Ladies and gentlemen, good day and welcome to the Puravankara Limited conference call hosted by Emkay Global Financial Services 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 the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Harsh Pathak from Emkay Global Financial Services. Thank you, and over to you, sir.
Yeah, thanks Manav. Good evening, everyone. On behalf of Emkay Global, I would like to welcome the management and thank them for this opportunity. We have with us today Mr. Ashish Puravankara, Managing Director. Mr. Rajat Rastogi, Chief Executive Officer, West and Commercial Assets. Mr. Mallanna Sasalu, Chief Executive Officer, South. Mr. Deepak Rastogi, Group Chief Financial Officer, and Mr. Neeraj Gautam, Deputy Chief Financial Officer. I shall now hand over the call to the management for the opening remarks. Over to you, gentlemen.
Am I clear?
Yes, sir, we can hear you.
Thank you. I am Deepak Rastogi, thanking you all for joining our earnings call to discuss the performance for fourth quarter and financial year ended 2025. I would like to thank our host for today's earnings call, Emkay Global Financial Services. The results and investor presentation have been uploaded to the stock exchange, and I hope that you have had the chance to review them. Let me first start with some brief highlights about the sector performance and outlook, followed by our financial and operational performance for the quarter. Despite global headwinds and geopolitical uncertainty, India continues to demonstrate remarkable resilience and stands out as a compelling growth story. The last quarter has reaffirmed India's position as the fastest-growing major economy, supported by prudent fiscal policy and strong domestic consumption.
Recent RBI repo rate cuts, liquidity measures, and fiscal incentives are expected to improve credit availability and drive demand, especially in real estate. On the real estate front, the residential market continued its strong momentum with over 88,000 units sold during quarter four of financial year 2025 across the top eight cities and more than 350,000 units for the full year. Pune and Chennai led the growth for these increases while Mumbai recorded steady demand. These trends reflect the resilience of Indian housing sector supported by urbanization, rising aspirations, and favorably policy support. On the commercial side, office space absorption crossed 70 million sq ft across six major cities, driven by demand from GCC, which is Global Capability Centers and hiring momentum. This is actually which was reported by several India. Bengaluru continues to be one of the headstart, especially on this.
Both rising residential and commercial real estate are benefiting from favorable micro trends with steady leasing activity and upbeat buyer segment. As a company, Puravankara is aligned with India's growth story focused on prudent expansion, operational excellence, and customer-centric cities. Puravankara is well positioned to capitalize on these trends with a robust launch pipeline of over 13.5 million sq ft planned for financial year 2025/2026, aiming at centering our presence amid a consolidating market. Moving on to the company's financial and operational highlight. For financial year 2024/2025, quarterly sales was INR 1,282 crores, and for the full year it was INR 5,006 crores. While sales volume was 1.42 million sq ft for the quarter, and for the whole year it was 5.67 million sq ft.
Customer collections for Q4 stood at INR 946 crores, and for the financial year, it grew by 9% from INR 3,937 crores from INR 3,609 crores, which is the last financial year. Average realization also witnessed healthy growth for Q4. Average realization stood at INR 9,031 per sq ft, up 9% year-on-year. For the full year, it improved by 10%, up from INR 8,035- INR 8,830 for this year versus last year. We have achieved our highest-ever sustenance sales during this year with a total value of INR 4,223 crores, marking a 14% growth over the last year. In terms of geographical sales contribution, Bengaluru led our sales with 56%, followed by Chennai, Mumbai, and Pune, which was close at around [17%] to 15%.
Notably, Mumbai and Pune saw a significant rise in contribution in terms of the overall sales which grew from 6%- 15% versus last year. This is actually driven by our growing presence in the West. With the recent acquisitions and redevelopment projects in Mumbai totaling over INR 9,500 crores in GDV, we expect this momentum to continue. Our launch pipeline remains strong with approximately 13.5 million sq ft of planned launches. It is important to highlight that non-Bengaluru projects now constitute 54% of our ongoing developments and 52% of our planned pipeline. Mumbai and Pune together account for about 21% of the planned projects, underscoring our focus on diversifying the portfolio across high opportunity markets.
On the business development front, we made significant progress during this financial year with land investment of approximately INR 1,284 crores, which added almost 8 million sq ft of our development portfolio, representing a GDV value of INR 13,000 crores. These strategic investments have further strengthened our pipeline and position for sustained growth and value creation in the coming years. In May, we basically announced a JV with KVN Property Holdings Limited LLP, for approximately 25 acres land parcels located in North Bengaluru, with a potential GDV of INR 3,300 crores, and a planned sellable area of approximately 3.5 million sq ft. This development marks a key addition in our portfolio in a high-growth micro-market and is expected to launch within the next six months.
We successfully launched our much awaited Project Purva Panorama in Thane, Mumbai, with a total GDV, total development potential of 3 million sq ft with an estimated GDV of INR 4,000 crores. Commencing with Tower C, which covers 0.52 million sq ft. On commercial portfolio, currently, we have 3.2 million sq ft of development underway with nearly 2 million sq ft expected to receive OC during this particular year. We have two projects. One is Purva Zentec and Purva Aero City. They both are in Bangalore. These two projects are expected to generate a surplus of INR 1,870 crores, making a significant value creation opportunity for the company. Coming back to the quarter of 2024/2025 Q4, the total revenue clocked was INR 564 crores.
EBITDA margins for the quarter was around 9%, while we had a net loss of INR 88 crores, given that, as you are aware that we had delays in terms of getting the approvals and hence the handovers were actually delayed. However, given the cost, which was there already, that being a period cost, it got accounted for during the quarter. Similarly, for the year ending 2024/2025, our total income stood at INR 2,093 crores, with a total loss of INR 186 crores for the quarter, sorry, for the year. The pre-sales value for financial year 2025 was INR 5,006 crores. The sales and marketing expenses and overheads incurred for the pre-sales have been entirely charged to P&L as per the accounting policy as per Ind AS. Operating cash flows for financial year 2024/2025 stood at INR 4,342 crores, up 10% Y-o-Y.
We have delivered approximately 3.09 million sq ft during this year. Further, we are expecting to receive occupancy certificates during this year, which is 2025/2026, for key projects such as Provident Capella, Purva Atmosphere, Purva Oakshire, Adora de Goa, for which we have already secured OCs for a few phases in the last quarter. These projects together account for total sellable area of approximately 3.95 million, with a total GDV value of INR 3,200 crores. Of this, approximately INR 2,600 crores have already been sold to our customers.
Coming to our debt position, as on 31st of March 2025, our net debt stood at INR 2,949 crores, with a net debt equity ratio of 1.7x . We also had a cash balance of INR 732 crores, which reflects a strong liquidity position and gives us the comfort to manage operations smoothly. We continue to stay focused on managing our finances well. Our aim is to gradually reduce debt per square feet, especially for projects under construction.
We also are exploring funding options as we have been obviously communicating with you, like QIP or platform level partnerships to keep our capital structure balanced and support our growth plans. To conclude, while financially 2025 posed challenges in the form of deferred launches and approval delays, we made decisive investments in land and business development that have strengthened our growth runway. Our sales performance and collection efficiency reflects operational resilience. As we marked 50 years of Puravankara, we are proud of our legacy and energized by the opportunities ahead. With a strong pipeline, key projects completion, and strategic land acquisitions, we are well-positioned to deliver sustained growth and long-term value creation for our shareholders during this year and beyond. Thank you for patiently listening. We will now open for further questions.
Thank you very much, sir. 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 withdraw 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. I would remind all the participants, if you wish to ask any questions, you may press star and one. We have our first question from the line of Deepak Purswani from SVAN Investments. Please go ahead.
Yeah. Hi. Good evening, sir. My first question is to Mr. Ashish Puravankara. Sir, just wanted to get the sense, with the resignation of Mr. Abhishek Kapoor in the month of May, if you can give the broader sense how we are looking into the organization structure at the first place. Secondly, if you can touch base on the broader aspect in terms of the growth and also the aspiration, where we should see this company over the longer trajectory point of view, and what would be your approach towards the capital allocation policy from the long-term perspective? That is my first question.
Sure. Can you hear me?
Yeah.
I think, just in terms of the organizational restructuring, we just believe that instead of having a very tall structure where we had the MD, then we had the Group CEO, and then we had regions, and we had different businesses. In order to get more operational efficiency, cost efficiency, process efficiency, a regional structure, the organization will benefit a lot more from efficiency and cost as well, both. Therefore, the new structure is where we have a CEO for the South region who manage the entire South business. We have a CEO for the West region who manages the entire, and both then report into the MD. So a more sleeker structure. A lot of cross-learnings that were happening, which was not happening, will start happening now.
Cost efficiencies. Earlier, while we had duplicated a lot of departments within different verticals or brands, today, those you will see some benefit coming out of that. So that was a long-term discussion that we were having, and eventually we put it into play. And we strongly believe that it will do great efficiencies as well as cost. In terms of growth aspirations, we continue to focus on the markets where we are present, which is Mumbai, Pune, Chennai, Hyderabad, and Bengaluru. So these are the key markets where we will continue to expand. As a business, you are aware, I think our focus, our strength has been residential, so that will continue to be our focus area. Surprisingly today, the brand is very strong. We have been able to secure. And I think that acid test is when you enter a new market.
When you launch a new project and the kind of sales that you sort of receive. Being a new brand in that city, I think, has been extremely encouraging. In addition to that, in terms of business development, we have been able to secure marquee locations in new markets, even like Mumbai. So for example, the project that we have secured, most of the society redevelopment that we have secured, which is extremely prime. One being Breach Candy, the second one being Pali Hill in Mumbai, if you are aware of the Mumbai market. The third being Lokhandwala. And each one of these cases, we were competing with the number one, number two in the city. Eventually, I think we were able to position the brand. And these customers also are highly discerning, right? So they understand real estate, they understand brands.
The entire team, the SGBM team, made a trip to Bangalore, saw the quality, saw the differentiations, or even the vision in the product that we bring around. We were able to secure these projects. All these projects that we speak about have been secured. DA has been signed. It has been registered. In some cases, we have submitted our plans for sanction. In some cases, they are in the final stage of designing. This is extremely encouraging. Going forward, we will continue to focus on these markets. As far as commercial is concerned also, today we have a strong portfolio, and these are very good locations, and that is what is very encouraging, of 3.2 million sq ft. Out of which I think about 2.5 million is on the Bellary Road, which is a new sunrise destination in Bangalore.
If you understand the Bangalore micro market—
Yeah.
—the ring road is completely congested, Whitefield is congested, and everyone is now looking towards the new airport road. Right? So two of our largest projects are coming up on that airport road. One will be ready by December. We have applied for RFPs, and we have visits already on. Even that aspect of the business is looking very positive.
Okay. And sir, just continuing on that part, previously, we were communicated that historically we had grown at a 30% CAGR in the last five years, and we would continue to look into this kind of growth. How should we see this trajectory at the current juncture? Also, any thoughts in terms of the debt reduction at the current juncture, if you can share your broader thought process, how we are looking to reduce the debt over the next 6- 12 months?
Sure. I think I am positive. I do not want to give you any forward-looking statements, but with the kind of projects that we have secured. Yes, there has been some approval delays. Like for example, in Bombay, there is that NGT issue you are aware of. All builders are stuck. Their case is going on in Supreme Court. So we have really secured some marquee projects. I think this coming year, the next 12 months, you will see some extremely big bang launches across Bombay, across Bangalore and other cities. Right? So that in itself, I think we should be able to better the growth trajectory that we have. In terms of capital allocation, one important thing that we are also doing is even in terms of land acquisition strategy, I do not think we are in any aggregation mode.
Right now we are looking at ready projects where we are able to give advances and take them to market within six months. I think the minute you are able to do that and get your land assets into production, I think that is the key. That is our business that we are in. As opposed to aggregating smaller pieces of land, you are incurring holding costs, et cetera. So that is a clear strategy, A, B, we have also very consciously started. We have had a land bank for a long time. For some reason, we were acquiring new lands. So if you see the last two launches, three launches, Dean's Gate, for example. So two launches, three launches have been a part of our old historic land bank. So that is another thing.
The minute you take these projects to launch, automatically the cash flows from these projects, et cetera, you are going to see that debt number significantly come down. Of course, we are a business. We are in real estate. There is a requirement for capital for growth, to buy land, et cetera. There, I think we will be opportunistic to look at a combination of joint development and outright. Bombay, there is a benefit where today society redevelopment per se, while these are large marquee high-value projects, being society redevelopment, you do not need huge upfront capital in that sense, right? So for the existing society, your investment, which is essentially your land cost to build their area, you are spending it over four years. So even there, it is a relatively lesser upfront requirement for capital. So I do not see that number going up extremely significantly.
Okay. Moving to the operational part of the business, just wanted to check it out. In terms of approval, I see last year also, we had a launch pipeline of 14 million sq ft, and eventually we ended up launching only the 3 million sq ft out of entire 14 million sq ft. I do understand, there has been some approval issue in the last year. Now, this year, we are also looking into the 13.5 million sq ft in terms of the overall launches. Out of this inventory would be 9.25 million sq ft. If you can share your thoughts in terms of where we are in terms of the approval scene, and how confident are we that these projects will be launched this year comfortably? Or if you can give the broader sense where we are in terms of—
In a broader sense, I am fairly confident, obviously. It's not been stagnant, right? Obviously, there is a delay, but none of the approvals, I can assure you, have been stagnant, which means that from last year to this year, they have not moved. Right? Now, for example, Lokhandwala and I think Thane, both are affected by NGT. Entire Bombay and those areas, all developers are affected by it. And those are high-value projects. My sense, what I'm getting from CREDAI as well, is that there should be some sort of a resolution come September. Right? So in terms of planning, everything done. In terms of base approval, everything done. In terms of NOCs, your airport, et cetera, that's all done. But for the want of that NGT. The minute I get that NGT, then it's a matter of two months.
I'll just add to this one, Ashish, with your permission.
Sure.
Here it is. Basically, you asked three questions, and I was just pondering on those three questions. First one is about the way forward. And we have positioned our company in a very unique way compared to any other organization. That is, we have created the two brands, that is Purva and Provident, and we have created two geographic locations, South and West, so that we are very focused in our approach as to what we want to do going forward. Because as you know that real estate development as a business is a localized business, and you need to have local competencies to run the business.
As you know that, the south business that what we have currently, that when it comes to now the operational efficiency and other things, I'll just reel out some of the things that what we are trying to do, and there we were little bit disadvantaged by few things that happened in the south because we are predominantly, currently as the west is picking up, today we are south-based business, out of which more than 50% of our revenues have come from Bangalore alone. When in Bangalore, the numbers that what we have reflected are for two reasons. One, about the launches, the other one is about the handover. When you look at the launches that what we were supposed to do, the launches got delayed for various reasons, for various rules and regulations that are being currently altered.
As we speak, there is another government order which is coming up, which is making more changes. We got a little bit delayed there. On the handing over, Karnataka went into a very new method of actually giving the khatas, which is called the e-Khata, which for millions of documents had to be redone and reconverted into an electronic format called e-Khata, and that was put into a line. We all were waiting in the line to get the khatas because of which we could not register. Unless we register, we cannot get the revenues recognized. At the same time, today, when we are looking at the expenses has gone up. Expenses means that we don't call it as an expense, we call it as an investment.
For example, if there are four projects which are ready to get launched and they are under approval, it means there already that is a marketing office, sales office, marketing initiatives, the monies that have already been spent. The spend is actually not an expense. It's an investment, which is going to be coming out as a product and as an outcome over the next three years, four years. Just to give you a few other things is that, we've got a project in Bellandur in Bangalore, Puravankara Windwards in Kochi, and Grand Hills phase 1 and phase 2, and then Apna Ghar redevelopment, and which Rajat probably is going to add to that. Hebbagodi, West End, Hennur Road, and Kanakapura Road. These are the projects where these are not something that we are saying that something that's going to happen tomorrow.
These lands have been acquired, fully paid for, almost 70%-80% of the NOCs received, and only these things are because of the town planning and other things wherein they've got a little bit changes that came into play. They were stuck and, in fact, as a matter of fact, in the last quarter of the last year that the year went by, we were supposed to have launched three or four projects, which got either it will be in the first quarter or the second quarter of this year. Looking at all these things and whatever the debt that we are talking about with a surplus of INR 15,000 crores, and which is more than 5x the debt that we have, we feel it very comfortable as a company.
With our focus, particularly Mr. Rajat Rastogi being there in the west, taking care of the western region, very focused, and who's got that much of in-depth experience in that region and his experience in commercial. We've got 3 million, 4 million square of commercial, which he is handling, and of course, in the south that we are there. I think the company is in a great shape. Today's result today, in my opinion, it's at a level where it is supposed to take off from here, and that's what I would like to convey to the investment community.
Okay. Finally, just one second.
Sorry to interrupt you, Mr. Deepak. Can you please request you to rejoin the queue?
Sure.
Thank you so much.
Thank you.
A reminder to all participants, if you wish to ask any questions, you may press star and one. Anyone who wishes to ask a question, you may press star and one now. We have our next question from the line of Prems ingh from A C Choksi Brokers. Please go ahead.
Yes. Hello, am I audible?
Yes.
Yes.
Yeah. I would just like to ask, what has sales growth been from the last 12- 18 months? And, could you also repeat what is your current debt profile?
I will tell you, versus last year, we were down in terms of sales around 8% versus last year. But overall, from a launch perspective, we have been growing for the last five years. We have been growing at a CAGR of close to around 25%. This year has been an anomaly. We intend to continue with similar growth plan—
I think one highlight there is, I think one needs to appreciate that our annual sales numbers come from two buckets, which is your ongoing projects and your new launches. In terms of our sustenance and ongoing projects, I think we have done much, much better than last year. That just shows how strong the brand is, the market sentiment, and our sales efforts. They have borne fruits from our sustenance launch projects. Any missing sales that have happened is on account of those delayed launches, which from last year has now gone into the following year, and like Mallanna explained, they are all there almost in the final stages of getting the approvals.
Ashish, just to add to that point is that our sustenance sales has come at a price increase, so there has been a decent price increase—
Yes.
—across all our sustenance projects. So there is a profitability also that has been kept in mind.
Yes.
Our sustenance has gone up from INR 3,689 crores- INR 4,223 crores. Where there has been a struggle is a little bit of that extraneous thing that with regards to the approvals. Today, we are sitting on a pipeline of 6.53 million sq ft of approvals that are in advanced stage in various locations and of various sizes and more than eight projects which are ready for the next year. So I believe that investment that what we have made so far in bringing those projects to that level will yield good results going forward.
Yes. Also another question. How do you exactly propose to enter and solidify your presence in South Bombay's market?
Rajat, you may want to take it.
Yeah. Our thought process in Mumbai market is around two lines. The first line of thought process is a redevelopment where we already have secured marquee assets across multiple regions in Mumbai, be it West Mumbai or be it Pali Hill or also as well in South Bombay. That is going to be one part of our strategy. The second part of the strategy is to acquire land parcels on outright basis or on JVA basis, where we have done a recent acquisition in Panvel, which is around 14 acres that we took over. We have also sold one tower. We launched one tower in the month of March, and we got very encouraging response, and we sold at a premium to the market in Panvel. Our strategy is going to be dual strategy, and we continue to focus on the strategy.
Of course, every asset that we are taking and every redevelopment that we're focusing on, we are focusing on the profitability aspect of it. Until the location is a marquee location or the project comes out to be a marquee project, we will only focus on those ones. That is what the strategy is.
Yes. Okay. Thank you so much, and all the best for the next quarter.
Thank you, sir.
Thank you.
Thank you.
Thank you very much. Participant line star and one to ask the question. Next question is from the line of Mr. Shah from Shah Wealth Advisors. Please go ahead.
Sir, out of the INR 12,000 crore, INR 1,200 crore is spent on land acquisition. If you can share what is the estimated timeline we are targeting to convert into entire GDV of INR 13,000 crore?
Sorry. Sir, can you repeat the question?
The question you have is, that t he INR 1,284 crores we have invested, what is the timeline to go to market, right?
Yeah, correctly.
That would be about six to eight months.
For the entire land acquired this.
But basically what you're asking is that, you're asking about the INR 1,280 crore of investment that we have done. The resulting of that is what basically any project in our real estate takes from anywhere between 8- 12 months to bring to the market. Depending on the size of the market, the maturity period, the sales period is around two to 2.5 years, and the project completion period, three to 3.5 years, four years. So the collection will be between the 3.5 to four years. So that realization will happen over that period.
Just to reaffirm, I think in terms of the acquisition strategy, all these new investments are for our projects which are sort of ready. The minute we paid this money, we've already started the designing. So, from a timeline perspective, the plan is to take this to market within around eight months to whatever, 10 months to take it to market. So none of this is aggregation, or this is not a future investment.
As Ashish was saying that previously that we do not get into the aggregation mode. These are ready to develop, which means that the land would have been converted, land would have got all the necessity land level approvals that were required would have been finished. Only for the development level approvals would be pending, like the MOEF and building plan approval and so on and so forth.
And just to add for the different projects, all our projects are into multiple stages of approvals. As Ashish clarified that all OBs have been done. In fact, we are looking at a launch in quarter three for one of our projects. So all of the projects are in pipeline right now for launches.
Okay. In fact, assuming all of the land cost is recognized upfront, and our accounting was same. But now we can see across the geography from last five year realization are growing at around 4% or 8% year-on-year. But we are still maintaining our margin guidance between 25%-30%. Is there any changes where we want to revise it upward or something like that? Because we are on the traditional land bank. I mean, many listed players are now revising margin to the upward or reporting margins to the [inaudible] .
We could not actually understand your question. What is that you want to know?
I think we do not give guidances, but I think your sort of assumption is right, and I think it will be in line with most other real estate developers. I think with the kind of acquisitions that we've done, we should see those margins improve.
Okay. In fact, one thing I want to understand, we are recognizing land as a raw material to us. Correct, sir?
Yes. Land is an inventory, is a cost of the project.
Okay. From the accounting perspective, I want to understand. From last 10 years, we have recognized the revenue worth of INR 18,000 crore, and we have paid taxes somewhere between INR 400 crore only. This effect is because of the land cost we are recognizing upfront and that help us to compounding the taxes?
I think we can answer this question offline. You send us mail, we will respond to you. As far as accounting is concerned, the day we buy land, we treat it as inventory. However, it is charged to the P&L only when we recognize revenue. The day we recognize revenue, that day, the cost of land, including the cost of construction put together, becomes the cost of the product, and that is charged against the revenue.
The tax is against the monetization. Tax is not against holding or buying the land.
Right.
Upon monetization, then that will be recognized and tax is paid.
If you drop us a mail, we can able to answer you better because tax regulation over a period of time has changed. Still tax we are paying on basis of the POC computation. However, the revenue recognition happens basis of the handover. There are little bit anomaly versus the company's rate, the way we are putting profit and the way we are computing income tax profit, and then we are paying tax over it.
Okay. And sir, for the next FY 2026 or 2027, we are looking for the similar kind of land acquisition on absolute amount?
We don't give guidance. Obviously we will be looking for growth for sure, and we will want to maintain similar kind of a growth. So you can expect obviously land acquisitions.
Okay. Earlier you mentioned that we have some 40 million sq ft of land every time we wanted to be in inventory. We want to maintain that?
The current land bank currently is around 25 million at this point in time. This is what under development is, or it will be planned over a period of time. We will continue to work on it. That's the way the current status is.
Okay. Just a last question from my side. Any other reason of Mr. Abhishek Kapoor to resign, or he's joining any other If you can explain a bit.
No, there is no other reason for Mr. Kapoor to resign. Like I said, there were two things that happened almost parallelly. A, also the view of reorganizing it region-wise was one, and also, I think at that point of time, even he was sort of, for some personal reason, he wanted to look at some opportunity, what we are told is outside the country. But yeah, there's no other reason.
Okay. Thank you so much, sir. Thank you.
Thank you.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. Anyone who wishes to ask a question, you may press star and one now. We have our next question from the line of Harsh Pathak from Emkay Global Financial Services. Please go ahead.
Yes, sir. I have a few questions. After the Q4, what is the sustenance inventory that we are left with in value terms? Just to confirm, is it the same INR 6,500 crore as we have mentioned in the presentation?
That is correct.
Yeah, that is correct. Yes, Harsh.
That is there in our presentation.
ICP.
Great. Sir, in Q1, I guess we are having one launch, Mallasandra. What will be the size in value terms, and at what stage are we with respect to the launch, and when can we expect the launch to happen?
All the approvals have come and even the development plan and other things have already been approved, and it has gone to the last level of the building plan approval is in process. I know these are all in place, and you should be looking at in the second quarter that the launch will happen.
Mallasandra would be in the second quarter or the first quarter itself?
The first quarter in the sense that there is only one month left. I believe that, depending on its little, what can I say? It is uncertain when you go to the government, and we may start with some kind of an expression of interest program and other things in this month, but we will be officially launching it in the second quarter.
Okay. How has been the sales velocity so far in the quarter? Just because I guess we are left with the sustenance inventory itself. Any thoughts on that?
I think we will not be able to comment on it, Harsh. You know that, right?
Yeah. Sure. But the velocity is going fine. I am just trying to gauge the demand sentiment on ground. That is why I am confirming.
No, I think the demand sentiment is good on the side, on the ground. Whatever the project that we are, okay, just if I have to put a reverse corollary to that one that you are asking, whether we are maintaining the same momentum. I can assure you that I think the momentum is continuing and the market still continues to behave well, and people are still wanting to look for good opportunities from listed players. So wherever we have the stock that we continue to do at almost the same pace. Without putting a number to this thing, yes, I can say that much. I can say that we are continuing to do well.
Great. And sir, with coming to the commercial side, I guess, how should we look at the Purva Zentec asset? Are we looking to lease this asset, or we would be selling it? And just in case we are looking to sell it, when can you expect the transaction to get completed?
For the Purva Zentec asset, our strategy is dual. We are looking at both leasing and sale, primarily sale as of now. As we speak, we are already seeing good traction in sales volumes over there.
Okay. The sale has largely been focused from a sales perspective.
Yes.
What would be the total size of this asset? Maybe if we are selling it.
Our share in the total asset is close to INR 6.5 lakh sq ft.
Okay. Great. And leasing side at the Purva Aero City asset?
Purva Aero City is overall a 2.3 million sq ft asset. We are looking at a 1.2 million OC by December this year, and right now we are filling lot of RFPs and getting very encouraging response from Grade A companies. Yeah, we are hoping that we should be able to announce our leasing very soon.
Are we able to command the rentals better than the market, or we are going at the market rates itself here?
Yeah. We will be hitting at a slightly better than the market rate because the quality of the product that we have put in is a Grade A platinum-rated product, and it's much better than what the market is offering.
Sure. Just maybe a couple of questions more. In Mumbai, you highlighted there is this NGT issue. We have been hearing since quite some time. How are we placed in terms of approvals, mainly at the Lokhandwala asset? Do we expect some launches to get delayed because of this? What stage are we with respect to the approvals at all the projects in Mumbai, if you can take up project to project, please?
Our Mumbai portfolio, just since you started with Andheri Lokhandwala, our approvals, excluding the NGT, which is MOEF, everything is going as per the plan. We are in the final stages of securing IOD. However, this NGT issue is pending in Supreme Court, so it will be difficult for me to give you any timelines for that. We are hopeful that by September this year, this problem should get resolved, and then we can apply for MOEF and look at the launch. Simultaneously, our redevelopment portfolio, for other projects also the plans have been submitted all in the final design stages. We are looking at a quarter three to quarte four launch for all our redevelopment projects.
Okay, sure. Just one last one. In terms of completion timeline for some of the key projects in this year, where are we currently with respect to these projects? If you can highlight some key projects that are getting completed, and when can we expect the revenue recognition for them?
Deepak, would you like to answer that?
Yeah, that is actually part of the ICP already. We have provided some of those details, when we are going to get that. Especially there is a comment that we have already received partly some of the OCs for a project called Atmosphere, Oakshire, Capella and Adora de Goa. The full OCs would get received during this year again, and I am sure that we will be able to at least see some of the handovers coming through. We are not expecting any like the way we have expected last year. We are not expecting that.
Okay, so close to INR 3,000 crores is what we will recognize in the revenue this year?
Yes. But the sale has already happened. Almost INR 2,600 crores worth of sales have already happened in those projects, actually.
Sure. I was just looking from the accounting perspective. Sure, sir, these are my questions. Thanks a lot for taking them.
Thank you.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. Anyone who wishes to ask a question, you may press star and one now. We have our next question from the line of Deepak Purswani from SVAN Investments. Please go ahead.
Yeah. Thank you for the follow-up opportunity. Firstly, on the project delivery perspective. This year, project delivery has again come down to 2,500 versus 2,600. Has there been any delay in terms of completion of any project, if you can give the broader sense? Second part of the question, if I'm looking into the operating profit in the P&L. Since last two quarters it has come down to the single digits. Just wanted to check it out. Any cost escalation has been booked into this particular project? When we are looking into the huge quantum of project delivery which are coming in next year, what kind of the run rate we should be looking it out?
Project delivery is a function of the burn. I think that so far in this year, we have constructed more than INR 1,500 crore of money is being spent only on the construction. Also the other projects which as Deepak was mentioning, are those projects which are about to get the OC. In some of the projects that we received OC as well, but as I was saying that because of the khata, e-Khata issue, that the delivery to the customer got delayed. So the two parts to this one, delivering to the customer after the paperwork, and the other one is the construction part. I think that with the effort that has gone in this year, and without delving too much into numbers, I can say that next year looks good for good handover and revenue recognition.
In terms of the upcoming project which are coming for the delivery, how should we see the operating profile margin for these projects? Is there any cost escalation?
It's healthy in terms of the way that whatever currently that we are doing, are probably slightly better than what we have achieved so far.
Has there been any cost escalation booked during second half of this year on the construction side?
There is not much of a cost escalation that has happened in our books. In fact, we have been able to keep the cost of construction to the estimated cost of what we had. So operationally, we feel that we are in control. As soon as these things will resolve, the handover will start and then you will see healthy margins, I think.
Okay. Finally, just wanted to check it out on the interest cost component. From the cash flow perspective, this year it is at INR 478 crore, and even on the P&L it is INR 550 odd crores on a debt of even if I were to consider gross debt of INR 3,800 crore. Just wanted to get the sense, how should we see this number from the next-year perspective, even on the cash flow perspective or something out there, sir, if you can throw some light?
Deepak, as we have been telling you, we are expecting obviously the cost should come down given the handovers and everything, the cash flows which would actually come up going forward, given the investments we have made so far, even though we will continue to do it. We expect those things to obviously get. I am sure that we are getting to a level wherein it has to only deliver and come down to that extent. We will see how best we can actually handle it. But given the growth aspirations we have currently, obviously, we will continue to replace the old debt. At the same time for our growth aspirations or on the land acquisitions, we would continue to do that. If we are able to at least raise some equity from the marketplace, which we have been telling all of you.
Then we would be able to at least take those steps to do it. The other steps which we are doing is more of obviously equity or a platform funding which will come as part of equity. We have been communicating and talking to the investors and let's see how it basically pans out. The idea is to continue to have the debts under control, which is there already. In fact, the residential debt per square feet has actually come down. Overall, it has come down. But because of the commercial development as well as the land acquisitions, it looks like the debt continues to go up. But from a residential perspective, RESI debt has come down for the year as well.
Okay. That's it from my end. Congratulations to Mr. Mallanna and Mr. Rajat Rastogi and wish you all the best.
Thank you very much.
Thank you so much.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from line of Shivang Joshi from Motilal Oswal Financial Services. Please go ahead.
Hello. Good evening, sir. I hope I am audible.
Yes.
A couple of questions, my side. First is, I am referring to your direct cash flow slide. I have been trying to, since reported numbers are not—
Sorry to interrupt you, Mr. Shivang. Your voice got broken in between. Can you please repeat your questions?
Hello. I hope this is better. I have been referring to your direct cash flow slide. Since reported numbers are not a proper way to gauge your profitability, I am trying to gauge profitability from the direct cash flows slide only, and taking operating surplus as a percentage of collections. Historically, the trend has been pretty decent, but of late, FY 2025 numbers particularly, it seems that I am just dividing operating surplus by direct collections. It seems to be below 20%. Just trying to understand what is your outlook for operating surplus to go up? Because this should rather mimic EBITDA margins of 25%. Also, this is before the land apportionment.
We will not be able to provide you the forecast. But definitely, if you were to see our historical numbers, the collections have consistently gone up. And we are confident that a similar thing will continue going forward also. In fact, the current year can be very good given the kind of launches and the handovers which we are expecting.
Okay.
Shivang?
Yes, sir. Go ahead.
Now, I was saying, the operating surplus is akin to or closer to our margin, but not necessarily yet. What happens is, some quarter or year, if I'm going to spend more money on construction, doing the faster construction on some projects, my operating outflow will be little comparatively higher than the scheduled outflow, and thereby, the operating surplus will be less. What you can see if you look at our P&L also, this financial year, we have incurred on a direct construction INR 1,500 crore compared to the previous financial year. Our construction spend, which is directly development project, is more. And these are part of our operating outflow. And hence, there'll be little bit aberration in terms of operating surplus, but it's not impacting the projected or estimated margin of a project.
We can expect a directional improvement. Not asking for guidance, but directional improvement in operating surplus going ahead.
That is correct.
That is first part. Second, on the debt feature, I understand your net debt equity seems higher because the network, the denominator itself is not a proper indicator since it is impacted by the reported losses, which are not actual losses. But the overall net debt number itself seems to be obviously a reasonably high number. What is your take on a comfortable absolute net debt number going ahead, if you can speak on that? And the second—
We do not give a specific number or guidance towards how much will be the number. But what we do is that, the overall debt per square feet, especially for the residential, should not go up, let's say, for 1,000 INR per sq ft, right? If you have an ICP, you can see our debt per square feet for residential and land has actually not gone up, right? It is within the control. We have also repaid some of the RESI debt. However, we have invested in land, and we have also invested in the commercial asset for development. And hence, because there is no revenue coming from that, and hence, it looks like that overall debt is coming up. So that is the anomaly. But we have provided this information in our ICP how the debt movement is.
We are not definitely looking to increase the debt per square feet for the RESI business.
Sure.
As far as the commercial is concerned, as Rajat was mentioning earlier, once the asset comes up for either LRD or sale, obviously, we will see dramatic improvement in those debt as well.
Perfect. Lastly, a connected question to debt. You mentioned about certain fundraise options. I believe that would be for overall reducing the cost of borrowing. Directionally, again, if you can, I am not asking for any guidance, but to what extent your cost of borrowing can come down in the coming year or two versus what it is today?
Cost of borrowing will come down, and I think I am sure that both Neeraj and Deepak will have their views. The cost of borrowing will come down because the equity that is locked inside the company at this point of time due to, for whatever reason, the launches that have not been happening or happened so far. Once we start to launch the projects and once we start to realize that, then automatically debt will have to be coming down. Today, if we are going to be expanding and borrowing the money, then debt will always look upwards. It is just our now the thing is to get the projects going and launching and delivering the projects, and that will bring down the debt. That is probably the right way to bring down the debt. Of course, generally that now, maybe Neeraj has a view.
Yeah. As far as rate is concerned, interest rate is concerned, yes, you have also asked question about the interest rate which we are paying.
Yes.
Yes. Our current weighted average rate is about 11.85%. However, it looks a little bit higher. But if you compare for the last year, one year ago, what our weighted average cost of debt, it was 11.59%. During the year, we have added or we have invested about INR 1,300 crore in the land, and that means we have funded this land cost from the additional borrowing. Despite that, we have not let our cost of debt go up. As you know, the land financing are not done by the bank or any even housing finance company. To finance the land, we have to reach out to the NBFC or the AIF, and those costs are little higher.
Yet our continuous endeavor is to check the interest rate and keep it down, and going forward basis also, as Mallanna said and Deepak said, as we are going to launch the project collection will be better and we will be repaying some of the debt, and also once we launch the project, we have option to convert these projects into our residential debt, and thereby also the rate will come down.
Okay. Thanks, Neeraj. Thank you, sir, and looking forward for your launches in the current year.
Thank you.
Thank you. As there are no further questions from the participants, I now hand over the conference to management for closing comments.
Thank you all of you for your time and your thoughtful questions. We appreciate your continued support and interest in Puravankara's journey. Should you have further queries or require additional information, please feel free to reach out to our investor relations team. We look forward to updating you on our progress in the upcoming quarters. Have a great day and nice weekend. Thank you so much.
Thank you. On behalf of Emkay Global Financial Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Thank you.
Thank you all. Thank you.