Pre-sales growth to expedite in FY27
About the stock: Arvind SmartSpaces (ASSL), is the real estate arm of Lalbhai group, which has a 120-year legacy. Post demerger from Arvind Ltd, it got listed in 2015.
• Real estate development across Gujarat (Ahmedabad, Surat, Gandhinagar), Karnataka (Bangalore) and Maharashtra (MMR, Pune). Presence in Horizontal (Plotting, Villas) and Vertical (Luxury, MIG) projects.
• Residential portfolio 9.8 msf completed, 57.8 msf ongoing and 29.86 msf planned projects. Q4FY26 performance: Arvind Smartspace reported strong pre-sales of ₹ 612 crore, up 61% YoY (+85% QoQ) for Q4FY26, led by strong response to project launches (Skycrest, Bannerghatta ₹ 262 crore and Greenfields, Vadodara ₹ 178 crore) forming 72% of Q4FY26 presales and rest 28% from sustenance sales in Ahmedabad (76%) and Bangalore (24%). Collections were up 65% YoY (up 12% QoQ) at ₹ 355 crore. Operating cash flows were up 61% and 24% YoY at ₹ 96 crore for Q4FY26. Net debt increased by ₹ 88 crore QoQ to ₹ 167 crore. Its cumulative new business development for FY26 stood at ₹ 3140 crore. On earnings front, consolidated revenues for Q4FY26 were down 5% YoY (- 7% QoQ) at ₹ 155 crore, EBITDA margins up 1757bps YoY (up 1316 bps QoQ) at 38.2% and net profit up 103% YoY (+51% QoQ) at ₹ 44.2 crore.
Investment Rationale
• Targeting ~₹ 3000-3500 crore GDV launches in FY27E: The management targets to launch six projects during FY27 having cumulative GDV of ~₹ 3000-3500 crore. The launch pipeline comprises one project in Gujarat (Vastrapur – ₹ 394 crore GDV) in H1FY27, three projects in Bengaluru and two in Mumbai (Khopoli phase I – ₹ 500-600 crore) and either of Santacruz (~₹ 300 crore) or Goregaon (~₹ 2400 crore, 43.5% profit share). Additionally sustenance sales from existing projects is expected to contribute over 30% of pre-sales in FY27 (almost 40% contribution in FY26). Hence, overall the company targets pre-sales growth of 35-40% for FY27 while keeping its longer term pre-sales guidance intact at 25-30% YoY.
• Strong business developments during FY26; balance sheet remain under levered: The company added six new projects having cumulative GDV of ₹ 3410 crore. Of the six, four projects were acquired on outright basis and are premium residential high-rise projects. In April 2026 it has secured a project in Goregaon, Mumbai (GDV of ₹ 2400 crore, ~43% profit share). Going ahead it continues to eye new business developments across Ahmedabad/Bengaluru/MMR having ~₹ 4000-5000 crore GDV in FY27. Its under levered balance sheet (Net Debt/Equity: 0.26x), strong OCF generation (₹ 417 crore during FY26) and accessibility to HDFC Capital Platform Fund can be utilised in new business development.
Rating and Target Price
• We retain our BUY rating with a revised Target Price of ₹ 820/- on project NAV basis (factoring newly acquired projects).
