Hubtown Q1 FY27 earnings call

Hubtown Limited reported a consolidated revenue of INR156 crores for Q1 FY27, marking a 17% year-on-year decline and a 3% sequential dip. Profit before tax (PBT) stood at INR32 crores, down 55% year-on-year, while profit after tax (PAT) was INR27 crores, a 68% year-on-year decrease. This performance is primarily attributed to a high base in Q1 FY26 and the company's project completion method of revenue recognition, where revenue is recognized upon receipt of occupation certificates and handover.

The company is progressing with its Hubtown 2.0 initiative, a transformative amalgamation of marquee luxury projects 25 Downtown, 25 West, and 25 South. These projects, intended to merge effective April 1, 2025, are advancing well, with two schemes already having key approvals and the third in regulatory process. Upon completion, the development portfolio will expand from 7.13 million square feet to over 34 million square feet, and the combined Gross Development Value (GDV) is expected to exceed INR1 lakh crores.

Hubtown's project portfolio includes developments at various stages, balancing near-term revenue visibility with long-term value. Projects like Hubtown Seasons Phase 1, Rising City Phase 1, and Premiere are nearing completion. The second tower at 25 South is expected to receive its occupation certificate this year, along with OCs for Rising City Phase 1, Hubtown Premiere Residences, and multiple buildings in Ahmedabad and Mehsana. These completions are crucial for revenue recognition in Q3 and Q4 FY27, as much of this revenue is already contracted and collected.

The company's balance sheet continues to strengthen, with total borrowings reduced to INR5,181 crores. INR3,956 crores of this debt pertains to merged companies and is project-linked. Hubtown has fully retired legacy bank, NBFC, and foreign fund debt. Management is actively exploring refinancing options for approximately INR2,800 crores of high-cost debt (ranging from 14% to 20%) to achieve substantial savings. The long-term target is to become net debt-free by financial year 2031.

Hubtown reported healthy operating performance with Q1 FY27 pre-sales of INR535 crores and collections of INR320 crores. The luxury segment, particularly in Mumbai, continues to exhibit strong demand and pricing power. For instance, 25 South has already seen an uptick, with an expected further price rise of INR15,000-20,000 per square foot for higher floors. Similarly, 25 West saw a price increase of INR30,000-40,000 per square foot within 1.5 years, indicating robust market conditions for premium properties.

The company has a significant future development pipeline of approximately 34 million square feet. For FY27, Hubtown targets INR6,000 crores in pre-sales and INR3,000 crores in collections. Key upcoming launches include Tower 5 of 25 Downtown (October-November), 25 Estates (last quarter FY27), 25 Chalets in Thane (end of FY27), and Phase 2 of the Chembur project, expected to generate INR300-400 crores in sales. The company plans to concentrate on the MMR region for the next few years.