Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press ‘*’ and ‘1’ on their touchtone telephone . If you wish to remove yourself from the question queue , you may press ‘*’ and ‘2’. Participants are requested to use handset while asking a question. Ladies and Gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Akash from Fedge Limited. Please proceed.

Umesh sir, Nikhil sir, Uday sir, many, many congratulations on excellent results this time again. I have 2 questions. I'll break it down in 2 parts. Firstly, the D&B order book is at 228 crores and Furniture order book is at 53 crores. How much of this is going to be for third -party? And how much of this is gonna be for internal capacity?

So, thank you so much, Akash. And yes, we have delivered a strong performance this quarter as well, and we are very confident going forward. With regards to the Design & Build order book and the Furniture order book that you mentioned or what is mentioned by us in the presentation, it largely contributes towards the outside business only. So more than 85% is from the outside business because the majority of the development on the internal work has already been taken care of and largely it is done by the landlords only. So hence, this entire order book that we are talking about is largely, more than about 85%, is from the external business relationships only, Akash.

So, my second question is, sir, the interior D&B division revenue has declined from the previous quarter. It was, I think, earlier about 120-odd crores, which has come down to about 100 crores now. Is this a business which is seasonal? Or are we expecting some order delays? Or what is it?

Yes. I mean, there is a little slight reduction compared to the last quarter, which is Q4. Typically, you would appreciate that our business in the Design & Build is a project-based business. There's no seasonality, which is kind of affecting this business. But what really matters in this kind of division or vertical is basically the projects that are under execution. Now typically, you start getting your projects in the third and the fourth quarter of financial year, then they get under execution. And obviously, you see a great amount of upside during these 2 quarters, which is quarter 3, quarter 4, and you would have probably observed in our financials in the last financial year as well. But so hence, the best way to probably look at this is if you look at it Q -on-Q, Y-o-Y, then obviously, there is a significant growth Q -on-Q, Y-o-Y. And it will continue similarly Q -on-Q every Y-o-Y, every quarter on Y-o-Y basis. And we are very confident that keeping in mind the order book that we already have, which is about more than 228 crores and our execut ional capability that the time line within which we execute, we are very confident of we are an absolutely on track of achieving the growth target that we have of more than around 50% under the D&B segment on a Y-o-Y basis. So absolutely, there is no seasonality involved. Yes, obviously, the market conditions overall, there has been, as you know that overall disruptions in the supply chain, overall disruptions in the material pricing, et cetera, But despite all that, we have kind of continued growing on a Y -o-Y basis, and we believe that we will continue growing this vertical at the kind of targeted growth rate that we have set for ourselves for the current financial year.

Thank you, Thank you so much. This answers my query.

Thank you

Yaa, thank you EFC team and Congratulations for this wonderful result. Sir, I have 2 questions. First question, I will just like to put, I understand your model considers leased centers, owned asset and asset monetization. So how do you look this product mix over the next 3 years? An d how investors should value these 3 models differently?

Absolutely. Thank you so much, Bharat. I mean I think it's a very interesting question, and it is very necessity for all our investors to understand that how we are really contributing in creating better returns and overall capital efficiency through this model. So, number one, what we are doing is that we are not getting our leasing business affected anyway. What we are doing through the asset monetization model is we are basically acquiring certain good assets. So we are doing value acquisitions where the assets which are probably, let's say, 10 -year-old, which are vacant, we acquire them, we refurbish them, we create value in them. And then we lease it out through our own managed office vertical, which is anyway, that's our kind of legacy business, right, and we understand this thoroughly. So what we are able to do is we are able to monetize such assets, create value in those assets and create a greater amount of IRR revenue through this additional kind of revenue stream in a sense, if I may say so, for my leasing business, I myself is the landlord, which otherwise, what would I do, I would have got into a leasehold contract with the landlord, take the property on lease and then I would have operated as a managed office. Here, what I'm doing is I'm acquiring an asset and I am developing them and offering them for a managed office solution and also getting appreciation in the property value because of the grade improvements and beca use of making this asset the yield generating, the rental yield generating asset and hence, create that appreciation. So this is a fabulous opportunity that our management has offered to the investors where investors apart from the leasing revenue that ap art from the leasing profitability and all the integrated business model profitability that we generate, we are also able to capture this asset monetization opportunity and which kind of improves our overall profitability, our overall margins, our overall offering to the investors at large. So I hope I've answered this broadly. But I mean, we don't differentiate as an asset class here, like I said, this is just we are kind of in a sense, some of the assets that we are acquiring on our own book to create this appreciation approach in this.

Understood. This is helpful, sir. Sir, my another question is, I understand we take 18 to 20 months for payback for per seat fit -out cost, which is 5 0K. Could you please give some idea whether 50K is a standard cost or it's for some selected centers or it i s from selected category? Or what is the worst payback period if the cost changes per seats for fit-outs?

No. I mean it's fairly standard. I mean, we have been doing this business for quite some time now. So obviously, it's fairly established for us. And as you also know that, the fit-out cost, in

our case, is usually funded by the landlord. We'd rather say that this is a payback for landlord in that kind of a period. So absolutely, there is not specific to any centers or anything like that. This is a kind of a standard payback period that one can achieve for the fit-out that is done for our businesses. And we also can achieve for fit-outs where we do for our own properties. Within this period only, we are able to kind of achieve the payback. And this remains fairly constant standard across the centers, across cities, across pan-India basis.

Understood. I think this is helpful Sir, thank you so much sir and once again congratulations for wonderful results.

Thank you. Thank you so much.

Thank you. The next question is from the line of Mohan Sharma from Vinayak Capital . Please proceed

Congratulations team EFC. Thank you so much operator. Your Furniture revenue has increased 36% quarter-on-quarter, but your segment profit fell around fr om 75% to around 7%, margin dropped 40% to 7%. What was wrong in the Furniture segment?

There's nothing wrong in the Furniture segment. And in fact, you see what how we look at it this segment right now is this segment is growing continuously. It is kind of stabilizing itself continuously. And if you see year-on-year and quarter-on-quarter, it is improving in terms of the top line. And hence, it is improving its capac ity utilization. And you would appreciate that the moment we kind of come to an optimal capacity level, we will be able to kind of demonstrate the margins which are more stabilized, margins which are more measurable. And I think that is the only situation that we are obviously witnessing in this Q-on-Q results that, yes, if you compare it with some of the earlier quarters where if the volumes are low, where maybe the services were for a specific type of projects, the margins were different and these are services for very different type of projects, the margins could be different. But when we operate at an optimal level and which is what we are progressing towards, I think by end of this year, we should be kind of progressing to an optimal capacity utilizat ion. And at that time, we would be able to kind of come to a position to compare our margins more appropriately. So at this point of time, comparing margins at a quarter -on-quarter level would not be appropriate because, like I said, it is still at not a f ull optimized capacity level, and we are in progress to achieve it sooner within this financial year. And I hope this answers your question.

Like I said, we will be able to kind of give you the real run rate once we are at an optimized level, which is, like I said, more than 6 0-70% capacity utilization. So the real run rate would only be established once we are at that level, and that is the time where we will be able to establish the correct profitability standards. And as we have always mentioned that this business is one of those business which is a value - accretive business for us and where our margins are going to be really well because we have a lot of visibility on the businesses, a lot of different kind of business model strategies that we adopted starting from doing OEM business, doing exports business, doing institutional business, providing customized solutions. All of this is kind of helping us to kind of expand our margin beautifully well. We expect achieving an EBITDA of more than 25% easily under this vertical. And that is a stabilized margin that one can really look at, and this is what we are looking at achieving once we are at an optimized capacity utilization level, sir.

Thank you so much. Thank you so much for the clarification.

Welcome please.

Thank you. The next question is from the line of Fenil Brahmbhatt from Choice Institutional Equities. Please proceed.

Yaa. Hello, so first of all, congratulations on a good set of numbers to team EFC. So I have couple of questions. So what was the average occupancy rate and retention rate for the quarter?

Hi Fenil, yes, the average occupancy rate has been 90% plus, as you can see probably in our presentation also. The operational billing capacities and the inventory that is roughly around 90% occupancy that has been worked out if you look at the numbers that is presented in the presentation also.

Okay. And the retention rate was?

Yes, our retention rate is roughly around 95% plus. I mean we just have a churn of about 4 to 5% which is also mentioned in the presentation that our average tenure for our enterprise client has increased to 51 months, which is even better than what we have achieved for our earlier quarters. So I mean, that itself shows that there is a great amount of retention. And hence, there is a very insignificant portion of churn that is happening at our organization level on the Leasing vertical. So we are very strongly positioned in terms of our stability of revenue stream under the Leasing business.

Okay. On this D&B segment, we have mentioned 2,280 million of current order book. So can we have handy the last quarter's order book? Or by end of last quarter, by end of FY '26, what was this number? So that will give the sense like it increased or decreased or what? So can you have that number with you?

Yes Fenil, you can obviously refer to our Q4 presentation where we have already mentioned that our order book at the end of the quarter 4 was at 135 crore worth of orders on hand, out of which, as we have mentioned, that already executed 100 crores plus of orders, which balance are under execution. And this quarter, we have order book of more than 228 crores, which is also already under execution. So that's on the order book, Fenil.

Okay, okay. Great, great. And then the next question on the guidance side. So what we can expect from the D&B and Furniture segment, like the average or any CAGR growth or margin from this segment? And for Leasing segment, the seat addition of 18,000 to 20,000. So we are confident on that?

100% confident on kind of adding about 18,000 to 20,000 billable seats on the Leasing business. 100% certain about the kind of growth that is happening under the Design & Build segment, which is, like I said, roughly around 50% Y-o-Y. And we are also equally confident of achieving similar kind of growth for our Furniture vertical also, which will bring us to a very optimal capacity utilization level. So we are absolutely confident on achieving the targets that we have set for ourselves for this financial year in terms of the growth targets. In terms of the margins, margin remains stabilized because one of our organization motto is very clear that independent of the growth that we're trying to achieve, we have to ensure that our margin remains stable and rather improves going forward w ith more capacity utilization, with more economy of scales being achieved through the integrated business model that we are working on and with more monetization models or strategies being added to the overall business plan. So absolutely, we are on target on those lines, Fenil.

Okay. Okay, noted. And the last question for you, sir. Like could you share some more color on demerger of EFC and EFC India? Like when we can expect these and the impact of this demerger on our financials as well as the overall business. So that will give more sense.

Yes, Fenil. So this is more of a restructuring mode and more of a consolidation process where we are trying to kind of consolidate our corporate holding structure rather than doing anything on the financial restructuring. So this is more from that point of view, and that is going to help ease understand the overall corporate structure much better. Now at the end of this entire process being executed, what you will see is a company which is a consolidated company at EFC (I) level where you have your Design & Build vertical and the Leasing vertical. What will be left out under a separate subsidiary, wholly-owned obviously subsidiary is an asset holding company because what happens is when we are acquiring assets on our book and when we try to monetize it from a tax efficiency point of view, we try to keep them separately so that whenever we monetize them, there is a good tax efficiency that we can achieve. But doing this demerger, the objective is that we have consolidated all our different verticals, different subsidiaries into one and everything gets consolidated at EFC (I) level, and hence, simplifying the corporate holding structure.

Sometimes people feel it kind of that there are multiple subsidiaries, et cetera. So that entire situation is kind of getting sorted out. Now it is simplified. By doing this restructuring, we are able to kind of consolidate everything under EFC (I) Limited. There will be only EFC (I) Limited, there will be asset holding company and there will be furniture manufacturing because that is our partnership company with our technical partner. So otherwise, everything will be consolidated under EFC (I) Limited, which is already there. But I'm saying, structurally also all these wholly owned subsidiaries are getting aligned at EFC (I) Limited.

Okay, okay. So sir, whatever revenue or whatever income we'll get from this normalizing the asset that will going to have an impact on the overall financial, right? So where we are going to show that, in which category or which line item or particular line item or like how we are going to consolidate that particular amount which we are going to right from the normalizing the asset?

I didn't u nderstand what you're saying about normalizing the assets. But basically, what I'm trying to say is that through this restructuring, we are doing all our Leasing business, Design & Build vertical under EFC (I) Limited. And then there will be furniture manu facturing business and then there is asset holding company where our SPVs, which will hold the assets that we will monetize over a period of time. So it will be EFC (I) Limited and then there will be EFC Limited, which is already there as a wholly owned su bsidiary, will getting kind of merged into the EFC (I) Limited. Hence, there will be only 2 company below EFC (I) Limited, one is the asset holding companies and the second Ek Design Industries Limited So the income will get consolidated at EFC (I) Limited, number one, on a standalone basis. And that will obviously offer a tax efficiency and also offer a simplified corporate structure. So an all income streams would be recorded accordingly, whether it is, let's say, revenue from Leasing, Design & Build or Furniture on a segment basis. And also if there is an asset monetization happening, that asset monetization, if there is a capital gain, then capital gain would be reported accordingly or if there is revenue from leasing activity, it will get clubbed under the Leasing business. So that's how things will get reported or organized through this restructuring that we are doing.

Okay got it got it. That’s all from my side. Thank you so much and all the best.

Thank you

Thank you. The next question is from the line of Ali from EN Capital. Please proceed.

Hi, Good morning, all our EFC. Firstly, congratulations to the team at EFC on the performance. We look forward to seeing this growth trajectory maintained on a quarter-to-quarter basis. Sir, I have a few questions. I hope I can ask them?

Yes. So sir, firstly, the revenue is down by 3% quarter-on-quarter and the EBITDA is also down 14% quarter-on-quarter. But if you see the profit after tax, that has gone up. So can you please explain what has driven this PAT increase despite the weaker operating performance?

First of all, there is absolutely no weaker operating perfor mance at all. The EBITDA reduction is primarily because of the way the Ind AS accounting works. What we have always maintained is the best way to look at our company is to look at the PAT level. And if you see the PAT level, the company has improved its rather profitability. And hence, the reason behind this improvement is obviously the outcome of our integrated business model where we are able to bring so much of efficiency, so much of cost control, so much of economy of scale that we are able to kind of achieve these things. And specifically, if you talk about, the Leasing vertical has performed very well. If you look at the segmental result also. In fact, the Design & Build vertical, despite there is a little reduction in the turnover compared to the la st previous quarter, which is as I've explained in my earlier question, it is largely because of that the Q1 is generally the slow starter relatively. And if you look at my Q1 for the previous years, you will also witness that. But right now, the order boo k already in hand shows a strong visibility going forward. And hence, kind of establishes whatever target that we have set could be achieved in terms of growth on a Y-o-Y basis for this financial year also. So what I'm trying to explain is that if you look at it all these situations and also the incremental businesses under the Furniture business also, all of this coming together and our core business model is enabling us to offer a better profitability, enabling us to kind of improve our margins. If you also look at that we have kind of rationalized our borrowing costs significantly and hence, that is also contributing to the bottom line significantly below. So if you look at from a PAT point of view, that is why there is a significant improvement in the bottom line because there is the rationalization of borrowing costs as well. The borrowing costs, again, as you already may know that it is largely towards the assets that we have acquired that is towards the LAP or the LRD facilities that we generally avail. So what I'm saying is overall, the performance, the positivity on the PAT is contributed through, obviously the better capital deployment strategies, obviously better operating performance because of the integrated business model and also the kind of scale at which that we are operating, hence, brings the efficiencies.

Understood, sir. Understood. Sir, as you said that the Leasing business did well, and obviously the segmental results show that. But the competition from all these competitors, Awfi s, Smartworks, WeWork India, IndiQube and large landlords is significantly increasing. So what is EFC's key differentiator which is keeping EFC on the edge beyond the price? What is that which is beyond price and speed of execution? And how do you look forward for the entire year?

So yes, Mr. Ali, I mean, keeping out price and speed of execution out of the equation is very difficult. And that is one of the key differentiators, obviously, which we drive and which has been our kind of one of the kind of business model that always has been. Listen, competition is

always there in every businesses. I mean and without competition, you also do not thrive to grow further, and we really thrive with the competition around. And fortunately, if you see, al l our competitors have adopted a very unique business model, and we have our own model, which is an integrated business model, which is a real estate-as-a-service business model. As Mr. Uday Vora would have explained in his speech, that we are able to make us more accountable and kind of offer us as a complete solution or a complete package to our customers where we are giving them a complete turnkey solutions for any leasing requirements that our customers are looking at, where they don't have to really look at whether, okay, if I have to take an asset and get it leased or whether I have to get it designed and build or whether I have to source my furniture, everything is happening at one place. So I think what is our moat in this entire business, if yo u see, one is this integrated business model, which kind of brings that economy of scale, that brings that economy of efficiencies, bring the kind of the abilities where we are able to improve our margins overall. And what we are also able to do is that ou r presence across these multiple cities and kind of able to kind of make the model harder to replicate for others because we are just not just doing only a pure leasing or co-working platform, but we are into enterprise-led revenue businesses where we have Design & Build, Furniture manufacturing and Leasing revenue all coming together and kind of making an integrated 3 multiple revenue streams that is enabling us to kind of grow going forward. So what I'm trying to say is that the moat comes if you look at it in terms of the revenue streams that we have developed, which is 3 different revenue streams. Not a single revenue stream with cost centers, but 3 different revenue streams with 3 profitable businesses that verticals that we have developed, number one. Number two, obviously, the integrated business model and hence the economy of scale. And number three is obviously the price and the execution capability. And number four is certainly the design capabilities. And number five is certainly the fit -out cost optimization that we've been able to kind of achieve over the years. So these are the key differentiators for us in the market. And we believe that this will and further, lastly, I mean, sorry to miss out, but lastly to add, which we have kind of mentioned this time in our presentation also that our ability to do the asset monetization and hence, achieve the capital appreciation as an additional source of revenue for our investors and hence, that adds further to our overall moat that we bring as an organization.

Absolutely, sir. Interesting. Last one, sir, if you allow me?

Please go ahead.

Yes. So I mean the city concentration is obviously there in the presentation. If you see, we have kind of done a regional bifurcation of how our presence is kind of across India. Yes, right now, we are heavy on the Western India because that's been our where we started our journey from. But we are very strongly going forward, we are kind of expanding our presence across India on an equal footing level. If you look at -- now we are more than 15% in North India. We are more than 15% in Southern India. And we are also continuously growing in the Eastern India. So I think with this expansion, then our focus will also remain in those 3 city quarters of North and South. Let's say, in North, you have Gurgaon, Noida, Delhi and on South, you have Hyderabad, Bangalore, Chennai because those are those 3 cities we are very focused. West India, I mean, from business -wise, it's always been the strong locations where we have locations like Bombay, Pune, Ahmedabad, Indore, to some extent, I would consider even Rajasthan, so the Ja ipur, all of these locations are those business cities and they are obviously thriving. And hence, our presence would also increase on those cities. Right now, we are focused on the 10 major cities, which is 3 in the North, 3 in South and about 3 in West, which is Mumbai, Pune, Ahmedabad and a couple of them in the eastern side, which is obviously Kolkata going forward. So that's where our presence is right now, and that's where we are also looking at expanding ourselves.

Yes Sir, Congratulations Sir and we will look forward.

Thank you so much.

Thank you. Ladies and gentlemen, we will take that as the last question for today. I now h and the conference over to Ms. Nidhi from MUFG Intime for closing comments. Over to you, ma'am.

Thank you. I would like to thank the management for taking the time out for the conference call today and also to all the participants for joining this call. If you have any queries, feel free to contact us. We are MUFG Intime, Investor Relations Advisors to EFC India Limited. Thank you so much.

Thank you.

Thank you on behalf of EFC India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.