Ladies and gentlemen, good day, and welcome to the earnings conference call of Godrej Properties Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mit Shah of CDR India. Thank you, and over to you, Mr. Shah.
Thank you. Good evening, everyone, and thank you for joining us on Godrej Properties Q3 FY 2023 earnings conference call. We have with us Mr. Pirojsha Godrej, Executive Chairman, Mr. Gaurav Pandey, Managing Director and CEO, and Mr. Rajendra Khetawat, CFO of the company. Before we begin this call, I'd like to point out that certain statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the results presentation emailed to you earlier. I'd like to invite Mr. Godrej to make his opening remarks. Thank you, and over to you, sir.
Good afternoon, everyone. Thank you for joining us for Godrej Properties third quarter financial year 2023 conference call. I'll begin by discussing the highlights of the quarter, and we then look forward to taking your questions and suggestions. While the global macroeconomic situation remained uncertain, the Indian economy performed well in the past quarter. Despite the recent increases in interest rates and housing prices, affordability of residential real estate in India remains attractive by historical standards, and residential real estate demand in India remains strong. We believe the Union Budget presented yesterday was supportive of the long-term growth of the real estate sector in India through its focus on infrastructure, affordable housing, and digitization.
The Finance Minister forecasted economic growth at 7% for the next financial year, with a planned capital expenditure of INR 10 lakh crore, a year-on-year increase of 33%, we expect robust economic growth, which will be very supportive of development of the real estate sector. I'm happy to report that Godrej Properties reported its highest-ever quarterly sales of INR 3,252 crore with the sale of 4,077 homes comprising an area of 4.42 million sq ft. This represents a year-on-year value growth of 111% and a year-on-year volume growth of 99%.h
We have also reported our highest-ever nine-month period sales of INR 8,181 crore through the sale of 8,784 homes with an area of 9.96 million sq ft, surpassing our full year FY 2022 sales. For the nine months, our booking value grew by 77% year-on-year by value and 51% year-on-year by volume. We look forward to building on this momentum in the current quarter and hope to significantly exceed our annual guidance of INR 10,000 crore of booking value for the year. On the operations front, we delivered 1.71 million sq ft of area in Bangalore and NCR during the third quarter.
We remain on track to deliver a large number of projects in the fourth quarter of the financial year and expect to end the year with deliveries in excess of 10 million sq ft. Due to the project completion accounting standard we follow and limited project completions in Q3, our revenue was moderate at INR 366 crore, representing a year-on-year decline of 8%. Our EBITDA grew by 33% to INR 153 crore, while net profit grew by 51% to INR 59 crore. Net operating cash flows for the quarter were robust at INR 549 crore. One exciting outcome during the third quarter was the pace and quality of business development. We added nine new projects during the quarter with an estimated future booking value of INR 23,050 crore.
For the financial year to date, we have added 15 new projects with an estimated sales potential in excess of INR 27,500 crore, thereby significantly exceeding our full year annual guidance of INR 15,000 crore of future booking value. We believe these projects are strategically located and will support our efforts to maintain rapid growth rates while substantially improving the margin profile of our company. On that note, I conclude my remarks. Thank you all for joining us on the call. We'd now be happy to discuss any questions, comments, or suggestions you may have.
Thank you very much, sir. Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question at this time may press star and then one on their touchtone telephones. If you wish to remove yourself from the question queue, you may press star and then two. If you are using a speakerphone, please pick up your handset while asking a question. This is required to ensure optimum audio quality on the call. We will wait for a moment while the question queue assembles. Our first question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.
Yeah. Hi. Congratulations on a great quarter, Pirojsha, both on GDV addition as well as on pre-sales. My first question is on the total GDV added this quarter. I just wanted to know how much is the total. These are largely 100% owned projects. How much will be the total CapEx on these projects and how much we have incurred in this year?
Yeah. We have incurred bulk of the CapEx on this. You know, around INR 1,000 crore is what we need to incur more. That phase milestone link, we will be incurring it as and when those CP through those transactions get completed.
For this, year-to-date, INR 27,500, what will be the total value of the total CapEx to the, total value of the CapEx on this GDV addition?
INR 3,000 crores, INR 3,500 crores.
You're saying balance INR 1,000 crores yet, is yet to be incurred out of the INR 3,500 crores? Hello?
Yes, that's correct.
Okay. The second question is, on. This, these new GDV addition, largely owned by us is coming at significantly higher realization. Just want to understand from the embedded EBITDA margins perspective, what would be the carrying value of the EBITDA margins, embedded EBITDA margins in this GDV addition versus our historical GDV additions?
I don't think we wanna get into EBIT, you know, embedded EBITDA margins. I think that it will develop over the course of a project. I think we've not, that's not a number we've historically tried to disclose. Of course, I think if you look at the kind of locations of projects we've added, the average price points we're estimating, and the fact that these are structures where we own the projects outright in many cases, I think it would imply a very meaningful increase in EBITDA margin over some of our older projects. I don't think we would like to disclose a specific EBITDA margin.
Okay. Just one more thing on these three launches. Ashok Vihar, we were planning to launch during 3Q FY 2023, and Worli in FY 2024, and Bandra was a little bit more longer. Any update on the timelines on these three projects?
Yeah. I think Ashok Vihar, unfortunately, now looks like it won't happen this financial year. We're still hopeful of a early next financial year launch. I think the team's still working towards a Q1 launch there. Worli also we'd hope to get done next financial year. I think Bandra, there's somewhat less visibility. There is some discussions ongoing there, hopefully we can bring that back on track. We're not certain whether that can happen next financial year.
Okay. Okay. Just wanted to congratulate Gaurav for taking up the role of the CEO now, and all the best to you, Gaurav. Thank you.
Thank you so much.
Thank you. Our next question is from the line of Puneet from HSBC. Please go ahead.
Yeah, thank you so much. Congratulations on a good quarter. My first question is with respect to the, you know, humongous project addition that you've done in this quarter alone. How soon should one expect for these projects to be launched?
Thanks for the question. you know, our endeavor is that, you know, some of these projects can be launched as soon as six months from now on. You should see much of the launch calendar of H2 of next year with some of these launches coming in. That's the target that we've set for ourselves.
Okay. you know, it's quite evident that most of these projects are in the nature of plots. What has really changed? I mean, is Godrej more veering towards plots or is opportunity better in the plots? Is demand better? Can you give more color on what's happening on this side?
I don't, I don't think, first of all, that's correct that, you know, majority of the projects are plots. If you look at it, I think of the nine projects we announced for the past quarter, two were plotted development. I think, you know, we do think that the plotted development story is an interesting one and something that we'd like to pursue for a couple of reasons. One, the turnaround times of these projects can be quite quick. The returns, therefore, can be quite high. We think this is a great way to expand our presence into new markets in a way that's less intensive from a management bandwidth perspective than group housing is.
Also gives us the opportunity to better understand some of these, newer markets, and over time, perhaps use some of them as entry points for the group housing business. Certainly, if you look at it, I think whether from a number of deals and certainly from a future expected booking value, the plotted business is still a relatively modest part of our overall business.
Understood. That's very helpful. you know, any plans of going beyond your traditional 4 cities, over next 1 year?
I think, you know, one is of course through the plotted development route, we have already opened up a larger number of cities and could continue to do that in the year ahead. I think from a group housing perspective, we still feel that the vast majority of the opportunity before us is in these four cities. We have also seen good traction recently in Ahmedabad. We are actively looking for business development in Kolkata, which are cities we've been present in but haven't put as much emphasis on as we have in the top four. Probably the only entirely new market that we are open to from a group housing perspective would be Hyderabad.
Okay. So, that's the new potential for you. While, you know, the environment looks quite encouraging, the momentum is quite nice, the mortgage rates have indeed gone up. Are you seeing any sort of reluctance on the part of, you know, buyers to make these purchase decisions? Is the momentum, you know, still quite strong?
Thanks. Good question. You know, the operating environment that we are seeing right now is very conducive for us. If you see that our sales have been, you know, historically at an all-time high in quarter three.
Yeah.
We don't see any bottleneck from, you know, any macro indicator. In fact, what we are continuing to see is that consolidation story and the value for good products and good locations with good design pieces is kind of getting a lot of traction, and we see that continuing for at least next one to two years in the near term. Yeah.
That's. Question, if I may. What would be your single biggest worry?
Worry. Come again?
What would be your single biggest risk that you would foresee for the year or something that worries you for?
I think, you know, largely speaking, you know, the operating environment seems to be conducive. The only black swan event would be a crazy global COVID wave, which is quite unlikely, so as to speak right now. To be honest with you, if you see from the past two years, we've all kind of learned to live with it. I don't really see anything, practically speaking, any real worry. Just it's about, you know, executing the plans that we set for ourselves and be very precise about, you know, timing the launches and getting into connection. Not really a real risk, authentic risk, so as to speak. Yeah.
Got it. That's... Thank you so much, and all the best. I'll come back with some few more questions later on. Thank you.
Thank you.
Thank you. Our next question is from the line of Pritesh Sheth from Motilal Oswal. Please go ahead.
Yeah, thanks for taking my question, congrats on, you know, strong sales performance as well as the business development. First question, again, on margins for this, you know, the new business development that we have been doing. While you know, won't specify on particular margins, but just a ballpark calculation if I do, you know, 13%, 12%-13% is your average land cost if I calculate, you know, INR 3,000, INR 3,500 crore as the spend. Another 30% in general for construction cost, plus, you know, overalls in the approvals, another 15%, 20%.
Can we that way assume like 30% should be the ballpark, you know, margins, that we can expect, at least, you know, from the base calculations that we look at?
Yeah, I think that's an interesting way of asking the same question. Yeah, I think, look, on land purchase, you know, I think 30% is not an unreasonable assumption. More importantly, depending on ultimate execution, I think there's, you know, a lot that can happen between project acquisition and project delivery. I think the real focus of the company and the real determinant of how successful we will be over these next few years will be, you know, delivering these plans. I think the number you've assumed is not too far off from what we'd expect on our price purchases.
Sure. Sure. That's helpful. In terms of launches, you know, probably this year we'll end at around 12, 13 million sq ft with the, you know, the pipeline that we already have. What should be, you know, the launches that we should consider for FY24? Obviously, that number would be higher, and you will give us a pipeline in Q4. Roughly, you know, what's the certain pipeline that you see for next year?
Yeah, I think, you know, we usually tend to be more happy giving this outlook at the end of the financial year because it's a little unclear still, you know, how many of these launches all happen in the next two months do some spillover, and all of that can have an impact. I think broadly, the way we were thinking about the business is that we wanted to get to this INR 10,000 crore number this year, and then we wanted to compound it at least 20% per year for the next few years on that base. Fortunately, I think we'll end ahead of that INR 10,000 crore starting point. Given the kind of business development, we've done, you know, hopefully the 20% plus compounding can also be exceeded. That's the way we're thinking about it.
Please give us until the next call to come back with more clarity on the number of launches and exact plans.
Sure. Sure. Just lastly on pricing, while interest rates have been increasing, we might see that topping out. You know, how do you see the prices, you know, escalating going forward? Will you still continue to take price hikes or, you know, probably you will, in near term, you'll see the affordability and then decide on the pricing?
I think we've been very focused on consistent price increase quarter and quarter, and quite happy to share that in quarter 3 in across markets, we've increased prices. In MMR, our average price increase has been between 1%-2%. In markets like, you know, South, we've increased by 4%. In North and East and West, largely our prices have been around 5%. Quite strong price uptake and also translating into booking value. We see that, of course, one has to be watchful about newer environments, but this all till now has been going at a good steady pace for the last few quarters. Yeah.
Just to add to that, you know, I honestly think that to a certain extent, I think obviously you can improve pricing at the project level through better design, better quality, you know, having the right brand. Ultimately, pricing in the real estate sector is not decided by individual developers. It is much more of a macro story. I think any individual developer in India today would have a low single-digit market share. In markets like NCR, prices have gone up maybe 25%-30% over the last 12-18 months. I think all developers would have seen those kind of price increases. In markets where prices haven't gone up to that extent, you know, the increases have been somewhat more moderate.
Certainly, our goal is to, you know, price our products at the, at the price that we think will clear the market. We do think that actually, as has happened in NCR, there is likely to be pricing momentum in other markets, too, over these next couple of years. That is usually the case at this stage of the cycle once, you know, the volume recovery has proved itself.
Great. Great. That answers my question. That's it from my side, all the best.
Thank you.
Thank you. Our next question is from the line of Kunal Lakhan from CLSA. Please go ahead.
Hi. Good evening. Pirojsha, I just wanna understand, like, we have acquired these 15 projects, totaling about 23 odd million sq ft plus in the nine months. When I look at our launches done in this year, of the 7 million sq ft or 3.6 million sq ft are actual, like greenfield new launches excluding the new phases. How should I look at this 23 million sq ft that you've acquired in terms of getting it to the market? Like, what kind of timeline you have in mind to bring them to the market?
No, I think Gaurav mentioned that, you know, the goal is to hit six months kind of timeline from project acquisition to project launch. In some projects, we've been able to do that. My own experience is that on some of the larger projects, you know, whether it be Ashok Vihar or Worli and so on, it does tend to, for one reason or another, take a little bit longer than initial expectations. I think the teams are very, very focused, of course, on bringing these projects to market as soon as possible. We attempt, one of the key lenses through which we evaluate business development is phases which these projects can be brought to market. We're trying to avoid projects that we think have too many regulatory hurdles and require, you know, longer time frames.
I think hopefully you'll see the vast majority of these come to market within 6- 12 months of being added, though I think it's probably reasonable to expect that some percentage, as is usually the case for one reason or another, will slip out of those timelines.
Sure. Sure, that's helpful. Secondly was on the completion side. We had set out a target of about 10 million square feet plus of completion. Just going by, you know, what we're seeing, there's a bit of a lag over there. That also reflects in our cash flows, right? Because, like you mentioned, certain milestone base payments were lagging sort of. How should we look at completion, and how should that reflect in our cash flows and also in our P&L in the quarters to come?
Kunal, you're absolutely right that I think year-to-date number on deliveries is of course very underwhelming. We are on track for that 10 million sq ft of guidance. We have a busy OT calendar expected over these next couple of months and do continue to expect to hit that 10 million milestone. You know, I think some of these benchmarks unfortunately do tend to be a little bit lumpy. I remember, you know, prior to this quarter, we were a little bit defensive on the business development deployment because while we saw a lot of momentum internally and knew we had the right set of portfolio discussions underway, what we had been able to get to the stage of announcement was not in line with that.
You know, I think, for example, you've seen in a quarter like last quarter that in a lumpy way, these targets can suddenly look very different from an achievement perspective. I think operationally it's, you know, similar this year, and there's no reason it should be this lumpy. We do expect a big Q4 from deliveries and therefore to get to that 10 million sq ft number as we'd earlier indicated. I think, you know, while of course there's no perfect way to look at it, Kunal, I think very broadly, if I was to indicate how we think the numbers for the company should pan out, is that clearly bookings come first because a large percentage of our bookings happen at the time of project launch.
If you look at our unsold to launched inventory, it's the lowest it's ever been. Bookings is always going to be at the time that the company is in now, where it's growing very rapidly, is always going to be the lead indicator. Roughly, collections should approximately equal the average of the previous two years' bookings. I think, you know, because there is the average delivery timeline would be roughly three years. I think the average of the previous two years' booking would be a good approximate indicator of where collections should be. Of course, this is not going to be an exact number, but I think from a directional perspective, that should be the case.
We've indicated that we are hoping to get, you know, 10%-15% net profit margin on bookings from the business we're doing. I think the average timeline for earnings delivery will be roughly three years, as I said, as it's linked to actual project completion. You know, very broadly, I think that's what we're trying to focus on. Grow bookings very quickly at least 20% a year on an ongoing basis. Of course, a year like this year will be much higher than 20%. Ensure that collections in a given year are roughly equal to the previous two years' average, and try to ensure that earnings are 10%-15% of three years prior bookings. That's broadly how we're thinking of it.
This is very directional, and there could be things like the crazy inflation that we saw at some stages last year that impact some of these numbers. I think broadly, this is what we're hoping to achieve.
Sure. Sure. Thanks. Thanks. That's very helpful. My last question actually going back to the business development. Like, you know, last year was pretty subdued, FY 2022. This year we have kind of like, you know, done really, really well by spending about INR 3,500 crores worth of land. How should we look at this going ahead, you know? I mean, would you see the same level of spend continuing going into next year, or would you kind of slow down?
I think we want to be intentionally quite dynamic with our business development strategy. I think the answer to your question depends very much on what we are seeing both in the overall market as well as through our own internal performance. If we're seeing, you know, continued stress amongst smaller developers and therefore what we think are attractive opportunities for business development, I think that will indicate, you know, that we intend to continue to see very high levels of action. It also depends obviously on our internal performance and are we, are we able to launch the projects in the timeline we're hoping to.
Are we able to continue to sell a large percentage of the projects we're launching and therefore not creating, you know, a large portfolio of unsold inventory which can create its own problems over time. I think we will be quite responsive to that. Broadly speaking, I think our expectation, as we said today, is that 2023 should continue to be a good period for business development. We continue to have-
Just one moment please, sir. Sorry, that was from one of the participant's lines. We'll move on to the next question, which is from the line of Abhinav Sinha from Jefferies. Please go ahead.
Hi. Congratulations on a strong quarter. Just a few questions. I think one I will just follow up on what Kunal was asking. We got interrupted. You know, with the BD development that we have seen this quarter, can you update us a bit on what should be the guidance on overall debt and gearing trajectory?
Yes. I think we've, you know, consistently since IPO, 12 years ago, said that our comfort from a gearing perspective is around 1:1. I think of net gearing. I think given the increase in the size of the balance sheet, now we'd probably say we'd more like to operate anywhere from 0.5:1 to 1:1. We ended last quarter at 0.3:1. Clearly I think we feel the balance sheet still has significant capacity for additional investment. As I was saying, I think the current visibility basis, the number of discussions underway at the moment, continues to be very strong.
Despite a very strong Q3, I think Q4 and Q1 of next year should see very healthy levels of business development continue. Then I think, you know, beyond the sort of 12-month timeframe, it's something that we'll have to evaluate both basis what we're seeing in the market and how our own performance has been and, you know, calibrate the strategy accordingly. But certainly for the rest of this calendar year, I think the business development opportunity remains quite exciting. I do think that this will quite quickly translate to, you know, meaningful top line growth for the company.
As these projects start reaching the revenue recognition stage, we are quite optimistic that the margin profile of the company will also look very different, both because the structure of the project is either profit shares where we have a high share of economic interest or outright, but equally because the location of the projects and price points of the projects are we think structurally much better than some of the older project locations.
Okay. Secondly, on, you know, on the residential side, the overall cash flow. I was just looking at slide 33 of the presentation, where you had just given good details on project-wise, you know, progress. There's about INR 160 billion of, you know, excess cash flow yet to be received on the currently sold projects. You know, there should be some unsold inventory as well. Can you guide us on what is the sort of net surplus, you know, we can expect from the ongoing pipeline and, you know, or maybe, you know, broad idea of where we would be on average on construction progress and what is to be spent?
Abhinav, it's very difficult to predict that. Like, you know, look, Pirojsha gave some numbers. Maybe you can do a back calculation on the sales price. If you are looking at some kind of a 15% of net profit margin, that would be my receivable surplus, which will get generated over a period of time. Now we have to go line by line, project by project to determine what would be my construction outflow and what would be my realizable surplus, cash surplus out of that. Maybe we can connect offline and take you through that.
Sure. fair to assume, I mean, there's substantial surplus here, yet to come or, you know, you are waiting for the newer launches for that to appear?
Sorry. Sorry, Abhinav. I couldn't catch up, you know, clearly on the call.
It's okay. I will connect on that separately. One last question on the NCR side where we have now seen, you know, pricing also move up materially. You know, has it started impacting the quality of demand? You know, one of the issues used to be that cash flows will start lagging in NCR versus sales, et cetera. Any such thing seen so far?
Abhinav, I'm sorry. I don't know if it's the issues at our end. We're not able to hear you very clearly.
Mr. Sinha, maybe I request you to please return to the question queue.
Sure. Sure. Let me try again. Yeah.
Thank you. Our next question is from the line of Abhimanyu Kasliwal from Choice India Limited. Please go ahead.
Good afternoon, team. Am I audible?
Yes, you are.
Perfect. Thank you so much. Firstly, congratulations on a good quarter. Even though we did not see very good recognition, the NPV of assets projects seem to have increased dramatically, like INR 23,000 throughout this quarter. What about the future outlook? Are we looking at more cities besides the existing ones? Tier two, I mean, for example, I'm from Indore, so I'm aware that in Indore we are looking at some land parcels. In general, are we looking at other tier two cities as such? Am I correct in my understanding that that could lead to the next level of growth for our company? What are the tier two cities, are we open to tier two cities?
What would you like to tell us about that?
Thanks for your question. If I understood you correctly, you wanna understand the future growth strategy in tier two specifically.
Yes.
I think that, you know, our focus will continue to remain in these cities where we operate from a group housing, you know, perspective. We believe that the fact that most of us as large developers operate at single digit market share, there is massive headroom to focus over there and grow. As far as the opportunity on tier two is, we are exploring opportunities and entering selectively through the plotted development platform, and that is going to be our current focus.
Understood. One last question, sir. The inventory seems to have increased this quarter. Is that, are we trying to ensure that our margin were maintained or is it just some short-term occurrence? Are we like say inventory is increasing because we are open to get higher margins, we are not planning to sell it at a lower margin, something like that. Could you please guide?
I think, our focus is to ensure the margins in every project and kind of do consistent sales across the geographies that we operate. I think we've been seeing a sort of a secular trend, largely speaking, in most of our portfolio, with any sort of, you know, anything other than the, you know, core strategy to maintain a healthy, robust sales pipeline and wherever possible, increase prices consistently. That's the way we've been maintaining our margins till now. Yeah.
Last question. Are you seeing anything in terms of the velocity being maintained as you look or is it slowing down a bit or you're expecting it to pick up? What is your call on that?
I think we've been maintaining velocities and as you would have noticed that this has to be one of the most exciting quarters for us from a sales velocity point of view. Yes, you know, we've been able to maintain our velocities across all markets where we operate. Also we've been able to kind of break our record for few three sales. Yeah.
Understood. Thank you so much. Thank you so much. Wish you all the best.
Thank you.
Thank you. Ladies and gentlemen, participants may enter star one to ask a question at this time. Our next question is from the line of Himanshu Shah from Dhruv Gems. Please go ahead.
I just wanted to ask you, the amount of projects we've signed. I wanna know about the land prices update because supposedly we bought the Ashok Vihar land before two years for INR 1,300 crores. Now same, you know, that what kind of land prices appreciation have you seen in the last quarter, the deals which we have signed? Throw some light on that.
You know, it's very specific to, you know, micro markets where we operate. As you would have noticed that on the demand side and residential pricing side across markets, generally there has been an uptake. Accordingly, you know, land being a raw material has also correspondingly increased in certain geographies. Yes, where, you know, where there's more confidence in terms of, you know, customer attraction to buy a product, those markets would have relatively seen slightly higher price. It's very difficult to really say there is a next % price increase across India. It's very specific to the micro markets where we operate. Yes, it's driven largely by what consumers are willing to pay and buy products over there.
Okay. This quarter you updated around 9- 10 projects which are on the launch. Are we on track for that?
I think, you know, obviously the investor presentation where we put the estimated launches is our most updated view on what will get launched. We do hope to of course launch all of those. As we are some of them linked to regulatory approvals, there's also of course some possibility of them slipping into the new financial year. Overall I think Q4 is looking good from a new launch as well as overall booking perspective.
I don't know. Any particular this is that you've generally shifted from the JV to outright purchase almost completely because we've signed like 8 out of 9 which are owned projects, right?
Yeah. I understand that optically it looks like we've switched completely based on last quarter's numbers. As we were saying, you know, BD can be a bit lumpy. We actually have a large number of joint venture projects also under discussion. Q4 may not be as skewed towards outright purchases. We are very much open to both outright purchases as well as any sort of joint venture structures where we have a reasonably high economic interest in the project. We have de-emphasized projects where our economic interest is relatively low, like development management fee structures. Only in exceptional cases would we add such projects.
We are not worried about Ashoka, right? Because the delay and all the sales perspective and all, we are comfortable, right?
I am extremely excited about Ashoka. Little frustrated that, you know, we haven't been able to bring it to market yet. I think it's gonna be an outstanding project from us for us both, I think from a project quality perspective as well as a financial return perspective. We're very excited to hopefully kick that project off over the next few months.
Okay. Okay. Thank you. All the best.
Thank you.
Thank you. Our next question is from the line of Sameer Baisiwala from Morgan Stanley. Please go ahead.
Yeah, thank you, and good evening, everyone. Pirojsha, can you talk about the supply situation in the micro markets that you are present? Are you seeing any stress building up, or you think it's okay for now?
Not, hi, Sameer. You know, I think the supply/demand situation seems quite favorable at the moment, if anything. You know, I think some of the metrics we track quite closely and are also sort of available through our presentation is the % of launched inventory that we have that is unsold. That continues to be at all-time lows, sort of any time in the history of the company. I think it's a good indicator that whatever we've been able to bring to markets is seeing good uptake. I think also very encouraged to see some of the big launch numbers we've posted in recent months, like our Ahmedabad launch and Bangalore launch last quarter. Overall, not seeing anything on the supply side that is worrying me.
Again, I think, you know, while some of the bigger developers in each market are scaling up, I think that is also happening through market share gains. Where a lot of the smaller players are focusing more on, you know, bringing land to the market rather than bringing too many new projects.
Okay, great. Any thoughts on Vikhroli land which is owned by the parent comp? We have not seen any, you know, major project launch out of that portfolio.
That's right, Sameer. I think in the upcoming financial year, we do expect a large new launch in Vikhroli. Hopefully, we'll get that part of the engine humming again as well.
Okay, that'd be great. When you look at your BD plan, I mean, are there any white spaces that kind of stands out, you want to go and make sure that you get a presence there, a deal there that you want to highlight?
I think honestly, there's so much opportunities, I mean, it's hard to nail down any one thing. While we are looking at from a new market perspective, I mentioned Hyderabad, one opportunity and, you know, plotted development, we're looking in several markets. I think the real big opportunity is continuing to deepen our presence in these top four markets. These are the real, you know, areas where our current scale, even if you look at what some of the leading players in each of these markets is today delivering, clearly there is significant room for scale up by entering new micro markets. I think as we took stock of, you know, how we've performed over the last few years, Last year, we felt that, you know, Mumbai and Bangalore were two markets where we certainly hadn't scaled to our potential.
I think we've made the kind of changes to the teams, the kind of intent we're driving in those markets. We're already seeing some early results from that. I think both Mumbai and Bangalore are showing sharp growth this year over previous years. I think certainly the opportunity remains. I think, you know, with Gaurav taking over now, we've got the exact right person to do this, as he's obviously delivered a similar thing in NCR. I think very happy to see him hit the ground running in his first quarter, managing the operations of the company in Q3. Certainly, I think the primary aspiration is to really significantly increase our market share in these top four markets.
In each of these, we think we have a very strong base now and are already amongst the leading players. You know, we think we have the balance sheets, the brand, and the intent, to significantly further scale.
Okay, great. Thank you so much.
Thank you. Ladies and gentlemen, before we take the next question, we'd like to remind participants that you may enter star one to ask a question. The next question is from the line of Biplab Debbarma from Antique Stock Broking. Please go ahead.
Good evening, sir. Congratulations on the excellent set of performances. Just, my first question is on the, on your project in Byculla. Could you throw some light on the details like, what kind of total area, and what kind of legal and financial liability is there in that project? Because my understanding is that it's a stuck project, and there was a JDA which has failed previously. Just trying to understand some insight on, what kind of projects is that, in Byculla.
This is actually a redevelopment project where we partnered with the existing developer to take over the development of the project. It's a brownfield project in that sense. We hope to launch the project in the first half of the next financial year. I think the expected booking value, et cetera, is mentioned in the presentation, about INR three and a half thousand crore. It's in Mahalaxmi, not Byculla.
It's in Mahalaxmi.
Yeah, looking forward to getting this going. It could be, you know, relatively fast to kick off as I said, because it was an existing project.
Okay. Great. Great, sir. Just, just your current mix of JV and outright, for the ongoing, what could be the current mix? In the medium to long term, what, do, would we see some kind of shift in this mix or this mix would be going in future if this mix of JV versus outright would be the same?
Current mix would, I think, around to our current mix of outright would be around 25-30%. Balance is still into JD, DM and other models. Going forward, obviously... I think going forward, you know, again, as we've said a few times, we don't think having some sort of blanket, you know, either 50/50 or anything like that necessarily makes sense. We will evaluate what we're seeing in the market and try to respond to that in the way that we think maximizes the value for the company.
I think, you know, if we're seeing market conditions where there is a lot of distress, where we are well-capitalized, and we can, you know, get land at what we think will be attractive valuations and develop that land through what is likely to be a strong leg of the cycle, we will, I think, probably lean more towards outright purchases. If on the other hand, over the next five, six years, you know, the market gets more frothy, we feel the cycle is topping out, we may not be as keen for outright purchases and might then look for more joint venture kind of structures. I think it will be a continual evaluation of what we think the market is offering, as well as where we think our own execution priorities lie.
I think we will, you know, respond in that way. Certainly, I think going forward, you can expect to see a fair mix of both outright and joint ventures and very limited, you know, development management agreement type structures.
One final question is, what kind of net operating cash flow should we expect in FY 2024? The reason I'm asking is, would there be significant jump in the net operating cash flow because of the strong traction in sales booking for the past, I mean, last year, this year too. What kind of operating cash flow should we see the next financial year? Some ball park, I'm not-
A number again that we're offering any guidance on, but certainly it's a number that obviously we attract very closely internally and is one we expect to see very meaningful growth on both next year and in the years ahead. You know, again, we mentioned that where our attempt is to ensure that what we deliver in bookings in one year, or the average of the previous two years is what we are able to show as collection. Obviously the linkage between collections and operating cash flows is quite tight and depends on, you know, the margins of the project and pace of completion.
Okay, great, sir. Thank you, sir. That's all from my side.
Thank you.
Thank you. Our next question is from the line of Manish Gandhi from KPMK Investments. Please go ahead.
Hi. Good afternoon. Pirojsha, to you and the whole team, leading by Mr. Daria, heartily congratulations. On all fronts on BD, especially locations across the cities, is excellent and it has succeeded, exceeded any expectations. I'm sure as you are guiding, you are discussing many more. First of that. My question is, first to RK. Rajendra, which has contributed to this INR 4,200 crore inventory rise? Can you just share?
basically, Manish, it is all the outright purchases what we have, you know.
Sir, I'm sorry to interrupt, but there's some disturbance in your line. May I reconnect you?
Disturbance is Rajendra's line, right?
Yes, sir.
Yeah.
Am I audible, Manish?
Yes, you are now, sir. Please go ahead.
Manish, the inventory accumulation is on account of various projects which we have accumulated. Now, you know, what happens in the accounting is you have to, in the redevelopment, you have to do a gross up of liability and inventories. Basically, it's all on account of new project addition, what we have done. You know? That is how the inventory movement is you are seeing from the last quarter.
My next question is on Bangalore. How you see the demand affecting because of this technology-led layoffs? Can you give some color, Gaurav or Pirojsha? Two, is it the reason we have little bit less BDs in Bangalore compared to the other cities?
Thank you for the question. I think Bangalore, we are seeing a very strong growth momentum. In fact, we sold close to INR 749 crores in the previous quarter, which is equivalent to almost the entire sales of the previous financial year. We see global demand out there. You know, as Pirojsha was mentioning sometime back that business development tends to be a little lumpy, and we are extremely focused on Bangalore business development. Hopefully, you know, in a couple of months, we should be hearing some very exciting stories on business development side for South Zone particularly. Yeah.
Okay. Lastly, just not a question, but just would love to have your thoughts. Next year in Mumbai, in MMR, we are launching multiple large projects. It must be exciting for the team, but this is the first time we are launching so many large projects in a particular city. Can you just give some color?
You know, largely the teams in Mumbai have really, you know, kind of started outperforming the previous year. In fact, if you see the nine-month sales of this financial year, it's at already INR 2,000+ crores, which is something which they did not achieve even a year. You know, every launch that they're kind of planning up, they've been able to show consistent delivery. I don't really see that as a challenge for Mumbai. It was largely a business development issue historically in Mumbai zone. With that kind of crack, I think, the team is extremely hungry to deliver on this as well. Exciting quarter of this one and also the next financial year from Mumbai side.
Perfect. Can I squeeze in one more last?
Yeah, go ahead, Ramesh.
Yeah. How do you think about the opportunities in extended Mumbai, like New Mumbai, in the coming area because of new international airport and of course, Harbour, the 22 kilometer trans-Harbour line? Do you see, or you are looking aggressively, to enter that market? Of course, we have one big project, Taloja, but anything else, you see?
Sure. I think, generally we've been seeing, you know, infra story directly, positively, giving a stimulus to any demand on the residential side. We will instantly also add some plotted developments in that specific corridor, with a very specific premise that we were seeing demand, especially in the segment which we don't have, in the portfolio MMR, on that side of the corridor. We continue to maintain the focus on opportunities. To be very frank, you know, from a portfolio point of view, our strategy is to maintain healthy growth across micro markets and not really get, you know, specific only in one specific micro market of MMR. Definitely that's a focus area. And you'll see, you know, continued launches out there, but not definitely only in that specific micro market.
Okay.
In MMR.
Thank you so much and, really exciting, next one year for everything. All the best to the team.
Thank you so much.
Thanks, Ramesh.
Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for closing comments.
I hope we've been able to answer all your questions. If you have any further questions or would like any additional information, we'd be happy to be of assistance. On behalf of the management, thank you again for taking the time to join us today.
Thank you very much. Ladies and gentlemen, on behalf of Godrej Properties Limited, that concludes this conference call. Thank you for joining us. You may now disconnect your lines.