Summary of earnings call for Arkade Developers Ltd published on 31 Jul, 2025

Arkade Developers Limited
Q1 FY26
Call date · July 25, 2025

1 · Management Commentary

Key Positives

• Achieved highest-ever pre-sales at INR142 crores (up 17% YoY), collections of INR170 crores (up 42% YoY), and area sold of 48,000 sq ft (up 27% YoY).
• Revenue for Q1 FY26 at Rs. 165 crores (up 32% YoY); PAT at Rs. 29 crores with a PAT margin of 17%.
• Strategic land acquisitions: four-acre Goregaon West (Filmistan, projected GDV INR3,200 crores), 1.1-acre Goregaon redevelopment (potential revenue INR350 crores), and Thane land parcels (GDV INR2,000 crores).
• Continued focus on premium and luxury housing, with strong execution discipline and timely project delivery.
• Maiden interim dividend of 10% declared; promoters forgoing their dividends to enhance shareholder value.

Key Negatives

• EBITDA margin for the quarter at 22%, lower than previous guidance and historical levels, attributed to increased competition and higher acquisition costs in redevelopment.
• No price appreciation in the last 6–9 months for most projects; appreciation has plateaued.
• Dahisar project delayed due to regulatory height restrictions and pending clearances.

Forward Guidance

• Capex plans: Not specifically disclosed.
• New products/segments: Foray into Uber luxury segment with Filmistan project (3, 4, 5BHK residences and penthouses).
• Expected client wins/losses: Not disclosed.
• Revenue/margin outlook: Management expects margins to improve over the year and absolute profits to rise with revenue growth; Filmistan and Thane projects to drive significant revenue from FY27 onwards.
• Other strategic initiatives: Continued focus on both greenfield and redevelopment projects in MMR; no immediate plans for expansion outside MMR; ongoing operational efficiency improvements and use of aluminum Mivan shuttering for faster project delivery.

2 · Q&A Highlights

Q 1 (Composite): When will revenue acceleration and inflection point occur, and what is the outlook for top-line and PAT growth?
A (Management):
• Major revenue spike expected in FY27 as Filmistan and Thane projects become operational.
• Top-line and PAT expected to grow 20–25% YoY, but management refrains from committing exact numbers.

Q 2 (Composite): What differentiates Arkade’s products and sales cycle versus competitors in premium markets?
A (Management):
• Strategic locations, thoughtful product planning (low-density, residential-only), faster and more reliable delivery, and strong brand reputation drive differentiation and faster sales cycles.

Q 3 (Composite): Why did promoters forego dividends, and why pay interim dividend at all?
A (Management):
• Promoters forgoing dividends to strengthen company capital; interim dividend paid to meet expectations of small investors who value regular returns.

Q 4 (Composite): What caused the drop in EBITDA margin, and what is the margin outlook?
A (Management):
• Margin decline due to increased competition and higher redevelopment acquisition costs; margins expected to improve over the year and average out closer to historical levels.

Q 5 (Composite): What is the timeline and margin expectation for Filmistan and Thane projects?
A (Management):
• Both projects have a 5-year timeline; revenue recognition to start from FY27; management expects good margins but did not quantify.

Q 6 (Composite): Are there plans to expand outside MMR or into South Mumbai?
A (Management):
• No current plans outside MMR; open to South Mumbai if suitable opportunities arise, with a threshold of 1-acre land parcel or INR500 crores top-line minimum.

Q 7 (Composite): What is the status of Dahisar project and other launches?
A (Management):
• Dahisar project delayed due to height restrictions from wireless station shifting; no new launches in Q1, Bhandup project expected to launch in Q2.

Q 8 (Composite): What operational efficiencies or technologies are being used to improve timelines and margins?
A (Management):
• Use of aluminum Mivan shuttering for faster construction cycles; overall operational discipline and strong execution team contribute to faster delivery and improved margins.

3 · Other Key Numbers

• Pre-sales: INR142 crores (up 17% YoY)
• Collections: INR170 crores (up 42% YoY)
• Area sold: 48,000 sq ft (up 27% YoY)
• Revenue Q1 FY26: Rs. 165 crores (up 32% YoY)
• EBITDA: Rs. 34 crores; EBITDA margin: 22%
• PAT: Rs. 29 crores; PAT margin: 17%
• Interim dividend: 10%
• Attrition rate: 20%
• Filmistan project GDV: INR3,200 crores
• Goregaon redevelopment project: 1.1 acres, potential revenue INR350 crores
• Thane land parcels: INR6.28 crores (acreage not specified), GDV INR2,000 crores
• Price appreciation in last 6–9 months: 0–10% (project-dependent)
• Minimum project threshold: 1-acre land parcel or INR500 crores top-line
• No launches in Q1 FY26; Bhandup project to launch in Q2 FY26
• Use of aluminum Mivan shuttering for faster construction

Note: This is an AI generated summary of the earnings call. There may be inaccuracies in the summary. Please refer to the original transcript before making investment decisions.