DLF Limited (NSE:DLF)

Investor update

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Mar 21, 2025

Summary

Development margin potential is ~INR 67,000 crore, with cash generation potentially reaching ~INR 50,000 crore including the pipeline. Annuity rentals target ~INR 10,000 crore by FY30, while priorities include execution, debt reduction and shareholder returns.

Hi, good afternoon. Welcome to all of you. A lot of familiar faces, some new ones. I hope you had a good intensive first half and a decent lunch, and some of you got to interact with the chairman, Anushka, Savitri, the leadership team. The way we want to run this is that we will have a presentation, which has now, post the trading hours, also been uploaded on the stock exchanges. Hopefully the presentation will run for about 35-40 minutes. Obviously, if there is a pressing issue, you are more than welcome to ask a question during the presentation as well. But post the presentation, we will open up for Q&A and invite the chairman also on stage at that time. I think really two or three disclaimers I will put. Most of the data that we have here is data that is already been disclosed as a part of our quarterlies, be it in terms of our presentations or in terms of our analyst calls. What we have done is we have slightly fleshed out the data more, made it slightly more specific, but that is one thing. There is no new earth-shattering data that you will necessarily get here, but hopefully you will get in a form and shape which makes it slightly easier to understand. This is forward-looking data in the sense comparable to what is there in the analyst reports. So obviously it is subject to the same sets of uncertainties that any forward-looking data would be, which is the usual safe harbor disclosures. The third point is wherever we have used areas here, the areas refer to the saleable area and the gross leasable area and not the carpet area. Obviously, as and when those products are launched, they are launched in the form of carpet area, square meters. So right now, the metric here used is saleable area, stroke, leasable area in square feet, in that sense. While obviously eventually when the documents get signed, it is carpet area and square meters, in that sense. The fourth point, which I think hopefully you would appreciate as you go through the presentation, is that by and large, it is simply our business is divided into DLF and DCCDL, but that is not the way we actually run the business. The business is run really as devco and annuity business. Most of the data that we have tried to capture is with that distribution in mind, that a devco and then the annuity business. The annuity business includes the DCCDL, as it is called, the Atrium Place, which is our JV with Hines, the rental projects that are housed on the DLF side of the equation, and our hospitality business, which also is an annuity business, and which is an increasingly growing and an important business in our ecosystem. So what we will do is we will get Badal to start the pitching of this. Badal, as all of you have met in the morning, is our new GCFO, and he will hopefully use all his experience to pitch out. Then as and when we come to specific sections, we will request the concerned business leaders to join us on stage. At the end of it all, then we request the chairman, Anushka and Savitri, to join us on stage, then open it up for Q&A. Badal, all yours. Good afternoon, everyone. Hope I am audible. The mic is not working. Mic is not working? Okay. It is better? Okay. I thought I will be very serious, but I thought I will start with a slightly lighter note on 107 days of experience in real estate sector. Hopefully I do justice to the, I would say, outstanding journey which this group, this company, has created and I think is in the path of creation. With that caveat, a few other caveats which Just Okay. A few of the standard caveats, possibly I will again repeat. We have structured the business the way we would want you to see the data. It is not an accounting representation of information like DCCDL and DLF. It is like a business segment, a management estimate. That is the way we would want you to see this data. Okay. First to begin with, eight-plus decades of strong presence. I think not many company can boast of. It has an impeccable record of generating customer value, having customer-centric focus on the kind of quality of development. It is just not about developing a property, but kind of ecosystem around it. Extremely high standards of corporate governance and compliance. I can say this with my five or six different experiences and stints I have. I think the level of corporate governance and compliance is absolutely top-notch, and I have worked with some reasonable companies in my life. This, to my mind, has resulted in an extremely strong brand, which DLF is kind of, like I say in Hindi, "Naam hi kafi hai." I think it stands for itself. It stands for product, it stands for quality, it stands for best of output. It stands for customer first. As we said that we have two distinct businesses which we run. One is our development business and the second one is the annuity business, and we are going to cover both. Our development business has been kind of performing exceedingly well, has been a strong growth driver for the last five years. As we say internally, annuity business is extremely steady and strong compounder, where we have significantly invested over the last four to five years. This gives us, to my mind, a uniquely positioned organization where we have got a balance of development business and rental business, which gives a balanced portfolio. I think we are one of the few players, or maybe the only player, at least in the country, to have such a balanced portfolio, a diversified portfolio, supported by hospitality and services businesses. Past few years, and we will run through numbers you are already aware of, it has been really strong for DLF as a group. As we go through the slides, you will realize that we have laid an absolutely strong foundation for the next level of growth for DLF. As we say, and again repeat, focus always remains on prioritizing customer needs, creating customer value to the customer. You would have heard Aakash say at least four times during the Privana presentation, we look at customer first, we look at customer value creation. Okay. Again, repeating the same thing, customer centricity, compliance, safety, governance, and sustainability. The five key pillars, which are of no compromise whatsoever in the way we think, in the way we execute, and the way we operate. These numbers which we are representing, is to give you a sense of scale and size of DLF as a group. So again, we have represented the 100% value of all the entities which we have. So we have disregarded, or rather, we have not considered the accounting definition of JVs, et cetera. So this is 100% level. DLF as a group had over almost INR 13,000 crores of revenue and over INR 7,000 crores of EBITDA last year. It is an extremely strong performance, and we have been growing steadily, rapidly over the last five years or so. We have been consistently paying dividend for almost 17 years, and for the last three years, basis the performance, we have actually taken care of shareholder returns in the same way and grown our dividend payout to the shareholders as well. Net debt or cash is absolutely one of the critical points which in almost every discussion comes into play. We have had our focus of reducing our net debt position for almost INR 24,000 crores. We are at INR 14,000 crores net debt position in the last five years, almost reduction of INR 9,500 crores. With a strong operating performance, measured in EBITDA in this particular case, our net debt to EBITDA has actually come down approximately 2.6 levels as of December end. Not repeat the same two lines of businesses. We will now dwell into the two businesses separately. We will talk about it on what has been the performance and what possibly our priorities are, the way we think about these two businesses in the future. Can I request Devinder Singh and Aakash Ohri to come for the development business discussion? Aakash. Okay. Move on. As you are already aware, that we have a high-quality land bank available for development. We will talk about the quality of land bank and how it is situated. We are one of the, I would say, fortunate companies possessing land bank, accumulated at the right time, maybe, and which is ready for great monetization, possibly in the coming years. Our focus, as we say, is always customer centricity. I am repeating this time and again, because again, it is very close to heart. But along with that, we do focus on margin as a concept, from a realization perspective. Our focus is on margin and cash. These are the two key levers which we continue to focus on in almost every discussion, in almost every aspect of business development when we talk about. One of the things which we wanted to highlight, that whatever we are doing today, or whatever we have done yesterday, is going to come into our financials only after 3, 4, 5 years or so. It is a conservative accounting policy. Our accounting records do not reflect what has been done today. So we thought we will just reiterate this. While I am sure you are aware of it, but it is important for us to reiterate this because this does not represent your current strength, the current potential of what is actually happening on the ground if we were to just look at mere financial statements. Hence, we thought we will bring this point out specifically. You may be aware, but it is always important to reiterate this because this is not comparable. Okay. In sales booking, I think we have had a good year. We have almost hit over 19,000 crores of sales in this fiscal year. Our launches, as you are already aware, have been well received, whether it was Privana South, Privana West. You got some statistics from Aakash. It was significantly oversubscribed. We did, if I may use the word, rationalize. We had to prioritize whom we want to give, and that's always a good position to be in. We saw exactly the same situation when we launched The Dahlias, which is an uber-luxury, super luxury product, and it definitely did exceed our expectation of how the sales booking or how the customers responded to our product. We feel confident of what possibly we have done. We feel confident of what the products have been, and we feel that our performance in sales has been fairly, if I may use the word, stellar, in the last 1.5 to 2 years or so. As I say, no discussion, at least for us, is complete if we do not talk of margin and cash, and hence it was important for me to bring this margins page along with the sales number. We continue to generate healthy margins from whatever sales we are doing. Our growth in margins is higher or faster than our sales numbers. If I were to look at the same margin number in a very different manner, as on April 20, we had almost 10,000 crores of realized revenue margin, which was supposed to be recorded in our financial books of account. As I say, there is a lag in accounting. The same number we generated, we accreted around 25,700 odd crores of margin from sales booking, which has been done. We consumed in our financial statement almost 13,000 odd crores. As on end of December, we had over 20,000 crores of margin, which is yet to be recognized in the P&L, which is going to get recognized over the next 2, 3, 4 years as and when the projects fructify. So these are for launch product sales done, 20,000 crores of margin sitting on a balance sheet, of course, subject to realization of cash. This strong margin, et cetera, has resulted in reasonable growth in PAT, and we have seen a steady growth on it. CapEx. Here, the CapEx, the way we have defined is land and approval cost. We continue to spend money on approvals and land wherever is required. The land acquisition will be whether to kind of improve contiguity or parcels, which can have accretive value to the product projects which we are launching. If there is an attractive parcel, which we feel can be extremely value accretive, we would kind of go out and invest in those property. I think we start by the IREO product or the IREO land which we have taken opposite to Grand Hyatt in Sector 61. So that's one of the examples where we think that we have had a reasonable investment, and it is going to be very value accretive to the group as a whole. Despite spending money on the CapEx and approval cost, where the realization is going to happen in the future, we continue to generate operating cash, post all expenses, post all CapEx and approvals. We continue to generate cash for the group. Hence, as a result, one of the stated goals which we had that we want to reduce our debt, which I covered earlier as well. We became net debt positive last year. We are almost INR 4,500 crores net debt positive as we speak as of December end. We continue to be in this path, and again, INR 9,000 crores of cash of which INR 7,100 crores is lying in the RERA account itself. This is an interesting thing, and we saw several cuts. This is the cut which we are presenting, but when we looked at this data, we looked at data 15 years, 10 years from the product launch, et cetera, of various product. The point which being made out here is the return or value accretion to the customers on the product launched by DLF has had a reasonable return over a longer period of time, and it is comparable with any other asset class in the country. As I said, we have taken this into various cuts, various segments, luxury, super luxury, 10 years, 15 years, and I think the answer by and large remains the same. This is a chart which has been shown earlier, it is published, of the launch pipeline. We had presented that we will have almost 37 million square feet of projects which will be launched in the medium term, effective yielding around INR 114,000 crores of revenue over a period of time as and when sold. 35% of this value, INR 114,000 crores, 35% of value worth projects have already been launched till date. Another 15% worth value will get launched in the coming fiscal year. So the pipeline which has been talked about, 50% value worth of projects will get launched, and hence all this is here and now and not something of the future. Again, we will kind of take this and peel this one by one and kind of go into the next level. Of the INR 40,000 crores, just one previous page, one point, INR 40,000 crores of launch product, we have already sold INR 17,000 crores, so the balance inventory left for us to sell is approximately INR 25 odd thousand crores from the products already launched. This is the number which will be required in this next slide, and hence I am just highlighting this point. If you recall, I had said that INR 20,000 crores worth of margin has already been locked from sales done of project launched. Sales done of all projects launched. The projects launched with unsold inventory, if you were to sell, just mere execute that, the gross margin potential could be another INR 17,000 crores. So the total gross margin which we will be able to generate from projects already launched and will be sold will be almost worth INR 37,000 crores. In a very defensive manner, if I were to say it very differently, if I did nothing else for the next 5 years, if I just executed what I had and sold what I had, we will generate INR 37,000 crores of margins. We have also talked about another INR 77 odd thousand crores of pipeline, which is going to be launched over the next X number of years, 3 to 5 years or so. If you were to kind of take a ballpark number of what kinds of margin potential those have, that could be another INR 30,000 odd crores. These are rounded off numbers, directional numbers, and that is the way possibly we should take these numbers. Overall potential of margin to be created from the projects already launched and will be launched, which are clearly defined in our thought process, is almost around INR 67,000 crores. Okay? If you were to take this forward, this margin into cash, how does this margin generate cash? The reason we are harping, because it is very important for us, again, I am repeating, margin and cash are fundamental parameters or KPIs we should like to monitor. Sales also is important, but these two are more important. We are sitting on INR 9,000 crores of cash as on December end. We talked about in the earlier slide. We have receivables of INR 30,000 crores. These are all published numbers. There are no new numbers on this. INR 30,000 crores worth of receivables from sales already done. All the projects which are launched, and if we were to complete today, we will end up having INR 20,000 or INR 30,000 crores of cost. If we did nothing, just executed our projects and realized what we have sold and the cash in hand, we will be left with INR 19,000 crores of cash before overhead and expenses. If we were to just add the inventory which we are sitting on of launched product, INR 25,000 crores, and we realize that money at INR 24,000 crores is net of brokerage, et cetera. INR 24,000 crores is incremental money which we are going to realize. From all the launched project till date, we will generate almost INR 43,000 crores of cash in the medium term. If we were to take this INR 43,000 crores cash and now take out all our CapEx, OpEx, taxes, net of financial income, which could be anywhere between INR 17,000 to INR 19,000 crores, a ballpark number over this period of time, our net cash generation, post expenses, et cetera, could be approximately INR 25,000 crores from project already launched. On top of it, from our new pipeline in this defined period of time, net of operating cost, we could generate another INR 24,000 to INR 26,000 crores of cash, depending on when we launch, what we launch, et cetera. In this period, we are looking at anywhere almost INR 50,000 crores of cash balance in a way, because we started with INR 9,000 crores in the medium term. Again, to crudely put, if we did nothing and just sold what we had, INR 25,000 crores cash balance. If we did well and we kind of kept on track and kind of market supported, it could be as high as INR 50,000 crores. Maybe, God knows, it could be even more. It is a good foundation, a good position to be in, is the point which possibly we wanted to highlight out here on this page. Is that clear? It is important to also tell us, we talked about land bank, which is there. We have been historically reporting that we have almost 192 million square feet of land, of which the development business potential was 169. That is the first column. This is what we have been publishing, et cetera. We have reassessed our potential, basis the revised zoning regulations, policies, taking into consideration TOD, TDR regulations, et cetera. Also assessing what we want to do where, we feel that this 169 today, on a reassessed basis, could be as high as 196 million square feet. Not as high as, it could be approximately 196 million square feet. Of this 196 million square feet, 23 million square feet is already under development, and another 29 million is the potential where possibly in the pipeline we will develop. If we did all of it, by the end of this period, we will still be left with almost 144 million square feet of developable land bank, which to my mind will be good for us to execute in a steady state basis for another 20 odd years or so. So we have a fairly potent land bank in prime area, developable, which will help us in good stead for a good times to come. Couple of decades at least we think so. Again, it is important to kind of give a margin twist to it, and we have kind of broadly qualified that what kind of the super luxury products area which we have, what is the kind of luxury which we have. But the highlight out here will be that the premium and commercial projects also we are saying could be in the benchmark of around 30% plus or minus 2%, 3% here and there. 30% kind of realization on margin, which to my mind also is a fairly good number. Overall, we are aspiring to have a 45% gross margin in the long term from our development business going forward. Just to summarize, we have got great quality of land bank. Our focus on cash is paramount. Even if we did nothing, almost INR 25,000 crores of cash will be generated. We have almost INR 37,000 crores of margin potential from already launched inventory, which the new sales booking will be a steady state we are talking about. We are looking at a similar number for at least next fiscal year. This should help us deliver almost a 2x growth of PAT and 2x plus growth in cash in the medium term. I would say in almost five years or so. Debt continues to be of importance. We have already done net debt zero. We have already been net debt positive. We want to reach a gross debt zero benchmark, and which will happen soon. We will be judicious and cautious on capital allocation, whether it is shareholder return or growth CapEx. So in summary, this is what we are looking forward from a development business perspective. Can we have Q&A for development first? Okay. Okay. We can now open. Yeah. We can open up on Q&A on development business for the questions that come to your mind on development. Please, mic. Hi, this is Praveen Choudhary from Morgan Stanley. My question is about capital allocation. I think Madan convinced us. I think we were earlier convinced, but he has convinced us that you are going to generate a lot of cash. The question is, how do you use that cash? I see one line, discipline and opportunistic capital allocation. But if it is possible to dig deeper into it, the dividend growth has been good in the last three, four years. But as a percentage of earnings, as a percentage of the stock price, it is very small. Can it be dramatically increased? Is that the focus? The second one is obviously investing in areas where the returns are very high. If you can delve into what are those areas potentially can be, considering INR 500 billion that you are going to generate over the next five years. Thank you. On the capital allocation, to be fair, we have maintained that we want to be broadly distributing 50% of the PAT that we generate over the medium term. Right now we are slightly south of it, but I think in the next couple of years we should hopefully hit that level. But you are right, we will have cash that will be generated over and above that also. Which step 1 is to get gross debt zero, which will hopefully happen in the relatively short term. B, we will build a cash cushion for sure, which would be available to us for any opportunistic acquisitions that come to us, and frankly, for also generating hopefully a very strong stream of financial income that can also become like a third major stream of income over the years. But obviously, the intent stays that as and when we get something very interesting, like the parcel that we did last year, we would be open to do it. But it can't be completely like a pie in the sky sort of a thing. Jevin? Yeah, I think I agree with Ashu. See, the main point basically here is that, as mentioned earlier, these are projections, okay? So we have to be careful that we don't go and spend what we don't have right now. So when we have that money, then you can ask this question again, maybe the answer will be different. Okay, that's the first point. Look, I think the message what we're trying to give is, because this question is raised many times by everybody, frankly it's raised in our own mind also. Are we doing enough? Should we do more? Should we look for certain things? I think the message which I want to kind of give to everybody is, over the last eight decades, we have done a lot. Maybe some mistakes, maybe some good things, we've done a lot. We now kind of feel that we are at that mature point where really we don't need to do more unless it makes sense to do more. Our numbers are healthy. Our cash generation will be healthy. Hopefully customer appreciation will be healthy. Return to shareholders will be healthy. Even after that, we will have an opportunity to reevaluate the next steps here. Okay. Nothing, I think, is off the table. Right now, we don't have anything on mind because we remain totally focused on what we are doing. We are not compelled to do anything, fortunately. But what we are leaving out there is that we will have that kind of firepower available to us to do things within our business or for shareholder return, as the case would be. But I think we have a few years to get to that point. The importance of this message here is that our journey is rewarding enough, and we need to remain focused on it rather than try to seek new journeys, try to seek new projects, try to seek new pastures. There will be bad days, and maybe sometimes it's better on those bad days to sit on the sideline and catch your breath and reinvigorate yourself, rather than trying to run in all directions. I'm well aware that in our industry, many people are aggressive and far more, I'd say optimistic, and fair enough, we were like that too here. There's a certain stage of growth and a certain stage of evolution where you need to be like that. Luckily, we've crossed that point. We've got all the buffers already built up. We are not feeling that we need to go down that journey and be in that risk-taking stage at this point of our journey. It will be easier for the audience. Whatever slide, they can just refer to that slide. You can put it back on again. Just, this is Parikshit. Just say what you want to ask, then we will put that slide on again. This is Parikshit from HDFC. I think one slide you had shown the returns of different asset classes. I just wanted to pick the brain of the DevCo team. Within your client profile, we see a very super luxury ticket size of INR 10 crores and upwards in NCR. What percentage of their net worth, across the asset classes, do you think will be real estate and on a more sustainable basis in NCR on a base of INR 20,000 crores, which you are sitting right now? I asked this question earlier to Rajiv. He was saying he will answer in the Q&A. On a sustainable basis, what kind of strategy on the DevCo side do you think that what could be the sustainable growth from here on the pre-sales, given that we already are sitting on a very high base and given different asset classes, what I understand that most of these people are not funding these homes through debt, so they are buying it on their personal balance sheet. What kind of allocation in their personal portfolio would real estate be? Sir, certain points you are asking are actually outside our remit. Maybe we will have to ask those questions from guys like you. I think the message here is that firstly, our pipeline we have defined, that number is 100 odd thousand crores plus. We have done almost 20 odd thousand crores out of it. We have defined the medium term. Sometimes these are not hard and fast numbers, but you need something to go by. We have defined it to be a five-year period. Any back of the envelope calculation means you kind of try to continue at the present pace of, say, 20 odd thousand crores. A good year, slightly better, and a bad year, slightly less. Okay. What we want to point out to you is we are not really pressed for looking for ways to sharply increase it. I am not saying that we will not have an opportunity to do so, or we won't do so, but the financial reasons to do so are not compelling. That is the first reason. We will keep our sales levels almost at what we have achieved, and if markets allow us an opportunity, after a few years, we can consider taking them up. But right now, it's just executing the plan, which will give us this average. Coming to the question of the customers and what they have, and as I told you, look, we try very hard. I am not saying that we are always successful, but there are three things we want to classify our customers as. First is a genuine user. We love that guy, whoever that person is. We do believe that that person will buy things in a reasonably prudent manner to the extent his or her income supports it, to the extent a financial institution decides to support them by giving them a loan. That assessment of their capability, we leave to the financial institution to make that wise judgment. We kind of try our best not to do multiple bookings here. That is where we feel the risk will multiply. Second is there is a person who is an investor. Investors also are always required in the business. They take a chance. They create a rental income. They come in at a reasonable time. They exit at a reasonable time. They are generally well-financed people who, what we wanted to indicate from here, would, as part of a larger portfolio, enjoy returns comparable over time to other asset opportunities they may have here. The third person is a person we are worried about and we try our best to stay away from, is the speculator. The speculator is the guy we all need to be careful about because that person is the guy who overtrades. Will take advantage of the installment payment schemes which are available and try to make bookings, which at the end of the day, cannot be funded unless somebody else is found to take them off his hand. That is the person who will suffer in a poor economic cycle. As a company, I am not saying we have not had our fair share of speculators. We have seen how it all ends. I think I explained to you at lunchtime also that with the project cycles today, only way to really make big money is to go high rise, and the only time thing to go high rise is it takes you 5 to 6 years to actually do a project. By the time you start a project and you accept bookings to the time you deliver the project and collect the rest of your money, world has changed. We have to be very careful that so-called speculator through that period will certainly not stay the course. There will be a bad time, there will be a good time. That person who speculates with us is not necessarily speculating with us alone. Maybe by habit, he or she speculates all over the place. They could get in trouble somewhere else, and so on and so forth. In the stock market world, it's like trading on margin futures. It's great till it happens. We are cautious on that point. I don't really think in a part of our portfolio that number is significant. We try to keep it down, and we watch our receivables very closely and very carefully. Keeping that in mind, I think Aakash and his team do proactively reach out, and if somebody is experiencing even the slightest of distress, we don't want to be harsh with anybody. We generally don't like to exercise the contractual clauses, but we try to get them a profitable exit here. We are all the time, I would say I know Aakash can give me a better number, but even in a project which is well sold, in the first couple of years, Aakash, what percentage of people do you manage to kind of trade out by giving them a better option? Almost-- Can you hear me? Almost about 25% of the people kind of trade out and kind of get a better option As we've spoken around Privana and Arbour's time also in the morning, we were subscribed and oversubscribed by about almost four times in each of these businesses' launches. As we stand today, in about two years, Arbour has an upside of almost about INR 8,000 a square foot, which is trading in second markets, and Privana is upwards of INR 4,000. So, that's the kind of trade-up that people are also doing and getting the margins that they're getting today. The message here, which I want to just give, Akash gave the right number, 25%. The point is that we can step in and take those. Somebody has bought from that person. That person could have been my customer directly. I can choose to step in and go to that customer directly, offer him Arbour 2, Privana 8, or whatever I want to do, and get that booking in. But then I leave that festering 25%, which keeps festering, and over time will become a bad debt or a speculative debt in my thing. We very aggressively, first say, before we go and sell, let our customers sell if that is their need or their desire, and very honestly, we go out to facilitate their sale. We do not distinguish, if at all, Akash prioritizes the sale on behalf of an existing customer, even at the cost of a residual stock leftover in the hand of the company. So it's a constant thing. As I said, with all the care, as he's mentioned, 25% of customers do tend to trade out as time comes through, some for economic reasons, some for making some other opportunities or making some money. We are conscious of it, and our projections take that into account. So I hope in the industry, people remain conscious and don't chase sales bookings. It's a metric which is quite a dangerous metric, because at some point of time, you start kind of looking for new customers and ignoring your old customers, and that is where the problem starts off. We are careful that, I'm not going to say there'll be no accidents, but overall, I think we are now far more cautious of the health of our receivables, yeah. Hi. Mohit from IIFL. Sir, while you have shared the pipeline for the next five years in terms of your development pipeline, as a business leader, if you look beyond the next five years, how do you see the geographical spread of DLF projects? Right now it looks like it is predominantly going to be Gurugram for the next five years. After that, do you see long vision? Sorry. Do you have a long-term vision? Sorry, I'm just going to repeat that question. Yeah. Go ahead. Yeah. Do you see after five years, DLF being meaningfully present in markets like, even if I consider NCR to be three markets? Right now, let's say in Delhi, which may possibly open up with the change in the government. You currently just have one project. Do you see your presence meaningfully increasing in Noida, in Delhi, in Mumbai? Some thoughts, your long-term vision on that. Yeah. I'll be frank with you that, as we mentioned, that even after we've completed our immediate launch pipeline, we've got about 150 odd million square feet of so-called development potential leftover. Willy-nilly through passage of time, some part of that potential will get enhanced because something or the other will be bought. Some will also get reduced by something will be sold. But net-net, we believe that that number will remain on slightly on the positive side. Look, the important point, which is that we're not compelled to do anything. This geography or our mix of geographies will give us the upside we continue to seek here. That's said and done. Whether we move NCR, I can safely say we will try our best to take advantage of all opportunities. We really don't look at Gurugram as Gurugram or something. We look at NCR generally as a market. For various reasons, Delhi had its very tough sort of development environment, which hopefully will ease. The Noida market, for historical reasons, we were not present. We look to look for opportunities to be present. So NCR will be a good market for us. North India, more around Chandigarh, will continue to be there. Mumbai, we are dipping our toes in the water. Let's hope the results are encouraging. So I think these will be principally the markets we will remain focused on. Our rental businesses will be more widespread, but I am not really feeling the need to do the development business as of right now in new geographies. I think these geographies will keep us quite busy and actually quite engaged here. Another important point of our company, it may be considered downside that we are over-focused. I keep hearing and reading sometimes that we are myopic in our vision, we are not diversified, we are not this, we are not that. But I will be very frank with you, that is why we are sitting here. That is our strength. We, every day, keep thinking about the same damn thing all day long, and everything we do has a knock-on effect on the next thing. So imagine if I go to, say, Mumbai, and I go to Thane. I pick up a 10, 15-acre parcel, I build it. I will go there, I will make my money, I will leave from there. Nobody will miss me, and that is the end of it. Here, what happens is, I build my parcel. Because of that, the kids need a school, I build a school. Because of that, the attractiveness goes up. Better people come there, offices come there, and so on and so forth. This whole cycle, this virtuous cycle we have been able to create is really the reason why actually we are sitting here. If you go to Mumbai, also go anywhere else. I will tell you guys, the guys who are creating larger communities, who are remaining deeply invested in those communities, at times looking stupidly so, are the guys who actually are succeeding, and in my opinion, will succeed. I don't want to really quote names, but it doesn't matter. I am not saying anything negative about anybody. But, say, let's look at Oberoi Realty. Okay. They have created that project in Mumbai, remained with that project, continued to create that project. That is his goldmine, that is his name, that is his reputation, that is so on and so forth. You can do 20 buildings in 20 different locations, but it will never have that impact. Anybody who has-- maybe Lodha is doing it with Palava. Takes a sizable chunk, remains deeply invested, starts thinking 20, 30, 40 years, lives through it, takes the good times, the bad times, stands with the customer. That is where the real reputation comes, that is where the real financial upside comes. So I think, don't take it as a negative. I think it is a strong positive that companies are actually deeply focused on what they are doing versus kind of spreading their bets all over the place here. Ideally, you should have many communities in many places. That is a pipe dream. If we get a chance to do larger communities somewhere else, yes, certainly we will consider it. Small things in random locations, they make money arithmetically, but that is not part of our thinking now, yeah. Sure. Just one question. We met about three years back. We had a similar and this question was asked then also about you entering the mid-income. You had clarified at that time that you look mid-income and affordable separately. I understand affordable may not be your area of interest, but on the mid-income, because there is one perception today, there are a lot of launches that have happened in Gurugram have been all INR 5, 6, 7 crores plus, and there is a real dearth of maybe a segment which caters to INR 2, 3, 4 crores kind of a ticket size. Any thoughts around you kind of trying to plug that gap, if at all that exists, yeah? Look, basic point here is that firstly, your memory is good of three years back. Anyway, the fact of the matter is that we are fortunate that we have got land parcels which allow us to operate in the better segments. Surely, you will not expect us to take those land parcels and underprice them and put something which is inappropriate, okay? The real question therefore comes up is: Do we have land parcels which are possibly in the premium segment? I think Badal did indicate we have got premium segments, and we have the land parcels, okay? We remain committed to that business. We enjoy that business. The so-called middle-class customer is actually our bread and butter. The company has been built by them, hopefully growing through a growth journey of improving their life and their incomes, and hopefully buying different properties from us at points of time. That is our business, yeah. They also are the backbone of our office business because the office business is predicated on good, strong salary talent, educated talent. We always take steps to encourage that talent, yeah. We have today got a couple of projects. Maybe if you do have some time or you want to, anyone, if you want to come back separately, please, you are most welcome to. We have struggled with one point that how do you make something which is affordable for a certain income segment, remains viable for the developer, most importantly, remains operational of a certain quality and safety later on, okay? Anybody can make a 40-floor building, but if it is not maintained, the lifts are bad, God help us, we are worried. We have done a project recently, it is almost getting delivered now, which is called Garden City Enclave. Devinder has done it. It's a bunch of low-rise houses, four floors, very sort of carefully and consciously planned within a price point which we sold, correct me if it was 1 crore, something was the price point? 1.4. 1.4, 1.5 crore rupees, we sold it at not too far back, about a couple of years back, I would say. Okay. These are units of about 1,600 sq ft. But we worked very hard in 1,600 sq ft. They get three bedrooms, they get car parking, they get all the amenities they need. There'll be a nice little community center and so on and so forth, et cetera. Their quality of life, in my opinion, will be quite nice, yeah. Today, that unit, again, because it's a nice unit, has escalated in value. Maybe today, I don't know what's the number for that unit. That means sort of 2.4. 2.4, 2.5. Now, we offered at 1.5. The market has priced it at 2.5, but we are in that segment, yeah. The point on that segment basically being that would we like to repeat that? Would we like to go and buy more land to do it, and so on and so forth? Again, that's where the question comes in is, I think since you talked about three years back, I'm going to repeat what I said three years back. I still say it today. Our constraint is our ability to successfully execute. Okay? The ecosystem around us of execution, unfortunately, is not keeping pace with the needs of our industry, maybe other industries. And therefore, what we need to be careful about is that while all these dreams are predicated on my ability to turn it around with lower margins, somebody behind me has to back me up to accept my sort of proposition and deliver and construct the product. That is, to be honest with you, a problem today at large scale. So when you are, again, confined to a few good contractors, a few people who follow certain quality and safe practices, then you have to ask yourself a question that where would you like to put those people? Would you like to put them to build your office buildings, or would you like to put them to build your certain residential projects, or can you spare them for the so-called tighter and tightly priced projects? This is the problem we are facing. If the construction industry here kind of opens up, that the delivery problems start going away from your mind, possibly companies like us can look at doing this. But right now, you have to keep your fingers crossed. It's a risky play. So we are, in the immediate future, going to utilize our lands, what we have. I don't think we'll go looking for new opportunities in that sector. Thanks. Yeah. Hi, this is Puneet here from HSBC. You talked about keeping your sales level to the levels that you achieved. Should we predicate this to the execution challenges, or are there any other thoughts that you would like to add? No, I think largely, yes, you're right. Execution challenge is something. I think the important point which was mentioned earlier was that we declared a launch pipeline a while back. We are not deviating from the launch pipeline. I think to our opinion, we have tested it that does it satisfy us? Does it satisfy our ambitions? The answer is yes. The odd project could come in. I mean, I'm not ruling that out. But largely, we feel this is a fair balance of the execution capacities, our own ability to focus, and our comfort level of the kind of customers we are seeking. It may be slightly conservative, I hope so. And maybe a new contractor shows up, maybe a new opportunity shows up. I think in the next 5 years, there will be some changes, hopefully positive, but nothing significant. So one should assume that pace of launches would be largely what you delivered last one year, two year. Pace of sales? Yes. Yes. Pace of launches is lumpy. What is going to happen is that, as already mentioned in the five-year story, we are already kind of 35% in there, will be another 15% as per our estimations. So we are going to be slightly, hopefully, God willing, front-ended in our launches. Whether that will result being front-ended in sales or not, time will tell. What we have told you right now is be prepared for a flattening of the sales curve. If it gets front-ended, good for everybody. Launches will tend to get a little bit front-ended, 50% being done soon, and hopefully the balance in the nearer future and not at the end of this period. Understood. Secondly, real estate as an industry and your company also have seen two cycles, 2014 to 2020 and then 2020 to 2025. Is there something that you think you would like to do differently so that you can insulate yourself from these kinds of cyclical impacts? Look, basically, I think that's why we did the 10-year test. We did the longer test. To be honest with you, it all firstly depends on what period you measure what. But the good news is that over time, and I'd say this for real estate in general, certainly specifically for our product, which we measured, it stands a test of time. Okay. It's not something which people go and say, "Oh, I doubled my money." That's good news for a week or 2 weeks. It's also not that I've lost all my money. So if you prudently invest, you prudently invest. You are as good or as bad depending on the time of the day and the month, in terms of any other asset class you invest in. So real estate, we believe, should be something which should give you safety, should give you comfort. But unlike many other asset classes, it gives you one big advantage, and that's what we hope the DLF difference is. Hopefully, you tend to enjoy your investment. You can live there. You can enjoy it. Your family can enjoy it. At the same time, your money is safe and growing. Okay. So that is what I think is the proposition we would like to give. That period of time you mentioned, what happens in period of time was it was a period of excesses. And excesses only get removed by extreme pain. China's going through it as we speak today. This is the first time I think where India's been ahead of China. We've been through what they are going through now. When people get carried away, things come down to Earth. If you ask me, I don't think it is an industry problem. Okay. It's not a demand problem. As somebody else asked me earlier, cycles and this. It's not a cycle. The consumer was ready to buy. Consumer was scared to buy. Consumer felt that if I go out and give money to anybody, in certain cases, including DLF, my money has gone down the tube. Okay. The customer confidence was completely destroyed. Okay. Very well-known, very established names, which I'll be honest with you, even I recommended to many people. I knew them personally, and I said, "Yes, please go ahead. They're good guys." Time proved otherwise. So that is why I feel that it was a problem caused by the industry of its own making. If we are intent on scoring self-goals every 5 to 10 years, I can't say. Otherwise, the consumer demand was only sort of staggered, and therefore it came back a bit stronger when the industry, post-RERA, became a little safer place to be. So, like everything else, there will be periods of exuberance followed by some periods of correction. I don't really think we're going to go through that deeper correction because people have got a bit wiser now. Understood. Anything you would like to do differently in the next 3, 4 years versus what you did specifically in last 3 years? No. I think the message what we want to give through this presentation, boring as it may be, is we actually want to remain intensely focused on our knitting. We all spend half the day keep thinking about what else different can I do, and we are wasting our time. I think we spend that time just doing what we should be doing, we will be much better off. This industry does not have I was recently in Dubai. There is nothing pathbreaking out there. There is no product I can say, "Oh my god." No, it is not that. Some nice things are there. I appreciate that, but that is about it. So it is just doing what we have to set out to do. Innovation levels are lower. Really what we have brought as DLF to the table, which I think has been well appreciated by my customers, by hopefully the industry, I do also believe even global players have taken notice, is not too much of a change on the hardware, but an intense focus on the software, whether it is customer focus during the process or the post-sales living experience. And I think that is where we are really seeing the monies we are seeing, the profits we are seeing, the price premiums we are seeing. I really do not think we can really say it is because my concrete is better than his or my this thing. It is just that people enjoy living in our communities because of the soft services, our commitment towards them, and the prestige that has given them. Today, there is some prestige to being part of living in building A or B or developer A or C, and that comes from the community and the way we run it. So we will spend more time on the softer services and keep working hard to improve them more and more and more, sometimes even at a cost attributable to us, but that is something which we feel is going to be the difference, not really the hardware. So if you want to ask me what we are going to change in next 3, 4 years, just do more and more for the consumers living or going to be living with us. Thank you. Also, if I may just add to what your point is. What I've seen over the last four years, residential real estate, post-COVID, has become a priority. I'm seeing the younger generation in my bus, I was addressing some of you. Earlier, the average age of purchase was about 38. Right now, that has come drastically down to about, it's between 28 to 30. This is the new set of Indians or the new set of people who are coming into buying residential real estate. The base has increased. The cyclical nature that you're talking about, obviously, your chairman clarified regulation stronger this, but I think what I'm seeing over the last four years is the residential real estate has become a priority to own bigger, better, and that's what people are aspiring to do. The younger generation is now for rent. A priority is even for them to- Buy is to buy. That's a big change I'm seeing. Hi. This is Kunal from CLSA. Just wanted to clarify, you said that you're going to be focusing more on the execution and sales are expected to remain steady at these levels. Do you think, is it because the industry may take a breather after a sharp run-up in the last few years? Also parallelly, what are your view on the prices across micro markets of Gurugram? No, look, I don't think we're taking a breather or we're doing anything else. As I'm saying it, our cash flow is going to come in sooner, but I want to qualify it. I think Badal put up that slide. He's brutally honest, but the hard fact, which I think all of you must realize, is, and that's a question I think you guys may ask us one day, hopefully not today, but one day. All the money which goes in, goes into the RERA account. So today cash flow it just goes into RERA account. I can throw my weight around and say it's mine, but actually it's not. Okay? So unless you don't execute and don't deliver, you don't get the cash flow. But yes, we'll start banking the cash flow, number one. Our profits will actually get recognized with a lag. We've done the sales booking. Great. We started the project, wonderful. But the journey is not over. I would like to ask you, why do we look at our industry as something different than any other industry you guys cover or your colleagues cover? You make a cement factory. The day you go and lay the foundation stone and award the contract and do a little bit of digging, do you immediately start thinking about second cement factory? This factory is done, now let's find a second cement factory. The one who does this will fail. The simple fact is that the journey has to be completed here. The sales bookings and all these are just the start of the journey. I think that is what I want to just say, that it may look like we are actually coasting, but actually, the hard work has just begun here. We want to finish that hard work. If we have time available, we certainly will take on newer adventures. So that's what I just want to say, that profits are yet to be realized, profits are yet to be accounted and booked. Cash flow is being realized, but cash flow is yet to be freed up. We're on our way, but by no means would I like to say the journey is over, and therefore, we start thinking about what's next year. That's my answer to your question. And on the prices, sir? Prices. Look, prices, we are enjoying good pricing. I think it is respectable pricing. What this product slide we had shown you should tell you that there was a period where prices had got depressed because of the uncertainty conditions around the industry, as I mentioned. They came back stronger. But over time, they level out at a low teens type of price delta, maybe 10%-15% here. So if the price points remain somewhere at a growth rate of, say, 10%-12% generally, I think the industry is safe and we are comfortable and our margins will continue growing. Rapid price increases beyond this point would be a little uncomfortable, somewhat unnecessary. Any price increases which start stagnating also would be a cause for worry in the case of inflation. So far so good. We are feeling that all the new launches which we shall be doing will reflect reasonable price increase and appreciation, but nothing untoward. At least from our end, we won't be pushed to change pricing drastically. Sure. My second question was on, incrementally, our strategy. What we've seen in The Dahlias that we sold certain significant amount, then we took a pause, and now we'll restart the sale sometime in future. For your incremental launches, especially in Privana and subsequent phases or even Sector 63, would we adopt a strategy, what we've been doing in the last few years, where we'll sell out if the demand is there, or would we take calibrated pricing hikes and do calibrated sales based on those pricing hikes? Is there some strategic change there? No, there's no strategic change. I think it depends how you look at issues. If I had one product, I had one project, and I had five or seven years ahead of me, I would certainly make sure that I sell X% at time of start, 15%, 20%, then I'll sell another 10%, 15% when I start construction, and so on and so forth. I will play the cycle. I'll try to maximize my realization. I'll try to time it to the need of my money, and I'll earn my money, hopefully intelligently and smartly over, say, five years here. The difference, what I want to point out to you guys is, it's not a particular project, it's a type of segment we operate in. So when we look at Privana, we don't look at Privana West, South. If somebody says, "Privana is all sold out," the answer is no. Part of Privana is all sold out, but in totality, Privana is yet to be fully sold out. So what we're really looking at are, these are all incremental blocks in the larger story. The larger story for us remains not Privana West or South, but remains Privana. So we know that we are intelligently mining Privana. Our price in South to West has changed. God willing, price from West to something else will change. And over time, we'll keep improving the product, we'll keep adding value to it, and therefore, when you sit back and say, "Did Privana get sold in a period of time and in batches?" The answer will be yes. And did you collect your due share of upside each time you went out to market? Answer, again, hopefully will be yes. So that is the difference which I want to say, that we look at something in larger chunks. Just that offering itself 100% sold out is because that offering is a part of the larger chunk. If I had nothing else to do, I would not go out and sell more. The Dahlias, why we have kind of slightly pausing for breath is because, touch wood, the response was more enthusiastic than we expected. So we don't want to pump that pipeline too much. So we're just saying maybe we got a little bit ahead of ourselves. Let's just try to get some healthy balance. So that's why we've kind of eased up a bit. But the intent is to sell The Dahlias also at the right point, at the right time, in a manner which is as soon as practically possible. Sure. And my last question was on, if you go back to that slide on your development of land, the potential development of land. Almost 85 million square feet is in the premium segment category. And when you try to tie that up with the, say, the asset class-wise returns that you have given. A premium segment for DLF projects has actually given the least price CAGR in the last 10 years. Yeah. How should we look at monetization of this 85 million square feet, like in terms of timelines, would you strategically push it further out so that 85 million square feet, that becomes more mature to launch it as luxury? Or how should we look at the timeline of this 85 million square feet? Very good question. I think the message, two points we want to tell you. Firstly, I think the point is that our revaluation of the TOD TDR potential has resulted in significant delta, an increase of almost 40, 50 million square feet, even after accounting for prudence in certain areas. When I kind of put that into perspective, what I want to say is this whole decade, last decade, development potential has kind of come back by change in entitlement and norms. In a good way, I am back to square one. The second side is that yes, today we have accurately reflected that this is what it can fetch as it stands today. But the journey will continue, and our fond hope is that portions of this 85 do tend to become the luxury segments and maybe one or two of the luxury segments becomes the ultra-luxury segments. I think I was giving an example earlier in the day, Privana, which you all have seen today. Till four or five years back, we were sort of excited about, and I will tell you a real-time case. We were actually looking at Privana to become a plotted colony and launch it as a plotted colony. We had got all the approvals, everything was done. In fact, some development also we had done and all that, it was done. This is not too far back, I think must be, Devender can correct me, eight, nine years ago. Not too far back. As a plotted colony. That time our realizations on this land as a plotted colony would have been net of costs incurred, et cetera, would have been maybe INR 7, INR 8 crores. INR 9 crores would have been considered a home run. Extremely excited. Markets after that changed, started going down. We felt the need beyond this, we will have to do some construction to hold it, to create the habitation. So we actually went ahead and made a building. We made a model, not sort of small model, life-size model, and actually said, "What will it require to build something nice where people will buy? We will get our margins, et cetera." And I will tell you, this is how life is interesting. On a foolish thing, but we wanted the rear gardens of those units to be contiguous so people can enjoy not little lawns, but sort of nice paths to walk around and enjoy and all that. The laws at that time did not permit it. We tried our best. We could not get permission for them to remove those boundary walls, legally. And therefore, we were so convinced that that was not going to be a good product from customer living point of view, we abandoned that idea and abandoned that project. So about five years back, we were kind of slightly despondent that within Privana, whether we will make INR 10 crores an acre or not, God knows, because our thoughts were not working out. Regulations were not allowing us. Fast-forward till today, that number has gone up by 10 times. Okay. Now what was therefore in the lower parts of the premium category now is possibly in the mid parts of the luxury category. So that is a matter of luck, matter of right timing, matter of right product. And therefore, long story short, part of the 85 will certainly go through an upsizing experience. We have also mentioned in the slides, which you will see more closely, very written in small print, but when you see it, is some part of this will also not work out. I am not going to say everything works out. Some part will also be outright disposed of. We have kind of mentioned that 5%-10% of our land inventory will, after careful evaluation, will not meet the bill. So we do hope 5%-10% will get sold out, 20%-30% will get upsized. And the balance also, to be honest, 30% is a number given plus. 30%-40% is, today we are all now flying a little bit high. It is not a bad number at all. And I do believe that a few million square feet a year of this type of potential in towns like Chandigarh, in certain other areas, will continue, and the company will continue to profit from it. So, I am not really worried about a 30% plus number. I do not think it represents anything which is something which the company should not be aggressively pursuing. But I know it is going to go up over time because of all the efforts we will put in. Sir, this is Rahul Jain from Elara Capital. So just one thing on the Gurugram market. Over the last three years, what we have seen, some new entrants in the market, a few channel partners turning developers. Are there any practices in your observation that you are seeing would be concerning or raising red flags? Well, I do not want to comment on anybody else. I am not very familiar. Everybody has to try very hard. It is a natural evolution cycle. Sometime land buyers become developers, sometime contractors become developers, sometimes brokers become developers. Sometime developers become bankrupt. This all keeps happening in our cycle. This is part of life. So let them do it. I think they are doing the right thing. They bring energy to the business. I will be frank with you, sometimes they may be dreaming a lot, but that dreams are required. So I welcome those guys. I do not want to take names, but I am familiar with a few of them which you are talking about. I wish them well if they can put it together. The industry always needs some new blood coming in and, if they can bring it, and become good quality developers, more than happy. They have been with us, some of them, for a while. Hopefully they have learned from our experiences and they will not do some foolish things and deliver to the customer and keep the customer commitment high. So that is all I can say. It is a welcome step. I am not going to say anything negative about it. Thank you, sir. Hi. Pritesh here from Axis Capital. Just a couple of questions. So first, on the bandwidth part. Last three years, we have seen one major launch, or last year we had two major launches. That is how we want to optimally utilize our bandwidth, or there is a scope for doing three to four launches in a year. I am not saying couple of launches in Purvanchal together in one year, but we have now good land parcels identified in the city which we can go for launch. 61 is there. So, will there be a time in next couple of years where we will see three to four launches in a year, or we are happy to do one, two major launch and optimally utilize our bandwidth that way? I think at some stage we will move on to the next part of the presentation also, which is our RentCo business. I think you will see that we are quite active in that area also. As far as I am concerned, the launches are more than 2, 3, because we are also starting and initiating significant size rental projects. As a company, we are geared up to do certainly 4 or 5 of them. It just so happens right now, fortunately, both parts of our business are equally attractive and consuming equal bandwidth. But if tomorrow it comes down that we have to do 3 or 4 launches in the residential sector, I think you will see that happening anyway next year, in my opinion. Okay. Because some approvals have kind of seemed to have got bunched off and delayed. I hope they come through soon. I think that number of 2, 3, I think 4 or 5, big and small, will take place in the development business itself and 2, 3 starts in the so-called commercial business. We are geared up for that much, yeah. Sure. Second on the Delhi part, which you highlighted, what kind of opportunity we might look at? Because whatever we have heard till now, opportunities are there, but largely on the mid-income side of far out Delhi. Anything on the premium luxury which are forte which we can look at? Delhi main point is that all the land of any significance in better locations belongs to the government. Okay, so the government has to do two things. It has to first loosen this policy and make the development business attractive, and then secondly, it has to make sure that the land is offered to it. It is almost impossible in Delhi for somebody to go out and get large parcels of land, et cetera. Most of the factories in Delhi were closed a while back. Those lands did get sold and all, but there will be those kind of opportunities, but they won't be in Central Delhi. But peripheral parts of Delhi, like where we have a Capital Greens project, et cetera. I think more opportunities will come up. That area will start transforming itself. So, that's where I think the action will lie. Central Delhi per se will be a few, but bulk of the action, I think, will be around the industrial areas and some areas which hopefully the government brings to the market by some disposal process, whatever they consider fair and appropriate. Outskirts Delhi, but outskirts, the infrastructure, everything else will take some time. Yes, you are right. It will remain a little bit challenging for the immediate near term. Sure. Thank you. That's all my questions. Should we move on to the next part of the presentation if it's okay? Then we can give you still a chance to recap at the very end of it if something remains, or if there's a last question or something, please feel free. Okay. We move to the second block, which we have talked about, which is the annuity business. The way we define annuity business. Shriram. Again, we have almost 44 million square feet of operation area, almost 39 plus in office space and close to 3.5 on retail. It's a good mix. We have a large portion in Chennai. We have a reasonable size in Gurugram. We have got portions in Hyderabad, so it's kind of reasonably well spread out. Like we talked about developed business, we have extremely strategically located land bank. We have created large and scalable integrated facilities, which is world-class and fairly consumer-centric, I would say. So that has been our forte and strength. We have had a steady compounding business over the last five, six years, whether it is rents or profits, and we will see some numbers out there, and we seem to be aggressively investing for growth for future as well. If we look at some references, key numbers, again, just to define, if I were to look at annuity business, rental business is office and retail. Then we have an hospitality business where we run a few hotels, various clubs, and then we also have our services business, which is very complimentary to both devco and rental businesses. Look at the overall revenue, which is rental, plus services and the hospitality business. It is a INR 7,000 crore business for us, of which rental portion for the last year will be almost INR 4,600 crores. We have also given for reference what is the split between DCCDL and DLF. For us, I think the more relevance is you look at the INR 7,000 crore number as an overall bucket rather than where it is getting accounted for. This has delivered. The revenue growth has been double digit, and it has extremely healthy, over 20% PAT return for the last five years or so. We continuously invest in CapEx. There are several projects. We visited one of them called Downtown in the morning. We talked about Hines, which was right across the road. We have got one coming out in Chennai. Many of them are in advanced stages and will get commercially operational, if I would say, rental yielding in the next fiscal year itself. Cash, again, continues to be our focus area, whichever business we consider, and this business also generates reasonably healthy cash flows consistently year over year. Net debt to EBITDA, we have got almost INR 18 odd thousand crores of debt in this business. We all put together, whether it is Hines and DCCDL. However, our financial performance has been reasonably good. Very, very steady across the years, and our net debt to EBITDA ratio is approximately 2.6 as on December end. Sorry, 3.6. 2.6. 3.6 as of December end, which to my mind is well benchmarked, and we are fairly comfortable with this number. To give a sense, we talked about 39 odd million square feet of office portfolio. We are looking at adding another 21 million square feet for projects which are already under pipeline or planned for. This portfolio itself will become 60 million square feet, and we will see a fairly sharper growth in the retail portfolio as well from another 4 million. We look at almost tripling this number to almost 12 million over the next five years or so. These are the list of the project whereby we say almost 8 million is already in execution, and several of them is in the last stages, which is going to get delivered in the next year itself. Next page. Overall, if I were to look at this five-year and if all our projects kind of come out on time, we are looking at almost INR 10,000 crores of rental revenue by FY30. Plus minus six months, one year, whatever, but we are looking at doubling our portfolio of rental business in the next five years with the projects which are there in the pipeline. As you say, we continue to invest. In order to make this portfolio viable, we will have to invest in CapEx. We are looking at almost investing INR 20,000 crores, INR 12,000 crores in the DCCDL portfolio and INR 8,000 crores across rental and hospitality business in the DLF portfolio as well. So INR 20,000 odd crores ballpark number over the next five years for identified projects. In terms of operational portfolio, we have talked about 44 odd million square feet. The balanced portfolio, after having completed the projects which are in pipeline or which have been already kind of defined in our mind, we will still have almost 60 plus million square feet available for future development. So my existing base end of five years could be approximately 73 million and another 62 odd million square feet available for future development. And hence we have enough and more in terms of land bank and opportunity to continue to grow this business even going forward. Commitment to sustainability. I think Shriram articulated this very, very well in the morning, and I don't think so I'll come even close to the way he passionately articulated it, so I'll skip this page. These are glimpses of the projects which possibly are under construction and are going to get launched. Downtown is what we saw in the morning. Downtown Chennai, the next building is going to be launched sometime in the next quarter. Not launched, it's going to get operational in quarter 1, and we have Atrium Place, which is three of the four buildings are almost ready for occupation in the next three to four months or so, and the fourth building by end of this year. One thing which I missed talking about is our occupancy level. We are at almost 93% on weighted average basis across retail and office. Our office portfolio is at 93%, short 93%. If I were to exclude the SEZ portfolio, it will be almost close to 97%. Retail is a healthy 98%. All our new projects are almost 95% pre-leased. So I think we are in a reasonable place for all the new projects which are going to come for occupation. Key takeaways, we have 44 million square feet available. It's going to go up to 70 million square feet in the near term. We continue to focus on cash. Our CapEx will be almost INR 20,000 crores in the next five years or so, yielding a INR 10,000 crore rental number by FY30. Another aspect is the net debt to EBITDA. We continue to look at almost a ratio of 3 of net debt to EBITDA as a steady state, and that's what we kind of aspire to be at this point in time. Should we take questions? The question on the RentCo business. If there are questions on RentCo business, we can take it right now. Yeah. Hi, this is Puneet from HSBC. In the RentCo business on slide 39, for example, we saw Cyber City has a potential of 28 and you have built 15 and a half. Is there a risk that there could be disruption in the existing business as you unlock this potential by maybe tearing down some older buildings to build new ones? Should one think of it that way, or is there land available on which you can build just new high-rises? Yeah. I think, look, no. None of this takes into account tearing down anything. This is all well planned for, and the land is available for it. What I think the message which I wanted to give to everybody here was that, DevCo is very big, growing, exciting, but there is a huge development potential sitting in our RentCo itself. I know when you benchmark us to many other rental players, the delta today is that most REITs or most of other things have 80%-90% of their portfolios, 90% even by law in some cases, unfortunately, to be mature and about 10%-15% to be developable. In our case, the important thing is, crazy as it sounds, we are about 33% mature and about 67% yet to be mature. So the growth outlook, even in a steady business, like our rental business, is actually enormous. That is the message I think we wanted to. To be frank with you, when we started doing these numbers very carefully, we also saw them four or five times because they were a bit startling. That is the real message there that, to your question earlier also, that as much as the development business offers us lots of opportunities, so does the rental business. Between embedded rental growth because of the quality of assets and time, the new additions will keep this business growing at a pretty strong clip. As we are estimating, certainly, the rentals would definitely, hopefully, let us say, double in a shorter period of time, and that kind of pace can be continued. Large portions of this land have been kind of. What large means, the land has been paid for. Hopefully the addition to the bottom line in cash and in terms of profits will be proportionately larger. This by itself is a very exciting business. The development business sort of adds much more to it. This is why we today actually took the opportunity to present our businesses in the two different ways in which we look at it. That's a deviation in a quarterly meeting. Unfortunately, we are so hidebound by so many things, time included, and the dos and don'ts, that you really can't get beyond just updating numbers. This time, I think the message we want to give you is, we've taken some liberties to present the data, not as strictly as accountants would want it, but as businessmen would like to see it, as investors hopefully would like to see it. The important thing is that we've got two strong complementary businesses, both demanding our time, both giving back a fair degree of return. Collectively between the two, I think we see good things happening. That's why when somebody asks me questions on development business, I want to kind of measure it with this, that both sides are keeping us busy for now, and hopefully this trend will continue. Yeah. Between the two, which one do you think gives you better return on your capital and time, and how do you allocate capital between the two? It depends on time of the day. 8:00 in the morning, RentCo looks good. By 12:00 in the afternoon, DevCo looks good. Okay? Look, there's two sides of the same coin, okay? It's like you guys are all in the financial business. It all depends on what drives you and what measurement you want to adopt for that discussion. Okay? I can justify either one of the two, so can you. I think that collectively it's a very nice mix to have. That development gives you the chance to generate the cash to actually fund the CapExes for this one. Then over time, this will give you the cash to go back and fund for the development. Most important is we can create the communities. Part of the Gurugram story, part of other stories is wherever employment generation is taking place, residential business will do well. Wherever residential business does well, retail will do well. This is going to be there in Gurugram. Questions keep getting asked, but the quantum of employment generation and quality employment generation, which is taking place, God willing, is quite high, and that's how the demand for apartments and other services is taking place. Both things are very strong, and this has its own sort of a path. Therefore, as I said, one time I'd mentioned earlier, last time maybe three years back, I was looking at about 10 million sq ft as being our kind of steady state number from a comfort, capacity, happiness point of view. I think between the two businesses, we are nudging ahead of that number now. We are happy to do so. This itself is a 4, 5 million sq ft per year delivery kind of thing. That energy could have been devoted to DevCo if this opportunity wasn't there. Between the two it's a very good opportunity, and a lot of this land gives us reasonably good paybacks. Do you worry that this 4 to 5 million sq ft that gets delivered, the city has the potential to absorb it over a foreseeable period of time? Or would others have to vacate to fill up in your place? Look, vacate. That is true, some people will have to vacate. Hopefully, they vacate for better times and better things. Some people will also move on. That's the way things are. But so far, I think we are cautious that, as Badal mentioned, we do watch our pre-leasing very carefully. So far, the output is backed up by good pre-leasing commitments, and hopefully, that will continue. If it doesn't, I'll be honest with you, we will slow down. This projection which we are giving you is based on a comfort factor that these things will tend to happen. Beyond that, what pace will be adopted will depend on various factors. But I think this overall pace should be maintained, yeah. Okay. Thank you. Parikshit from HDFC. On the CapEx, you have highlighted INR 20,000 crores of CapEx will give you incremental rental of about INR 5,000 crores, which is a 25% yield to cost. Is it the right number? It looks to be very high. What looks to be high? The CapEx or the yield? Yield to CapEx. Huh? Yield to CapEx of 25%. Sure. To be honest with you, I think this is a run rate. The actual numbers on a steady-state basis will even be slightly better, yeah. Those benchmarks are what we start with, but hopefully, we will be slightly better in terms of return to cost. But remember, in our case, we are fortunate right now to ignore land. If you ignore land, on construction, we certainly feel that money we spend, we should get back, hopefully, in 3 years. In some cases, it becomes 4 years, yeah. Second question. I think morning we were discussing with Mr. Khattar. He said that the concentration of the clients, now I think the Tower 7, there were about four clients and looking to lease about 1.2 million. One is the concentration risk seems to be increasing. Then we have this 40% coming from U.S., and then Europe about 40, and then balance India, and then the trade war going on all around. Do you think that there was the period when there was a pent-up demand which is now getting absorbed, and then there will be again a pause and the way the trade war pans out, there could be a significant slowdown hitting in. With high concentration, if some of these clients move out, then again, we look at a very kind of a model which was earlier more stable, where we had more diversified clients and then we have built a concentration and then this thing comes out. That could bring in a big disruption. No. Look, first point, I don't think we are out to select clients. We take all clients as they come. We welcome small guys. We welcome big guys. If it just turns out to be four of them, great. If it turns out to be 12 of them, wonderful. We are not doing anything here. Our only focus slightly is that we don't want to overexpose ourselves to the shared office space industry, so we kind of keep that number a little bit in mind. But beyond that, as long as we're dealing with corporates who also would be significantly investing. Interesting data, now I'll tell you, I was visiting some of our clients the other day. Their spend on their office interiors is actually slightly more than my spend on the building. Slightly more, much more, yeah. So are they deeply invested or am I deeply invested is a question mark. Look, if some disaster takes place, nobody can say anything about it, but otherwise, I think it looks good. And we are catering to all kind of clients, big or small. And it's just that many of our smaller clients have become big. Today, I don't think anybody is kind of running away from anything. I don't think there's pent-up demand. In fact, if you want a statement from me, I think demand is accelerating and not kind of catching this thing. And last but not the least is that, look, at the end of the day, any question any one of you may have, we have the same question. What if this doesn't happen? What if that happens? What if this happens? What if that happens? The answer simply put is have the financial strength to see through that period. You can do nothing about it. What will happen tomorrow, I can't change. Neither can you. But we must be able to be around day after. So the fact is, that's why a prudent financial policy will just put you in the worst case situation to a period of enforced rest. That's about it, yeah. So some building may lie empty and vacant for a year and a half, 2 years. If it is not killing you because your balance sheet can take it, that's about the worst that can happen, yeah. My colleagues and competitors may not have that luxury. So finally, who will remain standing? Time will tell. So I'm quite comfortable with the way things are going right now. The pace is good. And we also feel that retail as a sector in India still has a fair exploitation potential and anything in offices will more than get made up by, number one is retail, and I think the Indian office scenario also should not be ignored. If the economy comes to anything, what everybody talks about, we will start needing our own GCCs or our own offices, number two. And thirdly, I think I'd say the most important thing to all of you guys is, for us, we have identified this is devco and this is RentCo. That's our view. That's our thought on what we feel is the optimum utilization of space today. It's not mandated by anybody. We are very careful that we do not indulge in some things which are only this or that. We also are very careful that we don't go in locations where if somebody doesn't go and open up a pharma lab in that place, you're doomed because nothing else can happen. No, we don't do that. Worst comes to worst, one fine day, worst comes to worst will be that you convert them to residential opportunities. It may happen sometime. Markets may take a turn for this thing. If it so happens, we are okay with it. That's why I'm trying to say that all our lands below our office or retail buildings are quality lands capable of any use. So, we've thought about the downsides quite a bit. Conservative, but I don't think such pessimism is really necessary as of now. Just on the flex, last question on the flex piece. Do we have a flex strategy, or we will directly look at dealing the larger clients directly and maybe a managed office player who will be there leasing out from us and then doing more retail kind of leasing for us indirectly. We don't want to have that exposure. What's your view on the, first of all, the managed office industry and whether you'll have a flex strategy of your own or you'll like what will be the future of the flex within your leasing portfolio? Two, three things I'll say may not be in any particular sequence. Firstly, the good news is we are semi in the managed office businesses because we are not just making a building and walking away. Luckily for us, in all our buildings, we have sufficient amount of management presence. We manage them actively. We amenitize them a lot. We make sure that the customer, a lot of the stuff which he or she may have had to do on their own, we are anyway doing it for them, even before the flex industry came around. We had full-fledged maintenance services. We had lots of backups. That person didn't have that much to do beyond their four walls. We continue doing that. As I said, we've enhanced our soft services offerings. Hopefully, when you guys come back next time in Downtown, you'll see very vibrant sort of social amenities and health amenities, et cetera. We have reinvested and right now established a brand. The test samples have been successful. Now we are going to grow it aggressively, called Thrive, where we feel we'll be able to provide a very good wellness option to our customers. Our point is to give it to people who otherwise may not be able to afford that quality. We are determined to give it to them so that they enjoy coming to our buildings, et cetera. From that particular point of view, we are actually semi office managers, but we will not cross that line. We look at the managed space providers as our partners and sort of serve a purpose of providing flexibility and new tenant introduction into our portfolios here. Their business model is slightly more fluid, slightly more short-term, and the capitalization of some of them are slightly lesser than some of these established multinationals. You will expect that we'll be slightly more prudent in exposures, which we do sort of watch, so that while we manage the overall managed portfolio in our number is controlled and individually also it's controlled. That said and done, I think it's a very healthy collaboration and they are actually bringing a lot of value to us. Hopefully, we are also bringing it to them. Hi. This is Kunal from CLSA again. You said earlier, you talked about the limitations for REITs to grow, and at the same time, you spoke about our aspirations of scaling our rental portfolio. Should we just rule out any prospects of REIT in the midterm or even in the long term of DCCDL? Rule out, but definitely for sure in the short run it's not part of our agenda, number one. The way the REIT is structured, it's an instrument which is good, but as I said, it distributes income efficiently to its unit holders. But every time you want to grow it, you have one of two choices. You go and buy something, or you have to go and build something. In both cases, you need to go back to your unit holders for capital all over again. It's a great thing for the finance industry to be in because they get fees all the time from raising capital and loans and various things. I hope we can stay out of that issue. But like everything else, sometimes you want to try different things. We may have a REIT here or there just to test the waters, but I don't think it's going to be part of our strategy as we speak today. Government regulations can change. It may become far more attractive. Certainly, we'll look at it as and when such situation arises. Sure. Rajiv sir, my second question was a little more conceptual. Seven, 8 years back, we, promoters sold stake in DCCDL and brought in the much-needed capital in DLF, and it helped us pare down the debt significantly. Today, our situation is very different. Today, the debt is not an issue. We have significant cash flows, like you talked about, like INR 50,000 crores of surplus that we'll make, right? Would we consider buying out GIC's stake at any point in time and/or more so sooner than later because like you said, that 66% of value creation in that portfolio is yet to happen, and no better way to create value than develop the portfolio. Would you consider at some point in time? Yeah, two points I want to mention to you. Maybe I think our slides are not showing that correctly, so we need to be careful with that. The value creation in the DCCDL portfolio is not 67%. It is slightly lesser. The rest of it will be now in the DLF portfolio. That's said and done. Look, I'm not in sort of push to consider anything to do with GIC in buying out or this or that. No. Our understanding is very clear that if and when they wish to seek options of liquidity, we shall do our best to provide the same to them. It could be through listing, it could be through anything of that particular portfolio. I was with them recently, and I don't see anything at the present moment where at their end anything of that kind is there. Therefore, it's a good partnership. I always want to say that times change. Today we can sit and talk big things. Hopefully we continue to talk big things. But I appreciate anybody who came through at times when they needed to come through. So, from our side, we'll always respect them and welcome them and make sure that they stay with us as long and as profitable as is practically possible. But the day they want to kind of move on or encash, certainly we will respect their judgment. I'm not going to initiate it. If you want that answer from me, the answer is that, yeah. Sure. Thank you so much. Hello. Hi, this is Parvez from Nuvama. My question is regarding your geographical spread. As the development potential shows, we have large development potential in NCR, which obviously has the benefit of probably being the only economic center in North India. Have we in the past or let's say in future, will we consider moving out in newer geographies where we are not present today? Are you talking about for the rental business? Yeah, for the rental business. Yeah. Rental business, look here, we are anyway in Chennai in a reasonable way. We are in Hyderabad in a semi-reasonable way. Hyderabad has grown greatly, so maybe today we are not that reasonable anymore, but we are there. Bangalore, we are not there. Mumbai, we are not there. These are obvious markets for opportunity. But all I'm going to say is that, today when markets are hot sometimes the opportunity is not there. Markets do tend to cool. But yeah, I think the rental business will certainly seek geographies where our clients wish to be. While development business, we will have an option to remain hopefully focused, but in rental business we may follow our clients, but that time and a good opportunity will tell, yeah. Sure. The second part of the question is obviously in Gurugram we have a competitive edge in the form of high quality portfolio as well as a development potential that we have. Do you see that, let's say in future if we go to Bengaluru or Mumbai, which are probably much more competitive market than Gurugram, we'll have to do something different than what we have done here? No, I don't think we have to do anything different, to be honest with you. We need to have scale because customers expect that scale from us. They expect a certain level of infrastructure and amenities which we'll have to provide. I think if we just kind of keep that scale in mind, are willing to put that much on the table and remain competitive to what that market needs are, I don't see that to be a major issue. Nothing new needs to be done, yeah. Thank you. Yeah, hi, thanks. Karan here from Ambit. So sir, I had one particular question on the overall rental market, right? If you look at the rates for some of your resi or the devco portfolio, and Aakash has spoken about it in a few interviews how Gurugram rates have moved closer to London and Dubai and all these markets. But if you think about the rental portfolio, it seems like India is still a fairly underappreciated market because rentals abroad are much higher than what it is in India. And even for DLF's portfolio at about $2 a square feet or $2.50, $3 a square feet. So from a more medium term, do you think that the rentals actually have room for significant re-rating, let's say over the next five to seven years? Or do you feel that the infra initiatives that have been undertaken by the government still aren't enough, or the population growth that we are seeing compared to the infra capabilities currently still aren't enough for the rentals to move up? Yeah, rentals are. Firstly, I don't think we are even at the 2.5, $3 number you're talking about. The important part is that the companies are coming from worldwide here for two reasons. Economics is one of them, capability is the second one of them. I think hopefully the industry should not go to a point where the economics portion starts getting stressed out. We are making decent numbers. We are getting good numbers. I am quite comfortable if we don't have significant rental deltas, but have consistent and steady increase. We watch our paybacks. Inflation has affected us. Certain quarter changes affect us. Because of that our costs do go up. So far the rentals are covering that. I hope they continue to cover it. But otherwise, I think that the rental level is lower than residential. But again, Aakash is fortunate to speak of a few projects which he's been able to successfully position. But that's not true for all of India. I think an exaggeration on RentCo sort of being world-class, I think India overall has a long way to go, both in rentals compared to world pricing and in general, I'm going to call it, residential being to world prices. The average in India still today for the kind of apartment you are offering. Today, I hope most of the people start delivering what they are promising. They're quite nice apartments and the price point is, say about INR 15,000, INR 16,000 a square foot. I mean, maximum INR 20,000, but INR 15,000, INR 17,000 you get something nice here. What is INR 15,000, INR 17,000 here? $200? You'll get nothing but $200 in 90% of international cities. I think we are way behind in our residential pricing also. If you go to any other city, $800,000 is okay for city center pricing, and $500 to $700 is okay for decent in suburban. Think of the quality standard which people are promising. If you go back also and see, I think you know much better than me, but average pricing is still INR 7,000, INR 8,000. Bulk of India is still INR 7,000, INR 8,000. I keep reading reports from all of you guys. That's the kind of number. It's $100 a square foot. So when you start looking at those numbers, I think the residential business by no means can be said to be world-beating. I think the delta, if you personally ask me, may be slightly more still in favor of residential being at a discount, and quality commercial not necessarily being at that much discount. That's the way I'd like to sort of put it there, but let's see. Time will tell you. Second question, not related to the annuity piece, but the overall NCR real estate market. Historically, we've seen that some of your peers would have taken a few steps because of which the trust deficit overall went up. Are you seeing something similar happening at this point by any of your peers, or you think that the market is more mature, balance sheets are more cleaner because of it, such a risk cannot emanate? First point, I'll say people have become slightly wiser, so I hope they don't make the mistake. But being aggressive is nature of this business. Some new people may be aggressive. Some mistakes may happen. I'm not going to rule that out. It may not happen, financial reasons, sometimes competence reasons, sometimes bad luck. But financially, I think all of you guys must keep understanding that the model of development with post RERA is really a tough model. I'll tell you very frankly, I somehow can't figure out how you can enter this business because your project cannot generate the capital required to buy that land. The banks are not authorized to provide capital to buy the land. The money gets stuck into the RERA account. So 90% or 99% of developers are stuck in this wheel where they generate money, it'll go into the RERA accounts. Expectations for them to generate more money will be great. Moment they have to go into that, they can't pull the money out from RERA account. They have to go out and do one of two things. They have to borrow from so-called NBFC sector, which has its huge return expectations, which I think sometimes becomes challenging to meet, or they have to go and raise fresh capital. It's a very vicious kind of cycle. The more you do, the more you dilute or the more risk you in effect kind of take on. Now how many people have the discipline that today I have started and for 5 to 6 years I will not do anything. Then I will realize my RERA profit. Out of that profit, then I'll go and buy genuinely another piece of land. Then I'll take another 5 years to do it. Everybody's in that hurry mode. In that hurry mode, balance sheets or whatever it is, but if you go to the wrong financials, you take high interest cost loans. If you talk about the past, the fact of the matter is, 99% of people, I do not know how they borrow, how people borrowed 20% IRR, 27% IRR, 30% IRR. The lender also knows that money will not come, the borrower also knows that he will not be able to pay that money. If these things happen in the quest for growth, because you will have to either raise capital or you will have to borrow from secondary markets. I only hope people are sensible that they do not get carried away in that because finally those are where the accidents can take place. Right now, I think everybody's scared. Not too much of it is happening, but if a lot of capital is put to work in this sector, I think that will be weak and bad for the sector. I do not know how that's going to play out, but we will wait and see. Sure. My third and last question. Badal, in one of the slides, you are talking about the medium-term development potential of about INR 75,000 crores. Are you not building any escalation in prices as far as that INR 75,000 crores of launches are concerned, or is it based on current pricing or future? It's based on expected pricing, but it's expected pricing from those projects. Any escalation, what kind of escalation are you building at this slide? The escalations are fairly marginal, I would say. Sure. Fairly marginal. Sure. Thank you. Yeah. Hi, sir. This is Murtuza from Kotak. You have talked about investing deep in the infrastructure, the associated sort of network benefits when you look at a residential development. Towards that extent, when we look at the Mumbai project, which is to be launched soon, it is much smaller compared to whatever you would have done in Gurugram. Is there a larger plan for Mumbai, or the current development would be a one-off that you are looking at? That is my first question. Look, I think we are testing the Mumbai waters. Mumbai is a large market, mouth-watering market, but with its own issues and with its own strong set of players. How that turns out. The project is small, but not small to the point that it becomes unattractive. It is decent. There are certain potentials around that project which actually can make that project quite handsome. We will remain focused on that. If that project becomes successful, I think it will be a project of reasonable size and scale, and success will also be of reasonable size and scale. Maybe our temptation is to take that thing forward. Maybe after going through that experience, we come back and say: "That is not the market for us." I think this question, execution will answer, time will answer. Three to five years, either we will take deep steps into the market, or we will kind of satisfy ourself with executing limited projects very successfully. I do not know the answer to this. It is not material to our business, to be honest with you. Therefore, we can do the right thing for that project. There is no pressure either way. Let us wait and see. Ideally, if we can have a good presence in Mumbai, wonderful. But past experience has taught us that it is not that simple. So we will wait and see. Sure. Madhu, the second question for you. There is a slide which talks about a INR 20,000 crore odd of CapEx spend at DLF. Does that include the annuity business as well, or that is just on the development business? On the CapEx side, on the development business Yes I do not think so it is a INR 20,000 crore number. I think what we have shown out here that we have spent close to INR 5,000 or INR 6,000 crores in the last five years, which was land and approval. 20,000 The INR 20,000 crores is the RentCo business capital, whereas the INR 12,000 crores will be the DCCDL projects, and INR 8,000 crores will be on the DLF sites. This is on slide 19, actually, that I am referring to. 19? 19. 19. Yeah, this 20,000. There's no CapEx on this page. Oh, this is This cost to complete of all the pending projects. This INR 20,000 crores you are talking about? Yes. This is cost to complete all the projects which have been launched in the development side business as on date. Okay. All cost to complete. Yeah. Okay. Thank you. I think let me clarify to you because maybe in the other developments, this may not be there. Anything which we spend for holding for long-term, including rental, is considered CapEx. Expenditure to complete development obligations for products for sale is not CapEx. Our total construction spends will be significantly in excess of INR 20,000 crores, because INR 20,000 crores is just CapEx for the rental business in the next five years. INR 7,000, INR 8,000 crores would be CapEx for the development business. So CapEx alone will be around INR 26,000, INR 27,000 crore rupees. The expenditure on completing projects which we have to offer to customers would be possibly, as per these slides, another INR 40,000 to INR 50,000 crores. Actually, our construction spend, whether you call it CapEx or non-CapEx or government charges or whatever you want to call it, actually will start becoming a significant number of possibly INR 6,000, INR 7,000, INR 8,000 crore rupees a year. We'll have to aspire for a greater number, but that's the kind of scale we'll have to get used to in terms of annual expenditures, some for CapEx, some for development. Sir, just one question. One area where we have not invested heavily has been hospitality development. We have a couple of projects, but it's not been like we have invested. Is it just that you don't find the returns attractive enough in hospitality development, even as a part of your, let's say, integrated office development or retail development? Just your thoughts on that. No, I don't think so. That's not the correct case. Right now, we are new in hospitality. Our focus in hospitality had been to serve our existing customers, whether they were rental customers or our development customers. We've done a good job at it. We continue to do more. Frankly, in the next five years, a few thousand crores will be utilized just to build CapEx for that purpose alone. That money cannot be measured simply by what it earns. It has to be measured by what earnings it provides to the ecosystem it serves. Yes, if you take it that way, very viable and worthy of lot of investment. Okay. Would we do hospitality completely as a third-party activity? That means have a hotel in some location, just somebody walks in, somebody walks out, we make some money on it, hopefully. Yes. We have deliberately classified the hospitality as part of our annuity business. It indicates our intent that in due course of time, like any other asset class, it also represents a decent source of income and value and capital appreciation. We are quite busy with what we are doing, but we will keep our eye out for it, and opportunistically, we will look at that as time comes up. I think let's move on to overall summation, and then I will wrap. Any further questions? Otherwise, we can. Okay. Just to summarize two final slides on what we have talked about over the last couple of hours. We continue to hold extremely strong, valuable land bank with both DevCo and RentCo, annuity business and development business combined. We have over 200 million square feet of development potential, which will remain pending after which executing all the identified projects. That's the first key takeaway, which I thought I will bring this about because this is the core and fundamental to both of our businesses, both businesses. Just to summarize on the points which we discussed, we have enough and more land bank to give us sustained growth for over 20 years going forward, development business. The rental business, which we talked about, annuity business, we would have 73 million square feet of developed area by end of five years and another 60 plus million square feet available for development, and hence both the business have reasonably good runway. We are targeting almost 45% gross margin in the development side of business with INR 25,000 crores of surplus cash potential from existing already launched projects. Annual rentals of around INR 10,000 crores in the next five years, exit by FY30, and our group PAT and cash flow to grow 2x or two plus x, in the next five years or so. CapEx, INR 20,000 crores in the development business, INR 6,000-7,000 crores in the. Sorry. INR 20,000 crores in the annuity business, INR 6,000-7,000 crores in the development business. The CapEx of INR 20,000 crore is going to help us grow and build the base to kind of have accelerated growth in the rental business post FY30 as well. As stated above, in development side, we would like to get to a group, net debt zero position, group gross debt zero position, soon, and overall in the next five years on a group level, our net debt position, group gross debt position should be close to zero. Shareholder return, a balanced, judicious approach in growth and shareholder return. We look at almost distributing 50% of our PAT as a dividend return, which will translate to 15%-20% growth over the next five, six years on the dividend payout as well. Broadly, if you were to look at it, these are the goals which we have kept for ourselves for the next five, six, five years or so. There will be good times and bad times, but we think that we are fairly well positioned to go out and achieve these set of targets which we have kept for ourselves. I think Badal has summarized it well. You've all asked your questions, maybe exhausted out, but we've just kind of put everything back in perspective that it's two strong, independent businesses, both complementing each other, both having their own needs, but fortunately both being contributive. Collectively, as I said, we still look at generating enough cash even after strong CapExes, strong growth, to kind of bring our debt focus, which was for DevCo business, now we'll shift that debt focus for the entire group. We will hopefully generate even reasonable accounting profits despite the accounting standards which are reasonable and conservative. The deltas will be sort of good. And 50% of those profits which do get accounted and distributable, we will work towards distributing to the shareholders. I know we'll be retaining, God willing, a large amount of cash in the company. It's a happy problem to have, and it's something we will look at as time goes forward, as that cash becomes more and more real. We have kind of set ourselves a short-term goal of gross debt zero and DevCo, so we remain kind of disciplined towards that. We are now trying to set a goal for remaining group net debt zero. That will also help us being a little bit more disciplined. And even after we achieve both these goals, then we'll have to figure out what to do with the money, God willing. Any questions, anything you guys may have? I appreciate you all spending so much time, but please feel free. We do have a little bit of time. The intent was to kind of explain the company and explain the management thinking behind how we do things, and sometimes maybe because of the complexity of operations, it appears to be opaque. This is an opportunity to kind of clear the area. Yeah. Hi, this is Puneet. Just following up on your group net debt zero by FY 2030. Should one think that the gross debt would still be 2025 and INR 1,000 crores and you will have another INR 25,000 crore of cash in your books? If you see, Puneet, the gross cash that we are saying DevCo business will have would be at least INR 25,000 crores. Yeah. Hopefully the RentCo debt should be a number less than that. Yeah. On a group basis, our net cash should definitely be higher than the RentCo net debt. That's the cash we want to hold in the company. Yeah, absolutely. Our aim is to at least keep enough cash to cover any obligation which may be there in the group. That would be our short-term aim. And do you emphasize that the development business may not necessarily in future be net working capital positive for you? Is that why you want to keep so much cash here? No, I don't think so. But look, COVID happened. God was kind. We all got through it. Our tenants were very responsible. They paid up and so on and so forth. We know in countries like the U.S. that didn't happen. Even very large and eminent financial organizations who have great reputations had to kind of default and fold in, and so on and so forth. Therefore, what can happen in life, nobody knows. We've seen crazy things happen which nobody could have forecasted. So as an abundant measure of reasonable discipline, we want to kind of keep ourselves to the following, that we want to keep in the near term an objective where we are responsible. We do a lot of CapEx in RentCo to the maximum extent of our capacity to utilize. That number would be a number which, as we have indicated, about 3x of. That number generally could be north of what Ashok was talking. And naturally, INR 25,000 crores in the DevCo is just from the visibility of launch projects. Hopefully, we'll be doing some work in the next few years. That number should also be slightly better. So net-net, it kind of keeps you disciplined. So look, I'll be very frank with you. Life is good. We need lots and lots of discipline checks because you can get carried away. Our business, by nature, is a business where you are optimistic, you have to dream a bit, you have to believe a bit. When you start believing it too much is when you get into a lot of trouble. So I think I'm just kind of putting some guidelines. Now, after that, yes, the field will be fully open. I do believe in the next few years, we will be able to achieve these goals. They are serving as limiters to us. But then after that, the machine will start throwing out a lot of cash with almost no obligation under any circumstances remaining. By that time, hopefully, we'll mature, we'll also build up our organization skill sets better, and so on and so forth, and let's see what we can do with it. So message, what to leave to you is it's good. Could become better. Let's put it that way. Okay. Thank you. Hi. Akash from Nomura. Sir, some of your peers who are roughly at the same scale in the DevCo side, they are doing BDs, they are trying to gain market share in different parts of the country. But us, for example, we are still not pressing on growth as much as we can, and we have all this land bank. My question is, are not we being a little too conservative at the risk of losing market share? We do not measure market share. This is not a business of market share, number one. Number two, as I said, we did our bit a few decades ago. We do not really need to do it aggressively today. Okay. Number three, I am still continuously perplexed by words like GDV. Okay. Yes, if they are able to pick up lots of new projects which generate huge amount of margins, bring the money back and all, great. Many of those projects, I still would like to say, as I said, they need to. They are good companies, they are growing well, they are aggressive, and so they are hungry for new projects because they do not have those projects with them now. Okay. We are fortunate that we have those projects with us. So that is the only delta. I do not think it is more or less. Chasing additional business, we have realized it comes at the cost of what you already have. So we are happy to first utilize what we have and then go out and chase additional business. Maybe we are slightly more conservative than others, but maybe, I will be frank with you, we may have learnt our lessons over a longer period of time than others. I hope they do not repeat some of them, but that time will tell you. Thank you, sir. May- If I may just supplement. If you go through just the listed companies, the only ones making any modicum of serious money are the people who are doing projects on their own land. People who are doing JVs or JDAs for 10, 12, 15 years, without commenting on individual names, just look at how much money they have made. Are you in the business for running pre-sales, or are you in the business of generating margins and cash? We believe we are in the business of generating margins and cash and not in the business of generating pre-sales. Thank you. We are off that treadmill, for sure. Hi. One question. On the target for zero net debt at the group level, if I got it right, you said at the DevCo level, we might have, let's say, close to INR 25,000 crore of cash and maybe slightly lower net debt at the RentCo level. Now, currently our DCCDL net debt is somewhere around INR 16,000, INR 18,000, odd thousand crore. Now, this would mean that of the INR 12,000 crore incremental CapEx in DCCDL, you could say maybe around only half of it might come through debt and balance might come from internal accruals. While it is great from a financial stability point of view, considering that we are in a cyclical industry, another point is maybe we could improve our ROEs by taking slightly more debt, considering the strong quality of assets that we are going to develop. Just wanted to get your thoughts on that. I think, look, the point is you are absolutely right. We can do all those things. But to be very honest with you, I think we are fortunate that the cash being generated from our assets does fund part of the CapEx. But let me put it this way, that if we do want to add more CapEx, we have got a little bit of debt headroom. It is not that we don't want to raise more, or we don't want to do less. These are arithmetic based on the peculiar equations our company fortunately is placed in today. It just so happens that we will try to see the RentCo debt not drastically falling by multiple. It will, in fact, increase by absolute value, but not too much. DevCo will start throwing out cash. This equation, I do believe at the end of the day would change, but not materially so. Financial leverage, financial gains, increasing this, these are some things we are kind of a little bit away from. Because the biggest point is when you say return on equity, return on profits. Actually, unfortunately for us, we are, as I said, reporting profits of activities. Anyway, those numbers are kind of skewed. The way the system is set, the way the accounting standards are set, those things are stacked against you if you really want to play high stakes financial ratio games and all that. We have realized that, and therefore we say, "Well, look, we will live with what the external environment is and not pay too much attention to all these things. Thanks. Hi, this is Aditya from UBS. A quick question on the land bank. You have a five-year pipeline of launches, right? Both on DevCo as well as on the RentCo. Apart from this five-year pipeline, you have a huge land bank of 150, 160 million square feet on the DevCo, and I think 60, 70 million square feet on the RentCo. My question is, why is not more of this future potential also in the five, six-year pipeline? Is it because of execution bandwidth? Or is it the kind of demand that you foresee in the next five years, and the launches are calibrated according to that? Or is it also partly that some of this land bank is still in areas that are maybe far from development in terms of infra, et cetera, and so they are not viable in the next five years? Just wanted to understand why the launch pipeline has to be maybe only a small fraction of that overall land bank. Except for the last bit of your statement, the not being developable, it is all of the above. Okay. I think, look, the fact is we have a capacity constraint in terms of how much we believe we can develop well. Okay, number one. Number two, you are in a desperate hurry to get rid of something if it is going to lose its value. Okay, whether it loses value absolutely or loses value DCF, SCF, then you are actually in a hurry to do so. I think another myth which I would like to take on is that land loses its value. Okay, and that is what we have kind of tried to show you with the slides, that it does not lose its value. Okay. I can assure you, if you take buyer share, all of you, I don't think you can recommend a single one to your clients if you presume the following: the share will not increase in value, it will not yield anything, but it will have to bear the average cost of capital for 10 years. I don't think anybody can put any buy recommendation on any share because you basically by mathematics will come down to say, "Please give me the money. I'll make sure you lose half of it to me." Okay, it's not practical. The fact of the matter here is, we believe land generally as an asset class, unless you do foolish things with it, you run into some other problems, legal included. Those things can cause some damage to your land, but otherwise, sitting on your land is not unsafe. There are better investments, maybe. Smarter things to do, maybe. We don't have that capacity, but maybe. But it's not bad. You're not losing anything. Now, in our case, we actually, when we look back and see that would we have been a smart person by selling out that land sooner? Actually, the point is the land value increase, maybe at some point next time around, we'll try to do some fleshing out of that also. 10, 11, 12% is the average value increase in the hands of my customers. My inherent land value increase is significantly greater. That is why I'm saying that by quickly and desperately taking it out, rental is the only business where if I had tenants to give me that money and I had the capacity to build it quickly, I don't lose anything because then it's okay. In development business, we have to be careful that you have to kind of keep building up value. As I explained to you, unlike many other people, that soft services part of our business, the attention to customers, the attention to compliances, the attention to safety, believe me, it's taking up a disproportionate amount of our time relative to what it was in the past and what other people do. But that is what is giving us the increase. So I don't think it's that we are not looking at the fact that we should do it faster or not faster. I think there's a reasonable degree of caution that we are not necessarily having to sell it off because it's a losing proposition. Okay, now bluntly put, you can see the scale of cash generation we are anticipating. It may or may not happen. Really anything, dreaming beyond this, adding to this, making your life miserable, putting some customer to risk, and so on. I don't know if the risk-reward ratio is worth it. That in trying for the next INR 5,000 crore, you put everything at stake. Not sounding sensible to me at the present moment. Hi, this is Ronald from ICICI Direct. I had one question regarding this Gurugram and Noida versus Mumbai markets, with respect to the registration and the process involved in both this market that you register after the completion, or you say pay it and after the completion, you pay other balance money. This generates lots of speculative trading of flipping the apartments and everything. Do you consider that this could be rectified in the first place? Why it isn't rectified? Why it's not paid and registered at the time you sign an agreement? Do you think that it would get rectified in the future? I think what you said is interesting. It came to my notice also. The general principle is that stamp duty is payable when title is passed. Okay. I would still like to say Gurugram and Noida do it the right way, that you go and pay the stamp duty when the title is passed, and you pay a notional amount adjustable against the final stamp duty at the time of execution of a binding commitment. Mumbai, I will also say, treats that almost as an execution upon the first 10%. Okay? That the title is technically and theoretically passed. Every state has its own rules and has own interpretation. I'm not going to comment on it. I don't think there's any compulsive need for Gurugram and Noida to follow the Mumbai model. In Gurugram and Noida also, we have a very strong apartment act, which kind of says that the title is passed through a certain legal process upon and subsequent to receive of completion certificate, occupation certificate, et cetera. I find it hard to believe that how can a title be passed when you may not even have started construction. Anyway, every state has its own issues. If that's the law there, so be it. We'll follow it for Mumbai. I think Gurugram and Noida, I don't think this is encouraging speculative trading or discouraging speculative trading. I really don't think so. Okay, sir. Thank you. It also allows developers to start. The new India standards are that you cannot recognize income till you have created a sort of binding interest in it. By doing this in Mumbai, fortunately, unfortunately, you can say by taking 10% payment, now you can start recognizing revenue, which in places like Gurugram and all, till you get an OC, you can't start recognizing revenue. It does change significant benefits for the developer in terms of recognizing revenue. So maybe there's advantages to it, but again, I think we are not pressed to push for it in these places. Any last questions? I think thank you, everybody. I think it's been a long and good session. I think you have spent a fair amount of time in the morning at the sites. All my colleagues have shown you around. All I want to say is that this is a nice event to do periodically, but our doors are open. We're always happy to answer queries. We are also happy to receive and host you individually anytime. We remain constrained by what is in public domain, but within that, we're more than happy to share and expose any part of our operations to any one of you. So please feel free. I'm really happy that many of you made the journey last night itself so that you could spend the whole day productively with us. I do hope this session has been productive for all of you. As I said, happy to meet up with you next time. Maybe someday, God willing, we can have a shorter interaction in Mumbai itself. Vishal will hopefully create something which we can house all of us. So let's look forward to it. I think there's lots of good activity will take place. We had a choice of doing this significantly later, and having things to talk and report, but we felt it's important to do it on the calendar, which it was necessary to do so. I'm also aware right now that generally there's a thing in the markets of markets going up, markets going down, this, that, and all that. But as I said, it was even more important for us to put our point of view across when the point of view may not be that fashionable. Because I think we don't want to be sort of playing to a trend. We would like to play to our own plan and our own story. I think we've kind of put our facts out without trying to change them because of circumstances, optimistic or pessimistic. There's a period of turbulence which every industry and every markets go through. I still remain highly confident that the overall Indian growth story is intact. The real estate journey and the housing and other infrastructure stories in India is just beginning. We have a huge way to go before we can claim to be anything of world-class in terms of infrastructure, standards, quality, pricing, availability, everything. I think we still see a 20-30 year clear sort of run rate ahead of us. We can have bad timings, and that's why while we are following a very conservative debt strategy, we do believe it gives us the comfort to see through any bad time without changing or interrupting our plans. So I think I'd just like to put it in that perspective to all of you. But, thanks for coming here and we look forward to seeing you again. And some of you, I hope can stay back and like to join us for dinner. We look forward to it. Thank you

Data Source: Quartr Last updated: Mar 21, 2025

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