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    Eldeco Housing

    ELDEHSG
    Realty·13 Feb 2025
    Management Summary

    Eldeco Housing reported strong operational growth in Q3 and 9M FY25, with significant increases in sales bookings and collections, driven by premium projects. While profitability was impacted in Q3 by a low-margin project, the company anticipates a reversion to historical margins with upcoming higher-margin launches. The Lucknow market remains supply-constrained, presenting substantial growth opportunities for Eldeco's robust launch pipeline.

    Highlights

    5

    • 9M FY25 sales booking value surged by 107% YoY to INR279.7 crores, with area booked growing 34% YoY to 432,621 square feet.

    • Collections for 9M FY25 increased by 108% YoY, reaching INR178.5 crores.

    • Q3 FY25 total income grew 55% YoY to INR38.1 crores.

    • Land bank was strengthened with an additional acquisition of 7.3 acres during the quarter.

    • The company has a strong launch pipeline for FY26, including projects worth INR360 crores and a larger undisclosed project.

    Concerns

    4

    • Q3 FY25 consolidated profit after tax declined to INR5.8 crores from INR8.1 crores in Q3 FY24.

    • 9M FY25 net profit decreased to INR18.3 crores from INR22.2 crores in 9M FY24.

    • Q3 FY25 EBITDA margin was modest at 24.4%, primarily due to revenue recognition from the low-margin Imperia Phase 1 project.

    • Management noted a general labor shortage in the industry as a growing challenge.

    What Changed1

    vs Q4 FY25

    Guidance items8 → 6 (-2)
    Key financials

    Metrics

    13

    Periods

    2

    Headline

    4
    • Total Income
      ₹38.1 Cr
      YoY+55.0%
    • EBITDA
      ₹9.3 Cr
    • EBITDA Margin
      24.4%
    • PAT
      ₹5.8 Cr
      YoY-28.4%

    9M

    9
    • Total Income
      ₹106.1 Cr
      YoY+50%
    • EBITDA
      ₹29 Cr
    • EBITDA Margin
      27.4%
    • PAT
      ₹18.3 Cr
      YoY-17.6%
    • Collections
      ₹178.5 Cr
      YoY+108%

    Order Book

    high confidence

    Total Value

    ₹ 279.7 crores

    as of 2024-12-31

    quantified
    107.0% YoY

    Pipeline

    other

    Upcoming launches include Eldeco Hanging Gardens and Eldeco Skywalk (5-6 lakh sq ft, INR360 crores GDV) and a much larger undisclosed project (52 acres, potentially INR600-1000 crores GDV).

    "Sales have been above expectation in terms of velocity across all projects, with 50-60% of inventory typically booked shortly after launch, except for Trinity."

    Source:
    Prepared remarks

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    New land acquisitions were funded by the INR120 crores debt facility.

    Debt

    Debt disclosed

    Liquidity

    Liquidity disclosed

    The company has a clear visibility of about cumulative INR2,000 crores in cash flow over the next 5 years from existing projects and inventory.

    Guidance & targets

    6
    CategoryTargetPriority
    Volume
    Gross Development Value from Hanging Gardens and Skywalk
    INR360 crores
    		High
    Volume
    Saleable Area from Hanging Gardens and Skywalk
    5-6 lakh square feet
    		High
    Sales
    Annualized Sales
    more than INR400 crores
    		High
    Realization
    Sustainable Average Realization per square foot
    INR5,000 to INR6,000
    		High
    Cash Flow
    Cumulative Cash Flow Visibility
    INR2,000 crores
    		High
    Profitability
    Weighted Average EBITDA Margin
    about 40%
    		High

    RERA Approvals for Key Launches

    next 2 to 3 months
    CurrentMap approvals received for Eldeco Hanging Gardens and Eldeco Skywalk; awaiting RERA registrations.
    TargetRERA registrations secured, enabling project launches.

    Why it matters

    RERA approvals are a prerequisite for launching these projects, which are key components of the FY26 pipeline and GDV targets.

    We have received map approvals for Eldeco Hanging Gardens and Eldeco Skywalk. These projects are poised for launch as soon as we secure the RERA registrations for them. ... So, they should hit the market in next 2 to 3 months, both of them.

    How to verify

    order_book.pipeline

    Risks & concerns

    4
    RiskSeverity

    Labor Shortage

    General labour shortage in the industry, particularly from Bihar and Jharkhand, is gradually becoming a challenge for execution. — Management acknowledged

    medium

    Project Approval Delays

    RERA and local municipal approval processes can take 5-6 months, potentially delaying project launches. — Management acknowledged

    medium

    Project-Specific Execution Challenges

    Eldeco Trinity project experienced a 3-month delay in the basement stage due to a high-water table, though it is now progressing smoothly. — Management acknowledged

    low

    Margin Volatility from Project Mix

    Q3 FY25 EBITDA margin was modest due to revenue recognition from the low-margin Imperia Phase 1 project, but higher-margin projects are expected to revert margins to historical levels. — Management acknowledged

    low

    Q&A highlights

    7

    “the pipeline is Hanging Gardens and Skywalk. And between them, they have about 5 lakhs to 6 lakh square feet of saleable area at an average realization of INR6,000 a square foot, that's INR360 crores. Then there's another location which because we have not yet applied for approval, so, we are not disclosing it fully, but that's a much bigger launch. That will come towards the second half of the year, which will be much bigger than this.”

    Clarifies the immediate launch pipeline with specific GDV and area, and hints at a significantly larger project later in the year, providing visibility into future revenue.

    asked by Tanisha Jain

    2 min read5 chapters

    Detailed Narrative

    01

    Strong Operational Performance in 9M FY25

    Eldeco Housing reported robust operational growth for the nine months ending December 31, 2024. Sales booking value surged by 107% year-on-year to INR279.7 crores, with the area booked increasing by 34% to 432,621 square feet. Collections also saw a significant rise of 108% year-on-year, reaching INR178.5 crores. The average realization for 9M FY25 stood at INR6,465 per square foot, marking a historical high driven by the luxury project Eldeco Trinity.

    02

    Q3 FY25 Financials and Margin Dynamics

    For Q3 FY25, consolidated total income grew 55% year-on-year to INR38.1 crores. However, consolidated profit after tax declined to INR5.8 crores from INR8.1 crores in Q3 FY24. The EBITDA margin for the quarter was modest at 24.4%, primarily due to revenue recognition from Imperia Phase 1, a low-margin project. Management expects margins to revert to a weighted average of approximately 40% in the coming financial year with the recognition of higher-margin projects like Imperia Phase 2.

    03

    Robust Launch Pipeline and Land Bank Expansion

    The company has a strong launch pipeline for FY26, including Eldeco Hanging Gardens and Eldeco Skywalk, which are expected to generate INR360 crores in gross development value from 5-6 lakh square feet. Additionally, Eldeco acquired 7.3 acres of land during the quarter, strengthening its land bank. A much larger project on 52 acres, with a potential GDV of INR600-1000 crores, is also in the pipeline for the second half of FY26, pending approvals.

    04

    Favorable Lucknow Market Conditions

    Lucknow is characterized as a supply-constrained market, with annual absorption of 2,000-3,000 units, which management believes could easily double. The city's improved infrastructure, including a new airport, roads, metro, and social amenities, is driving demand for premium products. Sales velocity has been strong, with 50-60% of inventory typically booked shortly after launch, indicating a robust market for Eldeco's offerings.

    05

    Capital Allocation and Debt Management

    Eldeco deployed an INR120 crores debt facility for new land acquisitions during the period. Construction spend for 9M FY25 increased by 68% year-on-year to INR105.1 crores. The company currently has no plans for taking on additional debt. Management highlighted a clear visibility of cumulative cash flow of approximately INR2,000 crores over the next five years from existing projects and unsold inventory.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.