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Raymond Realty
Our verdict on Raymond Realty isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
The reported EBITDA margin for 9MFY26 is 13%, significantly lower than the 20% guidance and the 17% achieved in 9MFY25. (2 missed, 1 exceeded across 3 tracked commitments)
“But business as a whole we will be close to a 20% margin somewhere between 17% and 20% range we would be. And next year, we will continue our march towards 20%. So effectively the business is 20%, if I remove that accounting standard issue which has come, if I remove that averaging effect we will be very close to 20% by the end of this year also.”
The company expects to remain overall cash negative for the next two years due to reinvestment in growth and approval costs. — target: Cash negative
“the short answer to your question is going forward for the next two years, we will be cash negative on an overall basis but internal accruals will keep on growing and we will keep reinvesting them in building the balance sheet and growing our portfolio”
Strategic focus on asset-light expansion through JDA led business model with a potential value of over ₹140 billion. — target: ₹140 bn.+
“JDA LED BUSINESS MODEL Asset Light Expansion ₹140 bn.+”
Planned launch of 2 new projects on own land in Thane for the year 2025-26. — target: 2 New Projects (+1 more commitment)
“Launches planned for the year 2025-26 • 2 New Projects on own land - Thane”
Management maintains a strategic focus on the MMR and Pune real estate markets. (+3 more commitments)
“Continued focus on MMR/ Pune Market”
See the full cited Management analysis of Raymond Realty
How durable is the business?
The company's execution scale is accelerating significantly. Reported revenue grew 22% YoY in Q2 FY26, and the company is on track for ~20% annual growth in pre-sales and revenue. (1 expanding)
“Revenue from operations ... Q2FY26 697 ... YoY Change 22%”
The company is maintaining its focus on MMR but specifically expanding into new micro-markets including Wadala, Sion, and Mahim, while also confirming Pune as its only other target market. (4 expanding, 1 contracting)
“100 Acre Thane Land Bank... 7 JDA Projects Signed [across Mumbai]”
While Thane remains the core revenue driver with a ₹25,000 Cr potential, the company is shifting from existing projects to new launches. New launches in Thane are projected to grow from 3% of booking value in H1 to 17% in H2 FY26. (1 expanding, 2 shifted, 2 stable)
“If we look at in Thane where we have a 100-acre land parcel and it has been a massive value creator for us with a total revenue potential of INR25,000 crores on that entire land.”
The company has transitioned to a 'Net Cash' position post-demerger, significantly strengthening its financial defensibility. (1 expanding, 4 stable)
“Our debt equity on gross basis stands at 0.6, which is comfortably below our internal ceiling of 1:1 debt to equity, so we are very comfortable there.”
Inventory on owned land in Thane is nearly exhausted (91% sold out), leading to a temporary dip in Q1 revenue as the company awaits new RERA registrations to launch additional phases. (1 contracting)
“In Thane, 91% of our inventory was sold out when we started the year... as a result, Q1 numbers are what they are.”
See the full cited Business Model analysis of Raymond Realty
Where does growth come from?
The company is expanding its product range into 'High Street Retail' (commercial shops), diversifying its income beyond just residential apartments.
“Thane – TenX District 9 & Park Street – High Street Retail (Mar 2026)”
Raymond is targeting the 'Luxury' segment with its Invictus brand, catering to high-end buyers which typically offers better profit margins.
“Brand Portfolio: Creating Product Brands in a Commoditized Industry... Luxury: INVICTUS”
Revenue recognition is accelerating significantly, with a 4-year CAGR of 101%, jumping from ₹ 1,593 Cr in FY24 to ₹ 2,313 Cr in FY25. (1 accelerating, 2 new trend, 2 steady across 5 signals)
“Annual Revenue Growth ~20%... Annual Pre Sales Growth ~20%”
Customer collections show a strong 4-year CAGR of 64%, with a current pending collection of Rs. 2,639 Cr from sold inventory to fuel construction. (1 accelerating, 4 steady across 5 signals)
“Pending Collection from Sold Inventories 4,000... Est. Surplus from Project Cashflow 8,526”
Raymond Realty is maintaining a very disciplined balance sheet with low debt levels, providing them the financial strength to fund future growth.
“Our debt equity on gross basis stands at 0.6, which is comfortably below our internal ceiling of 1:1 debt to equity, so we are very comfortable there.”
See the full cited Future Growth analysis of Raymond Realty
What could break the thesis?
INTENSIFYING. EBITDA margin for Q1 FY26 dropped to 10.5%, significantly lower than the 13.5% in Q1 FY25 and 22.1% in Q4 FY25. (5 intensifying)
“EBITDA Margin %: FY26 16.3%; FY25 18.6%”
Booking value growth is stable to easing; while H1FY26 revenue growth was flat (1%), the company is projecting a massive 73% of its annual booking value to come in H2FY26, targeting ~20% annual growth. (3 stable, 2 easing)
“New Launches in Sion: The Address by GS... % Sold: ~4%”
Management claims to have the shortest 'time to market' in the industry (18-24 months from signing to launch) and reports being ahead of schedule on construction. (4 easing, 1 stable)
“And compared to that, when I look at Mahim, it was such a disparate group which was there... And there it has taken us almost two-and-a-half years. So somewhere the average for a project is about 15 months to 18 months.”
STABLE. Management admits certain parts of the market are overheated and they are exercising 'extreme form of discipline' in deal selection, which may lead to slower pipeline additions. (2 stable)
“there are some parts of the market which are overheated and we have to be cautious and disciplined in the deals that we take. And we've followed extreme form of discipline.”
STABLE. Management acknowledges that Thane is an intensely competitive market where developers generally lack pricing power, leading to only marginal price increases over the years. (1 stable)
“Thane has been an intensely competitive market, and that's why most people in Thane don't have pricing power... Thane has remained more or less very marginal increase in prices over the years.”
See the full cited Risk analysis of Raymond Realty
Read the full thesis on Raymond Realty
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