Ladies and gentlemen, good day and welcome to Puravankara Limited Q4 FY 2024 earnings conference call hosted by Axis Capital Limited. As a reminder, all participants' 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 then zero on your touchtone phone. Please note that this conference is being recorded. I will hand the conference over to Mr. Ashutosh Mittal from Axis Capital. Thank you, and over to you, sir.
Thank you, Neha, and good evening, everyone. Welcome again to the post-result conference call of Puravankara Limited. We have with us the senior management of the company led by Abhishek Kapoor, Executive Director, Group CEO, and CFO; Mr. Vishnu Moorthi, Senior Vice President, Risk and Controls; and Neeraj Gautam, President of Finance. I now hand over the call to the management for the initial comments. Thank you.
Thank you, Ashutosh. Good evening, ladies and gentlemen. Thank you for joining Puravankara Limited's earning call. I am Neeraj Gautam, President of Finance at Puravankara Limited. We appreciate your time today as we present our financial results for quarter and year ending March 31, 2024. Results and a comprehensive presentation are available on the stock exchanges for your review. In FY 2024, Puravankara Limited achieved exceptional performance, recording a pre-sales of INR 5,914 crore, marking a remarkable 90% year-on-year growth. We anticipate continued upward momentum in futures driven by our strong pipeline of launches and the unwavering trust of our customers. Our commitment to excellence extends on all aspects of our operations beyond just financial metrics.
For FY 2024, Puravankara led with sales of INR 2,752 crore, followed by Provident at INR 2,041 crore, and Purva Land at INR 1,122 crore. In Q4 FY 2024, we achieved an impressive pre-sales figure of INR 1,947 crore, reflecting a 93% year-on-year growth. Collections were robust at INR 1,094 crore for Q4 FY 2024, representing a 66% year-on-year growth. For the entire FY 2024, collections totaled INR 3,609 crore, demonstrating a 60% year-on-year growth. Throughout this financial year, we launched 12 projects with total saleable area of 9.47 million square feet to meet the preferences of our diverse clientele across various categories. We have given total solutions for 2,614 units in FY 2024 across Puravankara Group.
In line with our strategic plan and commitment to expansion, we are excited to enter the Mumbai redevelopment market. We are selected as the preferred developer for redeveloping a residential housing society in Pali Hill, Mumbai. The project has estimated saleable potential of 0.4 million square feet carpet area, and our share of saleable area in it is 0.21 million square feet, and a potential gross development revenue of over INR 2,100 crore. The strong response and numerous inquiries from the society indicate the continuous expansion of our development portfolio. In the previous quarter, we were appointed as developer for a redevelopment society in Lokhandwala, Mumbai, saleable area of 0.6 million square feet with a GDV over INR 1,500 crore.
Our launch pipeline is robust with approximately 14 million square feet of new projects slated for the coming period. Notably, non-Bangalore projects now comprise 47% of the total launch pipeline. Additionally, Provident accounts for 52% of the launch pipeline aligning with the market trends and our group's strategic focus. Coming to our debt management, our net debt increased from INR 1,741 crore in Q3 FY 2024 to INR 2,151 crore in Q4 FY 2024 and net debt- to-equity ratio from 0.85- 1.14. I would like to update and highlight that the way the debt has increased , its value of the price is increased. We have repaid IFC and ASK, two marquee investors who were with us and invested in two of our projects, and both the projects we have fully repaid them and by utilizing this increased debt.
Our cash and bank balance stood at INR 931 crore as on 31st March, 2024, which indicates a strong liquidity profile ensuring stability and operational continuity. The strong collection figures highlighted our commitment to execution excellence except of our effective collection strategy is evident in our net operating surplus reached to INR 513 crore for FY 2024. To underscore our strong financial position, I would like to emphasize that as of March 31st, 2024, the balance receivable from sold units total approximately INR 4,457 crore. This amount covers approximately 80% of our remaining costs needed to complete the inventory currently available for sale, which indicates that substantial portion of the cost for completing the remaining inventory has already been secured through receivables , giving us a solid foundation to fulfill our financial obligations.
Moreover, our cash flow visibility is equally promising with a projected amount of INR 7,455 crore expected over the next three to four years. In addition to this, estimated surplus from two commercial projects is INR 1,356 crore. Estimated surplus from launch pipeline projects is INR 2,696 crore, totaling to our overall estimated surplus of INR 11,507 crore. According to our financial performance in Q4 FY 2024, our total revenue grew by 112% year-on-year to INR 947 crore. The EBITDA for Q4 FY 2024 was INR 139 crore with a 15% EBITDA margin. However, there was a loss for the quarter of INR 7 crore. For FY 2024, our total revenue increased by 60% to INR 2,260 crore. The EBITDA for FY 2024 was INR 531 crore with an EBITDA margin of 24%. The PAT for the year was INR 42 crore.
Our pre-sale value, I would like to highlight that our pre-sale value for FY 2024 was INR 5,914 crore, and sales and marketing expenses related to this pre-sales number, and also the overhead incurred to achieve this sales number has been charged to the P&L for the financial year. However, the revenue in the P&L has come only for 2,614 units, which we have handed over during the financial year, which has a revenue value of INR 2,260 crore. In conclusion, FY 2024 has been significant and eventful period for our company, characterized by remarkable achievements across all key performance indicators. We are poised to expedite the development of new residential projects across India, delivering exceptional value to our customers and fostering long-term shareholder value. Thank you for listening, and we welcome your questions you may have.
This is Abhishek here. Hello, everybody. Let me start with an apology for the delay, and sorry for late upload of the financials. Going forward, I am assuring everybody here on the call that we will keep this call the next day and give sufficient time for everybody to study the financials and be comfortable with asking questions. Again, apologies, and we are happy to answer any questions you may have. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone 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. The first question is from the line of Himanshu Jain from Tiger Assets. Please go ahead. Mr. Himanshu, your line has been unmuted. Please go ahead with your question. Mr. Himanshu, your line has been unmuted. Please go ahead with your question. As there are no response for the current participant, our next question is from the line of Deepak Purswani from Svan Investment. Please go ahead.
Hi. Good evening to the management team. Congratulations for the excellent set of numbers, and also for the HDFC platform deal. My first question is regarding the HDFC Capital platform deal only. We have mentioned in the PPT there are some projects which are from the existing land bank to the extent GDV of INR 9,400 crore, and there would be some new acquisition which we are looking at, say, INR 7,700- odd crore. Could you please share further details in terms of which are the projects which are being a part of this deal now? Also, since this deal will also incrementally monetize our cash projects at a faster pace, how should we look into debt going ahead? And whether this would be predominantly for the growth capital or there would be some part of the debt reduction from the incremental cash ?
Thank you, Deepak, for your wishes. Deepak, just to give you a background, as you rightly mentioned, about INR 17,000 crore of which about INR 9,400 from existing. What is happening is a part of the capital is getting deployed to unlock these lands where we have either some acquisition or some sanction or some conversion cost, things like that, to bring these projects to further launch. Having said that, balance money that is available will get deployed in new projects, and that will create a further GDV of about INR 7,700 crore at a conservative basis . Second thing is that clearly Provident Housing as a business is poised for growth, both in terms of bringing the existing pipeline to the market and to add more land banks which is currently in the pipeline where we are in advanced conversations in the marketplace.
Overall, it is I think which will add tremendous value to Provident Housing. The second part I must mention is that f rom within the focus of existing projects, which is INR 9,377 and INR 9,400-odd crore of GDV, itself will be able to repay the entire amount to HDFC. The entire new investment then becomes our free completely, that we deploy. In that sense, we already have a financial capability to repay the entire money that is getting invested by HDFC Capital. If you look at existing projects, we are looking at about saleable area of 14 million square feet coming in from the existing projects, and we are looking at a surplus of about INR 2,600 + crore coming from the existing projects.
Okay. And sir, secondly, on the Mumbai expansion plan, in the second half, we have added two projects, one in Lokhandwala and one in Pali Hill. If you can throw some light in terms of the profitability engine of these projects. Also, we have also mentioned there are certain few deals which are at the advanced stage of negotiation in the MMR region. If you can throw some light on that part as well, whether these would be continuously in the Southern central markets or this would be in the Northern part of the market or in the Western part of Mumbai. If you can throw some light on that part, that would be really helpful.
Right. Good question. One is, as far as both these projects are concerned, like we have always mentioned, our target, EBITDA target is in the range of 30% for on average whatever investments we are making, some may be a little lesser, some may be a little higher. But I must tell you that both these are marquee projects and the scale and size of these projects in these locations is just not available. To have an excess of 2.5 acres in Bandra Pali Hill, I do not think that you have many plots or any plot which is of that size. That obviously clearly commands a premium in that market. We are already receiving calls for purchasing there. We are very, very optimistic about what kind of realization we can make at Pali Hill.
In Lokhandwala again, this is absolutely a prime Lokhandwala plot, and there is significant demand in that market. That is a very mature market, and we believe that we will be able to bring in the kind of quality that Puravankara is into. We will be able to command a premium in that market. Again, as I mentioned, we will target as per our company policy to 30% EBITDA , that is one. Sir, as far as planning is concerned, as a business, when we look at cities sitting in various geographies, for us, what we intend to do is we intend to have presence in Western suburbs and South Mumbai and Central suburbs in terms of redevelopment.
If I was to break this down, redevelopment strategy will spread right from Dadar, Mahim going up to Western suburbs up to Borivali and on the Southern side in the island city and on the central side up to Chembur. Beyond Chembur, redevelopment opportunities we may be very, very mindful, and personally we may not evaluate because of the feasibility of the redevelopment opportunity. That is one. As far as development, JDAs or acquisitions are concerned, we are looking at across the board, across the city. Clearly we want to enter. We already have a project in Dombivali, Shilphata . We are intending to add a project in Thane because Thane is a big market and we believe that we want to be active participant in that market and get a piece of that market as well.
Mumbai as a strategy, I think we are very clear that we are looking at presence in all these markets. Of course, we are also evaluating the new airport area and opportunities there thereof because we believe that at some point in time that market will open up.
And sir, just continuing on that part, what is the investment we have made in the Mumbai region so far in terms of the project acquisition? And what could be the investment we would be looking how to do incrementally? And what would be the launch pipeline for this Bandra project as well as for the other project, Lokhandwala project?
Lokhandwala we should definitely take it to market and Lokhandwala we expect between Q3 and Q4 for sure. And Pali Hill, our target will be that we should take it to market in Q4 or Q1 of next year. As far as investment is concerned, I think we can send that data to you separately.
Sure. I have few more questions I will come in later .
Thank you.
Thank you.
Thank you. The next question is from the line of Sumit Kumar from JM Financial Institutional Securities. Please go ahead.
Hi. Good evening, Abhishek. Thanks for taking my question and congratulations on a great set of numbers as well as.
Sorry to interrupt you, sir. May I request you to use the handset, please?
Is this better now?
Yes, sir.
Yeah. Thanks for taking my question and congratulations on a great set of numbers and also on conclusion of two marquee deals in the Mumbai market. My first question is on the land bank that the company has, which is sizable, close to around 28 million square feet of, I think, development potential. In terms of BD, business development, how are you looking at it? What is your target, at least on an indicative basis, for the next two to three years? As a follow-up to that, how much of the launches would come from the existing land bank monetization, and how much would be from the newer projects started?
For the next year, as we have published, we are looking at launching about 14 million square feet from within the current land bank. As you know that we have sold out about 7.35 million square feet last year. The velocity at which we are selling, we need to replace our inventory. Our target will be to maintain our 40+ million square feet of inventory at any point in time. Therefore, there is a big gap in terms of acquisition now, given that we are launching so much as well as we have sold the kind of sales that we have already done. Therefore, our goal will be to minimum maintain 40 million square feet. But at any point in time, our target is that from the date of deployment, we take the product to market within nine to 12 months outer limit. Right?
So that we are not sitting on any investment. It is just a matter of planned sanction and launching the product at any point in time. So, in that sense, that is point number one. Point number two, in terms of, I think you asked about geography, is not it?
No. What will be coming from the existing land bank of 28, and how much do you intend to add?
So 14 million square feet will come from current land bank and whatever we add this year. As I think somewhere we have mentioned in the ICP that we have already paid INR 300 crore of land advances, and we are expecting closure of some of these projects within next one quarter, say 90 days timeframe. As those get closed, our endeavor will be as much as possible, we can bring some of these projects into the market within the same time frame. So we are not able to give a guidance right now on what we will be able to bring to the market.
Obviously, there is an internal target and there is a bunch of stuff that is going on, but our goal will be to definitely bring in more inventory to the markets so that we can continuously grow at a rapid pace, and we are able to beat the market growth rate. To answer your question, 14 million square feet, and it will be definitely above 14 million what we will take to market this year.
Sure. In Mumbai, is it that you are only looking at redevelopment or in the newer markets like Thane and near the new airport area, you will be looking at outright land acquisitions as well?
We are looking at outright as well, JDA as well, both in Thane and Navi Mumbai, as in Panvel area because we see that also as a growth sector over time. But we are looking at good options.
Okay. That's helpful. That's all from my side. Thank you and all the best.
Okay. Thank you.
Thank you. The next question is from the line of Shivang Joshi from Centrum PMS. Please go ahead.
Good evening, sir. Thank you for the opportunity. Firstly, I want to understand when I look at the presentation on your debt slides. So your net debt has slightly gone up and consequently your NCD/ OCD amounts have gone down. Can you throw some light on this? Consequently, your borrowing costs as highlighted in your cash flows, net interest costs have gone up from an average of INR 70-INR 80 crore to INR 100 crore. If you can throw some light on this first.
You are absolutely right. Two of the NCD amounts which we have been reporting as NCD issued to the IFC and NCD issued to ASK hasn't come down because we have NCD repaid to them and as in our slide number 14, you remember, about INR 410 crore we have repaid to them, and these are repaid from the project which already launched. We have raised the money on a very competitive cost, and from there this goes to investment has been there. That is the reason of these two NCDs going out of our debt slide. However, while we repay them, it's not that debt has gone up. For this quarter, if you compare with the previous quarter, debt has gone up by only INR 519 crore.
The end use also, we have given in slide 14 , about INR 410 crore has gone towards giving an interest to our element of IFC and ASK, and we also invested about more than INR 300 crore in the acquiring new land parcels. So part of the money, part of this loan has gone towards in funding those advances, and part of the money we have used on different accruals. I hope I have given the answer of all your questions, or if you have anything more, I can answer.
Okay. Lastly, you have refinanced your NCDs through your interest-bearing debt.
Those NCDs basically were equity in nature, and thereby there is certain amount of IRR it could have gone from the projected cash flows. However, paying them back then that is actually in a sense reducing the implicit cost of capital. The borrowings are at a bank rate and thereby the overall cost, which is otherwise you would have continue, which is not going to increase. And added to the bottom line. Directed to the bottom line.
Okay. Your increased payout of interest of INR 200 crore is essentially of that nature, and hence you see a higher interest.
Yes. However, the return which otherwise I would have given to IFC or ASK, that will not go. That is always much more than the interest which I'm otherwise going to pay to the bank.
Got it. This is the first time we saw your interest payout being higher than the-
Abhishek here.
Yes, Abhishek.
We have great tailwinds and great volumes and velocity that is happening right now. We want to take advantage of the cash flow coming in and making sure that we are able to bring as much value to the bottom line and to the value creation for the shareholder as possible. Therefore, it makes so much sense to say that, "You know what? Why don't you reduce your cost of capital and take it to the bottom line and pay this off?" So that's the basic thesis. The demand has been fantastic in these targets. The cash flows have been fantastic, and we're saying, "Why not?" In fact, the money taken from ASK, I think, should be over before December. It will get recovered because everything is sold out over there pretty much. It's selling pretty fast and the construction that we will complete the project.
Similarly, we will have the other projects which IFC has invested in. We are expecting the surpluses coming in there and starting to repay. So it could be on the money that we got down and then the cost is lower. So in the business sense, it makes fantastic sense.
Okay, great. Second, on your launch pipeline, when you say 13 million square feet, 7 million square feet is the phases that you would be opening, and this would be from your land bank. So optically, should we expect. Last year you closed at how much? 9 million square feet of launches?
Yeah. We opened 9 million square feet of inventory per share last year. Out of 13-odd million that we got for sanction, is around 10 million square feet. We opened about 9 million square feet. You are right.
This year, what you have mentioned in your slide 22, launch pipeline 7.28 million square feet. What is the status of approvals of these projects? Are these already at advanced stage of approvals? Should we see large part or all of them coming in this year itself? Something that you can highlight there.
Absolutely. I think a lot of momentum you will see starting from the end of second quarter and possibly most of it, a lot of it will come in the third and fourth quarter because they are all in approval stage. As I mentioned earlier, our target will be to make sure that we, goal will be that we make sure that we open higher than what we have opened in the last year. While we have opened 9 million square feet, we would like to beat that, but this is what we have done here is give you visibility of what we already have in hand, which we have complete clarity on that this is definitely coming. Having said that, I think that we will possibly, in all likelihood, add some more projects to it in next two quarters.
Okay. Finally, on your cash flows, when I look at the closing cash and cash balance is INR 931 crore. Could you give a broad spread between how much would be in escrow, which you cannot transfer to the other, which has to be retained at a project level, and how much would be free cash to be utilized?
About INR 500 crore money is lying into different project escrow accounts, RERA accounts, et c., subject to submitting a certificate and withdrawal, et c. About INR 400 crore are the fixed deposits, money which we have raised or taken some loans and then money yet to be deployed for land purpose. That is money lying in the form of fixed deposit with the banks.
If I may continue with a follow-up question on that. On the deployment piece of Mumbai tool development project.
Excuse me, sir. I request you to come back for a follow-up question.
I will join back. Thank you.
Thank you. The next question is from the line of [Abhishek] from YES Securities. Please go ahead.
Good evening, sir. My only question is that I just want to understand the structure of HDFC platform. What are the responsibilities? How equity would be infused? I mean, INR 1,150 crore of total platform. What could be our share?
Zero coupon NCD, zero coupon bond. There is no interest servicing for those NCDs. This money they will be investing, or this NCD will be issued by the Provident Housing Limited, the 100% owned subsidiary of Puravankara Limited or subsidiary of Provident Housing Limited. In the first tranche, Provident Housing Limited will be issuing NCDs of INR 550 crore, and those NCDs will be zero coupon bond. That is the structure. The money will be utilized out of that entire facility of INR 1,150 crore. We will be investing about INR 300 crore and INR 350- odd crore in existing projects, the remaining money will be going towards acquiring new land parcels. Service will happen to this NCD by paying seven percentage of cash flow surplus from the projects, and there will be no fixed obligation.
Understood, sir. Sir, another part is when we are transferring our project, which already we have. Are we going to get something out of that or that is a part of structure only?
We are not transferring any of our assets. Those assets are there where they are. In the Puravankara Limited, the assets are there, in Provident Housing, the assets are there. The money which we are utilizing towards unlocking those assets, either land parcel or existing projects, and the surplus of these projects will go towards servicing the NCD. Our plan is that service or fully repay this NCD from the existing project itself. New project which is going to require some investment will be of additional assets for the company.
Grossly, what kind of cash flow or the percentage of cash flow will be diverted to us in general?
No, there is no fixed cash flow that will be diverted to them. These projects which are part of the platform, there will be a flow mechanism. Based on the business plan, if there is any surplus left in the month, then out of that surplus, a certain percentage will go towards servicing of the NCD. In a manner that NCD will decide fully the actual return of NCD, also NCD gets a great return.
If you look at it, Abhishek, I will just add to this. Total from within the existing projects where the capital is getting deployed, which Neeraj was talking about, we are looking at about INR 2,600 + crore of surplus. That INR 2,600 + crore of surplus will be more than sufficient, not just to repay HDFC, give their return, but leave surplus for us. Other than that, what this will do is it will add further, we are estimating about INR 1,900 + crore of surplus for us from the new investments. With this, our ability to scale Provident Housing and almost develop 21 million square feet, this is what we are targeting, from this platform will be possible and adding significant value to the business and the organization.
Okay, sir. Got it. Thank you. That is all from my end.
Thank you. The next question is from Ranodeep Sen from MAS Capital. Please go ahead.
Thank you for the opportunity and congratulations on the great set of numbers for FY 2024. My question is at a strategy level. Like how we have a sub-brand, Provident under Puravankara, is there a school of thought for having another sub-brand in the ultra luxury-
Sorry to interrupt you, sir. May I request you to use the handset, please?
Am I audible now?
Yes, sir.
My question was on the strategy level, like how we have a sub-brand in the affordable housing space, which is Provident. Is there a school of thought of having an ultra-luxury brand given the premiumization theme in India is picking up loud and clear, and we've seen success stories of some of the listed players, some of the great projects that they've launched, and it's sold like in record days. Is there thought on those lines?
See, as a strategy, I am sure you are aware that Puravankara is clearly the luxury brand, and from the way we present or we will present the product as far as ultra-luxury is concerned, will obviously, a much higher, many notches higher, and therefore the whole approach and model that we are looking at is different. To answer the question, will we look at a new brand? We do not need to look at a new brand because Puravankara itself is known for luxury homes and the kind of quality and the product that we bring on the table. I will give you an example. For example, all of these redevelopment projects that we have done, and a bunch of them, which is currently we are closely engaging with, all of these customers are already living in these ultra-luxury homes, right?
Of course, the project has been developed long back, and they may go into redevelopment. Having said that, they all come from very wealthy positions, and they have visited our projects, and they have said, "We think your quality and your brand is fantastic and is brilliant." So we do not need another brand. I think brand over the last 50 years has gained so much respect in the marketplace. If you go out there, and we see this every day, especially in the Mumbai and Pune market, this is relatively people say it is a new market, but when every time I am out there talking to people and the team is out there, we realize that the brand has a phenomenal recognition in that market. So, we do not need another brand as a strategy.
What we will do clearly is take the product several notches up and be extremely competitive in the kind of product we bring in the market.
Sure. A connected question on similar lines. Our average realization seems to have kind of stabilized very nicely around that INR 7,900 mark. With our foray into Mumbai, and with the luxury brand that you spoke about, do you see it clocking the INR 10,000 mark in the next coming year?
Look, definitely. If you just look at Puravankara in isolation, without Purva Land and Provident, our average realization is already above INR 10,000 per square foot, INR 10,229. Provident Housing is at INR 7,800, and Purva Land is at INR 5,444. Now, see what's happening is, if you look at Purva Land, like last quarter, we had launched a project in Chennai where our average realization was only INR 3,000 a square foot. That dragged down the overall average realization. But are we making money at INR 3,000? Of course, we are making money at INR 3,000, right? But our average looks smaller. But if you break this down and say, we've already crossed INR 10,000 in Puravankara, and I can tell you for sure that once we and which we are already in Mumbai.
We will definitely average realization will go up, and Puravankara average realization will relatively go up much higher. That clearly going to happen.
Sure. My last question, I think great set of numbers in terms of the sales value, almost touching INR 6,000 crore. I understand as per Ind AS, the realizations will happen at the time of delivery. Tentatively, can you give me a sense, when do we see the peak EPS that we have seen in 2012/ 2014 levels of around INR 6-INR 6.5? When do we see that coming back?
Yeah, I think the journey is between next, I would say between next three to four years timeframe. But we will start seeing green shoots possibly in the early third year from now. I would say this is 2024/ 2025/ 2026. So 2027/ 2028, we will start seeing the green shoots. Because, see, the thing is that you are expanding so rapidly and your details have happened in the past, which you are delivering now, and that is causing as per the accounting standard, what is rightly said. The way it is looking on paper. But as you start to deliver more and more projects and newer projects and the pace of delivery starts catching up with the pace of sales. True that it will never catch up, obviously, because we will continue to grow, but it starts becoming better and better.
You will see better and better gross profits and therefore, and some of these older investments will start making capital. Like, for example, a large amount G&A may have been spent in the Western region, but you have added or you will continue to add significant top and bottom line to the business in next nine to 12 months timeframe. I think I would say the answer is, I would say four years and fourth year would be significant. We will start seeing green shoots possibly in 24 months- 28 months.
Sure. Appreciate all the responses and wishing you all the best for the next year. Thank you.
Thank you.
Thank you. The next question is from the line of [Rishikesh] from RoboCapital. Please go ahead.
Yeah. Hi, [Rishikesh]. Thank you for the opportunity. So my first question was regarding the-
Sorry to interrupt you, sir. I request you to use the handset, please.
Hi, am I audible now?
Yes, sir.
Yeah. Hi. My question is with regards to the launches for FY 2025 that we have mentioned around 14 million square feet- 15 million square feet. Could you please also mention what is the value of the launches that we are going to do?
We are looking at a total top line. Estimated top line is about INR 7,443 crore pre-sales value. You are looking at a surplus from these projects of about INR 2,696 crore.
Okay. We have delivered around 2,600 units for FY 2024 as per our PPT. How many units do we target to deliver in FY 2025 and FY 2026?
Look, I mean, last quarter itself, we delivered about 1,188 units, and we have received OC, which is pending to be recognized, is about 1,700 units. Out of 3,600 units for which we have already received the OC, we have handed over 1,700. We will be handing over at least 1,700 from the OC which is already received. Our target for the year is approximately between 3,500 units- 4,000 units, because what may also happen is as it happened last year is when you get the OC to the time your customer is able to take possession, sometimes there is a delay. But our target will be to deliver like we delivered last year, about 2,200+ units-2,600+ units. In the next year, our target will be to deliver anywhere between 3,500 to 4,000 units.
Okay. Would it be fair to say that likewise, on a reported basis, our revenue growth would also be upwards of 50% for FY 2025?
I mean, if you do the math clearly from 2,600 units, if you go up to 4,000 units, obviously you can map the growth. As far as the revenue recognition is concerned, we have to just see the mix of inventory, whether it will be exactly proportionate to that. Because obviously there will be certain amount of land and certain amount of profit development which also could be developed, can get delivered. So we have to just look at the realization and come back to you with a specific answer. But having said that, I think, yeah, we can expect that the revenue growth will be intact.
Okay. Lastly, on a reported basis again, then what would be our sustainable EBITDA margins?
Look, EBITDA margin, as I mentioned earlier, is also factoring into my marketing cost and my G&A. Sorry, I will say. I will leave that disclaimer on the table because a business that is growing very rapidly will have to make investments ahead of getting the return on the investment in terms of GDV and surpluses as far as G&A is concerned. As far as marketing is concerned, clearly we are extremely invested in the marketplace, and with the quantum of pre-sales that we will look at as it goes up, we will definitely look at increasing costs, which will clearly get booked as expenses. To that extent, leaving that disclaimer, I would think that our target is pretty much intact. If I look at the projects that will edit our margins, they are absolutely intact.
But what is happening at the corporate level is that when you put that gross margin, then you put in your marketing cost of new launches or of increased sales, and you look at your G&A, and that is where it starts to look different. So that is what earlier conversation was as to when will you see the books reflecting really the kind of value we are creating in the organization. I think the brand will start seeing that reflecting on paper, I would say the third and fourth year, quite steadily and then possibly grow pretty rapidly.
Okay. No problem. Thank you.
Thank you.
Thank you. The next question is from the line of Sushil Jaiswal from Bajaj Capital. Please go ahead.
Yeah. Good evening, sir. Based on the existing growing sales and good collection, what is your going forward trajectory? Do you think that it will sustain the same in the next couple of quarters too?
If you are asking about the overall real estate market, yes, we believe that it will be sustained. The market is good. Demand is well there and it will sustain.
I think what may happen is that we have pulled a lot of launches in the last year. We may see some of our launches spill over to the second, third and fourth quarter. We will see a lot more pre-sales, I would think, in the second, third and fourth quarter. A lot of it will happen in the third and fourth quarter, specifically. So in the first two quarters, I think we have land purchases we are waiting for. They are all in advanced stages, but elections are around the corner. Elections are ongoing across the country. Then there are some state elections happening. Keeping those in mind, you may see some of these launches come in the third and fourth quarter. Keeping that disclaimer in mind, I think everything else is on track. I would see a lot more pre-sales coming in the third and the fourth quarter.
Okay. My second question is, as the real estate sector has begun to rise, do you think the scenario is in every part of the country or just some specific parts? Also, majority of the business comes from southern part and some from western side also. Do you have any plans to expand your presence in northern side, like Delhi NCR region also?
Look, we are seeing demand across the country, and we see tailwinds and consolidation across the country, across the segments, which is great advantage for a brand like Puravankara. To answer the second question, yes, we are looking at NCR. We are evaluating opportunities. We have already started to put a team on ground, and we will definitely look at. Our intent is clear that we will be a national player, and we will rapidly expand in new geographies. West is obviously something which is maturing, which we have already seen, and the intent is for, while we do those acquisitions and look at new acquisitions in NCR, Gurgaon and Delhi to start with, our first endeavor will be to make sure that we get our launches in the Western region. This financial year, Western region will be a big one for us.
Okay. Thank you, sir. Thanks a lot.
Thank you. The next question is from the line of Shivang Joshi from Centrum PMS. Please go ahead.
Thank you. Hello, sir. Wanting to understand what is your take on the amount to be spent on BD in FY 2025 and 2026, considering that you have got decent free cash and good collection run rate? On the two Mumbai projects, what is the capital that you would be deploying? If you can quantify the same, both Lokhandwala and Pali Hill?
As far as BD is concerned, as I mentioned earlier, we are not looking at a capital target, but we are looking at a replacement target. In the sense that we have already launched and sold last year about 7.35 million square feet, and this year we are looking at launching another 14 million square feet. Clearly, we are looking at replacing that inventory and scaling above 40 million square feet at any point in time. The second thing that you asked about debt. Our total cost to launch for these projects is about INR 900 crore. As I mentioned earlier, we are looking at. Sorry. That will be about INR 650 crore. Land cost plus cost to launch will be about INR 650 crore for these two projects specifically which you asked about.
As we mentioned earlier, between these two projects, we will be able to generate more than INR 3,800 crore.
Okay. Any specific numbers you have in mind or as a strategy, what amount you will be putting as a capital for the West? Since you are land banking, you will have to start afresh in the Western region. Afresh in the sense, relatively you have a higher land bank in the South than the West.
Look, as I mentioned, one of the things which I mentioned in the previous call is that a market like Kochi, we are sitting with a significant surplus of about INR 1,800 crore. What we are really looking at doing, and hence you will see some amount of capital churn and debt churn, is that we are looking at reallocating this capital into the Western region, which is Mumbai and Pune. That is significant capital. Even if I discount it and say that I will take out certain amount of capital from this region and reallocate that capital in the Western region, clearly, the number I mentioned is there. So I think we have enough and more within our portfolio to look at in terms of equity to be able to deploy in the Western region.
As I mentioned, Mumbai in the past also, Mumbai is going to be a significant part of our portfolio. I have been saying this for a long time. We intend to get back to at least 40%-50% of our value-wise business. Square footage could be lesser, but value-wise, we definitely look at getting at least 40%-50% of our pre-sales from the Mumbai region. So we will continue to deploy in that market as well.
Okay, great. Thank you. Thank you for answering the question, and congratulations once again on the very good set of numbers.
Thank you.
Thank you. The next question is from the line of Sourabh Gilda from Motilal Oswal Financial Services. Please go ahead.
Yes. Hi, am I audible?
Yes.
Yes. Hi. So congrats on the good set of numbers, and most of my questions are answered. I just have one question on your trajectory for pre-sales going ahead. I know you do not give exact guidance, but just wanted to understand what sort of pre-sales that you want to achieve or what sort of growth that you intend to achieve for at least for the next two, three years?
Look, I think I've mentioned this in the past. As we don't give guidance, you already see what we give guidance on is the number of projects and strategies we're been able to bring to the market and have also indicated that w e'll definitely try and win more than what we've brought in the last year. Having said that, our goal is definitely to beat last year's number and to beat the average market growth rate. If we are assuming that somewhere in the mid-teens will be the market, we will definitely beat that growth rate in terms of our pre-sale numbers. Our plan is to ensure that we are able to achieve that number.
To answer it in another format, we are definitely part of the consolidation in the sense that we are going to make sure that we gain a lot more market share in the process of this consolidation. What will be the extent of market share? I think that is yet to be seen. It's also a factor of how much supply we are able to bring into the market, which we are working on the increase. We will see where we land in the end of the year, but obviously we're not looking at just growing at a market rate.
Okay, fair enough. Thank you.
Thank you.
Thank you. The next follow-up question is from the line of Deepak Purswani from Svan Investment. Please go ahead.
Thank you, sir. Thank you for the follow-up opportunity. Sir, firstly, on the launch pipeline. On the launches front, how much was the sales contribution from the new launch projects in FY 2024?
In FY 2024 from new launches. Let me come back to you with the exact data. I can share with you. We will try and see if we can give it while you ask your next question. I am sure you will have more.
Sure.
Other than at a later date. You can write to us, and we will respond to it for sure.
Sure. Just hopping again on the interest expenses, if I were to look from the cash flow statement point of view, our interest outflow was INR 443 crore against a net debt of INR 2,150. Just wanted to understand when we say repayment of the NCD of ASK and other investors, was there any premium component which payment was made for that during this quarter? If yes, then what will be the sustainable kind of interest expense outflow which we would be looking at with the current terms?
These NCDs have been paid at an agreed IRR. There is no additional premium. However, whatever IRR was agreed with the investment or that IRR, it has been paid. The answer to your second question, while repaying these NCDs of IFC and ASK, we have taken the debt at competitive rates. To that extent, interest will go up while servicing those debts. However, what in the beginning of the conversation, Mr. Abhishek mentioned about it, both the debts for ASK as well as IFC investment, which were return given, which were given from the existing project. This project is doing very good, and we are estimating that from project cash flow itself. So the cash flow itself can be used for repayment mechanism, substantial amount of debt will be repaid within this financial itself.
Sir, there are surplus from the next phase of the project. Significant surplus in that project. I mean significant surplus in the projects which Neeraj is talking about.
Okay. But from the cash flow perspective, I mean from the next year perspective, what will be the interest outflow we will be looking ?
Our kind of gross debt is about INR 3,000. [crosstalk] INR 3,000 either on IRR or 11.5% is our average cost of debt.
Okay. So roughly INR 350-odd crore or INR 360-odd crore?
INR 350- odd crore. As long as we are not adding more debt to
No, it is the same as it is.
Yeah. Correct. The repayment is also there. About INR 900 crore in next 12 months .
Okay. Does that answer your question?
Yeah. Okay. Yeah. That is it from my end. Thank you.
Thank you.
Thank you. The next follow-up question is from the line of [Abhishek] from YES Securities. Please go ahead.
Thank you for the follow-up. Sir, just one question. We have invested roughly upwards of INR 750 crore towards land in last two quarters. Basically, we are taking care of BD. How much more capital are we allocating towards BD? Or how much of BD we are targeting to maintain the growth which we have seen in last one to two years? That is one. Secondly, with that growth, how we are going to maintain the balance between growth and debt?
Let me break this down for you in two parts. One is, as I mentioned earlier, our growth, we are always going to work towards outperforming the market and gain market share. Right? We are expanding in new geographies to ensure that our portfolio is diversified wider and deeper. Having said that, as I mentioned earlier, we want to first get to make sure that whatever our original land bank, which is somewhere about 40 million square feet, is secured back in our book. We want to maintain at least that much land bank at any point in time. The target is that we are able to move efficiently to scale launches and do the launches within nine to 12 months. Because we don't want to sit on any assets. We don't want to buy and wait. We will buy and deploy and launch. Between these two things, the fact is that we have about INR 11,500 crore of surplus within the business, internal accruals.
At this point in time, from the projects which are already launched and from the projects which we launch in the current financial year, over next, you can assume, say, four-year time frame. As that capital comes in and we are reallocating that, we do not and we cannot necessarily wait for that capital to come in. We will, say, for example, Kochi, I mentioned a little earlier on the same call. We have got significant surplus. I would estimate it would be about INR 1,800 crore of surplus sitting in Kochi and for no reason, including land end profit.
What we want to do is take that, and obviously that means that to bridge that, we may draw some money against that and take some cash out from there and put that money in Mumbai because we believe that we will be able to create a lot more value and we will be able to do a lot more in Mumbai. In that sense, first priority will be to create growth from rebalancing and reallocating capital within regions. That is priority number one. Priority number two for us is to look at opportunities where we can raise equity. For example, we are working towards now, we are evaluating the next AIF. The first AIF is almost deployed. The money is starting to, I mean, I am sure the next quarter will start to return because the projects which we launched. Right?
Look at AIF as an opportunity. Third, we will go and create another platform where, like in asset return platform and trade-level platform . We will create another platform where we will look at deploying capital. Other than, for example, the first priority, as I said, is take money out of the region and put it in a new region. This will be a constant churn of capital to create growth opportunities and ensure that your lead is robust and you are able to plan not for this year, but for the next year and the year after. Because whatever we do this year will have an impact on the next year and then the next year. Right? That is how we are looking at the business.
Goal, as I mentioned earlier also that we are very comfortable with debt numbers on a per square basis being under about INR 1,000 in square meter . We will keep these parameters in mind and the other factor that we must watch out for is our operating surplus. Last year if you see, our net operating surplus was more than INR 500 crore-INR 513 crore. Obviously, like Neeraj mentioned earlier, we have paid out about INR 300 crore of land advancement. Right? The target will be to stay focused on cash flows with the collections, continue to spend money on your operations, run your operations aggressively and efficiently, and with that you create. For example, if you look at total operating, not net operating, but operating surplus was INR 1,298 crore.
So what I am trying to say here is that between internal accruals, reallocation of capital, AIF, equity platform, we will be able to manage the entire BD that we are working towards. Special requirement for the BD.
Correct. And to just break this, in the first question when you asked about the HDFC structure, here INR 750 crore is committed for BD only. It's part of the structure.
Okay, sir. Understood.
I have definitely answered your question about BD.
Yeah. Thanks. That's all from my side and best of luck.
Thank you.
Thank you. Ladies and gentlemen, we'll take this as the last question. I would now like to hand the conference over to the management for closing comments.
Thank you ladies and gentlemen for joining our call. I hope we have been able to answer all your questions. Me and my colleagues are available. If you have any further question, you write to us and we'll answer your questions. Thank you.
Thank you. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.