Kalpataru Limited: Building Momentum with Strong Q2 & H1 FY26 Performance

Kalpataru Limited, a leading real estate developer headquartered in Mumbai, has reported a robust financial and operational performance for the second quarter and first half of the fiscal year 2026. The company, which recently made its debut as a listed entity, showcased significant growth in pre-sales and collections, alongside a notable improvement in its balance sheet. Despite some challenges related to its revenue recognition method, Kalpataru's strategic execution and disciplined capital allocation underscore its commitment to sustained growth and value creation.

For Q2 FY26, the company recorded pre-sales of INR 1,329 crore, marking a substantial 19% year-on-year increase. Collections also saw a strong surge, rising by 37% year-on-year to INR 1,162 crore. The positive momentum extended into the first half of FY26, with pre-sales reaching INR 2,577 crore, up 43% year-on-year, and collections totaling INR 2,308 crore, also up 37% year-on-year. This consistent performance reflects strong market sentiment, the quality of Kalpataru's portfolio, and effective execution. The average sales realization also improved significantly, rising by 27% year-on-year to INR 16,977 per square foot in Q2 FY26 and 54% YoY to INR 19,260 per square foot in H1 FY26, indicating a focus on premium offerings and improved pricing power.

Strategic Project Launches and Pipeline

Kalpataru's operational highlights for Q2 FY26 include significant project launches. The company unveiled Kalpataru Estella at Kalpataru Parkcity, Thane, its largest offering to date. This project spans 12 acres, featuring eight towers, a six-acre podium, and a 76,000 square foot clubhouse. The initial launch of Towers A and B, covering approximately 900,000 square feet of saleable area, is strategically positioned to benefit from Thane's transformative infrastructure projects, including new Metro Lines and high-speed rail. Additionally, a new tower was launched at the existing Srishti Namaah project in Mira Road, a premium township designed to cater to the growing suburban ecosystem.

The company's robust pipeline includes 31 ongoing, forthcoming, and planned projects with a developable area of approximately 43.7 million square feet. A significant advantage is that land payments for these projects are already complete, providing a strong foundation for future launches. Looking ahead, Kalpataru plans to bring new projects to market in Lokhandwala, Andheri, and new phases in existing projects like Eternia in Thane and Aria in Karjat, totaling about 3.2 million square feet of saleable area in FY26. The management is also actively evaluating new business development opportunities in redevelopment, joint ventures, joint developments, and plotted developments, primarily in the MMR and Pune regions.

Financial Strengthening and Outlook

Kalpataru has made significant strides in strengthening its balance sheet. Net Debt as of September 30, 2025, stood at INR 8,025 crore, reflecting a reduction of approximately INR 1,285 crore since March 2025. This deleveraging was supported by an equity infusion of INR 1,590 crore via an IPO in H1 FY26. Consequently, the Net Debt to Equity ratio improved substantially to 2.0x from 3.8x over the same period. The management expects this metric to further improve, targeting a Net Debt to Equity ratio of 1.5x by FY27 and 1x by FY28.

Despite the strong operational performance, the company's consolidated Profit After Tax (PAT) for H1 FY26 was negative at INR (47) crore. This is partly attributed to the Project Completion Method (PCM) of revenue recognition for projects started post-April 2022, where expenses are booked upfront while revenue is recognized only upon obtaining the Occupation Certificate. However, Adjusted EBITDA for Q2 FY26 grew by 9% to INR 190 crore, though H1 FY26 Adjusted EBITDA saw a 6% decline to INR 293 crore.

Commitment to Sustainability and Future Growth

Kalpataru is deeply committed to sustainability, with a core focus on implementing green and sustainable building practices. As of September 30, 2025, 39 projects, covering 27.15 million square feet, are developed with green features. These initiatives include renewable energy systems, local construction materials, low VOC paints, electrical charging points for EVs, and efficient plumbing fixtures. The company also actively engages in Corporate Social Responsibility (CSR) initiatives across healthcare, education, and environmental protection, demonstrating its broader commitment to community welfare.

Management has provided strong guidance for FY26, projecting pre-sales of approximately INR 7,000 crore and collections of INR 5,700 crore. Net Debt is expected to reduce further to around INR 7,300 crore by the end of FY26. The company remains confident in sustaining robust operational performance while maintaining prudent financial discipline, leveraging its strong brand, diversified portfolio, and strategic project pipeline to capture growth opportunities in the buoyant Indian real estate market.