Ladies and gentlemen, good day and welcome to the Sobha Limited Q4 FY26 earnings conference call hosted by ICICI Securities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing *10 on your touch-tone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Adhidev Chattopadhyay . Thank you, and over to you, sir.
Good evening, everyone. On behalf of ICICI Securities, I'd like to welcome everyone on the call today. From the management, as always, we have with us Mr. Jagadish Nangineni, the Managing Director, and Mr. Yogesh Bansal, the Chief Financial Officer. Now I'd like to hand over the call to the management for their opening remarks. Over to you. Thank you.
Thank you, Adhidev . Good evening to all the participants of the call. I and our Sobha team are pleased to connect with you today post-declaring our Q1 FY2026 financial results, which we declared yesterday. This is the first time in the last 15 years that we have declared the quarterly results within a month after the end of the quarter, thanks to our improving processes. In our first quarter of this financial year, we achieved our highest ever real estate sales, crossing a huge milestone of INR 2,000 crores for the first time, with a total sales value of INR 2,078.8 crores. This achievement was driven by a successful launch of Sobha Aurum in Greater Noida, our first project in Greater Noida, a project that has garnered exceptional demand from customers in its launch week towards the end of June.
This achievement signifies a major step in deepening our presence in NCR. Our total sales for the quarter were supported by a sale of 1.44 million sq ft across all our operational markets, with an average realization of INR 14,395 per sq ft . During the quarter, we launched two projects measuring 1.62 million sq ft . One of them is Sobha Aurum, and the second one is Marina One Four Towers, which constituted about 920,000 sq ft . Cumulatively, during the past five quarters, we launched more than 10 million sq ft of area, and our inventory at the end of the quarter was about 11.55 million sq ft , with a potential sales value of about INR 17,000 crores.
In addition to that, we have a strong residential pipeline of 17.67 million sq ft across 17 projects in nine cities, and a commercial pipeline of about 0.7 million sq ft across our operation cities. We envisage to launch these forthcoming projects in the next four to six quarters. Also, we are working on our subsequent project plans for about 23.53 million sq ft . During the quarter, we completed 1.07 million sq ft of delivery, which is 594 homes, and we are on track to complete about 4 to 4.5 million sq ft for the balanced nine months. While the operational and cash flow performance has been healthy, one of the key concerns for all of you might be on the margin front. We expected significant improvement starting this quarter in this year.
However, due to delay in obtaining OCs in five Bangalore projects, we could not recognize those project revenues and corresponding margins. This has led to much lower margins with all the operational costs baked in. We expect to see good improvement in the subsequent quarters and years as we recognize these completed projects. With this, I hand over the call to Mr. Yogesh Bansal, our Chief Financial Officer, to provide color on the financial performance, post which we shall open the floor to take questions.
Good evening, everyone, and thank you for joining us today. I will update the first update about cash flow, our quarterly performance, and future visibility. Then I shall briefly touch upon the P&L and open the floor for questions. During the current quarter, our total collection from all businesses was INR 1,778 crores, recording a 15% growth from Q1 2025. Real estate segment recorded the highest ever collection of INR 1,599 crores, supported by strong sales and construction milestone completions. Contracts and manufacturing businesses contributed INR 179 crores in Q1. We generated INR 395 crores of net operational cash flow in the quarter. Post-finance land and CapEx-related payments, net cash flow was INR 56.8 crores. Our gross debt was INR 1,019 crores and cash balance of INR 1,706 crores. Our average interest cost for the quarter was 8.86%, which is lower than Q1 and Q4 2025.
We expect it to reduce further in the coming quarter. Looking ahead, we have a clear visibility of future cash flow from our ongoing and forthcoming inventory. From all our completed and ongoing projects, we expect a total of INR 24,752 crores of future cash inflow. The cost to complete these projects is estimated at INR 13,661 crores, thereby generating marginal cash flow potential of INR 1,191 crores at project level. We expect to realize this over the next four to five years. Additionally, we shall generate another INR 7,000 crores of marginal cash flow in the next five to six years from the forthcoming project of 18.38 million sq ft , which will be launched in the next six to eight quarters. Overall, we are on a very strong financial footing with robust future cash flow visibility, giving us the confidence to pursue growth opportunities.
Now coming to P&L for the quarter, we recorded a total income of INR 901 crores. Real estate income contributed INR 690 crores. Contracts and manufacturing contributed INR 162 crores. Our EBITDA was INR 73 crores with a margin of 8.1%. We generated a PAT of INR 13.6 crores with a margin of 1.5%. As we start recognizing revenue from new projects in the upcoming quarters, we expect improvement in margins. Our total balance revenue to be recognized from already sold units as on 30th June 2025 was INR 17,245 crores. With this, we can now open the floor for questions. Once again, thank you all for your participation.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Puneeth from HSBC. Please proceed.
Thank you so much, and congratulations on a good start for the quarter. My first question is on margins, right? If your margins, if you had included those five projects which did not receive OCs, what would your margins have been?
Good evening, Puneeth. We have these five projects which we should have received these OCs. Unfortunately, there have been delays at the authority end due to certain ongoing matters related to the fee that needs to be charged to the projects for the issuance of any approvals. If we had included those, we could recognize additional close over INR 650 crores with regard to these projects. Probably the net that we could have recognized, net in the sense PBT, would be over INR 150 crores.
Okay. PBT, I'm guessing for all this, a clean PBT would have been INR 400 crores.
Yes.
Marina One Four Towers already received, or are they still pending?
Yes.
Are the loss-making contract manufacturing business part of the problems resolved now?
Absolutely. All the contractual projects which we had undertaken previously, all of the projects are completed. In contracts, we do projects related to civil, electrical, and plumbing. We are continuing to execute and take up new projects in electrical and plumbing. However, in civil, we have only one project which is ongoing, which is in Bangalore. Other than that, all the rest of the projects are completed, and corresponding revenue and costs, most of it is already taken. Any concerns related to margins in that division are so far, it's all accounted for, and hence we should not see anything more coming going forward.
Okay. That's good to hear. Also, on your central overheads and advertising expenses, both have been higher this quarter. Any particular reason for that?
Typically, the Q1 is generally higher, and this time particularly because we had to incur expenses related to IT, which is technology expenses, which is license expenses which come in once periodically, not necessarily every year, but comes periodically. That's one. Second is some insurance-related expenses also have been higher. Both these have contributed to higher expenses. In addition to that, some of the expenses which we were earlier categorizing in projects expenses, which we started treating as overhead expenses, have also contributed to a slight increase in the overhead expenses. Going forward, I think it would not be as high as what we have seen in this first quarter, but it will be slightly lower. Second is related to the sales and marketing expenses. Of course, with the higher sales value, there would be higher expenses going forward.
That will, in fact, cause a little bit of pressure on the P&L in this financial year.
Understood. That's helpful. Lastly, if you can talk about what are the major projects we should look out for in the coming year?
In terms of launches?
In terms of launches, yes.
In terms of launches, like I was saying, there are three small-sized projects in Bangalore. There are a couple of projects in Gurgaon, which can be large, and one in Greater Noida. There is one project in Pune, which we intend to launch during this year. In Chennai, we have a reasonably large-sized project. In addition, in Kerala, we have a couple of projects, one in Trivandrum and one in Calicut. These largely should, if accumulatively, if you do all of these, it should be close to about 7 to 8 million sq ft . We have already done about 1.62 million sq ft .
Understood. If I can just squeeze in the last one here, on the projects which you launched in Noida, how much of it has been sold and what is still to sell? Sobha Aurum?
Aurum, as on the end of the quarter, we sold close to 80%, and the remaining, hopefully, we should be completing in this quarter.
What was the sale value and volume from this, if you can just focus on it?
Yeah, the value for Aurum, which was part of the operational update, INR 2,078 crores, it's INR 833 crores.
833 crores. Okay. That's very interesting. Thank you so much and all the best.
Thank you, Puneeth.
Thank you. Before we proceed with the next question, ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Parikshit Kandpal from HDFC Securities. Please proceed.
Yeah, I'm Parikshit . Congratulations on crossing the INR 2,000 crore mark on pre-sales. I just wanted to understand, is it now the quarterly bottom for us, and things will continue to build around this number and increase from here on in subsequent quarters?
Thank you, Parikshit. A lot of our performance in the future is also dependent on our new launches. Even the sustained sales that we are seeing from existing projects seem to be good and stable as of now. We do aim to beat each number and be consistent. However, as you're aware, the external market conditions and the timing of the launches are also very critical. We are hoping that we will continue to achieve these timelines. Once we do that, hope that we should be able to do far better than what we did last year and what we have guided for this year.
Great. Good to hear that. The other question is on, I just want clarification. You said you have missed around five projects OC of INR 650 crores revenue and INR 450 crores PBT. Is this number correct because PBT number?
Sorry, Parikshit, it's not INR 450 crores, it is INR 150 crores.
Okay. My bad. INR 150 crores was the PBT. Okay. Just lastly, on the business development, anything in this quarter, and especially also on the launches, what are the launches planned for this quarter? That would be my last question.
This quarter, we did plan to launch two projects in Bangalore and one project in Gurgaon. However, I think there might be touch and go. I'm hoping that at least one project we'll be able to launch.
And value of that project and also business development done in this quarter?
You are aware that we do not disclose business development actively. As and when they come into the pipeline, you will be able to see those. As of the value of the new launch, we are hoping at least one project, which is of about INR 950 crore.
I think Yogesh Bansal.
Yes.
Okay. Sure. Thank you .
Thank you, Parikshit.
Thank you. The next question is from the line of Pritesh Sheth from Axis Capital. Please proceed.
Hi. Good evening to the team. Congrats on great numbers. Firstly, just on this response to this Greater Noida project that we got, how you read this, was the market Greater Noida too hot? I mean, too much of demand right now? Or from our side, we strategically did something to get such a kind of response. How do you expect the response for other launches during the year across the markets that you see? How are the other markets behaving versus what you're seeing in Greater Noida? That's my first question.
Yes, it is. The first project response has been really good. We are very happy to see that. Over the years, there is definitely a good pickup in the demand side in Noida and Greater Noida. Considering that we could capitalize on it is a good thing. As in any market, it's a function of demand and supply. Right now, it does seem that the supply is a little bit limited in Noida and Greater Noida. As it opens up, things might be a little different. We are happy to be in the current position and we are hoping to launch our next project also in the next few quarters and hope to see a good response there as well.
Your thoughts on other markets like Gurgaon, Bangalore, Kerala, where you had a launch, how are those markets behaving in terms of demand versus your, in general, expectations about the current demand situation? Has it been better in line with your expectations or slightly lower if you can highlight or give a color on each of these markets?
The demand environment in all these markets, which is Kerala, Bangalore, and Gurgaon, seemed to be very stable for us. If I look at all our leading parameters, which is with respect to the opportunities that we get, the site visits that people are doing, it seems to be good interest in terms of real estate buying, and there's good interest in terms of end-user buying. I believe that the situation of good demand continues to stay. As things progress, it depends on how much is the supply that's going to come into the market. That also would play a big role in terms of at least medium to long term how things will pan out. Overall, from a demand perspective, the basic fundamentals continue to remain the same. It looks like there is stability over there.
Sure. Got it. In Greater Noida, we have two projects now, and one already largely done with. We have another one upcoming. What are the avenues to expand our pipeline in Noida or Greater Noida? Is it that we'll have to continue to wait with the government auctions? How is the intensity there, or are there some kind of private opportunities which are also available, like the one we have already done, to increase our pipeline there and continue to be present in that market?
No, that's a good question, Pritesh . We are exploring all opportunities. Particularly in Noida and Greater Noida, the majority of the land is with the government, and/or someone has taken the land from the government. There are some which do have private lands as well. We are surely looking at other opportunities also. Like I said, the pricing and the demand environment has definitely improved, and it provides us a good chance to look at these opportunities now.
Yeah, thanks for that. That's it from my side for now. In case I have any questions, I'll jump back to the queue. Thank you. All the best.
Thank you.
Thank you. The next question is from the line of Biplab Debbarma from Antique Stock Broking . Please proceed.
Good afternoon, sir, and good afternoon everyone. Congratulations on the excellent performance. My first question is on the stated launch pipeline for the remaining of the year. You mentioned around 7.8 million sq ft . I just wanted to understand, are you planning to launch the entire 7.8 million sq ft or, you know, we said launch 7.8 million sq ft , but open just part of each project? Also, in that, I didn't hear Mumbai project. Is Mumbai project part of the pipeline? This is my first question.
Oh, yeah. To clarify on the Mumbai project, yes, it is part of the pipeline project. To the earlier question, I was answering for the major large projects that we can launch. Mumbai is our first phase, is a smaller one. It's about, it should be about 150,000 sq ft to start with. Hence, I didn't add in the pipeline, but it surely is part of that. Coming to the other 8 to 9 million sq ft , the definition of our launch of a project is once we obtain REDA and we open the sale to the market, irrespective of the size of the project, we say that when I say, when we say launch, the entire inventory that is available where we have obtained REDA is available for, is declared as launches. Like you know, we do open the sale on a phase-wise manner.
If demand is good, then we open up all phases. Given the nature of the launches this year, the majority of them are not very large sizes, and hence, we should be able to open up the entire inventory for most of it. If I have to say that about, if it's about 8 million sq ft , I think 70 to 80% of it should be available for sale.
Actually, your voice is not clear.
I'm not audible now?
No, sir.
I'm not, but your voice is breaking. Can you please repeat that? Repeat your question, please.
The question is on the brokerage and accounting policy and brokerage. I'm trying to understand what.
Sorry to interrupt, Mr. Biplab .
Hello.
Hello, Mr. Biplab . Could you please rejoin the queue?
Oh, okay.
Yeah. Thank you. The next question is from the line of Manoj Dua from Geometric. Please proceed.
Good afternoon, sir. What is the guidance for pre-sale this year?
Good afternoon, Duaji. We had guided for a 30% increase over the last financial year, Duaji.
Okay. Secondly, the expectation that we continue.
With an expectation that we would go towards an INR 10,000 crore sale in the subsequent year.
Okay. Secondly, since you have joined as MD, there are some changes we observe, like in Greater Noida, the amount of projects you sell to the total size was much higher. The projects are being launched very fast when they are in the business development. Can you give context to what are the major changes that have happened in three, four years in Sobha in terms of your strategy and according to keeping with the pace of the time?
Duaji, i t's not just about the last three to four years. We have been at it in terms of the overall operations for the past three decades. Incidentally, we are completing 30 years this year. We did focus on a few things, which is, like you mentioned, the new project launches and making sure that the timeline of the launches from the time we obtain the land is very critical and that is an area where we need to work in an integrated manner internally. That's something we have clearly focused upon. There is a separate team which is formed to coordinate this, and that has helped us in accelerating some of our project launches. That's one.
Second, even in terms of business development, we have been lucky in two locations, like in Greater Noida, where we had, in fact, we have paid the total value for the land in November last year, and we could launch the project in June. That's been a very good turnaround for us, and that's very heartening to see. While this is happening in some other cities, it's not such a rosy picture, and mainly due to the external factors, we are continuing to improve in those cities as well.
Okay. Host quarter will be launched this year?
It's a fairly large project, and for phase one, we are mostly done with our land consolidation and the initial planning and the drawings. We should start working towards approvals since we started working on approvals from this month. Depending on the entire timeline of the whole approvals, we should be able to launch it within the next one year, is what our expectation is. If it can happen earlier, nothing like it.
As you told that if the INR 650 crore revenue would have recognized this year, we could have got INR 150 crore PBT. Can we take going forward whatever project we have launched in the last two, three years, and we're launching now, 20% PBT is given almost in most of the projects on the project level? 20% PBT?
Yes, Duaji. This INR 150 crores, what I mentioned was PBT, not the PER. The second is for all the new projects that we have been selling in the past, say, two years, we have guided last time that we have at the project level, the EBITDA margin is at 33%.
Okay. Congratulations on adding Greater Noida and Mumbai to the micromarket as well. Thank you in the process.
Thank you, Dua ji.
Thank you. The next question is from the line of Parvez Qazi from Nuvama Group. Please proceed.
Hi. Good evening, and thanks for taking my question. Congrats to the great set of numbers. A couple of questions from my side. First, when we talk about this potential launches of 8 to 9 million sq ft , does this include the launches that we have already done in Q1, or does it exclude it?
Good evening, Parvez. We are hoping that we'll do another 8 million sq ft in the next nine months.
Sure. What will be the total, let's say, sales potential of the 8 million sq ft over the quarter?
The total value of the projects at an average of at least INR 12,000 should be about close to INR 10,000 crore. How much of that is going to translate into sales is dependent on the timing of the launch of the project. Overall, we expect that we should be doing roughly about 50% of our sales from new launches in this year and 50% from the earlier inventory that we had.
Which is pretty much similar to what we did in Q1, right? About INR 1,000 crore from new launches and INR 1,000 crore from the finances.
Absolutely. You're right.
Lastly, in terms of the ticket size of the projects that we are launching, if one looked at Q1 sales, roughly about 60% was from ticket sizes less than INR 3 crore and about 40% above INR 3 crore. For the upcoming 8 million sq ft of launches, will the split be largely the same, or will it be slightly different? Thank you.
Yeah. Last year, around this time, we had a much larger sale value through a much higher ticket size because of the launches of high ticket size projects that have come together. I have been saying this, that it was no strategic call that we have taken, just that the timing of all of those projects have come together. Otherwise, all our projects, the bread and butter business, has been largely between 1,800 to 2,000 sq ft , which is roughly about a ticket size between INR 2 to 3 crore. However, as some of the projects would be, in some of the projects and also some of the inventory in each of these projects would be over that ticket size as well. It is going to be a mix of both, but tilted towards less than INR 3 crore.
Sure, thanks and all the best too.
Thank you, Parvez.
Thank you. The next question is from the line of Himanshu Upadhyay from BugleRock Asia. Please proceed.
Yeah. Hi. Good afternoon. My first question was, can you give your thoughts on business development and any thoughts on which markets are most attractive markets in terms of difference between sales value and cost of land currently in the market, and where you find the least favorable markets in terms of profitability over the next four to five years? Some of your thoughts will be helpful.
Thank you, Himanshu. That's a strategic question which probably I'll not be elaborating much. What we can see is for us, the priority markets are where we currently, in our current operations, is Bangalore. Of course, second is India. In addition to these two, we would be, in long term, we would look at Mumbai as well. However, we have just started there. These three are, as you know, very large markets in India. In addition to this, of course, our presence in Kerala and Hyderabad, Chennai, and Pune are also there. These would continue to be our areas where if we find very opportunistic lands, then we would look at investments. From a high return on investment, if that's what you are alluding to, then still Bangalore is a good market. India also is a good market. Mumbai, we are still testing out, so our understanding is limited.
As we continue to look at opportunities and invest there, we'll have a much better view. From our priority markets right now, these both seem to be good, both in terms of returns and in terms of the demand potential and our own presence. They make the most strategic sense for us in focusing here. While we leverage our presence in other locations and see if we get something which is great on return, great on margins, we'll definitely take those up.
One question on Mumbai, U.K. We have launched a very small project for land acquisition, okay? What is our thought process? Are we exploring various micromarkets through small projects, and then we finalize a micromarket, and then we launch also a bigger project, or it was just it happened that we have started with a small project? Is it strategically that we are just doing a small project? Some thoughts on that will be helpful, or how are you approaching that market?
Yeah. We have been evaluating various types and sizes of the projects, and we had been doing it for the past more than a year. It depends on the cycle at which we had our capital availability also. At that point of time, where we had done this and some of the others that we are evaluating and in the advanced stages, there are two factors that we would consider. One is the size of the opportunity and the quality of the opportunity, and second is our own ability to fund it. Both these matter. Now that we have slightly better capital structure in which we can evaluate opportunities, we should be looking at larger ones.
More importantly for us, the first one is very critical because our own understanding of the market and going through the entire process of acquisition to launch and completion is very critical so that we would have significant learnings from it and take it forward from there. We are in the market for a very long term, and Mumbai is a very large market, and we are on a path of exploratory nature right now. As and when we find good opportunities, we would be willing to take those up.
Just to follow up on this, see, when we do this 150,000 saleable type of project, nearly 150 types of plans, okay? Can we give and show all our prospects what we can do in such a small piece of land? Do you think you will be able to create a brand like what we have in NCR or Bangalore for these smaller projects? What are your thoughts?
It's a good question, Himanshu. First thing is, in this particular project, this is phase one of the project. The total size of the project is over 300,000 sq ft . The second part is regarding the scale of the project. Yes, we would definitely like to do projects which are larger in nature. However, I think considering the nature of land and kind of opportunities that are present in Mumbai, particularly in the core Mumbai areas, it is very difficult to start with a much larger development potential. Hence, even if this is a we think that even this is a good start for us, we will be able to showcase our quality even in a project like this. That entire construction and experience for the customers would take time.
However, since the brand is well recognized, we do think that the understanding of our brand and our processes, there are people who do understand that and should be able to be moving towards us and building a brand. This might be a small step, but at the same time, we are continuously evaluating new opportunities.
Thanks . Thanks for further questions.
Thank you, Himanshu.
Thank you. The next question is from the line of Yohan Bhartivala from Motilal Oswal. Please proceed.
Yeah. Hi, thank you very much. Am I audible?
Yes, Yohan.
Yeah. Thank you. First of all, good evening, sir. My question is on your earlier comment on the project-level EBITDA margin. You said you target 33%. Just a bookkeeping question on that. On PBT basis, what is the margin that you target for the INR 172 billion? Also, on an overall perspective, what will be the margin excluding overheads and interest?
Yohan, that's a slightly tricky question because the timing of the recognition of that revenue plays a significant role in terms of arriving from that project-level EBITDA to a PER level for the company, because there are various overheads that come in which are recognized during the quarters. Whereas the timing of these unrecognized revenues, when they come in and how much quantum of that coming in matters a lot. Hence, it's very difficult to just clearly say how much would that translate into PER. What we can clearly say is that as we go forward, the core EBITDA margins that we are seeing at the project level, which were in the past, are definitely seeing an increase. Hence, overall, our PER margins also should significantly see an increase.
Sure. Okay. My second question is on the OCF. I think in the last quarter's call, you guided a 10% increase for FY26. Does that still hold true?
In terms of operational cash flow?
Yes. Yes. For the full year?
For the full year, yes. I mean, we would still be on track for that. Overall, with the increase in our sales value and corresponding milestone achievements in the construction, we should be able to do better. Yes.
Sure Thank you very much. Have a nice day. Thanks.
Thank you, Yohan.
Thank you. The next question is from the line of Puneeth from HSBC. Please proceed.
Yeah. Thank you so much. My question is, again, on your net debt. Now you have a significant amount of cash, and you're also buying land, as I can see in the cash flow statement. What are your thoughts on deployment of this cash? How soon do you think can you spend the bulk of it, and where is it really going? What areas are you targeting?
Puneeth, from a debt point of view, yes, we are sitting on, we have significant cash sitting on our books. Majority of them are in RERA accounts, which would get available for deployment as and when we progress on the projects.
How much would be RERA cash? Sorry.
1,300 crores. About INR 1,300 crores of that would be RERA cash.
Okay.
That gives a big confidence for us to actually deploy capital. While that is the case, there are three aspects to this. One, we are far better off in terms of financial structures. Yes. Second, the demand environment is good. On the other side, the cost of land and the kind of opportunities that we are seeing are fully mature in the sense the margin of error is much, the margin of safety is much lower than what we could see a couple of years ago. It's very, in a calibrated manner, we will need to deploy this cash. While that is the case, we are in a situation where we have good visibility of inventory from our own projects, which we have done either consolidated land in the past or we have done business development in the past.
Hence, we would deploy this capital in a calibrated manner and wherever we find good opportunities. We are not in a super hurry to deploy it because not necessarily just because we have cash, we need to deploy it.
Understand what's the need to buy land here? You had a significant amount of land here, and you're still spending close to INR 280 crore this quarter as well. Where is it?
Some of the cash outflow that we are seeing is not necessarily in the new land that we are acquiring, but a part of it is being, the majority of that part is being deployed for the earlier land procurements and to consolidate those lands or whatever deals that we have done in the past. This quarter, the majority of that cash flow has gone towards that. Last year, tentatively, we have deployed cash where we have increased our overall value, the sale value we have, or let's say on a saleable area point of view, we have done over 9 to 9.5 million sq ft . This year, also, let's see how we will deploy it based on the opportunities available.
However, some of the past development that we have done, those have flown into this, will flow into this year, and some of it we have seen in this quarter also.
In simple terms, is it fair to assume that the INR 281 crore is essentially going to the 1,765 acres that you had categorized earlier as under various stages of consolidation? That's where it is getting cleaned up.
That's right. Some of them would be in some of the forthcoming projects where there would be some dues either to the landowner or in terms of certain other payments related to the land.
Understood. That's very good. Lastly, just again on the taxation side, the income tax has been quite low for you in the last few quarters. What has really changed there? Yeah, like this quarter, INR 387 crore used to be INR 67 crore earlier. Sorry, 38% of 67.
Okay. I would like Yogesh to take that question.
Puneeth?
Income taxes, in current, we are maintaining income tax book separately. Our property is very high, and we are paying income tax accordingly. That is recorded as a default tax for us. Okay.
I'm just talking about the cash tax which we put out in the cash flow statement, the INR 38.7 crore versus INR 67 crore.
Cash flow, because that's cash flow thing, if you have a cash flow, cash flow has, see, income tax has two parts. One is TDS deducted by customer, which is already debited by customer. Here, we are talking about cash flow from our Sobha side. That will come on an average, we are expecting that INR 200 crore we'll pay income tax, including TDS this year.
This year, INR 200 crore. Out of INR 38.7 crore, which is already paid.
Including TDS, which is not captured in cash flow.
Which is also there, right? You include in the presentation income tax, including TDS.
This has two parts, Puneeth. One is income tax. Second is TDS deducted for our vendors.
Okay. 38.7 is the vendor part of it.
Vendor plus income tax, advance tax we pay. Both.
Yeah, this number should correlate to 200 for full year.
This number, yeah, you can correlate 200.
Okay, that's very good. Thank you so much. All the best.
Thank you. The next question is from the line of Biplab Debbarma from Antique Stock Broking. Please proceed.
Thank you. Am I audible?
Yes, Biplab . Now it's much better.
Yeah. My question was, what is the brokerage structure? Like how much is paid and when is it disbursed? Is it disbursed at the time of booking or 10% receipt or staggered? What is the accounting treatment? Do we fully expense in that year or whenever we pay the money? I'm just trying to understand what is the brokerage and accounting policy of brokerage.
Good question, Biplab . See, the payment of brokerage is typically after at least 20% of the payment by the customer and signing of the agreement with the customer. That's one. Second is the accounting treatment of brokerages. If it's an owned land project, then it is the entire brokerage paid, which is which we can account to specific unit in the project. Those are accounted as the project cost and recognized as a cost whenever the revenue recognition happens for that project, which is typically at the time of completion and handover. Whereas for the joint development projects, whatever is the share of the brokerage for the landowner, that is expensed as part of the quarterly expense.
Okay. Thank you. Thank you and all the best.
Thank you. The next question is from the line of Parikshit Kandpal from HDFC Securities. Please proceed.
Thanks for the follow-up. The question was on EBITDA margins. If you have recognized these five projects, your EBITDA broadly works to be around 12.5% or 13% in that range, which is almost a four, four, eight quarters high. Directionally, we will keep bettering this every quarter, and eventually, maybe when do we reach that 33% mark? How many quarters do you think this journey will take us from here, 12% to 13% going up to 30% plus?
Right. Parikshit, yes, you're right. The EBITDA margin should have been far higher this quarter pending these OCs. Directionally, we are in an upward function. Third is 33% is an EBITDA margin at the project level. The EBITDA margin that we see in our P&L is post all the expenses, which are overheads and other items as well. EBITDA margin of 30% post all of that, like I was mentioning earlier, it will again depend upon the timing of this recognition of the revenue.
Directionally now, in this coming quarter also, I mean, and other quarters, like you're bettering that 12 to 13% now. We're moving ahead of that now.
Yes. It should become better. The only treatment in P&L, one of the things that we need to be cognizant of is on a higher sale. If I'm spending higher sales and marketing costs, that would, of course, be additional for coming in as expense versus the revenue that we are recognizing. We are today selling at an average of INR 12,000 to INR 13,000, right? Versus we are recognizing revenue at about INR 7,000, and we are recognizing margin. Corresponding sales and marketing is at an increasing function, right? If you look at it, then it will impact the P&L for the current year. In a typical, as you I'm sure you have seen all the P&Ls of real estate companies, particularly the ones who recognize revenue on a completion basis, an increase in sale in the pre-sales for the subsequent years are, in fact, detrimental to the P&L.
That is how the accounting works. That does not mean that we are in a worse situation than earlier. Coming back to your earlier point, we should be seeing an increase in project-level margins, and that should reflect in an overall margin improvement of the company.
Okay. I think a couple of quarters back, you said that quarterly run rate on revenue will now be about INR 1,000 crores. This quarter, with that OCs, if they had come, we would have touched INR 1,500 crore. Year as a whole, now quarterly averages, like how the revenues will move because you did say that 4 million sq ft to 4.5 million is delivery, which would translate to about INR 4,000 to 5,000 crores of revenue. How do we look at the quarterly revenues now or the yearly revenues?
Yes. This particular quarter would have been lumpy because this unrecognized revenue of about INR 650 crore was pending from a little earlier also, and which we surely thought that it would have come in this quarter. While we got it covered from, I mean, actual real estate revenue, it is about close to INR 600 crore. If we had added this, then it would have been INR 1,260 crore. This would have been slightly higher than a typical quarter because the OCs were pending for a longer duration.
But quarterly run rate now, like 1,000, going much higher now?
Sorry, Parikshit. Largely, like we have in the initial comments, our CFO also has mentioned that we have an unrecognized revenue of INR 17,000 crore, which was about INR 16,000 crore a couple of quarters earlier. If we have to recognize in the next four years these revenues, it would be roughly about INR 1,000 to 1,100 crore.
Okay. Just lastly, I'm going to go on now.
Sorry, Parikshit.
Yeah. Sure.
Could you please go on to the queue, as there are several participants waiting for their turn?
Sure. Thank you.
Thank you. The next question is from the line of Pritesh Sheth from Axis Capital. Please proceed.
Yeah. Just one question as a follow-up. INR 10,000 crores of pending launches for this year, Q2 would be INR 1,000 crores because of some slipovers. Next two quarters, should we assume it would be like equally split, INR 4,500 crores across both the quarters? Particularly, when are we expecting next launches in Bangalore Sector 63 and Noida, the other projects that we have?
Yes, Pritesh. We should be seeing these launches in the next two quarters after Q3 and Q4, but largely, they are skewed towards the end of Q3 or the beginning of Q4.
Okay. Gurgaon and Noida?
Gurgaon and Noida are also similar, end of Q3, beginning of Q4.
Sure. Okay, thanks. That's your comments.
Thank you, Pritesh.
Thank you. Ladies and gentlemen, due to time constraints, that was the last question for the day. I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Thank you. Thank you, everyone, for participating on a call even on a Saturday. We really appreciate that. We hope that we have answered most of your questions. In case we could not, we can connect with you through our investor relations subsequently. Like I mentioned in the earlier opening comments, we are at a good juncture in terms of a stable demand environment, and we have built a good brand around ourselves. We have exceptional experience in terms of developing projects across India. We think that with the current financial structure and with the kind of brand and experience that we have built, it's an opportune time for us to have a very long-term growth and to continue to invest in opportunities, people, processes, and technology to enable this long-term growth. Thank you, everyone, for participating, and have a good weekend.
On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your line.