Embassy Developments Ltd Q4 FY26 Earnings Analysis

- Strong pre-sales growth with Rs. 2,000 crores achieved in first nine months of FY ‘26; target to reach Rs. 5,000 crores by March 31, 2026 (Page 23). - Robust demand in core markets like Bengaluru and Mumbai, supported by recent launches such as Embassy Greenshore and Embassy Eden showing strong absorption and sales velocity (Pages 6, 23). - FY ‘27 expected to be a strong year with multiple project launches, including Embassy Citadel and Embassy Sky Terraces, backed by secured approvals and low additional capital needs (Pages 27-28). - Priority on unlocking receivables and selling existing inventory to generate cash surpluses to fund growth (Pages 29, 9). - New third-party deals like Whitefield project planned for launch within 12 months, enabling quicker monetization and contributing to future revenues (Page 29). - Long-term GDV pipeline stands at Rs. 52,000 crores, excluding some land banks yet to be developed (Page 9).

- Embassy Developments is focused on completing legacy projects and launching new, high-margin projects expected to improve profitability over the next 2-3 years (Page 29). - ROE of 11%-12% is anticipated but dependent on completion and OC of current project cycles, likely within a 2-3 year horizon (Page 29). - New project launches in FY ‘26 and FY ‘27 (~Rs. 19,000 crores GDV in FY ‘26) with strong pre-sales and collections indicate robust growth potential (Pages 8 & 17). - Cash surplus margins on new projects are healthy, ranging from 45% to 60%, supporting future profitability (Page 21). - EBITDA losses currently impacted by legacy projects; operational cash margins and cash flow visibility underpin confidence in earnings growth (Pages 20 & 9). - The company expects profitability and PAT improvement as OCs are received for new assets, with earnings benefiting from executed launches and strong market demand (Pages 21 & 29).

- For FY ‘26 launches, all approval funding secured through debt raised from Kotak, including working capital for RERA and initial sales period. - FY ‘27 projects largely within Embassy Springs, with existing DP and master plan approvals, requiring minimal additional approval money. - Construction finance to be raised for some projects launching in next financial year, but overall approval spends are a one-off, largely done. - Company pursuing selective deals like the Whitefield residential joint development (JD), with Rs. 50 crores deposit and Rs. 20 crores working capital, targeting high IRR and Rs. 450+ crores surplus. - Office/commercial development at Embassy East Business Park underway, with phased construction and a decision to hold or exit asset post-completion in 3-4 years. - Post-2030 strategy includes higher-margin, large-scale office/city developments; current focus is on asset-light, selective investments. - No aggressive land buying planned amid inflated prices; selectively unlocking existing land parcels when surplus funds available.

- The company has raised net institutional funds of Rs. 880 crores through debt in the last nine months of FY ‘26 to support construction activity and upcoming launches. - For projects launching in FY ‘27, some construction finance will be raised, e.g., for Embassy East Business Park, discussions for construction finance at sub-9% interest rates are ongoing with banks like Bank of Baroda and SBI. - The company feels comfortable that future project launches will not require significant additional approval funding, as much of this was secured in the previous raise from Kotak. - The shareholder debt of approximately Rs. 1,100 crores is held by Blackstone and Embassy Property Developments; discussions are ongoing about whether to convert this shareholder debt into equity or other options. - Overall, the company is following a strategy of raising capital in line with execution needs while maintaining financial discipline and preserving balance sheet flexibility.

- Embassy Developments Limited's current and future pipeline includes a Gross Development Value (GDV) of approximately Rs. 52,000 crores across all projects as of February 2026. - Future pipeline beyond FY ‘26 shows a GDV of Rs. 24,200 crores. - Unsold inventory stands at roughly Rs. 4,500 crores. - Sold receivables are around Rs. 4,000 crores. - The company prioritizes executing and unlocking receivables and selling existing inventory. - Key projects include Embassy Citadel in Worli, Embassy Springs township, Embassy Knowledge Park, and others with significant GDV and expected robust sales. - For FY ‘27, guidance on pre-sales and net surplus will be shared around March-April 2026, with expectations of strong sales. - Debt-financed approvals and construction budgets are largely secured, minimizing the need for substantial new capital for launches in the next three years.