Arvind SmartSpaces Limited — Q2 FY26 earnings call

Call held 4 Nov 2025

Management summary

Arvind SmartSpaces reported a mixed Q2 FY26, marked by robust sequential growth in bookings and operating cash flows, largely propelled by the successful launch of Arvind Everland. While H1 bookings and revenue saw a YoY decline, management remains confident in achieving annual presales and business development targets, supported by a strong balance sheet and an aggressive H2 launch pipeline. The company is undergoing an organizational transformation, strengthening its leadership and processes to enhance execution velocity and scalability.

Highlights

  • Q2 FY26 bookings of ₹432 crore showed a significant 147% sequential growth, driven by strong demand for the newly launched Arvind Everland project.

  • The Arvind Everland project in Mankol achieved ₹400 crore in sales bookings, representing 82% of its launched inventory.

  • Operating cash flows for Q2 FY26 surged by 368% QoQ to ₹125 crore, contributing to H1 FY26 operating cash flows of ₹152 crore.

  • The company maintains a strong balance sheet with negative net debt of ₹(32) crore as of September 30, 2025.

  • Management expressed confidence in meeting the annual BD pipeline guidance of ₹4,000 crore and 30-35% presales growth for FY26.

Concerns

  • H1 FY26 bookings declined by 8.9% YoY to ₹607 crore from ₹666 crore in H1 FY25.

  • H1 FY26 revenue decreased by 28.7% YoY to ₹242 crore from ₹340 crore last year.

  • Sustenance sales in Q2 FY26 were weaker than usual, attributed to strategic resource diversion towards the new Everland launch.

  • The Surat project is progressing at a slower pace due to ongoing approval and revenue-related issues.

Key financials

2 periods

Q2

  • Bookings
    ₹432 Cr
    YoY -6.9% QoQ +146.8%
  • Collections
    ₹236 Cr
    YoY -10.3% QoQ +23.5%
  • Revenue
    ₹140 Cr
    YoY -47.4% QoQ +37.3%
  • EBITDA
    ₹31 Cr
    YoY -62.6% QoQ +26.5%
  • PAT
    ₹18 Cr
    YoY -58.1% QoQ +50%
  • Operating Cash Flow
    ₹125 Cr
    YoY +4% QoQ +362.9%

H1

  • Bookings
    ₹607 Cr
    YoY -8.9%
  • Collections
    ₹427 Cr
    YoY -14.1%
  • Revenue
    ₹242 Cr
    YoY -28.7%
  • EBITDA
    ₹55.5 Cr
    YoY -39%
  • PAT
    ₹30 Cr
    YoY -36.2%
  • Operating Cash Flow
    ₹152 Cr

What they filed

Q1 FY27: revenue up 211.8%, net profit up 708.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue266 210 163 102 141 −47%166 −21%155 −5%318 +212%
EBITDA66 59 34 21 30 −55%42 −29%59 +74%156 +643%
Net profit43 50 22 12 18 −58%29 −42%44 +100%97 +708%
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

₹4,110 Cr

as of 2025-09-30 quantified

Inflow this quarter

₹432 Cr

Composition

  • Arvind Everland (Mankol) (project) ₹400 Cr

Pipeline

other

Upcoming launches in H2 FY26 across Bangalore, Baroda, Pen-Khapoli (Mumbai), and an industrial project.

Bookings for Q2 FY26 showed strong sequential growth, primarily driven by the successful launch of Arvind Everland. Sustenance sales were strategically deprioritized to ensure the success of this launch but are expected to pick up in Q3.

Source: Prepared remarks

Capital allocation

high confidence
  • Debt Net cash ₹32 Cr
    Our net debt was negative at Rs. (32) crore as on Sep 30, 2025 from a negative net debt of around Rs. (50) crore as on June 30, 2025.
  • M&A Vadodara residential project Joint venture · Signed

    Strengthening geographic footprint in high potential micro markets of Gujarat, Ahmedabad plus 1 strategy.

    Signed under joint development model with 68% Revenue share coming to ASL.

    Very recently we have entered into the Vadodara residential market, our 23rd project in Gujarat. This is a large-scale horizontal project with a topline potential of around Rs. 700 crore. The project is spread over ~98 acres and signed under the joint development model with 68% Revenue share coming to ASL.
  • Liquidity Liquidity disclosed Company has a lot of cash sitting in its books and has headroom to deploy Rs. 600-700 crore for BD, in addition to the HDFC platform.
    we have a lot of cash sitting in our books, and we have opportunity to deploy more money in deals... headroom of investing anything between Rs. 600 crore to Rs. 700 crore in addition to HDFC platform.

Guidance & targets

Volume

  • BD Pipeline Value Volume · FY26 · High confidence ₹4,000 crore
    we will be aiming that Rs. 4,000 crore guidance that we have given at the start of the year.

    — Priyansh Kapoor

  • Presales Growth Volume · FY26 · High confidence 30-35%
    our run rate is now getting close to the required run rate to hit the guidance of 30%, 35% that we had given at the start of the year.

    — Priyansh Kapoor

  • H2 Launch Stock Value Volume · H2 FY26 · Medium confidence ₹2,500-3,000 crore
    So approximately, I would say between Rs. 2,500 crore to Rs. 3,000 crore what we are looking to, I would say, bring to the market.

    — Priyansh Kapoor

Capital Allocation

  • BD Investment Capacity Capital Allocation · FY26 · High confidence ₹600-700 crore
    headroom of investing anything between Rs. 600 crore to Rs. 700 crore in addition to HDFC platform.

    — Kamal Singal

Growth

  • Company Growth Aspiration Growth · Going forward · Low confidence 35-40%
    aspiration is to continue to grow 35%, 40% going forward, what will it mean?

    — Kamal Singal

What to watch in Q3 FY26

Sustenance Sales Recovery

Q3 FY26
Current Slightly weaker than usual in Q2 FY26 due to resource diversion.
Target Pick up and show momentum in Q3 FY26.

Why it matters

Recovery in sustenance sales is crucial for consistent cash flow generation and overall sales growth beyond new project launches.

very confident that this quarter onwards, sustenance will pick up. And I also mentioned that now we are seeing most of the approvals coming probably November onwards. So we are also seeing this as an opportunity to ramp up our sustenance number. So quarter 3, we are fairly confident with the teams fully mobilized on the sustenance projects. We expect momentum to pick up.

Risks & concerns

  • Weak sustenance sales due to resource diversion

    medium

    Sustenance sales in Q2 were not exciting as resources were diverted to ensure the success of the Arvind Everland launch.

    Management acknowledged

  • Project approval and revenue issues causing delays

    medium

    The Surat project is progressing at a slower pace due to unresolved approval and revenue issues.

    Management acknowledged

  • Unpredictable regulatory timelines for project approvals

    medium

    Regulatory timelines in the real estate industry can be unpredictable, potentially impacting launch schedules.

    Management acknowledged

  • Mumbai market inherent risks

    medium

    Mumbai is a very risky market if one does not understand the risks well, requiring careful partnership selection.

    Management acknowledged

Q&A highlights

6 direct
Weakness in sustenance sales and cancellations Direct
sustenance sales for the quarter were not something which we are very excited about. We did feel we could have done better. But we actually made a strategic choice on focusing on Everland to make it a very large success.

Management acknowledged the underperformance in sustenance sales, explaining it as a strategic trade-off to ensure the success of a major new launch, and expressed confidence in its recovery.

Asked by Amit Srivastava

Delays and status of the Surat project Partial
Surat... has taken a little longer than what we would have otherwise anticipated... As of now, things are moving, but at a slower pace... We should be able to launch it this year, and we are resolving and solving some of the approvals and revenue issues.

Management confirmed ongoing delays for a previously announced project, citing approval and revenue issues, indicating potential challenges in project execution timelines.

Asked by Amit Srivastava

Dip in H1 collections despite bookings growth Direct
this is quarter-on-quarter variability and some bit of it will also kind of flow into half versus half, etcetera... growth rate of 25% to 30% in fresh sales and accordingly, collections is expected, and we should end the year like that.

Management attributed the H1 collections dip to quarterly variability, reassuring that collections are expected to align with sales growth by year-end, implying no fundamental issue with collection efficiency.

Asked by Naysar Parikh

Strategy for new business development (ownership vs JDA) Direct
we will continue to look at a mix of ownership and JDA both as a company strategy. So JDA asset-light has always been our focus... if the deals are very, very lucrative and we feel there is merit in considering them on an outright basis, we are currently more open to that particular scenario as well.

Management clarified its flexible capital allocation strategy for land acquisition, balancing asset-light JDA models with opportunistic outright purchases, leveraging its strong cash position.

Asked by Dhananjay Mishra

MMR market GDV, micro markets, and preferred project size Direct
Rs. 500 crore to Rs. 1,000 crore that continues to be our preferred size and scale of the project to look at right now... upwards of Rs. 25,000, Rs. 30,000 per square foot on the carpet area.

Management provided specific parameters for its target projects in the MMR market, indicating a focus on mid-to-large scale premium residential developments, while also noting flexibility for opportunistic deals.

Asked by Harsh Pathak

Timelines for liquidating inventory in large, long-term projects Direct
Aqua City and Adroda are kind of projects that are called LTVCs in our scheme of things. LTVC is a long-term value creation project... They obviously will have to be phased out very carefully.

Management explained that certain large projects are long-term ventures with phased inventory release, differentiating them from typical projects and managing expectations for their liquidation timelines.

Asked by Harsh Pathak

Strategy for Bangalore market expansion beyond current projects Direct
Bangalore is a market which is Bangalore plus 10 in itself... We think there's a huge opportunity in Bangalore to go deeper. We are just about... the mantra is to go deeper within the city of Bangalore at this point.

Management articulated a strategy of deepening its presence within Bangalore's diverse micro-markets rather than expanding to 'Bangalore plus one' cities, highlighting the significant untapped potential within the city itself.

Asked by Shreyans Mehta

3 min read 7 chapters

Detailed narrative

Q2 and H1 FY26 Financial and Operational Performance

Arvind SmartSpaces reported Q2 FY26 bookings of ₹432 crore, marking a significant 147% sequential growth, though it was a 6.9% YoY decline. H1 FY26 bookings stood at ₹607 crore, down 8.9% YoY. Collections for Q2 FY26 were ₹236 crore, a 23% QoQ increase, while H1 collections were ₹427 crore. Revenue for Q2 FY26 was ₹140 crore (38% QoQ growth) and H1 FY26 was ₹242 crore. The company maintained a strong balance sheet with negative net debt of ₹(32) crore as of September 30, 2025, and generated ₹125 crore in operating cash flows in Q2 FY26, a 368% QoQ increase.

Strategic Focus on New Project Launches

The strong Q2 bookings were primarily driven by the successful launch of the Arvind Everland project in Mankol, which generated ₹400 crore in sales bookings from 954 units, selling 82% of the launched inventory. Management indicated a strategic decision to divert resources to ensure the success of this large launch, which temporarily impacted sustenance sales. However, they expressed confidence that sustenance sales would pick up from Q3 FY26 onwards as resources are re-mobilized.

Business Development and Geographic Expansion

The company recently entered the Vadodara residential market with a large-scale horizontal project spanning ~98 acres, signed under a joint development model with a topline potential of ₹700 crore and 68% revenue share for ASL. This aligns with their 'Ahmedabad plus 1' strategy for Gujarat. Management is confident in meeting its annual BD pipeline guidance of ₹4,000 crore, with a healthy pipeline across Mumbai, Bangalore, and Gujarat. They are open to both asset-light JDA models and outright purchases for lucrative deals.

Capital Allocation and Funding Strategy

Arvind SmartSpaces maintains a robust financial position with negative net debt and significant cash reserves. The company has identified a headroom of ₹600-700 crore for investing in new business development, in addition to leveraging the HDFC platform if needed. This flexible funding approach supports their strategy to lock in future supply at favorable terms and achieve the targeted BD pipeline for the year.

Organizational Transformation and Execution Enhancement

The company is undergoing a significant organizational transformation, including the addition of two CXO-level executives (COO Dharmesh Vyas and CFO Amit Chamaria). This involves strengthening leadership bandwidth, implementing a city-led organizational structure for agile decision-making, and reinforcing processes. The goal is to increase execution velocity, expand project funnels, and enhance customer satisfaction, with a focus on building a strong foundation for hyperscale growth.

Market Outlook and Growth Drivers

India's real estate sector is projected to contribute USD 0.3 trillion to the economy in 2025, driven by improved affordability, lower interest rates, and increasing preference for quality developers. Gujarat, particularly Ahmedabad, is experiencing strong growth due to employment generation and infrastructure development, with events like the Commonwealth Games providing additional momentum. The company sees significant opportunities in these markets, especially for horizontal projects and in deepening its presence in large markets like Bangalore.

Project-Specific Challenges and Long-Term Strategy

The Surat project is facing delays due to approval and revenue issues, though management expects it to be launched this year. For large, long-term value creation projects like Aqua City and Adroda, the company employs a careful phased launch strategy, optimizing inventory release based on micro-market conditions. This approach allows them to manage large land parcels (600-700 acres) effectively over extended periods.

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