01 — At a Glance
The Mumbai Builder That Time Forgot (But Markets Are Remembering)
- 52-Week High / Low₹775 / ₹368
- Q3 FY26 Revenue₹125 Cr
- Q3 FY26 PAT₹33.8 Cr
- TTM EPS₹36.7
- Q3 EPS₹4.80
- Book Value / Share₹326
- Price to Book1.28x
- Debt / Equity0.03x
- Return over 3 years14.7%
- Return over 5 years45.1%
Flash Summary: Marathon just delivered its highest 9-month profit ever at ₹161 crore. Q3 saw PAT of ₹33.8 crore despite a -29% quarterly profit decline (sounds bad, but read on). The stock is at ₹419, sits at P/E of just 13.3x while the industry median trades at 24.64x. They’ve raised ₹900 crore in QIP in July 2025, reduced debt to almost zero, and are merging with entities holding 400 acres of land. Meanwhile, the stock has crashed 21.7% in three months. Welcome to the Mumbai small-cap comedy show.
02 — Introduction
A Real Estate Company That Tried to Stay Small (And Failed at It)
Marathon Nextgen Realty Limited was incorporated in 1978. That’s older than most investors’ investment theses. For decades, it was essentially a boutique Mumbai builder — not DLF, not Lodha, not even Prestige. Just Marathon. A company so under-the-radar that its quarterly earnings would move a grand total of nobody’s needle on Dalal Street.
But here’s the thing about boring, deliberate builders: they compound. For 45 years, Marathon has been quietly doing what Mumbai builders do — buying land, building apartments, selling them, collecting cash, repeating. They own 8.4 million sq ft of completed projects and another 6.2 million sq ft in the pipeline. They’ve finished 100+ projects. And they’ve done all this with almost zero debt, which in Indian real estate is like owning a unicorn that actually exists.
In early 2025, the company board approved something called a “Composite Scheme of Amalgamation and Arrangement” — a fancy way of saying they’re merging with other entities and demerging some parts. On paper, this brings ~400 acres of additional land, opens new geographies (Panvel, Dombivli), and sets up their commercial division with a co-promoter (Adani Realty, who’s becoming the joint owner of their ₹3,400 crore Monte South project in Byculla). By July 2025, they raised ₹900 crore via QIP at ₹555 per share. Everyone assumed the stock would moon. Instead, it crashed 37.6% in six months. Narrative destruction, Indian-style.
Concall Highlight (Feb 2026): Management reported “highest ever nine-month profit after tax of INR 161 crores” and emphasized “robust performance of our Commercial portfolio, complemented by steady contributions from our Residential business.” Post-merger, area sold reached 2.46 lakh sq ft with bookings of ₹628 crore and collections of ₹798 crore in 9M FY26.
03 — Business Model: WTF Do They Even Do?
Build Things. Sell Them. Repeat. Oh, and Leverage Your Land Bank Into Infinity.
Marathon’s business model is real estate development. They acquire land, develop residential and commercial projects, and sell them. There’s no fund management, no PMC (project management consultant) business, no REIT drama. Just: buy plot → develop → sell → repeat.
The portfolio is split roughly 60% residential and 40% commercial by sales value. The residential side includes Monte South (Byculla, premium towers with +₹100 crore quarterly sales), Nexzone (Panvel, township-style, launched Phase 3 with ₹600 crore GDV), and NeoHomes (Bhandup, pre-launch sales machine with >90% sold before occupancy). The commercial side is anchored by Futurex (Lower Parel, Grade A office, nearly 2.24 lakh sq ft ready, selling into strong leasing demand) and Millennium (Mulund, SME-focused, steady absorption).
The magic sauce? Land bank and zero debt. With D/E of just 0.03x, they can deploy capital into projects without leverage anxiety. Most builders carry debt of 0.7–1.5x. Marathon’s balance sheet makes credit analysts weep tears of relief. They’ve deployed ₹145 crore in acquisitions (including a 90% stake in Sunset Spaces, a Dombivli redevelopment entity) and still have ₹750+ crores in investments and other assets.
Residential Segment~60%of sales mix
Commercial Segment~40%of sales mix
Land Bank (MMR)400+acres post-merger
Debt/Equity0.03xpractically debt-free
Fun fact from Feb concall: Management cited a Lower Parel land deal (1.3 acres for ₹448 crore) as evidence of CBD market validation. That’s ₹344 crore per acre. When the market is paying that for raw land, your completed Grade A office tower starts looking like a screaming bargain. Futurex has 2.24 lakh sq ft of ready inventory and “extremely strong” demand in both leasing and outright sale.
04 — Financials Overview
Q3 FY26: When Quarterly Profit Drops But 9M Total Soars. Welcome to Real Estate Accounting.
Result type: Quarterly Results | Q3 FY26 EPS: ₹4.80 | 9M FY26 PAT: ₹161 Cr (highest ever) | TTM EPS: ₹36.7
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 125 | 123 | 117 | +1.26% | +6.84% |
| Operating Profit | 25 | 36 | 42 | -30.5% | -40.5% |
| Operating Margin % | 20% | 30% | 36% | -1000 bps | -1600 bps |
| PAT | 33.8 | 49 | 67 | -30.8% | -49.6% |
| EPS (₹) | 4.80 | 9.35 | 9.80 | -48.7% | -51.0% |
What’s Actually Happening: Q3 profit dropped 30.8% YoY and 49.6% QoQ. Sounds like a death spiral until you realise: this is revenue recognition timing. In real estate, projects get OC (occupancy certificate) in specific months. Monte South Tower A delivered marquee amenities, Tower B got partial OC approval in December. Panvel Nexzone Phase 1 got full OC, Phase 2 progressing. Bhandup projects are pre-launch velocity machines. Q4 (March quarter) will likely see large OC-related revenue recognition. The headline “9M profit at record ₹161 crore” tells the real story. Q3 is just a slower month in the revenue cycle.
💬 If Q3 profit dropped 30% but 9M is at record levels, and management explicitly said booking value is ₹628 crore (post-merger, 9M), what does that suggest about Q4 expectations? Will Q4 unlock the inventory sitting in completed projects?
05 — Valuation Discussion: Fair Value Range
Is 13.3x P/E for a Builder Sitting on 400 Acres Cheap or Just… Unloved?
Method 1: P/E Based
TTM EPS = ₹36.7. Median Realty P/E = 24.64x. Marathon trades at 13.3x. Even if we apply a 20% smallcap discount (justified given market cap of ₹2,825 crore), fair P/E = 19.7x–21x.
→ 18x × ₹36.7 = ₹660 22x × ₹36.7 = ₹807
Range: ₹660 – ₹807
Method 2: Price to Book Value
Book Value = ₹326. Current P/BV = 1.28x. For builders with strong land banks, low leverage, and expanding portfolio, 1.5x–2.0x P/BV is typical (DLF trades 1.8x, Lodha at 1.1x). Marathon’s zero-debt profile deserves 1.6x–1.9x.
→ 1.6x × ₹326 = ₹522 1.9x × ₹326 = ₹619
Range: ₹522 – ₹619
Method 3: DCF Based on GDV Pipeline
Management has ~₹3,000 crore+ in GDV pipeline (Monte South, Panvel Phase 3, Bhandup launches, Dombivli post-merger). Assuming 25% net margin and 3-year realization, NPV of future cash flows with 12% discount rate suggests intrinsic value in ₹550–₹700 range.
Conservative assumption: ₹700 Cr average annual net margin × 2 years = ₹1,400 Cr discounted NPV
Range: ₹550 – ₹700
Consolidated View: All three methods point to a fair value range of ₹522–₹807, with clustering around ₹600–₹700. The CMP of ₹419 is 15–25% below even the conservative end of the range. The discount reflects: (a) execution risk on the merger integration, (b) recent QIP dilution sentiment, (c) smaller market cap = lower institutional interest, and (d) narrative damage from the -37.6% six-month crash. However, at current levels, risk/reward appears asymmetric to the upside.
⚠️ EduInvesting Fair Value Range: ₹520 – ₹800. This fair value range is for educational purposes only and is not investment advice. Please consult a SEBI-registered investment advisor before making any financial decision.
06 — What’s Cooking: Merger, JVs & The Great Land Play
400 Acres + Adani JV + ₹900 Crore Raised = “Something Big Is Happening”
