Takeaways from Q3 call: A lot of activity going on & to track / P&L accounting profitability will take 4-6qtrs to be +ve / Cash flow already is +ve
Core Strengths
Asset Monetization & Inventory Liquidation
Debt & Capital Strategy
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Key Project Launches & Pipeline
Financial Guidance & Operational Targets
Risks & Discrepancies to Track
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Can anyone see EMBDL in Zerodha? It disappeared for me. Any news?
EMBDL is undergoing an Insolvency Resolution Process (IRP) as per the Insolvency and Bankruptcy Code (IBC). As such, the exchanges have put the stock under Additional surveillance mechanism in which the stock will trade only on the first trading day of the week starting April 13, 2026.
Check this support article for more information on Insolvency Resolution Process (IRP) and the surveillance actions taken by the exchanges.
The shares held by you will not be visible on Kite on days other than the first trading day of the week but you can check them on Console. Do refer to this circular to know more.
Regards,
Team Zerodha
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The NCLAT overhang is now a thing of the past! Embassy_NCLAT_Order
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Thoughts on recent warrant issues
| Direction | Positive — converts high-cost promoter debt to equity, lowers cost of capital, signals promoter conviction at a premium |
| Catch #1 | Circular — no new external capital; promoter pays themselves back |
| Catch #2 | Price of 111.51 vs market 62.88 — a premium anchored to pre-insolvency-scare prices, creating possible overhang |
| Catch #3 | Conversion not guaranteed — history shows lapsed warrants & forfeited upfront payments |
| Catch #4 | Only fixes part of the problem — Bigger issue of 700 crore Blackstone debt (18% ROI) unresolved |
| Catch #5 | Doesn’t fix operating losses/cash burn — a balance-sheet, not an operating, solution |
The key question as an investor:
- Is the promoter paying the premium because the asset is genuinely worth that (making the market cheap), or is this a self-referential transaction that converts internal debt into equity at an aspirational price?*
- The structure is constructive for the balance sheet but does not address the company’s operating losses, its high-cost Blackstone debt, or its cash-burn cycle — and the “premium” pricing carries an element of the promoter marking up their own investment.
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It is unlikely that any promoter would convert a significant portion of equity at an aspirational price and simultaneously commit to paying an additional sum exceeding ₹100 crore. Embassy, as a well‑established real estate group with a strong reputation, has consolidated its various real estate entities to position this as its primary business. The management’s initial priority was to resolve the issues created by the previous administration, as highlighted during the concall. Having addressed those challenges, they have now shifted focus toward launching new projects. The key factor will be their ability to deliver on commitments related to pre‑sales and cash collections over the next couple of years.
Regarding BlackRock, while the interest rate is relatively high, such structuring is not uncommon in real estate transactions and therefore may not be a major concern. Moreover, given BlackRock’s role as an investor in the company, management had indicated in the concall that conversion could take place at a later stage.
The Q1F27 call was very informative, thanks to candid communication from management and some fantastic questions from the participants. Anyone looking at the company should read that.
Given the 57K Cr GDV and 30-35% EBITDA realisation over the next decade, there’s a significant value out there - despite the poor operating cash flows, next 4-6 quarters of pain, large part of land bank being actually junk - the reasonable market cap (assuming GDV replenishment over the next decade and current net debt of 3300 Cr) is roughly 5800-8700 Cr via DCF
Incidentally Embassy Mcap today is 8700 Cr (talk about markets being efficient!!!) - so fairly valued by all means.
Let’s revisit this in 6-8 quarters once all the fire fighting is done. Revisit in August 2028!
3 Likes
Embassy Developments Ltd. — Deep Value & Pipeline Breakdown:
Massive Cashflow Pipeline:
Sold receivables + inventory (ongoing projects): ₹19,550 Cr
FY27 launch pipeline GDV (owned): ₹13,300 Cr
Future developments GDV: ₹23,500 Cr+
Expected Net Surplus: ~₹30,000 Cr + 3,251 acres debt-free land bank vs M-Cap of ~₹8,900 Cr.
Key Monitorables: Quarterly presales, cash collections, project execution speed, and debt management.
Promoter Alignment: Promoters converting debt/warrants into equity at ~₹111.51 per share (vs CMP ₹64), signaling strong insider conviction.
Disclaimer: For educational purposes only. Not investment advice. I may hold position. Do your own research before investing.
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