Hubtown FY26: Premium pre-sales rise, but the real story is debt and delivery timing

/n# Hubtown FY26: Premium pre-sales rise, but the real story is debt and delivery timing

Hubtown Limited used its Q4 FY26 analyst meet to reinforce three themes: premium residential momentum in Mumbai, corporate structure consolidation through mergers, and an explicit push to bring down legacy high-cost debt. The investor presentation is built around proforma operating metrics and a project-by-project view rather than a traditional P&L discussion. That focus matters because, for real estate developers, the headline bookings and collections can look strong even when reported earnings and free cash flows remain volatile.

On a proforma basis, Hubtown reported FY26 pre-sales of INR 43,823 million and collections of INR 19,100 million. Q4 FY26 contributed INR 7,790 million of pre-sales and INR 4,032 million of collections. The company also showed improving booking momentum over the last four years, with FY25 and FY26 materially higher than FY23 and FY24.

Operating momentum is visible, but revenue recognition is back-ended

Hubtown’s project table for FY26 highlights where bookings and cash inflows are coming from. Residential dominated the year with INR 41,561 million of booking value out of total pre-sales of INR 43,823 million. The biggest contributors were 25 Downtown at INR 26,541 million and 25 South at INR 6,086 million.

At the same time, several large projects are still in a stage where revenue recognition is limited. In the proforma portfolio overview, 25 Downtown and 25 West show no revenue recognized in the table, even though sales value and collections are already meaningful. Management repeatedly pointed out that a substantial amount of revenue is expected to be recognized in the year ahead because recognition is linked to completion and handover.

Project concentration: 25 South is near completion, 25 Downtown is early-cycle

The ongoing portfolio table gives a clear snapshot of where Hubtown is in the cycle.

25 South in Prabhadevi is the most mature of the premium assets. It is shown at about 96% completion, with 0.90 msf sold out of 0.95 msf total. Collections till date are INR 48,450 million on total sales value of INR 56,464 million, with INR 20,210 million of revenue recognized.

25 Downtown in Mahalaxmi is the scale project, with about 3.68 msf of carpet area. But it is still early in construction at about 18% completion, and the table shows 2.56 msf of unsold inventory. Total sales value is shown at INR 51,001 million, but revenue recognized is not presented.

25 West in Bandra West is also early-stage, with about 17% completion and 0.40 msf of unsold inventory out of 0.54 msf total carpet area.

Outside Mumbai’s core premium projects, Hubtown also lists commercial assets such as 27 West (Pune), Hubtown Northstar (Ahmedabad), and Hubtown Joyos (Mehsana and Vadodara). Some of these are near completion, but their contribution to pre-sales is modest compared to the Mumbai residential portfolio.

Debt: listed company has reduced over time, but proforma leverage remains heavy

Debt is the most sensitive part of the narrative. Hubtown’s presentation states listed company principal debt of about INR 12.80 billion as of March 2026, with INR 12.52 billion categorized as project-backed and only INR 0.28 billion as corporate debt. The company also highlights a long-term reduction from March 2017, when debt is shown at INR 23,021 million.

However, proforma debt is substantially higher. A separate slide shows merger entities debt of about INR 40.48 billion, and the proforma debt table totals INR 53,282 million as of March 2026. The company also disclosed summary metrics including net debt of INR 50,123 million, average cost of debt of 15.38%, and proforma debt-to-equity of 2.15.

During the Q&A, management addressed why finance costs appeared elevated. They explained that after a settlement with DLF related to 25 Downtown, they had to provide for interest payable that had not been provided in earlier years due to disputes. Management also indicated some incremental outflow could continue until repayments are completed.

The free cash flow table in the presentation shows FY26 free cash flow at -9,123.08 million, with operating cash flow post-interest at -10,601.21 million. The key driver is finance costs, which were shown at 14,362.35 million in FY26.

Corporate simplification via mergers is a key strategic lever

A significant part of the presentation is dedicated to mergers intended to consolidate project entities into the listed company.

The presentation outlines proposed mergers including Saicharan Consultancy (linked to Rising City stake), 25 West Realty, and promoter-linked entities holding 25 South and 25 Downtown. In the transcript, management stated that two mergers (related to Rising City stake holding entity and 25 West) have been approved by NCLT and are underway. The third merger covering 25 South and 25 Downtown is stated to be awaiting stock exchange approval.

Management also emphasized that the effective date for the mergers is 1 April 2025, indicating that proforma numbers are intended to be incorporated into the listed company based on that effective date once statutory processes complete. Investors should note the presentation disclaimer that these schemes are pending approvals and may not become effective as contemplated.

Launch pipeline and the Sunstream City overhang

The launch pipeline includes Breach Candy residential, 25 Vistas (Thane), 25 Estates weekend homes (Khalapur), Hubtown Seasons Phase 2 (Chembur), Sunstream City (Mulund-Thane, JV), a commercial project off BKC (JV), and Rising City Phase 2 (commercial).

Sunstream City is presented as a very large optionality asset: about 141 acres, about 26.64 msf of development potential, and Hubtown holding 40.67%. In Q&A, management said environmental clearances are the biggest hurdle due to the seafront location and that approvals are being pursued, with hope of progress within the next few months. Beyond clearances, management did not quantify capital requirements or financing plans, stating that planning and requirement assessment would commence after approvals.

FY27 guidance: higher pre-sales and collections, with debt repayment priority

Hubtown provided explicit forward guidance in the analyst meet: pre-sales of around INR 6,000 crore and collections of around INR 3,000 crore for FY27. Management also stated that surpluses are intended to be directed toward repayment of high-cost debt.

On refinancing, management stated efforts are ongoing, and cited a lower-rate construction finance for 25 West at around 12%. They also suggested refinancing progress may be slower in the near term due to market conditions.

Key takeaways

Hubtown’s FY26 presentation shows clear booking momentum, driven largely by premium Mumbai projects. But the investment debate is likely to be shaped by delivery timelines, revenue recognition, and the cost of debt. With 25 South nearing completion and 25 Downtown still early-cycle, the next year is positioned as a transition period where completion-led revenue recognition and debt reduction are expected to start showing up more visibly. The merger program is also central, aimed at making the listed structure more consolidated, though it remains subject to approvals and timelines.