Suraj income rises 18% as Q2 EBITDA margin falls to 33%

Suraj Estate Developers reported Q2 FY27 total income of Rs 171.1 crore, up 18% year-on-year, while earnings before interest, tax, depreciation and amortisation (EBITDA) fell 14% to Rs 56.5 crore. EBITDA margin declined to 33.0% from 45.1%, and profit after tax (PAT) fell 30% to Rs 23.1 crore as expenses increased faster than income.

Why did Suraj’s Q2 profit fall despite higher income?

Suraj’s Q2 FY27 PAT fell because total expenses increased by more than total income. Total income rose by Rs 25.7 crore year-on-year to Rs 171.1 crore, comprising Rs 170.0 crore of revenue from operations and Rs 1.0 crore of other income. Total expenses increased by Rs 34.8 crore to Rs 114.6 crore, reducing EBITDA to Rs 56.5 crore from Rs 65.6 crore in Q2 FY26.

The change in costs included operating and project expenses of Rs 77.3 crore, compared with Rs 69.6 crore a year earlier, and a Rs 20.0 crore change in inventory of capital work-in-progress, compared with negative Rs 3.6 crore in Q2 FY26. Other expenses rose to Rs 10.9 crore from Rs 8.0 crore. Finance costs increased to Rs 24.4 crore from Rs 20.5 crore, while depreciation and amortisation was Rs 1.1 crore, leaving profit before tax at Rs 31.0 crore, down 30% year-on-year.

How did Suraj’s margin change in Q2 FY27?

Suraj’s EBITDA margin declined to 33.0% in Q2 FY27 from 45.1% in Q2 FY26, a reduction of 12.1 percentage points. The margin was also below the 37.5% reported in Q1 FY27, even as total income increased 17% quarter-on-quarter from Rs 146.2 crore. EBITDA rose 3% quarter-on-quarter from Rs 54.8 crore in Q1 FY27, but not at the same pace as income.

The first-half figures showed the same direction. H1 FY27 total income rose 14% year-on-year to Rs 317.3 crore, while EBITDA declined 4% to Rs 111.2 crore and EBITDA margin fell to 35.7% from 41.6%. H1 FY27 PAT was Rs 45.9 crore, down 16% from Rs 54.4 crore in H1 FY26; total income and EBITDA in the presentation include other income, which was Rs 2.6 crore in H1 FY27.

What drove Suraj’s sales and collections in Q2 FY27?

Suraj recorded Q2 FY27 sales value of Rs 206 crore and collections of Rs 104 crore, compared with Rs 153 crore and Rs 71 crore, respectively, in Q2 FY26. Commercial projects accounted for Rs 160 crore of Q2 sales value and 32,003 square feet of sales area, while residential projects contributed Rs 47 crore and 9,484 square feet. In Q2 FY26, the reported Rs 153 crore of sales value and 34,875 square feet of sales area were residential.

Total Q2 FY27 sales area increased to 41,487 square feet from 34,875 square feet, while H1 FY27 sales area rose to 70,321 square feet from 51,399 square feet in H1 FY26. Residential average realisation increased to Rs 49,065 per square foot in Q2 FY27 from Rs 43,885 per square foot a year earlier, and commercial average realisation was Rs 49,921 per square foot. H1 FY27 sales value was Rs 347 crore, including Rs 241 crore from commercial projects.

How did Suraj’s borrowings and balance sheet change since March?

Suraj’s non-current borrowings increased to Rs 696.9 crore at Sept-26 from Rs 532.0 crore at Mar-26, an increase of Rs 164.9 crore. Total non-current liabilities rose to Rs 701.2 crore from Rs 547.1 crore over the same period. Short-term borrowings declined to Rs 102.7 crore from Rs 110.0 crore, while H1 FY27 finance costs rose to Rs 46.8 crore from Rs 41.1 crore in H1 FY26.

Total assets stood at Rs 2,282.8 crore at Sept-26, compared with Rs 1,961.3 crore at Mar-26. Current assets increased to Rs 2,198.5 crore from Rs 1,875.0 crore, as other current assets rose to Rs 965.3 crore from Rs 692.4 crore and trade receivables increased to Rs 131.3 crore from Rs 117.0 crore. Cash and cash equivalents declined to Rs 14.5 crore from Rs 40.1 crore, while current investments rose to Rs 38.7 crore from Rs 4.1 crore.

What is Suraj planning after Q2 FY27?

Suraj is targeting FY27 pre-sales of Rs 700 crore, according to Whole-Time Director Rahul Thomas. The company reported H1 FY27 sales value of Rs 347 crore and said its focus would remain on advancing ongoing projects, bringing upcoming developments to market, and maintaining sales and collections momentum. It reported 13 ongoing projects and 18 upcoming projects in the South Central Mumbai region.

A disclosed project initiative is the expansion of Suraj One Business Bay in Mahim. Suraj completed the acquisition of development rights for an adjoining approximately 2,941 square metre parcel for agreed consideration of approximately Rs 75 crore. The combined development is planned to have approximately 3.59 lakh square feet of saleable area and estimated gross development value of Rs 2,000 crore, compared with Rs 1,200 crore for the original project; management said approximately Rs 500 crore of inventory had been sold since launch.

Conclusion

Suraj’s Q2 FY27 results show higher operating activity alongside lower reported profitability. Sales value increased to Rs 206 crore and total income reached Rs 171.1 crore, but higher expenses reduced EBITDA by Rs 9.1 crore and PAT by Rs 10.0 crore year-on-year. The quarterly sales mix also shifted towards commercial projects, which accounted for Rs 160 crore of sales value.

The next measures to watch are progress toward management’s Rs 700 crore FY27 pre-sales guidance and collections after the Rs 190 crore reported in H1 FY27. The balance-sheet effect of non-current borrowings rising to Rs 696.9 crore at Sept-26 and execution of the expanded Suraj One Business Bay, with estimated gross development value of Rs 2,000 crore, are also part of the disclosed plan.