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Q2FY26: Building Momentum on Strong Launches & Structural Transformation

Recommendation Rationale

* Strong Bookings Guidance: The company has clocked pre-sales of Rs 432 Cr, which is above our expectations for a seasonally slow quarter. The pre-sales were mainly driven by the launch of its Mankol project – ‘Arvind Everland’, which recorded sales of Rs 400 Cr, ~92% of its launched inventory. Its sustenance sales from Ahmedabad and Bangalore saw a hit and were below our expectations for the quarter. Despite this, the company is positive about achieving its 30% bookings growth guidance for FY26. The management is expecting better momentum for sustenance sales going forward as a function of expanding teams, better technological and other processes. It will see a pick-up post November for the coming quarter.

* Launches Pipeline and BD: Arvind has guided towards a launch topline potential of Rs 4,000 Cr. These launches will be majorly bunched up towards the H2FY26. The company expects 2 launches in Bangalore, which are in advanced stages of approval, along with additional launches in Baroda and MMR, as well as its upcoming industrial project. Arvind expects to maintain its BD at a healthy rate of Rs 4,000-5,000 Cr per annum with additions in Ahmedabad, Bangalore, and the MMR regions. Its BD going forward will be largely driven by JD/JV, with increasing outright buying share as well. The company is aiming at a 40-40-20 kind of distribution among Blr-Ahd-MMR. Arvind expects a Rs 1,000 Cr a year deployment for BD going forward, mainly with increasing outright purchases, yet asset-light will continue to have a higher contribution.

* Management Approach: Arvind has seen a notable change in its top management in H1FY26. The new management is more focused on enhancing efficiencies and reducing the time lag from ‘announcement of project-to-launch’ period. It expects a transformation in business while balancing agility and control. It is now a city-led organisation that drives the last-mile decision-making. Furthermore, Arvind is investing ahead of time to build a platform, designing new processes, and the flow of the company. We expect a better launch plus sustenance focus in the coming quarters.

Sector Outlook: Positive

Company Outlook & Guidance: The management reaffirmed its FY26 pre-sales growth guidance of ~30%, supported by a robust launch pipeline of 4–5 projects in H2FY26 with an estimated GDV of ~Rs 3,000 Cr. It expects sales, collections, and execution momentum to strengthen in the H2 as new projects in Ahmedabad, Vadodara, MMR, and Bangalore come to market. The company remains focused on asset-light expansion, capital-efficient growth, and sustained cash generation. Management reiterated confidence that the ongoing organisational transformation and city-led model will enable project scale-up. It continues to maintain a strong balance sheet and disciplined capital allocation.

Current Valuation: 5.5X FY28E EBITDA; Earlier Valuation: 8X FY27E EBITDA

Current TP: Rs 740/share (Earlier TP: Rs 840 /share).

Recommendation: With a 21% upside from the CMP, we maintain our long-term BUY rating on the stock

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SEBI Registration number is INZ000161633