Ladies and gentlemen, good day, and welcome to the Oberoi Realty Q2 FY 2025 earnings conference call. We have Mr. Oberoi, the Chairman and Managing Director of the company, and Mr. Saumil Daru, Director of Finance of the company, with us for the call. Please note that this call will be for 30 minutes, and for the duration of this conference call, all participant lines will be in the listen-only mode, and this conference call is being recorded, and the transcript for the same may be put up on the website of the company. After the management discussion, there will be an opportunity for you to ask questions. Should anyone need assistance during the conference call, you may signal the operator by pressing star then zero on your touchtone telephone.
Before I hand the conference over to the management, I would like to remind you that certain statements made during the course of this call may not be based on historical information or facts and may be forward-looking statements, including those relating to general business statements, plans, strategy of the company, the future financial condition and growth prospect. The forward-looking statements are based on expectations and projections and may involve a number of risks and uncertainties and other factors that could cause actual results, opportunities, and growth potential to differ materially from those suggested by such statements. I now hand over the call to Mr. Oberoi, the Chairman and Managing Director of the company. Thank you, and over to you, sir.
Thank you. Good morning, good afternoon, good evening. This is the time zone you have logged in, and welcome to the conference call Q2 FY 2025 results and business updates. Thank you all for taking time out for this call. Before I begin, I would like to share with you a quick business update. I'm happy to announce yet another strong quarter driven by healthy residential sale momentum and strong growing performance across our annuity assets. During the quarter, we received full occupation certificate for Enigma, our project at Mulund, and this project continues to see a steady, sustainable, sustained in sale. We continue to see strong leasing interest across our office assets, and occupancies are also ramping up. We have received occupation certificate for Sky City Mall, Borivali, and are gearing up for its launch.
On Friday, we also launched our residential project, the first phase of our integrated development, Oberoi Garden City Thane, and we are very happy with the overwhelming response. We have recorded a sale of close to INR 1,350 crores, which is almost 50% of our launch inventory. Yes, for now, I mean, both Saumil and I are available for any questions and answers.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.
Yeah. Hi, Vikas. Congratulations on a great quarter and a great launch, and also a strong uptake in 360 West. So my first question is on the fundraise of INR 6,000 crores, which was kind of a surprise for all of us, because 360 is doing so well now, it's throwing so much of cash. So if you can delve a little bit deeper on what is the purpose of this, INR 6,000 crores of fundraise? Is it something imminent right now? How do you intend to deploy it, whether this will get deployed in this year? Could you be some more clear on the utilization of this?
Hi, Parikshit. Firstly, thank you for the compliment. See, the fundraise is basically, you know, literally to expand, buy new property and really expedite the pace of growth of the company. We are at a... You know, we feel that we actually are in a great position. Our brand is strong. There is the opportunity, the entire India story playing out so well. And it's we know that we have a lot of cash coming in from our own, you know, sales, but we want chunky amount where we want to go and buy some large lands. We would want to use it for that. So basically, this is all for growth.
But are you looking to deploy this? So what will be the timelines you're able to raise this? What are the timelines to deploy this? I, I understand that such a quantum of fundraise, you may have something in hand to deploy it. So do you, what kind of time horizon are you looking at to deploy this capital?
If things go well, we will deploy this in the next four, five months, like, that aggressively.
And potentially, it can add close to about what kind of GDV multiples we have, close to about 70,000-80,000 crores of development value with this kind of a fundraise?
You know, we all know the backend math. I don't want to say something, you know, on the call.
Yeah.
Yes, we are clearly looking at, you know, deploying this and, yeah, I mean, this is money going in the business.
And will this be largely in MMR, or are you looking at even some part of this will go to NCR? So, so what kind of concentration does this development you, you'll be running on this kind of funds with?
I don't want to disclose a lot. All I can tell you is that this money will go in business. We have opportunities. We want to deploy this in those opportunities, and you know, let it unfold. The rest will happen.
Okay. This is the last question on the launch pipeline. So, now we have Thane, which has given us huge numbers and kind of the sales that we are doing, so we're looking at a very strong Q3. But in terms of launches for the rest of the financial year, so is there anything coming in from Borivali or any, I think last tower we have, so Borivali, Goregaon, or Thane, anything more we see coming in terms of launches, which can help us understand that?
So, you know, we have two towers in Goregaon. We have one in Borivali. We have, you know, two towers in Thane that we can launch, which is in Kolshet. And of course, Pokhran, within this what you call project that we've launched, is another three towers. And by the way, like, we have started work at all these projects. Some of them are on, you know, tenth level, fifteenth floor, and all that. So we are not wasting any time waiting to launch. The day we launch, we can straightaway, you know, book that as our revenue and profit once it crosses 25% of our sales and construction. So all that is happening as we speak.
But any launches, I mean, for H2 now, beyond the current slate? Like in Borivali, do you think can come, and one more tower in Goregaon in this financial year?
There is tremendous demand. We are not taking that away. But, frankly, I don't want to commit right now. There could be a possibility in the last quarter of this financial year, we may launch, but I don't want to commit as such right now. Like I said, that for us, it's just press the trigger and there you go, like, you know, work is happening, everything is in place. We don't really need to wait for anything.
Okay, sure. Bye. Thank you, and wish you the best.
Thank you. The next question is from the line of Praveen from Morgan Stanley. Please go ahead.
Thank you. Thank you for taking my call. Hi, Vikas. Hi, Saumil. Again, congratulations on fantastic quarter-
Hi, Praveen.
-and also great launch. Hi, Vikas. So, so a couple of questions you've already answered. So I have just one or two very small question, if, if, you can indulge. One was, just trying to understand, your strategy outside of, Mumbai region. I know you have taken a very good land parcel in Gurgaon, if there is any launch timeline for that, but also, you know, with this money, are you planning to, go aggressively outside Mumbai or not? And, second question, again, also very simple question: What are you seeing the ASP trend, like for like, in your, properties or MMR region in general, as well as the land price trend? Thank you.
So as far as Gurgaon, we are in the design phase. Actually, we are almost ready with our design. We are in the approval stage now. And hopefully, maybe the first quarter, next financial year or second quarter, next financial year, when we would likely launch that project. So that's as far as NCR goes. And sorry, what was your other question? I should have actually made a list.
And the other question was your strategy to go outside of MMR, other than the project you already mentioned in Gurgaon, with the new money coming in?
Okay. So very aggressively looking at opportunities everywhere. We, you know, we'll be ready with our office probably in the first or last quarter of this financial year itself. Around January is when our office will be ready. And we are looking at a long-term and in a strong play in NCR. And obviously, you know, some bit of this money can go in, you know, looking at land parcels there as well.
Right. And then the last question I had was about the pricing trend in MMR for project as well as land price trend, please?
So, you know, again, both looking very stable, I would say. In fact, I thought we positioned and priced our product really well within this Thane launch. And I would say that, you know, markets have both width and depth, and I see this trend continuing, you know. And like, really, I think India is truly shining, I would say. And it's really working well. And there's enough money, and there's enough appetite. People really want, you know, to spend money on homes, and people want to spend on good quality. They want a branded product or somebody they can trust. So I think all in all, a great story, great future for us.
Indeed, indeed. Thank you so much, Vikas, and again, congratulations.
Thank you.
Thank you. The next question is from the line of Puneet Gulati from HSBC. Please go ahead.
Yeah, thank you so much, and congratulations on great new launch for Thane and great quarter as well. My first question is if you can comment upon how do you think about launching new projects, given that demand is not a problem for you? Most of the approvals, I presume, for Borivali and Goregaon are in place. So how are you deciding on pacing these launches? What is the broad criterion that you would use?
So, hi, Puneet. With regards to Borivali and Goregaon, we have reasonable inventory within the projects that we've launched. That's point number one. We also have inventory beyond, let's say, a particular level where we've opened up. So we will open those up. And again, I'm not saying that we won't launch. I'm just wanting to wait and watch and then probably, you know, take that call. We could probably launch either within this quarter, next quarter, or the first quarter of next year. Either of these, you know, we have this opportunity. Like I said, that we are very ready. We're just looking at...
You know, and another thing I see is, like, the resale that is happening in these projects, Borivali and Goregaon, actually surprising me in terms of the prices they are getting and all that. So, you know, we are also, I'm hoping and probably thinking, what is it that we can really get in terms of, you know, price? And that is something that we are closely monitoring, and then we'll take that call. Let me-
I said, do you have any questions for the participant? Since there is no response, we move on to our next question, which is from the line of Ritesh Sheth with Axis Capital. Please go ahead.
Yeah, thanks for the opportunity, and congrats on, you know, quarter as well as the launch. First, you know, on couple of land transactions you did, this quarter, especially on Nirmal Lifestyle, you know, how are we going to plan the development here? It would be like a continuing phase of existing Enigma towers or was there a development potential, development plan there?
Yeah, you see, you know, again, that's a market we now really know well. We've been there. We've done, two very large projects, very successful. So we know that market. Again, we are planning something really interesting. Very interesting.
And, you know, do we have additional potential coming from, you know, other land parcels that Nirmal might be holding, and that would be in the NCLT, or this was the only one which we are targeting here?
We do have a commercial, you know, development left in the existing project. We will be doing that also, and we will be building this as well.
You know, apart from these two, any other opportunities that we will be considered to look there from Nirmal Lifestyle or, you know, this is the only one which we are targeting?
This is not bilateral. This is more, you know, we got it from NCLT.
Yeah.
We haven't dealt with them as such.
Sure, sure. And second on, you know, Sky City Mall that you mentioned, you know, when is the opening planned and, you know, any progress on leasing there?
Leasing is going on very, very well. We are hoping that we can launch our mall probably, you know, maybe mid-December. You know, we ideally want to catch the season mid-December, and if not for sure, within January is when we will be completely ready. My team tells me that we should be fully operational by. Rather, we should be ready by fifteenth November, but let's say for any reason, if there's a delay, then maybe by, like, another thirty days, and then we'll be ready.
Sure. And when we open, we would be at, what, 50%-60% kind of occupancy, trading occupancy already there?
So, you know, leasing far beyond that would be done, but, you know, everybody will be in that fit-out mode and so on and so forth. By, let's say, you know, within two to three quarters of our operations, we will reach a very high level of occupancy. It could go up to 80%-90% also.
Got it. That's it from my side. All the best.
Thanks.
Thank you. The next question is from the line of Abhinav Sinha from Jefferies India. Please go ahead.
Hi, Vikas and team, very strong performance, and congrats for that. Sir, can you highlight how you are seeing the pipeline in 360 West from here on? So that's first. And secondly, on pricing, if you, you know, look at from a, let's say, two, three-year perspective, the pricing on 360 West has jumped quite a lot, but, you know, in the other projects it's also rising, but not to that extent. So do you see that gap narrowing?
So, hi, Abhinav. Firstly, 360 West, you know, we had a lag because our partner was selling his apartment, and he obviously was selling them a lot cheaper because he needed the money or whatever, and once his stock got over, we started getting the price that the project deserves. And that's why, I mean, you know, like, what you see as a slow build-up or rather as a quick build-up, is actually from my end, a real slow build-up. And yeah, I mean, that's about it. So it's not like, you know... And moreover, I would say that the building has been received very well by the people. Most people say that, you know, this is the best building and all that.
So yeah, I mean, I would say this building is on a destiny of its own. It's really doing well, and there is great momentum, and you know, the kind of people that are coming to stay, the community that it got built within that building, it's also helping, you know, so yeah, it's unique, I would say. Very thankful to God.
Right. And you would expect the same space to continue?
Yeah, I can say I would hope to, but, yeah, I mean, you know, the way things are, there is really no resistance on price, and the demand is great. Everybody, you know, like, really, closures are happening very quickly, and, it's we've been really lucky and very happy with the response at 360.
Right. So secondly, I wanted to check also on the capital structure, with the large, fundraise that we have planned. And you know, historically, we've seen a gearing in the zero to point five range. So will we, like, go back to that range, you know, once we have all our, land deployment done?
You know, firstly, the usage of this money is obviously, you know, for growth. We see opportunity. We know that we need to deploy this within the next four to five months, and that's why we are doing it. We also have restrictions in terms of usage of, you know, money when you borrow from banks.
Right.
So that also is a challenge. And, I mean, this is why we are looking at equity, and, yeah.
Great. Thanks and all the best.
Thank you. Thank you, Abhinav.
Thank you. The next question is from the line of Puneet Gulati from HSBC. Please go ahead.
Yeah, thank you so much. As a follow-up, can you also talk a bit about your launch timing for start of work at Glaxo, the Glaxo Worli land and also the Adarsh Nagar projects?
So, Glaxo, we hope to, you know, we are now looking at doing a mall, office building and another hotel. So we are looking at starting work somewhere in the first quarter of next financial year, because, you know, we are, we are still again in the on the designing phase and stuff like that. Adarsh Nagar also, you know, approvals should take us another nine months, and then we'll be good to go.
Okay. That's very good. Helpful. And on the Commerce Three, what kind of ramp up do you see? You're already at 65% levels. Is there room for much higher rentals from where you are and in terms of occupancy growing to a 90% level within a span of one year?
So we would, you know, again, we would be fully occupied within this financial year. We've already done deals which will now get reported as, you know, like, because they've been done later and registrations are happening. 100% of Commerz III should be leased within this financial year, you know, or close to 100% would be leased.
How should we think about rentals here? What would be the average rentals?
Rentals are doing well. You know, I think the building has turned out really, really well, and probably gets the best rentals within, you know, with a competitive set within this area. We're really doing very well with that.
Okay. Thank you so much, and all the best.
Thanks, Puneet.
Thank you. The next question is from the line of Abhishek Lodhiya , with Motilal Oswal. Please go ahead.
Hello.
Hi, Abhishek.
Yeah, good evening, sir. So just one question. While going through the presentation, I noticed that, for 360 West, we have done sales of at least INR 600+ crores and even collected that much amount, right? But the revenue recognition is that low. So just wanted to understand, I mean, what is the reason behind that? And jointly, maybe you might have answered that. Sorry.
Thank you for asking this question, because even I was asking this to my CFO.
Hi, Abhishek, Saumil here. So, very simple, you know, there are certain criteria to be met, you know, as far as recognition of revenue is concerned, even in case of, you know, finished goods. So, if the booking has happened, but some of these criteria have not happened, and for example, if you will know, you know, you would be aware that virtually the whole of the end of September was the, you know, the Shradh period. So while people may do the booking, they may not end up doing the documentation and all of that. You know, in the absence of some of these criteria, if it doesn't fulfill the revenue recognition criteria which are there, then you know, the recognition doesn't happen. But very frankly speaking, you know, that doesn't matter, because you know, we'll end up recognizing it in the next quarter.
Understood. Understood. Thank you, sir. Thank you.
Thank you. The next question is from the line of Vignesh Iyer with Sequent Investments. Please go ahead.
Thank you for the opportunity and, the other analyst mostly asked the question I wanted to ask. Just one question from my side. On the Thane launch, can you help me understand if the pricing is a tiny bit below, you know, expectation? Is there any specific reason that goes with this pricing or is it just because it's the initial one or two towers and subsequently we might see higher pricing coming in?
No, I think, Vignesh, I thought we really priced it very smartly, and, you know, this is why the response is so good, so I really don't see anything wrong. We are gonna make a lot of money even at this price, so we really strategically priced it.
Right. Right, right. Yeah. Just one question. Thank you, sir.
Thank you.
Thank you. As there are no further questions, I now hand the conference over to Mr. Oberoi for closing comments.
Thank you all for taking time out for this call. We look forward to hearing from you on an ongoing basis. Please feel free to reach out to us or our investor relation team as and when you have any questions. Thank you again.
Thank you, everybody.
Thank you. On behalf of Oberoi Realty, that concludes this conference call. Thank you for joining us. You may now disconnect your line.