Max estates Limited has informed stock exchanges about an adverse ruling from the Income Tax Appellate Tribunal (ITAT) affecting its subsidiary Max Square Limited. The tribunal dismissed the subsidiary's appeal in a tax dispute involving ₹63.77 lakh of interest income from the financial year 2020-21.

Tribunal Order Details

The Income Tax Appellate Tribunal, Delhi Bench, pronounced its order on February 25, 2026, in case ITA No. 4100/Del/2025 for Assessment Year 2021-22. The tribunal upheld the decision of the National Faceless Appeal Centre, rejecting Max Square Limited's challenge to the tax treatment of interest income.

Core Tax Dispute

The disagreement stems from the accounting treatment of interest income worth ₹63.77 lakh earned by Max Square Limited during FY 2020-21. The subsidiary had netted this interest income against interest costs incurred on loans from banks and financial institutions during the construction phase of a project. This amount was subsequently capitalized as part of the overall project cost.

However, tax authorities challenged this approach, arguing that the interest income should be treated and taxed separately under the category of "Income from Other Sources" rather than being offset against project-related interest expenses.

Company's Position and Impact Assessment

Max Estates Limited has evaluated the tribunal's decision and concluded that it will not have a material impact on the company's financial position, operations, or other business activities. The parent company emphasized that the subsidiary is actively reviewing available legal remedies.

Legal Recourse Options

Max Square Limited is considering appealing the tribunal's decision before higher appellate authorities. This development follows previous communications from Max Estates dated June 5, 2025, and January 1, 2026, indicating the company has been tracking this matter closely throughout the legal proceedings.

The company disclosed this information under Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015, ensuring transparency with stakeholders regarding significant legal developments affecting its subsidiary operations.

Max estates Limited delivered robust Q3 FY26 results, achieving pre-sales of over INR 1,900 crores in Gurugram, marking a significant milestone in the company's growth trajectory. The strong performance was anchored by the successful launch of Estate 361 and exceptional commercial leasing momentum across its portfolio.

Estate 361 Launch Drives Residential Success

During Q3 FY26, Max Estates launched Phase 1 of Estate 361 in Sector 36A, Gurugram, representing India's first forest-anchored residential community. The project spans 18.23 acres with a Gross Development Value of approximately INR 2,500 crores.

The development features over 2,50,000 sq ft of forest greens, including 1,000+ indigenous trees and 50+ species of climate-resilient flora specifically curated for Gurugram. Estate 361 will also include Senior Living Residences managed by Antara Senior Living Limited and an Antara Integrated Wellness Centre, creating a comprehensive wellbeing ecosystem.

The average price realisation at Estate 361 currently stands at INR 22,000 per sq ft, reflecting a significant premium to both the prevailing micro-market rates and the company's earlier project, Estate 360.

Commercial Portfolio Demonstrates Strong Momentum

Max Estates secured a landmark commercial leasing agreement during the quarter, signing a binding LOI for pre-leasing approximately 200,000 sq ft at Max District, Sector 65, Gurugram. This transaction will deliver gross rentals of over INR 270 crores over the lease period, concluded three years ahead of project completion at a 35%+ premium to prevailing micro-market rentals.

The company's operational commercial assets—Max Towers, Noida; Max House Phase I & II, Okhla; and Max Square, Noida—continue operating at 100% occupancy. The overall commercial portfolio is positioned for annuity rental income potential of over INR 723 crores on a 100% basis across delivered, under-construction, and acquired assets over the next five years.

Project Pipeline and Development Updates

Max Estates continues advancing its under-construction residential offerings. Estate 128, Noida has achieved 100% sales with pre-sales of INR 2,734 crores and collections of INR 1,094 crores. Construction progress shows work on the 27th/28th/30th floor slab for Phase 1 and 1st floor slab for Phase 2.

Estate 360, Gurugram recorded pre-sales booking value of INR 4,831 crores with collections of INR 1,110 crores. The project has completed ground floor slab for four out of six towers, with balance towers expected to complete by February 2026.

The company secured development rights for a 7.25-acre prime land parcel in Sector 59, Gurugram on Golf Course Extension Road, with development potential of 1.3 million sq ft and GDV potential exceeding INR 3,000 crores. Launch is targeted for Q4 FY27.

Financial Performance and Strategic Initiatives

For 9M FY26, Max Estates reported consolidated revenue of INR 150 crores with consolidated EBITDA of INR 27 crores. Consolidated PBT stood at INR 29 crores and PAT at INR 20 crores. Total leased area as of December 31, 2025 reached 1.23 million sq ft.

Lease rental income from Max Towers, Max House, and Max Square increased 38% year-on-year to INR 115 crores in 9M FY26. The company maintains a strong balance sheet with cash and cash equivalents of INR 1,284 crores and net debt of INR 414 crores as of December 2025.

Sustainability and Future Outlook

Max Estates initiated solar power sourcing for its Max Square project, marking the first step toward achieving 50% renewable energy transition by 2030. This aligns with India's climate pledge to meet half the nation's energy needs through renewables by 2030.

Post Estate 361 Phase 1 launch, the company has secured a launch pipeline with GDV potential of approximately INR 14,500 crores. Max Estates aspires to add 2 million sq ft in the residential segment and 1 million sq ft in the commercial segment annually.

Earnings Conference Call Recording Available

Max Estates has submitted the audio recording of its earnings conference call held on February 10, 2026, to discuss Q3 FY26 financial results. The company filed the submission with BSE Limited and National Stock Exchange of India Limited under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The conference call was conducted at 10:00 A.M. (IST) and the audio recording is available on the company's website for stakeholder access.