Ladies and gentlemen, good day and welcome to the Sobha Limited Q3 FY 20 25 earnings conference call hosted by ICICI Securities. 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. Adhidev Chattopadhyay from ICICI Securities. Thank you, and over to you, sir.
Yeah, good evening, everyone. On behalf of ICICI Securities, I'd like to welcome everyone to the Sobha Limited Q3 FY 20 25 results call today. As always, we have from the management, Mr. Jagadish Nangineni, the Managing Director, and Mr. Yogesh Bansal, the Chief Financial Officer. I would now like to hand over the call to the management for their opening remarks, after which we'll move on to the Q&A. Thank you, and over to you, sir.
Thank you, Adhidev. Good evening, everyone, and thank you for participating in this Q3 FY 2024-2025 earnings call. Our team at Sobha and I are delighted to be interacting with you today. As usual, you can access the results and this quarter's investor presentations on our website. In today's call, I'll quickly take you through the operational highlights of the year and the quarter. Yogesh Bansal, our CFO, will take you through the financial highlights post that. In Q3 FY 20 25, our total real estate sales value stood at INR 1,388 crores. 72.1% of the total value is from Bangalore, 10.3% from Gurgaon, 9.3% from Kerala, and other regions contributing to the remaining 8.2%. Sobha's share of total sales value stood at about 90%, highest ever for us, thanks to the contributions from our own projects based in Bangalore, Sobha Neopolis, and Sobha Ayana.
In nine months of FY 2025, our total real estate sales value stood at INR 4,440 crores. About 50% of that has come from Bangalore, 25% from Gurgaon, about 16% from Kerala, and other regions contributing to the remaining. In the last three months of this FY, we are hoping to reach close to our last year's sale value with the help of new launches and regular sales. In Q3 25, we launched one new project, Sobha Ayana, in Bangalore with a total saleable area of 1.13 million sq ft. This launch takes the overall launch area for this FY to 4.66 million sq ft for six projects in four cities. We are happy to inform you that we have received RERA for Sobha Townpark , Madison Heights in Hampton, which is about 3.67 million sq ft with apartments of about 2,104.
We will be launching the town park during the month and expect one more launch in Bangalore in this quarter that can take the yearly launches to about 9 million sq ft. We have received this RERA post end of this quarter. Our remaining inventory as of end of the quarter stood at 8.92 million sq ft, totaling a sales value of about INR 14,000 crores. We have a very strong residential pipeline of 21 million sq ft across 19 projects and 10 cities, and a commercial pipeline of about 1.19 million sq ft for four projects across our operational cities. This entire pipeline we will be envisage to launch in the next four to six quarters.
In addition to this, we are working on our subsequent project lands for about 19 million sq ft and also actively working on lands that can be monetized and generate cash flows from the same. In the next financial year, we aim to add Greater Noida, Hosur, and Mumbai to our operating locations, increasing our real estate presence to 15 cities. As you are aware, we have procured a small land of 3.44 acres in Greater Noida for which the approvals are underway. For Hosur, after a long wait, we have been able to resolve the on-ground issues, and we are making progress on project design and approvals for the first phase of plotted development in about 38 acres. In Mumbai, it is still very early stages of approval process, which will get better visibility in the next three to four months.
On the visibility to our revenue and profitability, the real estate revenue yet to be recognized from already sold units stands at about INR 15,000 crores. This revenue has profit before tax margin of about 28% at the project level. Our contracts and manufacturing segment had a revenue of about INR 160 crores in this quarter, and we might stabilize at a cumulative revenue of about INR 450 to INR 500 crores on a yearly basis with gross margins of over 15%. As I had mentioned in my previous calls, we are reducing our emphasis on the civil contracts and some of the other contracts related to glazing. And in fact, we scoped some of the projects this quarter. Hence, we had to account for additional expenses towards the same, and that reflects in our lower margins this quarter. With that, I hand over the call to Mr.
Yogesh Bansal, our Chief Financial Officer, to provide color on the financial performance, which we shall open the floor to take questions.
Good evening, everyone. I'm pleased to share our financial performance for the nine-month and third quarter of financial year 2024-2025. Our quarterly result underscores a commitment to consistently improve operational performance and financial management for a sustained and disciplined growth. Starting with cash flow, for nine-month FY 2025, total operation cash inflow was INR 43.99 billion, reflecting a 2% increase from the same period last year. The real estate segment led this growth, with collection increasing by 6.3% to INR 39.35 billion. Contract and manufacturing business contributed INR 4.64 billion. We have incurred INR 1,251 million under CapEx during nine months, which is 46.54% more compared to the same period last year, to support increased area under construction on the back of the new launches.
In nine months, we spent INR 6.33 billion in net land outflow, which is more than 2X of the same period last year, in line with our commitment of deploying growth capitals. Our net cash flow generated INR 8.06 billion, including rights issue application receipts. We have called for the first tranche of call money towards the end of December 2024 and received the proceeds in January. For the unsubscribed portion, which is very minor, the window will be reopened from 18th February to 4th March 2025. As of 31st December, we have unsold inventory of 8.92 million sq ft and under forthcoming projects at 21.22 million sq ft. The projected margin cash flow from ongoing and forthcoming residential projects stands at INR 1.13 billion. Q3 FY 2025 net debt was INR 4.56 billion, with net debt-to-equity ratio of 0.13. Average borrowing cost has remained steady in recent quarters, which stands at 9.44%.
On the P&L side, for the nine months, total revenue stood at INR 28.92 billion, with real estate contributing INR 23.19 billion, or 80.2% of our total revenue, and the contractual and manufacturing segment generating INR 4.79 billion. In Q3, real estate segment contributed for 84.6% of total revenue. EBITDA nine months was INR 2.94 billion, with a margin of 10.2%. Tax spent at INR 538 million for nine months and improvement of 28% over last period. And for Q3, it stands at INR 217 million. In Q3, our total revenue rose by 76% year-on-year to INR 12.56 billion. The revenue yet to be recognized from sales completed as of December 31st stands at INR 153.61 billion. With this, we can open the call for questions. Once again, thank you all for your participation. Now we can open the call for questions and answers.
Thank you very much. We will now begin with 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. Thank you. We take the first question from the line of Puneet Gulati from HSBC. Please go ahead.
Yeah, thank you so much. My first question is, during the year you're guided for pre-sales target of INR 8,500 crores, given the run rate and the fact that you're still to launch Town Park, is there a reasonable expectation that you would still be able to meet this guidance by March?
Good evening, Puneet. It's true that the first nine months we did about INR 4,440 crores, and our guidance was much higher, but because of the delay even in the town park when we have guided earlier on, and also some of the initial last three quarters, we have been saying that there is some slower pace of sales in some of our projects where the ticket size is large, and hence, because of that, I think we are currently aiming at reaching at least what we have done last financial year in terms of pre-sales, and if we can do that, that would be a good outcome for us, and in case we are able to launch a couple of other projects in Bangalore, which we are trying during this quarter itself, if that also comes through, then probably we can do better than that.
Got it. My second question is on the margins front. The reported margins in this quarter as well seem lower than the previous quarter, despite better recognition of revenue. Why is that happening, and when do we see a turnaround?
Yeah, that's why I had mentioned during my initial remarks itself, Puneet, that we have actively de-scoped a couple of projects of our contractual projects. One was in civil contract, and one was a glazing contract. And both these contracts, we had to recognize some of the losses towards the end of the project that has been completed in the last period. And that, as a one-time item, has reduced the margins. Otherwise, I think we are largely towards the end of these contractual losses that we have incurred. And going forward, we don't foresee any such anymore because the remaining order book in these contracts are far lower now. And hence, the entire now margin would shift towards real estate as we recognize the revenue in that, which is quite healthy.
On top of it, even the manufacturing and contractual projects, remaining ones, seem to be running well in terms of financially as well. From Q4, we should start looking at slightly better margins, and also from next financial year, it should be far better. That said, like I mentioned in the initial remarks, overall, if you look at the larger picture from the remaining revenue to be recognized, it's close to about INR 15,000 crore now, which roughly we should be able to recognize in the next three and a half to four years. That would be roughly about INR 1,000 crore a quarter. And if we are able to do that, which I was mentioning, it's about 28% of PBT at the project level. Over the period, as we keep recognizing those revenues, the margin on the margin front will have a significant improvement in between.
Okay. So just 28% of PBT, you said, on those revenues?
At the project level.
At project level. Is it possible to quantify how big were the losses on the contractual business? Because on a Q3 over Q2 basis, I see INR 290 crore revenue growth, but no change in EBITDA. Is it as big as INR 280 to INR 290 crore of losses on contractual business?
It's not just the contractual business, but also slight reduction in some of the JV projects in real estate. We have accounted for a higher cost that we are incurring even in real estate projects. Unfortunately, in this particular quarter, a combination of both the real estate cost increases and lower margin projects that we have recognized in the joint development projects, and combined with even the contractual losses, all of them put together has led to this. This, I think, is a one-time scenario. Hopefully, it should improve from here.
Okay. That's it, and lastly, on the interest cost, despite an INR 1,000 crore addition to the cash balances, the interest cost on cash flow side hasn't gone down. How should one think about that?
On that front, it's very clear. We had a clear object of usage of the rights issue. We had, in fact, reduced the debt towards that. A certain portion of that has gone in reduction of the debt. Our gross debt continues to remain roughly around INR 1,500 crores. That has sort of continued to have the impact on some of the interest cost basis. Otherwise, the remaining, if you look at from a net point of view, it is significantly lower in terms of debt. The remaining ones, part of it are in RERA accounts and in fixed deposits. Those will be earning small interest, which we will be using to deploy for the business development.
Okay. Understood. I'll come back in a few thoughts of what I said. Thank you so much.
Thank you.
Thank you. Before we take the next question, ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your question to two per participant. If you have a follow-up question, please rejoin the queue. Ladies and gentlemen, please restrict your question to two per participant. We take the next question from the line of Himanshu Upadhyay from Bugle Rock PMS. Please go ahead, sir.
Yeah. Hi, good afternoon. My first question was, if you look at the realization per square feet or sq ft to sell, has increased from INR 7,500, what used to be there two years back, to nearly INR 14,000 per square feet, the realization. If the velocity remains slow for such projects, how much does it impact the project level IRR? And can margins be under pressure because of general inflation, which is there in the country and in most expenses? And secondly, what can we do to increase our velocity for such projects?
Good question, Himanshu. The price on average, if you look at, yes, it's right, from about five to six years ago, where we were at about 7,500, now we are almost reaching 14,000. It's a combination of two factors. One, in general, real estate pricing has gone up significantly in our operating locations. And second, even in the mix of the inventory that we are selling today and what the inventory that we have currently, both those, the inventory mix has changed not just from Bangalore, but also from some of our other locations like NCR, Gurugram, and even in some of the prime projects that we have in Kerala and in Hyderabad. So it's a combination of both inventory mix and the price increase that has occurred in general in the market.
I think from a pricing point of view, it seems we are at market or slightly premium to the market, which has been the case historically, given our brand and the kind of products that we deliver. However, to answer your other question related to the pace of sale, largely what we have seen continues to be very strong in places like Bangalore and even in NCR. The only cause of a little bit of concern for us in some projects has been in those where the ticket size has been significantly higher. That, with the new launches and changes in the inventory, we should be able to address that concern, and we should start seeing much better velocity in terms of sales.
Secondly, I think historically we have stated that premium projects generally tend to have a higher sale near the completion.
But if the project or construction phase is faster, let's say in two and a half to three years, do you think the sales velocity will also tend to increase for premium projects? Because if people are able to see the fully constructed project much earlier, the sales also.
Well, if you see, the current inventory of completed projects is very low. And even as you would have noticed that even when we launch the projects, we release the inventory on a phase-wise basis that our construction will also progress. So both the pace of sale and the pace of construction go hand in hand. Hence, I don't see a big risk towards that. If you're alluding to the fact that because of this, there would be a build-up in terms of working capital, that's not been the case, at least in the last two to three years.
We don't foresee that in the majority of the projects that we have.
So my first question was, if a premium project, the construction happens faster, will it also help in faster sales side for those projects? Does it also happen in that way?
Our view is, Himanshu, once the project starts, irrespective of the pace of sale, the sooner we deliver, the better it is. If the pace of sale is faster, it is even better for us. We are more incentivized to complete the project faster. And even if the pace of sale is a little slower, faster we construct, we contain any escalation in terms of cost. And like rightly pointed out, there is generally a higher offtake from projects where there is visibility of completion or, in fact, where there is a completed unit. So both ways, it's best for us once we start the project completed within time or ahead of time.
Last question.
I'm sorry to interrupt. Himanshu, may I request you to please join the question queue as we have participants waiting for their turn? Thank you. We take the next question from the line of Kunal Lakhan from CLSA. Please go ahead.
Yeah. Hi, good evening. I am just trying to reconcile the margin guidance that you have given on the 15,000 crore of unrecognized revenue. When I look at your margins in your P&L, if you look at your nine-month PBT margin is about less than 3%. I understand there is corporate overheads and all. So if I were to ask you that this 28% PBT margin at project level, if you were to apportion, say, corporate overheads over there, what would be the realistic PBT margin considering eventually you have to look at the business at the consolidated level, right? What kind of margins and cash flows the company makes on a consolidated basis, not just project level? So I'm just trying to understand if you apportion the corporate costs to your project-level margins, what would be the realistic PBT margin there?
Our current estimate of the overheads, because of this accounting norm where we recognize revenue on completion, you will appreciate that all the overheads we take on in the cost irrespective of my revenue recognition. But if you spread over this period of revenue recognition over the next, say, period, about three-to-four years, then I would say about 10% of the overall revenue to be recognized would be in the ballpark in terms of the other overheads. I'll ask Yogesh to throw some more light on it.
So in this, Kunal, if we add corporate overhead plus interest plus depreciation, it will be removed. So, will the PBT level be between the range of 15% to 18% in FY 2030 going forward?
Okay. I mean, depreciation isn't very significant anyway. So basically, your interest and corporate overheads, if you remove it, it'll be roughly about 15% to 18%, you're saying?
Yeah.
Okay. Understood. That's helpful. All right. Yeah. Thank you.
Thank you, Himanshu.
Thank you. The next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.
Hi, sir. My first question is, so you said you're launching 9 million sq ft this year, so I want to understand out of the total sales of the nine months, how much was out of this 9 million sq ft was opened for sale, and how much is the contribution of new launches to the overall sales for nine months?
Good evening, Parikshit. We have launched 4.6 million sq ft till date, and we have, like I mentioned in the opening remarks, we have obtained RERA for the remaining for Sobha Townpark, Madison, and Hampton , so that's about 3.67, so plus if we are able to manage one or two more project launches during this quarter by end of this quarter, which we are trying hard, but there might be a delay of one to two weeks here and there, so hopefully, we should be able to meet the target of nine million.
So, Jagadish, my question was out of 4.6 million. That is the total size of the project. How much was opened for sale and what is the area which is still to be opened?
From what we have launched this financial year, we would, I mean, I clearly don't have the exact number, but roughly we have launched about 50% of the projects in larger ones. In smaller ones, the entire inventory has been opened. We can get back to you with the exact numbers.
On the Town Park, I think the total size of the Town Park is 3.7 million sellable. How much are you planning to open there?
In the initial phase itself, we would launch about 1/3 of it, and so that would be the first in this month, we will be doing about four to five towers based on the pace of sale that we can achieve.
Jagadish, to ensure that you are launching, the number which you are giving is very high, but actual launch is only 1/3 or maybe 30%, 40% of that. And so when we look at pre-sales, so we are building it with thinking that you're launching the entire project and market is basing that on assumptions, making assumptions on pre-sales, but the actual launched or opened area is much lower. And that is getting reflected in much lower sales than pre-sales.
Right. Parikshit, the opening of new phases is not an issue for us. The reason why we are opening in phases is only based on how we are pacing out our sales. Because we have obtained RERA for the entire project, so we can choose to launch the phases much faster. For example, Ayana that we have just launched in November, we were planning to launch only one or two towers initially, but based on pace of sale, we could launch almost close to 70% of the project right now. So hence, it's entirely dependent on how the project progresses in terms of sale. So it's absolutely nothing to do with our release of units or towers versus the actual launches.
Okay. And just the last question. So now we had this year guided for INR 8,500 crores. If we would have achieved that, then next year, if we had guided 15%, 20% growth on that, we should have crossed INR 10,000 crores of sales. So when I look at FY 2026, so how will you base the growth there? I mean, will 8,500 be the relevant number? So we look to cross INR 10,000 crores. And to do that, what kind of launch pipeline or GDV releases would be there on a quarterly basis? Are we targeting like INR 3,000 to INR 4,000 crores of launches every quarter from next year so that we can deliver on that number?
We will definitely come to the end here. We have good visibility of all the launches for the next financial year, Parikshit. Hence, I believe that the launches will accelerate in the next year also. We have enough inventory and experience of some of the projects which are launched this financial year also. With the build-up of the inventory and with new launches, we should be able to do a far better number. I will not be able to comment on what that number is right now, but during the course of as we plan out in the next two to three months, we should be able to come back to you with a better visibility of that.
Okay, sir. And just one, Mumbai was.
Hi, Jagadish. I've interrupted Kandpal. May we request you to please join the question queue? Thank you. Participants, reminder, please limit your question to two per participant. We take the next question from the line of Biplab Debbarma from Antique Stockbroking. Please go ahead.
Good evening, sir. So my first question is on the MMR project that you plan to launch in FY 2026. Can you give us some insight on the project in terms of GDV? What is the size of the project? What kind of project it is? JDA, SRA, or outright purchase? And where is the location?
Good evening, Biplab. The project is still in very early stages. We have tied up the land and the project, but we are in very early stages towards the approval process. Ideally, given the uncertainty of us navigating in a new location like Mumbai, we would be able to give out the numbers and have greater visibility to you subsequently.
Okay. My second question is, what would we attribute the slippage in guidance to? Should we say that because of slow sales velocity in the Gurugram project, or there is a moderation in demand, or it's because of approval challenges? I mean, if we have to pinpoint the reasons for the slippages.
You have already listed out all the issues. Having said that, I think that there is a silver lining to this aspect, which is, now standing where we are, we have the best inventory visibility that we have in years, which we have already launched, and also for the future projects. So hence, our ability to grow from here seems to be far more visible, and we should be able to achieve what we are showcasing.
Okay. Okay. Thank you, sir. I'll come back and thank you.
Thank you, Biplab.
Thank you, sir. The next question is from the line of Parvez Qazi from Nuvama Group. Please go ahead.
Hi. Good evening and thanks for taking my question, so of the INR 633-odd crore of land expenses that we have undertaken this year, would the bulk of it relate to the Greater Noida and the Mumbai project, or are there other cities also where we have acquired land?
Good evening, Parvez. It's a combination. Greater Noida, yes, it is a bulk of the payment has gone to Greater Noida because it's an outright purchase from the authority. And in addition to that, we have, in fact, spent across various projects. We have recently signed up a project in Chennai for about 1.8 million sq ft. And we have entered into new agreements with a couple of owners in Bangalore. Part of it is in Mumbai. Part of it is in Pune. So it's spread across. It's not focused on, or let's say, bulk of it has not gone to one particular city. But it's overall spread all over multiple cities.
Overall, if you look at from the INR 633 crore, that net payment that we have done, roughly, if you look at from a new land that we have tied up, that would be roughly about 5 to 5.5 million sq ft where we can develop new. And probably at a value of, even if you take it about INR 12,000, it's about INR 6,000 crore what we can achieve in sales from that.
Sorry, if I got the number correctly, you said the GDV of the land that we have tied up is about 12 odd thousand crores. So if that number is correct, what is the pending land payment for this 12,000 crore GDV project?
Yeah. I mean, there would be additional payments, which is, I mean, part of them are like we have seen its own land, and part of them are JDA. We'll be able to give you the remaining payment details separately, Parikshit.
Sure. The second question is with regards to geographical diversification. We are already present in 10+ cities. So on the ground, are you seeing differences in terms of sales velocity across the cities where you are present? And which cities are relatively doing better, and which are the laggards?
The demand scenario continues to remain very strong in some of the cities that we operate. Of course, there is an increase in pricing, and hence, the ticket sizes have gone up for all of us. And due to that, wherever there is still a ticket size of about two to three crores, demand still continues to be good. And wherever there is a much higher ticket, of course, the ticket size sweet spot differs from city to city. So hence, if you can hit the sweet spot, it's very good. For example, in Bangalore, the sweet spot is between two and a half, two to three crores. And if it's in Gurugram, it is about five to six crores. If we are able to be within that range, probably our sales velocity can be really good.
Last question. For the projects or inventory that we are going to release.
All right, Jagadish Nangineni. May we request you to join the question queue, sir? Please. Before we take the next question, participants are requested to limit their question to two per participant. The next question is from the line of Pritesh Sheth from Axis Capital. Please go ahead.
Yeah. Thanks for the opportunity, and good evening, Jagadish and team. First question is on Gurugram, where we have seen impact since last couple of quarters. Any course correction we have done there to improve the sales velocity and how's the traction now? And we have three more projects planned in Gurugram over the next four to six weeks. I mean, residential projects. What kind of ticket sizes that we are targeting in those three projects, considering that we already, I mean, you have already mentioned that anything between five to six crore is doing good. So will that be our product offering in upcoming three projects? That's my first question.
Yes, absolutely, Prateesh. That's the aim for us in terms of new projects. But even for the existing inventory, the existing projects, both Sobha Altus and Sobha Aranya, both are fantastic projects they are doing. They have, in fact, Aranya is a very unique project, and it would have an inherent demand. And in between, there was, after the initial rush, there has been some stabilization. With the progress on the site and the progress on what we are doing continuously, there is an increased interest in the project. And I'm very confident that the project will do well. Similar would be the case of Altus, which is a slightly smaller project, but we have changed a few specs and rationalized the pricing as well corresponding to that. And based on that, there has been an increased interest from the customers.
So both are on good track, and I think we should start seeing good results from next few months.
Got it. Got it. And just a clarification on what you mentioned in the last question. So with the INR 630-odd crore of spending in land, you have acquired 5-5.5 million sq ft of new projects. And the GDV is 12,000 or 6,000? I couldn't hear that correctly.
At an average pricing of INR 12,000 is what I have taken. That would be about INR 6,000 crores.
6,000 crores is the GDV. Okay. Okay. Got it. That's it from my side and all the best.
On a conservative basis, yes.
Thank you, sir. The next question is from the line of Vipul K umar Anup Chand Shah from Sumangal Investment . Please go ahead.
Hi. Thanks for the opportunity. Sir, my question is, can you break down your inventory into land and finished flats? Around INR 11,000 crores of inventory. So can you break it down between the land and finished product flats?
Sorry, Vipul, just to clarify, when you say land, it would mean like a plotted development?
Sorry?
Just to clarify, what's the question? Land would mean what? Plotted development, or is it completed inventory?
I would like to know what is the completed inventory portion in this and what is the land under development portion?
Okay. Completed inventory is very minimal for us. Out of this 8.92 million, only we have 210,000 sq ft as completed inventory. The value of that would be about close to INR 180 crores or so.
So that's probably at various stages of development.
Yes.
Okay, sir. Thank you.
Thank you, Vipul.
Thank you, sir. The next question is from the line of Puneet from HSBC. Please go ahead.
Yeah. Thank you so much. If you can also elaborate on where all are you going to spend the Rights Issue money? Is there any plan there? And how much would we expect you to spend over the next one year?
Okay. I'll let Yogesh take that question.
In our rights issue, we have given objects. So we are using money part of it for our objects. And general corporate, I need to use for our growth capital so that we can buy, we can invest in business development, and we can grow our growth. So basically, the combination of both, one is reduction of debt, and the other part of it goes to our growth capital, to our growth capital.
Just to rephrase also.
How much reduction of debt and how much for land?
Okay. In the Rights Issue, from the proceeds of the Rights Issue, we are planning to reduce debt of close to INR 900 crores.
Okay. And the balance 1,100 for the land acquisition and general corporate?
Yes, which are clearly demarcated. Our objective is like this, which is we are a cash-generating company. In the last several quarters, I'm sure you have noticed that. So while we are clearly utilizing some of the proceeds in accordance with the objects, we are also generating new cash flow. So it's sort of replacing that, and we'll be utilizing that for the growth capital. So although we are reducing the debt right now, but we would, as we keep generating cash flow from the new projects, we would definitely use the same for growth.
So what is the internal target for debt to equity now?
It's not about debt to equity, Puneet. What we currently, in the near or less than medium term, what we are comfortable is between INR 1,200 to INR 1,500 crores.
Okay. Absolute amount of?
On an absolute amount, yes. Because I'm sure you have seen it, that the marginal cash flow from our existing projects is still very strong. INR 10,000 crores is coming from already launched projects, and from the new projects, we have about INR 7,000 crores, so since that is very strong, then we can also the visibility of our subsequent lands is also good, so it puts us in a unique position where we can opportunistically grow in certain cities, and hence, based on that, we can deploy our capital. It's not necessarily that I will need to deploy today the entire amount, so we will take a calibrated approach, but we have the maneuverability to utilize whenever it is feasible now versus about a year ago when we didn't have the raised capital.
Understood. That's excellent. Thank you so much.
Thank you, Puneet.
Thank you. The next question is from the line of Jeet from Pinpoint. Please go ahead.
Hi, sir. A couple of questions. So firstly, on Altus and Aranya, you mentioned you've reoriented the Altus project a little bit, and Aranya has picked up in terms of interest. So incrementally from here, what kind of quarterly sales and rate can you expect from these two projects together? And secondly, on Town Park, you mentioned you will be opening about one-third of the area. But if you do sense more demand than that, will you be opening up more area in this quarter itself, or how will it be phased out? Thanks.
Sure, Jeet. It will be difficult for me to give the exact estimate of how it's going to perform. We have taken these actions, and our teams are really working hard to make it a success. We will have to see over the next couple of quarters how we are picking up. And then we will be able to have a much better sense of how we are getting some sort of run rate here. So it's very difficult for me to give an answer on the estimate right now. On the other part, which is about the Town Park launch, like I said, we release the inventory based on the pace of sale. And of course, if the pace of sale is good, particularly the one which we launched has all the sizes of the inventory.
And if there is any specific inventory which is moving faster, we generally do open the towers which have those inventories. So we will be, of course, opening up new inventories as we progress. And if it happens this quarter, surely we will do that.
Okay. Perfect. Good luck.
Thank you, Jeet.
Thank you. The next question is from the line of Manoj from Geometric. Please go ahead.
Good afternoon, sir.
Good afternoon.
I'm I audible.
Okay. Okay. Sir, as we go forward to 8,000, 10,000 crore sale, general cost, corporate cost, how much we can think of increasing per year as a percentage?
Manoj, I think from what we are already running at a run rate of about 6,000 odd crores, right? Apart from being inflationary, we don't think that we will be incurring significant increase in the fixed cost. It would largely be inflationary. Because our current, we are already structured towards aiming at the sale value of about 8,000, 10,000 crores. So we don't envisage significant increases in the fixed cost.
Okay. That would be a great lever for the margin.
Apart from, of course, like I said, inflationary regular salary increases and inflationary increases in other costs.
Okay, so this would be a very great lever for the margin increase as well as your premium projects, which would be also coming for revenue recognition. Is it my understanding right?
Absolutely. That's correct.
Okay. Thank you and best of luck.
Thank you very much.
Thank you. The next question is from the line of Rahul Jain from Elara Capital. Please go ahead.
Hi, sir. Thanks for the opportunity. So just wanted to understand, given that Sobha as a brand has a significant presence internationally, what percentage of the pre-sales would be coming from NRI demand? It would be specifically higher for certain geographies, or how should we look at it?
Yeah. Good question, Rahul. Like you mentioned, there is a significant visibility of our brand internationally. And that has indeed increased our customer interest in our projects. So the typical, and not only it's that results in NRI demand, but also results in demand from frequent travelers or travelers who are exposed to international locations. That puts our brand a little ahead. And that definitely creates a higher demand for us, both from local and from NRI. And typically, our NRI demand has been in the range of about 8% to 10%. And largely, that remains unchanged in the last few quarters. So with the greater visibility and if it varies and with the depreciation of the rupee and several other uncertain events, if there is a push from the increase in interest from NRI, we would greatly benefit from it.
Got it, sir. And sir, on the Mumbai land piece, can you just share the locations where exactly it is in Mumbai?
Rahul, we will be able to share it separately with our investor relations. That would be ideal for us.
Sure. Thank you.
Thank you.
Thank you. The next question is from the line of Himanshu Upadhyay from Bugle Rock PMS. Please go ahead.
Yeah. Thanks for giving an opportunity again. My question was, in the upcoming projects, our share is around 79%. And currently, we are having around 90%. Is there an opportunity to increase our share in the forthcoming projects? And because these projects will be much nearer in launches, any thoughts or opportunity for you to allocate capital and increase share in these projects?
Yeah. Himanshu, the share of the projects is a function of our own land projects and the joint development projects. If you look at our current inventory of about 8.9 million sq ft, there itself, our share is about 80%. And forthcoming projects is also roughly about that. So the 90% that we achieved is specific for this quarter because some of our own projects have done far better. And hence, if you look at an average over the next few years, then we would revert to the average of about 80% because that's the nature of the inventory.
Okay. Okay. Thank you for the clarification.
Thank you, Himanshu.
Thank you, sir. As there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments.
Thank you, everyone, for participating in the call. I hope that we have answered your queries to the best possible extent. In case you have more clarifications or questions, please reach out to our investor relations. We'll be happy to provide more information. Thank you, everyone, and have a good evening.
Thank you, members of the management. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.