Eldeco Housing And Industries Limited — Q4 FY25 earnings call

Call held 23 May 2025

Management summary

Eldeco Housing reported a mixed FY25 with lower fresh bookings and area booked due to launch delays, though this was offset by higher realizations from luxury projects. Collections saw strong 105% YoY growth. The company successfully aggregated 50 acres for a new large project and received strong initial response for recent launches. Management is optimistic about FY26 with a pre-sales target of ₹500 crores and plans for further land aggregation.

Highlights

  • FY25 collections grew 105% YoY to ₹253.9 crores.

  • Realization per square foot grew 32% YoY to ₹6,568.

  • Recommended a higher dividend of 450% (up from 400%).

  • Successful aggregation of 50 acres of land for Eldeco Salano Garden.

  • Phenomenal response to Eldeco Hanging Gardens, with nearly 70% inventory booked within the first week of launch.

Concerns

  • FY25 fresh area booked significantly lower at 5.1 lakh sq ft vs 7.8 lakh sq ft last year.

  • FY25 fresh bookings of ₹337 crores were 15% lower than guidance due to launch delays.

  • Operational margin remained low in FY25 due to Imperia Phase-1 revenue recognition.

  • Lower PAT for FY25.

Key financials

  1. Collections ₹253.9 Cr +105%YoY
  2. Fresh Bookings ₹337 Cr
  3. Realization per sq ft ₹6,568 +32%YoY
  4. Construction Spend ₹156 Cr +60%YoY
  5. Dividend 450%
  6. Cash ₹123 Cr

What they filed

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

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue33 35 37 29 33 +0%43 +23%60 +62%49 +69%
EBITDA5 6 6 3 3 −40%18 +200%7 +17%17 +467%
Net profit5 6 3 3 3 −40%14 +133%5 +67%15 +400%
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

₹337 Cr

as of 2025-03-31 quantified

Composition

  • Eldeco Trinity (project)
  • Eldeco Hanging Gardens (project)

Pipeline

other

Upcoming launches include Eldeco Skywalk (underway) and Eldeco Salano Garden (Q3 launch).

Cancellations & deferrals

  • deferred: Delays in approvals and launches for FY25 projects resulted in lower fresh area booked.
FY25 bookings were lower than guidance due to launch delays, but new launches like Hanging Gardens received phenomenal response, and a strong pipeline is building for FY26.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed from advances from customers, internal resources and some debt
    • Land aggregation for Eldeco Salano Garden and other locations ₹250 Cr
    We largely do not need loans or construction finance to finance our construction which is being financed from advances from customers. ... we can easily manage this kind of CAPEX with our internal resources and with some debt ... This 70 acres, what would be the outflow expected in cash? Pankaj Bajaj: It should be about Rs.250 crores.
  • Debt Debt disclosed
    • New borrowing Expects debt to increase for business development.
    So our debt should be at the end of this year, what to expect the debt levels to be? Pankaj Bajaj: We have not done these kind of granular projections, but yes we will have to dip into debt.
  • M&A Land on new Jail Road, Lucknow Acquisition · Closed

    For integrated township project Eldeco Salano Garden.

    The other achievement for the year was successful aggregation of 50 acres of land on new Jail Road in Lucknow.
  • M&A Land at few other locations in Lucknow Acquisition · Pending regulatory

    For future developable projects.

    we are right now in the process of aggregating developable lands at a few other locations in Lucknow.
  • Liquidity Cash ₹123 Cr Cash is impacted by RERA guidelines, mandating 70% of collections into escrow, limiting usable cash.
    we have a strong balance sheet with about Rs.123 crores in cash. ... this cash is not available to use, and this paradox is because of the RERA guidelines which has come in, which mandate us to deposit 70% of all collection into a RERA designated escrow account which can be used only in the project.

Guidance & targets

Pre-sales

  • Annual Pre-sales Pre-sales · FY26 · High confidence Rs.500 crores

    Previously Rs.400 crore → Rs.500 crores

    So for this year we had guided about Rs.400 crore, and we have been short of that, we are about Rs.340 odd crore. So we will make up for that plus we will make, I had said that generally we would be at Rs.400 crore will be a new normal so that whole. So, I think on the whole, we should be touching Rs.500 crores this year. Minimum, I will be disappointed if it is anything less than Rs.500, I would expect it to be higher than that.

    — Pankaj Bajaj

Project Launch

  • Eldeco Salano Garden Launch Project Launch · FY26 · Medium confidence Q3
    Then in the third quarter, we will have probably have the launch for Solano Garden.

    — Pankaj Bajaj

Project Completion

  • Imperia Phase-2 Completion Certificate Application Project Completion · 2025 · High confidence September and October
    We are targeting to apply for completion certificate sometime in October and receive them by say December

    — Pankaj Bajaj

Revenue Recognition

  • Imperia Phase-2 Revenue Recognition Start Revenue Recognition · FY26 · High confidence Quarter 4
    I don't expect revenue recognition to start before Quarter 4, actually.

    — Pankaj Bajaj

Land Bank

  • Land Aggregation Target Land Bank · this year · Medium confidence 100 acres

    Previously 31 acres → 100 acres

    I expect that this number should reach about 100 acres this year, this 31 acres should become 100 acres.

    — Pankaj Bajaj

Gross Margin

  • Imperia Phase-2 Gross Margin Gross Margin · FY26 · High confidence upwards of 40% if not 45%
    in which our margin will be much higher there, upwards of 40% if not 45%.

    — Pankaj Bajaj

  • Other Projects Gross Margin Gross Margin · ongoing · High confidence closer to 25%-30%
    and the other projects are closer to 25%-30%

    — Pankaj Bajaj

  • Weighted Average Gross Margin Gross Margin · ongoing · High confidence early 30s
    so the weighted average should be in early 30.

    — Pankaj Bajaj

What to watch in Q1 FY26

FY26 Pre-sales Target Achievement

next quarter (progress update)
Current FY25 bookings ₹337 crores (15% below guidance)
Target ₹500 crores

Why it matters

Key indicator of sales momentum and future revenue visibility.

I think on the whole, we should be touching Rs.500 crores this year. Minimum, I will be disappointed if it is anything less than Rs.500, I would expect it to be higher than that.

Risks & concerns

  • Project Approval and Launch Delays

    medium

    Delays in FY25 led to lower fresh area booked and missed booking guidance.

    Management acknowledged

  • RERA Escrow Impact on Liquidity

    medium

    70% of collections are locked in RERA escrow accounts, limiting usable cash for business development.

    Management acknowledged

  • Overall Market Slowdown

    medium

    While Lucknow market is strong, broader national real estate sentiment is down, which might eventually impact local market.

    Management acknowledged

  • Geographical Concentration

    low

    Analyst raised concern about concentration in Lucknow, but management emphasized strong potential in Lucknow and planned expansion to Gorakhpur.

    Analyst downplayed

Q&A highlights

7 direct, 1 evasive
Eldeco Trinity Sales Velocity Direct
So regarding Trinity, we always expected it to be a slower velocity kind of project, because it's the highest project in Lucknow in terms of luxury and the per square foot pricing.

Explains the slower sales for their luxury project, attributing it to the niche market and high price point rather than competitive intensity.

Asked by Bharat Gupta

Stable Realization for Other Projects Direct
So, we have recently launched Hanging Garden, which was at about Rs.7,000 a square foot, Skywalk is at a lower price of what Rs.5,500 a square foot. Latitude is currently selling at about Rs.6,500 a square foot. So, let's take Rs. 6,000-Rs.6,500 per square foot as a stable natural realization.

Provides a clear range for expected realizations from non-luxury projects, helping analysts model future revenues.

Asked by Bharat Gupta

Imperia Phase-2 Margin Improvement Direct
Imperia Phase-1 has a lot of common facilities loaded on to it, which are common to both Phase-1 and Phase-2. So the margins are lower in Phase-1, but the margins are much higher in Phase-2, and the weighted average has come back to normal. So, Phase-2 will start getting recognized this year, because we are targeting to apply for completion certificate sometime in October and receive them by say December, and I hope in the last quarter we start recognizing revenue, in which our margin will be much higher there, upwards of 40% if not 45%.

Clarifies the margin structure for the Imperia project, explaining the drag in Phase-1 and the expected significant improvement in Phase-2, which will normalize overall project margins.

Asked by Bharat Gupta

Merger with Unlisted Arm Evasive
But we have never committed on any merger, where is this talk of merger coming from. There is no update on our side from this. The two entities are completely different, they don't compete with each other.

Management explicitly denies any ongoing merger talks, addressing a recurring analyst concern about the unlisted entity.

Asked by Kunal Tokas

Cash Utilization and Debt Aggression Direct
So the thing is it's a peculiar situation with real estate companies... RERA guidelines which has come in, which mandate us to deposit 70% of all collection into a RERA designated escrow account which can be used only in the project. And that money, even if it is collected in advance, remains stuck in the project account till the project receives completion certificate. So a lot of this money is stuck in RERA accounts is not really available for use. So even we have Rs.130 crores, not a lot of it is available for use.

Explains the paradox of having significant cash on the balance sheet but limited usable liquidity due to RERA escrow requirements, impacting capital allocation decisions.

Asked by Kunal Tokas

Eldeco Select Revenue Recognition and Margin Direct
So we are trying based on technicality on which it is stuck. So we should be able to get it closed in a couple of months. So, the moment we get the completion certificate, it will all be recognized... it's a very small project it's only 24,000 square feet, so margin would be higher... the profit margin should be about 40%.

Provides clarity on the timeline for revenue recognition for Eldeco Select and confirms a high-profit margin for this smaller project.

Asked by Varun Gupta

Lucknow Market Outlook Direct
One is Lucknow market, which I have always said, the last two, three years, I have been saying it's an under supplied market... So the local market is very good because of infrastructure upgrade, the investment that the local government is putting into the city... but other contradictory forces. Yes, there is an overall slowdown in the related demand and sentiments all across the country.

Offers a nuanced view of the Lucknow market, highlighting its strong fundamentals and local drivers while acknowledging the broader national real estate slowdown.

Asked by Yash

Hanging Garden Inventory Strategy Direct
So the first question Hanging Garden, we would prefer the latter which is, sell it as an when the opportunity comes, we are not in the business of holding on to inventory. We are a developer, we are not an asset holder. So very clear about our business, so having said that we are also not desperate in terms of getting all the sales upfront.

Clarifies the company's strategy of not holding inventory and selling as opportunities arise, indicating a focus on development velocity rather than speculative holding.

Asked by Manan Patel

2 min read 5 chapters

Detailed narrative

FY25 Performance and Operational Overview

Eldeco Housing reported a mixed FY25, with fresh area booked significantly lower at 5.1 lakh sq ft compared to 7.8 lakh sq ft in the previous year, primarily due to delays in project approvals and launches. Consequently, fresh bookings of ₹337 crores were 15% below guidance. However, this was partially offset by a 32% YoY growth in realization per square foot, reaching ₹6,568, driven by the launch of luxury projects like Eldeco Trinity. Collections for FY25 showed strong growth, increasing 105% YoY to ₹253.9 crores, while construction spend also rose 60% YoY to ₹156 crores.

New Project Launches and Pipeline

Despite initial delays, Eldeco successfully launched Eldeco Hanging Gardens in April 2025, receiving a phenomenal response with nearly 70% of inventory booked within the first week. The company is also in the process of launching Eldeco Skywalk. A major upcoming project is Eldeco Salano Garden, an integrated township on 50 acres of newly aggregated land on Jail Road in Lucknow, with an estimated gross development value (GDV) of ₹1,000 crores, slated for launch in Q3 FY26. The combined GDV of Eldeco Hanging Garden and Eldeco Skywalk is approximately ₹360-380 crores.

Land Bank Expansion and Future Growth

A key achievement in FY25 was the successful aggregation of 50 acres of land for the Eldeco Salano Garden project. The company is actively pursuing further land aggregation, with 31 acres already in process across three locations, aiming to reach 100 acres this year. Management expects the total GDV from current projects, including new launches, to be between ₹3,000-3,500 crores, with an annual earn rate of ₹500-600 crores over the next five to six years, although revenue recognition will be back-ended.

Margin Profile and RERA Impact

Operational margins in FY25 were lower due to the recognition of revenue from Imperia Phase-1, which had common facilities loaded onto it, impacting its profitability. However, Imperia Phase-2, expected to start revenue recognition in Q4 FY26, is projected to have significantly higher margins of 40-45%, which will normalize the overall project margins. Other ongoing projects are expected to yield gross margins of 25-30%, leading to a weighted average gross margin in the early 30s. The company highlighted that RERA guidelines, which mandate 70% of collections to be held in escrow, significantly impact usable cash, despite a balance sheet cash position of ₹123 crores.

Outlook and Capital Allocation Strategy

Eldeco is optimistic about its growth trajectory, setting a minimum pre-sales target of ₹500 crores for FY26. The company plans to increase its debt to fund business development, particularly land aggregation, as internal cash is constrained by RERA escrow requirements. Management emphasized its strategy of being a developer focused on selling inventory as opportunities arise, rather than holding assets. The Board recommended a higher dividend of 450% for FY25, up from 400%, reflecting confidence in future profitability. The Lucknow market remains strong due to infrastructure development, though broader market sentiment is a watch item.

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