29-Oct-2026 21:54:04
HORIZON INDUSTRIAL PARKS Q2 FY27 CONCALL: TARGETS 6.5 MILLION SQ FT LEASING & 6 MILLION SQ FT DEVELOPMENT IN FY27; ₹1,000 CR+ CONTRACTED REVENUE RUN RATE
• FY27 Leasing Guidance: Management reiterated its target of 6.5 million sq ft of leasing, up approximately 30% YoY. H1 leasing reached 4.4 million sq ft, achieving nearly 68% of the annual target. • FY27 Development Guidance: Targets completion of 6 million sq ft during FY27, with 2.7 million sq ft already delivered in H1. Management remains confident of achieving the target. • Operational Area: Expects operational portfolio to reach approximately 35 million sq ft by FY27-end, compared with around 31.5 million sq ft currently. • Contracted Revenue: Annual contracted revenue run rate has crossed ₹1,000 Cr, reaching approximately ₹1,004 Cr, providing visibility for future rental income. • Rental Growth: Existing leases carry approximately 5% annual contractual escalations. Combined with re-leasing opportunities, management expects embedded rental growth of around 7–8%. • Re-Leasing Spreads: H1 re-leasing of 1.2 million sq ft achieved approximately 12% positive rental spreads, reflecting strong demand for institutional-grade industrial properties. • Occupancy: Stabilized portfolio occupancy remains approximately 94%. Management expects recently completed vacant properties to typically secure tenants within 6–9 months. • Future Development Pipeline: Fully paid land bank offers approximately 29–30 million sq ft of additional development potential, supporting expansion over the next 4–5 years. • In-City Logistics Expansion: Management expects approximately 6 million sq ft of in-city developments over the next 3–4 years, creating a major additional growth opportunity. • In-City Rental Premium: In-city properties are expected to generate rental rates approximately 2–3 times those of conventional large-format industrial parks. • Pune In-City Project: First multi-storey in-city logistics asset in Pune is targeted for delivery in Q4 FY27, with management expecting its first lease signing during Q3 FY27. • Rental Realisations: New large-format leases are generating approximately ₹30–35 per sq ft versus the existing portfolio average of ₹27. Management expects the portfolio average to move toward the high ₹30s to low ₹40s as in-city assets scale up. • Value-Added Services: Rooftop solar, worker accommodation and hospitality-related services could contribute approximately 5–10% of future revenue over time. • Solar Expansion: Current rooftop solar capacity is approximately 38 MW, including projects under implementation. Management highlighted potential for significantly higher capacity, subject to regulatory approvals. • Solar Capex & Returns: An incremental 10 MW rooftop solar project is expected to require approximately ₹42–43 Cr, with management targeting an IRR above 20% on incremental capex. • Debt Reduction: Net debt declined to ₹2,765 Cr as of September 2026 from ₹4,967 Cr in June 2026, following IPO proceeds and debt repayments. • Finance Cost Savings: Refinancing of a ₹635 Cr facility reduced borrowing costs by approximately 71 bps. Management expects greater benefits from deleveraging in subsequent quarters. • Cash Profitability: H1 FY27 pro forma cash PAT stood at approximately ₹248 Cr, after adjusting for non-cash depreciation and the benefit of reduced interest costs. • Future Acquisitions: Management plans to restart its acquisition engine over the next 1–2 quarters, supported by internal cash generation and available debt capacity. • Industrial Demand: More than 80% of H1 leasing came from industrial customers, supported by manufacturing expansion, China Plus One, supply-chain diversification and domestic consumption. • Q3 Leasing Outlook: Management indicated that lease closures may be seasonally slower in Q3 due to festive holidays and global year-end shutdowns, although underlying demand remains strong. • Key Risk: Ongoing CWC litigation remains unresolved. Management stated that development activity can continue under the existing interim court position, but the final outcome remains uncertain.
LEADING LEASING FINANCE AND IN