Marathon Nextgen Realty Limited (503101) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q1 and FY '27 Earnings Conference Call hosted by Marathon Nextgen Realty Limited. [Operator Instructions] I now hand the conference over to Mr. Chetan Shah, Chairman and Managing Director from Marathon Nextgen Realty Limited. Thank you, and over to you, sir.

Good afternoon, everyone, and thank you for joining us for Marathon Nextgen Realty Limited Quarter 1 FY '27 Earnings Call. I'm Chetan Shah, Chairman and Managing Director of Marathon Nextgen Realty Limited. I'm joined here today by Mr. Mayur Shah, Vice Chairman; and Director and Promoter Group, Kaivalya, Samyag and Parmeet. We also have our Group CFO, Suyash Bhise, present here. We have uploaded our Q1 financial results on the stock exchange and on our website. I hope everyone has had the opportunity to review them before this call. Ladies and gentlemen, we have started FY '27 on a good note with the total income for the quarter standing at INR 217 crores, which is a multi-quarter high, while EBITDA stood at INR 66 crores and profit after tax at INR 52 crores. We continue to maintain healthy profitability while making steady progress on execution across our development portfolio. Friends, this quarter reflects the strength of our diversified portfolio with contributions from premium residential, affordable housing and commercial segments, supported by a strong balance sheet and growing development pipeline. During the quarter, on our existing portfolio, we sold approximately 38,000 square feet with a booking value of INR 86 crores and collection of INR 118 crores, INR 118 crores. This is considering MNRL's 40% stake in Monte South project and not 100%. Including the merged portfolio, areas sold stood at 46,000 square feet. Booking value was INR 108 crores and collections were INR 146 crores. Let me briefly touch upon some of the key project level developments. Friends, our Monte South project, our joint venture project with 4 residential 65-story towers and commercial towers, Monte South is located at Byculla and continue to see healthy customer interest with approximately 35,000 square feet sold during the quarter, generating a booking value of INR 125 crores and collection of INR 140 crores. The sustained sales momentum at Monte South is particularly encouraging as we continue to see robust demand for well-located premium residential developments. We also benefit from having ready-to-move inventory in our tower A and B, which we sell at a premium. As we have seen over the past several quarters, the project has demonstrated consistent sales velocity, giving us confidence in the underlying demand. On execution, Tower A, as you already know, we have received occupation certificate, while Tower B has achieved RCC completion up to 65th floor tariff, and it is also having part occupation certificate up to 45th floor. The occupation certificate for remaining part up to 65th floor is expected during this financial year. Tower C has also progressed rapidly with RCC work completed up to 28th floor. Coming to our next project, Marathon Nextgen -- Nexzone, our 25-acre 19 towers development, Marathon Nexzone in Panvel, we sold 14,000 square feet during the quarter with a booking value of INR 17 crores and collection of INR 43 crores. Importantly, we achieved full occupation certificate for the Cedar and Daffodil Tower, enabling customer handovers and supporting collections. The project is well placed to benefit from the continued transformation of the Panvel micro market. The Navi Mumbai International Airport is now operational. Atal Setu has significantly improved connectivity and the broader Panvel corridor is progressing with the deadline being December 2026. With this, the peripheral areas of Panvel, which was connected by road will now be connected by Mumbai local trains as well. We believe these infrastructure developments are strengthening Panvel's position as an important growth corridor within the MMR and redefining the city center. Coming to our Bhandup projects. Our Bhandup portfolio is progressed as per schedule. NeoPark and NeoSquare together contributed 8,000 square feet of sales with a booking value of INR 14 crores and collection of INR 9 crores. NeoSquare, as you know, has already received its occupation certificate, while construction at NeoValley and NeoPark continues as planned. The underlying market outlook for Bhandup is encouraging. The micro market is benefiting from improving connectivity. In June this year, more than 350 slum dwelling families were rehoused by government to pave way for the construction of Goregaon Mulund Link Road, GMLR. Project twin tunnel -- twin tunnels have started for connection of Goregaon and Mulund. The GMLR will further strengthen connectivity between the Eastern and Western suburbs. Friends, Marathon's commercial portfolio. At Marathon Futurex on a combined basis, including the post-merger position, we sold approximately 4,000 square feet during the quarter with a booking value of INR 19 crores and collection of INR 23 crores. Millennium sold over 1,000 square feet with a booking value of INR 3 crores and collection of INR 1 crore. Futurex, as you know, has already received its occupation certificate, while construction at Millennium continues as planned. Our commercial portfolio remains an important part of the overall platform. We continue to be well positioned through established assets such as Futurex and Millennium. At Futurex, we continue to see strong demand across both leasing as well as outright sales with limited supply of comparable quality space. friends, with the recently planned Monte South commercial being 5 minutes drive from Futurex, it gives us good confidence to launch this commercial project in the vicinity by leveraging our existing relationships and capitalizing on the limited supply of commercial grade A space in the vicinity. As we look beyond the current quarter performance, we have significant value as well as a visible pipeline of future development. Our upcoming projects are as follows: Monte South Commercial with an estimated GDV of INR 3,400 crores, Monte South Residential Tower D with an estimated GDV of INR 1,600 crores, and in Bhandup, Marathon Neo Series represents an estimated GDV of approximately INR 2,800 crores. Another area where we see meaningful potential is redevelopment. In the last few months, we added 2 strategically important opportunities, one in Versova and one in Sewri. At Versova, through our subsidiary, Sunset Spaces, we entered into a development agreement for the redevelopment of an existing residential society spread across approximately 1.5 acres with an estimated GDV of over INR 450 crores. This is an important milestone for Marathon as it marks our first major entry through society redevelopment. The project is being planned as a relatively low-density residential development with greater emphasis on open and landscape spaces. We believe this gives us an opportunity to bring our development and execution capabilities into an established land-constrained micro market. The next one is at Sewri, we entered into a joint development agreement for a cluster redevelopment project spread across approximately 7,500 square meters with an estimated GDV of around INR 450 crores. Sewri improving connectivity, strategic South Central Mumbai location and stunning waterfront view and relative affordability compared to established neighborhood areas enhance its long-term appeal as a residential destination. Together, these 2 projects, Versova and Sewri demonstrate our approach of entering redevelopment selectively, focusing on locations where we see strong underlying demand and where our execution capabilities can create differentiated projects. Friends, we are excited by the opportunities in Mumbai. Our approach to growth remains selective. We will continue to evaluate opportunities based on location, project viability, approvals, the structure of the transaction and most importantly, capital efficiency. Our balance sheet gives us considerable flexibility in pursuing this strategy. Following the successful QIP of INR 900 crores, we remain in a net cash position with approximately INR 200 crores of acquisition capital available for new acquisitions and a debt-free balance sheet. This provides us with the capacity to selectively pursue attractive new opportunities. The proposed merger is another important part. It is designed to consolidate and optimize the group's real estate assets that were not part of a listed entity. The consolidation will bring over 400 acres of land, several ongoing projects and some ready inventory at Futurex into the company's portfolio. Friends, our existing portfolio has an estimated unsold GDV of approximately -- estimated GDV approximately of INR 8,000 crores, while our broader land bank, which is coming through the consolidation provides substantial visibility for future development. Looking ahead, our priorities for FY '27 are clear. We will remain focused on execution across our ongoing projects in MMR, driving sales and collections, bringing the next set of projects to market at the appropriate time and selectively adding new development opportunities for future. We want to build a balanced, sustainable development platform with a mix of premium residential, affordable housing, commercial and redevelopment opportunities, while maintaining disciplined capital allocation. As per our strategy, we will continue to balance our projects across city, suburbs and extended areas of MMR. The broader MMR environment remains supportive. Infrastructure is progressively bringing peripheral market closer to the establish city. While redevelopment is creating opportunities within mature Mumbai micro markets, at the same time, demand for quality residential and commercial assets remain very healthy. We believe these are durable trends rather than short-term opportunities. Friends, for Marathon, the opportunity is particularly attractive because we are participating across both sides of this market, established locations such as Byculla and Bhandup as well as growth corridors such as Panvel and Dombivli. With a strong liquidity position, a sizable development pipeline and in-house capabilities across land acquisition, design and engineering, we believe we have the foundation to execute the strategy with greater control and certainty. We enter FY '27 with a stronger platform and a deeper pipeline and multiple avenues for growth. Our focus now is to convert these opportunities into consistent execution, healthy cash generation and sustainable long-term value creation. Friends, with this, we open the floor for questions. Thank you very much.

[Operator Instructions] First question comes from the line of Mihir Shah with MP Securities.

Am I audible?

Yes, Mihir, you're.

So sir, you added INR 900 crores of redevelopment GDV in Versova and Sewri. So what is the launch time line? And how much additional redevelopment GDV can be added over the next 12 to 24 months, if you can throw some light on that?

So the total GDV, as mentioned, is about INR 8,000 crores. The 2 new acquisitions that we have done in this last quarter are going to add about INR 900 crores. Each project, Sewri is INR 450 crores and Versova is also INR 450 crores. So this INR 900 crores is the additional GDV during the quarter that we are -- yes.

[Operator Instructions] Next question comes from the line of Karan Mehra with Mehta Investments.

Sir, in Q1, the bookings were around INR 108 crores. What is the business outlook for FY '27 and which projects are expected to drive the acceleration?

So the numbers of this year, of course, I mean, I won't be able to answer in terms of future-looking things. But then in terms of our demand, especially in commercial as well as Monte South, we are seeing good demand. Our Monte South project has -- in terms of footfalls have dramatically increased. And if you -- in the next few quarters, you shall be seeing a much better result than what we have already performed. In terms of Bhandup, we have recently launched an additional phase of an existing project. So that itself is also showing good numbers. The booking value of that will be seen in the next following quarters, considering we show booking only on registration. Panvel also, we have launched. So again, those numbers you shall see in the following quarters to come. That being said, the outlook of this year seems positive. And yes, so it looks much positive than last year.

Understood. And if you look in terms of collections, which were around INR 146 crores in the quarter. So can you throw some light how should we think about the collection trajectory over the next 2 to 3 quarters, particularly following the recent proceeds?

So collections are -- a lot of our projects have ready-to-move-in inventory. So from that perspective, if we sell that ready-to-move in inventory, the collections are directly 100%. So for example, our Futurex, whatever sales happen from that project, the collection of that comes within a TAT of around 3 months of sale. Similarly, Monte South, we have in Tower A and Tower B till 46th floor, whatever we sell, the TAT of that also is around 3 months. So the ready-to-move inventory will augment our collection, number one. Number two, the rest of the collections are basis on percentage completion. And including Tower C, if you notice of Monte South, we've already reached 28 slab. So from that perspective, we are around 40% odd collection, which is, again, that's the maximum collection where you come from. So these are some of the projects where collections are. So again, our collection this year will be slightly on the heavier side.

[Operator Instructions] Next question comes from the line of Dave Ajmera, an Individual Investor.

Congratulations for the quarterly results. Am I audible, sir?

Yes. Thank you, Dave.

So why is there a reduction in the other income for this quarter?

So the other income actually has an investment property of Futurex. And in this quarter specifically, that specific floor where the investment property is, is not sold. Hence, there is a reduction in the other income.

Okay. And one follow-up question. Sir, in the September, this is the first NCLT hearing or this is the final NCLT hearing for the amalgamation?

So the first year, the dates for the public shareholder meeting has been asked to convene. So the convening of all the meetings of public shareholding has been planned in September. Post that, the second hearing will take place.

Just to add to that, all the stakeholders' meeting, some of the meetings have been waived by secured creditors and other meetings, whatever were planned are supposed to be done in the first week of September, including the shareholders' meeting of our company. So these are the meetings. After that, there will be a second hearing and then the merger would proceed.