Nirlon Q4 FY26 Earnings Call — Analysis (NSE: NIRLON)
Nirlon Q4FY26 PAT surges 32% YoY to ₹71 Cr, occupancy at 99.7%, proposes ₹15/sh final dividend, and adopts new tax regime
The take
Total Income (FY26) ₹683 Cr ( +6% YoY ) , Q4FY26 +9% .
Results
Q4FY26 total income ₹174 Cr (+9% YoY), EBITDA ₹136 Cr (+8% YoY), PAT ₹71 Cr (+32% YoY); FY26 PAT ₹346 Cr (+59% incl. one-time deferred tax re-measurement; ex-item +27% YoY)
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Total Income (Q4FY26) | ₹174 Cr | +9% | yoy · Q4FY26 |
| EBITDA (Q4FY26) | ₹136 Cr | +8% | yoy · Q4FY26 |
| EBITDA Margin (Q4FY26) | 77.85% | point_in_time · Q4FY26 | |
| PAT (Q4FY26) | ₹71 Cr | +32% | yoy · Q4FY26 |
| Total Income (FY26) | ₹683 Cr | +6% | yoy · FY26 |
| EBITDA (FY26) | ₹535 Cr | +5% | yoy · FY26 |
| EBITDA Margin (FY26) | 78.36% | point_in_time · FY26 | |
| PAT (FY26) | ₹346 Cr | +59% | yoy · FY26 · Includes one-time deferred tax re-measurement ₹69.5 Cr |
| PAT (FY26) ex-item growth | 27% | +27% | yoy · FY26 · Excluding ₹69.5 Cr deferred tax re-measurement |
| Occupancy (Q4FY26) | 99.7% | point_in_time · Q4FY26 · Combined NKP + Nirlon House | |
| Dividend per share (FY26) | ₹30 | +₹4 | yoy · FY26 · Increased from ₹26 to ₹30 |
| Cash & Bank Balance (Mar-26) | ~₹300 Cr | point_in_time · point_in_time · As of 31 Mar 2026 | |
| Fixed Deposits (Mar-26) | ~₹287 Cr | point_in_time · point_in_time · As of 31 Mar 2026, earning ~5.5% | |
| HSBC Debt Outstanding (Mar-26) | ~₹1,150 Cr | point_in_time · point_in_time · As of 31 Mar 2026, cost 7.75% | |
| NKP Valuation per sq ft (Mar-26) | ₹6,650 | point_in_time · point_in_time · Mar-25: ₹6,500 |
Key themes
Full occupancy, dividend step-up, tax optimisation
Operational commentary
- Combined NKP and Nirlon House occupancy hit 99.7% in Q4FY26, with only ~8,000 sqft vacant
- No significant lease renewals expected in FY27; next major renewal cycle is in FY27-28, and negotiations have not begun
- Management's primary focus is on operational excellence and enhancing licensee experience to command higher license fees upon renewals
- No early tenant exits currently visible
- Nirlon House monetisation remains stalled due to multiple (12-13) owners; no significant progress to report
- Company opted for the new tax regime under Section 115BAA from Q2FY26, resulting in a one-time deferred tax re-measurement gain of ₹69.5 Cr
- Dividend per share raised from ₹26 to ₹30 for FY26; management signals intent for further dividend growth but stresses consistency
- Cash of ~₹287 Cr parked in fixed deposits earning ~5.5% while HSBC debt costs 7.75%; management has no concrete plans to prepay debt, citing existing loan agreement terms
- HSBC loan repayment: 5% in May 2027, then 5% annually for five years, and a 75% bullet payment at the end
- Brookfield's shareholding crossed 10%; management declines to comment on promoter reclassification
Analyst Q&A
Q. What is the plan for the remaining ~₹165 Cr cash after the ₹15 final dividend? Could there be a special dividend?
We cannot speculate at this point in time whether we will pay a special dividend or what we will do. When we do something, we will inform immediately.
Q. Why keep ~₹287 Cr in FDs at 5.5% while paying 7.75% on the HSBC loan, resulting in a clear loss?
No concrete decision or significant plan for this particular... there is no concrete decision or significant plans in this regard. As and when there is something, of course, we will let you know.
Q. Is buyback an alternative option to return cash more tax-efficiently?
Not at this point in time, for various reasons.
Q. Does the move to the new tax regime mean REIT conversion plans are now shelved?
We looked at potential efficiencies in new structures and felt this was the most efficient way to go now. We don't want to preclude any potential benefit; if we do something in the future, we will see then.
Q. Do you have any visibility on potential early tenant exits?
No, not right now. Not anything significant that we have been told.
Q. What is the repayment schedule for the HSBC loan?
5% in May 2027, then 5% annually for five years, then a 75% bullet payment at the end.
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