Synopsis: Aditya Birla Real Estate is reporting losses even as home bookings and collections remain strong. Goldman Sachs has also increased its stake, raising questions about what the fund may be seeing beyond current profits. Could this Birla company be hiding an opportunity that other investors are missing?
Real-estate companies can look weak on the profit-and-loss statement even while selling thousands of crores worth of homes. Bookings, customer collections and reported revenue are three different numbers. Investors therefore need to look beyond current profit and examine the projects that will generate revenue and cash flow over several years.
Aditya Birla Real Estate Limited, or ABREL, presents exactly this puzzle. The company reported a consolidated loss in FY26, but the additional shareholding data shows that Goldman Sachs increased its stake from 1.21 percent to 1.40 percent around three quarters ago. Buying more of a loss-making developer may appear strange, but ABREL’s operating numbers tell a different story from its reported earnings.
Why Is ABREL Reporting Losses Despite Strong Home Sales?
ABREL recorded total sales from continuing operations of only Rs. 407.2 crore in FY26, down from Rs. 1,218.9 crore in FY25. EBITDA moved from a profit of Rs. 68 crore to a loss of Rs. 307.2 crore, while the loss from continuing operations widened to Rs. 338.1 crore. Profit from the discontinued paper business (Rs. 223.2 crore) reduced the final consolidated loss to Rs. 114.8 crore.
The main reason is the company’s accounting method. ABREL follows the completed-contract method for real estate. An apartment sold during a launch is counted in booking value, and instalments received are counted as collections, but the property revenue generally enters the P&L only when the relevant project or phase is completed.
Most of ABREL’s large developments are still under construction. Niyaara Phase 1 is scheduled for completion in March 2028, Niyaara Phase 2 in March 2029 and Taranya Phase 1 in March 2032. The company is already paying employee, marketing, administrative, finance and depreciation expenses, while much of the revenue connected with current bookings remains outside the P&L.
Source: ABREL Q4FY26 Investor Presentation
The losses are not imaginary. Finance costs stood at Rs. 64.4 crore and depreciation at Rs. 67.5 crore during FY26. However, the accounting mismatch explains why current earnings cannot reflect the scale of residential sales.
Are The Operating Numbers Telling A Different Story?
ABREL’s booking value increased from Rs. 621 crore in FY21 to Rs. 8,136.3 crore in FY26. Collections rose to Rs. 3,340.9 crore, with collection efficiency at 99 percent and 85 percent CAGR since FY21. The company sold 3,130 units covering 5.5 million square feet during the year, compared with 934 units and 1.7 million square feet in FY24.
Q1FY26 had no major launch, yet bookings reached Rs. 423 crore and collections stood at Rs. 545 crore. In Q2, bookings increased to Rs. 890 crore despite another quarter without a new launch, while around 80 percent of launched area had been sold by September 2025.
The real jump arrived in the second half. Birla Pravaah in Gurugram sold out within 24 hours and generated more than Rs. 1,850 crore of presales, helping Q3 bookings reach Rs. 2,536 crore. Q4 then delivered bookings of Rs. 4,288 crore. Arika Phase 2 contributed around Rs. 1,600 crore after selling 97 percent of launched inventory, while Taranya, Trimaya Phase 4 and Punya Phase 2 added around Rs. 952 crore, Rs. 649 crore and Rs. 250 crore, respectively.
This may be the first reason behind Goldman’s interest: ABREL is loss-making in accounting terms, but it is not struggling to find customers.
What Could Goldman Sachs Be Seeing In The Project Pipeline?
An institutional investor may value a developer by estimating the cash that can emerge from projects rather than looking only at current earnings. ABREL had 20 million square feet of ongoing projects with gross development value, or GDV, of around Rs. 31,753 crore. It also had 14.7 million square feet of upcoming projects with a GDV of approximately Rs. 42,105 crore. Combined, the portfolio had revenue potential of nearly Rs. 73,858 crore across MMR, Bengaluru, NCR and Pune.
Source: ABREL Q4FY26 Investor Presentation
As of March 2026, ABREL had booked Rs. 24,507 crore, representing 77 percent of launched inventory. It expected another Rs. 16,587 crore from homes already sold and valued unsold inventory at Rs. 7,246 crore. After deducting estimated remaining project costs, including partner payouts, management calculated surplus cash-flow potential of around Rs. 9,637 crore.
Source: ABREL Q4FY26 Investor Presentation
This surplus is an estimate and will arrive over several years. Still, it explains why a long-term investor may not judge ABREL using current earnings. The possible thesis is that today’s losses are funding a pipeline that may eventually produce larger revenue and cash flow.
The company is also reducing the capital it must carry alone. It uses outright purchases as well as joint ventures and development agreements. IFC invested around Rs. 420 crore in the Thane and Manjri project entities, while ABREL also has a project-level partnership with Mitsubishi. Management described such partnerships as a way to share risk, access long-term capital and learn from global partners.
Is ABREL Facing An Execution Problem?
The thesis would weaken if projects were being sold but could not be constructed. Management stated in both Q3 and Q4 that construction progress remained on track, while Birla Alokya and Birla Navya Phase 1 were completed and delivered during FY26.
ABREL is preparing for a larger construction load. During the Q2 call, management said the team had expanded to more than 700 people and was working with BCG on standardisation, cost control, technology and operational excellence. It said construction activity was expected to scale from around 6 million square feet in the previous year to 50 million square feet.
Source: ABREL Q2FY26 Earnings Call Transcript
There have been delays, but they were mainly connected with launches and approvals. The Thane project was affected by an environmental-clearance issue linked to an NGT ruling. Niyaara Tower C was delayed after an unexpected Supreme Court decision involving BMC land forced ABREL to separate the parcel from its approval layout. These events show that regulatory risk remains real even if physical construction is progressing.
What Could Go Wrong With Goldman’s Bet?
The biggest risk is time. Several major projects are scheduled for completion between FY28 and FY32. Any further approval delay, construction slowdown or cost escalation could postpone revenue recognition and keep the P&L weak for longer.
Debt is another risk to watch. As of March 2026, ABREL had a gross debt of Rs. 5,648 crore. After deducting its cash, mutual fund investments and RERA balances, net debt stood at Rs. 3,204 crore. This was lower than Rs. 3,514 crore in December 2025, but it is still high for a company whose real-estate business is currently reporting losses.
In Q3FY26, management placed net debt-to-equity near 0.8 times. It said part of the borrowing related to construction finance and loans against fully leased rental assets.
The company also depends heavily on premium and luxury home sales. Buyers have responded well to its launches, but demand could slow if prices rise too much, buyers face cash problems or more projects enter the market. The expected cash from these projects could also fall if construction costs, interest expenses or partner payments increase.
Goldman’s increase from 1.21 percent to 1.40 percent should not be treated as proof that the stock will deliver returns. It indicates institutional interest, but the position is still small enough to remain part of a diversified portfolio.
Hidden Gem Or A Long-Dated Realty Bet?
ABREL is not a conventional hidden gem whose profits are already visible but ignored. It is closer to a long-duration real-estate bet. The company has built a strong brand, achieved more than Rs. 8,000 crore of annual bookings, collected money efficiently and created a pipeline across four important housing markets.
Goldman Sachs may be increasing its stake because it sees the gap between the current loss-making P&L and the potential cash flows locked inside ABREL’s sold and upcoming projects.
The investment case depends on one question: can ABREL convert its large bookings and pipeline into timely deliveries, healthy margins and lower debt? If it can, today’s losses may represent the cost of building a larger developer. If it cannot, the same long pipeline could become its biggest risk.
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