Marathon Nextgen Realty Limited (503101) Earnings Call Transcript
November 13, 2025
Earnings Call Speaker Segments
Ladies and gentlemen, good day, and welcome to Marathon Nextgen Q2 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Kanav Khanna from E&Y. Thank you, and over to you, Mr. Khanna.
Thanks, Nirav. Good noon to all the participants on the call, and thank you for joining the Q2 and H1 FY '26 earnings call of Marathon Nextgen Realty Limited. Please note that we have mailed out the results to everyone, and you can also see this on our website, and it's also been uploaded on the stock exchanges. In case you have not received the same, you can write to us. We'll be happy to send it over. Now before we proceed to the call, let me remind you that the discussions may contain some forward-looking statements and may involve known and unknown risks, uncertainties and factors. It must be viewed in conjunction with our business that could cause the future results, performance or its achievement to differ significantly from what we have expressed or implied. To take us through the results for the quarter and answer to all our questions, we have the management of Marathon Nextgen Realty Limited represented by Mr. Chetan Shah, Chairman and Managing Director; Mr. Mayur Shah, Vice Chairman; Mr. Kaivalya Shah, Director; and Mr. Samyag Shah, Director. We'll be starting the call with a brief overview for the quarter and the half year gone past, and then we can follow it up with question and answers. And with this being said, I'll transfer the call to the management. Over to you, sir.
Thank you. Good afternoon, everyone. We are pleased to share the second quarter and first half year of financial year '26 that has been very -- among the strongest periods for the company. During Q2, we delivered our highest ever quarterly profit after tax of INR 67 crores, a growth of 35% year-on-year, supported by steady execution and strong operating discipline. This performance highlights the strength of our portfolio and the operational efficiencies we have systematically built across our projects. Friends, operationally, we achieved steady progress across our portfolio with healthy sales velocity, strong collections and notable milestones such as the occupation certificate for NeoSquare in Bhandup and the part occupation certificate for Monte South Tower B. These developments reinforce our commitment to timely deliver and commitment to our customers' trust. The first half of the year has also been encouraging with H1 FY '26 profit after tax at INR 128 crores, the highest ever for the company, representing a 47% year-on-year increase. The momentum across our ongoing projects, combined with disciplined cost management and healthy mix of residential and commercial contribution has enabled us to deliver consistent profitability. Now for the business updates and new project announcements. Across our portfolio, friends, operational execution progressed very well throughout the quarter. Byculla, Monte South project, we received the part occupation certificate for Tower B, a significant milestone for the project. Construction progress on Tower C continues at a healthy pace. Additionally, we announced Monte South Commercial, a large-scale Grade A office and retail development at Byculla being developed in joint venture with Adani Realty. The project will offer approximately 7.5 lakh square feet of premium commercial space with an estimated GDV of INR 3,400 crores, marking a significant expansion in our presence in the South Mumbai commercial market. Strategically positioned within the Monte South campus, where we have more than 1,800 high net worth family going to be residing when the campus gets completed, and this is our market. It is designed to provide a modern integrated walk-to-work environment and will be important addition to our commercial portfolio. Friends, coming to Panvel, Marathon Nexzone, we announced the launch of Phase 3 of Marathon Nexzone in Panvel titled the Nirvana Collection, spread across approximately 3 acres with 4.9 lakh square feet of RERA carpet area and an estimated GDV of more than INR 600 crores, the phase introduces four premium towers along with curated retail and a 70,000 square feet amenity zone, elevating Nexzone's position as one of the Panvel's most sought-after integrated townships. Coming to our -- another project in Bhandup, Neohome portfolio, we recently launched 2.2 lakh square feet of residential space under the Neohomes portfolio in Bandu, amounting to GDV of INR 370 crores. This strengthens our position in the micro market and supports the ongoing momentum in the location. Considering this Lower Parel project of Marathon Futurex, sales momentum remained healthy, and sales realizations are getting stronger. We also witnessed expansion requirements from some of the existing tenants within the building itself and demonstrating the strength of the asset and the continued preference for well-located Grade A commercial spaces. Marathon Millennium, Mulund, the project continued to maintain strong sales momentum through the quarter, supported by healthy end user demand and the micro market's established connectivity. The well-designed product offering and sustained buyer interest contributed to consistent absorption levels. Friends, our operating performance for Q2 and first half year -- half year 1 FY '26 reflects steady progress across our portfolio. During the quarter, we achieved area sales of 65,845 square feet, representing an 18% year-on-year increase. This was supported by healthy demand across our key micro markets and consistent traction in our ongoing projects. Booking value for the quarter stood at INR 166 crores, which is up 29% year-on-year, driven by strong response from residential as well as commercial offerings. Collections remained stable at INR 191 crores for the quarter, reflecting disciplined execution and the continued confidence of our customers. For the first half of FY '26, the company recorded area sales of 143,600 square feet, an increase of 12% year-on-year. Booking value for H1 reached INR 349 crores, growing 22% year-on-year, while collections rose, INR 430 crores, up 17% year-on-year. Our balance sheet continues to remain strong. We maintained a net debt-free position during the period, supported by healthy collections and measured capital allocations with a robust launch pipeline and consistent progress across ongoing developments, we remain well positioned to deliver sustained growth in the periods ahead. Friends, homebuyers these days are increasingly gravitating towards transparent, financially disciplined and execution-focused developers, resulting in a growing market share for organized players like Marathon. We have a robust and proven business model, a healthy balance sheet and a substantial land bank of over 400 acres across high potential micro markets like Panvel, Dombivali and Bhandup. Our strong execution capabilities backed by in-house design, engineering and construction expertise continue to be a key differentiator. We also have a diversified and well-placed launch pipeline, which will be an important growth driver over the next few years. Our vision is simple and clear: monetize these land parcels in rapid way in the next few years to come through self-development, strategic partnership that is JV and JDA, making use of government policies for maximizing margins and creating value for shareholders. In addition to developing our existing land parcels, we are actively evaluating new project opportunities, supported by the capital raised through the recent QIP of INR 900 crores. This positions us well to participate in redevelopment, joint development and other asset-light opportunities across Mumbai, enabling faster ceiling and portfolio expansion. The progress we have made this year reinforces our conviction in our long-term strategy, supported by strong fundamentals, a disciplined approach, a clear growth visibility, Marathon Nextgen is well placed to leverage upcoming opportunities and continue creating long-term value. We thank all our stakeholders for their continued trust and support. Friends, we will now open the floor for questions. Thank you very much.
[Operator Instructions] The first question is from the line of [ Mihir Desai ] from Desai Investments.
Sir, on the operations side, I had a few questions. So if we see our area sold has grown by, say, roughly 15% to 20% and bookings have also grown by 25%, 30%. So could you share which projects contributed most of this growth?
Yes. So the major project that...
Yes, you're audible.
Yes. The major projects that contributed are actually Futurex. We are seeing phenomenal growth in terms of -- I mean, demand in terms of Futurex sales. In fact, within the building also, our existing Grade A clients are demanding for extra -- more area. So Futurex as a commercial asset is doing superbly well. And along with it, Monte South and Nexzone are supporting the sales growth as well. This is -- these are the top three projects that are contributing in terms of booking growth.
Okay. Sir, a follow-up on this, like for the collections, for this quarter, the collections are flattish. So what have been -- so are you taking any steps to increase? So -- or how do you see the collections in, say, next -- second half of this FY '26?
So collection is a factor of percentage completion in terms of that milestone of that specific building. So as and when the progress of the project happens and which is happening rapidly, especially in Monte South, if you look at it, Tower B, we have topped out in terms of 65 floors in terms of RCC. Tower C is also growing rapidly. Nexzone, in fact, H1, we achieved occupation certificate for two or three towers. And Neosquare also, we received occupation certificate. So these are the factors that actually increase the collection. And next quarter also, we will see some good construction progress happening. So yes, collection will be going strong.
Okay. And sir, on the inventory position, can you please share what is the unsold inventory? And how do you expect the trend by this year-end?
So from inventory position in the listed company right now, in Futurex, we have very -- ready-to-move-in, almost 30,000 square feet. And in -- ready-to-move-in, Monte South, we have around 1 lakh square feet. Other than that, there is hardly any ready-to-move-in in Bhandup, a little bit there. All in all, ready-to-move-in inventory is around INR 340 crores worth. And that -- because it's a ready building, the demand is high for ready-to-move-in units. So we will be selling that on a super-fast pace.
Okay. Sir, one question on new launches or the upcoming projects. As I see the trend, say, most of the players or most of the players in the market in MMR, basically MMR region are largely moving towards premium housing. But if I see the portfolio of yours, I guess, the upcoming projects, the most -- if I see our portfolio, the portfolio contains more of the affordable housing. So I just wanted to understand your strategy behind this? And are there any plans to launch premium and luxury housing? So I just wanted to understand your strategy towards this.
Basically, our portfolio is spread across premium and affordable housing. But premium project is already ongoing. Monte South, we already have -- we have a substantial [ pipeline ] coming in. So we do not really need to acquire anything in the premium space immediately. And the projects in the Nexzone is also now going into a little bit of a premium category in that local micro market. So the launches which are happening are as the land bank which are available with us. And our product portfolio is quite mixed in premium and affordable.
Okay. And sir, what is the particular trend which you are seeing in the premium housing? Like is the demand strong and we'll be able to sell whatever we construct?
So we have -- see, basically in the premium, what we are talking is between INR 3.5 crores to INR 7 crore kind of a market in the South Mumbai. But the super-premium, like beyond INR 10 crores and INR 50 crores, we have seen a little bit of a slowdown from the market data. But particularly, this INR 3.5 crores to INR 7 crores market is still going strong.
Okay. And sir, are there any plans to come under the annuity or build any annuity portfolio under our commercial space?
No. As of now, we are kind of not in that space. Even though we do a leasing to the corporate clients and MSC, at appropriate time, that investment portfolio, we go ahead and sell.
Okay. Okay. Sir, lastly, are there any new land aggregation which you are seeing?
Yes, definitely, we are going quite -- looking for a JDA, JV model, particularly in redevelopment model, redevelopment type of a project in Central and South Mumbai and central suburbs, where project has been already started by somebody and we can quickly take over from our QIP funds, that is our top priority, where the revenue can start coming very quickly. That is our top priority. And second is definitely South Mumbai premium segment redevelopment projects.
Okay. And lastly, sir, on the macro front, do you see any slowdown in the industry? Or this is a temporary...
We actually, in our micro market, we have not seen slowdown. It's a steady and ongoing thing. And the Mumbai MMR region, the way the infrastructure development push has been given by the state government, we see really big real estate play still there in the MMR region and particularly outskirts, Panvel 3.0 is something which has been announced by the state government. So -- and the bullet train stations and all those infrastructure, metros, everything is getting -- the vision of the state government is that any point to any point in 45 minutes will really give a very big boost to real estate in all the micro markets, which we are working on.
Correct, sir. This gives a strong indication of the demand, sir.
Yes.
[Operator Instructions] Next question is from the line of [ Kinza ] Shah Sharma, individual investor.
Am I audible?
Yes, you are.
I just had a couple of questions from the sense of overall business demand and a little bit of a macro environment. Just wanted to understand how do you see the macroeconomic environment influencing real estate demand, particularly in the second half of FY '26?
So I can talk about mainly Bombay and the way infrastructure is growing and the way the government has actually planned out the city and that influencing the real estate market. Mainly, if you look at all the three government bodies, the SRA, the MMRDA and MHADA and even BMC, they are -- they have been given challenges of making sure the city infrastructure is dramatically improved. Right now, recently, Mr. Mukherjee of MMRDA actually took up the challenge of reaching from one point of the city to another point of the city in 59 minutes. That's the challenge that he has taken up in the city of Mumbai. That essentially means the whole Bombay north to south is going to be connected via either Western Freeway or the Eastern Freeway and east-west connections are getting made via JVLR, SCLR and Thane-Borivali and Mulund GMLR. And Panvel, if you look at it, Atal Setu is connecting it and Panvel, the new airport has been made. So all these connections within the city actually is changing the city dramatically. New suburbs are being created where real estate prices are increasing. For example, in Bhandup, the GMLR is the superb project that is happening, and that is connecting Mulund to Goregaon, and that is where Marathon is well positioned in Bhandup with 130 acres. Similarly, Panvel, if you look at it, we have around 205 acres. That's where the airport is -- already, in fact, soft launch of the airport just happened. Turns out the whole city center is going to shift because of the way Panvel infrastructure is happening. The train, the Panvel to Karjat train tracks are getting expanded. The Bombay-Delhi corridor is actually ending at JNPT, which is again in Panvel. So that in terms of infrastructure boost is actually boosting where our project locations are. Talking about Dombivali, the new BKC is getting made there because there's a bullet train station that is coming in there. So there's one bullet train station in BKC and one in Dombivali. So all these locations, because of the infrastructure, there's a dramatic change in terms of real estate story. I hope that answers...
Just to add to that, the new bullet station near Dombivali, our portfolio of land, group portfolio of more than 80 acres is very much within that zone.
Right. Right. Okay. So that's very helpful and very, very detailed. If I could just from here, move on to the overall demand momentum and how it's shaping up, basically, both in the residential and commercial segment, primarily post the GST rate cut, if you could just give some color on that?
So basically, GST rate cut is not really coming to any real estate, it is -- mainly the consumers have been driven particularly that market. However, the demand in Mumbai is really remaining buoyant. Typically, as we told you that infrastructures are improving, and people are moving more inward from the -- particularly what we are seeing Bhandup and all those locations. We are seeing people coming from beyond Kalyan, beyond Karjat. All those people are finding convenient to move, affordable to move into these locations. So typically, Mumbai City was not actually having more demand coming in earlier. But because of these infra projects which are coming up, the -- within the Mumbai city limit is also the demand is increasing across the segment, affordable and luxury and premium.
The demand for office, so as you can see in our portfolio, there's very little inventory left in both of our office projects, Millennium and Futurex. And what we are witnessing is while the demand remains strong, we are able to even get a higher rate every year, whether it's in terms of any rental we have done or in terms of what we have sold. So while demand is remaining intact for sure, we are also able to get a much higher rate than we were getting before. And that clearly shows that the overall environment remains robust.
Okay. Okay, sir. This is helpful. If I can probably just squeeze in another question, if that's okay. If you have any visibility or outlook on buyer sentiment and pricing trends across your key micro markets, that could be a little helpful.
Sure. So just to give you a perspective from a calendar year perspective between 2004 and 2025 -- 2024 and 2025 in Panvel project, we have seen an escalation of almost 5%, 6% in price. It's been a combination of some of our buildings getting ready as well. And there is a lot of activity and a lot of positive sentiment around the infrastructure story in Panvel. And we've seen similar or probably a percentage or 2% more increment in terms of pricing in Futurex as well.
[Operator Instructions] Next question is from [ Navarun, ] individual investor.
Congrats on a good set of results. So I just -- can you throw some light on how do you plan to monetize the land bank that we have given the huge amount of development that is coming into that area, like Panvel is touted as Mumbai 2.0 (sic) [ Mumbai 3.0 ] and Dombivali and Bhandup getting significant connecting projects. So what is the management's plan to monetize it and how quickly you plan to monetize it?
So yes, we have large land banks in all these three areas. The idea -- so currently, what is happening in Bhandup specifically, if I start, we have 130 acres, one end touching the Mulund side and one end touching the Kanjurmarg side. We have started Neopark from the Kanjurmarg side and -- sorry, from the Mulund side and Neovalley from the Kanjurmarg side. We're doing self-development as much as we can do. The other strategy is actually doing B2B sales in the sense that in case there's another developer requiring some FSI, there is a government policy where we can actually sell the FSI to another builder. So that is B2B sales. And there is -- we can also employ our strategic partnership with any developer who's a large-scale developer, wherein we can do all the groundwork because we have the expertise to clear the slum, and we can partner with those kind of developers as well. Talking about Panvel, the location, as you mentioned, is Mumbai 3.0. Infrastructure is amazing. We intend to start with plotting. And then as and when the opportune time comes, we also intend to do large-scale township because the land size is almost 205 acres. Similarly, in Dombivali, Dombivali, we already have our expertise in terms of we have executed Nextown and Nexworld project. So we understand the market. We know how sales happening -- are going on. So -- and with the government push, we feel that the market is going to boom, and that's why we intend to do -- sell development of large township there.
[Operator Instructions] Next question is from the line of [ Jignesh ] from [ Jeeva Capital. ]
Sir, I wanted to understand regarding your Bhandup project, how do you envisage in coming 3 years, how many projects you will do? And how far is the site from the LBS road because the proposed 90-feet road, I believe it will take a few years to come.
Yes. So it's -- in terms of distance from LBS, it's under 200 meters. So -- and in terms of the 90-feet road, in Mulund, the 90-feet road has already started developing. It is going through multiple real estate projects. It has reached the GMLR already. And the first part of it has already been started developing. And if you look at Google Maps also, you will see a massive cycling track also coming through from Bhandup, and it is -- so all these government projects are actually happening. The difficulty over here is to demolish the slum that is on the way. And that is where we intend to work with the authority, the Slum Rehabilitation Authority. The SRA has come up with a cluster plan where if you -- if a developer has more than 50 acres, they come up with specific incentives and that helps the SRA development -- department to become -- to make Mumbai slum free as well as it assists us in terms of our land bank because we have a large land bank. So it's a win-win situation for government as well as us, and we will create the infrastructure within Bhandup. That is what we intend to do.
And sir, the forest issues that a lot of developers faced in the past on one side of the LBS, so that issue has gone off. So we will get FSI as we require going forward.
That is correct. So on 8th November, the Supreme Court has given a verdict wherein all these private forests have benefited. The private land, which was considered as private forest, that has been taken off. So a lot of new development that will take place where the revenue authorities had put in private forest as their -- in their own names. However, the environment clearance is still required if you are abutting the forest. Yes, Samyag, you wanted to add?
No, no, that's it. I think all points are covered.
Sir, coming to that question, for next 3 years, how much we see any potential from this Bhandup project?
So Bhandup project, we have already announced today morning that we are going to -- we are launching INR 370 crores worth GDV project. The area is 2.2 lakh square feet. Going forward, our focus is going to be on Neovalley and Neopark. Neopark is a 6.5-acre land, wherein we have decent balance potential. And Neovalley also is a 14.4-acre land. We have a decent potential left. All in all, it's a 15-lakh carpet area, which is balance. And GDV of INR 2,000-plus crores, which is balanced from both these lines together.
[Operator Instructions] As there are no further questions, I'll now hand the conference over to Mr. Chetan Shah for closing comments.
Thank you, everybody, for participating in our conference call. As we mentioned, the future is very bright. We're having a good land bank in three micro markets, all three micro markets, we have been in the top three or top five sellers. So from a perspective of acceptance of the product is already established. So all these things added with government's infrastructure push is going to have a great impact on not only Mumbai real estate market, but also majorly on Marathon's land bank. Thank you very much for participating.
Thank you very much. On behalf of Marathon Nextgen, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.
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