Nirlon - Nirlon
Financial Performance
Revenue Growth by Segment
Total income for H1-FY26 reached INR 3,359 Mn, a 4.8% increase YoY. This was driven by License Fees of INR 2,916 Mn (up 3.3% YoY) and Other Operating Income (CAM) of INR 367 Mn (up 6.4% YoY).
Geographic Revenue Split
100% of revenue is generated from Mumbai, India, specifically from Nirlon Knowledge Park (NKP) in Goregaon East and Nirlon House in Worli.
Profitability Margins
Profitability showed significant variance due to tax changes. H1-FY26 PAT margin was 61.36% (INR 2,061 Mn) compared to 33.18% (INR 1,063 Mn) in H1-FY25. This 93.9% increase in PAT was primarily due to a one-time reversal of deferred tax liability amounting to INR 69.50 Cr upon transitioning to the New Tax Regime.
EBITDA Margin
EBITDA margin for H1-FY26 remained stable at 78.83% (INR 2,648 Mn) compared to 78.84% in H1-FY25, reflecting consistent operational efficiency in managing IT park assets.
Capital Expenditure
The company has no major capital expenditure plans in the near future as Phase V (1.16 Mn sq. ft.) was completed and capitalized in December 2021. Historical capex focused on the 3.06 Mn sq. ft. development of NKP.
Credit Rating & Borrowing
CRISIL reaffirmed its 'CRISIL AA+/Stable' rating in November 2025. Total borrowings stood at INR 1,146.6 Cr as of September 30, 2025, with an adjusted interest coverage ratio of 4.53x in FY25.
Operational Drivers
Raw Materials
As a real estate leasing company, Nirlon does not consume traditional raw materials. Its primary operational costs are Common Area Maintenance (CAM) and utilities, which grew 6.4% to INR 367 Mn in H1-FY26.
Import Sources
Not applicable as the company provides IT-ITES real estate services rather than manufacturing goods.
Key Suppliers
Not disclosed, but primary vendors include facility management, security, and utility providers for the 23-acre NKP campus.
Capacity Expansion
Current chargeable area is 3.08 Mn sq. ft. (NKP: 3.06 Mn, Nirlon House: 0.05 Mn). There are no current plans for further capacity expansion beyond the existing five phases.
Raw Material Costs
Total expenses for H1-FY26 were INR 711 Mn, representing 21.1% of total income, a 4.9% increase YoY, largely tracking revenue growth.
Manufacturing Efficiency
Operational efficiency is measured by occupancy, which stood at 98.6% in Q2-FY26. Chargeable area efficiency is approximately 80% of constructed area.
Logistics & Distribution
Not applicable; revenue is derived from on-site leasing of commercial space.
Strategic Growth
Expected Growth Rate
5%
Growth Strategy
Growth is achieved through scheduled rent escalations (typically 15% every 3 years) and renewals at market rates. In Q2-FY26, 2,60,000 sq. ft. was licensed/taken up by marquee tenants like Deutsche Bank and Barclays.
Products & Services
Leave-and-license of Grade A IT-ITES and commercial real estate space in Nirlon Knowledge Park and Nirlon House.
Brand Portfolio
Nirlon Knowledge Park (NKP) and Nirlon House (NH).
New Products/Services
No new products; focus remains on maintaining high occupancy (currently 98.6%) and managing the existing 3.08 Mn sq. ft. portfolio.
Market Expansion
No current plans for geographic expansion outside of the Mumbai market.
Market Share & Ranking
Nirlon is a significant niche player in the Goregaon micro-market of Mumbai with a 3.06 Mn sq. ft. Grade A IT park.
Strategic Alliances
Majority owned by GIC (Government of Singapore Investment Corporation) with a 63.9% stake through Reco Berry Pvt Ltd.
External Factors
Industry Trends
The industry is seeing a flight to quality with demand for sustainable, 'Occupier Friendly' Grade A spaces. Nirlon is positioned as a premium provider with 98.6% occupancy despite broader market volatility.
Competitive Landscape
Competes with other Grade A commercial developers in Mumbai like DLF, Blackstone-backed REITs, and Brookfield.
Competitive Moat
Moat is based on prime location (Goregaon East, near Western Express Highway), marquee tenant base (JP Morgan, etc.), and a low LTV ratio (<20%), which provides high financial stability.
Macro Economic Sensitivity
Highly sensitive to the growth of the Indian IT and BFSI sectors, which drive demand for Grade A office space in Mumbai.
Consumer Behavior
Shift toward hybrid work models is a monitorable, though Nirlon's high occupancy suggests continued demand for its specific high-quality campus environment.
Geopolitical Risks
Low direct risk, but global slowdowns in the banking sector could impact the expansion plans of its primary multinational tenants.
Regulatory & Governance
Industry Regulations
Subject to Maharashtra state land laws, BMC regulations, and IT/ITES policy benefits. Operations must comply with the Leave and License regulatory framework.
Environmental Compliance
Focus on sustainability for NKP is a key strength, though specific ESG spend in INR is not disclosed.
Taxation Policy Impact
Transitioned to the New Tax Regime in Q2-FY26, resulting in a lower concessional tax rate and a one-time deferred tax reversal of INR 69.50 Cr.
Legal Contingencies
Not specifically disclosed in the provided financial summaries, though the company follows Ind AS accounting standards.
Risk Analysis
Key Uncertainties
Refinancing risk is a key uncertainty due to a bullet repayment of ~75% of debt (approx. INR 860 Cr) due in fiscal 2033.
Geographic Concentration Risk
100% of assets and revenue are concentrated in Mumbai, making the company vulnerable to local real estate market downturns.
Third Party Dependencies
High dependency on a few marquee tenants; one tenant alone previously occupied 15% of the total leasable area.
Technology Obsolescence Risk
Low risk for physical real estate, but requires ongoing maintenance to meet 'Grade A' standards for global tech/finance firms.
Credit & Counterparty Risk
Low risk due to the high credit quality of multinational tenants like JP Morgan and Deutsche Bank.