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Nirlon Limited — Q1 FY27 earnings call

Call held 11 Aug 2026

Company page: Nirlon share price, financials & guidance record

Management summary

Nirlon reported a solid Q1 FY27 with a 3% YoY increase in total income to ₹173 crores and a significant 19% YoY growth in PAT to ₹69 crores. The company maintained high occupancy levels of 99.8% and strong EBITDA margins of 77.30%. Management indicated no immediate plans for REIT conversion or Nirlon House redevelopment, and debt repayment is scheduled to commence in May 2027.

Highlights

  • Total income for Q1 FY27 grew 3% year-on-year to ₹173 crores.

  • Profits after tax (PAT) registered a strong 19% year-on-year growth, reaching approximately ₹69 crores.

  • PAT margins stood at a healthy 40.19% for the quarter.

  • The company maintained a high average occupancy of 99.8% across its portfolio.

  • EBITDA margins remained robust at 77.30%.

Key financials

  1. Total Income ₹173 Cr +3%YoY
  2. EBITDA ₹134 Cr +1%YoY
  3. EBITDA Margin 77.3%
  4. PAT ₹69 Cr +19%YoY
  5. PAT Margin 40.2%

What they filed

Q1 FY27: revenue up 3.1%, net profit up 19.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue160 161 158 163 165 +3%170 +6%171 +8%168 +3%
EBITDA129 131 123 128 129 +0%132 +1%132 +7%129 +1%
Net profit56 58 54 58 148 +164%69 +19%71 +31%69 +19%
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.

Capital allocation

high confidence
  • Debt 1.8× EBITDA
    • Repayment Repayment of 5% of debt annually for the next few years, totaling 25%, starting May 2027.
    My question is regarding the net debt position. How would you guide for the next couple of years? Currently, we are at 1.81. So, how do you see this trajectory moving forward? ... As per the existing agreement with the lender, we have to pay back for the next few years 5% every year totaling 25%.

Guidance & targets

Debt

  • Debt Repayment Debt · Next few years, starting May 2027 · High confidence 5% annually, totaling 25%
    As per the existing agreement with the lender, we have to pay back for the next few years 5% every year totaling 25%.

    — Rahul V. Sagar

Revenue

  • Rental Growth Revenue · Remaining quarters of FY27 · High confidence Based on contracts in place
    So, rental growth over the remaining quarters of FY’27 as of now will predominantly be based on contracts in place.

    — Rahul V. Sagar

Market context

  • EBITDA Margins Profitability · Future · High confidence Steady
    we feel that based on the contracts we have in place, they should not be very, they should not fluctuate greatly. Yes, very steady.

    — Rahul V. Sagar

What to watch in Q2 FY27

Commencement of debt repayment

FY28 (starting May 2027)
Current Scheduled to begin May 2027
Target Confirmation of 5% annual repayment initiation

Why it matters

To verify the company's adherence to its debt repayment schedule and its impact on financial leverage.

As per the existing agreement with the lender, we have to pay back for the next few years 5% every year totaling 25%. So, to that extent, we will be guided by the terms and conditions of the agreement with the lender and that may or may not have some impact on the EBITDA margin.

Risks & concerns

  • Lack of progress on REIT conversion and Nirlon House redevelopment

    low

    Management confirmed no significant progress or concrete plans for REIT conversion or Nirlon House redevelopment, citing complexities with multiple co-owners for the latter.

    Analyst acknowledged

Q&A highlights

4 direct, 3 evasive
REIT conversion plans Evasive
So, essentially, as of now, we have no concrete plans of converting to a REIT. As we said in the past, if we have anything significant to say on this front in terms of any significant change in the structure of the company or restructuring, we will let you know.

Analyst probed on potential REIT conversion given favorable tax treatment, but management stated no concrete plans, indicating no near-term strategic shift.

Asked by Dilip Jain

Nirlon House redevelopment Evasive
So, just to refresh, you may be aware, so you may not need to be refreshed. There are 12 other co-owners in the building as well. So, anything that happens in Nirlon House will obviously need consent and approval of the other owners. So, as you know, these processes and these things take a significant amount of time. We do not have anything significant to say at this point in time.

Analyst inquired about redevelopment of Nirlon House, but management indicated no significant progress due to multiple co-owners and complex processes.

Asked by Dilip Jain

Leasing rate at Nirlon House Direct
So, approx., on the area was about Rs. 250 a square foot.

Management provided a specific leasing rate for a recent 1100 sq ft office lease at Nirlon House, offering insight into rental economics for older properties.

Asked by Dilip Jain

Standard escalation clauses and license-free periods Direct
So, initially, Mr. Jain, we had 15% every three years. We had 15% escalation in license fees every three years. Very often, that also meant 15% increase in security deposit. Now, we are more focused, as we have said in the past, on annual escalation, which are about approximately 4.75% somewhere there, +/- a few basis points.

Management clarified the shift from triennial to annual escalation clauses, providing a specific annual rate of approximately 4.75% for new agreements.

Asked by Naman Jain

Planned CAPEX investments and redevelopment Direct
Nothing significant in NKP apart from the routine CAPEX that we have for upgradations and to ensure that licensed premises and the Park in general is of an international quality, international standard, Grade A office standard.

Management confirmed that no significant new CAPEX or redevelopment initiatives are planned beyond routine maintenance and upgrades, indicating a focus on existing asset quality.

Asked by Sampreeti Dutta

Prepaying debt Direct
The Company has not taken any decisions thus far or had any serious discussion with the lender with regard to prepaying any debt at this point in time.

Management stated no current plans to prepay debt despite healthy cash balances, suggesting adherence to existing debt agreements.

Asked by Sampreeti Dutta

Dividend guidance for future years Evasive
So, firstly, we do not want to make a comment on what the dividend will be for the future years. As you know, in the past few years, it was Rs. 26 a share. This year, for the Financial Year 25-26, we have increased it to Rs. 30 a share.

Management declined to provide specific dividend guidance for future years, emphasizing focus on improving park performance and shareholder value rather than committing to a number.

Asked by Shayam Khan

Net debt trajectory and repayment schedule Partial
Currently, we are at 1.81. So, how do you see this trajectory moving forward? ... As per the existing agreement with the lender, we have to pay back for the next few years 5% every year totaling 25%.

Analyst inquired about the net debt trajectory (currently 1.81), and management outlined a fixed repayment schedule of 5% annually starting May 2027, but did not project future net debt to EBITDA ratios.

Asked by Pranay Jain

2 min read 6 chapters

Detailed narrative

Q1 FY27 Financial Performance Overview

Nirlon reported a robust financial performance for Q1 FY27. Total income for the quarter stood at ₹173 crores, marking a 3% year-on-year growth. EBITDA reached ₹134 crores, reflecting a 1% year-on-year increase, with healthy EBITDA margins of 77.30%. Profits after tax (PAT) demonstrated strong growth, rising 19% year-on-year to approximately ₹69 crores, and PAT margins were 40.19%.

High Occupancy and Vacancy Levels

The company maintained a high average occupancy rate of 99.8% across its entire portfolio, which includes NKP and Nirlon House, during Q1 FY27. As of June 30, 2026, the combined vacant area across both properties was approximately 6,900 square feet. This near-full occupancy limits significant new leasing opportunities but ensures stable revenue from existing contracts.

REIT Conversion and Redevelopment Plans

Management clarified that there are currently no concrete plans for converting to a REIT, despite recent favorable income tax treatments for REIT SPVs. Similarly, discussions regarding the redevelopment of Nirlon House remain in limbo due to the complexities involving 12 other co-owners and the need for their consent and approval. The company stated it would inform stakeholders of any significant developments in these areas as they arise.

Rental Dynamics and Market Outlook

A small office space of 1100 square feet at Nirlon House was leased this quarter at approximately ₹250 per square foot. The company's new agreements now feature annual escalation clauses of about 4.75%, a shift from the previous triennial 15% escalation. Management views the growth of Global Capability Centers (GCCs) and the overall development of the Goregaon micro-market as positive for real estate demand, even though Nirlon's high occupancy limits direct benefit from new inquiries.

Capital Expenditure and Debt Management

Nirlon's capital expenditure for NKP is limited to routine CAPEX for upgradations and maintenance to ensure international Grade A office standards. No significant additional CAPEX or redevelopment initiatives are planned. Regarding debt, the company's net debt to EBITDA ratio currently stands at 1.81. Debt repayment is scheduled to commence in May 2027, with 5% of the total debt to be paid back annually for the next few years, amounting to 25% of the total. Management has not yet decided on prepaying any debt.

Shareholder Returns and Dividend Policy

For the Financial Year 2025-26, Nirlon increased its dividend to ₹30 per share, up from ₹26 per share in previous years. However, management refrained from providing specific guidance on future dividend payouts, stating that the focus remains on improving the park's performance and rentals to maximize shareholder value. The company aims to maintain steady EBITDA margins based on existing contracts.

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