We hosted Hubtown for Q1FY27 concall, and what we heard sounded like a solid re-rating potential.
First the key numbers for Q1FY27
Revenue: ₹156 crore; PBT: ₹32 crore; PAT: ₹26 crore
Pre-sales: ₹535 crore; Collections: ₹320 crore.
Hubtown 2.0 Unlocks A New Growth Chapter
Q1 FY27 marks the beginning of an inflection year for Hubtown Limited (BSE: 532799; NSE: HUBTOWN; Market Cap: ~INR 2,660 Cr). Pre-sales of ₹535 Cr, up 8% year on year, demonstrate continued pricing power across their premium and ultra-luxury portfolio. This performance is anchored in a land moat that took 35 years to build. With ₹11,583 Cr of contracted balance revenue and three merger schemes progressing, FY27 is the year Hubtown's investment thesis begins to manifest in reported numbers.
The Embedded Pipeline: Value Yet To Be Recognised
The least understood part of the story is the embedded book. Across ongoing developments (including the to-be-merged entities), Hubtown has cumulative pre-sales of ~INR 14,835 Cr, of which ~INR 8,352 Cr is already collected and only ~INR 3,252 Cr recognised as revenue so far. That leaves ~INR 11,583 Cr of contracted pipeline still to flow through the P&L as projects complete and hand over, much of it already collected and simply awaiting the final milestone. Beyond this, Hubtown carries ~34 msf of planned development across 25 Chalet, 25 Estate, Season Phase 2, Sunstream City, Hubtown Commercial and Rising City, a multi-year growth runway to layer on top of a ~13 msf delivery track record built over three decades. The company was also the No. 2 top-selling residential developer in South Mumbai during the quarter.
Hubtown 2.0: Consolidating The Marquee Assets
The transformative piece is Hubtown 2.0, the amalgamation that consolidates the marquee luxury projects (25 Downtown, 25 West and 25 South, effective 1 April 2025, subject to approvals) into the listed entity. The first two schemes have received key approvals and await final NCLT sanction, while the third is progressing through the regulatory process.
Absorbing 4 promoter-group entities via NCLT to unify assets and eliminate cross-holdings.
Saicharan Consultancy: Merging to boost Hubtown’s revenue share by 21.17% in the Ghatkopar Rising City project.
25 West Realty: Merging the luxury Bandra West asset to unlock a lifetime revenue potential of ₹6,000 crore.
25 South: Absorbing the 25 South Premium project with a Total Carpet area of 0.96 msf
25 Downtown: Large scale project in South Mumbai, in terms of revenue and area under development and total development of ~3.68 msf.
On completion, the ongoing development portfolio expands from ~7.13 msf to over 34 msf, backed by ~347 acres of landholding, with combined GDV expected to exceed INR 1 lakh Cr over time. Post-merger promoter holding moves to the ~68-70% range, as the schemes are issued against equity.
Deleveraging And Refinancing In Motion
Total borrowings have been cut to ~INR 5,181 Cr, of which INR 3,950 Cr sits in the to-be-merged companies and is project-linked and self-liquidating, funded directly by project cash flows. Legacy bank, NBFC and foreign-fund debt has been fully retired, and the company targets a net-debt-free balance sheet by FY2031. Management noted refinancing options improved sharply over the last quarter and it is looking to refinance ~INR 2,800 Cr of high-cost debt currently carrying 14-20% rates, with substantial savings expected once term sheets are finalised. All project surpluses remain ring-fenced towards debt repayment before any redeployment. On the capital side, enabling resolutions are in place for a preferential issue, QIP and FCCB (~INR 1,400 Cr / USD 150 Mn), with management preferring a single tranche once markets improve. Two promoter pledges remain outstanding, with release targeted within FY27.
Pricing And Demand Hold Firm At The Top End
Luxury demand and walk-ins stayed strong through a seasonally soft Q1, while mid-segment walk-ins were muted but conversion remained healthy. The higher floors (51st to 85th) of 25 Downtown will open strategically from October at premium pricing, with the typical higher-versus-lower floor gap running 30-40%, while 25 West has already risen INR 30,000-40,000/sq ft over ~1.5 years.
Launch And OC Pipeline (FY27)
Planned launches include 25 Downtown Tower 5 (Oct/Nov), 25 Estate (Q4), the Thane project 25 Chalet (Q4) and Chembur Phase 2 (luxury, mid and commercial). OCs expected this year span the last tower of Rising City Phase 1 (Ghatkopar), the North and Central towers of 25 South, Bel Air / Tower 1C at Hubtown Premiere (Andheri West), and multiple buildings at Hubtown Polaris (Ahmedabad) and North Star (Mehsana).
Guidance: FY27 pre-sales of ~INR 6,000 Cr (H2-weighted on launch timing) and collections of ~INR 3,000 Cr. Annuity/commercial income to begin only after ~2.5 years; focus stays on the MMR region, with new projects pursued on an asset-light/partnership basis.
Outlook: Hubtown is positioning around three levers, monetising a premium Mumbai-centric portfolio, consolidating marquee assets via Hubtown 2.0, and de-leveraging towards a net-debt-free balance sheet. Reported earnings will stay lumpy under project-completion accounting, and historically sub-10% ROE should improve as refinancing lowers the interest burden, price rises stick and deliveries pick up through H2. At CMP, the stock trades at ~1.2x P/B (book value ~INR 184), a modest multiple against a ~INR 11,583 Cr contracted pipeline yet to be recognised and combined post-merger GDV pegged at over INR 1 lakh Cr, though realisation of that embedded value hinges on NCLT approvals, execution and OC timelines.
GoIndia Advisors LLP | SEBI Registered Research Analyst | Reg. No. INH000020040 | BSE Enlistment No. - 6518