SHRIRAMPPSNSE30 May 2022

Shriram Properties Limited has informed the Exchange about Investor Presentation

Shriram Properties Limited

Download PDF ↗View SHRIRAMPPS Stock →

~ Shriram . Properties Homes that live in you

May 30, 2022

National Stock Exchange of India Limited The Listing Department Exchange Plaza, 5th Floor Plot C 1 - G Block

Bandra-Kurla Complex, Bandra ( E) Mumbai 400 051 Scrip Code: SHRIRAMPPS

BSE Limited

Dept of Corporate Services

Phiroze Jeejeebhoy Towers

Dalal Street, Fort

Mumbai 400 001 Scrip Code : 543419

Dear Sirs

Sub: Submission of Investors Presentatio n to be made to Anal st

Investors

With further reference to our letter dated May 27, 2022 and pursuant to Regulation 30 read with Schedule Ill Part A Para A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,

please find attached the presentation to be made to the Analyst/ Investors on the Audited Financial

Statements for the quarter and year ended March 31 2022

We request you to take the above information on record.

Thanking you .

Regards

For SHRIRAM PROPERTIES LIMITED

D. SRINIVASAN

COMPANY SECRETARY

FCS 5550

Shriram Properties Limited "Shriram House", No.31, Old No.192, 2nd Main Road, T Chowdaiah Road, Sadashivanagar, Bengaluru - 560080 T +91-80-402299991 F +91-80-41236222 I Web: www.shriramproperties.com

Registered Office: Lakshmi Neela Rite Choice Chamber, New No.9, Bazullah Road, T. Nagar Chennai - 600 017

GST No: 29AAFCS5801D1ZI CIN No: L72200TN2000PLC044560

Shriram Properties Limited Q4 FY22 & FY22 Performance Highlights

Analyst / Investor Presentation

30 May 2022

STRICTLY PRIVATE AND CONFIDENTIAL

Residential RE Sector : Sustained Growth Momentum

❑ Housing markets remain robust across top 7 markets

Housing Sales Trend

❑ Pan-India quarterly housing sales at a new high since 2015

❑ New launches outpaced pre-covid, despite 3rd wave fears

❑ Mid-market and affordable remains strong performers;

•

65% of FY22 launches in Affordable and Mid-market segment

❑ Pan-India prices up 4% over in last 12 months

New Launch Supply Trend

❑ Pan-India inventory overhang declined by 5 months

Key Emerging Trends

❑ Housing affordability remains at a multi-decade high

❑ Improved job security and robust hiring (IT/ITeS & financial)

❑ Desire for owning a house to remain strong

Improved Affordability ; Highest in 2.5 decades

❑ Larger branded players to dominate the market

❑ Plotted developments in high demand

❑ Focus on mid-market and affordable segments to continue

❑ Raw material cost inflation pushing selling prices

_____________ Source : Anarock

Rising Input Costs & Interest Rates – Key Concerns for the Sector

Rising Input Costs

❑ Rising costs of cement, steel and other materials due to raw material shortage, logistic challenges and rising fuel prices – Likely Impact on construction costs by ~ Rs.250-375 per sq.ft

❑ Expect costs to stabilize at lower levels;

❑ Recent reduction (by GoI) in fuel prices and favourable change in

duties on key commodities to help moderate trends in the near term.

❑ Price rise inevitable for protecting margins; Prices moving up since

H2 FY22, at least for branded players

Rising Interest Rates

❑ Rising interest rates have natural, direct impact on housing demand; more so in Affordable and Mid-Market segments

❑ Recent increase (40bps by RBI) is unlikely to have material dampening

• Typical mid-market buyer likely suffer Rs.1,200-1,500 pm for every 50bps; Unlikely to change their decision (buy vs lease)

• More prominent and sharp increase in interest rate may impact demand growth

• Stagnant property prices vs. 40% higher purchasing power (8-10% hike) in last 5 years (vs.) post WFH desires for owning

home / larger homes

❑ But, sustained sharp hike may dampen sentiments and slowdown demand growth

❑ SPL expects demand growth to remain strong over the next 2-3 years

Budget Housing Project of the year – Shriram South East

Property Awards of the Year Plotted Development Shriram Earth

Best Gated Community of the year – Shriram Shankari

Visionary Leader of the year (1)

Integrated Township Project of the year – Shriram Grand City

Best Efficient & Sustainable Smart Real Estate Project Shriram Greenfield

MD of the Year Real Estate Sector9

Most Admired Upcoming Project of the Year Shriram Suvilas11

Developer of the Year

Lifetime Achievement Award For Outstanding Contribution To Real Estate Sector10

OPERATIONAL HIGHLIGHTS Q4 | FY22

Brand Leadership Award1

Affordable Housing – Brand of the Year2

Developer of the Year3

Best Builder Residential Projects in Karnataka4

Innovative Real Estate Campaign of the Year5

Most Admired Upcoming Project of the Year6

Outstanding Project of the Year for Shriram Greenfield

Innovative Real Estate Marketing Campaign of the Year for Shriram Greenfield

Innovative Real Estate Marketing Campaign Of The Year8

MD of the Year13

KPI Snapshot : Q4 | FY22

Pre-Sales Volume (msf)

14%

3.8

25%

3.0

Sales Value (INR mn)

15%

14,824

19%

12,443

1.0

1.2

0.6

2,476

3,399

4,159

4,792

Q1 FY22

Q2 FY22

Q3 FY22

Q4 FY22

FY22

FY21

Q1 FY22

Q2 FY22

Q3 FY22

Q4 FY22

FY22

FY21

Collections (INR mn)

11,835

42%

8,309

Construction (INR mn)

61%

157%

6,435

3,053

3,140

3,399

2,242

1,958

1,371

899

2,207

2,505

Q1 FY22

Q2 FY22

Q3 FY22

Q4 FY22

FY22

FY21

Q1 FY22

Q2 FY22

Q3 FY22

Q4 FY22

FY22

FY21

Strong growth momentum, despite Covid led interruptions

Operational Highlights (KPIs): Q4 | FY22

Sales Volume (msf)

25% 3.8

3.0

1.6

0.7

1.0 1.0

1.4

1.2

• FY22 Net sales of 3.76 msf – SPL’s highest ever

- Despite Covid 2.0 led lockdown for 6-8 weeks during Q1FY22

- Average run rate of 1.0+ msf net sales in Q2, Q3 & Q4

- Supported by 12 good launches (8 in Bangalore, 3 in Chennai & 1 in Kolkata)

• FY22 Collections: At a new record high level

H1'21 H1'22

Q3'21 Q3'22

Q4'21 Q4'22

FY21 FY22

- Average monthly gross collections at above Rs.1,000 mn range during Q2, Q3 & Q4 FY22

- Net collection of Rs. 11,835 mn (Gross Rs.12,631), despite 6-8 weeks of Covid interruption

Sales Value (Rs Mn)

19% 14,824

12,443

• FY22 Constructions: SPL’s highest ever; 1.5x jump YoY

- Construction momentum strong (Rs. 6,435 mn for FY22 vs Rs. 2,505 mn for FY21)

- Labour strength consistently above 5,000 vs 4,200 pre-covid levels

5,874

2,165

4,107 4,159

6,171

4,792

H1'21 H1'22

Q3'21 Q3'22

Q4'21 Q4'22

FY21

FY22

• DM projects accounted for 28% of sales

• Q4 FY22 - Net sales at 1.17 msf

- 4 New launches in Q4; 2 in Bangalore & 2 in Chennai

- Q4 Collections at Rs. 3,399 mn (vs Rs.3,167 mn in Q4FY21 reflecting a 7% growth YoY)

- Construction grew to Rs.2,207mn vs Rs.868mn in Q4FY21 with a 154% YoY growth

Sales by Dev. Model

Collections (Rs Mn)

42%

11,835

8,309

Construction (Rs Mn)

157%

6,435

JDA 8%

DM 28%

Own 22%

JV 42%

5,295

2,705

3,140

2,438

3,167 3,399

2,857

2,207

2,505

931

1,371

706

868

H1'21 H1'22

Q3'21 Q3'22

Q4'21 Q4'22

FY21

FY22

H1'21 H1'22

Q3'21 Q3'22

Q4'21 Q4'22

FY21 FY22

SPL’s best-ever operational performance across KPIs

Successful Launches; Impressive ‘Sales-at-Launch’*

FY22 Launches1 3

(Area in sft)

Type

Launch

Launch Area

Sold at launch

% sold

Chirping Grove – Phase 11

Suvilas Palms

Westwoods

Eden 144

Chirping Grove – Phase 2

Yuva – WYTField Phase 2

Sunshine – Phase 2

Temple Bells - Phase 4

Southeast Phase 3 2

Divine City – Phase 2 2

Clay Grove 2

New

Phase

New

Q1FY22

250,421

103,793

41%

Q1FY22

229,657

99,025

43%

Q2FY22

497,790

373,200

75%

# of project launches3

Includes 6 new launches & 6 new phases of ongoing projects

Q2FY22

151,045

101,553

67%

FY18

FY19

FY20

FY21

FY22

Q2FY22

244,135

67,605

28%

Q3FY22

255,320

108,391

42%

New Launches – Impressive Sales-at-Launch

Q3FY22

164,640

97.650

59%

Q3FY22

185,286

59,905

32%

Q4FY22

864,609

112,738

13%

Q4FY22

313,484

185,159

59%

Q4FY22

108,163

12,723

12%

52%

35%

48%

34%

38%

FY18

FY19

FY20

FY21

FY22

Temple Bells - Sanjeevini 2

Phase

Q4FY22

211,970

3,570

Average Sales-at-launch %

38%

FY22 Sales-at-launch at ~38%; Key to de-risking projects and hence thrust continues

____________________________________________________________________ * Sales-at-launch = Actual sales during first 90-days of launch; 1. 2. 3.

Chirping Grove (Phase 1) soft launch towards end of March’21 and hence included in FY22 Southeast-3 launched in Feb’22; Temple Bells – Sanjeevini, Clay Grove & Divine City-2 launched in Mar’22. Sales-at-launch is computed only till 31st Mar’22 (lesser than the 90-days) Includes launch of additional phases in ongoing projects

Improving Sales Realisation Trends

Price Increase by Project – Top Projects only

Amounts in INR

Project

Development Type

Realisation Sep’21

Realisation Mar’22

% Increase

Southeast Phase 1

Apartments

Southeast Phase 2

Apartments

Blue

Chirping Woods

Apartments

WYTfield – Phase 1

Apartments

Liberty Square

Apartments

Chirping Grove – 2

Westwoods

One City – 2

Park 63(1A)

Park 63(1B)

Park 63(2A)

Grand One

Sunshine

Villas

Plots

Apartments

Encouraging Pricing Trends

3,803

3,925

5,205

6,523

5,026

4,590

5,621

1,669

1,323

5,559

5,506

5,497

3,636

3,343

4,208

4,309

6,003

7,359

5,264

5,311

6,329

1,735

1,452

6,600

6,408

6,501

3,932

4.025

11%

10%

15%

13%

16%

13%

10%

19%

16%

18%

20%

Across development types and locations

Average realisation up by

8% In H2 FY22

Avg. Realisation (INR psf)

4,646

4,616

2,587

2,365

Plots

Apartments

FY21

FY22

❑ Capital Prices in the Residential RE Sector have largely been stagnant over last 5 years

❑ With significantly increased demand coupled with rising input costs, price curve expected to rise.

❑ Industry consolidation impact adding strength

❑ Improving price trend since H2-FY22; Rising trend to continue in FY23

Strong Project Pipeline; Growing Further

Project pipeline (msf)

Project pipeline Movement – Dec’21 to Mar’22

6.9

51.2

# projects

8.9

0.3

0.9

2.4

5.3

6.7

13.7

6.2

Ongoing Owned

Ongoing JV / JDA

Ongoing DM

PuD Owned

PuD JV / JDA

Note: FC : Forthcoming; PuD: Projects under development.

PuD DM

FC Owned

FC JV / JDA

FC DM

Total

Pipeline – By Region

Others 11%

Kolkata 17%

Chennai 24%

Bangalore 48%

Pipeline – Dec’21 (RHP)

Add: Project Additions

Own

JV/JDA

Sub-total

Less: Project Deferred

Less: Other adjustments

Sub-total

Pipeline – Current

(1)

Pipeline – By Dev. Type

DM 28%

Own 27%

JV 12%

JDA 33%

•

17 projects with 13.6 msf potential added since IPO filings

• Over 10% net addition to the portfolio during Q4FY22 (51.2msf vs 46.7msf @ RHP in Dec’21)

msf

46.7

2.5

6.4

4.7

13.6

(3.0)

(6.1)

(9.1)

51.2

Budget Housing Project of the year – Shriram South East

Property Awards of the Year Plotted Development Shriram Earth

Best Gated Community of the year – Shriram Shankari

Visionary Leader of the year (1)

Integrated Township Project of the year – Shriram Grand City

Best Efficient & Sustainable Smart Real Estate Project Shriram Greenfield

MD of the Year Real Estate Sector9

Most Admired Upcoming Project of the Year Shriram Suvilas11

Developer of the Year

Lifetime Achievement Award For Outstanding Contribution To Real Estate Sector10

FINANCIAL HIGHLIGHTS Q4 | FY22

Brand Leadership Award1

Affordable Housing – Brand of the Year2

Developer of the Year3

Best Builder Residential Projects in Karnataka4

Innovative Real Estate Campaign of the Year5

Most Admired Upcoming Project of the Year6

Outstanding Project of the Year for Shriram Greenfield

Innovative Real Estate Marketing Campaign of the Year for Shriram Greenfield

Innovative Real Estate Marketing Campaign Of The Year8

MD of the Year13

Financial Highlights : Q4|FY22

❑ FY22 is the ‘turnaround year’, in line with investor guidance

❑ Improved margins and earnings – ROCE at 11%, sustained improvement in last 3 years

❑ Improving operating leverage and rising share of DM income supporting higher margins

❑ Thrust on reducing debt and cost of debt

•

Finance costs lower by 24% QoQ in Q4, reflecting impact of refinancing & pre-payments post IPO

Encouraging fall in Net Debt and Debt-Equity; Amongst lowest in the listed RE space

❑ Income recognition at Grand-1 (Kolkata) with commencement of Customer handovers

Financial Highlights : P&L Quarterly Trends

H1 FY22

RHP

Q3 FY22

Audited

9M FY22

Audited

Q4 FY22

Audited

QoQ (%)

FY22

Audited

INR Mn

Revenue from operations*

Other income

Total Revenues

Cost of revenue

Employee benefit expense

Other expenses

Total Expenses

EBITDA

Finance Costs

- Interest expense

- Unwinding of interest (non-cash charge)

- Other finance costs (net of finance income)

Depreciation

Profit before Tax

Tax expense

Share of profit/(loss) of JVs

1,182

330

1,512

603

345

233

1,181

331

639

524

(343)

(184)

1,096

205

1,301

460

175

134

769

532

301

249

(1)

217

(46)

2,278

535

2,813

1,063

520

367

1,950

863

940

773

152

(126)

112

(231)

91%

85%

84%

94%

-14%

-24%

2,051

314

2,365

760

210

443

1,413

952

259

190

675

Net Profit * Includes DM fee of INR 323 million, INR 299 million, INR 622 million and INR 421 million in H1 FY22, Q3 FY22, 9M FY22 and Q4 FY22 respectively

(600)

(468)

132

645

• Q4 positive earnings fully offset cumulative negatives of 9M

•

Sequential Improvement in financial performance, helped by operating leverage and rising DM income

Strong QoQ growth despite postponed revenues from key projects - Southern Crest and Grand One

4,329

849

5,178

1,823

730

810

3,363

1,815

1,199

964

205

549

146

(226)

177

Q4FY22 : Financial Performance Highlights

❑ Aggregate revenues nearly doubled QoQ in Q4

•

Improved Revenue from Operations, driven by starting of handover and income recognition in Grand-1 (Kolkata) and Panorama Hills (Vizag) as well as Earth (Whitefield), and Chirping Woods

Income recognition from transfer of development rights in Sannath and Prime Life also contributed positively

• DM Fee up 41% QoQ to Rs.421 mn; driven by higher flows from Xander (Gateway) and 9 residential DM projects

• Despite delayed income recognition in case of Grand-1 (initially planned for Q3) and deferred recognition in case

of Southern Crest (OC delayed from Q4 to H1FY23)

❑ Total Expenses grew relatively lower at 84% QoQ; thus leading to improved EBITDA

❑ EBITDA up 94% QoQ at Rs. 952 Mn

❑ Interest costs down by 24% QoQ; Overall finance costs (including non-cash charges) down 14% QoQ

❑ PBT Turns Positive; Net profit remains positive sustaining the turnaround witnessed in Q3FY22

Financial Highlights : P&L Annual Trends FY19-FY22

INR Mn

Revenue from operations

(Of which, DM Revenues) Other income Total Revenues Cost of revenue Employee benefit expense Other expenses Total Expenses EBITDA Finance Costs

- Interest expense

- Unwinding of interest (non-cash charge)

- Other finance costs (net of finance income) Depreciation Profit before Tax Tax expense Share of profit/(loss) of JVs Exceptional items Net Profit EBITDA Margin

FY19

FY20

FY21

FY22

YoY %

22% 3%

51%

6,117

571 1,121 7,238 4,854 783 807 6,444 794 1,051

1,080

(29) 48 (306) 341 (90) 1,224 487 11%

5,667

871 651 6,318 3,524 848 1,043 5,414 904 1,232

1,070

182

(20) 65 (392) 47 (409) (15) (864) 14%

4,315

1,142 698 5,013 2,387 634 793 3,814 1,211 1,253

1,025

202

27 66 (120) 230 (332) - (682) 24%

4,329

1,043 849 5,178 1,823 730 810 3,363 1,815 1,199

964

205

31 66 549 146 (226) - 177 35%

•

FY22 a turnaround year for SPL, consistent with our guidance

Improving profitability and returns, consistent with guidance

Reinforces confidence on sustainable revenue and earnings growth going forward

10.8%

7.4%

RoCE %

5.1%

4.1%

2.9%

FY18

FY19

FY20

FY21

FY22

FY22 : Financial Performance Highlights

❑ Revenues and Cost of revenues

• Revenue growth 3% YoY despite postponed revenues in key projects: Southern Crest and Grand One • Top 6 projects contribute 84% of revenues; Key projects: Panorama Hills, Earth (Whitefield), One City, Luxor, Chirping Woods • Higher gross margin YoY, 31% for FY22 vs 17% for FY21, arising from revenue recognition in o Earth (Whitefield), a high margin plotted development and One City plots in Chennai o Income recognition from transfer of development rights in 2 projects (Sannath, Bangalore & Prime Lifespaces, Chennai)

❑ DM Revenues

•

DM Revenues stabilised around Rs.1bn mark. INR 1,043 million in FY22 vs INR 1,142 million in FY21.

o Higher base of FY21 is driven by large contribution from Xander (Gateway Office). In FY22, construction matured and now

ready for OC thus adding residual DM Fee.

Top 5 projects account for 75% of DM revenues viz., Blue, Chirping Grove, Divine City, WYTfield and Xander (Gateway Office)

❑ Operating Expenses

•

Employee expenses up higher by 15% YoY, but 13% below pre-Covid levels of FY20.

o Lower base of FY21 due to Covid pay cut & head count reduction

Other expenses up 4% YoY as a result of higher sales & marketing costs consistent with sales growth

❑ EBITDA

•

Highest-ever EBITDA at INR 1,815 million despite postponement of revenue recognition in key projects

EBITDA margin at 35% reflects income recognition from high value projects, higher DM fee income and transfer of devlop. rights

Improving operating leverage and rising share of DM to help stabilise EBITDA margin around mid-20s going forward

❑ Finance Costs

•

Interest costs lower YoY; Interest saving in Q4F22 from pre-payment of debt from IPO proceeds;

FY23 likely to see significantly lower interest cost

❑ Share of JV income remains negative, reflecting early stage of these projects, that will come into income recognition in future ❑ Net Profit turns positive, rising on the turnaround momentum witnessed since Q3-FY22. Full year profits at Rs.177 Mn ❑ ROCE: Improved to 11% in FY22; Likely to stabilise over the next 12-18 months

Financial Highlights : Cashflows Q4 | FY22

(INR mn)

Collections

DM Income

Other Inflows

Operating Inflow

Construction

Marketing & Admin Overheads

Other Operating outflows

Operating Outflow

Cash flow from Operations

IPO (Primary) Proceeds

Loan Drawals

Loan Repayment

Interest expense, net

Cash flow from Financing

Net Cash Flow

Opening cash & cash equivalents

Closing cash & cash equivalents

SPL Consolidated Cashflows

9M FY22

3,397

Q4 FY22

1,948

553

3,955

2,553

884

(36)

3,401

554

2,775

709

1 ,214

655

1,615

2,169

872

3,040

168

2,118

1,123

445

249

1,816

302

350

2,135

152

(1,937)

(1,636)

3,040

1,405

•

Positive cash from operations; Improving trend continues

Strong liquidity even with significant repayment of debt in Q4FY22

Likely additional cashflows from scheduled completion of projects during FY23

FY22

5,346

722

6,073

3,645

1,329

213

5,217

856

2,775

1.059

3,349

807

(323)

533

872

1,405

Financial Highlights : Balance Sheet | FY22

Consolidated Summary Balance Sheet

31-Mar-21

30-Sep-21

31-Mar-22

Particulars (INR mn)

Fixed Assets

Investments and loans

Inventories

Cash and Bank Balances

Other Assets

Total Assets

Less: Liabilities (Customer advances, trade payables, provisions excl. borrowings)

Net Assets

Equity

Borrowings

- External borrowings

- Inter-company borrowing (from JVs)

Total Equity + Borrowings

758

1,899

20,261

814

9,264

32,996

17,450

15,546

8,274

7,272

6,558

714

728

1,918

20,626

422

9,240

32,934

18,315

14,619

7,668

6,951

6,201

750

823

1,810

22,630

1,405

10,746

37,414

20,674

16,740

11.309

5,431

4,811

619

15,546

14,619

16,740

Strong Balance Sheet further strengthened post IPO with headroom for growth

Improving Gearing Ratio and Cost of Debt – Consolidated1

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

Net Debt movement

6,724

494

6,230

6,558

864

5,694

4,811

1,405

3,407

Mar'20

Mar'21

Mar'22

Net Debt

C & CE

Gross External Debt

Debt Equity Ratio

0.70

0.69

0.70

0.60

0.50

0.40

0.30

0.20

0.10

0.30

Mar'20

Mar'21

Mar'22

___________________________________________________________________ 1 As per consolidated financial statements excluding inter-company debt from JVs 2 Source: Company Presentations

Budget Housing Project of the year – Shriram South East

Property Awards of the Year Plotted Development Shriram Earth

Best Gated Community of the year – Shriram Shankari

Visionary Leader of the year (1)

Integrated Township Project of the year – Shriram Grand City

Best Efficient & Sustainable Smart Real Estate Project Shriram Greenfield

MD of the Year Real Estate Sector9

Most Admired Upcoming Project of the Year Shriram Suvilas11

Developer of the Year

Lifetime Achievement Award For Outstanding Contribution To Real Estate Sector10

STRATEGY AND OUTLOOK

Brand Leadership Award1

Affordable Housing – Brand of the Year2

Developer of the Year3

Best Builder Residential Projects in Karnataka4

Innovative Real Estate Campaign of the Year5

Most Admired Upcoming Project of the Year6

Outstanding Project of the Year for Shriram Greenfield

Innovative Real Estate Marketing Campaign of the Year for Shriram Greenfield

Innovative Real Estate Marketing Campaign Of The Year8

MD of the Year13

Strategy and Outlook | FY23 and Beyond

❑ SPL standing firm on its growth path – proven sales and execution machine delivering strong performance

❑ Operating leverage kicking-in, on the back of scale and improving efficiency

❑ FY23 to be a promising year with strengthened long-term fundamentals, for the sector and SPL

– Markets conducive for new launches with improving outlook

– Opening inventory from ongoing projects at ~5msf currently to drive sustenance sales in FY23

– Strong project pipeline to support growth momentum

– Launch pipeline robust with 17 potential projects in FY23;

Strategic Objectives

❑ Sustain growth momentum: Target 20+ % CAGR in Sales over the next 2-3 years

❑ Unlock potential from Kolkata

❑ Emphasis on DM

❑ Sustain profitability at ~22-25% ; Positive net earnings

❑ Improve and sustain RoCE at ~10-15%

❑ Cautious entry into new markets – Hyderabad

Long Term Strategy & Growth Outlook

SPL Competitive Strengths

SPL Forward Strategy

Leadership in Core Markets

Strong Parentage and Established Partnerships

Experienced & Professional Management Team

Focus on Mid Market and Affordable Housing

Beneficiary of RERA-led industry consolidation

Asset Light Business Model

Demonstrated Execution Track Record

Strong Balance Sheet

Stay focused on mid- market and affordable housing

Enhanced focus on DM model

Build scale and enhance execution capabilities

Continued focus on core markets of South India

Unlock value from ongoing development project in Kolkata

Leverage established relationships with financial investors for growth funding

Growth Outlook: FY23-FY25e

Sales Volume Outlook (msf)

7.0

5.5

3.6

3.2

3.0

2.4

4.5

3.8

Supported by 18 Launches in FY23

(12 New projects and 6 new phases)

1.3

0.7

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23e

FY24e

FY25e

FY23 Encouraging Earnings Visibility

Project Revenues – Current status of key drivers

Projects

Current Status

Southern Crest

In the process of obtaining Occupancy Certificate (‘OC’)

Grand One

Summit

OC Obtained. Only Sale Deeds to be registered

In the process of obtaining Occupancy Certificate (‘OC’)

Park 63 (1A & 1B)

Park63 (1A) OC already received & Park63 (1B) OC expected

• 62% of FY23 revenues likely from 4 Projects

• 83% revenue share with

Gateway Mall

• Bengal FSI Sale not

included

DM Revenues – Current Status of key drivers

• 11 ongoing DM Projects (out of 15 in the portfolio)

• Ongoing projects likely to account for 67% of FY23 DM Income

• New Projects to add 33% of DM Income

• ~ 70% of aggregate revenues over next 3 years to come from volumes sold as of Mar’22

• ~ 60% of aggregate DM fees over next 3 years to come from projects launched already

• Nearly Rs.3 billion of FCF likely in next 3 years

Strong Income Recognition Outlook (FY23-25e)

Sales Volume (msf)

3-year cumulative sales of 10msf

3.8

3.2

3.0

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

Ongoing Projects – By Region (msf)

11.3

6.0

…

12.0

10.0

8.0

6.0

4.0

2.0

FY20

FY21

FY22

Bangalore

Chennai

Kolkata

No. of projects

No. of units handed over

Project Completion Trend1 (msf)

10.7

2,885

6.9

2,093

3.5

2,280

2.4

FY14-16

FY17-19

FY20-22

FY23-25E

• • •

SPL sold over 10msf in last 3 years Construction progress encouraging and most projects on track SPL to deliver over 10msf in next 3 years, to support income recognition & earnings

_____________________________________________________________________________________ 1 Completed projects based on timing of receipt of Occupancy Certificate while there would be a lag in handing over of individual units

Unlock Potential from Kolkata

Project Overview

❑ Integrated township in Uttarapara, Kolkata

–

314 acres of land parcel with 33.54msf of estimated total saleable area

Development Strategy

❑ Focused on developing c.10msf over the next 3-5 years; and

❑ Simultaneous focus on monetising remaining land bank

Development Status Update

❑ Shriram Grand-1: (2.1msf)

–

Fully sold. Construction in full swing.

– Handover commenced; To deliver 600 units in FY23

❑ Shriram Sunshine: (2.3msf)

–

Launched in 3 phases; ~95% of Sunshine Phase-1 (0.8msf) sold.

Sunshine Phase-2 launched in Dec’21 (0.7msf) and ~26% sold

❑ FSI sale progressing well; MoU with LOGOS, integral part of the strategy

Tower - 22: 12th Floor in Progress Tower - 23: 8th Floor in Progress Tower - 24: 12th Floor in Progress

LOGOS Deal:

External painting Done – Custer A & B

❑ Integral part of SPL’s strategy of selling land bank to partners for other formats of development

❑ MoU entered for a potential sale of up to 90 acres of land; Due diligence underway

❑ LOGOS to develop a Logistics Park offering ~ 2.2msf of industrial and warehousing space

❑ Expected to generate 50,000 of local direct and indirect jobs in West Bengal

❑ Transaction expected to complete during H2FY23

Development Management (DM) Model Update

❑ Successfully stabilised development model, now account ~30% of Pipeline

❑ Sustainable Opportunity:

– RERA-led changes in the industry are irreversible

– Large opportunity from existing players: smaller developers/land-owners are

looking to handover the project to larger player for risk issues

– Fragmented land ownership : small players continue to look for larger, branded

players to unlock value from land

– Recent success endorses SPL’s ability to build strong DM pipeline

❑ Scalable Opportunity:

– Market being vacated by smaller developers is large enough to support

significant growth for larger players

– SPL’s model of outsourcing construction & scaling up in-house capabilities for

project mgmt. & cost control is key

– SPL has created a strong platform over the last 2-3 years

– Minimal capital investments from the DM partner

DM Volumes (msf)

1.05

1.06

0.83

0.69

0.49

FY18

FY19

FY20

FY21

FY22

❑ Profitable Opportunity – both for DM operator and landowners

DM Revenues (INR mn)

– Fees ranging from 10%-16% of total project revenues

1,142

1,081

– Less competition : Large developers are balancing between unlocking value from

own land banks and projects

– Low risk profile given low capital investment

871

571

– Doesn’t involve land valuation constraints, and provides next best return to

FY19

FY20

FY21

FY22

landowner after outright purchase

DM Portfolio# projectsArea (msf)Completed12.0 Ongoing126.7 PUD10.9 Forthcoming76.9 21 16.5 Entry into New Market | Hyderabad Residential Market Overview

❑ Hyderabad was the best performing residential market in 2021 with sales growing by a resounding 142% YoY to 24,318 units in 2021.

❑ The mid segment of INR 5-10 Mn has constituted the bulk of sales

and accounted for 48% in H2 2021 which resonates with SPL’s target audience in other operational markets.

❑ 12,344 housing units were sold in Hyderabad during the second half,

an increase of 135% year-on-year.

❑ Hyderabad’s homebuyer base is composed of a substantial

Information Technology (IT) workforce which has been largely unaffected by the pandemic.

Source: Knight Frank Research 2021

Investment Summary

8. Access to Capital

➢ Strategic relationships with domestic and

international financial investors

➢ Early recipient of FDI in the sector

1. Corporate Governance

➢ Shriram Group DNA and marquee investor presence for a decade contribute to strong governance and transparency practices

7. Low Leverage

➢ Well capitalized, with leverage levels of 0.3x1

6. RERA Beneficiary

➢ Well-positioned to benefit from RERA and

industry consolidation

➢ Built deep project pipeline

➢ Proven ability to manage partnerships to help

build pipeline

5. Scalability

➢ Asset light and highly scalable business model

with DM being core part of strategy

➢ Strong organisational build up in past few years

2. Trust and Brand

➢ ‘Shriram’ brand benefits from strong trust and

recall among target customers

3. Track Record

➢ Robust execution track record; have delivered 29

completed projects

4. Strong Growth Outlook

➢ Visible growth pipeline with continued focus on

mid-market & affordable segment

➢ Demonstrated ability to ramp-up sales volumes

➢ Core strategy unchanged – Focused on mid- market and affordable housing in South India

___________________________________________________ Note: 1. As of Mar 31, 2022. Net debt calculated as (Gross debt – Cash & cash equivalents). Gross debt excluding unsecured inter-company loans (from JVs)

Well-positioned to navigate key challenges of the real estate industry

THANK YOU

← All Transcripts SHRIRAMPPS Stock Page →

Shriram Properties Limited has informed the Exchange about Investor Presentation

Market Movers