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Dev Accelerator Limited — Call Transcript 2026
May 26, 2026
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Call Transcript
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Dev Accelerator Limited
(Formerly known as Dev Accelerator Private Limited)
C-01, The First Commercial Complex, B/h Keshavbaug Party Plot,
Nr. Shivalik High-street, Vastrapur, Ahmedabad- 380015, Gujarat
+9174348 83388 | [email protected]
CIN: L74999GJ2020PLC115984
DEVX
accelerating innovation
May 26, 2026
| To, BSE Limited Phiroze Jeejeebhoy Towers Dalal Street Mumbai 400 001 | To National Stock Exchange of India Limited Exchange Plaza, Plot No. C/1, G Block, Bandra Kurla Complex, Bandra (East) Mumbai 400 051 |
|---|---|
| Script Code: 544513 | Trading Symbol: DEVX |
Dear Sir/ Madam,
Sub: Disclosure under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 – Transcript of the Earnings Conference call
Pursuant to the provisions of Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended from time to time), we are enclosing herewith the transcript of the earnings conference call, conducted on May 20, 2026, in relation to the audited financial results of the Company for the quarter and financial year ended March 31, 2026.
The above information will also be hosted on the Company's website viz. https://www.devx.work/investor-relations/financials
This is for your information and records.
Thanking you
Yours faithfully,
For Dev Accelerator Limited
(Formerly Known as Dev Accelerator Private Limited)
ANJAN PARESHKUMAR
TRIVEDI
ANJAN Trivedi
Company Secretary & Compliance Officer
Encl: As above
Startup Accelerator
Program
Collaborative
Work Space
Corporate Innovation
Partnerships
University
Collaboration
www.devx.work
DEVX
"Dev Accelerator Limited
Q4 FY26 Earnings Conference Call"
May 20, 2026
DEVX
ADFACTORS PR
CHOROSDEALL
Management:
Mr. Umesh Uttamchandani – Managing Director – Dev Accelerator Limited
Mr. Parin Shah – Joint Chief Financial Officer – Dev Accelerator Limited
Mr. Parthiv Panchal – Joint Chief Financial Officer – Dev Accelerator Limited
Mr. Anjan Trivedi – Company Secretary and Compliance Officer – Dev Accelerator Limited
Mr. Yash Shah – Non-Executive and Non-Independent Director – Dev Accelerator Limited
Moderator:
Ladies and gentlemen, good day and welcome to Dev Accelerator Limited Q4 and FY26 earnings conference call. I have with me Mr. Umesh Uttamchandani, Managing Director; Mr. Parin Shah, Joint Chief Financial Officer; Mr. Parthiv Panchal, Joint Chief Financial Officer; Mr. Anjan Trivedi, Company Secretary and Compliance Officer; Mr. Yash Shah, Non-Executive Non-Independent Director.
Before we proceed, I would like to bring to your attention that certain statements made during this discussion may constitute forward-looking statements. These statements are based on our current expectations, assumptions, and beliefs regarding future developments and are inherently subject to various risks,
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May 20, 2026
uncertainties, and factors beyond our control. Such forward-looking statements involve both known and unknown risks, and we advise you to interpret them with caution.
As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touchtone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Umesh Uttamchandani, Managing Director. Thank you and over to you, Mr. Uttamchandani.
Umesh Uttamchandani:
Thank you so much for initiating the call. And good afternoon, everyone, and a warm welcome to Dev Accelerator Limited earnings conference call for the fourth quarter and full year ended March 31, 2026. I am assuming you all had the opportunity to review the audited results, the investor presentation, and the media release that we have shared with the Stock Exchanges.
I'll start with this year's numbers. This year has been extremely meaningful for all of us at DevX, as it completes the full financial year as a public listed entity. Our thesis of focusing on India's Tier 2 cities has now become the frontier for the entire country, not only from a real estate perspective but also from other growth parameters. Tier 2 cities have played out in our numbers extremely well, and I would run you through all those numbers in the next 20-25 minutes.
For the full year FY26, our consolidated revenue has reached to a phenomenal outcome of INR226 crores. That's an annualized growth of 42 percentage, wherein our FY25 revenue was INR159 crores. I am sure a lot of people who are there on the call today, who have been monitoring and tracking us during our pre-IPO roadshows, I had showcased the numbers of achieving an outcome of INR225 crores, and today we have achieved INR1 crore additional to what we had envisioned a year ago.
Our consolidated EBITDA has come up to INR109 crores, with the margin of 48.4 percentage. On a Standalone basis, which is excluding our design and build company and technology company, it reflects a strong unit economics of our core managed workspace platform. The standalone numbers have increased 34 percentage on an annualized basis, and we have achieved a phenomenal number of INR171 crores for FY26. And our margin, EBITDA margin, has been achieved at 60.5 percentage, which last year was 59.8 percentage. Just to help you understand this amongst our peers
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who are listed in the flexible workspace sector, this is one of the highest numbers to be achieved.
The headline profitability that we have achieved in our standalone numbers at an I-GAAP basis is extremely strong on core managed workspace operations. So normalized Cash EBIT for FY26 is INR36.55 crores, which is 21.38 percentage margin. At an industry parlance, 15 to 18 percentage is assumed to be a better outcome. We have exceeded that industry peers as well.
The Standalone normalized PBT for FY26 has been achieved at a number of INR20 crores. And this has been the second consecutive year wherein we have achieved a positive normalized profit before tax, which is supported by operating leverage from our mature centers and efficiencies that we have built in our operations.
For the last quarter, the consolidated revenue stood at INR59 crores. One of the key highlights of the fourth quarter has been the go-live of our dream project of Capital One campus on Ambli Bopal Road. I still recall that we signed this asset back in 2022, wherein Tier 2 cities were not looked upon as the frontiers for flexible office spaces. It is a 19-story building with 3.15 lakh square feet. That entire asset has been pre-leased by us with a 95 percentage occupancy achieved even before going live.
Immediately after we received business operations or the OC of the asset, the next month itself we had operations running in that premises. The asset is EBITDA positive from day one, and we would be achieving a revenue run rate of INR2.65 crores to INR2.75 crores per month. The revenue from this center would be reflecting in our books from Q1 FY27.
Let me now elaborate a little bit on what we are actually building at DevX, because the opportunity here is not just the quarterly numbers but the entire platform that produces this number.
India as a country today hosts 1,800 global capability centers, employing more than 1.6 million professionals. And this workforce is on track to cross 2 million professionals within the current calendar year.
Crucially, GCCs are now no longer confined to metros. Hiring in Tier 2 cities is growing at a massive 21 percentage year-on-year, because it gives them cost arbitrage of 35 percentage over Tier 1 city on real estate and availability of a massive digital skilled talent pool of 800,000 professionals. Today, India looks towards Bharat to achieve a $5 trillion economy of our honourable Prime Minister by 2030.
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The Indian flexible workspace market has already crossed 100 million square feet of stock, and it is expected to reach $11.4 billion in valuation by 2030. This is a structural migration, and this probably ignites or starts the dream that we had thought of back in 2018 when we were starting DevX. It is our deliberate choice to focus on Tier 2 cities and create that as our strong foundation.
While DevX is focusing on operating managed office spaces in Tier 2 city, our real differentiating factor is in creating institutional grade supply in markets where land ownership is unorganized, fragmented, and non-institutional.
Our proprietary land owner first development management model, which we had introduced a couple of years ago, partners us, that is DevX, directly with non-institutional land owners. What we bring on the table for land owners is strong capability execution skill sets, technical specifications, construction discipline, GCC and institutional client relationships, and a confirmed demand over a longer period of time.
This also gives land owner ownership of the asset for long-term basis, which in turn helps them to generate 30 percentage higher returns as compared to traditional leasing arrangements. What DevX builds for them is a grade A+ asset, which is specifically designed for institutional clients, including GCCs.
As DevX, we are not putting the construction risk or the land risk onto our balance sheet. What we are committing is operational expertise and lease obligation against assets where we have already received a committed demand. This is one of the strong key moats for us. It is 100 percentage asset-light, and it also solves the biggest constraint in the country and specifically for institutional clients looking for office spaces, is the availability of grade A supply in Tier 2 cities.
The micro market called Ambli Bopal in Ahmedabad is an example how this model works at scale. In the entire last year, which is FY26, DevX has signed and secured approximately 15.75 lakh square feet of contracted space in one micro market. I'll break that down for you to understand. 3.15 lakh square feet at Capital One, wherein we have delivered that asset, achieved 95 percentage occupancy levels even before going live.
It has 4,000 seats, which is anchored by one of our largest client which has been with us since last six years, Manubhai & Shah. Typically, a similar size asset gets leased in 12 to 18 months of time frame. The single client, Manubhai & Shah, has contracted with us for a yearly revenue of INR110 crores.
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- The second asset is 8.1 lakh square feet, which also starts our development management journey in the city. We have committed an investment of INR100 crores across four years, which will ultimately help us achieve an annualized revenue of INR120 crores with 80 percentage occupancy and 8,500 seats. Recently, in this last quarter, we also signed 4.5 Lakh square feet in an asset called under Stright lease model Ambli–Bopal corridor, funded through a preferential issue.
Three contracted assets, one single micro market, almost 16 lakh square feet in a single corridor. This is what we intend to build in other Tier 2 cities as well. Identify certain corridors wherein we can grow stronger, which ultimately creates a challenge for our peers to enter that micro market.
And this is 100 percentage replicable as it is asset-light for us. We have already started land owner conversations in multiple cities, in multiple Tier 2 cities to say so, in Indore, Jaipur, Surat, Baroda. These are few of the cities wherein we are already present. We understand the ecosystem strongly, and we now would be growing stronger in those micro markets. There would be few development management partnerships that we would be announcing in this FY27.
Underpinning this strategic platform, I’ll run you through certain operating metrics that are the indicators of our revenue durability. On client side, 65 percentage of our revenue comes from enterprise clients, which is on built-to-suit contracts. So typically an enterprise client would come to us, share the requirements, and we would design and build their entire office right from scratch. Hence, we call it built-to-suit. 65 percentage of our revenue comes from such nature of the contract.
The client retention is unheard of. We have a 99.7 percentage retention this year, almost negligible 0.003 percentage of churn that we achieved last year. Amongst our clients of 300 plus, the average lock-in that we have is of 34 months. One-third of our clients, that is more than 100 clients with us, are present with us in multiple cities.
So the revenue base is structurally contracted and not transactional in nature. The typical industry average of rent-to-revenue ratio is 2.2x in Tier 1 cities. While the cities that we operate in, we have been able to achieve a rent-to-revenue ratio of 2.4x in FY26.
On our subsidiaries, which is our design and build, Needle & Thread, we were able to achieve a INR52.3 crores revenue with 7.2 percentage EBITDA margin. Just to help everyone recall, we started this company as a back office for DevX to build offices only for DevX. Since we were able to build processes and make it stronger, we now offer it as a full-fledged solution to external clients as well. And we were recently
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recognized as India's most futuristic interior design and build firm 2026 and a revenue of INR52.3 crores. As an organization, we are extremely proud of this achievement.
Our technology subsidiary, which is SaaSjoy Solutions, continues to scale on providing recruitment, payroll, and HRMS solutions to our GCC clients, wherein we intend to position ourselves as a full-stack offering to our GCC leads that we interact with. It is also heartening to mention that as an organization we were named co-working start-up of the year at the Economic Times Entrepreneur Awards 2026 for the second consecutive year.
Sharing thoughts on the capital structure, we recently raised, our board recently approved a preferential issue of INR35 crores, which was largely to fund the growth and take up a 4.5 lakh square feet with Winston as an asset. Out of this INR35 crores, INR15 crores had been subscribed directly by the promoter and promoter group through convertible warrants, and additional INR20 Crores coming in from non-promoter investors. The promoter participation is a clear signal of our internal conviction in the asset and the corridor strategy that we are building up.
Q1 FY27, we are anticipating a significant capital event through monetization of our holding in one of our subsidiaries, wherein we are building almost 0.5 million square feet. That capital event would result into a liquidity of INR110 crores to INR120 crores within DevX.
Largely, the priority of utilization of the funds would be to accelerate growth across the country and build similar corridors like Ambli Bopal in at least four to five cities across the nation, establish development management partnerships with land owners based in Tier 2 cities so that it can strengthen our future supply and obviously strengthen our balance sheet. The board has also approved a non-convertible debenture issuance at a project level to further optimize our financing mix.
To help you on an outlook of FY27 and FY28, we would be, we are planning to invest roughly INR200 crores to INR225 crores in the next two years of time frame, which practically would empower us to reach from current 1.2 million square feet to 3 million square feet of operational area by FY28.
This substantial portion of this capacity that is getting added in our books is already contracted from the demand side as well as from the supply side, which has a mix of ready-to-use buildings and development management partnerships that we are signing up.
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FY26 has been the year DevX transitioned from a flexible workspace operator in Tier 2 city to becoming an institutional infrastructure platform for the GCC migration and institutional migration into Tier 2 cities.
We have delivered our highest revenue, our highest margins in the last eight years of our journey, and the largest contract not only in the company's history but also across the industry history by contracting 8.1 lakh square feet of single managed office space asset. And this is just getting started. This is first year of full operational entity as a public listed company.
We are not compromising on unit economics, neither on balance sheet quality. With this business model, we believe we are well-positioned to capitalize on the upcoming opportunities and the future scale-up.
I thank you everybody for your continued support. I'll now open up the floor for questions.
Moderator: Thank you. The first question comes from the line of Urmish Shah from Moneywisers. Please go ahead.
Urmish Shah: Yes, hope I'm audible.
Moderator: Yes.
Umesh Uttamchandani: Yes, we can hear you.
Urmish Shah: Sir, my question is on the mature occupancy first. In FY26, we saw a very steep decline because we have maintained the range of plus 90s and in FY26 we are at 70. So and also the occupied seats have gone on the lower side or have been stagnant. So could you just throw some color on that?
Umesh Uttamchandani: Thank you so much for the question.
Urmish Shah: Sir, your voice is cracking.
Parin Shah: Yes. Thank you so much for your question. I just wanted to give you the understanding about the maturity center. Earlier, whatever the number we have presented in the investor presentation, where we are presenting the occupancy understanding is the more than 85 percentage of the across all the centers, that's why we consider a mature center.
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But then now, considering the operational efficiency and we consider and putting a benchmark at a higher level, so basically we say that the 100 percentage occupancy is the higher benchmark for the business.
So considering the 70% mature centers, like we are saying that out of whatever the area we are managing, like 0.83 million square feet, 70% of all the centers are achieving a 100% occupancy. So basically we don't want to change the previous numbers, that's why we see the dip in the occupancy percentage in a mature center.
Urmish Shah:
Then sir, why were you considering 85% before?
Parin Shah:
So in an industry, all other players or we basically 85% is the right metric where we generate the more revenues and more than break-even. So that's why in earlier we have understanding and internal discussion like 85% is the right benchmark and the right metric to evaluate the business. But then we also see that we if we can also achieve the more than 85%, that is good for the business. So that's why we keeping our benchmark high, so that's why we updating the numbers at a mature center.
Urmish Shah:
Okay. And you know, if I see Q4 numbers on a consol basis, year-on-year our revenue has gone down a bit and also the margins. So and how do you see the industry outlook going forward for FY27? So you know, will these margins be sustained or will we be back on FY25 margins?
Umesh Uttamchandani:
So if you dig down in the numbers, at a standalone metric, the numbers have not dipped. In fact, the margins have slightly improved as well. Next, across the year if you see, we have been able to achieve a higher margin number as compared to the previous year. So just to contextually help you, we have achieved a revenue of INR170 crores at a standalone basis.
Urmish Shah:
Sir, I'm talking about quarter four year-on-year. I'm not talking about the full year.
Umesh Uttamchandani:
So, quarter four year-on-year we have achieved a revenue of INR59 crores. You are comparing that with previous year or this year?
Urmish Shah:
I am comparing quarter four FY26 to quarter four FY25. On standalone basis, the margin, I'm talking about EBITDA margin, sir. Obviously, the drop has been there, but it's flat, but I just wanted to know the reason.
Umesh Uttamchandani:
So there has been a dip in the revenue compared to last quarter because one of the asset that we were operating in Noida, that we had closed down. And that was the primary reason why that dip of that revenue comes in on compared to previous
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quarter. On the EBITDA percentage, we are almost kind of achieving the similar outcome.
Urmish Shah:
Right. So why was the Noida asset shut down?
Umesh Uttamchandani:
The Noida asset was typically operated by a land owner which was going through a very difficult phase. And the common area maintenance was their responsibility. And the asset was not being able to maintained or managed by them. And we were not happy with the services that were being rendered to us.
So, there were instances wherein the elevators were getting stopped on a recurring basis, the AHUs, I mean the systems from where the ACs were being powered, they were not being serviced and maintained in a rightful manner. So, we were extremely unhappy with the services. And that was the primary reason why we had to close down this center.
Urmish Shah:
Okay. And as brokerage as a percentage of revenue from ops has also been a bit on the lower side compared to FY25, if I see that correctly.
Umesh Uttamchandani:
Correct. So typically -- in our business, how it, Yes, I'll run you through that, sir. So typically, in our business, when we take up a new center, that is the time when we see higher amount of quantum of brokerages kind of getting in the, getting registered. Last six months largely has been delivery of the centers that we have already contracted earlier. So the conviction of me saying a revenue number six, seven months before was largely coming up because of those pre-committed agreements, signing agreements with the clients.
And for those, brokerages were already paid beforehand. Having said that, our brokerages payout is way better as per industry standards because 65 percentage of our leasing in Gujarat happens directly, while 35 comes, 35 percentage of revenue comes from brokerages. When it comes outside Gujarat, we have a 50-50 ratio wherein 50 percentage of our client comes directly and 50% comes from the brokerage or channel partners.
Urmish Shah:
Right. So, one question before I join back. You know, how do you see the industry going forward? You know, obviously we are not directly impacted by the geopolitical situation, but you know, the government calling for work from home again and you know, things like that. So, do you see certain shift in the industry or how do you foresee the, I mean, just as an outlook?
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Umesh Uttamchandani:
Sure, sure. So, I have always been sharing on these lines that whatever we see with respect to digital payments, the UPI numbers that have kind of extrapolated in the recent years, the credit goes to demonetization and COVID. The adoption of technology from all users came largely because of these two primary drivers. The same thing what demonetization did for digital payment gateway is what COVID has done or hybrid work culture has done for flexible office space.
Geopolitical tensions obviously should curtail down. It is extremely not the right situation for the country and the world to be in. We are obviously standing strong against those measures. But it is definitely acting as an advantage for the entire sector and the industry. The moment the hybrid culture becomes much more prominent, much more better, and much more adopted, the better it is for the flexible office space sector overall.
Because I'll cite an example. One of our biggest client, I cannot name the client because of the contractual agreement, but one of the Fortune 500 companies which is sitting with us in Jaipur, they have 485 people that are working from that city. The number of seats that they have signed up with us is 240. So they are almost having one seat for two people that are working in that city. So it gives them the flexibility to design their workplace which can accommodate hybrid culture.
So what we, we actually empower that. So tomorrow any organization wants to inculcate a hybrid work culture, we give them our technology access wherein each individual that is working in the office gets to pre-book a seat and then come to office. So that empowers the organization as well to enable people to come to offices on few days of the week. And that is where the power of flexible workspace comes into play.
Urmish Shah:
Okay, sir. That helps. I'll join back to the queue for further questions. Thank you.
Umesh Uttamchandani:
Sure. Thank you.
Moderator:
Thank you. Next question comes from the line of Aniket Rade, an Individual Investor. Please go ahead.
Aniket Rade:
Yes, thank you for the opportunity. So sir, I have few questions. First, can you share the contribution from the enterprise client versus the start-up client contribution?
Umesh Uttamchandani:
So, we have 65% of our revenue coming in from enterprise client, wherein the average lock-in is 34 months.
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Aniket Rade: Okay. And what about the start-up client?
Umesh Uttamchandani: And these are all built-to-suit. So in our client profile or client mix, all the enterprise clients that we have wherein we do built-to-suit, we have almost negligible exposure in the start-up sector. We do have start-ups using our offices, but that is largely on the co-working side, which is contributing 6% of our revenue.
Aniket Rade: Okay. Okay. So, just to compare with the both, most of the demand is from the enterprise client only.
Umesh Uttamchandani: Right. Right. Enterprise, institutional clients, and GCCs.
Aniket Rade: And sir, what is the trend in the seat addition and the occupancy during the, during the FY26 and what is our target for FY27?
Umesh Uttamchandani: What is the trend in FY26?
Aniket Rade: Yes, yes. In terms of the seat addition and occupancy?
Umesh Uttamchandani: So we were 13,304 seats in FY26, wherein 4,000 seats got added in last quarter, that is Q4 FY26, but the revenue would be coming in Q1 2027. So today if you ask me, we are at 17 and a half thousand seats.
Aniket Rade: Okay. Okay. Got it. Got it. And sir, just to try to more on this Bangalore related. So earlier we had, you had mentioned that the expansion plans about the new centers including the Bangalore. So can you throw some light on it? In terms of the rollout and timeline and expected capex.
Umesh Uttamchandani: Absolutely. So we have a healthy mix of our expansion in Tier 2 cities and tier-1 city. Our Tier 2 city proposition is having a presence of 65% of our portfolio and Tier 1 cities we have a exposure of 35 percentage. On the same lines, just to balance that portfolio, we have added 1.1 lakh square feet of area in Bangalore. Actually, we have partnered with one of the largest developers there, which is called Prestige.
We have partnered with them and we have taken up two assets from them on Outer Ring Road. So just to contextually help everybody understand, Outer Ring Road is where 40 percentage of the entire leasing happens in Bangalore. Bangalore does 22 million square feet of leasing on an annual basis. So technically 10 million square feet gets leased on a year-on-year basis just in that stretch of Outer Ring Road.
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Aniket Rade:
Okay. Okay. Got it. Got it. And sir, one last question. As we raised the fund through this NCDs, so what is the intended utilization of this fund and how are we going to use this?
Umesh Uttamchandani:
Sure. So we are actually planning for an investment of total INR220 crores to INR230 odd crores. The break-up of this is in three phases. One, we have, we have taken a board approval for INR100 crores of NCDs. We are expecting a liquidity event of INR110 crores to 120 crores from the proceeds of certain asset and the preferential allotment of INR35 crores.
With that total, total investment would be deployed across two years of time frame from the current 1.2 million square feet, which is FY26 being 0.84 million square feet and an additional of 0.3 million square feet with Capital One, that is 1.2 million square feet.
From here on, we intend to add additional 3 million square feet with this extra liquidity of, with this extra capital infusion of INR220 crores to INR230 crores.
Aniket Rade:
Okay. Perfect. Got it. Got it, sir. And sir, one, are you seeing any pricing pressure or increased competition from such key operating markets?
Umesh Uttamchandani:
On the demand side, we are not seeing any pressure. On the supply side, there was certain crunch of critical supply chain or probably value chain product, like for a short period the availability of tiles was not there because of unavailability of gas and our suppliers kind of not operating during that period. But now the supply chain seems to be, you know, streamlined. We have availability of labor as well on site and all the raw material which was there is now accessible.
Aniket Rade:
Got it. Got it, sir. Thank you so much, sir, and all the best for the future.
Umesh Uttamchandani:
Thank you so much.
Moderator:
Thank you. Next question comes from the line of Nikita Mehta, an Individual Investor. Please go ahead.
Nikita Mehta:
Thank you. Thank you, sir, for the opportunity. So, I have couple of questions. Sir, one is how much contribution is expected from our non-core businesses like Needle & Thread and SaaSjoy over the next two to three years?
Umesh Uttamchandani:
Well, so in terms of revenue, they are contributors roughly around 20-25 percentage towards the revenue. But I would not probably categorize them in non-core domain
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because both entities kind of play a very strategic role in the journey that we are kind of creating for ourselves. So design and build entity, Needle & Thread, plays a very pivotal role in giving commitment to our end clients that we would deliver their office from day one to the day when they enter the office anywhere between 75 to 90 days of time frame.
So that commitment or that conviction to commit within that time frame comes because of the resources that we have built, the processes that we have created in the last four years of time frame. Second, going forward and currently as well, GCCs are now becoming a very strong contributor to office space leasing in India. And to attract GCCs, we need to be a full-fledged solution provider.
And that is where the other subsidiary SaaSjoy Solutions plays a role. So the recruitment, payroll, technology stack, all of that offering comes under that umbrella. So both the subsidiaries play a very pivotal role in ensuring or probably defining as to what we intend to achieve in the next couple of years.
Nikita Mehta: Okay. Okay, sir. I think, Yes --
Umesh Uttamchandani: Did I answer that correctly?
Nikita Mehta: Yes, Yes. Okay. Sir, I have one more question. Like, can you explain the economies of development management model versus the straight lease?
Umesh Uttamchandani: Super. I think, I mean, this helps me to address the model that we are extremely proud of. So one fundamental challenge that our country has today in Tier 2 cities specifically is the unavailability of institutional grade supply. So when a larger enterprise client comes to any Tier 2 city, they literally feel that they do not belong here because the quality of supply, quality of assets that are available here are not to the state that they are used to operating from.
And we identified this challenge. So what we are doing here is we partner with land owners, tell them that we would be leasing this asset, we would be bringing in clients, and it's our commitment to bring in the client. However, the infusion of capital to build the asset is to be done by the land owner.
So we charge them an fee for managing and designing that asset. The revenue that we generate is a per square feet revenue which ranges anywhere between INR300 to INR500 per square feet, which spans across two years to four years of time frame. So if I'm building an asset of let's say 4 lakh square feet, my revenue at the books of DevX would be anywhere between INR12 crores to INR20 crores.
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That is what our fees would be to the land owner. And the land owner would be contractually binded to invest for building an asset which is grade A+ quality, which is, which is pertaining to certain specifications of technicalities and even building a green building asset.
Nikita Mehta: Okay. Okay, sir. I think, Yes, I think that was great. It answers my question and thank you, sir, so much for this opportunity.
Umesh Uttamchandani: Thank you. Thank you, Nikita.
Moderator: Thank you. Next question comes from the line of Sana, an Individual Investor. Please go ahead.
Sana: Hi, sir. Good afternoon and thank you for the opportunity. Sir, I have few questions on the margins. Sir, can you please tell us if the margins will remain stable if the company accelerate expansion into newer cities?
Umesh Uttamchandani: I think that's a very interesting question. Internally as promoters we kind of keep on discussing this. So fundamentally when we started this company, we achieved the profitability in first year itself. With scale, we realized that till this point we have been extremely hands-on into doing things. The next wave of growth, that is from this 1.2 million square feet to adding more 3 million square feet in the next two years of time frame, will obviously be requiring more brains and more leadership team in the system.
The moment that comes in, it can result into two outcomes. Either we become way efficient than what we were earlier, or probably we lose out on track and there arises some leakages in the system. The other option becomes a probability if we as promoters are not hands-on. Our daily time in our personal life is coming to office at morning 10, 10:30 and leaving the office premises. Is this better? Can you hear me now? Am I audible?
Moderator: Sana, can you hear the speaker?
Umesh Uttamchandani: Am I audible to you?
Moderator: Sana, can you hear? Since there is no reply from the line of Ms. Sana, we will move to the next participant.
Umesh Uttamchandani: Sure.
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Moderator:
The next question comes from the line of Vikrant Sahoo with RK Advisory. Please go ahead.
Vikrant Sahu:
Hi, sir. I just have few questions. Like how much free cash flow generation do you expect in FY27?
Umesh Uttamchandani:
So how much?
Vikrant Sahu:
Free cash flow generation do you expect in FY27?
Umesh Uttamchandani:
So if you see, I mean, the core per, I mean, strength of the business is the fact that the availability of free cash flows empowers us to kind of scale rampantly. So the cash EBIT item that you see in our books, that is ranging between 21 to 22 percentage, has been very steady since last couple of years. So next year, at a revenue run rate of 330 to 350 Crores, we expect to have a cash EBIT of 21 to 22 percentage.
Vikrant Sahu:
And one more question I have, like how scalable and replicable is the Ambli Bopal development model across other key cities and micro markets?
Umesh Uttamchandani:
Well, that is actually what we are trying to do right now. So the journey that we live in every city is between two years to four years of time frame. So let's take an hypothetical example of Jaipur. Today in Jaipur we are almost 1.2 lakh square feet of area which is operational. We have spent three years in the city. In these three years, we have identified who all are our vendors, who can be the developers that we partner with, and what is the probable list of clientele that we can cater to. Once we establish this understanding in the system, the next step is to build what we have built in at Ambli Bopal. So we would start growing vertically in all those cities wherein we are present beyond two to three years of time frame.
Vikrant Sahu:
Okay, sir. And one more question, and like what are the management's top three priorities for FY27?
Umesh Uttamchandani:
So first and foremost priority is to bring in senior leadership team at multiple city level so that we can kind of build autonomous growth at an across the organization but driven from those specific cities. That's the first agenda.
Second is to become AI native in nature. So currently we are building and developing lot of micro tools which are helping us increase our productivity. We in fact hosted an AI hackathon for our internal team members, wherein the entire team participated and they came up with solutions that we had never thought of.
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So the objective in the next one year would be to become complete AI native and build certain processes which can scale massively. That's second. And third is identify at least 5 to 7 Lakh square feet of projects under development management model in the next 12 months of time frame. These are three priorities I would say so for us.
Vikrant Sahu: Got it, sir. Got it. Thank you so much, sir.
Umesh Uttamchandani: Thank you.
Moderator: Thank you. Next question comes from the line of Arvind Singh with Manthan Capital. Please go ahead.
Arvind Singh: Hello, am I audible, sir?
Umesh Uttamchandani: Yes, Yes, absolutely. I can hear you.
Arvind Singh: Sir, good afternoon. My question is on the broader terms, like there is there is lot of talking about the -- IT services are replacing by AI. So how do you see this trend in terms of the real estate, like majority of the -- majority of the occupancy is driven by the IT industry. So how do you see this trend?
Umesh Uttamchandani: Correct. I totally resonate with this question. In fact, there was one of the fear that was in our brains probably five, six months ago when AI was kind of becoming very prominent. What we did was we started speaking with all our existing clients to pick up their brains and understand as to what are they thinking on the lines of what AI is doing.
What we ultimately realized, all the noise that is happening outside these companies, wherein IT companies' stocks being bashed out, their news wherein larger IT companies are relieving people, all those negative news, what is getting created as noise, when we spoke with these companies internally because they use our offices daily, and we don't see any churn within them.
When we had a good elongated conversation with them, what we realized is that earlier they used to let's say target 15 industries. Now they are able to have conversations with at least 30-35 industries. Second, the projects that they used to take and deliver in a time frame of 18 to 24 months, now they are able to deliver those projects in 9 to 12 months of time frame.
So ultimately what we are sensing and what they are echoing is in the next 15 to 24 months of time frame, their margins are going to shoot up drastically than what has
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happened in the last decade. Their productivity is going to blast out. Sorry, you were saying something.
Arvind Singh:
Yes, yes, sir. Much appreciated your response. But sir, you have said correctly they have lot of productivity gain, but my issue is that, if we look at the data then the number of addition of the job has subdued or I think it has de-grown in the IT industry. So it will impact some way or the other way the occupancy and the real estate area required for the IT industry. So that's the point I want to know. The number of ...
Umesh Uttamchandani:
On that only, I'm answering. Since the productivity is increasing, they are bound to add more number of people. What we are witnessing -- so you create a funnel in your brain which is an open-ended funnel. Right? On one side, there is an influx of talent which was pushed in let's say in 2020-2021 when there was massive outburst of projects that all these IT companies got.
Now, this entire tunnel is packed with people. Now, suddenly, AI comes in. The projects are already there. Right? The business is there. Now, this tunnel needs to be filled in with people who are extremely adoptive on AI technologies. If those set of people which are in this tunnel are not adopting the technology, they will be moved out of the tunnel but they will be mandatorily replaced by people who understand using the technologies which are currently required.
So, to answer your question, is real estate going down the drain because of talent pool being fired by these IT companies and that sector being one of the largest consumers of real estate? I think it is the other way around. That funnel or the tunnel that I am referring to needs to be packed in with more number of people. It is probably getting drained by a set of people who are not able to adopt the newer technologies.
Arvind Singh:
Okay. Great, sir. Sir, I think I have a data point that TCS and other big firms are hiring less and less from the campus recruitment. So, that's the point I want to highlight. If you can?
Umesh Uttamchandani:
Correct, sir. We all have that data point. Times of India had this news published in the newspaper wherein India from the top five IT-ITES companies hired 1,500 net new people in the last year, wherein somebody fired 11,000 people, somebody hired 4,000 people, somebody fired 10,000 people and all that stuff. So that is, I mean, I'm addressing that point only, sir.
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You need to create that tunnel in your brain right now. Imagine, imagine yourself, imagine a pipe, a water pipe, right, wherein the water is flowing. Till this point, the end point was choked up, so there was the entire pipe was filled with water. Today, the end point is opened up and the new influx of water is being putting, put into that pipe.
What eventually would happen is that pipe would be filled with water which can understand what these newer technologies are. It cannot be a fact that we continue with individuals, people in the system which are not able to or not willing to retrain themselves. If it is a business, then people will be needed. So that is a mandatory outcome.
Arvind Singh:
Okay, sir. Okay, sir. Okay. Thank you. Thank you for your time.
Moderator:
Thank you. Next question comes from the line of Atul Daga with Daga Securities. Please go ahead.
Atul Daga:
Hi, sir. Congrats. Sir, just two questions. What are the milestones should investors track over the next four quarters?
Umesh Uttamchandani:
As I just said, there's, I mean, before IPO I fondly remember during the roadshows, I was kind of sharing as to what has been signed by us. And we forecasted a revenue of INR225 crores. Today, by God's grace, we have been able to achieve INR226 crores of revenue. In our business, there's certain predictability as well. So for the next two years, what you need to track us is how much we are adding in terms of the supply that we are committing today.
So if I'm committing a 3 Million square feet of area in the next two years of time frame, how much are we adding on a quarter-on-quarter basis? And probably where are we on that supply which we have signed up? That's one.
Second, the demand that has been contracted for all these 3 million square feet. The moment this supply gets ready, are the clients that we have signed up ready to consume that supply at the same time, or is there a gap in that? So that's the second thing that you should track up on.
The third thing, as my shareholder, what is the leadership team that I'm building in the next two years of time frame? I think that is the third most critical aspect that I should be monitored on. And certain fundamental things, am I ensuring that my cash EBIT remains in the range of 20 to 22 percentage? Am I ensuring that my rent-to-revenue ratio is more than $2.2x$? And am I ensuring that my debt-to-equity ratio is
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less than one? I think these are some of the hygiene things that I should be, you know, tracked up on.
Atul Daga: Got it, sir. Got it.
Umesh Uttamchandani: Did I answer that?
Atul Daga: Yes. Sir, the second question that I had was does management expect FY27 to be more, you know, back-end loaded in terms of revenue recognition?
Umesh Uttamchandani: Back-end loaded?
Atul Daga: Hello?
Umesh Uttamchandani: Sorry, the question was, sir, will the management expect back-end loaded revenue in FY27?
Atul Daga: In terms of revenue recognition. How do you see that for the year 2027?
Umesh Uttamchandani: So, you'll have to help me with the term back-end loaded.
Atul Daga: Can you specify how the revenue recognition is going to differ from FY26, FY27?
Umesh Uttamchandani: So, for the first two quarters this year, we can expect the revenue to be coming in from couple of assets that were in pipeline, which is Capital One and Million Minds and one asset in Pune. So, the first two quarters would have revenue recognized from these few assets. There are few other assets which are in pipeline, which can be going live in the quarter three.
So that quarter I'm assuming to be slightly slower in terms of newer revenue to be added. But these two quarters would definitely be pumped up with new addition of revenues. And last quarter would again get pumped up with the delivery of half a million square feet of asset in Ahmedabad. So that is how currently I would break it up with respect to revenue that we are forecasting.
Atul Daga: Got it, sir. Thank you so much and all the best.
Umesh Uttamchandani: Thank you.
Moderator: Thank you. Next question comes from the line of Vraj Shah with Tycho Ventures Private Limited. Please go ahead.
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Vraj Shah:
Hi, sir. Thanks for the opportunity. So most of my questions have been answered. I just have one question. The revenue that we are projecting for FY27, INR330 crores to INR350 crores. So, can you -- can we expect that the majority of the growth over FY26 will be coming from the Capital One center, the remaining capacity that is required that is pending to be utilized?
Umesh Uttamchandani:
No, sir. So Capital One would be contributing 0.3 million square feet, that is, I mean, on a revenue terms it's anywhere between INR2.6 crores to INR2.75 crores monthly. But on top of that, in the coming three quarters, there are at least four-five assets which are, which are going live. There's one asset on Vaishnodevi, which is Million Minds, which was, the asset was recently inaugurated by our Honourable Home Minister. We have 84,000 square feet there.
Then we have 40 odd thousand square feet in Pune. We have 0.5 million square feet going live in the last quarter of this year in Ahmedabad. Then we have other three-four assets which are on the verge of kind of getting signed up, which are demand-backed, which I'm sure at least couple of them would materialize in the next couple of quarters. And so this is in terms of the existing contractual demand and supply.
Then we have just the supply, which is 1,10,000 square feet that we have signed up with Prestige. That would start the, we'll start the fit-outs from 1st of June. So we can expect the revenue in the month of August mid or end. Then we have 2,00,000 square feet coming up in Pune.
The possession that we'll get up, that is in September or October. So we can expect the revenue to start hitting in the books in the month of January. So there's a strong pipeline that is kind of coming up. Capital One probably I'm assuming would be just like 20-25 percentage of the future supply that's coming up.
Vraj Shah:
Noted, noted. That was helpful. And sir, what would be the approximate interest rate that would be charging on the issuance of the debentures?
Umesh Uttamchandani:
Sorry, what would be the?
Vraj Shah:
What would be the interest rate that will charge in for the -- for the – Yes, Yes, sir, cost for the debentures?
Umesh Uttamchandani:
We are looking to kind of issue debentures in the range of 11 to 12 percentage.
Vraj Shah:
All right, sir. And by when can we see the impact of this coming?
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Umesh Uttamchandani: So, we are earmarking a total issue of INR100 crores. We would be issuing those debentures as and when we are ready with the properties.
Vraj Shah: Okay. All right, sir. Yes. Thank you.
Umesh Uttamchandani: All right. Thank you.
Moderator: Thank you. Ladies and gentlemen, as there are no further questions, we have reached the end of the question-and-answer session. I now hand the conference over to Mr. Umesh Uttamchandani, Managing Director, Dev Accelerator Limited for closing comments.
Umesh Uttamchandani: First of all, thank you so much everybody for joining us today and sharing your questions with us. It gives us strong confidence when our shareholders are actively participating in our growth story. Our focus absolutely remains on ensuring that we are generating value for all our stakeholders. Thank you so much for joining on the call again.
Moderator: Thank you. On behalf of Dev Accelerator Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.
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