 reached INR 7,462, a 20% increase YoY, driven by strong sales at Arihant Advika. Management expects the blended average price per square foot to increase to INR 6,500-6,700 in the coming quarters and around INR 6,500 for FY26. Key micro-markets like Panvel (Arihant Aspire at INR 7,100/sq ft), Taloja (INR 4,800-5,200/sq ft), and Kharghar (INR 8,600/sq ft) are expected to see 5-7% price increases due to ongoing infrastructure development and proximity to the upcoming airport.

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