Eldeco Poised for Robust Growth and Margin Expansion

Ashwin Thakker

— 2 min read
  • Sales Outlook: Q1 FY26 bookings surged 274% YoY to Rs. 221 crores, with future quarters expected to see significant growth driven by new project launches like the flagship Eldeco Solano Garden (over Rs. 1,000 crores GDV). Bookings are deemed sustainable.
  • Margin Outlook: Q1 FY26 EBITDA margin of 17.6% is set to recover to the historical 30-40% range in upcoming quarters, as revenue from recent high-margin project launches like Hanging Gardens and Skywalk is recognized.
  • Construction Spend: Construction expenditure to ramp up significantly from Rs. 39.3 crores (Q1 FY26) to Rs. 50-60 crores per quarter by FY26 end, reflecting accelerated project execution.
  • Revenue Recognition: While revenue recognition typically lags bookings by 3-4 years, major projects like Imperia Phase-II are expected to contribute substantial revenue in Q3 and Q4 FY26, leading to overall strong revenue growth from FY27.
  • Pricing: Average realizations of approximately Rs. 6,500 per square foot are stable and considered the "new normal," with no significant increases expected this year.

Eldeco Housing and Industries Limited's Q1 FY26 earnings call revealed a powerful growth trajectory. With bookings surging 274% year-over-year, the company is set for an exciting future. Management guidance points to sustained sales momentum, a significant ramp-up in construction, and a strong recovery in profit margins, driven by strategic project launches and improved execution. This period marks a pivotal shift for the real estate developer.

Eldeco Accelerates Growth with New Launches

Eldeco Housing and Industries Limited commenced FY26 with strong sales, reporting Q1 bookings of Rs. 221 crores, a 274% year-on-year increase. This growth is driven by successful new project launches, including Eldeco Hanging Gardens and Skywalk. Management anticipates sustained momentum, with Chairman Pankaj Bajaj expressing optimism for continued robust customer demand and a healthy launch pipeline. He stated,

"We remain optimistic about the rest of the year, backed by strong launch pipeline, robust customer demand, and healthy execution progress."

The upcoming flagship Eldeco Solano Garden, with a gross development value exceeding Rs. 1,000 crores, is slated for launch this fiscal year, poised to further boost sales. Current booking levels are considered sustainable, with expectations for "much better numbers" in coming quarters. Average realizations are stable at Rs. 6,500 per square foot, a "new normal" rate.

Eldeco Targets Strong Margin Recovery and Execution

Eldeco anticipates a significant rebound in EBITDA margins from Q1 FY26's 17.6%. The quarter's lower margin was attributed to project mix and upfront marketing expenses. Management projects margins will revert to the historical 30-40% range as revenue from higher-margin projects, including Hanging Gardens and Skywalk, is recognized. Chairman Pankaj Bajaj stated,

"Going forward, it should reverse to its mean of about 30% or probably even 40%."

Construction expenditure, Rs. 39.3 crores in Q1, is set to ramp up sharply to Rs. 50-60 crores quarterly by FY26 end, accelerating project execution. This will boost revenue recognition, with significant contributions from Imperia Phase-II expected in Q3 and Q4 FY26, driving robust revenue growth from FY27.

Eldeco's Q1 FY26 performance signals a robust outlook. The company anticipates sustained high booking volumes, a significant improvement in EBITDA margins, and accelerated construction progress. Strategic project launches, particularly Eldeco Solano Garden, position the company for strong financial performance and market share expansion in Lucknow. Investors can expect improved revenue recognition from Q3 FY26, with FY27 poised for substantial growth. The emphasis on execution and market responsiveness underscores a positive future.

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