Ladies and gentlemen, good day, and welcome to the Sunteck Realty's Earnings Conference Call for Q1 and FY 2025. We have with us today Mr. Kamal Khetan, the Chairman and Managing Director of the company, Mr. Prashant Chaubey, the Chief Financial Officer, and Mr. Abhishek Shukla, the Vice President of Strategy and Investor Relations. Please note, this call will be for 30 minutes, and for the duration of the conference call, all participants' lines will be in listen-only mode. This conference call is being recorded, and the transcript for the same may be put up on the website of the company. After the management's discussion, there will be an opportunity for you to ask questions. There will be a Q&A session, and we request you restrict questions to two per participant.
Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Before I hand the conference over to the management, I would like to remind you that certain statements made during the course of this call may not be based on historical information or facts and may be forward-looking statements, including those related to business statements, plans, and strategies of the companies, its future financial conditions, and growth prospects. These forward-looking statements are based on the expectations and projections and may involve a number of risks and uncertainties, and other factors that could cause actual results, opportunities, and growth potential to differ materially from those suggested by such statements. I would like to turn the conference over to Mr. Khetan, the Chairman and Managing Director of the company. Thank you, and over to you, sir.
A very good afternoon to everyone for joining us today, and thank you for taking the time to participate in our company's earnings conference call for the first quarter of the financial year 2025. We have started FY 2025 on the strong note with several positives. I would like to share five key highlights before our CFO, Prashant Chaubey, speaks on the financials. We did INR 500 crores of pre-sales in Q1 FY 2025. This is 30% year-on-year growth with contribution from all projects. BKC project recorded INR 110 crore from the above. I'm happy on the momentum pickup at BKC, as it is also directly close to our operating cash flow surplus.
With a strong start to this financial year, we remain confident to achieve 30%-35% growth in pre-sale for the FY 2025, as we had guided at the beginning of the year. Our operating cash flow grew slightly higher at 32% year-on-year and stood at INR 100 crore during the quarter. With higher sales in BKC, two big project completion in FY 2025 and higher pre-sale, I am confident Sunteck will deliver a stronger operating cash flow surplus growth in FY 2025. Balance sheet continues to remain strong. We remain a net cash positive company. Gross debt is down over 60% since FY 2022, today at 0.09x of the equity, and it is less than one quarter cash collection.
On execution, we have made a significant progress with completion of Sunteck MaxXWorld project at Naigaon and handover of units to almost 2,500 families. This marks a major milestone for us as cumulatively, we have delivered more than 5,000 apartments in Sunteck World, Naigaon, over the past 2 years. The second project, Sunteck City, 4th Avenue at ODC, Goregaon West, is also nearing completion and shall be delivered in FY 2025, well before the stipulated timeline. And lastly, happy to share progress at 2 of our major upcoming uber luxury projects. We have activated our investments in Dubai. Our project in Dubai is likely to be launched in the next 12-15 months in FY 2026.
It has the potential of generating over INR 9,000 crore of sales, and our investment in the project is just around INR 250 crore for 50% of the profit share. Just to give you an idea that the project is in most sought-after locations of Burj Khalifa community area in Downtown, near Dubai Mall. The Nepean Sea Road project, a second project, which is a Nepean Sea Road project, is progressing well and is in one of the best locations of South Mumbai. It is on the sea with an uninterrupted lifetime sea view. We are in the advanced stage of planning and started the process of site clearance. The project has a potential of INR 2,500 crore of gross development value.
We are excited about this positive development, and with low inventory months at our projects, we are likely to launch more in the coming quarters. We continue to be aggressive in identifying more opportunities, which align with our high equity multiple philosophy to further exponentially expand our portfolio. I will now hand over the call to Prashant Chaubey for more information on earnings performance of Q1 FY25. Over to you, Prashant.
Thank you, sir. Good afternoon, everyone. I trust you have had the opportunity to go through our latest results and the investor presentation, which are published on our company website and the stock exchanges. I would like to take this opportunity to share a brief update on financial and operational performance of quarter 1, FY25.
The key details are as follows: We sold INR 502 crores worth of area in quarter 1, FY 2025, which is a 30% growth over quarter 1, FY 2024. Collections for quarter 1, FY 2025, stood at INR 342 crores, which is a 19% growth over quarter 1 of FY 2024. The strong collections has resulted in a net operating cash flow surplus of INR 100 crores, as against INR 76 crores in quarter 1 of FY 2024. Operating revenue in the P&L grew by 348% year-on-year for the three months ended June 24th, to INR 316 crores, in comparison to INR 71 crores in the same period in the last financial year. This was because of recognition of revenues from Sunteck MaxXWorld , Naigaon, and ODC projects. Our Core EBITDA stood at INR 79 crores.
However, except for a one-time charge, it would have been close to INR 170 crore. Adjusted for this, our core EBITDA margin is close to 50%, and reported EBITDA margin shall be close to 40%. We were expecting certain height approvals to utilize additional FSI in our existing development at Sunteck City 4th Avenue at ODC, Goregaon West. In line with this, the related costs were capitalized in the balance sheet. As we do not want to wait any further for the same, we have now amortized it in the P&L. We reported a net profit of INR 23 crore for the quarter ended June 2024. Our net debt-to-equity stood at -0.01x, with a cash surplus of INR 39 crore. Our total GDV, excluding pre-sales already done, stood at INR 37,480 crore. Thank you. With this, we open the floor for questions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. 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 line of Puneet Gulati from HSBC. Please go ahead.
Yeah, thank you so much, and congratulations on, you know, good pre-sales momentum and also on the new project. Can you help me understand the broad economics of the Dubai project? How much did it cost you to build, and how would the money flow in from India to Dubai and back from Dubai to India? Is there any tax implication or leakages anywhere? Thank you.
Hi. Good evening, Puneet. So this project is in 100% subsidiary of Sunteck. We have invested close to approximately just INR 250 crores, so it is a quite asset-light model. It's a nd the project is obviously, I've said in my opening remarks, is in the heart of the heart of downtown, in the Burj Khalifa community near Dubai Mall. And so most of the money obviously will come from the pre-sales, just for the maybe little bit more investment in the beginning. We a nd no incremental investments, we are looking at the very clear.
Some small money for the launches and all which may be required, which may go from India, which will be negligible, with respect to the size of the project. And cost is obviously, the cost of the project is around INR 2,000 crore, and which should, most of it should come from the pre-sales. And, we all know the Dubai market is doing extremely crazy well. Where, on the launches, the projects are getting sold almost to 100%, you know. And but this and bringing this project in the heart of the, once again, at the cost of repetition, heart of the Downtown, next to Dubai Mall, we don't see any problem there.
Okay. So INR 9,000 crore GDV, INR 2,000 crore construction cost, and from that, we should look at your share at 50%?
Yeah.
What will be the time to complete, and who will be the construction partner there?
So we are identifying the contractors. But one thing I'm sure you must be knowing, Dubai today has the best of what we struggle in India to find a contractor. Dubai has best of the world's contractor working in Dubai. You know, it is a international now capital of the world. So we don't see any problem in finding a contractor to do construction. And we will not be doing constructions ourselves as what we do in India. So we are very clear on that.
Who is the partner and time to complete?
The partner is a group called MAS, M-A-S.
Okay. And time to complete this?
Time to complete should be 3-4 years.
That's great. And secondly, if you can talk a bit about the progress on the IFC platform. Is there anything that you're likely to conclude? And plus, if you can detail the launch plan for this year.
So IFC, we have already done a platform, you must be aware.
Yes.
We remain committed to that platform and build on that partnership. We are in process of evaluating the right project and obviously hopeful of closing it soon.
Okay, and launch pipeline?
Sorry to interrupt you, sir. May I request you to rejoin the queue?
Sure. Thank you.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your questions to two per participant. If you have a follow-up question, I would request you to rejoin the queue. The next question is from the line of Abhinav Sinha from Jefferies Group. Please go ahead.
Hi, sir, and congratulations to the team on great quarter. So first question is on Nepean Sea Road. Where are we in the approval process? And do you see the launch this year or maybe next year?
Yeah. Good evening, Abhinav. So, can you repeat your questions, please, once again, if you don't mind?
On Nepean Sea Road, where we are on the approval process, and, what are the launch timelines?
So Nepean Sea Road, we have vacated almost most of the tenants there, and we are clearing the site, and approval is in the process. Approvals are in the process. We are at the also advanced stage of designing of the project. As far as launch timeline, I have already mentioned in my last quarter call that we should be looking to launch this in either Q4 of FY 2025 or Q1 of FY 2026. That is at the cost of repetition. I have mentioned that earlier in the last quarter call also.
Right. Okay. So secondly, for our growth guidance of this year, it's been a good start. So just wanted to check, A, how much unsold inventory do we have in all of the projects, as in, which is launched but not sold, barring the BKC one? And, what is the launch pipeline looking like?
So on to start with your second question first, your launch pipeline. So the launch pipeline, we have lined up few launches in obviously the coming quarter. The combined launches of the Sunteck for this year, what we are planning, is close to the GDV value of INR 5,000 crore. But we are looking at one new phase launch of Sunteck World in Naigaon, one new tower launch in Sunteck Sky Park at Mira Road, one new phase, again, a launch of 5th Avenue after now as we are almost completing 4th Avenue, so 5th Avenue at ODC, Goregaon West, and one or two more new towers in Sunteck Beach Residences, our SBR project. Plus, again, in one or two more towers in Sunteck Crescent Park at Kalyan.
So with all these obviously strong launch pipelines and sustenance sales, and again, to repeat, combined GDV value of close to INR 5,000 crore, we expect our presales to grow 30%-35% in FY 2025.
Abhinav, Prashant this side. With regards to your first question, of the unsold inventory. In our ready to move in project in BKC, our unsold inventory is close to INR 1,200 crores, and in our ongoing projects, the unsold inventory is close to around 1,600 - 1,700 crores. In terms of the cost to be incurred for our ongoing projects, it is close to 1,300 - 1,400 crores.
Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Riddhi from Arihant Capital. Please go ahead.
Thank you for the opportunity, and congratulations on the successful numbers. So I had one question regarding the pre-sales guidance as well as the EBITDA guidance for FY 2025 and also for the next two years, if you could provide, sir.
You're not clear. Can you mute some instruments around you? I think there is a problem.
Hello, sir.
Yes, Riddhi, may I request you to please use your handset?
Yeah. Am I audible?
Yes, ma'am. Better.
Yeah. So just wanted to know the pre-sales guidance for pre-sales as well as EBITDA guidance for FY 2025 and also for next two years.
So, Riddhi, as we have already spoken in our opening remarks, we are looking at a presales growth of 30%-35%. That is what we are targeting. And in terms of our EBITDA margin, those numbers are already published in our presentation, and you can look at it from there.
Sir, would you provide for FY 2026 and FY 2027 as well, if you could give some ballpark figures?
Riddhi, on a continuous basis, we are looking at 30%-35% growth year-on-year.
Okay. Okay. Thank you, sir. And also for Dubai project, sir, if you could provide, like, are we going to launch phase-wise the project, or if you could elaborate more on that?
So, Riddhi, Dubai. It's a one single land parcel, and you can't have the phase-wise kind of a thing. So I think we will launch at a time. It's a one single project with maybe one tower or two tower, and that's how it is. So it will be launched one at one single time.
Thank you. The next follow-up question is from the line of Puneet Gulati from HSBC. Please go ahead.
Yes, thank you so much. So just from the cash flow clarification perspective, so would it be fair to assume that had the collection from BKC not been accounted for, the operating cash flow would have been negligible? And if that is the case, why should that be?
Puneet, hi. Prashant this side.
Yeah.
Puneet, your understanding is slightly incorrect. It's basically when you are looking at a cash flow, from a cash flow perspective, you have to consider the cash flow from all the projects that we are getting.
Right.
In certain quarters, the cash flow from one project is higher than the cash flow in the other quarter. So if you look at the number on a yearly basis, like last year, we did INR 484 crores of operating cash flow surplus. Before that, we did INR 428 crores of operating cash flow surplus, at which time my collections from BKC was very negligible. In fact, it was nothing. So, I would say that you should not look at it from just one quarter perspective. It has to be a more, like a 3-4 quarter perspective, that then only you will get to know the right picture. However, BKC collections are definitely helping us in our operating cash flows.
Understood. So it's just a one quarter anomaly here at this time?
Yes. Yes.
Okay. And secondly, in respect to your BD costs for the projects that you already have in hand, what is the balance to spend on BD?
Puneet, the balance cost to be spent on our BD of our existing projects is zero, is nothing.
Okay. Great. Super. Thank you so much, and all the best.
Thank you. The next question is from the line of Biplab Debbarma from Antique Stock Broking. Please go ahead.
Good afternoon, sir. My first question is on your business development. Sir, currently, how many projects are we evaluating? What would be the total GDV of these projects?
So, yeah, Biplab, so we are evaluating obviously a couple of projects. You all know market is good. We have obviously a strong BD team, but it will be very hard for me to disclose anything on this call that what are these projects and what are, what will be their GDV value.
Okay, sir. That's my second question is, sir, on from the ongoing projects, what would be the receivables from these ongoing projects from the sold units?
Biplab, Prashant this side. The receivables from the ongoing projects is close to around INR 2,300-INR 2,400 crores.
Thank you. The next question is from the line of Charul Gupta from Bearwood Capital. Please go ahead.
Yes. Hi, hi. You know, you've given the guidance on, you know, FY 2026 and, FY 2026 pre-sales growth as well. You were saying, you know, you expect, you know, 30%-35% growth to continue. So could you just talk to me about what are the drivers of this pre-sales growth continuing? I assume the GDV, right, year-on-year, the GDV is growing about 40%. So basically, this, you know, GDV growth that you think would lead to continued 30%-35% growth, what are the trends you are seeing that, you know, give you confidence that you can pin this not just in 2025 but also in 2026?
So we will update you with the obviously, the new, 26, FY 2026 guidelines to you, slowly. But we all know whatever growth we are talking about in FY 2025, which is only from the existing projects. We have not even considered Nepean Sea Road and Dubai into this, because both those projects are going for the launch. We are considering that if we miss out on Q4 for the Nepean Sea Road launch, still we are confident that we will achieve 30%-35% pre-sales growth from our existing project, because we are launching in every project, because we are left with very little inventory for all the existing projects.
So we are launching new phases and new towers in every project. So and that and our this existing projects, which we call our growth engines, these are projects with the inventories of like 6-7 years and 8 years. And obviously, while we are talking this, we are also talking about that our BD, our right now, our GDV value is INR 30,000 crore, which we are saying that we will continue to add, and we'll make it to INR 60,000 crore over a period of next 2-3 years. And before even completion of FY 2025, we have added this INR 9,000 crore of GDV from the our Dubai project, so which has already taken us close to INR 40,000 crore. So I think that explains itself.
It is self-explanatory that we to achieving this 30-35% growth, year-on-year on the presale for the next few years is very easily possible.
Got it. Got it. Basically, you are saying FY 2025, we get 30-35% growth from your existing portfolio, just launching new inventory there. And then next year, you'll have the impact of launch of Burj Khalifa and Nepean Sea Road, you know, which is INR 9,000 crore of total GDV, and so then that will help you continue this growth into the next two years, essentially.
Yeah. Yes, I think that growth will be in fact, ideally, it should be more than... And plus, there is many more projects which are already, which we have already, acquisition has been done, but it has not been added to the GDV value. So if you, to give you one more example, let's say Borivali, S K Resorts, which is also there, plus there is a Bandstand, which is there. Plus, there are a few more projects which we are contemplating to, which I don't want to disclose before we complete the transaction. 3-4 projects, which are sizable projects and which we, we would like to, as soon as we close those transactions, we would like to disclose it to the market.
That's okay. That's okay. Maybe this last question from my side is, you know, how like, you know, do you are both Dubai and Nepean Sea kind of large projects in terms of year one pre-sales? Do you think, you know, when we launch them in FY 2026, that will be a big boost year-on-year to sales? Like, how do you think about sales expectations at Dubai?
So we want to be conservative, when we are giving our guidance, which we have maintained at 30%-35%. We all know if obviously, the launches in Nepean Sea Road and Dubai, looking at the current status of the market, obviously, we may achieve much more than 30%-35%, but we don't want to, overcommit and then underdeliver. We are, very clear on that.
Thank you. The next question is from the line of Kunal Lakhan from CLSA. Please go ahead.
Yeah, hi, good evening. Just a clarification on the Dubai project. So the INR 2,000 crore construction cost includes approvals as well as sales and marketing, or it will be over and above it?
No, I think that includes most of the costs, which includes your sales and marketing and approval costs, as well as your construction cost, which is we are talking about almost close to AED 1 billion. So which is quite enough for a, for a FSI, which is for a sale area, which is close to 1 million sq ft.
Okay, got it. Understood. And, secondly, on the Borivali project, what is the status there? And, you know, what will be the launch timeline?
So Borivali project, you know, Kunal, I think when, we, when we are even little bit uncertain, we don't add the project. We follow the discipline of not adding the project to the GDV value, and hence, I would like to refrain myself to give you any, commitment or any, any, timeline about that. The moment we see the possibility of, approvals getting, expedited, obviously, we would first like to add it to the GDV value and then, then come up with the timelines.
Sure. Sure. Okay. Thank you so much.
Thank you. The next question is from the line of Ronald Siyoni from Sharekhan Limited. Please go ahead.
Yeah, good afternoon, sir, and thank you for the opportunity, and congratulations on the set of numbers. Sir, I had a question regarding BKC sales, you know, and that has seen a good, quite a good improvement. So, you know, has there been a change in terms of strategy, in terms of selling or pricing? And, you know, what kind of outlook you can give there, you know, whether this runway should continue going ahead or, you know, this would be a lumpy each quarter and annual there will be some target with respect to BKC.
Ronald, Prashant this side. So if you see in BKC in the last 12 months, we have done pre-sales of close to INR 355 crore, and this is against INR 203 crore that we did in previous three financial years, all put together. So overall, you know, the momentum has definitely picked up in BKC by quite a margin, and we are quite confident that this will continue, and it will keep on continuing.
Okay, sir. Thank you very much.
Thank you. Ladies and gentlemen, we will take that as the last question. I would now like to hand the conference over to Mr. Kamal Khetan for closing comments.
Thank you all for taking out the time from your busy schedule today. In case if any of your queries have been left unanswered, you can get in touch with us. We look forward to your continued support. Thank you once again for joining us today, and please be safe. Thank you once again. Thanks. Bye.
On behalf of Sunteck Realty, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.