Ladies and gentlemen, good day, and welcome to the Puravankara Limited’s Q1 FY 2024 earnings conference call hosted by Axis Capital 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 would now like to hand the conference over to Mr. Samar Sarda from Axis Capital Limited. Thank you, and over to you, Sir.
Sorry. Good evening once again to everybody, and welcome again to Puravankara Limited post-results conference call. As always, we have the senior management with us, led by Abhishek Kapoor, the ED and Chief Executive Officer, Vishal Mehta , the Senior Vice President of Risk and Control, and Neeraj Gautam, Executive Vice President, Finance. Before I hand over the call to the management, Abhishek, let me congratulate you and your team for crossing a really good quarter on sales. You’ve crossed more than INR 11 billion. Collections has been good, and we have a minor reduction in gross debt as well. With that positive note, handing it over to the management for the initial comments.
Thank you, Samar. Good evening, ladies and gentlemen. Welcome to Puravankara Limited’s earnings call for the first quarter of FY 2024. I’m Neeraj Gautam, the President Finance of Puravankara Limited. Thank you for joining us today. We are pleased to present our financial results for the quarter ending June 30, 2023. The results, along with comprehensive presentation, have already been uploaded to the stock exchange for your review. Today, we will provide insights into our output and key initiatives. Before we dive into our country risk assessment performance, it is important to mention the broader economic landscape, both on a global and national level. This will set the context in terms of the underlying demand that has consistently propelled our team’s performance. Moreover, this understanding will highlight the potential for future growth. The world economy is getting better, especially in places like India.
India’s economy is doing even better than expected. The International Monetary Fund has raised its prediction for India’s economy growth to 6.1% for 2023, which is higher than the earlier prediction of 5.9%. This is happening because of the people in India are investing more money within the country and the economy got a boost from a strong growth in the last financial year as well. Many good things are helping India’s economy grow. Also, technology, digital changes are happening, and new buildings and roads are being built. People in India are buying more things, and the country is handling global challenges well. Even the property market is doing great, especially for buying and selling houses. In big cities like Bangalore, a lot of young people are coming because of the good job opportunities in technology and other industries.
This has caused more people to want houses, which is increasing house prices and the rent cost. Renting a place to live in Bangalore is becoming expensive, similar to how it is in Mumbai. Because of this, many people are feeling it is better to buy a house instead of paying high rent. This is making the property market in Bangalore even stronger and other parts of the country as well. Interestingly, Puravankara's operational performance quarter-on-quarter is a testimony to this growing trend. On that note, let us dive into operational performance for this period. For our operational performance, we have achieved the highest-ever sales value of INR 1,126 crores in any quarter, the highest-ever first quarter of any financial year in recent times, up by 119% compared to INR 513 crores in Q1 FY 2023.
Out of total sales, INR 715 crores is attributed to Puravankara brand, INR 215 crores to Provident brand, and INR 196 crores to Purva Land brand. Moving to the launches for the quarter, we introduced the Purva Raagam to Purva Land in Chennai. There is now a 181% year-on-year increase in the sales value of Purva Land in this quarter. Our collections are INR 696 crores, representing 32% year-on-year increase. Average price realization is increased by 11% to INR 8,227 per square feet during Q1 FY 2024 from INR 7,436 per square feet in Q1 FY 2023. We have an impressive and robust launch pipeline of approximately 15 million square feet, ensuring a steady flow of new projects in coming periods. Non-Bangalore projects now account for 36% of the share of ongoing and 65% of launch pipeline.
On division basis, Provident accounts for 52% of our launch pipeline in line with market trends and growth through its strategy. Our net debt stood at INR 2,119 crores in Q1 FY 2024. Gross debt has been reduced by INR 55 crores from last quarter and net debt by INR 89 crores. Further, it is worth noting that our debt per square feet of buildings purchased declined from INR 1,277 - INR 1,008 per square feet in Q1 FY 2024, showcasing our efficient capital utilization. As of June 30, 2023, the balance receivable of approximately INR 3,062 crores from sold units covers around 74% of our remaining cost needed to complete the inventory open for sale. Furthermore, we have a cash visibility of INR 6,730 crores in next three to four years.
Turning to our financial performance, Q1 FY 2024, our revenue from projects delivered stood at INR 323 crores. The EBITDA for Q1 FY 2024 was INR 75 crores, which is 26% margin. The PAT for Q1 FY 2024 was negative INR 20 crores against INR 35 crores in Q1 FY 2023. I would like to bring to your notice that under Ind AS 115 and five, the revenue recognition is now acknowledged only upon project completion and upon delivery of the unit, rather than gradually throughout the project execution. This alteration in revenue recognition timing has led to notable disparity in our periodic financial outcomes, as is evident from past performance. To conclude my opening remarks, I would like to reiterate that Puravankara is aligned with the prevailing nationwide expansion trend, especially notable with Delhi-NCR.
We are well-positioned to leverage this growth first through our early launch pipeline, which has generated significant customer interest and enthusiasm. While adhering to financial discipline, we maintain an unwavering commitment to timely and exceptional execution. As always, we remain committed to delivering value to our stakeholders. Thank you for your attention. Now, I will open the floor for the questions, and me and my colleague, Abhishek Kapoor, Vishal Mehta are here to answer all your questions and guide you in the Q&A process. Thank you.
Thank you very much. Ladies and gentlemen, we will now begin the question answer session. Anyone who wishes to ask a question may press star then one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking your question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. I would like to remind all participants present in this conference, if you have a question, please press star then one on your touchtone telephone. The first question is from the line of [Vasant Bhavaskar] from [Investment] Securities. Please go ahead.
Hello?
Hello.
Hello.
Good evening.
Good evening.
Good evening.[Non-English content]
Dividend. [Non-English content] Last year board meeting financial results recommendation. [Non-English content] However, as the quarter goes by, profit respective quarter. [Non-English content] Growth change growth position and then board has recommended to remain invested in the business rather than taking out profit in the form of any dividends. Interim. [Non-English content]
[Non-English content] Thank you.
Thank you. Before we take the next question, I would like to remind all participants, if you wish to ask a question, please press star then one on your touchtone telephone. The next question is from the line of Ronald Siyoni from Sharekhan. Please go ahead.
Yeah. Good evening, Sir, and congratulations on a very good set of numbers in terms of sales, then also there has been a net debt reduction, collections have been strong. Sir, on the outlook for FY 2024, how do you see this year in terms of sales booking and what kind of launches we should expect in terms of top-line potential or GDV we can expect by FY 2024?
Ronald, we do not give forward-looking guidance. But having said that, let me share with you some data points. Basically, we are looking at total of about 15 million square feet of launches. In that 15 million square feet of launches, 3.6 is in Puravankara, 7.97 is in Provident, and 3.68 is in Purva Land. These projects are pretty much on track in terms of the launch. As mentioned in the Investor Presentation, we launched about a million square feet in the last quarter, and we saw that the numbers were pretty good. On ground, what we are seeing is there is good traction, and we are expecting that we will take more projects to the market starting this quarter. The work is on track as we speak. And we are quite optimistic for the continuous increase on quarter on quarter and year on year numbers.
If you see the trend in the Investor Presentation, what is also mentioned is whatever we do in the first quarter, we normally do higher numbers in the second, third, and the fourth quarter. I will leave you to estimate what our detailed numbers will be and the cash flows will be. But the trend is very optimistic and very positive.
15 million square feet, we should take it over the next two years or for FY 2024 or something, 2018 - 2024? What kind of timeline you expect for 15 million square feet?
You should assume that we will open only up to 6 million square feet, 6 million square feet-7 million square feet in this year. The balance inventory will be opened in a phased manner in next year and the year after.
Okay, great. This quarter, we have also seen net debt reduction. Has the management balancing the view that we should also reduce some portion of the debt going ahead or this was just one off quarter where you had paid off some debt. Is this a conscious decision that some part of the cash flow should go towards debt reduction?
Look, as we have disclosed on slide 26 of the Investor Presentation. Of the total debt, INR 2,267 crores of debt or now INR 2,200, which is reduced by INR 64 crores in the last quarter, is self-liquidating in nature. Right?
Right.
What it means is basically on its own account, as we progress the project, it will naturally reduce. What will happen is our composition will change. We will continue to invest in our commercial projects, wherein we will draw down debt for construction to build those assets. At the same time, new acquisition strategy is on a rollout. Our aim and goal will be that we will try and keep our debt at similar levels while the ongoing debt continues to reduce as we engage in the market and we deploy capital for new acquisitions. Therefore, what I am saying is, while we keep the absolute debt at similar levels, at the same time, we will see technically more acquisitions happen.
Second and most important thing is, and I keep saying this every call and every presentation, that please look at my debt per square foot number of area under development. If that debt per square foot area under development continues to reduce, then the leverage is actually not something that should affect the business. Because then what we are saying is against an average realization of INR 8,000 per square foot. My cost of debt is, say about INR 300 return, my average tenure of debt is three years on INR 1,000 per square foot. Right? That is point number one. Point number two is that you look at our cash surplus, and if you look at slide, either where we have showcased the total cash surplus of INR 11,200 crores, slide 28.
We are talking about a INR 2,000 crore debt on a INR 11,200 crore surplus, which is only from projects which are ongoing and which are going to be launched. I think we are in a very comfortable position. As we launch these projects, you will see the debt per square foot come down and our ability to scale. Our focus is really to expand and grow, and we will remain committed to growth.
Okay. Just on that follow-up, you said about business development. The focus is on getting faster, of course, or churning the land from existing land bank, or you want to go for new acquisitions. If you want to go, then what kind of model outright, JDA?
We are looking at both. First step has been for us to monetize what we have invested in the land bank, and therefore you are seeing this INR 15 million come to a plan being shared with you all, and it is unfolding as we speak in this financial year. As far as new acquisition is concerned, we are absolutely committed to it. We have a fairly balanced mix of business in terms of outright and JDA. We will look at both the models. We are also looking at a lot of redevelopment projects in Mumbai, which is society redevelopment projects. Of course, JDA and outright acquisitions across all the markets where we are present in.
The model is pretty much in a way where we look at about 30%-35% of our business coming from the JDA business and about 60%-65%, maybe up to 70% of our business coming from projects where we would outright purchase and invest. Because margins are much healthier and much better, and you get to see the appreciation of prices and appreciation of margin as you go along. That is the balance we are looking at.
Last question on the Starworth, what kind of contribution was there and what kind of margins were there by Starworth during the quarter? Also the related one that the order book has reduced. Can you help know why the order book reduced from INR 1,600 crore to INR 1,200 crore?
We are on the job. Last quarter, we added about INR 300 crores of order book. We did have it. What happened is, see, this order book is a net order book. It is not a gross order book. That means the order book net less what we have billed during a quarter or a period, and hence this order book is net of delivering or billing.
Okay.
Billing, that is why it is reduced, point number one. Point number two, this quarter, Starworth has done a turnover of about INR 103 crore and a negative PAT of INR 3.3 crore.
Okay.
Having said that, I think what is important is that we are very actively pursuing new business. There are a lot of tenders in process. We will see the order book go up as we go along in the coming quarters. The focus is really on business development other than the existing operations. We have had some challenge in terms of the slowdown of turnover because of availability of labor supply, which is normally the case in this particular quarter, April, May, June. Hence, normally the billing cycle begins this time of April, May, June. Because as you may know, laborers go back to their harvesting season and the marriage season in the north. Having said that, I think we are pretty much back. We are full steam going ahead and our business development activity is now moving at a good pace.
We will see next few quarters our order book increase.
Okay, Sir. Thank you very much and best of luck for going ahead, Sir.
Thank you.
Thank you. The next question is from the line of Niraj Mansingka from White Pine Investment. Please go ahead. Mr. Niraj Mansingka, you may please go ahead with your question. Your line is unmuted.
Yes, I was on mute. Thank you for the opportunity. Can you give me the trend of the walk-ins and inquiries for the customers that have come in the last one or two quarters, and how do you see that going forward?
Obviously the business is going up. That means there is a lot more site visits and lot more conversion that is happening on the ground. We are seeing an increasing trend, including in our sustenance projects. That's what is very encouraging because what's happening is that our ongoing projects, it's not just the new launches that are contributing, but the ongoing projects are seeing increasing traction, both in terms of site visits and conversions. As we see that and we add the new launches to it, we are seeing the kind of numbers that we are seeing. This is the first time in our history of Puravankara that in the first quarter we have done a higher numbers than the Q4 of the previous year.
That shows that we have broken that glass ceiling that we were under, and that's why the numbers look so phenomenally good also when you compare on a year-on-year basis, 119% growth. The point I'm making is that both sustenance and new launches are doing quite well, and we are seeing increasing traction. I think that's also a result of the feverish activity that is going on site in terms of construction and people's understanding and confidence in the quality of work that we do, and hence the premium also that we are commanding in the market. Overall, it's a good situation to be in for the brand.
I am aware of that as I saw the presentation, but still wanted to know on the inquiries and walk-ins. Can you give some statistical number or some thought process of how you see the walk-ins? Has it gone down or has it gone up? Sales we understand has gone up, but I'm more trying to see on the current situation slowdown in the tech sector. Trying to understand from that perspective.
If you were to compare apple to apple, I would give that the number was obviously much higher. It was twice the number in both in terms of site visits, twice the number in terms of inquiries, and twice the number in terms of conversion rate. That percentage is pretty much solid. Let me give you a number. If you were to look at our inquiry to allocations, our inquiries on every 100 inquiries, we have allocations of anywhere between 35% and 40%, which is 35% - 40%. Of 35% - 40%, about between 20 - 25 site visits. And out of that 25 site visits, we are looking at a conversion of anywhere between three to four conversions. That's the kind of numbers that happen.
When we do a INR 1,126 crore, which is 120% higher on the same statistics which we are maintaining right now, you will see twice the amount of inquiries and twice the amount of allocation and therefore twice the amount of site visits and hence double the number of conversions. Therefore, are confident on the numbers. Only statistical difference I can possibly add to this is that our conversion has gone up by another maybe 15% - 20%. When we were earlier getting 25 site visits, we were closing maybe 2.5 sales. Today, that's become between three and four sales. Are you with me?
Got it.
That is the improvement that we have seen because of the brand and the focus on the construction.
And second question is on the current projects that you are selling, what might be the EBITDA margin that you might be booking, which you would obviously report much later?
I think if you look at our plotted development, the EBITDA margins will be upwards of 35%-40%. If you look at our Puravankara margins, we are looking at anywhere between 30%-35%. If you are looking at a Provident margin, it will be anywhere between, I would say 26%, 27% going up to 30%.
Okay. But then how do you explain this current quarter EBITDA margins? On the last three, four quarters, the margins have been not so supportive compared to what you've been saying. Any thoughts on that?
Margins are two things. I think Neeraj explained it in his opening remarks. Margins are on account of what you deliver, which gives you the revenues. And what you spend, which you can't capitalize. What that means is we gave a certain number of units and certain value of units as possession. Some of our possession was, in fact, the projects were ready, but were deferred because of OC or certain local technical issues where I could not do the handover, which will happen now in this quarter and the next quarter. So, the revenue booking will go up. Having said that, what has affected my margin really is my launches. If you look at the sales number, and when you say that we have more than doubled the sales number. We were at INR 500 odd crore, we are at INR 1,100 odd crore.
What that means is that we have spent INR 15 crores more on marketing costs, which will hit us. That INR 15 crores alone, if you just adjust that number, almost takes care of the extra losses that we talk about. Plus my G&A, which is also higher because G&A is spent based on what business we are doing fully, which cannot be capitalized and cannot go into my P&L. So between both of these things and my ability to get my revenue recognition because of handover, the margin is looking squeezed. But if you look at the project level and if you look at the way we look at our business, our margins are very much in line with the projections, what I suggested, and you will see this unfold as we start giving the deliveries.
Okay. So putting it in a different way. Next two quarters, do you see that margin going back to, say, 20% +? Because it is not a one-off, that it might have happened and you might have booked some costs in this quarter.
As I said, we do not give guidance. Having said that,
But this is, in one way, real estate is not guidance, right? Because whatever booking you are doing, you are knowing the cost, you are knowing the revenue, so you will know everything. So there is no forward-looking forecasting we are asking. We are just asking that See, the reason I am asking is that the EBITDA margins are not as much as when you said about plotted Puravankara and Provident. The blended EBITDA margin comes roughly 27%-28% on this average net margin. So obviously that margin should come in next two, three, four quarters, right? Ultimately, because
I think if you look at it over the next three quarters to four quarters, you will see that margin come back, for sure.
All we can say is, a couple of projects are coming for possession in coming quarters. A large plotted project, Purva Kensho Hills. There is a project in Chennai, Purva Windermere. All are coming for possession, and then Purva Clermont is coming. Purva Clermont is some of the two towers we are expecting to get possession in few days. The other project, Nora, we are expecting OC any time. These projects we are reaching to the completion, we will start giving handover, and that margin will come in the P&L. That is what
Okay.
At this moment, I can give that kind of information.
Got it. What you are saying is as these last projects are closer to completion, it will reflect in better margin from next likely future quarters.
Of course.
As the accounting norms, the moment I recognize-
Yes, we understand.
EP from every unit which I recognize will come to the P&L, and thereby there will be reflecting the margin and profit for the quarter.
Got it. The last question, the debt that you are talking about is INR 2,581 crores, and you said it will remain further flattish over the next few quarters of one or two years. Why would you not want to repay the debt and-
As you know, Abhishek mentioned in some other question. The point is that certain amount of leverage is beneficial for the business. A substantial part of our debt today is backed by our ongoing projects, and which will be repaid in a natural course. If you look at the next 12 months, I will be naturally paying about INR 600 crores, approximately, as per scheduled repayment. Right.
Right.
If you look at this quarter also, which we have given you a slide in the residential business, it is reducing. Hence, debt management will be in that line. Besides this, more and more new launches we are going to take that will reduce our debt per square feet as a business volume. That will reflect in better utilization of capital. That will in turn will add more value to the P&L as the volume of production goes up and debt per square feet comes down.
I think our focus is, as I mentioned in the beginning of the call, is on acquisition and business development. For that, whatever is the capital requirement that we need, we will continue to draw down on that capital, and hence that is the reason why Neeraj is rightly saying INR 500 -INR 600 crores will repay in natural course, and it takes INR 500 -INR 600 crores to add to my new acquisitions. Again, the whole point is that how much debt is relative to how much business you are doing. I think that is the context that you need to put our debt in. Accordingly, you measure the debt. You will see the numbers in this quarter, in the coming quarter, and the next quarter. Obviously then, we can have a conversation.
Besides that, we are also creating two big commercial assets for the company. To that extent, we will be drawing down debt and increasing the value of assets for the company.
I think wonderful. I have just two suggestions. One, can you, in longer term, show the debt as a commercial debt and residential debt so that we can understand what is a debt for development and what is a debt for longer-term assets like this?
If you go to our investor presentation, slide number 26. There we have given a breakup of the debt, how much debt is backed by residential business, how much debt is lying for our lending.
Yeah, I saw that.
And how much commercial we have drawn down.
Got it. Last suggestion is, you also should include the NCD debt of INR 400 crores in the debt outstanding, because that is still a debt ultimately.
Just a correction. That debt is kind of equity in nature. We have taken money from IIFL against a project which is payable and amenable structure. Similarly, Puravankara Limited has launched our own AIF by Purva Residential Excellence Fund-1. That fund has invested in two of our projects in the form of NCD, and that again, a payable and amenable structure. And hence, that we are showing separately. That is not essentially equity in nature. That is not essentially being paid and being as a manner or akin to our debt, like monthly servicing of interest or things.
Okay. Thank you. And I think, looking for also good improvement in the next few quarters. Thank you very much.
Thank you.
Thank you. The next question is from the line of Sagar Ramchandani from MK Ventures. Please go ahead.
Hi. Good evening. I have two questions. One is-
Sir, I am so sorry to interrupt, but your audio is not audible. Requesting you to please speak a bit louder and use the handset mode while speaking.
Can you hear me now? Hello, can you hear me?
Yes.
Yeah, that's better. Yeah.
Out of the 15 million square feet launches that are planned in FY 2024, how many have been completed in the first quarter, and what are the plans for the next quarter in terms of million square feet?
We've launched about 1 million square feet already, 770,000 sq ft of plotted development and 240,000 sq ft of a villa development. That is launched already. In the coming quarters, starting this quarter, we are expecting additional launches.
Additional.
Yeah. We are expecting-
Additional.
Yeah, in this quarter.
This quarter. Okay. And the second question being, what is the strategy on Pune and Mumbai, primarily redevelopment aspects of Mumbai and where are we on that, and what is the revenue contribution, say, from Purva Clermont and the other Pune projects?
As we speak, we are actively pursuing opportunities of society redevelopment in Mumbai and actively pursuing opportunities for new land acquisition, both on outright and JDA basis in Mumbai and in Pune. Our intent is eventually that we will see of the total revenues over the next few years, we will see 50% of our business will come from Mumbai and Pune. That's the target we are working towards. Today, we are very heavily invested in the Bangalore market, and almost 60% of our business comes from the Bangalore market. Of course, then we get it from Chennai, Kochi. These are the other markets that contribute, but this composition will change over time. Having said that, today the contribution of Mumbai and Pune is quite low.
It's under 10%, but I think that will change with the new acquisitions and the new launches that we are looking at doing in the next 12 months.
All right. Thank you very much, and best of luck for the next quarter.
Thank you.
Thank you. The next question is from the line of Rishikesh Oza from RoboCapital. Please go ahead.
Hello. Yeah. Hi. Thank you for the opportunity. Sir, my first question is, what was the unit deliveries in Q1?
We delivered 457 units in Q1.
Okay. What is our target for FY 2024 as well as FY 2025 in deliveries?
FY 2024, we are targeting about 3,000 units of delivery. That is the estimate we had given. FY 2024, we can come back to you with an answer.
Okay. Also, Sir, just wanted an idea of those 3,000 deliveries. How are the deliveries lined up? Which projects would they contribute mostly, and in which quarter can we see the run rate to really start?
We will start seeing a pickup of deliveries starting from the end of this quarter, which is end of September quarter, going into December and the March quarter. The project that we are talking about, I think we had mentioned on the call with you guys earlier. Purva Tivoli Hills is a large, plotted development which is over 1 million square feet. That is going to come up for delivery starting end of this quarter. Provident Equinox, which is our solid end project. Puravankara High Crest is another plotted development that will come up. Provident Park Square, which is ongoing. There is another project called Purva Promenade in Bangalore, which will come up.
There is another project called Genium, which will come up for delivery in the January quarter. There is another project in Chennai called Purva Somerset House, which will come closer to the end of the fourth quarter. These are all projects which are-
Lined up for delivery.
Lined up for delivery.
As mentioned. Yeah. Okay. Just wanted an idea. When we say there are some upfront costs that we have to bear due to the new launches, what would they be as a percent of revenues?
When you are asking that question, what do you mean? You mean pre-launch marketing expenses, or you mean land approval and all of these expenses?
Basically the cost that we have to debit from the P&L, due to which you have said to the earlier participant that the margins, the reported EBITDA margins are slightly down because of those upfront costs that we have to take because of new launches.
Generally you would see any pre-launch cost. There are two parts to that cost. There is a pre-launch cost, there is cost of launch, and it depends on the scale and size of launch that we typically do. But for whatever sales contribution you look at, you can easily assume about 1.5%-2%. For example, if I was to look at INR 1,100 crore of sales
I would say that I would have spent about INR 15 crores -INR 20 crores, which I cannot capitalize. And of course, three months cost, which I can't capitalize, will be to the tune of anywhere between INR 5 crores -INR 10 crores minimum. So that's the range that you're talking of. You should take a number which I can't capitalize of every quarter's pre-sale, anywhere between 1.5% - 2% are the ranges.
Okay. So we can say that around normally this level of EBITDA margins, and this should actually increase going forward, like you said to the earlier participant, because of the plotted development projects which will come for deliveries in coming quarters, which have higher margins. So ideally, Q2 onwards, the EBITDA margins, the reported business EBITDA margins should increase.
Yeah, correct. You're right. Between Q2 and Q3, it should start reflecting on the EBITDA margins. It's not just the plotted development. I named quite a few of Puravankara and Provident developments, which are also coming into play this year.
Okay, got it. Thank you.
Thank you.
Thank you. The next question is from the line of Anurag Katta from B&K Securities. Please go ahead.
Hello.
Hi, Anurag.
Yeah, Sir. Congratulations on a good set of numbers. I wanted to know what kind of bandwidth do we have in terms of executing projects at one time?
Thank you, Anurag, for the question. As an organization, we have ability to. We are present in about eight cities, minus Bangalore, because we want to get out of that market. That is not a market we want to stay in. We have a clear focus on five cities, which is Bangalore, Hyderabad, Chennai, Mumbai, and Pune. We have seven lines of businesses. Let us focus on the top four lines of businesses, which is Puravankara, Provident, Purva Land, Commercial, and the Starworth, which is a contracting business. Now, if you were to look at the geography for each of the brand in each of the geography, at any point in time, your ability to launch is anywhere between eight projects, which is two projects in a year under each of the category, which is eight projects.
If I simply do a basic math, eight projects into five, 40 projects there, and if I take four in the rest of the projects, if I do only one launch in each category, it is about 16. We are talking about at least 50, 60 launches in a year is what we are capable of in terms of the potential of business. The question is how do we get to that potential of business? For that, we have set up a P&L structure where each of the businesses and each of the geographies have focused dedicated teams which are working, and for the brands which are working, only focusing on execution and operations of that business. I am not sure if you have seen some of our past.
One year and a half back, we deployed a different organization, matrix organization structure, where we have brought in CEOs heading different regions and different businesses and different P&Ls. Creating independent teams below them to empower them, authorize them, of course, make them accountable to deliver the results. It is a completely performance-driven culture, and the systems and processes that we have implemented enable these teams to be able to deliver the kind of volumes we are looking at. The bandwidth has already been created, and if you go and research the kind of talent that we have been able to attract in the marketplace, I think that is pretty much akin to the quality of the brand that we have and the vision that we have. I think we will see this bandwidth display the results which you are already seeing in the last quarter.
I mean, this is obviously exponential in nature. You will continue to see something that is unfolding as we go along.
All right, Sir. Thank you. Thank you so much, Sir. That is a very interesting number. Sir, the reason that I asked this was because as per our last interaction, what I remember is that we are poised to keep our land bank between 40 million square feet and 45 million square feet. Plus, if we add up the projects that we are working on in a particular financial year, I just wanted to get a feel of how the cash would flow, because we are poised to keep our land bank intact at a certain level. Plus, if we launch additional projects, particularly in Puravankara, then how would the business development look like for a year?
To answer that question, are you asking—let me ask you and understand what you're asking. Are you asking how much new land acquisition we will do? Is that the question?
Sir, the question is, as our business grows, in our bandwidth, how many new projects can we execute simultaneously while acquiring new land?
As I mentioned earlier, these 15 projects are on the way. The respective teams are running these projects, and they're getting launched. It is not one person; it's an organization that's been built. There are 3,000 people in the organization, and they have different P&L heads who are driving their own businesses. That is one part of it. At the same time, for replacements, we are in an aggressive deal mode where we are evaluating proposals very intelligently, profitable margins. Fortunately, consolidation is helping a brand like us to get the right kind of deals in the market space, and you will see announcements that will happen. Our endeavor will be to replace whatever it is that we sell within the same year. So that we have replacement of that inventory what we have sold in the year.
So that is how we are at this point in time approaching it. It will be, as I mentioned earlier, a mix of JDA and outside.
Okay, Sir. Okay. Thank you so much.
Thank you.
Thank you. The next question is from the line of Harsh Parekh from RSPN Ventures. Please go ahead.
Yeah. My question is with regards to current project mix between luxury and affordable. Can you guide with what is the project mix of residential and commercial, and can this change in future?
Sorry, what is the?
What is the current project mix between luxury and affordable?
Okay. If you look at all the Puravankara projects, you can count them as luxury projects, which are shown, which is to the extent of 3.6 million square feet Provident, which is kind of mid-income project, which is about 8 million square feet , and Project which is in Purva Land, which is about 3.7 million square feet , 3.8 million square feet .
This is about the last five months. If you would like to know about breakup of ongoing projects, if you go to our slide number 31 in our presentation, there we have specifically mentioned which are the projects under Puravankara Limited, which are the projects under Provident Housing Limited, and which are our commercial projects.
Okay.
Which is why million square foot, why breakup is there.
Are you looking at only new launches or are you looking at the breakup of existing sales as well?
No, both. Existing as well.
If you look at existing sales, when you go to slide number 12, it talks about unit value-wise contribution to sales value. If you see there, that gives you a breakup of how much units we are selling sub INR 1 crore and how much is it above INR 1 crore. Sub INR 1 crore, if you look at it is about 46% of our business, and 54% of our business is coming from above INR 1 crore category.
Okay. My next question is with regards to the redevelopment projects. Since you are keen on taking redevelopment projects in Mumbai, what are the margins for redevelopment projects as right now going on? Are we in talks with anyone or are we still looking to explore these projects?
For redevelopment projects, our target margin will be similar in nature, which we discussed, which are the EBITDA margins, obviously, which we discussed earlier, specifically in Puravankara, because most of the redevelopment projects will come under Puravankara. That is to answer on margins. As far as actively pursuing, we are very actively pursuing multiple tenders and multiple society opportunities which are today out there. We are pursuing, we are shortlisted in a few and we are negotiating and engaging, part of the whole process. We will see as we go along, as we close some transactions, I am sure you will hear about it.
It will happen in this FY 2024 or next FY?
No, definitely in this FY 2024.
Okay. Thank you.
Thank you.
Thank you. Ladies and gentlemen, due to time constraint, that was the last question for today. I would now like to hand the conference back to the management for closing comments.
Thank you very much for joining today's call. I hope my colleagues and I have been able to answer all your questions. I am wishing all of you a very happy Independence Day. Thank you very much.
Thank you. On behalf of Axis Capital Limited, we conclude today's conference. Thank you all for joining. You may now disconnect your lines.