Ladies and gentlemen, good day, and welcome to the Q2 FY 2025 earnings conference call of Aditya Birla Real Estate Limited, hosted by Batlivala & Karani Securities India Private Limited. As a reminder, all participants' lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Srivastava from Batlivala & Karani Securities India Private Limited. Thank you, and over to you, sir.
Yeah. Thank you, Nami. Good afternoon, everyone. On behalf of B&K Securities, welcome you all to the 2Q FY 2025 earnings conference call of Aditya Birla Real Estate. We have with us from the management, Mr. R.K. Dalmia, Managing Director, Aditya Birla Real Estate Limited, Mr. K.T. Jithendran, MD and CEO, Birla Estates Private Limited, and Mr. Snehal Shah, CFO.
Amit, even Mr. Ajay Gupta, our CEO for Pulp & Paper , is also there.
Okay. Okay, sure, sir. So Mr. Ajay Gupta, our CEO for the Pulp & Paper business. So we will now start the call with the opening remarks from the management, which will be followed by Q&A. Over to you, sir.
Thank you. Good evening, everyone, and welcome to the earnings conference call for the second quarter and first half of the financial year 2025 . To start with, let me first inform you, as you may have already known, that our company's name has officially changed to Aditya Birla Real Estate Limited, in line with the company's strategy to continue to expand the real estate portfolio. Let me now take you all through the financial highlights, followed by the business and operational highlights. For the second quarter of the financial year 2025 , the consolidated turnover of continuing operation grew by 32% year-on-year to INR 1,121 crores. EBITDA for the quarter grew by 50% year-on-year to INR 99 crores, with EBITDA margin reported at 8.8%. The net profit continued operation was INR 13 crores for the quarter.
For the first half of the financial year 2025, the consolidated turnover of continuing operation grew by 30% year-on-year to INR 2,260 crores. EBITDA for that period grew by 5% year-on-year to INR 223 crores, with EBITDA margin reported at 9.9%. The net profit on continued operations for this period was INR 40 crores for the quarter. Now, let me take you through state of the key highlights across our three business verticals, starting with real estate business. During Q2 financial year 2025, the Indian real estate sector continued to experience a robust demand, driven by factors such as a large space requirement, enhanced amenities, and a desire to secure a well-designed living space, boosting the luxury market.
Tier 1 cities are witnessing steady demand, while Tier 2 cities are emerging as a new investment destination due to infrastructure development, improving connectivity, and affordable pricing. In Q2 FY 2025, the revenue of Birla Estates grew by 500% year-on-year to INR 254 crores, driven by continued delivery at Project Alokya in Bengaluru , Birla Vanya in Kalyan, and Birla Navya phase I in Gurugram. EBITDA was reported at INR 28 crores, representing the EBITDA margin of 11%. During the quarter, we launched three projects, namely Birla Anayu in Walkeshwar , Birla Ojasvi in Bengaluru, and Birla Trimaya phase II in Bengaluru. For the quarter under review, we achieved bookings worth INR 1,412 crores for our already launched projects, and collections remained strong at INR 644 crores from all projects during the quarter.
We also made two major acquisitions during the quarter, wherein we acquired ownership rights of 10 acres of land parcel in Mumbai, with a GDV of INR 14,000 crores, and we also acquired 5 acres of land parcel in Gurugram, NCR, with GDV of INR 1,400 crores. In other updates, Birla Niyaara achieved five-star rating by British Safety Council. Our outlook on the sector remains positive, fueled by robust demand from high-net-worth individuals, non-resident Indians, and growing aspiration among urban elite. We expect the growth momentum to continue, driven by strong economic fundamentals and favorable policy measures. Now moving on the Pulp & Paper segment. In Q2 financial 2025, paperboard and tissue prices continued their downward trajectory, with average net sales realization down by 4% year-on-year. They are almost at par with the previous quarter.
Production and sales volume increased by 8% year-on-year and 13% year-on-year, respectively. Sales volume increased by 10% QoQ, driven by growth in board segment. Sales volume Q2 2025 increased by 7% YoY and 9% QoQ. However, EBITDA decreased by 22% YoY and 10% QoQ due to lower NSR, rising input cost pressure from increasing wood and imported pulp cost, thus constraining profitability. Demand for writing and printing paper remained subdued in Q2 FY 2025. Import quantity has also been seen an upward trend in copier segment. The company continued to implement various cost reduction initiatives to counter these market conditions, like increasing fiber line production, subsequently enabling substitution of imported pulp on tissue machine. Bamboo usage also increased 30% to reduce production cost of treated pulp.
We started the oxidized white liquor plant to potentially reduce costly consumption in fiber line pulp production. On the sustainability front, the company developed 18 nurseries in 11 districts to increase wood catchment area, with about 97 lakhs plantation completed in Q2 FY 2025. The company generated 131 metric ton of compressed methane gas from wastewater and utilized the same instead of LPG in tissue machine. Company is also taking various steps, various strategic measure, like reworking the copier market strategy to revamp product portfolio. Additionally, B2C strategic initiatives are also under instruction stage. The new product are being developed in writing and printing paper segment. On the market outlook, writing and printing paper demand is expected to improve Q3 FY 2025, driven by publishing season and anticipated release of government tender. Tissue demand in Q3 FY 2025 is expected to remain low, post festive holiday season.
Broad demand is expected to remain subdued due to tapering of festive season demand. An excess supply of cost-competitive import is expected to aggravate the pricing pressure in the domestic markets. The decline in international pulp pricing is also expected to impact exports and increase low price import in excess of anti-duty, anti-dumping regulation. The impact of low demand excess supply imbalance, leading to inventory accumulations at all major paper producers, is expected to contribute to continued pricing pressure. In conclusion, Q2 FY 2025 has been an overall good quarter, driven by stellar performance by real estate business, and we are therefore strategically expanding our real estate portfolio. With that, I will now conclude our opening remarks, and we can start the question- and- answer session. Thank you, then. Thank you.
Thank you very much, sir. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the client of Karan Khanna from Ambit Capital. Please go ahead, sir.
Yeah, hi. Thanks for the opportunity. Just a couple of questions from my side. Firstly, on the NCR portfolio, in 1Q FY 2025 presentation, you had mentioned that the launch of Delhi Mathura Road project was planned for this fiscal year. But in the 2Q presentation, this does not feature in FY 2025 launch pipeline. So, what could you elaborate on the reasons for this delay? And secondly, the presentation also doesn't talk about the Noida land parcel you have taken under development. So could you provide more insight into this project as well, in terms of arrangement, revenue sharing, et cetera, between the company and Lotus Group? And what can be the anticipated development potential for this project?
Good afternoon, Karan. The first one, question on Indian Hume Pipe . Though we are trying to launch this project in this quarter, but it looks unlikely because we are not able to make enough progress on the approval. So it looks difficult for us to launch this project in this financial year because of the approval issue in New Delhi. It may take more time. That's why we have put it out of guidance.
As far as Indian Hume Pipe is concerned, as far as Noida, we have signed a binding agreement, and there is certain conditions precedent, which the JV partner has to fulfill. So until that is completely, you know, complied with, we are not talking or disclosing the other commercial details of the project. Once we get that, cross that bridge, then we'll be happy to disclose all the other details, because it becomes relevant only once those preconditions are met.
Sure. Thanks for the clarification. Just to follow up, by when do you expect these terms to be complied with by the partners?
Our expectation is that before December, we should be able to do this.
Sure. That is helpful.
Yeah.
Sure. The second question on Worli, you know, you have acquired about, you have 2.5 million sq ft of development potential besides Niyaara phase I, II, and III, and now you have also acquired 10 acres of land parcel from the Wadia Group, so with the optionality with Century Bhavan . So how are you planning strategically planning the launches in this micro market? And how should we assess sales momentum in the micro market based on the expanded land portfolio? And as a follow-up, when do we expect the launch of Birla Niyaara phase III? Any specific milestones or considerations that could influence this timeline?
Yeah. So, Karan, yeah, we have a pretty strong inventory in Worli, and it's a very valuable inventory. It's a very strong market. Inventory levels are at a very all-time low. I think it's a good place to accumulate good assets at very good valuations that we've been able to accumulate. What we are planning is that we would definitely be, you know, aiming to launch Tower C, which is our last phase of Niyaara, next financial year. Simultaneously, we are also thinking of launching this, I mean, that we have our plans for launching this newly acquired asset of 10 acres, at least one phase of that.
The others, like, the 2.5 million, which, the adjacent land, that may take a couple of more years to get launched, and we will think about Century Bhavan, how to time that, because that is still under plans.
Sure. And my last question, given where the leverage is, you're at about INR 4,000, INR 4,500 crores, going forward, how are you thinking about business development? And, likewise, where do we see this number settling at in terms of leverage, given the construction and the upcoming development pipeline that you have?
Yeah. So if you look at our current acquisitions, we have acquired this year about INR 21,000 crores worth GDV, with an investment of only INR 1,500 crores. So I think we will keep looking at value accretive, good value projects whenever we get an opportunity, either through JDAs or through, you know, such, you know, very good valuation we get at outright or deferred outright. That will continue to be our strategy. On the debt position,
Karan, Snehal here. B asically, I mean, let's look only at the standalone level. Our gross debt is about INR 3,581 crores, if you see, and there is a cash balance and other in liquid investments of about INR 600 crores.
We are roughly around net debt of INR 3,000 crores, and we can straightaway, we can easily borrow another INR 2,000 crores if required. That is one part. We don't look at the subsidiaries borrowing, because in any case, their borrowings don't come into the calculations of the standalone borrowing covenants that we have. For the construction finance, et cetera, I think we already have lines for most of the projects, except that, you know, because of very good sales velocity, we are able to finance the construction cost so far out of the collections that we receive. That is not a problem over there too. I don't see the borrowings increasing in the subsidiary.
So we have enough firepower at the moment, if required, to, you know, invest in more properties, more projects if required.
Great. Thanks, K.T. Thanks, Snehal, and all the best.
Thank you.
Thank you, sir. The next question is from the line of Raj Rishi from DCPL . Please go ahead, sir.
Yeah, hi. Any plans to raise resources at the project level?
Resources? You mean the funds or what? Equity. No need at this point of time, but we may be open to, you know, some private equity investments if, you know, there are the right partners. We are open to that to further, you know, expanding our business development portfolio.
Okay. And, in the previous call, I think you had said in three years' time, easily you could cross INR 10,000 crores. So could you comment on that?
Annual sales, right? That's what you are meaning, right?
Yeah. Yeah, yeah.
Yeah. So, we'll stand by that.
Got you. And, the real estate scenario over the last, few months and years has been very robust, right? Especially in the area you're, addressing. So what's your, assessment of the future, like, from here onwards for the next, whatever you can foresee?
So, Raj, as we, you know, looking at the inventory levels, et cetera, in all the four major markets where we are operating and all the micro markets that we are looking at. It looks like a very good bet for the future, for the coming few years. Inventory levels are still high, are still pretty low. Number of players are less, supply is less, comparatively less. Supply is increased in some markets, definitely. But still, I see there is a very good lever for strong branded, trusted brands, players, et cetera, for to have a good run for at least the next three to four years.
What kind of price movement do you see in the markets you operate? Like, what about... What is your perspective?
Difficult to predict, Raj. So we just, we, in our calculations, we take about 5% per annum sales, well, sales increase, but largely we take a call just before the launch, see what's the market's position and accordingly price the project.
As of now, you don't see the prices going down from whatever levels they are at?
Oh, no, we don't see that at all.
Okay. Okay. Thanks.
Thank you. The next question is from the line of Pinaki Banerjee from AUM Capital Private Limited. Please go ahead, sir.
Hello, sir, good afternoon, and thanks for the opportunity. Sir, last week there was a news article that you have opened your first international office in Dubai to cater to clients in the Gulf region. So, sir, can you throw some light on this news and how-
Sorry to interrupt. The management's line has gone disconnected.
Oh, sorry.
Please wait while we reconnect them. Thank you for patiently waiting. The management's line has been reconnected now. Pinaki, you may-
Yes.
Go ahead.
Yes, thanks, so thanks for the opportunity, and sir, there was a news article last week that you have opened your first international office in Dubai to cater to clients in the Gulf region, so sir, can you throw some light on this matter, and how much revenues you are going to expect in future from this region?
Dubai office. Yeah. So we had actually opened the Dubai office last year.
Okay.
As a part of a strategic expansion for sales, and I'm very happy to say that our recent launches, we had substantial bookings from Middle East.
Okay.
Yeah, so I think we're very happy with that, and revenues are growing pretty strong, and we may be open to strategically opening offices in other international regions of growth also.
Okay. And sir, sir, my last question is just a hypothetical one, sir. Actually, you have just changed your name from Century Textiles to Aditya Birla Real Estate, and going by what your current presentation, you have shown that the optimism is more towards the real estate than your pulp and paper business. So sir, do you have any plans to actually demerge the business to unlock value in future?
At the moment, Pinaki, we don't have any plans at the moment.
Okay.
Reason why we changed the name, there are two reasons. One is to give the connotation of being part of the Aditya Birla Group.
Okay.
That is the Aditya Birla part. And second is to provide focus on of the investors that we are focusing more on the growth of the real estate business.
Okay.
Because most of our fresh capital allocation, whether through borrowings or in case tomorrow we raise any money or through equity, will be only towards the real estate business.
Okay.
The paper business has to sustain itself on its own internal cash flows.
Okay. Okay. Thanks, sir. That's all from my end. Thanks, and all the best for the future.
Thank you. A gentle reminder to the participants, anyone who wishes to ask a question may press star and one. The next question is from the line of Dixit Doshi from Whitestone Financial Advisors Private Limited. Please go ahead.
Yeah, good evening, sir. Thank you for the opportunity. Sir, so, our balance sheet as of September, does it reflect the deal that we have done with Bombay Dyeing? So the land is part of the inventory and if we would have taken some loan, that is also part of the loan that we're showing in this balance sheet, or it-
Yes, it is. Yes, it is, Dixit.
Okay. And sir, this booking value, if you can give us a break-up, you know, the project-wise of the booking value.
Yeah. Those bookkeeping questions we can take later also.
Okay. Okay, no problem. And if you can help us till date, how many Niyaara phase II units we have sold?
Niyaara phase II , yeah, means Silas. Silas, we've sold about 77 apartments.
Okay. And sir, in the segmental result, we see that because we have around 9%-10% EBITDA margin. That I can understand is because of the head office expenses, which-
Yeah. Our project margin is about 30%.
Yeah. So if you can help us, what kind of, you know, head office expenses and, at the end
There is some more clarity you need to understand is that the EBITDA margins are overall, and we are not recognizing the EBITDA of the real estate business because it is on, from an accounting perspective, we can only recognize the EBITDA once the finished goods are handed over to the customers. So that is a bit of an anomaly for us because, and yes, of course, the corporate expenses are growing in line with the growth of the real estate business. HO corporate expenses are not going up. It is the expenses of the real estate business which are going up in terms of corporate overheads, which is in line with our budget, and it is in line with the growth that we are planning.
Okay, okay. Now, so I understand that we book revenue when we deliver the project, but at, so the sales that we have booked today, those projects would have been delivered, but the cost is also booked at the time when the sales is booked, right?
Right.
That's why I was trying to understand. So the only factor which dilutes the EBITDA margin could be the HO cost, right?
The HO cost has been there. You are talking about HO, as a parent HO, or you're talking about HO of real estate?
Of real estate, sir.
And also all the launch costs of the new projects, no? When we launch new launches, the sales, marketing costs, all of that get expensed out.
Okay. Okay. Thank you. Thank you, sir. Thank you. That's it from my side.
Thank you. The next question is from the line of Biplab Debbarma from Antique Stock Broking. Please go ahead.
Good afternoon, everyone.
Good afternoon, Biplab.
Advance Diwali wishes to you all.
Thank you. Wish you the same.
Sir, I have three questions. First is, on the FY 2025 guidance that we have, earlier guided around INR 7,000-INR 8,000 crores. Are we still sticking to our guidance, looking at slippages in approval?
Okay. Yeah, so I mean, okay, yeah, so if you're going to put all questions, then it's fine, but if you want me to answer that, yeah, we are still going by that guidance.
Okay. Second question is on the, you know, where do we stand regarding project launches in Wellesley Road, Sarjapur, and Thane? I mean, at what's-- what is the current stage of approvals for these projects?
Wellesley Road, Pune, we are planning to launch this quarter, December. December is what we're planning to launch. We are well on our way in terms of approvals. Sarjapur will be in January, Q4, and, Hindalco will be more likely in March of Q4.
Okay. Okay, great, great. So we are on track in these three?
Yeah, we are.
And third question is for Snehal, sir. Sir, for the paper business this year, what do you think would be our EBITDA margin in FY 2025? And in terms of cash flow, will you be able to generate at least INR 300-INR 400 crore of net cash flow from this business?
No, Biplab, the answer is negative on the cash flow. I don't think we expect to generate any cash flow this year, because half year is gone, and there has not been a significant flow of cash from the paper business. The outlook does not look very good, but we hope that it will be better in the second half. But we don't expect profits to probably reach even 50% of what we did last year.
Okay. Thank you. That's all.
Thank you, Biplab.
Thank you. The next question is from the line of Himanshu Zaveri, an individual investor. Please go ahead.
Yeah. Hi, K. T. I would like to know, do you think the real estate prices have peaked as of now in Mumbai, and where we have most of the important portfolio? And we should go a little bit now on volumes, too, as price appreciation from this, these prices looks difficult now onwards.
Yeah. Thanks for that question, Himanshu. Yeah, I mean, we have always looked at volumes in all times. All our launches, if you have noticed that, we have had, we have been able to garner very strong volumes, and we stand by that, you know, by that idea. As far as prices are concerned, I think there is, you know, the markets, as I mentioned to you earlier, I've mentioned earlier in this call, that, you know, the inventory levels are still pretty low. Overhangs are very low. So I think, I think there is still quite a bit of upside left in the markets, especially Mumbai, Bangalore, NCR, all of these markets. I think there is a good amount of upside still left. Supply-demand gap is still quite wide.
Number of players are also fewer. There's a lot of consolidation in the industry. Demand seems to be very strong, and so if the product is good, backed by a strong and reliable brand, I think there is a quite, very good upside still left in the market. That's my belief.
I particularly was asking about the Niyaara project, because I think we are already around, selling around INR 90,000 per sq ft, right? So do you think the prices can still go up from here on? That's what my question is.
I think given the, as we progress in our construction and the project gets closer to completion, I think there is a very good room. There is still quite a bit of room for appreciation. I'm largely looking at the developments around. There is going to be a business district coming next to it, top-notch hotels, five-star hotels coming close to that. There is a second access coming behind the project. So lots of new stuff is coming. So the value creation from here is going to be phenomenal. So I think there is a very good strong upside still left in this project.
And the new land which we acquired, it is just next to Niyaara, right?
Yeah, yeah, it's touching Niyaara, the boundary. It's a part of Niyaara, and it was always ours, but anyway, there was some distance.
Yeah, but there was a. Yeah.
Yeah. Yeah, so now-
So that is also going to be full residential, like-
We are still. Yeah, so largely it will be residential, but we will look at other options also. We are still on the drawing board, figuring out what best to be done.
And premium only, right? Like 300, 400, 500 .
We haven't taken a call. We may, it will be a separate project. So, to say from that point of view, the positioning and all, depending on market conditions, we will think about it.
Don't you the same thing you feel is for the NCR market also, because there also the pricing is very, very strong, right?
Yeah. NCR also, demand is very strong. If you look at the recent launches of the few players that have lands there, every launch has been a sellout, and every launch has been pretty strong. Prices have been very, very strong. So I expect that momentum to continue.
Correct. And now we also have quite a few parcels where we can-
Yeah, we're pretty excited about that.
Okay. Good luck, K. T. Thank you.
Thank you very much.
Thank you. The next question is from the line of Krishna from Ashika Stock Broking . Please go ahead.
Good evening, sir. So my one question is that I quickly wanted to understand the consumer mix. How much of it is driven by investors, and how much is driven by first-time users for the residential projects?
Yeah, difficult call to make, Krishna. We don't know how many of them.
Okay.
To the extent possible, in our sales, we would like to believe that they are all actual users, but with the very fact they're willing to wait till the product is delivered, there is also a element of you know, investment coming in there. What we try to do is that, all of our projects, as soon as 10% is collected, we do the stamp duty, registration, the GST, et cetera. We have some rules saying that you can't sell for three years, you know, or at least till 50% of the payments are made. So despite that, if you see people coming in, we really don't care whether they're investors or actual users, because all we care is that they're all long-term players that are seriously interested in buying this, and they're not flippers.
Okay, got it.
Yeah. So from that point of view, I think we are getting very, pretty strong traction.
Okay, got it. So follow-up question to that, like you mentioned, that we set up an office in Dubai, and we also plan to set up offices abroad. So what percentage of the sales or bookings do we see from, these,
Yeah. As of now, we are seeing about 20%, 25% of these bookings coming from international markets.
Okay, and any specific project or market that it comes for?
Yeah. For both our Niyaara phase, Silas, we had very strong response from both Singapore and Middle East and U.S. And now in the recent Bengaluru launches also, we saw very strong traction from all these markets: Singapore, Middle East, U.S., U.K.
Okay.
Yeah.
Got it. Got it. So, one more question. If you could just mention the total sales that we have done, like the collection, how much of it is coming from home loans? Like, what is the percentage of collection from home loan?
Yeah. Yeah, so we, I don't have that number offhand, Krishna. Maybe we can give it to you. But the projects, right now, the launches have been very recent in Bangalore, so there is not... I mean, it will still take time for people to go and fetch home loans. But if you look at Silas, there's been very few people who have taken home loans. The product at Worli, very, very few. Hardly anybody so far went for the home loan. But generally, I look at the, other, the Bengaluru market, we see 60%, 70% people taking home loans.
Okay. Got it. Got it. And, one last question, if I may ask: How do you see the competition in the NCR region, given there are a lot of new players entering and also existing players having a good hold in the market?
NCR is a very broad market. If you look at Noida, there's hardly any supply, hardly any new projects launched. Very few projects are being launched. There's virtually no supply there. Prices, there's huge demand there. Demand far outstrip supply. People are waiting for the right projects to come. There are a lot of stuck projects and, you know, half-done projects, because of which there's a lot of unmet demand. So there's a very distinct leaning towards stronger, you know, dependable, branded players. If you look at Gurugram, again, the number of players has dwindled a lot from what it used to be. There may be a slight increase from what it used to be last year or year before last, but if you look at the overall picture in the last 10 years, it has drastically reduced.
The number of lands availability has also drastically come down. So in both these markets, I see, you know, a very strong opportunity for growth.
Okay, got it. Thank you so much.
Thank you. The next question is from the line of Chirag Sureka from UTI Mutual Fund. Please go ahead.
Yes, good evening. So in terms of the land acquisition, which we did in Worli, I think where we mentioned, the land cost was around INR 1,100 crores. Have we made the full payment or is it a sort of-
Yeah, we made a full payment, Chirag. Full payment has been made.
... Okay, and for the other, perfect. And for the other acquisitions, is there any component of, pending land payments?
No. Others, anyway, it's our own land, so there's no question of any land [audio distortion]
Okay. And so in terms of debt cap, like previously, we have been guiding that we'll try and keep it, about one X in terms of leverage. So are we continuing with that stance, or is there a relook in terms of, because of the growth opportunity?
We are comfortable. Right now, I think we are at 0.7 or something on standalone. We are looking at it on a standalone basis. I think we are at 0.7 or something as of today, and we maintain that we will be around one at the most.
Okay, sure. Got it. That's it from my side.
Thank you. The next question is from the line of Vivek Ramakrishnan from DSP MF . Please go ahead.
Hi. Chirag just asked a lot of my questions, so let me ask another question then. In terms of Niyaara II, do you see... You know, you said you sold 77, so I think 77 out of 148. Do you see the sales momentum as per your projections? And in looking into the medium term, the question is this: I understand that you're bullish on the market, and you are acquiring, and that you're raising debt for that. At what is the point where you would say, I mean, what is the art or science that you're going to use to say that, "Okay, this is the, you know, from now on, we'll go for self-sustaining cash flows?" Those are my two questions. Thank you.
Yeah. So the first question on Niyaara sales, yeah, I think, we have done much better than expected. We didn't expect such a strong sales momentum. So I think, this has been a positive surprise for us. And, of course, there has been a little lull in the first quarter, because after a strong, sales initial launch, and then the last quarter, Q1 being a little bit of, election, et cetera, there was a kind of a slowdown. But it's again picking up now. I see the momentum again picking up. Yeah, and, in terms of...
I mean, if I get, I don't know what your question clearly was, but I think if it is self-sustenance means, I think there's a lot of collection that we're expecting from these projects going further down based on the progress and milestone billings. So, but more importantly, I think there is so much potential for growth. There is so much demand, so we'd like to really take full advantage of that. So we'll keep looking for growth opportunities. Self-sustenance will happen whenever, you know, that happens, but I think we don't want to miss out on the growth opportunities. So whenever there is a right project or the right valuation, and we think there's a right demand, we will always look for the capital resources to acquire that. So that's not going to be constraint.
Vivek, as earlier, to answer your question specifically, quite honestly, for our launch projects, we are already self-sustaining ourselves. So we are, you know, in a negative working capital situation. What, after providing for corporate overheads, et cetera, and all that stuff, we are still yet to reach a position where we will have free cash flows, which will fund the growth capital award. Right now, funding for the construction of our launch project is not a problem. We are already positive on the operating cash flows.
Only when, I think couple of years, when our projects come, most of the projects come into fulfillment, probably that is the time when we'll start having free cash flows from the real estate business, and we expect that to then keep on funding the growth capital of the real estate business further. I hope that helps you.
Yeah, that does. Yeah, perfect. In fact, I think you mentioned that last quarter, also at 67%, 60% sales, you are self-sustained for a project. If I can just ask one more question: In terms of execution of projects, are you facing any challenges due to the availability of labor, any of these issues affecting the real estate players, or is it all going as per plans?
So, Vivek, as things stand today, everything is fine. Broadly, all of our execution is on plan, within budgets, no issues there. But if the market continues to grow along with the infrastructure growth, the Indian economy continues to grow, we will may have to look for more subcontractors, more, you know, skilled labor, mechanization of construction, modernization of construction, modular construction, et cetera. Because the kind of demand which we expect, both in real estate and in infrastructure construction, the availability of good contractors could be an issue, and further downstream, the availability of skilled labor could be an issue. So we may have to find solutions for this in the long run.
Thank you. Wish you all good luck, and season's greetings.
Thank you.
Thank you, Vivek.
Thank you. The next question is from the line of Hitesh Doshi from Nirzar Securities LLP. Please go ahead.
Yes, yeah, I'm Hitesh Doshi here. Good afternoon, K. T., sir, and the entire team.
Hi. Hi.
Hi, Hitesh. Hi.
Congratulations on the name change of the company reflecting Aditya Birla Group.
Thank you.
Sir, my only question is that can you have a breakup of this INR 43,000 crore GDV of Bombay, in which INR 10,000 is ongoing and INR 33,000? Because there is some confusion is that does it include the Kalyan land total potential or part of it, does it include the 10 acre of employees quarter or land in Worli? And does it include the Wadia land we acquired? And my second question is that the 10 acre of Wadia, Mr. Wadia's land, which you acquired recently, what FSI we will get? What kind of carpet area we can sell out of that? Thank you so much.
Hitesh, Thane is about INR 7,600 crores in a conservative basis.
Okay.
Yeah, and, this new acquisition in Worli is about 2.6 million sq ft, right? So that's what INR 14,000-INR 15,000 crores. INR 14,000 is what we have currently assumed on a more conservative basis, looking at the kind of supply.
Mm-hmm.
Then we have, o f course, we had the INR 20,000 crores in from the previous 30 Worli, 30 acres. So INR 20 crores plus INR 14 crores, INR 34 crores. P lus INR 7 crores, so that's INR 43 crores.
Okay.
Absolutely, yeah. It can only be, you know, INR 43-INR 43.5, is so definitely there on a conservative basis.
Okay. So this include entire potential of the Hindalco land or is it part of it?
Yeah, no, no. It's full, full potential. Full potential.
Okay, full potential.
Yeah.
Even the 10 acre of the employee quarter is included in this?
Yes, Hitesh. Yeah, yeah, yeah. All that is included.
Okay.
That is all included.
Thank you so much, and wish you, all of you, a happy Diwali!
Thank you, Hitesh bhai.
Thank you. The next question is from the line of Akash Gupta from Nomura. Please go ahead.
Hi, K. T. sir. Hi, everyone.
Hi. Hi, Akash.
Hi, sir, my first question is with respect to Niyaara. I was just seeing your sales. So Niyaara sales were weaker on a quarter on quarter basis. So I wanted to understand why is that so? Because Oberoi's project, Three Sixty West, had a pretty strong momentum even in the second quarter.
So I can't speak about, maybe that's the ready possessions, you know, ready to move in.
Mm-hmm.
As you know, you know, we had an extremely strong, a super strong launch, where, you know, there was a lot of excitement, and most of the people picked up, you know, during that period. So obviously, after such a strong response, there is always going to be a little bit of lull. All I can assure you is that it's again picked up momentum now. We are having a very strong this month is going. I mean, the response has been, there's a huge amount of interest again generated. And this is expected. It comes in bits and spurts.
Mm-hmm.
Initially, there is, with the launch time, there is, you know, momentum, but our momentum was much higher than what we expected. Then, of course, that's followed by a little bit of lull, and now again it picks up in the festive season, and, you know, the year ends. Q3, Q4 is largely when the momentum picks up for various obvious reasons. So we are not at all worried because, what we had expected as our business plan, we have already covered all of that during the launch season itself.
Mm-hmm. Okay, okay. And just wanted to understand this quarter, our residential EBITDA margins came in at roughly 11%. So what were the project level margins for this quarter?
30%. 30% for all projects.
30% ? Okay.
Yeah.
I heard during the call that one of our projects was delayed to the next financial year. So I just wanted to understand, based on our current launch pipeline, what projects are we planning in the third quarter, and what projects are we planning in the fourth quarter?
I had mentioned a little earlier that we are planning our Wellesley Road, which is Sangamwadi in Pune this quarter.
Mm-hmm.
Then we are looking at Sarjapur in Bangalore , another phase of Trimaya in Bangalore next quarter, Q4.
Mm-hmm.
And also, we're looking at Thane launch.
Mm-hmm.
Thane project, the Hindalco land, that project launch-
Mm-hmm.
in Q4.
Mm-hmm.
To make up for IHP, we are trying. We're not too sure to launch the Sector 31 Barmalt project also.
Mm-hmm.
We may be touch and go. We may be able to do it, we may not be able to do it, but we're trying to get that also in the next quarter.
Mm-hmm. And despite the delay in launches, are we still sure to reach our guidance of INR 7,000-INR 8,000 crores in pre-sales?
At this point of time, Akash, we are reasonably confident.
Okay, okay. Sir, just one final question. On the consolidated level, we were looking at debt of roughly INR 4,000 crores this financial year, and we are already at roughly INR 4,500 crores at 1.1 x net debt to equity at a consolidated level. So just wanted to understand, like, towards the end of FY 2025, how are we looking at net debt to equity at a consolidated level?
So, Akash, I think I answered this question at the beginning of the call.
Mm-hmm. Mm-hmm.
Maybe you're looking at the consolidated basis.
Mm-hmm.
I think you should probably look at a standalone basis, which is more important. I think we are still sticking to the point that we will be around 1, as far as the debt equity ratio goes. Right now, I think we are somewhere close to 0.7 , 0.8 or something, anywhere between that. And, I don't see. And I think when we were talking about it, we didn't have the Wadia land deal in our calculations. So that has kind of slightly changed the apple cart for us. But then, at the end of the day, it was a very attractive deal, which we could not leave for. And it's about being in the vicinity of a larger land parcel, as well as the attractive pricing that we got.
But we are still comfortable. As I said, our net debt on a standalone basis is right now INR 3,000 crores. So we can easily, you know, if required, stretch ourselves to INR 5,000 crores if required on a standalone basis. Maybe we'll be slightly above the 1, but we will, of course, see that we are spending it on some good acquisitions.
Okay. Okay, that's all. Thank you so much.
Thank you. The next question is from the line of Deep Mehta from Bank of India Mutual Fund. Please go ahead.
Hi, sir. Thank you for the opportunity, and congratulations for a very stable quarter, both in terms of pre-sales as well, as well as attractive BD deals. Two questions. First is a clarification which I would like to ask. We talked about potential fundraise from private equity investors. So we are talking about fundraise in the project, at project level or on at holding company?
At project level.
Project level. Okay, so no potential fundraise at the hold-
No, no, no, no.
Okay, very clear. And my second question is regarding our pre-sales guidance for the year. If we have to meet our guidance, we'll have to do significant pre-sales jump in H2. So this, say, elevated H2 will be led by new launches or from sustenance from existing projects?
No, it will be largely through new launches.
Okay, and
Primarily driven by new launches.
Okay, and if you can share us the potential GDV of each of the launches which you are planning in H2? Hello? Hello?
Participants, the management's line has gone disconnected. Please stay connected while we reconnect them.
Sure.
Participants, the management is connected now. Deep, you can go ahead.
Sure. So my last question was that if you can share the potential GDV of each of the launches which we are planning in H2?
I'll broadly try to share it.
Sure.
Wellesley Road, which we're planning this quarter, is about INR 1,050 crores. Sarjapur is going to be a very big launch in Bangalore, in Q4, is about INR 2,700 crores. New phase of Trimaya is another 700,000 sq ft, will be roughly about INR 700 crores. The last phase of Navya will be about INR 1,400 crores. In the Hindalco launch, which we are planning in March of Q4, that is expected to be at INR 1,800 crores, the first phase.
Understood, sir. It was very helpful, and that's all from me. Thank you, and festive greetings to you.
Thank you.
and the entire team.
Thank you. The next question is from the line of Ishita Lodha from Svan Investments. Please go ahead.
Hi, sir. Thank you for the opportunity. I have one question with respect to the cash flow statement. So if I come to presentation, page number 32, I see that the project development cost is around INR 3,441 crores. Now, I understand that INR 1,100 crores was spent towards the Wadia Group land acquisition. Then, maybe around INR 500 crores for the other business development activities we did in Gurugram acquisition and Manjri, Pune. So what about the balance 1,900 odd crores? Like, can you throw some light on that?
Yeah. So, Keyur, can you... Yeah, just a minute, Ishita.
Yeah.
Because Keyur can.
Yeah. So, we've also acquired land at Sector 71. We've also acquired land at Sector 71. Then, we've made some payments for the land at Sector 31. We've also made payments for the Kalwa land. So all of that is comprised in the cash flow, which you have included therein. And, there is also a working capital adjustment because then, so that, that is also factored in the overall. So the gross amount is recorded in project development costs, and that also includes the development cost which we have incurred on the projects, and-
So, Ishita, this also includes construction costs incurred on the existing project that we've launched.
Okay. Okay, got it. Also one other question that I have is on the Walkeshwar launch. I see that 23% has been sold so far, so I mean, this seems to be muted versus the other launches, the response we are getting on the other launches. So, is it because it was launched towards the end of the second quarter? Or, can you throw some light on this?
See, it's a very, very, ultra super luxury project in South Mumbai. We have just about eight apartments. Two are already sold, and we have some very strong follow-ups on the other inventory also. Given the profile of these customers, they take their time, et cetera, but I think we're already done to. And the pricing has been at INR 1 50,000 crores per sq ft. So obviously, you know, we can't do a Trimaya here, but we did, because that's about INR 1 crore average, so this is INR 50, INR 60 crores per square. And so it has its own, you know, characteristics. So, but we have, it's as per our plans, so we're, so it's going well from that point of view.
Understood. Understood.
If you look at these kind of, you know, high luxury sales, you look at the other places, you see most of them, the bulk of it goes more towards the, when the product is, you know- Almost ready or structurally ready, et cetera. Here we just launched, and we already kind of done two apartments. We're looking at a few more for the end of this year. So I see, you know, this project doing very well from that point of view.
All right. Thank you. That answers my question.
Thank you, Ishita.
Thank you. The next question is from the line of Biplab Debbarma f rom Antique Stock Broking. Please go ahead.
Thank you. So, I have two follow-up question. First question is on the development, project development cost. Out of that, how much was the construction cost in 1H FY 2025? And in second half of this financial year, how much the project development cost do we anticipate?
Biplab, I suggest these bookkeeping questions you can take offline, you can connect, you know, and take it from Keyur. I don't want to take, these, Everybody has to- Yeah, other time on this. We can talk more about-
I think broadly we answered Ishita, so I think you should have got your answer from there. Very detailed, each project.
Yeah. You can always, you know, connect with Keyur and take the number. Yeah?
Okay. Okay, that's all. Yeah.
Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing remarks.
Thank you all for participating in this earnings phone call. If you have any further questions or would like to know more about the company, please reach out to our IR manager at Valorem Advisors. Thank you so much for your time, and have a good day. Thank you.
Thank you. On behalf of Batlivala & Karani Securities , that concludes this conference. Thank you for joining us, and you may now disconnect your lines.