Embassy Developments Limited — Q3 FY26 earnings call

Call held 10 Feb 2026

Management summary

Embassy Developments Limited reported strong operational momentum in Q3 FY26, with pre-sales growing 240% QoQ to ₹1,392 crores, driven by successful new launches. While 9M FY26 EBITDA remained negative at ₹107 crores due to legacy project costs, the company maintains a robust balance sheet with ₹670 crores in cash and a low net debt-to-equity ratio of 0.29X. Management is confident in achieving its ₹5,000 crore pre-sales target for FY26 and expects profitability to improve as new generation projects contribute.

Highlights

  • Q3 FY26 pre-sales grew 240% QoQ to ₹1,392 crores, contributing to a 9M FY26 total of ₹2,000 crores.

  • Successfully launched Embassy Paradiso (₹200 crores GDV, fully sold), Embassy Greenshore (₹804 crores pre-sales in 5 days), and Embassy Eden (₹286 crores sold shortly after launch).

  • Secured RERA approval for 6 residential projects with a GDV of approximately ₹13,500 crores and a commercial project with a GDV of ₹3,100 crores.

  • Maintained a strong liquidity position with ₹670 crores in cash and bank balance and a net debt-to-equity ratio of 0.29X.

  • Identified an estimated project surplus of ₹28,000 crores across current and future projects, ensuring strong cash flow visibility.

Concerns

  • EBITDA for 9M FY26 was negative ₹107 crores, primarily due to higher cost of goods sold on legacy Indiabulls projects (Vizag and Thane Phase 1).

  • P&L profitability is expected to remain negative for the next four to six quarters as historical project costs are recognized.

  • Ongoing insolvency proceedings related to a ₹372 crore claim from Canara Bank, although management expresses confidence in their legal case.

Key financials

2 periods

Q3 FY26

  • Total Income
    ₹264 Cr
  • Collections
    ₹414 Cr
    QoQ +15%

9M FY26

  • Total Income
    ₹1,495 Cr
  • Gross Profit
    ₹254 Cr
  • EBITDA
    ₹-107 Cr
  • Collections
    ₹1,096 Cr
  • Construction Spends
    ₹868 Cr

What they filed

Q1 FY27: revenue down 68.1%, net profit down 41.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue475 325 889 681 493 +4%213 −34%342 −62%217 −68%
EBITDA76 94 8 -11 -52 −168%-152 −262%-261 −3362%-131 −1091%
Net profit-34 -27 123 -166 -153 −350%-233 −763%-323 −363%-234 −41%
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

₹2,000 Cr

as of 2025-12-31 quantified

240% QoQ

Inflow this quarter

₹1,392 Cr

Composition

Mix 3 projects
  • Embassy Paradiso ₹200 Cr 15.5%
  • Embassy Greenshore ₹804 Cr 62.3%
  • Embassy Eden ₹286 Cr 22.2%

Share of order book by project, derived from disclosed amounts

Pipeline

other

RERA approved residential projects and commercial project, Q4 FY26 launches, and future pipeline beyond FY26.

The company has a strong pipeline of new launches and existing unsold inventory, providing confidence in achieving its annual pre-sales target.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed Secured funding for FY26 launches from Kotak.
    • Reviving erstwhile Indiabulls projects ₹200 Cr
    • Investment in Mumbai projects (Worli, Juhu, Alibaug) ₹4,500 Cr
    • Deposit for Whitefield residential JD ₹50 Cr
    • Working capital for Whitefield residential JD ₹20 Cr
    In the first nine months, we have spent Rs. Rs. roughly about Rs. 200 odd crores for the erstwhile projects of Indiabulls Real Estate and reviving them. ... Mumbai projects ... planned investment of approximately Rs. 4,500 crores. ... We did one JD in Whitefield. It's a residential JD. ... We put in Rs. 50 crores as the deposit. We'll put in another Rs. 20 crores of working capital...
  • Debt Gross ₹4,700 Cr · Net ₹3,000 Cr Cost 14%
    • New borrowing Net institutional funds raised through debt in the last nine months of FY '26 ₹880 Cr
    Net institutional debt stood at approximately Rs. 3,000 crores... There is an additional Rs. 1,058 crores of shareholder debt outstanding as on December 31, 2025. ... a gross total debt at about Rs. 4,700 to Rs. 4,800 crores. ... Today, the average cost of debt is around 14%. And some of the new construction finance that we are raising today is sub 9%.
  • Liquidity Cash ₹670 Cr Liquidity position remains comfortable, supporting both construction activity and upcoming launches.
    We have closed Q3 FY '26 with Rs. 670 crores in cash and bank balance. ... our liquidity position remains comfortable, supporting both construction activity and upcoming launches.

Guidance & targets

Pre-sales

  • FY26 Pre-sales Target Pre-sales · FY26 · High confidence ₹5,000 crores
    we remain confident of achieving our Rs. 5,000 crore FY '26 pre-sales target.

    — Aditya Virwani

Launch GDV

  • FY26 GDV of Launch Projects Launch GDV · FY26 · High confidence exceeding ₹19,000 crores
    total FY '26 GDV of launch projects exceeding Rs. 19,000 crores.

    — Sachin Shah

GDV

  • Next Three Years GDV to Market GDV · next three years · High confidence approximately ₹41,000 crores
    plans to bring about an aggregating approximately 41,000 crores of GDV to the market over the next three years

    — Aditya Virwani

Project Surplus

  • Next Three Years Net Project Surplus Project Surplus · next three years · High confidence ₹21,000 crores
    even our next three years projects provide a net surplus of Rs. 21,000 crores

    — Sachin Shah

Cost of Debt

  • Average Cost of Debt Cost of Debt · next year or so · Medium confidence 10% range

    Previously 14% → 10% range

    our endeavor is to bring down this cost of capital from the current 14% to the 10% kind of range over the next year or so.

    — Rajesh Kaimal

Profitability

  • P&L Profitability (PAT) Profitability · within 4-6 quarters · Medium confidence Positive PAT

    From Negative PAT today

    the balance sheet profit will take at least four to six quarters to show on the P&L.

    — Rajesh Kaimal

What to watch in Q4 FY26

FY26 Pre-sales Target Achievement

By March 31, 2026 (end of FY26)
Current ₹2,000 crores (9M FY26)
Target ₹5,000 crores

Why it matters

Key indicator of sales momentum and future revenue for a realty company.

we remain confident of achieving our Rs. 5,000 crore FY '26 pre-sales target.

Risks & concerns

  • Canara Bank Insolvency Proceedings

    high

    A claim of ₹372 crores under an erstwhile corporate guarantee, with the next hearing scheduled for Feb 19, 2026. Management is confident in their legal case and financial capacity to address it.

    Canara Bank has initiated proceedings against the company alleging liability for repayment of loans of Rs. 372 crore under an erstwhile corporate guarantee framework and filed a Section 7 application under the Insolvency and Bankruptcy Code 2016. ... The next hearing is scheduled for 19 February and we remain confident in the strength of our case.

    Management downplayed

  • P&L Losses from Legacy Projects

    medium

    9M FY26 EBITDA was negative ₹107 crores due to higher cost of goods sold on legacy Indiabulls projects. P&L profitability is expected to remain negative for 4-6 quarters.

    Gross profit for nine-month FY '26 is Rs. 254 crores and EBITDA for the same period is negative Rs. 107 crores. This loss is due to higher cost of goods sold on two legacy Indiabulls real estate projects, Vizag and Thane Phase 1... the balance sheet profit will take at least four to six quarters to show on the P&L.

    Management acknowledged

  • High Average Cost of Debt

    medium

    Current average cost of debt is 14%, which management aims to reduce to the 10% range over the next year or so.

    The current cost of capital is a little high because we are in the cycle where we are launching projects. ... Today, the average cost of debt is around 14%. ... our endeavor is to bring down this cost of capital from the current 14% to the 10% kind of range over the next year or so.

    Management acknowledged

  • Promoter Pledge

    low

    An analyst noted promoter pledge is down 50% and share prices are under pressure. Management is not worried, citing sufficient assets and plans to pay down shareholder loans.

    Aditya, aren't you worried? The promoter's pledge is down about 50% and the prices of the shares are under heavy pressure. ... I'm not too worried, to be honest, Varun, because from a promoter's side, we have enough assets backing the loans that we have.

    Analyst downplayed

Q&A highlights

7 direct
Unsold Inventory & Total GDV Direct
Our unsold inventory is roughly Rs. 4,500 crores and our sold receivables is Rs. 4,000 crores. ... The total GDV in the company stands at Rs. 52,000 crores.

Clarifies the current inventory position and the overall development potential of the company's portfolio, including future pipeline.

Asked by Niteen S Dharmawat

Debt Reduction Plan Direct
most of these debts are project debts and from the collection, we will be paying this down over the next few years. While the shareholder debt is something that we are talking about, the two main shareholders... are holding these debts. We are discussing with Blackstone as to what best to do, whether to convert to equity or what to do with this debt is something that we are still contemplating.

Provides insight into the company's strategy for managing its gross debt, distinguishing between project-specific debt and shareholder debt, and potential equity conversion.

Asked by Niteen S Dharmawat

Revival of Indiabulls Projects & Panvel/Nasik Land Banks Direct
In the first nine months, we have spent Rs. Rs. roughly about Rs. 200 odd crores for the erstwhile projects of Indiabulls Real Estate and reviving them. ... our goal would be to solve with MIDC, get the debonding done with respect to the SEZ, and then basically do a plotted kind of development out here for industrial plots where we're kind of selling wholesale to retail.

Details the investment made to complete legacy projects and the strategic plan for monetizing large land banks like Nasik, indicating potential future value creation.

Asked by Rusmik Oza

Commercial Project Strategy (Whitefield & Future Split) Direct
Embassy East Business Park is a project that we broke ground on in Q3. ... we will take a call whether we feel we should exit this asset to the right buyer, and REITs are very competitive buyers, or should we hold this and build a little bit of annuity in this development company too. ... today the company would represent roughly an 80%-20% split between residential and commercial. ... maybe 70%-30%, 30% is commercial.

Outlines the strategy for commercial development, including the flexibility to monetize or hold assets, and the long-term vision for the residential-commercial mix.

Asked by Rusmik Oza

Cash Balance & Profitability vs. Pre-sales Guidance Partial
on the losses, this is P&L loss. But if you see the cash balance, that is mostly money deployed in our projects for execution for a new project. ... And to answer your second question on how we reach our guidance of Rs. 5,000 crores, that this company was a little bit heavier on Q3, Q4 going into it, and Q1, Q2 has been muted, given that most of our launches have been Q3 and Q4.

Clarifies that P&L losses are historical and cash is being deployed, while explaining the path to achieving the annual pre-sales target despite a slower start to the year.

Asked by Gaurav Khanna

Legacy Issues Beyond Canara Bank Direct
We actually believe that we have a pretty good understanding of the combined company, the erstwhile Indiabulls as well. And we don't expect really anything new. ... So, there's nothing new that's out there today that we feel can, again, create surprises.

Reassures investors that the company has addressed most legacy issues and does not foresee further significant unexpected liabilities beyond the Canara Bank case.

Asked by Rohit Chaudhary

Worli Project (Embassy Citadel) Launch & Pricing Direct
with respect to the Bombay launch, we were just waiting for RERA approval, which came, as Aditya was saying, on December 30th of last quarter. And so, in January, we started our Mumbai campaign. ... We have intentionally positioned ourselves quite differently. From a ticket size point of view, from a product itself, we are not a full flow plate. We are not, and by the way, we are not launching at one lakh square foot. We're way more competitive than what's out there in the market.

Provides an update on the highly anticipated Mumbai project, clarifying its launch timeline, competitive positioning, and pricing strategy.

Asked by Amish Kanani

PAT Negative Outlook & Cash Flow Direct
Yes, we will be PAT negative for the next six or quarters, but cash flow will be cash flow profitable. You can see that from the cash flow. ... So what's reflecting today is actually the sins of the last few years. And it's going to take some time, naturally, while Rajesh Kaimal had said four, six quarters, it could even take a little bit longer as more OCs of the Embassy projects come in and take care of that number.

Managements clarifies the distinction between P&L profitability (negative due to historical costs) and strong cash flow generation from new projects, setting expectations for a delayed return to PAT positive.

Asked by Varun Dujari

3 min read 7 chapters

Detailed narrative

Merger & Strategic Vision

Calendar year 2025 marked the successful merger of erstwhile Indiabulls Real Estate Limited and Embassy Group's NAM Estates Private Limited, rebranding as Embassy Developments Limited (EDL). This merger aimed to create a stronger, more resilient, and institutionally scaled real estate platform with deeper operating capabilities. EDL now boasts a presence across 8 cities, a portfolio of 40+ projects, and approximately 38 million square feet of residential and commercial development, supported by a land bank of over 3,100 acres. The company's strategy focuses on execution, organic growth through new launches, and selective high-margin land acquisitions.

Q3 & 9M FY26 Operational Performance

Embassy Developments Limited reported cumulative pre-sales of approximately ₹2,000 crores for the first nine months of FY26. In Q3 FY26 alone, pre-sales reached ₹1,392 crores, demonstrating a significant quarter-on-quarter growth of 240%. Collections for 9M FY26 stood at ₹1,096 crores, with Q3 collections at ₹414 crores, reflecting a 15% QoQ increase. Construction spends for 9M FY26 totaled ₹868 crores, indicating strong execution cadence with a healthy spend-to-collection ratio of 79%.

Project Launches & Pipeline

The company successfully launched three residential projects: Embassy Paradiso (fully sold out with ₹200 crores in realizations), Embassy Greenshore (₹804 crores pre-sales within five days), and Embassy Eden (₹286 crores sold shortly after launch). By Q3 FY26, RERA approvals were secured for 6 residential projects (GDV ~₹13,500 crores) and a commercial project (GDV ~₹3,100 crores). Upcoming Q4 FY26 launches include 4 new projects, notably Embassy Citadel in Worli (1 MSF luxury tower), contributing to a total FY26 GDV of launch projects exceeding ₹19,000 crores. The future pipeline beyond FY26 has a GDV of ₹24,200 crores.

Financial Position & Debt Management

As of Q3 FY26, Embassy Developments Limited held ₹670 crores in cash and bank balance. Net institutional debt stood at approximately ₹3,000 crores, resulting in a net debt-to-equity ratio of 0.29X. Including shareholder debt of ₹1,058 crores, the gross total debt is around ₹4,700-4,800 crores. The company raised ₹880 crores in net institutional funds through debt in 9M FY26. The average cost of debt is currently around 14%, with new construction finance secured at sub-9%. Management aims to reduce the overall cost of debt to the 10% range over the next year or so.

Legacy Project Resolution & Profitability Outlook

The company spent approximately ₹200 crores in 9M FY26 to revive erstwhile Indiabulls projects, bringing 6 previously delayed residential projects to handover stages. While 9M FY26 EBITDA was negative ₹107 crores due to historical costs from these legacy projects (Vizag and Thane Phase 1), management clarified that this does not reflect current operational performance. They expect P&L profitability to remain negative for the next four to six quarters but anticipate strong cash margins (45-60%) from new generation projects to drive future value creation.

Mumbai Market Entry & Commercial Strategy

Embassy Developments Limited announced its entry into the Mumbai metropolitan region with three initial residential projects in Worli, Juhu, and Alibaug, representing a combined GDV of over ₹12,000 crores and a planned investment of approximately ₹4,500 crores. The company has broken ground on Embassy East Business Park in Whitefield, a 2.7 MSF commercial project, with a decision on holding or exiting the asset post-completion in 3-4 years. The current residential-commercial split of 80%-20% is expected to shift towards 70%-30%, with a focus on selective, trophy-like commercial assets in high-conviction markets.

Land Bank Monetization

The company is actively working on monetizing its extensive land bank. For the 1,500-acre Nasik land bank, with a cost of approximately ₹70 crores, plans involve resolving issues with MIDC, debonding the SEZ status, and developing it for industrial plots, expecting a significant net surplus. In Panvel, non-contiguous and non-core land parcels will be sold, while aggregable land will be retained for future development. Management emphasized that unlocking the existing land bank is a priority once sufficient surplus is generated and market conditions are optimal.

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