Puravankara

Puravankara reported Q2 FY26 pre-sales of ₹1,322 crores, a 4% increase year-on-year from ₹1,270 crore in Q2 FY25, driven solely by sustenance sales. Average price realization improved by 7% year-on-year to ₹8,814 per square feet. Customer collections for the quarter reached ₹1,047 crore, up 8% from last year. Despite a reported loss of ₹42 crore in Q2 FY26 (versus ₹20 crore loss in Q2 FY25), management clarified this was due to IndAS revenue recognition timing and strategic investments, not underlying operational weakness, with cash flows remaining robust.

The company made significant strides in bolstering its pipeline during H1 FY26, adding over 6.36 million square feet of developable area with a potential GDV of approximately ₹9,100 crore. Key additions include a 24.6-acre partnership at KIADB Hardware Park in North Bengaluru, preferred developer status for eight societies in Chembur (1.2 million sq ft), a 5.5-acre joint development in Balagere, East Bengaluru (valued at ₹1,000 crore GDV), and the Malabar Hills redevelopment in Mumbai (0.7 million sq ft, ₹2,700 crore premium residential share). The H2 FY26 pipeline includes 15.46 million square feet with a potential of over ₹5,800 crore.

Several significant project launches are anticipated. In Mumbai, the Andheri project is set for launch in January, with Miami expected in March/April/May next year. Thane and Bandra projects are also targeted for launch in Q4 FY26, with Thane expected to add around 6 lakh square feet of inventory. In Bangalore, Hebbagodi and KIADB projects are slated for launch this quarter (Q3 FY26), while the KIADB Hardware Park and Balagere projects are expected in January/February and within FY26, respectively. Redevelopment projects in Malabar Hills and Chembur are targeted for Q3/Q4 of the next financial year (FY27).

On the commercial front, the Zentech project is expected to receive its Occupancy Certificate (OC) by February (Q4 FY26), with significant sales and leasing underway, including a substantial area to a large retail player. The Aerocity project is anticipated to receive its OC in January (Q3 FY26), with a target to lease 1.2 million square feet. Management expressed optimism about the Pune market and is actively exploring commercial development opportunities there. The Malabar Hill project is expected to yield an EBITDA margin upwards of 30%.

Net debt at the end of the quarter stood at ₹2,894 crore, with residential debt at ₹859 per square foot and commercial debt at ₹252 per square foot. Management outlined a debt reduction schedule, projecting a decrease of ₹800 crore in the next 12 months and ₹1,646 crore in the subsequent year, assuming no new debt. The remaining ₹450 crore from the HDFC platform is expected to be deployed within the next 3-6 months to fund growth initiatives. Commercial project debt for Aerocity will convert to an LRD facility upon completion and leasing.

Management acknowledged that regulatory changes in Bangalore, such as issues with e-khata, registration department software integration with the revenue department, and the creation of five different corporations (GBA), have caused some project approval delays. These factors have pushed back some Bangalore launches, with a few projects potentially moving to Q1 FY27. Additionally, a state government census has temporarily impacted the availability of officials, affecting project possession and handover time^⏳lines, though management expects these issues to resolve soon.