Concall AI

Eldeco Housing And Industries Limited — Q3 FY25 earnings call

Call held 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

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

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.

Key financials

2 periods

Headline

Total Income
₹38.1 Cr
YoY +55%
EBITDA
₹9.3 Cr
EBITDA Margin
24.4%
PAT
₹5.8 Cr
YoY -28.4%

9M

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%
Sales Booking Value
₹279.7 Cr
YoY +107%
Area Booked
4,32,621 sq ft
YoY +34%
Construction Spend
₹105.1 Cr
YoY +68%
Average Realization
₹6,465/sq ft

What they filed

Q1 FY27: revenue up 69.0%, net profit up 400.0% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	33	35	37	29	33 +0%	43 +23%	60 +62%	49 +69%
Expenses	28	29	31	25	30	25	54	32
EBITDA	5	6	6	3	3 −40%	18 +200%	7 +17%	17 +467%
Margin	15%	17%	16%	11%	10%	41%	11%	36%
Other income	3	3	1	2	2	2	4	1
Interest	1	1	1	1	1	1	0	1
Depreciation	0	0	0	0	0	0	0	0
Profit before tax	6	8	5	4	4 −33%	19 +138%	10 +100%	18 +350%
Tax rate	30%	28%	40%	29%	39%	26%	53%	15%
Net profit	5	6	3	3	3 −40%	14 +133%	5 +67%	15 +400%
EPS	4.59	5.87	3.30	3.18	2.67	13.90	4.93	15.37

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

₹279.7 Cr

as of 2024-12-31 quantified

107% 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

high confidence

Capex Capex disclosed New land acquisitions were funded by the INR120 crores debt facility.
- Land acquisition
Yes, that's where the new land acquisitions have happened from.
Debt Debt disclosed
- New borrowing INR120 crores debt facility deployed for new land acquisitions. ₹120 Cr
Okay. And have we deployed the INR120 crores debt facility that we took? Yes, that's where the new land acquisitions have happened from.
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.

over the next 5 years, we have a clear visibility of about cumulative INR2,000 crores at the moment.

Guidance & targets

Volume

Gross Development Value from Hanging Gardens and Skywalk Volume · FY26 · High confidence INR360 crores

we are expecting a realization of about INR6,000 per square foot at launch in both these projects. So, state multiplication will give you INR360 crores of gross development value.

— Pankaj Bajaj
Saleable Area from Hanging Gardens and Skywalk Volume · FY26 · High confidence 5-6 lakh square feet

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.

— Pankaj Bajaj

Sales

Annualized Sales Sales · next year · High confidence more than INR400 crores

You have also stated that you want to reach annualized sales for more than INR400 crores. Can that be expected in the next year? Yes, why not. ... to say that we will get an annualized figure of INR400 crores of fresh bookings every year and including the next year, yes, that's a fair expectation.

— Pankaj Bajaj

Realization

Sustainable Average Realization per square foot Realization · new normal · High confidence INR5,000 to INR6,000

So, I think INR5,000 to INR6,000 will be the new normal. It used to be, if you remember, till last year, it used to be INR3,500.

— Pankaj Bajaj

Cash Flow

Cumulative Cash Flow Visibility Cash Flow · over the next 5 years · High confidence INR2,000 crores

over the next 5 years, we have a clear visibility of about cumulative INR2,000 crores at the moment.

— Pankaj Bajaj

Profitability

Weighted Average EBITDA Margin Profitability · coming financial year · High confidence about 40%

So, if we recognize that, we are able to get the completion certificate of Imperia Phase 2 in the coming financial year, then our consolidated weighted average EBITDA margin will revert to our mean, which is about 40%.

— Pankaj Bajaj

What to watch in Q4 FY25

RERA Approvals for Key Launches

next 2 to 3 months

Current Map approvals received for Eldeco Hanging Gardens and Eldeco Skywalk; awaiting RERA registrations.

Target RERA 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.

Risks & concerns

Labor Shortage
medium

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

Management acknowledged
Project Approval Delays
medium

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

Management acknowledged
Project-Specific Execution Challenges
low

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 but manageable
Margin Volatility from Project Mix
low

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 and explained

Q&A highlights

6 direct

Launch Pipeline and Cash Flow Generation Direct

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

Sustainable Realizations and Cash Flow Visibility Direct

So, I think INR5,000 to INR6,000 will be the new normal. It used to be, if you remember, till last year, it used to be INR3,500. ... over the next 5 years, we have a clear visibility of about cumulative INR2,000 crores at the moment.

Establishes the company's expected average realization trend, indicating premiumization, and provides a long-term cash flow outlook from existing inventory and projects.

Asked by Abhishek Agarwal

Operational Execution and Labor Shortage Direct

everything is on schedule. There's no red flag on the execution side. ... Apart from a general comment that there is general labour shortage in the industry now because of all the schemes which are being rolled out in the hinterland in Bihar and Jharkhand and Orissa where labour usually comes from. So labour is gradually becoming a challenge.

Confirms project execution is largely on track but highlights a potential industry-wide risk of labor shortage, which could impact future timelines or costs.

Asked by Priyank Gupta

Lucknow Market Dynamics and Supply Constraints Direct

Lucknow is a supply-constrained city. I think the city can absorb much more than the numbers show right now. ... If you are able to start a project, there are people who would want to buy because the supply is so short.

Explains the favorable market conditions in Lucknow, characterized by high demand and limited supply, which supports the company's strong sales velocity and future growth prospects.

Asked by Karan Premchand Gupta

EBITDA Margin Trajectory Direct

historically, our EBITDA margins have been close to 35%-40%. ... Imperia 2 is a much higher margin and a bigger project. There, the EBITDA margin is close to 45%-50%. ... our consolidated weighted average EBITDA margin will revert to our mean, which is about 40%.

Addresses the Q3 margin compression, clarifies the impact of project mix, and provides clear guidance on the expected recovery and sustainable level of EBITDA margins.

Asked by Priyam Poddar

Revenue Recognition for Imperia Phase 2 and Eldeco Twin Tower Direct

Imperia Phase 2: we may go for revenue recognition this year, but that will be touch and go. It will be either this financial year. And when I say this, I mean FY26, or it will be FY27. ... Eldeco Twin Tower: Of course, since we got the completion certificate and I think 90% of that inventory is sold out, it must be there in the presentation. So, revenue recognition should happen now.

Provides clarity on the timing of revenue recognition for key projects, which will significantly impact future financial results, especially for the higher-margin Imperia Phase 2.

Asked by Manan Patel

Openness to JDA and Inorganic Opportunities Partial

We are 100% open, Manan, but the local market, the local landlord ecosystem does not seem to be that open. ... If an opportunity for JDA comes along, we will be open to it. ... not aware of any inorganic opportunities in Lucknow because the kind of situation we are facing of scant supply in terms of the rising demand, the same is the case with other developers in Lucknow.

Indicates the company's strategic flexibility regarding land acquisition models but also highlights the challenges in the Lucknow market for such partnerships due to the tight supply.

Asked by Manan Patel

2 min read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

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