Knowledge Realty Trust544481Earnings call transcript

Q2 FY27 earnings call transcript: revenue up 13%, distribution of INR1.72 per unit announced

Transcript of the Q2 FY27 earnings conference call.

By ScoutQuest · Thu 5 Nov 2026, 3:20 PM IST · 3 min read

Revenue: INR1,273 crores, up 13% year-on-year
NOI: INR1,140 crores, up 15% year-on-year
Distribution per unit: INR1.72 per unit, aggregating INR764 crores, up 11% year-on-year

Financial performance

Revenue grew 13% year-on-year to INR1,273 crores
NOI grew 15% year-on-year to INR1,140 crores, with NOI margin at 90%
EBITDA grew 13% year-on-year to INR1,094 crores
NDCF for the quarter was INR764 crores, translating to a DPU of INR1.72 per unit, up 11% year-on-year
82% of the distribution for the quarter is tax-exempt or tax-deferred in the hands of unitholders
Gross asset value as of September 30, 2026 was INR68,863 crores, giving a NAV of INR127 per unit, up 7% year-on-year

Distribution

The quarter's distribution is INR1.72 per unit, aggregating INR764 crores. Management said the DPU has grown sequentially in every quarter since listing. Nav was arrived at using a discount rate of 11.46%.

Occupancy and rents

Portfolio occupancy on a value basis reached 94%, a 100 basis point increase during the quarter
Overall occupancy has risen from 91% at listing to 93%, and in-place rents are up 7% year-on-year from INR94 to INR101 per square foot
Mumbai occupancy reached 95%, up 300 basis points from the last quarter; Prima Bay is now 100% leased, One BKC moved from 87% to 96%, and Central Mumbai from 89% to 95%
Hyderabad portfolio is 99% occupied; about 0.6 million square feet has been repriced since listing at an average spread of 41%
Economic occupancy was 88% at quarter end and 89% as of 31st October; the gap with committed occupancy narrowed from 6% to 4%
Bangalore leases at three assets (Exora, Cessna, Softzone) account for about 0.8 million square feet of vacancies, with Global City holding a similar 0.8 million square feet; management said Bangalore occupancy can get closer to 90%

Leasing

Gross leasing was 0.8 million square feet in the quarter, with an average leasing spread of 24% on 0.5 million square feet; first-half gross leasing was 2.2 million square feet
Annual escalations were achieved on 100% of leasing during the quarter
Mumbai re-leasing of 0.6 million square feet in the last six months delivered 28% spreads; 34% of Mumbai rentals expire over the next two and a half years with a 31% mark-to-market potential
The portfolio carries a weighted average mark-to-market potential of 25% until FY30; of the 1.1 million square feet expiring in the second half of FY27, 66% is tied up or under closure at a 23% spread

Development pipeline

Sattva Endeavour is set to become operational in Q3 and Sattva Spectrum in Q4. Management said it is in advanced leasing discussions on both, with Endeavour already 25% pre-leased.

Balance sheet and financing

LTV is 18%, which management described as leaving headroom for inorganic growth
On interest rate sensitivity, a 25 basis point increase was described as about INR30 crores on the INR12,000 crores loan book; on an assumed 50:50 fixed-variable split, a 25 basis point impact on the INR6,000 crores variable book works out to about INR15 crores annually before tax savings
Management said it is in advanced stages of progressing a potential financing transaction that would move the debt mix further towards fixed rate
Following a taxation amendment, MAT credit of INR136 crores is available to be utilised against future taxes, which management expects to be accretive to distributions

Sponsor holding

Management said the sponsor reduced its stake to 54% during the quarter through an OFS. It said it cannot speak for the sponsor, but does not expect another large sale anytime quickly given the size of the transaction completed.

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