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Changes in Estimates post Q4FY25

FY26E: Revenue: 27%; EBITDA: 6%; PAT: 0%

Recommendation Rationale

Business Development: The company has clocked pre-sales of Rs 1,271 Cr, missing its guidance of 30% growth. This shortfall was primarily due to the company's inability to launch all the projects planned for the year, including the Bannerghatta and Surat projects. However, it continues to believe that these launch spill-overs will occur in FY26. For FY26, Arvind has guided for ~Rs 4,000 Cr of launches, comprising Rs 2,000 Cr from Bangalore, Rs 1,000 Cr from Gujarat, and the rest ~Rs 1,000 Cr from the MMR regions. The company has added new projects with topline potential of ~Rs 4,450 Cr, including the MMR horizontal township, ITPL Bangalore project, Industrial Park in Ahmedabad, and new plotted development in Sanand. For additional BD in FY26, it has guided on capex of Rs 1,000 Cr, which will convert into topline potential of Rs 5,000 Cr.

Strong Bookings for Launches: Arvind has historically proven to have a robust sale on launch trajectory. For the FY25, the Arvind Aqua City and The Park, Devanhalli project saw ~100% sales on launch. These were the primary drivers of its total bookings, with Aquacity contributing Rs 675 Cr and The Park showing Rs 180 Cr. The Forest Trails project also received a good response in Q4FY25, clocking Rs 164 Cr. As a leader in urban lifestyle quality living, Arvind has experienced good sales momentum in its projects, with ~22% of sales driven by referral bookings.

Upcoming Portfolio: Arvind continues to follow its no-land-bank strategy, undertaking more projects under an asset-light model. The company’s performance is strongly dependent on upcoming launches. It is confident in continuing its previous growth trajectory of ~30% growth for the coming years, based on upcoming launches of ~Rs 4,000 Cr. These launches are geographically diversified among Bangalore, Gujarat and MMR. For its Gujarat portfolio, we expect the Surat project, Industrial Park, and new plots in Ahmedabad. For its Bangalore portfolio, we foresee the Bannerghatta project to be launched by H1FY26, and for its MMR projects, the company is exploring weekend homes projects along with redevelopment projects. Additionally, Arvind has an unsold inventory of ~Rs 1,400 Cr.

Sector Outlook: Positive                

Company Outlook & Guidance : We remain positive about the company’s long-term prospects.

Current Valuation: EV/EBITDA-based valuation

Current TP: Rs 970/share; (Earlier TP: Rs 1,085 /share).

Recommendation: With a 38% upside from the CMP, we maintain our long-term BUY rating on the stock.

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