Ladies and gentlemen, good day, and welcome to Ashiana Housing Limited Q1 FY21 earnings conference call. As a reminder, all participants' lines will be in 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, this conference is being recorded. I now hand the conference over to Mr. Gaurav Sood from Kanav Capital. Thank you, and over to you, sir.
Yeah, thanks, moderator. Welcome, everyone, and thanks for joining this Q1 FY21 earnings call for Ashiana Housing Limited. I hope all of you are keeping well in this stressful time and staying safe. The results and investor update have been mailed to you, and it's also available on the stock exchange. In case anyone does not have a copy of the press release, please do write to us. We will be happy to send it over to you. To take us through the results of this quarter and answer your questions, we have today with us Mr. Varun Gupta, Full-time Director of the company, and Mr. Vikash Dugar, who is the CFO. We will be starting the call with a brief overview of the company's performance, and then we will follow up with a Q&A session.
I would like to remind you all that everything said on this call that reflects any outlook for the future, which can be construed as a forward-looking statement, must be viewed in conjunction with the uncertainties and risks that they face. These uncertainties and risks are included, but not limited to, what we have mentioned in the prospectus filed with SEBI and subsequent annual reports, which you will find on our website. With that said, I now turn over the call to Mr. Vikash Dugar. Over to you, Vikash.
Thank you, Gaurav. Good afternoon, everyone. Thank you for joining us to discuss performance of the first quarter of FY21 of Ashiana Housing. I extend a warm welcome to all of you. Area booked recorded in Q1 FY21 was 0.81 lakh sq ft as compared to 3.5 lakh sq ft in quarter one, FY20. The sales are at 4.14 lakh sq ft in the previous quarter. The fall in booking in comparison to the previous quarter was largely attributable to the lockdown implemented due to the spread of COVID-19 pandemic. As discussed in the last quarter update, we were expecting approx 50-55 cancellations in Ashiana Amantran. From initial bookings, we had received in last quarter.
Documentation regarding cancellation of 41 units, that is around 0.72 lakh sq ft in Ashiana Amantran, is pending completion in the system, and those cancellations will be recorded in second quarter of FY21. Bookings have further recovered from July 2020 onwards, and we expect second quarter to be substantially better than the first quarter. We handed over 0.85 lakh sq ft in quarter one, FY21, out of which 0.03 lakh sq ft was delivered in partnerships. This was against a delivery of 1.55 lakh sq ft in quarter one of FY20. Revenue recognized from completed projects was INR 25.19 crore, versus INR 50.46 crore in Q1 FY20. Revenue recognized from completed projects was INR 80.37 crore in Q4 FY20.
Total comprehensive income, that is TCI, was negative at INR 2.30 crore, vis-à-vis positive INR 8.63 crore in Q4 FY20. Pre-tax operating cash flows were positive at INR 10.56 crore, versus positive INR 5.14 crore in the previous quarter. Equivalent area constructed was 1.21 lakh sq ft versus 3.27 lakh sq ft in the previous quarter, and was 2.14 lakh sq ft in Q1 FY20. The construction was hampered in Q1 FY21 due to lockdown, and this might push the delivery dates of our projects, but we intend to ramp up construction in the months to come. On this note, I would like to conclude my remarks. We will now be happy to discuss any questions or suggestions that you may have.
Thank you, sir. Sir, shall we begin the question and answer session?
Yes, please.
Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question, may press star and one on your 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. To ask a question, please press star followed by one on your touchtone phone now. We have our first question from the line of Darshan Shah from White Equitie s. Please go ahead.
Yeah, thanks for the opportunity. My question is linked to maintenance segment for the FY20. We have seen a decline in gross margin in maintenance segment to 22% in FY20. Is there any one-off in that?
Hi, hi, Darshan. Maintenance segment continues,
...On a net basis, I don't think we will generally be profitable in the maintenance segment. Overall, it's more or less on a net profit basis, we end up being no profit, no loss in a general environment, a very slim profit. I think that will continue. Some decline in the gross profits last year, I think, were due to one-off items that happened last year. And we can give more detail later on if you write to us and give more color on the one-off items that happened last year. Vikash, would you want to elaborate a little bit right now some of the one-off items that we had in financial year 2020 maintenance?
So on a rotational basis, some of the older projects we do carry out certain activities like painting and certain civil work over a period of time, as and when the projects get old. And the expenses regarding that, they get booked. So as and when, during the period, there is a significant impact of these, there might be an impact on the margins. And since it's a relatively smaller size balance sheet, smaller size entity, the impact can be significant at times. So that's what the reason could be.
Okay. My next, next question is on receivables. So around 50% of receivables are outstanding for more than six months. It was a similar case even in last year. So can you just throw some light on that?
Again, the receivables pertaining to the maintenance segment, particularly, there are receivables which will pertain where the
Sorry to interrupt. It's not pertaining to maintenance, it's overall receivables.
Okay, so overall receivables, as well as Darshan, some of them I wouldn't be able to add color as to what's been the movement. But receivables do keep moving between 6 months, and some of them move upwards, and some receivables get into 6 months. Receivables more than 6 months pertain to 2 kinds of receivables for the company in general. One, which is in the maintenance segment, and that particularly pertains to not staying, not paying customers. So people who have taken handed over flats have been handed over to them, but they are not occupied. And since they're not occupied, they do not pay maintenance for a bit, and recovery takes usually longer than it would take from a customer who is occupying the units.
And the second, more than six months, customers are generally people... It's the last, let's say, 4, 5, 10% of a flat, where we have issued possession letters to customers, and they have not taken handing over of the flat. That's the other thing, things, pertain to. And, that again, again, changes, time to time. I, I don't have a specific color or there is nothing that, as a management, we are alarmed about.
Yeah, and the spread also is across a couple of projects. It's quite spread across a number of projects. So there isn't any particular location, any particular project where that concern is there. So more in the normal course, which will gradually get recovered.
Okay, thank you. That's it for now.
Thank you, sir. Anyone who wishes to ask a question, press star followed by one on their touchtone phone now. We have next question from the line of VP Rajesh from Banyan Capital. Please go ahead.
Hi, VP.
Mr. Rajesh, your line is unmuted, sir. Please go ahead.
So one of my question was, this footnote about 71,566.
Mm-hmm.
One should expect that this will show up in Q2 as the cancellations. Is that the right way to think about it?
Correct. That's the right way to think about it.
Okay.
We had given an estimate that we were expecting cancellations in Ashiana Amantran when we did the annual call, because that project had just concluded launch before lockdown became. Actually, some of the units were concluded for sale during the lockdown. And then we started seeing that some of those bookings will cancel as expected. And those expectations have come around, but you know, paperwork, we don't record cancellations till certain paperwork is completed. In real estate, we don't record bookings also till a certain amount of paperwork is completed. So that paperwork got into July, so we just thought that we'd clarify on that.
Yeah, I remember you mentioning it on the last call. So what is the trend you are seeing now? Are those units getting picked up by buyers or, there's, if you could just touch on that?
No, so, in Ashiana Amantran, new bookings have been good. July was a good month. August continues to be a good month. Not just Ashiana Amantran, but last quarter, we had seen bookings across projects, albeit slow. July has been a good month, across the board. And, we are seeing, overall traction in sales is generally good, in second quarter.
I see. And, what happened in THR this particular quarter, that suddenly we were able to, have we funded that project or that's still-
No, we have still a few units left. It is, again, very large units. We were able to transact two units there, so therefore that happened. It will keep coming up, like it was one person who took up two units. So-
I see.
Again, but very limited inventory left there now. I think we have about seven odd units left in that project.
I see. And
I'm unable to hear you, Vivek.
Sorry. My question is, what is the prognosis on town?
I said on Ashiana Town, again, July has been good, August continues to be good. I think this year we'll have an overall better year in Ashiana Town than last year.
Okay, thank you. I'll, I'll get back in the queue. Appreciate it. Thank you.
Thank you, sir. To ask a question, participants press star one. We have next question from the line of Manasvi Shah from ICICI Prudential AMC. Please go.
Yeah. Hi, sir. Thanks for taking my question, and, congratulations on the good set of cash flows reported. So, so my question was on, you know, the cash flows in particular. Do you expect that this run rate continues? Because, you know, while the collections are very healthy, obviously there is not much construction which has happened this quarter. So what is the outlook on both collections and constructions in the coming quarters?
So in the coming quarter, construction and collections both are expected to ramp up, Manasvi. Construction has ramped up, collections also ramped up in July, but the ramp up in construction in July was more than collections. July was not as good. We expect August and September to again show positive cash flows. We expect the cash situation in the company to improve overall. If not second quarter, third quarter, definitely, because most of the cash flows for the customers for us is locked in from previous year's sales.
I think-
And as you said, except for Ashiana Amantran, there has not been cancellations much anywhere. And Amantran was also expected because it was in the launch phase, and obviously bookings there again. I'm overall optimistic on the cash flow front end.
Okay. Sir, given that bookings are now improving in July and then in August, are you looking to launch any new phases?
If I... I couldn't hear you clearly, but what, what I understand was, if you asked, are we planning to launch any more phases during the year?
Yes.
Yes, we are launching. We are already in the process of launching Vrinda Gardens Phase 5. In Ashiana Nirmay Phase 3, we had two blocks, and even though we were constructing both, we had only launched one block for sale earlier. The second block for sale is also getting launched in this quarter. We have more phases in other projects planned for launch in the second half of the year as well.
You know, in terms of, say, lakh or million sq ft, could you give some numbers?
Can you say that again, ma'am?
In terms of, you know, lakh or million square feet, could you give a probable number?
For sales? For launches?
For launches. For the launches.
I think we should launch about 1 million sq ft for sales this year. Overall.
Okay. Sure, that's it from my side. All the best, and thanks a lot.
Thank you.
Thank you. We have next question from the line of Vivek Joshi, Investor. Please go ahead.
Yeah, I just had a question that in these three months, did you have any significant people who were due to pay for, you know, construction and stuff like that, and they didn't pay? Or was that, like, not significant?
No, there was collection concern in the first quarter. A lot of that also had to do with procedural issues at banks, in the home loan processing, visiting projects, confirm construction happened, and processing files and paperwork. And in some cities, you know, lockdown being announced by state governments, and that also delaying certain things. So there has been a slight bit of concern. They are again overall... But let me put it this way, we are seeing a little bit delay in payments, but we are not concerned about credit of the payments and whether the payments will be received as of now in general. That's the general sense.
Okay.
August is an important month, where things need to get resolved and we are closely tracking how things go. And most of our collections for any month is anyways backended to the second half of the month. We'll get more color as we go along. But things are far more normal than the caution and concern that we probably had, let's say, at the beginning of the year.
Okay, thank you so much.
Thank you, sir. We have next question from the line of Harsh Vora from Investor. Please go ahead.
... Hi, my question is, I have two questions. The first one is about EMI schemes. Has the company launched any new EMI scheme, like Godrej recently launched, I think, 90 EMI scheme?
Okay. There are two kind of different schemes. One, is Godrej has launched a 10-90 scheme, where it's not an EMI scheme, where you pay effectively 10% now and 90% later. We haven't done a 10-90 scheme or any scheme of that sort. We have always had some EMI sharing schemes, which we continue to do, where we pay EMIs on behalf of the buyer for a certain time frame or a portion of the EMI for the time frame, which continue. They are not necessarily any new schemes, as y ou know, whether we haven't done anything new, and we typically do not like to delay our cash flows.
So we are not, we are generally of the view, I'd rather have the cash flows early and give a discount to the customer for getting earlier payment than he would have usually made. That's our typical view to have. We are not very comfortable launching schemes of the nature of 10% now and 90% at the end.
Okay. My next question is about the senior citizen housing project that you had announced, like you are looking for something in Chennai. Did you finalize something in Chennai?
No, we haven't been able to conclude on a senior living transaction in the last 3-4 months. We continue to be scouting right now. We are in talks for a lot, but we have not been able to conclude anything yet.
Okay. Thank you. That's it from my side.
Thank you.
Thank you. To ask a question, participants may press Star followed by one on your touchtone phone now. Your next question from the line of Priyank Singhvi from 5Y. Please go ahead.
Yeah. Hi, Varun.
Hi, Priyank.
Can you tell what's the current rental yield in the Bhiwadi area for the units that we help renting out? And the difference, the decrease in interest rates and is that creating some, I mean, is that, that difference between rental yield and the post-tax housing loan rate, that decrease, does that move any balance and help us in moving some customers from rent to buy, as you said something in the last call?
So Priyank, yes. So the rental yields in Bhiwadi and/or most places where we are, would be approximately 3%. You know, 50 basis or 50 basis, more, but in general, the... it will hover around a 3%, rental yield in most of our projects. And, yes, the overall compression in interest rates, I think, is absolutely making a difference. And, and that should, it should continue according to me therefore.
The question is, July was a good month, and the question that we have always is whether it was a pent-up demand month of the last four months, which is coming into a month in general, or is it more to do with the fact that with compression in interest rates, properties has become a lot more affordable and a more attractive also a place to place put money in? We would know over a period of time, but my sense right now is that the compression in interest rates is overall the tendency to buy over rent, it's tilting more and more consumers in that favor, that they'd rather buy than rent.
Perfectly. Yeah, it will take time for the idea to spread around the, about the compression. And, what's the rental yield in Jaipur?
Again, similar, Priyank, about 3%, you know, 50 basis here or there.
Okay, fine. My last question is about how's the economic activity in the Bhiwadi and Jaipur area?
So, again, our overall information is very sort of colored and comes in a little bit from the media, some of the things that we see, very little data to support it, as compared to others. But our first sense is that it's coming back to normal in most sectors. In Jaipur, where tourism forms a large part of the economy, that remains a concern. Fortunately, most of the tourist season is in the winters of the year, and we'll get a little bit more deeper sense as to what's the impact over there. But the tourism sector there and the jewelry sector also, which is a large driver of that economy there, are constrained.
But outside of that, economic activity in terms of, trade, in terms of industry, in terms of, IT and, a little bit of IT that there is, seems, overall okay. And also, Bhiwadi, again, with automobile industry coming back to life, in July, which Bhiwadi's manufacturing is very heavily dependent on, things seem to be coming back to normal over there as well. Okay, fine. Thank you. Thank you.
Thank you. We have next question from the lineup, Abhishek Shah from Valcore Capital. Please go ahead.
Hi, sir. Thank you for the opportunity. Am I audible?
Yes, Abhishek, you are clearly audible.
Hi. So my question is actually on the sales strategy. It's more of a broader question to understand how we think. You know, a strategy of not involving real estate agents and having an in-house sales team. I'm just-
Mm-hmm.
Trying to understand your thoughts on that.
Mm-hmm.
The second is, you know, adding on to this question is, how do we create brand visibility? Because for other real estate developers, you generally have these real estate agents who would, you know, sort of get volumes and, you know, create that brand visibility.
Okay. So one, first, our choice of selling directly came in more out of compulsion and less out of choice early on in our journey in Rewari, because there were no real estate agents in Rewari and people in NCR. It wasn't really worthwhile for an agent that's in Gurgaon to sell Rewari at that point in time, because the time, effort and its cost, and the remuneration he would have got from Rewari wasn't just making sense. So the first reason we took up direct sales was more out of default and, market, situation rather by choice. But as we evolved, we became more and more, capable and selling directly, generating leads, directly generating leads to referrals and word of mouth and online and digital marketing, and therefore, it, it worked for us, we kept at it.
Then it became, you know, we also were able to control the information going to the consumer far better and more significantly going down that line. That said, we have started experimenting, working with channel partners and real estate agents. The first experiment is going on in Gurgaon at this point in time, where we have started engaging with channel partners over the last six months. Once we learn how to engage with them, then we might want to use them otherwise. But even in Gurgaon, engaging with channel partners, they are more, let's say, as partners who are generating leads and are also working with clients.
But a large part of the sales process is controlled and conducted by an in-house team of Ashiana, which is trained, which can understand Ashiana's projects, thought processes, what brand stands for, what we want to do, and is working with the channel partner team, with the channel partners at large, and creating a sort of a more collaborative thinking than sort of a substitution thinking. So that's the strategy we have evolved on and learnt and seen other developers do that successfully. So we are experimenting with that, and let's see how that goes before we take that to other places.
So basically, even in the long run, you would expect still major, major chunk of our revenue still coming from our in-house, team rather than, outside partners as well?
Yes, because a large part of our sales continues to be driven by referrals and word of mouth and sort of relationships that we have with our existing customers, so that-
Just even, what we, you know, agent who could do that push marketing, coming from alternative, that push, you know, to probably then-
So, you know, last year was a great year in sales for us. We struggled three years before that.
Yes.
We got good sales last year without any really channel partner support. So I don't think that's necessarily it. I think even channel partners who are able to sell, they are able to sell established brands in a micro market. So in that situation, our ability to build brands based on our product and service and quality and differentiation of our product there and services is going to be important for even channel partners to be able to, you know, sell us. It's not... I don't think the push of the channel partners is as critical as it is.
And also from a longer term perspective, I also would like to when we are looking with channel partners, one clear thing is that if you want the channel partners for us to be successful, we have to build a brand which is easier for channel partners to sell. I think that's where our key would be, and we are working on that in Gurgaon. And let's see how that goes, and then we'll take it from there. I think that's what I would suggest.
All right.
Or that will be, I think. Let me put it this way.
Got it. Got it. So this is really helpful, sir. Thank you so much.
Thank you.
Thank you. So we have next question from the line of Himanshu Upadhyay from PGIM India. Please go ahead.
...Yeah, I had one question on portfolio augmentation, okay? And how is it looking? Means new deals and new-- how much time will it take further? And do you think last time when we were talking, you stated that there are deals where prices are down, but we are thinking and looking at it. Do you think waiting from here on also makes sense? Means the much better deals may come up and hence we would like to wait from here on also or what is your thought process right now, and how are you looking at things, means, in the larger market like-
Yeah, sure. Two, three things on that. One, our project in Pune now seems to be clearing a hurdle, which was critical. There we had a land there, which was pending zone conversion. So their zone conversion orders have come in, but a larger play on building plan approvals and environmental clearances remain there. But I would say those are smaller hurdles to cross than zone conversion. Zone conversion was a much bigger hurdle to cross, which took a lot of time for us after even doing an MOU. So, A, in that portfolio, I'm hoping that that project will be now definitely up for launch in the next, you know, 12-15 months.
We are more clearly seeing a light there and going forward there. So that's, that was one part of portfolio from an operating perspective, which was important to us, and was testing our patience also a little bit, if that's the way to put it. On the other transactions that we are evaluating and looking at, I think a larger part of our caution was coming less from whether we get a better deal tomorrow. More it was very how certain are our cash flows looking in the future that we take our transaction today, and then it becomes a problem because we are stuck in future cash flows from our end.
On that front, over the last four months, we have gotten a lot more certainty. That's been one good thing. Second bit has been for certain transactions we need equity financing at the project level and those, so there were financial partners also we were talking to as to their view in the market, and people had become a little bit more cautious, if that's the way to put it. I think those hurdles are clearing up, and we should start looking to put things together on that side of things. Overall, we are not going to wait for transactions to become nicer and sweeter as we go forward.
I think we are going to be more, that A is our cash flows looking good, which currently the sense there is.
Okay.
The second thing is, does this deal make sense fundamentally to us in terms of, so after our estimate of a reasonable sales price to sell this at, where we think the market can absorb it and the cost that would take to build, is there enough margins left on it that it makes a fundamental sense of a base case, return scenario? If that does, we will go ahead with the transaction instead of saying, "You know, I'm getting this for INR 100 today, and might get this for INR 80 tomorrow, let's wait." I don't think we will go into that mode of thinking. That's not going to be our attitude.
Okay. And, just on this bit only, see, one of the things is, the sales price, have been more stagnant in many micro markets, but, the sales velocities have dropped out, okay?
Mm-hmm.
So in this environment, when you are purchasing land, how are you planning? So earlier when we used to hear from most real estate players was it takes... the current what buyer, buyer phenomenon, okay?
Mm-hmm.
How would—what would be your basic assumptions of?
Yes.
Both sales price and, again, how much can you sell would be dependent on how large land area you get there?
So, let me put it this way. Those are the assumptions we have to make when we buy a project, any okay? Sometimes you've got those assumptions right, sometimes you've got those assumptions wrong. But the fundamental thing is you are, at the end of the day, estimating as to these volume of units, can you sell at a particular price in a given market environment, okay? Different micro markets are in different micro market environments. But as I said, last year, we were able to sell well, particularly in new launches, because we were able to... I have a belief that there is a combination of four things that have to work: product, price, location, and developer, okay?
When this combination is right for any particular land or a project in a particular market context, things will work in any market, but it has to be right for that context. And we got those right in projects which we launched last year, and therefore success. So any new project that we are looking at, we have to get this right. Given our context of a developer, any market have the right product at the right price in the right location. And that will differ market to market, and those are the options we will get right sometimes, we'll get wrong sometimes. And the hope is that we get them right 80% of the time, right? And then we are more or less okay. But that's where we are.
I would like to say that as a management, our assumptions are generally reasonably conservative. You know, that's again a very subjective view.
No, perfectly fine. But just, question, would you be still the assumptions majorly work for you would be at the constant selling price or the constant, the current market price would be the base assumption with which you would be working, or you think-
I would, you know, so we would work with, again, a market price. One thing is to come from a. See, market price is for a product, so I might go with a view that I'll change the product. So my per square foot price might remain the same, but my ticket size might reduce, or I might have a view that, you know, I'll reduce the... I'll keep the ticket size the same and reduce the per square foot price and give a bigger flat. And there could be combinations of those thinking. So as I said, we have to get the right price, product, location, developer combination in a particular market context. And in Jaipur, let's say the example that is there, we launched two projects, one Ashiana Daksh and Ashiana Amantran.
Ashiana Amantran, we launched bigger flats at a higher per square foot price, and we have sold well there as well. And but it was in a particular location with a particular context. Ashiana Daksh was a lower per square foot price with a smaller size, and we sold well there as well, again, in a particular context. That project sold better than Ashiana Amantran. But, you know, I'm okay with both. I am not looking for having a superlative launch. I am, I'm okay with having a basic threshold of launch, when we go in and selling the rest over the period of the project. And that, that I'm perfectly okay with what happened. So, again, let me put it this way, only. The context-
Thanks for the explanation. One last question on this. We are seeing a number of stops and starts, okay? How are they impacting our projects, and, do you think that, cash flows or the receivables constraint due to lesser work bills you can raise to get?
You're talking about the lockdown-related stops and starts?
Yeah, yeah, yeah.
Okay. So fortunately-
How is it impacting?
Fortunately, Rajasthan has not had a second lockdown.
Okay.
Okay? So where-
Or Jamshedpur.
So there, Jamshedpur has had second lockdowns, but now they have allowed more continues to be more or less like Chennai also we've been able to resolve it, again, mostly in situ construction. Right now, again, unless and until a longest, largest lockdown comes in place, I don't see a challenge. And my personal view has become that another serious problematic lockdown is not really in the offering within the states that we are working, wherever I have context. I don't think that's going to happen to a larger degree. From just an economic compulsion perspective. And that's my view, but if they happen, I don't know what will happen.
Right now, there, I don't see a problem with, I don't see a problem with construction in any of our sites at this moment, sir.
What would be your-
Sir, I'm sorry to interrupt. We would like to come back in the question queue. Thank you. Your next question from the line of Rohan Advani from Multi-Act. Please go ahead.
Yeah, thanks for the opportunity. Most of my questions have been answered. I just want to check if you foresee any demand traction owing to COVID, like, say, work from home option, you know, makes Bhiwadi a better market than before for someone living in Gurgaon? Or is that true for any other, you know, market that we cater to? That was my first question. Secondly, when you said that you will launch 1 million sq ft this year, does that include anything from Kolkata and Pune? Yeah, those were the two questions. Thank you.
Thank you. First, I'll take the second question first. The 1 million sq ft will not include anything from Kolkata and Pune. We are basically looking to launch Vrinda Gardens phase five, another building in Ashiana Nirmay, a phase in Ashiana Shubham in Chennai, a phase in Ashiana Daksh, and a phase in Ashiana Umang extension. And I gave an estimate of a million, so it might be a little lesser than that, maybe like 750,000-1 million sq ft, somewhere between those two. And we're not looking to launch. This does not include Kolkata and Pune, which will be on top. I think there, COVID has definitely led to a certain delay, and I said now Kolkata and Pune, we are looking at 12-15 months from now.
Kolkata, I can't give an estimate on, because there, again, the government offices have really, really not moving anything, because of COVID at this moment, and, there's nothing moving, in Kolkata. So that's the answer to the second question. On the first question of, demand, changes, see, again, it's difficult to pinpoint what is, demand really being driven by. It could be lower interest rates, it could be pent-up demand, it could be COVID, induced work from home and locations becoming, lesser importance in terms of the distance from the workplace. I, I am not sure exactly what's, happening on that front, but as I said, July was good, and Bhiwadi also did well, overall, in that, context.
The only other sort of thing that I heard, and again, difficult to substantiate, but we are seeing some sort of demand, let's say, particularly in Jaipur, whereby people whose parents were living in independent homes in Jaipur and the children were working, let's say, in Bombay or Delhi or Gurgaon or Bangalore. And suddenly because of COVID, they've started thinking that their parents should live in a probably a gated community which is more secure, where daily needs are easily taken care of, and they have some sort of community support. That was an indication that I think that is also happening because of COVID.
But again, very thin data points and to see, but I see work from home making COVID catalyzing home demand for the kind of development that we do and in the kind of locations we do. We expect COVID and lockdown to induce long-term positive demand for this. But again, very little data as of now to substantiate.
Thank you, Varun. Thanks for taking my question.
Yeah, thank you.
Thank you. We have next question from the line of Arpit Ranka from Kovill Investments . Please go ahead.
Yeah. Hi, Varun.
Hi.
So a couple of questions. Firstly, so in U.S., you had particularly, say, higher instances of infection in senior living or senior care homes. In India, in the projects that we have, let's say Chennai or some places, did you see any relatively higher?
No, we haven't seen any instances of higher infection as yet.
That's good to hear, I mean, because we, I mean, a very nascent stage of developing this concept, so you don't want, I presume. So I just wanted to clarify that, that's
Mm-hmm. Yeah, so I would also give one context of that, Arpit, and just to clarify. Again, in the U.S., where you are seeing more instances or abroad, it's really just not U.S., but abroad, where you're seeing more instances of in senior care facilities of more COVID. They seem to be more in what you would call an assisted care center.
Yes.
Where people are generally older, we live in, you know, communities which are more integrated in the sense that they are not independent homes. You have sort of a room to yourself and share a common area. And they're not separate apartments that way. The ones which are more separate apartments and where the younger community are more independent senior living communities. We've in our senior living communities, that's not. But so our senior living communities are more independent senior living communities. We have a very small fraction, very, very small fraction of our total population, which is in assisted care in Ashiana.
Sure.
I think that also makes a difference as to the spread of the infection.
Yeah. Actually, I visited some of them, and you generally end up running into very active people there. So I didn't... I just want to clarify, given that we would not get to know the situation as it is today. So it's good that you've clarified.
Yeah.
And, the second question is a combination of two. See, one, you said last two months, let's say, you've again gotten sales velocity going up. The fact size of maintain the realizations?
No, we've been able to maintain realizations. There has been no additional-
No discounting, nothing?
Nothing that is any significantly different.
Okay, great. So on the sales velocity, so this is more I presume we're in... So let's say, unemployment is on the rise, and there's uncertainty around wages or so wage hikes or something. Now, so today you may have moratorium, but let's say by December, moratorium is no more an option... And existing units, or unit owners put up some of these units for resale. Do you think that may kind of, is this something that bothers you? It's not necessarily in terms of volumes, but in terms of, say, distressed sales creating pressure on pricing or stuff like that? Or do you think-
That problem of distressed sale creating a problem has already been happening in Bhiwadi. Okay?
Okay.
That is, that has been one of the reasons for sluggish sales in Ashiana Town, and we had to factor in a price discount, and therefore Ashiana Town sales realizations have compressed over the last 3-4 years. So they're not anything significant in the last 3-4 months, but it did compress earlier and that was a problem. In case we see resale units coming up because of stress, it would create concern depending on the number of units such come on board. Right now, so overall, the situation on ground does not seem as grim as it is.
So, in Jaipur, let's say we were doing the Vrinda Gardens phase launch, and we have this target of, corporates that we want to hit, where, you know, we have existing customers where we can get references, and therefore we can get bookings. They are, you know, they are either people owning properties with us, it's living on rent or both. And we had a list of 20 sort of, companies that are, we should, look at. And out of those 20 companies, only two companies had either a salary cut or layoff. They had no layoff.
Sure.
Both those companies which were there were both hospitality companies.
Understood.
And hotels, you naturally understood. So I think the overall, my... The more the information I get from ground, the challenge is lesser than what we think it is. That's my overall perspective.
No, that, that certainly helps. Just one final question on... So let's say January 2020, right?
Mm-hmm.
This is more qualitative side to it than just quantitative.
Mm.
2025, you had a certain aspiration or a vision for the company.
Mm.
Now you've had a good, let's say, five, six months to process this event, which is huge.
Mm
... in what it can imply.
Mm.
How has that vision changed for you? Let's say 2025, what qualitatively has changed for you, or even quantitatively, want to kind of put numbers to it?
Yeah.
I broadly want to get a glimpse into how you're thinking about it.
Yeah. There has been no quantitative changes, we were hit over a difficult time anyway, 3, 4 years. Then we got a good 12-month run, and then this came in. So let me put this way, quantitatively, we've stopped thinking so much about the vision in a quantitative basis in general, with COVID or without COVID. On a qualitative basis, I think our purpose of creating lifestyle and communities which are vibrant, where we are able to deeply impact people's lives positively by impacting how they live, how they form relationships, how they grow up, how they live their day-to-day life, how their family interactions are, what are their friends like, what kind of things do they celebrate?
And all that, that we think we can do as a, as a home builder, I think that aspiration and vision continues, that we want to positively impact lives of people, in ways they didn't expect that we could also. And, that purpose continues. COVID has actually just emboldened that thought, with a view. And so one of our anti-real estate views, or anti, common consensus views has been that, the product is more important than the location in real estate. And people are willing to, pay for lifestyles and, communities, that one builds, even though they're a little further away. I think COVID will just, probably enhance that perspective, that, you know, I'd rather live in a better community, even if it's 10 km further away.
Work from home probably will create a catalyst for that also. Let's say, I don't think a six-day work from home will continue, or a five-day, but a situation where people will work two to three days a week from home and come to office two to three days a week is something that I think can become permanent in nature for a large part of the working community. There, I think COVID will probably enhance the value for our projects, and we want to continue to live that purpose of giving a great lifestyle to people.
Thank you, sir. We have next question from the line of Ruchak Mehta from Sayan Capital. Please go ahead.
Yeah, thanks. My question is more regarding the future projects and the land available for future development. To be specific, what you've shared in slide numbers 24 and 25 of the presentation.... Okay. So if I look at it, they look largely skewed towards Bhiwadi, even the land which is available as well as the future projects, in a percentage terms, if I was to look at it. So is that something as per plan? Because if we look at the last few quarters or even couple years, we've been finding good response from other markets like Jaipur especially or other places. So just wanted to understand, is that something that we would like to correct as a balance, or this is something as per plan that we are going ahead with?
No. So we, we would like to correct that, because if you see most of the Bhiwadi land came in or all of it came in, pre end of pre-December 2013.
Okay.
Okay? And we have not deployed any additional capital in Bhiwadi since then, and we don't plan to deploy any further, land, there. But, the pace of, you know, the correction of this will be dependent on the pace at which Bhiwadi, sells and, consumes this. So I think, so therefore, this sort of, skew will continue for a bit, according to me, as it corrects over a period of time.
Okay. Okay, but do you foresee that could kind of restrict our ability to grow in other markets, what otherwise we could have done?
It has already restricted some of our growth by-
Mm-hmm.
You know, with capital being allocated in one place and not sort of creating desired returns, it does create a drag on the balance sheet. And it is what it is, but it is correct. You know, there is... To me, in Bhiwadi, there is no other way to monetize this other than that, sell it over a period of time. And sales fortunately have been improving, and we are getting a lot of our capital out. And I would say it's a 3-4-year process where capital gets freed up here and gets deployed elsewhere, and growth sort of comes back on track in a way that we would like. And that process can sort of continue. We've been working at it.
We've been going through details, what's the kind of capital we need and other locations to grow. We want to get back to, you know, return on average net worth in the teens, and to get to how we need to allocate capital, that's been going on. Our balance sheet moving away from Bhiwadi is important in that, in that role to play. We see that, but I think the future looks a lot more brighter today than it looked three years ago.
Thank you. Sir, we have next question from the line of Raj Shekhar, investor. Please go ahead.
Thank you. I think, my questions are already answered. I think I was also very keen to understand about the Bhiwadi, game plan, because certainly majority stuck there doesn't help. But you have already answered it. Thank you very much for that.
Thank you.
Thank you, sir. We have next question from the line of Avadhoot Joshi from Newberry Capital. Please go ahead.
Hello? Hello.
Yeah.
Sir, I just want to know about the new projects which will be launching in Q4 FY21, it is Shubham, and Q4, Q1 FY22, Vrinda Gardens Phase IIIb. Is expected completion time, are we on the track, or will there be any delay in this project?
Vrinda Phase 3B, in terms of completion?
Yeah. Yeah, yeah.
No, we are far ahead of schedule, yeah. Vrinda Gardens Phase IIIb, we hope to hand over in the next month or two. The building is completely ready. We have applied for CC. So most of the data that we give here is as per RERA.
Yeah.
We are far ahead of schedule on that. Ashiana Shubham phase two is also in the process of handing over.
That's great.
We are handing over both of those projects. We are ahead of schedule, and we don't have any issues with it as well.
That's right. Second thing is, last call you mentioned that sir, we are facing pricing pressure in Bhiwadi and, Gurgaon. So I just, in continuation to the last question, I hope that we are not going to invest much in Bhiwadi in future. Is my understanding correct?
Yes. So in Bhiwadi, we are looking to, as I said, the first question, not only not invest in the future, but we are also looking at getting a lot of our capital deployed in Bhiwadi to come out of Bhiwadi. So overall, from a capital deployment perspective, and Bhiwadi should reduce over a period of time.
Thank you, sir. The last question from the line of VP Rajesh from Banyan Capital. Please go ahead.
Yeah, just a couple of follow-up questions. So we paid the NCDs in the current quarter or the last quarter, I guess. What was the thinking behind that, especially if we are looking to buy more land?
So, there were NCDs which were the amount which were due in April of next year. So there was a very short postponement. So to us, that saved interest for those 8-9 months without really impacting our perspectives on looking at land, because when I'm looking at land purchase, I'm looking at even longer-term financing. So we didn't. So let's say that part of the NCDs which are due in April 2022 and April 2023 and April 2024, that's, I think that's our NCDs are due. It's the ones which is April 2021, 2022 and 2023, the amount which is due in April 2021, we part prepaid those. So that was the whole thinking that we paid off the shorter end of the curve.
Understood. In terms of the land prices, have they corrected pre-COVID further, or they are holding stable?
Yeah, according to us, COVID has had very little impact on either sales prices or land prices. All it has done is delayed things to a large degree, and probably impacted some demand of land right now from developers whose balance sheets were already stretched. But I don't think those developers, in any case, weren't anyways evaluating land parcels. So I don't see COVID having a very dramatic impact on pricing, either of residential units or land in any form or fashion.
No, I was just thinking the other way, that some of the builders who are stressed balance sheet may be forced into liquidating their land banks, and if that then-
They were already doing that,
Okay.
I don't think there was any changes. If anything, you know, the loan moratorium has helped delay certain things, and people have been able to get some time. Loans will get restructured also, so it might have the counterintuitive impact that might give breathing room to some of the stressed balance sheets.
I see. Okay. And in terms of the launches, you know, what are the... Sorry, I may have missed this.
Yeah.
What are the launches that you have planned for the rest of the year, Q3, Q4, anything?
Yeah. So we are looking to launch. We've launched Vrinda Gardens phase 3B, phase 5, sorry, phase 5 in this quarter. We've launched a block in Ashiana Nirmay phase 3, which are two blocks. We had not launched one block for sale, which is getting launched in three days. We will include in the second half of the financial year. We look to launch another phase in Ashiana Shubham, phase 4. We look to launch phase 3 in Ashiana Daksh, which is a very smallish phase, and look to launch a phase in Ashiana Umang extension. A small part of that phase we have not decided the exact phase size yet.
Right. So what is the roughly square footage of all these launches?
Yeah. I can't, I don't have a totaling in my head right now, but, as I said, I've given an idea of 1 million sq ft. I think it's anywhere between 7.5 lakh sq ft to 1 million sq ft.
Okay, great. Thank you.
Thank you, sir. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for closing comments. Over to you, sir.
We would like to thank you, all of you, being on this call and, being patient with all the questions and somewhat long answers of mine. If we were unable to take any queries or, if you wanted more information on some of your queries, please feel to write to us directly or reach us out, directly. With that, we would like to conclude the call. Thank you everyone, for being here and joining us on this call. Do stay safe, do stay healthy. Thank you, everyone.
Thank you very much, sir. Ladies and gentlemen, on behalf of Ashiana Housing Limited, that concludes this conference call. Thank you for joining with us, and you may now disconnect your lines.