Keystone Realtors Reports Record Presales and Sets Ambitious FY27 Target

Keystone Realtors Ltd has announced a record INR 4,022 crore in annual presales for the fiscal year ending March 2026. The fourth quarter alone saw bookings reach INR 1,346 crore. Looking ahead, the company aims for INR 5,000 crore in presales for FY27, pointing to anticipated strong growth.

Key Financials and Performance

Keystone Realtors (Rustomjee) achieved INR 4,022 crore in total presales for the fiscal year ending March 2026, surpassing its internal targets. The fourth quarter alone contributed INR 1,346 crore to this total.

During FY26, the developer launched seven projects with a Gross Development Value (GDV) of INR 9,813 crore, exceeding guidance by 40%. Business development efforts were also strong, adding five projects worth INR 10,400 crore, 70% above guidance.

The company remains net cash positive and maintains a gross debt-to-equity ratio of 0.26:1. A key strategic focus is the shift towards premium and emerging premium segments, which now represent 94% of its project pipeline.

Keystone Realtors is also adopting the Percentage of Completion Method (POCM) to provide a clearer view of revenue and margins as projects progress. An in-house precast plant is being developed with Singapore's Robin Village to improve operational efficiency.

Strategic Shift and Future Impact

This performance highlights Keystone Realtors' execution and strategic direction. The move from low-margin legacy projects to high-margin premium and redevelopment projects is key for future profitability. Adopting POCM is expected to offer a more dynamic view of financial performance starting in FY28.

Company Background

Keystone Realtors Ltd, known as Rustomjee, focuses on residential and commercial real estate, mainly in the Mumbai Metropolitan Region. The company has been building its presence in the premium housing segment. The adoption of POCM aligns with accounting standards for real estate, providing a more accurate reflection of a project's financial progress.

Investor Outlook

• Shareholders can anticipate improved revenue recognition and margin visibility as the company transitions to POCM from FY28.
• A greater focus on high-margin (35% gross margin) premium projects will reduce reliance on legacy developments.
• Project execution efficiency is expected to improve with the in-house precast plant, potentially lowering costs and labor needs.
• Aggressive growth in presales is planned, with targets of INR 5,000 crore for FY27 and INR 10,000 crore by FY30.
• Debt levels are projected to peak in FY27, suggesting a controlled leverage strategy during expansion.

Potential Challenges

• Input costs are rising: Overall costs are up 5%, with specific materials seeing 8-13% increases, potentially impacting margins.
• Supply chain issues: International material shortages could cause project delays.
• Labor availability: A shrinking pool of skilled labor is a concern.
• Legacy project revenue: Low-margin legacy projects still represent 62% of current revenue, expected to be a drag until FY27.

Market Position

Keystone Realtors is actively repositioning its business. Competitors such as Oberoi Realty and Godrej Properties are also focusing on premium segments and expanding their project pipelines. Keystone's strategy to move away from older, low-margin projects and adopt POCM provides a clear narrative for investors seeking long-term value in the real estate sector.

Key Metrics

• The gross debt-to-equity ratio was 0.26:1 as of Q4 FY26 (Consolidated).
• Legacy low-margin projects accounted for 62% of revenue in FY26, expected to drop to 12% in FY27.
• New projects targeted for FY27 have an estimated Gross Development Value (GDV) of INR 8,000 crore.

Next Steps for Investors

• Achieving the FY27 presales guidance of INR 5,000 crore.
• Progress in launching new projects valued at INR 8,000 crore in FY27.
• Effectively managing input cost pressures and supply chain challenges.
• The planned reduction in revenue from legacy projects.
• Generating INR 1,000 crore of Operating Cash Flow (OCF) in FY27.
• The timeline and impact of fully adopting the Percentage of Completion Method (POCM) by FY28.