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00:00Abhishek Kapoor, Group CEO, Purvankara Limited, you know, we'll continue our chat, Abhishek,
00:08you know, I want to quickly first off understand from you, firstly, welcome, good morning.
00:15Let me understand from you how demand is playing out currently, because the last we spoke,
00:21you spoke about very robust demand, you spoke about execution being something that you all
00:27are looking at very actively.
00:29And that's basically the focus has shifted towards execution, given the kind of demand
00:33that there is.
00:35Is demand really holding up?
00:37And how is pricing shaping up for you?
00:40Harsh, as an industry, I can share with you, I think demand is continuing to hold up.
00:47The challenge really is on the supply side, as I mentioned earlier, to bring in new launches
00:52and the supply still continues to be a challenge in most of the markets that we operate in.
00:59I would expect now with the festive season that the demand will be better than the first
01:04quarter.
01:05And then going forward, the third and the fourth quarter definitely will be a better
01:10quarter as it is, you know, annually, because that's the general real estate cycle, especially
01:15in residential for us.
01:17Most of the demand really comes in the third and fourth quarter.
01:20So I think the industry is looking forward to the festive season.
01:24Right.
01:25Abhishek, Mahima also joining in, you know, you have a couple of flats, a couple of flats
01:31in pipeline.
01:32I want to understand what is happening on the execution side of things.
01:37And overall in FY25, what kind of overall execution timeline are you looking at?
01:42Mahima, thank you.
01:44So you know, as far as execution is concerned, last quarter we delivered about a million
01:49plus square foot.
01:50Our goal this year is to deliver over a four million square foot.
01:54And that's a target we are working towards.
01:57And we believe that as we increase our launches, for example, last year we sold more than seven
02:03million square foot.
02:04This year, we are launching about 17 million square foot of which about 12 million square
02:09foot is new launches and four million pluses from the previous phases of previous launches.
02:18So we expect that the delivery will continue to pick up in the coming years and that continues
02:23to be our focus.
02:24And of course, that is resulting into the cash flows and collections, because if you
02:28see now our quarterly run rate of collections has gone over a thousand crores and we will
02:33continue to see that trend improving.
02:36Got it.
02:37And how is the execution pipeline looking?
02:40Is Q2, Q3, Q4 pretty much balanced in terms of execution or do you believe that a lot
02:45of it will be back-ended towards second half of this year?
02:49Look, the first quarter, as I said, over a million square foot.
02:53We are expecting the second quarter to be pretty much similar in nature.
02:58A lot of delivery will happen in the fourth quarter for sure.
03:01Third quarter, we will see where we land because it's also a question of how many occupation
03:09certificates we are able to get upon completion, because we have to go through a plethora of
03:16approvals in terms of completion before we start the handing over process.
03:19And from the date we get the OC, there is a process also of handing over.
03:23While I say that, I must tell you that we have about 32 million square foot under production
03:29and we continue to focus on that entire 32 million square foot.
03:32And on an ongoing basis, if you look at our burn rate, our quantum of money spent on operations,
03:40that is continuing to scale up, which basically means that eventually this product, which
03:44is currently being constructed and the money being spent on will come to delivery.
03:48All right.
03:49And Abhishek, in Q1, we saw that Providence segment had a significant increase of bookings,
03:55but the luxury segment did see some kind of decline.
03:59So what is the kind of strategy that you are adopting, which is the kind of segment that
04:03you are focusing on one thing and what are the kind of trends overall that you are observing
04:08in the market?
04:10See, you know, our demand as we see it is pretty much homogeneous across all categories,
04:16whether it is mid-mass or luxury category.
04:20In fact, in the first couple of quarters, we have had robust performance from Providence
04:26also on the back of the new launches that we have had in Providence.
04:29We are expecting the launches to come through in Purvankara in the coming quarters.
04:34As I said, the challenge really is more on the launch side and the supply side.
04:38And as those launches kick in, you will see a fairly balanced growth in both the numbers,
04:44including Purvaland.
04:45You know, we continue to focus on that product as well.
04:49So you know, we have an annual goal.
04:51I think we have shared the fact that we are going to launch about 17 million square foot.
04:54Our goal will be to make sure that we are on target there.
04:59And what's the target with regard to overall collections for FY25?
05:05How are we shaping up there?
05:08Like I mentioned, you know, our quarterly run rate is about 1000.
05:12So you know, we are at least at 4000 for sure.
05:15But you add to that new launches, I'm sure you will see much better collections.
05:19We intend to continue to grow the collections.
05:21Of course, operations and delivery will also help.
05:25So we will continue to see upward momentum in the collection, especially in the third
05:29and the fourth quarter as we do the new launches.
05:31Right.
05:32And what about realizations?
05:33So you're talking about such robust demand continuing.
05:38Do you therefore, is there a continued uptick where realizations is concerned?
05:44And how much of an uptick really, because the base is getting higher now?
05:49Look, I think, you know, as an industry, we've been very consistent in the price increase
05:55now, specifically in the last couple of quarters.
05:58My sense is that we would be expecting a price increase of, you know, single digits,
06:07more inflation linked.
06:08I would expect it to be average industry escalation of 8 to 9% annually.
06:13But from project to project basis, you will see different price increases in different
06:16micro markets.
06:17I think that's where the nuance is.
06:22But as far as Purvankara and Provident and Purva land is concerned, you know, again,
06:27it's more a factor of mix of inventory that we are bringing to the market and mix of inventory
06:32that is getting sold.
06:33And therefore, you will see, while on an individual project level, you will see continued appreciation.
06:38But on an overall realization level, you will see, depending on the mix of inventory that
06:43we bring to the market on how the average realization is, for example, you know, if
06:48you look at Purva land, typically our realizations are anywhere between 3000 rupees to 5000 rupees
06:54a square foot.
06:55Whereas in Provident, it would be somewhere around 8000 and Purvankara will be 10000 plus
06:59average realization.
07:00So, depending on the mix and volumes that you sell, you will see the overall average
07:05moving.
07:06However, on a project level basis, you will continue to see the realization go up.
07:10All right.
07:11And in terms of debt, you know, your net debt has seen a slight uptick in Q1 as compared
07:16to Q4.
07:17I want to understand that what are your plans with respect to managing these debt levels
07:22and where will the debt level be at by the end of FY25?
07:25Look, as I mentioned, you know, our debt, we are expecting to keep it at similar levels.
07:31Our goal is on a per square foot basis to be to keep the debt under 1000 rupees a square
07:38foot of area under development and we will continue to target that number.
07:42And on an absolute number, maintain it at similar levels.
07:46It may marginally go up and then may come down depending on, you know, the transactions
07:50that we are doing, because it's a constant process of churn of debt, because debt is
07:55getting constantly repaid as well as we are doing also new acquisitions.
08:00So, you know, it will be a consistent churn, but we will, our target is to keep it at similar
08:04levels by the end of the year.
08:06Okay.
08:07And with regard to geographies, of course, new launches you've spoken about, but talk
08:12to us about the next three years, right?
08:14What's the kind of thought process you're looking at?
08:18Is it going to be more focused on Bangalore, Kochi, Chennai and the like, or are you going
08:23to move towards a Pune or a Mumbai and beyond?
08:28Look, that's pretty much reflective of what's happening currently in the acquisition.
08:33I mean, if you see our last, this calendar year acquisitions, you know, we have done
08:39acquisition in Thane in Mumbai, we have signed up in Lokhandwala.
08:43In fact, we've just added four more societies in Lokhandwala.
08:47We have just announced a project in South Mumbai, our first project in Breach Candy.
08:53We have also been appointed as a preferred developer in Pali Hill.
08:57If you look at, you know, the quantum of investments that's happening in the West clearly
09:01indicates that in future we will have significant contribution coming in from the West.
09:06While we continue to consolidate and announce our acquisitions in South, for example, we
09:12have acquired two projects in the Electronic City area in Bangalore.
09:16And I'm certain that you will see more and more announcements as far as the Southern
09:20markets are concerned. So our goal is going to be definitely to make sure in South we
09:25consolidate our position and in the West we expand our position.
09:28While we have now started to explore NCR and we are hoping that next two years to three
09:33years time frame, we'll start expecting some contribution coming in from the NCR region.
09:37All right. Well, Abhishek, thank you so much for giving us those insights on Purvankara.
09:42And thank you so much for taking our time and speaking with us at NDTV Profit.
09:46But with that, we're completely out of time on this edition of Small and Mid Cap show.
09:49But keep watching NDTV Profit for more news and updates.