Concall AI

Marathon Nextgen Realty Limited — Q4 FY25 earnings call

Call held 22 May 2025

Management summary

Marathon Nextgen Realty Limited reported a strong Q4 and FY25, achieving its highest-ever full-year PAT of ₹190 crores, a 13% YoY increase. The company significantly reduced its net debt by over ₹200 crores, bringing its net debt to equity ratio to 0.46. Key operational highlights included ₹605 crores in booking value and ₹523 crores in collections for FY25, alongside the receipt of occupation certificates for four projects. The company also announced a composite scheme of amalgamation to merge promoter entities' assets, which is pending regulatory approvals.

Highlights

Highest full-year PAT in history at ₹190 crores, registering 13% growth year-on-year.
Substantial debt reduction of over ₹200 crores, leading to a healthy net debt to equity ratio of 0.46.
Achieved total booking value of ₹605 crores and collections of ₹523 crores for FY25.
Received occupation certificates for four buildings: Atria, Triton at Nexzone, Wing B of NeoSquare, and Monte South A Wing.
Profit from sale of investment assets of ₹103 crores contributed to PAT growth.

Concerns

Management declined to provide pre-sales outlook for FY26, citing it as a future-looking statement.
The amalgamation scheme's approval process is lengthy, estimated to take 12-15 months, with potential for delays due to multiple regulatory hurdles.

Key financials

3 periods

Headline

Net Debt (as of Mar 31, 2025)
₹542 Cr
Net Debt to Equity Ratio
0.46

Q4 FY25

Revenue
₹188 Cr
EBITDA
₹80 Cr
PAT
₹54 Cr

FY25

Revenue
₹676 Cr
YoY 0%
EBITDA
₹269 Cr
PAT
₹190 Cr
YoY +13%

What they filed

Q1 FY27: revenue up 62.5%, net profit down 11.9% 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	53	39	74	24	63 +19%	22 −44%	68 −8%	39 +63%
Expenses	29	20	55	21	35	11	40	23
EBITDA	24	19	19	3	27 +13%	10 −47%	28 +47%	16 +433%
Margin	45%	48%	25%	13%	44%	48%	41%	40%
Other income	26	29	43	58	46	27	47	31
Interest	7	7	13	11	1	0	0	0
Depreciation	1	1	0	0	0	0	0	0
Profit before tax	42	40	49	50	72 +71%	37 −7%	75 +53%	46 −8%
Tax rate	13%	14%	16%	16%	16%	25%	21%	20%
Net profit	36	35	41	42	61 +69%	28 −20%	59 +44%	37 −12%
EPS	7.11	6.80	8.00	8.18	8.98	4.13	8.79	5.43

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

₹605 Cr

as of 2025-03-31 quantified

Management declined to provide a pre-sales outlook for FY26, stating it is a future-looking statement.

Source: Prepared remarks

Capital allocation

high confidence

Debt Net ₹542 Cr
- Repayment Substantially reduced debt by more than Rs. 200 crores during this year. ₹200 Cr
- Rate reset Reduced cost of debt.
We have substantially reduced our debt by more than Rs. 200 crores during this year. This is a significant 28% reduction in the net debt figure from FY '24. This has resulted in a healthy and sustainable capital structure as reflected in our low net debt to equity ratio of 0.46. This is in line with our long term strategy of reducing debt. I am also happy to report a reduction in our cost of debt.
M&A Promoter entities' assets and projects Merger · Pending regulatory

Reduction in number of legal entities, simplification of group structure, reduction of managerial overlap, avoiding duplication of administration work, bringing high net worth projects/promoter group entities under the listed entity.
Expected to result in a win-win situation for all involved, including public shareholders.

On 31st March, 2025, the Board approved a composite scheme of amalgamation. This includes 205 acres of land at Panvel, 83 acres of land in Dombivli, 130 acres of land in Bhandup, and some ongoing projects, as well as ready assets including Marathon Futurex office building in Lower Parel. The scheme is subject to necessary regulatory and statutory approvals under applicable laws, including the sanction of the jurisdictional NCLT, National Company Law Tribunal, and such other relevant authorities.

Guidance & targets

Other

Merger Approval Timeline Other · post-announcement · Medium confidence 12 to 15 months

Usually it takes 12 to 15 months. I have seen it online somewhere. It is the usual process, it does take that much time. But again, it's based on scheme to scheme, every scheme is different, so it may take longer or shorter.

— Kaivalya Shah
Repo Rate Drop Other · during this year · Low confidence 0.25 bps to 0.5 bps

We are estimating maybe a drop of 0.25 bps to 0.5 bps on the repo rate. That will definitely give further fillip to the real estate market.

— Mayur Shah

What to watch in Q1 FY26

Merger Approval Status

next quarter

Current Pending regulatory and statutory approvals

Target Progress on NCLT and other approvals

Why it matters

The amalgamation scheme is a significant strategic move to consolidate promoter assets and simplify structure, with long-term value creation potential.

The scheme is subject to necessary regulatory and statutory approvals under applicable laws, including the sanction of the jurisdictional NCLT, National Company Law Tribunal, and such other relevant authorities.

Risks & concerns

Merger approval delays
medium

The composite scheme of amalgamation requires multiple regulatory and statutory approvals, including NCLT, which is estimated to take 12-15 months and could potentially take longer or shorter.

Management acknowledged

Q&A highlights

4 direct, 1 evasive

Pre-sales outlook for FY26 Evasive

That is actually a future-looking statement, and we would not be able to answer that right now, anything related to the FY '25 we can answer.

Management declined to provide forward-looking guidance on a key metric for the real estate sector.

Asked by Harmish Desai

PAT growth despite flat revenue Direct

So PAT is a product of construction as well as sales. So this year we have dramatically increased the pace of construction. Also, if you look at our debt, debt has reduced by around Rs. 200 crores, hence that does impact the PAT as well. So, these are some of the instances how PAT has increased from last year, while the like you mentioned the revenue being constant. ... And one extra reason is in the top line the turnover. We have sold investment assets at Marathon Futurex worth Rs. 103 crores. These assets were already in investment. So right now in the turnover numbers only the profit of that Rs. 103 crores is reflected, and not the total turnover.

Clarified the drivers behind profit growth, including debt reduction, increased realization, and sale of investment assets, despite flat reported revenue.

Asked by Ravi Gupta

Operating cash flow being negative Partial

I think the operating cash flow is not negative at all. So where are you getting those numbers? In fact we have reduced the debt, so operating cash flow has resulted in our being able to make the payment of debt to the extent of more than Rs. 200 crores.

Addressed an analyst's concern about cash flow by highlighting significant debt reduction, implying healthy cash generation for debt servicing.

Asked by Mihir Desai

Other income jump Direct

So the other income is reflecting substantial amount of profit from our investment, asset that we have sold. Like I mentioned in the answer to previous questions that Rs. 103 crores of investment assets have been sold. Investment assets are assets which were completed earlier and either kept for leasing or converted into a finished inventory as investment, and not just as inventory. So that gets reflected directly as a profit into the other income.

Provided a clear explanation for the significant increase in other income, linking it to strategic asset monetization.

Asked by Mihir Desai

Merger impact on dilution and regulatory hurdles Partial

Again, regarding the merger, we will all talk about it after the approval of the merger. ... So the merger steps are very well listed online. So there are multiple authorities and multiple sanctioning authorities that we have to cross, and post which the merger is sanctioned. So, it does take a while. So, yes, it goes through approvals.

Management deferred discussion on dilution but acknowledged the complex and time-consuming regulatory approval process for the amalgamation.

Asked by Harmish Desai

Promoter pledge of 91.5% Direct

There is no pledge, that is the misinformation. What is happening is when you take a standard loan for construction purposes, the bankers would want a non-disposal undertaking which is known as NDU. Non-disposal undertaking, meaning you will not sell your shares because the loan is being given with this company as a face of it or this promoters as face of it. So NDU is generally signed in a normal way whenever you are borrowing money. And that recently has been started being informed to the exchanges also. So one of the loan that we have borrowed has an NDU kind of arrangement with the bank that we will not dispose of the ownership of these shares in the company.

Clarified a potential misunderstanding regarding promoter share encumbrance, explaining it as an NDU for construction loans rather than a pledge.

Asked by Dev Ajmera

Sales slowdown in affordable segment Direct

No, there is no slowdown of sales. But in all these projects, many times the sales happen towards the end of the project when the delivery is scheduled, or the progress is at the advanced stage. At the foundation level, the sales are slow. So if you have noticed in my opening remarks, I mentioned about occupation received of the four different projects, two in Panvel, one in Byculla of over 64 story building, and one in Bhandup. So, while we are delivering the occupation, most of the money would have received by us and we are finishing of the work. So that way, depending on quarter-to-quarter, that would be differences. That's why I keep on telling everybody that on an average, a real estate company should be evaluated by a three-year moving average turnover, not three months or six months or nine months or even 12 months. It should be last three years average turnover, and you keep on rolling it over and you see how the company is growing.

Management addressed concerns about sales slowdown by explaining the typical sales cycle in real estate and advocating for a longer-term view of performance.

Asked by Jignesh

3 min read 7 chapters

Detailed narrative

Q4 & FY25 Financial Performance Overview

Marathon Nextgen Realty Limited reported its highest-ever full-year profit after tax (PAT) of ₹190 crores for FY25, marking a 13% year-on-year growth. The total revenue for FY25 stood at ₹676 crores, with an EBITDA of ₹269 crores. For Q4 FY25, the company recorded a total revenue of ₹188 crores, EBITDA of ₹80 crores, and PAT of ₹54 crores. The company highlighted its consistent growth, achieving four consecutive years of profit after growth at a compounded annual growth rate of 48%.

Significant Debt Reduction and Capital Structure

The company achieved a substantial reduction in its net debt by over ₹200 crores during FY25, a 28% reduction from FY24. As of March 31, 2025, the net debt stood at ₹542 crores, resulting in a healthy net debt to equity ratio of 0.46. Management also reported a reduction in the overall cost of debt during the year. A portion of the debt portfolio includes lease rent discounting, and the company clarified that certain share arrangements are Non-Disposal Undertakings (NDUs) for construction loans, not pledges.

Composite Scheme of Amalgamation

On March 31, 2025, the Board approved a composite scheme of amalgamation to merge assets and projects of promoter entities with the company. This scheme includes 205 acres of land at Panvel, 83 acres at Dombivli, 130 acres at Bhandup, several ongoing projects, and the Marathon Futurex office building in Lower Parel. The amalgamation aims to reduce legal entities, simplify group structure, and bring high net worth projects under the listed entity, benefiting public shareholders. The scheme is subject to regulatory and statutory approvals, which are estimated to take 12 to 15 months.

Operational Highlights and Project Progress

For FY25, Marathon Nextgen sold 265,376 square feet of area, achieving a total booking value of ₹605 crores and collections of ₹523 crores. The company received occupation certificates for four buildings: Atria and Triton at Nexzone (Panvel), Wing B of NeoSquare (Bhandup), and Monte South A Wing (Byculla) up to the 64th floor. Construction is progressing rapidly across all sites with a focus on quality and timely delivery. The company emphasized its in-house construction management and quality control processes, including the use of software and batching plants.

Market Outlook and Realization Trends

Management noted that sales realization increased by up to 10% year-on-year in some projects. They expressed confidence in the sustainability of the market momentum, driven by population growth, aspirational values attached to homeownership, and migration into Mumbai. The company anticipates that a potential drop of 0.25 to 0.5 basis points in the repo rate during the year could further boost the real estate market. The company's portfolio spans affordable, luxury, and commercial segments across key micro-markets in Mumbai.

Other Income and Investment Asset Sales

The significant jump in other income was attributed to the profit generated from the sale of investment assets totaling ₹103 crores. These assets were previously completed and either held for leasing or converted into finished inventory, directly contributing to the profit reflected in other income. This sale contributed to the PAT growth despite the relatively flat revenue from core operations.

Project Portfolio Overview

The company's existing project portfolio includes Monte South in Byculla (four residential towers and one commercial tower), Nexzone in Panvel (25 acres, 19 buildings with four proposed), two clusters in Bhandup (5.8 acres and 14 acres with four ongoing buildings), Millennium in Mulund (commercial project, 1.7 lakh sq ft carpet), and Marathon Futurex in Lower Parel (built, OC-ready commercial building). The incoming land bank from the amalgamation scheme includes 205 acres in Panvel, 83 acres in Dombivli, and 130 acres in Bhandup.

This is an AI-generated summary of a publicly available earnings call transcript.

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