Eldeco Housing

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.

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.

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.

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.

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.