Arihant Superstructures Q4 FY26: Deliveries surge, realizations rise, but cash flow stays under pressure

Arihant Superstructures closed Q4 FY26 with a sharp sequential jump in reported revenue, powered by steady execution and a visible delivery cycle that started to kick in during FY26. Consolidated operating revenue for Q4 FY26 stood at INR 181.8 crore, up 18.5% year on year and 43.2% quarter on quarter. EBITDA for the quarter came in at INR 30.2 crore with an EBITDA margin of 16.7%, while PAT stood at INR 11.9 crore with a PAT margin of 6.58%.

For the full year ended March 31, 2026, operating revenue was INR 551.0 crore, up 10.5% YoY. EBITDA increased 21.0% YoY to INR 126.6 crore, taking the annual EBITDA margin to 22.98%. PAT, however, declined 15.9% YoY to INR 46.0 crore as interest costs rose sharply. Management attributed margin pressure in Q4 partly to first-time revenue recognition for World Villas, where pre-operating and marketing costs were recognised in the quarter.

Bookings held up even as units fell

Sales momentum in value terms remained intact. In Q4 FY26, the company reported pre-sales of INR 313.2 crore from 395 units and 3.98 lakh sq ft of area sold. For FY26, pre-sales stood at INR 977.4 crore, up from INR 888.7 crore in FY25.

What changed materially was the mix. FY26 units sold declined to 1,155 from 1,568 in FY25, and area sold fell to 12.58 lakh sq ft from 14.61 lakh sq ft. Yet booking value grew because realizations moved higher. Management stated average price per sq ft for FY26 was INR 7,769 versus INR 6,082 in FY25, a 27% YoY increase. For Q4, the company reported an average selling price of INR 7,870 per sq ft, up 5.5% YoY.

This shift aligns with management commentary that the company is seeing stronger performance in mid-income and luxury housing, and is increasing focus on these segments, while affordable housing continues to contribute significantly to transaction volumes.

Execution: the core FY26 story

FY26 was described by management as a landmark year for deliveries. The company delivered 1,721 units in FY26 versus 344 units in FY25, a 5.24x increase. In Q4 FY26, Arihant received occupancy certificate for two towers in Arihant Aspire Phase I and delivered 657 units equivalent to around 7.37 lakh sq ft.

Management framed this as the beginning of a larger delivery cycle, with subsequent phases and additional projects expected to enter delivery stages from FY27 onwards. In the concall, management said FY27 deliveries should go upwards of 2,000 units, with projects such as Aalishan Phase II, Aspire towers and Advika expected to contribute.

The company also launched Benita Tower at Arihant Aspire, Panvel, comprising about 3.82 lakh sq ft saleable area. Management indicated capex for this tower at around INR 190 crore.

Pipeline size and geographic concentration

In the investor presentation, Arihant reported gross development value of about INR 14,000 crore, up from INR 12,500 crore last year. Management attributed the increase largely to improved realizations across projects driven by infrastructure development, including the Navi Mumbai International Airport being operational for over six months.

The company highlighted scale indicators such as 21 million sq ft under development across 19 projects, and 12 million sq ft already developed across MMR and Jodhpur. It also disclosed a forthcoming portfolio of 14.6 million sq ft with revenue potential of about INR 100 billion.

The geographic mix of ongoing projects is heavily tilted toward Panvel airport area, which the presentation states accounts for 68% of ongoing project revenue mix. Other buckets include JD/MMR at 10%, Kharghar-Taloja at 8%, Jodhpur at 5%, Cashiv at 5% and Other MMR at 4%.

World Villas and the annuity push into hospitality

A key strategic thread through the presentation and concall is the move toward annuity income through hospitality and leisure assets. The company described World Villas as a mixed-use project comprising villas, a gymkhana and a 5-star hotel. The presentation states the total outlay is INR 3.5 billion with an IRR of 15%.

On the concall, management provided multiple time-bound updates:

1. World Villas Phase I completion is targeted by October 2027.
2. The overall project completion timeline was indicated up to 2030.
3. Management expects sale of around 65 to 70 additional villa units in the current financial year.
4. The company expects hotel revenues from the Panvel Chowk hotel in about 3 to 3.5 years from now, with brand finalisation expected in Q1.

The presentation also mentions a 221-key 5-star luxury hotel in Panvel, Chowk and a 108-key 4-star hotel in Khopoli. In the concall, management said the Khopoli hotel is in approvals and involves an investment of around INR 60 crore, with a development timeline of about 3 years.

Management reiterated it is not planning any specific equity raise for World Villas. Funding is expected through internal accruals and debt.

Leverage, interest costs, and the cash flow question

The biggest financial drag in FY26 was the rise in interest costs. Interest expense increased to INR 67.7 crore in FY26 from INR 41.0 crore in FY25, contributing to the decline in PAT despite higher EBITDA.

The presentation shows net debt of INR 814.0 crore as of March 31, 2026. It also shows adjusted net debt of INR 453.0 crore and adjusted secured net debt to equity of 1.01. In the historical indicators slide, net debt to equity is shown at 1.81x for FY25 and FY26.

Cash flow remains a visible pressure point. The cash flow statement in the presentation shows cash flow from operations negative for four consecutive years: FY23, FY24, FY25 and FY26. FY26 operating cash flow is negative INR 70.8 crore.

Management said it expects to turn free cash flow positive from next financial year onwards, and indicated that in 2 to 3 years the company should be cash flow positive.

Near-term leverage is unlikely to fall in a straight line because the company is investing into annuity assets. Management stated capex for the gymkhana and hotel development could be around INR 75 crore this year and that overall debt could increase by another INR 50 crore, even as debt reduces in maturing residential projects.

What management guided for FY27

The concall included multiple explicit forward indicators:

1. Pre-sales growth: management expects 25% to 30% CAGR.
2. EBITDA margin: expected to rise to 25% to 27% in FY27.
3. Revenue: management indicated the company could move from the 500-550 crore range to about 700 crore this year.
4. Deliveries: expected to be upwards of 2,000 units in FY27.

Management also commented on cost inflation risk, stating construction costs could change by about 3% to 5% due to geopolitical stress and commodity price movement, and that the company would seek to recover this by increasing selling prices on balance inventory.

Takeaways

Arihant Superstructures ended FY26 with clear execution momentum, visible in the sharp rise in deliveries and occupancy certificates. Booking value growth held up despite lower unit volumes, supported by materially higher realizations and a mix shift toward premium and mid-income products.

The key investor monitorables remain financing costs and cash conversion. Interest expense rose sharply in FY26 and operating cash flow remained negative, even as EBITDA expanded. Management has offered a margin improvement range for FY27 and expects revenue and deliveries to rise, but the transition to positive free cash flow will be an important proof point as annuity assets add incremental capex and debt.