- #KoltePatil sees Q3 net loss of 63 crore
- MRPL posts net profit of 392.1 crore in Q3
Hiral Dadia and Hersh Sayta bring you small and midcap stocks to keep up with on 'The SMID Show'. #NDTVProfitLive
- MRPL posts net profit of 392.1 crore in Q3
Hiral Dadia and Hersh Sayta bring you small and midcap stocks to keep up with on 'The SMID Show'. #NDTVProfitLive
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TVTranscript
00:00 We have Rahul Tadele who is part of Kolte Patil's management and he's going to break down some of
00:06 the numbers for us and you know try to take us through what trends are playing out in real estate
00:11 at the moment. Welcome to the Small Enrichment Cap show sir. Yeah good morning. So certainly
00:19 this year has been a phenomenal for the industry and for Kolte Patil as well. So we have done the
00:24 highest ever business development in last 10 years in this year around 4000 crores worth projects we
00:31 have already acquired and having said that there is a strong pipeline of further business development
00:36 opportunities which will get fructified in next few quarters. Also we have launched around 3000
00:43 crores worth inventory in this financial year so I'm planning to launch 2000 in this quarter itself.
00:49 So again a highest ever launches in the history of company. Having said that we have achieved
00:54 again a highest ever numbers in nine months in terms of pre-sales number which is a forward
00:58 looking indicator for real estate company and we are confident of matching or surpassing our 2800
01:05 crores of pre-sales number in this financial year. Also we have you know very strong launch
01:11 pipeline for the next financial year with around 7000 crores worth projects and we are confident
01:17 of those launches as well. So entire business development has been completely done for those
01:23 projects. In terms of the industry yes currently you know the affordability is very good if you
01:29 compare the household income and the EMI's the customers are paying. So across the you know
01:35 it is the best ever in last 10 to 15 years so that is pushing the sales. On top of that you know
01:44 there is a strong desire to purchase a property post-covid so there is a very you know strong
01:49 desire for a good branded development. There are accumulated savings if you see the wage growth in
01:54 last 10 years phenomenal. Again that the property prices you know the betterment is very limited.
02:00 So considering that considering the strong tailwind in the industry the good macroeconomic
02:05 indicators we feel that there is going to be a very strong demand. So currently we feel that
02:11 we are just you know in the first half of the entire cycle and next four to five years are
02:17 going to be a very good for the industry and we are certainly you know trying to capitalize on this
02:23 positivity in the industry. Right so that's a good backdrop of how things are at the moment
02:29 but let me start coming more granular with regard to some of your numbers. Now you've guided for
02:34 roughly an 8000 crore of BD pipeline in FY24. You've done around 33 maybe 3500 odd in the first
02:43 half of the financial year. So 4600 crore to be done H2. Where are we now? Is that still continuing
02:52 to be a realistic target? So we have already done 3500 in H1 and we have just announced around
03:00 550 crores worth deal in Mumbai a couple of days back. So currently we are sitting in 400 crores
03:07 of BD achievement and having said that we are consolidating our position in our flagship project.
03:13 So over there we have already acquired the lands with a GDV potential of more than 2000 crores. So
03:19 if we add that the you know the GDV that we have already achieved is more than 6000 crores.
03:26 But you know in business development there is a you know we follow a very stringent due diligence
03:32 process and sometimes it is very difficult to predict on a quarterly basis because see till
03:38 the time we don't our consultants our internal diligence teams is not confident about their you
03:43 know the entire due diligence we don't proceed with those deals and that's the beauty of this
03:48 company that we whatever the deals that we have closed we have delivered on those projects
03:52 with a good margins. And so there is a very strong pipeline of launches and in next
03:59 few months certainly we are going to announce multiple you know BD closures. So we are confident
04:05 of you know matching this guideline but not maybe in by March but there can be a spillover of you
04:12 know couple of months but we are confident on that. Understood understood and you know what
04:17 would the geographies be like for the new BD that you are doing of course 2000 crore in your
04:23 flagship as well as 2000 crore incrementally going forward where do you expect that to be at
04:29 roughly in terms of geography? See currently our aim is to diversify around 30 percent beyond Pune
04:37 as we speak so from that perspective our in this financial year our focus was on Mumbai and we have
04:45 done a BD of more than 2500 crores in Mumbai in this financial year itself. So in next time these
04:52 projects will get launched in next financial year so diversification target can be comfortably
04:56 achieved. Simultaneously you know in terms of the future or ongoing BD you know progress so there
05:03 will be a combination of some deals which will get announced in Pune and a couple of deals which will
05:09 get announced in Mumbai. Understood a couple of them in Pune a couple of them in Mumbai.
05:15 Let me come to pre-sales therefore as a subset to this where would pre-sales lie as context of
05:23 course first three quarters you've done pre-sales of roughly 2100 crore and where should that
05:29 therefore go given the kind of pipeline you have or the kind of BD you know potential that you have
05:35 over Q4 alone which is roughly 4000 crore from what I understand. So we are planning to launch
05:42 around 2000 crores worth project in Q4 so considering that and considering our you know
05:47 opening inventory of Q4 we are confident of surpassing our or matching our target of 2800
05:53 crores of pre-sales number for this financial year and we are expecting at least 25% CAGR for
05:59 next two years in terms of pre-sales number and we have you know strong backup of launches to
06:06 achieve these numbers. Understood got it and you know with regard to realizations you know I've
06:14 seen that your realizations have gone up quite sharply is that only premiumization what's at
06:21 play here and is that number sustainable or are you now moving into more premiumized projects in
06:28 any case and therefore that's the new normal. So if you see there is a constant efforts to
06:34 improve our you know the realization across project across geographies so if you see there
06:40 is a price rise that we have achieved from 7-8% to 15-17% in last three four quarters and you know
06:49 so we are confident of bettering our price realization going forward as well so we try to
06:55 categorize our inventory into various buckets so difficult to sell moderate to sell and easy to
07:00 sell so for particularly for easy to sell inventory we are or the premium inventory within the project
07:06 so we are charging a good amount of premium and customer are ready to pay that kind of premium
07:11 if we are offering a good product and that is what we have observed and going forward also we
07:16 are confident of bettering our price realization so we are expecting around 7500 kind of price
07:22 realization for the next financial year on account of price realization across projects and also it
07:29 is a combination of you know our better contribution from our premium project as well so it
07:35 is a combination of both price realization betterment in our across projects and you know the
07:41 higher ticket size higher price products are also contributing more. So are you saying that it will
07:47 now stabilize at 7500 or do you still expect some so 7500 from viewer perspective is the realization
07:54 which is rupees per square foot so do you expect that to be maintained or do you expect to continue
08:01 to build on that going forward? See certainly wherever we find an opportunity we will try to
08:07 you know capitalize on those opportunity and this price realization is merely a function of which
08:13 project is contributing more in that specific quarter if my MIG product is contributing more
08:18 so just to give you a instance in this quarter our price realization the calculated quarter price
08:23 realization was more than 7500 but last quarter it was around 6700 so for this nine months it is
08:30 you know on a yearly basis it is a you know the right parameter to calculate price realization
08:36 on quarter on quarter basis there can be ups and downs depending on which project is contributing
08:42 but if you just to tell you about our flagship project which is contributing which is a highest
08:46 selling project in Pune over there we have our price realization has gone up from 4800 rupees
08:52 per square foot to 6400 rupees square foot in last two years and certainly we are planning
08:57 to launch two more sectors in that flagship project at a better price realization so there
09:02 is a constant effort to better price realization without hampering our you know the guidance and
09:07 that is what we are you know continuously doing in order to better our margins. That makes sense
09:13 before I come to margins is there an appetite as well given the higher price realization that
09:18 you are demanding what is the appetite like is the customer still absolutely willing to purchase or
09:25 do you therefore start to feel that at slightly higher price points there are far lower customers
09:32 now that you are catering to. See there are two points one is the affordability if you compare
09:38 the affordability matrix the EMI component against the household income that is one of the lowest
09:45 in last 15 years so because of the affordability customers are willing to invest in the
09:49 you know end-use driven houses and we are confident about this trend going forward.
09:57 There is another element which is a demand supply so inventory replenishment ratio is around one
10:04 at as we speak so which gives us a good you know age to improve our price realization because
10:10 whatever the inventory is getting sold out so the same or maybe a lesser inventory is getting you
10:15 know launched in the geographies where we are currently operating so that is giving us an age
10:20 being a good strong brand in Pune as well as we are established brand in Mumbai as well so
10:25 to a better our price realization. Understood and you know my last question is with regard to margins
10:31 so therefore where do margins lie you are guiding for a roughly 7500 annualized kind of a number for
10:37 price realization where should therefore margins be for cold department? See whatever the you know
10:44 the inventory that we are selling in last you know four to six quarter which will get you know
10:49 the revenue for that will get recognized start recognition will start in FY26 last quarter
10:56 onwards so for that we are confident of you know achieving the EBITDA margins of more than 20 to
11:04 24 percent at a corporate level but till that since it is a growing company our overheads are
11:10 more so because of the because the overheads are getting recognized on a real-time basis
11:16 against the revenue of the past so there is a mismatch of the timing and because of that there
11:22 can be a distortion in margins from a short-term perspective but certainly we are confident of
11:26 maintaining our margins at the project level and which will get fructified in the FY26 onwards.
11:33 Absolutely thank you so much for that Rahul it's been a comprehensive chat with you with regard to
11:39 how real estate is moving as well as how Kolte Patil is doing again congratulations on a strong
11:45 set which you continue to deliver and it was good speaking with you thank you for all that perspective.
11:51 Thank you. Right with that we'll slip into a very short break more on the other side
11:56 stay tuned to the Small and Mid-Cap show.
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15:00 Welcome back you're watching the Small and Mid-Cap show here on NDTV Profit. Thanks for staying tuned with Stick With Earnings.
15:07 We've spoken with the management of Kolte Patil. We'll switch over completely different sector MRPL also disclosed its earnings and we'll try to get some more perspective with regard to some of the numbers disclosed from Sanjay Varma who's the Managing Director at MRPL. Welcome to the Small and Mid-Cap show sir.
15:27 Thanks for inviting us. Good morning to you. Yes sir. Good morning. So, you know, how were the numbers overall in Q3? What do you assess of it? You had one unit which was shut for around half of the quarter. How do you assess the quarter?
15:47 Well, I think if we see the historic Q3 performance, the results are slightly subdued. It is mainly attributed due to the volatility in the market and the main reason for the subdued results are basically because of the inventory loss and overall JRMs were also low.
16:12 So, if you look at the Singapore, if you typically see from Q2 to Q3, it has fallen down roughly around by 3.5 to 4 dollars as far as your question is concerned about the unit shutdown. We had a major shutdown in Q2 that we have already completed in last quarter itself and all units have been put to operation.
16:36 In fact, this quarter we could have a very good physical performance. Our capacity utilization was around 117.7% capacity utilization. So, as far as the physical performance of the refinery is concerned in this quarter, there are no issues. We have done extremely well over there.
16:55 But, results historically, Q3 is a good quarter for refiners including MRPL because of the winter effect in the west part of the world. So, we get good cracks. These are the two reasons which have caused a little subdued result but we are happy to post a profit of around 2459 crores in 9 months.
17:24 And, last 9 months average of last financial year, we were only 730 crores. So, that way if you see, our consolidated profit stands pretty good at this point of time.
17:41 Sure, I take your point. Sir, you did speak about the macro, you did speak about how GRMs are evolving. Where do you see, it's a volatile environment, it's a tough environment where the business is concerned. But, where do you see GRMs really evolving in Q4, if you can have a crack at that? And also, how do you see this impacting your performance in Q4 and where do you assess fully your FY24 therefore?
18:10 Fine, see it's a bit difficult question because prediction of the GRM forward looking becomes extremely difficult because you see the geopolitical situations are slightly unpredictable.
18:26 We have two conflicts in an adjacent area which impacts our supply chain and even the products which are exported are getting impacted out of it. But, looking into the three weeks of January operation, I think the crude has almost in a stable range as of now.
18:49 And, GRMs also look to be in a reasonably good level. And, Singapore GRM, if you see, in the month of January as on this date, is around $3 up than the previous quarter.
19:05 So, we look for holding on our GRM of 9 months, what we have got is close to around 10. So, 9.98 something is our GRM for the 9 months gone in this financial year.
19:20 So, we are optimistic that if something drastic doesn't happen in a geopolitical scenario, we'll be able to hold on to that kind of a GRM.
19:33 Right, so let me talk of demand. Of course, GRMs fully get very volatile, it's a tough one to predict. Where do volumes go from here? You're expecting around 1 MTPA or thereabouts as your target, especially where the retail market is concerned.
19:52 How do you capture that? How is the company prepping for that?
19:56 Well, if I talk about my company, it is a balancing refinery. Our all best endeavors are to saturate the domestic demand to the maximum extent.
20:09 And, being a coastal refinery, whatever is left over fuel is exported. So, this is one of the areas where we have strategized to increase our marketing footprint.
20:24 And, as you rightly put up, 1 million MTPA is our ambition to grow in the next 3 to 5 years.
20:33 And, we have our own MRPL retail outlet brand, HiQ. HiQ denotes high quality.
20:41 And, as of now, we are operational in around 82 retail outlets in Southern India. And, we aspire to touch around 1,000 retail outlets in 3 to 5 years, for which CapEx is already allocated in a phased manner.
21:00 And, the thing which I would like to further add on to you is that MRPL products are well received by our customers through our retail outlet HiQ.
21:11 And, we are doing better with the nearest competitor by around 10 to 15% with respect to the monthly throughputs that are concerned.
21:22 So, we are upbeat with the response that we have got from our customers. But, the limitation is that it takes time to put up those kind of things.
21:33 But, the company is fully focused. Apart from that, we have also put up a marketing terminal in the outskirts of Bangalore.
21:43 And, that marketing terminal will be operationalized in this quarter. We are just stepping into a mechanical completion any time in another 2 weeks or 3 weeks time from now.
21:53 And then, it will be pre-commissioning, commissioning activity will be taken up. And, that will put us at an added advantage because Bangalore, from Bangalore refinery, it is connected through a pipeline.
22:07 So, our cost of placement will become competitive. And, we will be able to cater our first phase of marketing footprint in Southern India.
22:17 For which, we have already advertised around 1,800 retail outlet advertisements floated this year.
22:26 And, we have got a very good response for it. This year also, we do intend to come up with retail outlet advertisements for around 1,000 numbers of retail outlets.
22:40 And, probably next year, another 1,000 retail outlets we are going to put it. The strategy is to first cover the South India and then move upward.
22:48 So, that is what we are looking into it as far as retail marketing footprint is concerned.
22:56 Right. And, with regard to how your gross crude input is evolving, it is at its highest that you have clocked in any single month in the month of December 23.
23:10 Can you see that kind of number now sustained?
23:14 Yeah, definitely. The quarter 4 outlook is that we will be able to repeat the kind of physical performance we delivered in Q3.
23:23 As I told you, our major maintenance is over. Basically, MRPL has three trains of crude units.
23:30 So, these trains will go once in four years for a major overhaul.
23:35 So, last quarter, that is Q2 of this financial year, we have taken a shutdown of our phase 3 refinery.
23:41 And, those units have been put back into operation. And, there are no plant shutdowns in this financial year as of now.
23:50 So, quarter 4 outlook also, I am expecting that it will be in a similar kind of physical performance we will be able to deliver.
24:00 Understood. And, where should you see margins on a normalized basis? I know it is difficult to call it in the short term.
24:08 But, where would you aspire that margin number to be at?
24:12 See, it is very difficult to say because the market in the world apparently is very much sensitive to how the international market behaves.
24:28 So, it is very difficult. But, as I told you earlier, Q4 we are looking for holding on to a GRM of around 9.98 which is our average.
24:39 We are able to foresee that there should not be much of an issue.
24:43 Basis, January, three weeks, whatever experience we have got of the market.
24:51 Understood. Thank you so much, sir. It is a pleasure speaking with you and getting all that perspective.
24:58 That's of course, Mr. Verma, who is the Managing Director at MRPL.
25:03 But, with that, we are completely out of time on this edition of the Small and Mid-Cap show.
25:08 More on the other side. Stay tuned to NDTV Profit.
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