Keystone Realtors FY27 launches and legacy mix shift support margin recovery

Investment View and Company Positioning

ICICI Direct Research’s August 5, 2026 result update retains its Buy rating on Keystone Realtors and its target price of Rs 590 per share. Operating under the Rustomjee brand, Keystone Realtors is described as a prominent developer in the Mumbai Metropolitan Region (MMR), with a leadership position in redevelopment.

The company has completed 39 projects, with 17 ongoing and 21 forthcoming projects. It has delivered more than 29 million square feet and has a construction pipeline exceeding 46 million square feet.

Strong Q1 FY27 Financial Performance

Keystone Realtors reported strong Q1 FY27 performance, supported partly by the transition from the project-completion method to the percentage-completion method. Operating income increased 72.2% year-on-year to Rs 470.3 crore.

ICICI Direct’s result highlights separately cite EBITDA of Rs 105 crore and PAT of Rs 52 crore. The broker attributed the improvement to a better project mix, with EBITDA and PAT margins of 21.3% and 10.4%, respectively.

Q1 FY27 Operating Performance

Q1 FY27 pre-sales were Rs 617 crore, entirely from sustenance sales, as the company undertook no launches during the quarter. Collections stood at Rs 599 crore, while construction outflow increased to Rs 299 crore from Rs 238 crore in Q1 FY26.

Keystone Realtors added two business-development projects with aggregate gross development value (GDV) of approximately Rs 547 crore: an addition to the Dindoshi-Goregaon cluster and a plotted development in Igatpuri. Management said residential demand remained robust across the luxury, premium and mass-market segments in MMR.

FY27 Launch Pipeline and Growth Guidance

Management maintained its guidance for approximately Rs 8,000 crore of launches during the first nine months of FY27, comprising eight projects and 5.2 million square feet. In July 2026, the company launched 28HQ in Prabhadevi and Ozone Skye in Goregaon West, with aggregate GDV of Rs 2,000 crore.

Planned launches include Dhuru Wadi, Urban Woods in Dombivli, Avinash Towers in Versova, Urbania Thane and phases of the GT Nagar, Dindoshi and Om Nagar clusters.

• FY27 pre-sales guidance retained at Rs 4,500–5,000 crore.
• Aspirational FY30 pre-sales objective retained at Rs 10,000 crore.
• FY27 target for new project additions retained at Rs 8,000 crore.

Unsold inventory across ongoing and forthcoming projects is estimated at approximately Rs 55,000 crore and is expected to generate more than Rs 15,000 crore of company-share operating cash flows.

Margin Recovery Outlook

ICICI Direct expects a material improvement in reported margins from FY27 as lower-margin legacy projects phase out. Legacy projects contributed 62% of FY26 revenue and generated an adjusted EBITDA margin of approximately 5% before corporate overheads, resulting in a blended adjusted EBITDA margin of 10.9%.

The broker expects legacy projects to account for only 15% of FY27 revenue. Embedded EBITDA margins in unrecognised revenue from already sold ongoing projects are estimated at approximately 21%, while the balance unsold ongoing-project portfolio is estimated to have margins of 35%.

Valuation

ICICI Direct values Keystone Realtors’ residential business using a project-wise net asset value approach, discounting net post-tax operating cash flows at an 11% weighted average cost of capital. The Rs 590 per-share valuation is derived as follows:

Key Risks

• Delays in under-construction residential projects.
• Inability to acquire new residential projects.