AJMERANSEQ4 FY22May 24, 2022

Ajmera Realty & Infra India Limited

7,724words
92turns
13analyst exchanges
1executives
Management on call
Dhaval Ajmera to begin the proceedings of this call. Over to Mr. Dhaval. Dhaval Ajmera
Thank you Mr. Bavisi. Good afternoon everyone. I hope everyone is safe and sound. As we all
Key numbers — 40 extracted
rs,
ple to realize the importance of home and definitely its preference towards real estate to investors, buyers and everybody in India has definitely moved ahead and we can see that, over the amount of s
Rs. 48,000 crore
irectly, but it gave an emphasis and overall benefit about the urban development allocating about Rs. 48,000 crores for the affordable housing and also ensuring that we have a control on the steel prices by red
50%
s. Our commercial project, Sikova in Ghatkopar has also witnessed a great sale of about more than 50% of boutique offices of about 400 odd offices, we have seen 200 already been sold and that too giv
Rs. 800
pandemic period. From all the existing projects and estimated balance revenue is expected to be ~Rs. 800 odd crores. As a move towards our 5x growth which we have announced and where we all as a team,
5x
ects and estimated balance revenue is expected to be ~Rs. 800 odd crores. As a move towards our 5x growth which we have announced and where we all as a team, everyone from management to our entire
Rs. 4,000
Bangalore during the coming years of FY23 and 24. This will give us a total potential revenue of Rs. 4,000 plus crores with an estimated salable area of ~2.8 million square feet. Thus the total revenue fro
2.8 million
ill give us a total potential revenue of Rs. 4,000 plus crores with an estimated salable area of ~2.8 million square feet. Thus the total revenue from the existing plus the new launches will be in the tune o
Rs. 4,800 crore
uare feet. Thus the total revenue from the existing plus the new launches will be in the tune of ~Rs. 4,800 crores in the next 3 to 5 years. We are also aggressively looking at inorganic growth within our compan
Rs. 2,000 crore
and in Wadala. Over the last decade, in this project at Ajmera I-Land we have done sales worth ~Rs. 2,000 crores with an estimated sales area of 1.3 million square feet. We have delivered Ajmera Aeon, Zeon and
1.3 million
oject at Ajmera I-Land we have done sales worth ~Rs. 2,000 crores with an estimated sales area of 1.3 million square feet. We have delivered Ajmera Aeon, Zeon and Treon and now Manhattan is progressing faste
Rs. 150 crore
ai where we had acquired the high-end residential redevelopment project which has the topline of ~Rs. 150 crores. We are happy to say that all the tenants of that project has been vacated and the building is a
Rs. 100
our strategy from rental base to sale model, unlocking its value and bringing up our revenues by Rs. 100+ crores from that project which we hope to realize in the coming quarters. While we acknowledge
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Guidance — 20 items
Dhaval Ajmera
opening
“Our commercial project, Sikova in Ghatkopar has also witnessed a great sale of about more than 50% of boutique offices of about 400 odd offices, we have seen 200 already been sold and that too given this pandemic period.”
Dhaval Ajmera
opening
“As a move towards our 5x growth which we have announced and where we all as a team, everyone from management to our entire team is working rigorously day and night to envision and make our vision come true, a dream come true, we plan to launch 5 projects in Mumbai and one in Bangalore during the coming years of FY23 and 24.”
Dhaval Ajmera
opening
“Thus the total revenue from the existing plus the new launches will be in the tune of ~Rs.”
Dhaval Ajmera
opening
“We are also aggressively looking at inorganic growth within our company by doing some JV/JD and are in very advanced stages and we hope to have some few announcement and tie ups in the coming quarter.”
Dhaval Ajmera
opening
“Over the last decade, in this project at Ajmera I-Land we have done sales worth ~Rs.”
Dhaval Ajmera
opening
“We have delivered Ajmera Aeon, Zeon and Treon and now Manhattan is progressing faster and already construction activities have started and very recently we have also launched this project.”
Dhaval Ajmera
opening
“This project is complete in terms of all aspects be it permissions, be it approvals, be it environmental clearances and obviously with all of this the construction is going on in full swing.”
Dhaval Ajmera
opening
“Other projects also where we are, just about to start in Juhu, Mumbai where we had acquired the high-end residential redevelopment project which has the topline of ~Rs.”
Dhaval Ajmera
opening
“We are happy to say that all the tenants of that project has been vacated and the building is already under demolishing stage where we hope to start construction of the same in the next 2 months.”
Dhaval Ajmera
opening
“Also, our commercial project in Bangalore known as Ajmera Nucleus is almost ready which will give us great generation of revenues over the coming quarters because we moved our strategy from rental base to sale model, unlocking its value and bringing up our revenues by Rs.”
Risks & concerns — 9 flagged
The sector has also seen and benefited from the decade low interest rates which obviously over the last few months or the last few weeks, we had seen it increasing and we just hope this momentum continues and the government, I know it is a very difficult task, but if this interest rate continues, obviously it brings big momentum within the minds of the buyer, which actually impacts the overall significant sales in real estate which indirectly or directly contributes to 280 other industries.
— Dhaval Ajmera
Property price rise has been inevitable because of the rising inflationary trends which we see in the raw materials like steel, cement, etc., and we are seeing that there has been a lot of pressure from the input cost, this will affect and have an impact of incremental prices which we will see in the coming quarters for our project because the cost price increasing is inevitable.
— Dhaval Ajmera
So this in fact shows the impact of the brand which has been in this project or it is seen since the long time and showing results.
— Dhaval Ajmera
I have a couple of questions, I just wanted to know about the margins, margins have gone in a lower end this time, so just assuming that inflationary pressure was there, so like, I just wanted to know what are the other reasons that could be there for this and would this be the further play for lower margins or how are this bouncing back from there and is there any strategy that the management is taking for this?
— Ankita Mehta
So that has remained kind of given us some kind of a support, however, the inflationary pressure because we are on the fast track execution of all our projects, be it advanced stage to bring it back to almost at OC stage or the case study like Greenfinity which is a very super-fast track, like 22 storey completion in 14 months.
— Nitin Bavisi
Sir, my question was regarding the sales velocity for first month of the next quarter, if you look at last 4-5 months, especially in Wadala area and will be even in other projects, how do you see the queries and closure of deals, is there some kind of a slowdown that you are witnessing in last 2 months vis-a-vis what it was 4-5 months ago?
— Vinay Khattar
To answer the question, as I said, we are seeing like, if I have to compare any launches I could simply say that the launches, but overall probably this month because of what you call slowdown in 2-3 factors because of the stock purchase also with vacations around, there has been a bit slowdown, not I would expect it to be there usually in the cases, but as compared to probably January, February, yes I would say May would be a little slow.
— Dhaval Ajmera
So Dhaval, given the overall sentiment portion to the market and in residential market, especially once you look at 8-10% hike which is across the broad phenomena, all companies are close to data because of input cost, so our combined impact of sentiment and price hike to your mind, can that be at some degree of pressure over coming couple of quarters and this is more from an industry perspective is what I would request you to answer?
— Vinay Khattar
It would have an impact on the pressure for sure because if you see overall everywhere we have seen price hike happening, not only us, but every developer across India, everyone is forced to increase the price, while none of the developers would want to, but it is the external cycles which are forcing it to be done.
— Dhaval Ajmera
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Q&A — 13 exchanges
Q
Sir, I had couple of questions, starting with, I see there is no change in completion percentage in Bangalore projects, Florenza and Lugaano, can you throw some light on this?
Nitin Bavisi
So Florenza and Lugaano is the projects where we have A, B wing which is under construction and C and D wing which has also just started , and we are contemplating to refinance the entire project through our A, B, C and D wing all put together and they have just moved this project from the revenue model with the landlord arrangement to area sale model, so that is how that particular project is going to see the entire A, B, C, and D wing at the project and start the revenue recognition based on the entire enhanced footprint of the project. That is how the numbers have remained at what it is. So
Q
I have a couple of questions, I just wanted to know about the margins, margins have gone in a lower end this time, so just assuming that inflationary pressure was there, so like, I just wanted to know what are the other reasons that could be there for this and would this be the further play for lower margins or how are this bouncing back from there and is there any strategy that the management is taking for this?
Nitin Bavisi
So firstly, I will give basis the numbers, we have sequentially from Q3 versus Q2 and as well Q4 versus Q3 in FY22, we have the per square feet realization which has gone up ~ 5% and as well ~8% in the last quarter. So that has remained kind of given us some kind of a support, however, the inflationary pressure because we are on the fast track execution of all our projects, be it advanced stage to bring it back to almost at OC stage or the case study like Greenfinity which is a very super-fast track, like 22 storey completion in 14 months. So significant part of the cost and the execution time
Q
Sir, I had few questions, so first one I have on the Manhattan projects, it would be really helpful if you could share some details on Ajmera Manhattan project and would also like to know what are your expectations for the revenue recognition and the sales velocity for this project?
Dhaval Ajmera
As far as Ajmera Manhattan is concerned, this is a residential 3-4 BHK in Wadala which we have started, over at the topline of this, we see in the range of around Rs. 1,400 to Rs. 1,500 crores and the work of the same has already as I said in terms of permissions, approvals, environment out of that are being secured and the work is already started. So we are hopeful to finish the construction of this 3.5 to 4 years, and while we just launched this project about 2-3 weeks ago and there has been a good traction in terms of sales and we hope to see great numbers coming in the coming quarters whic
Q
Dhaval bhai, actually only one question I have, so can you just give the breakup of the cost in the Manhattan project, so how much you expect the construction cost would be in the Manhattan? Per square feet cost I am asking?
Dhaval Ajmera
Per square feet cost only purely construction I have to say because we have the residential area to livable area versus the non-livable area is almost 1:1.5, in terms of podium etc. and all of that. So if I look at these total area of construction or the total area which is ~13 lakh square feet, it will be ~4000 to 4500. On a salable basis, it is ~6000 plus. And if you have to load the approval cost and everything on that done? There are different cost components as I mentioned the sub 10% finance cost, so important components is that being the approval cost which we have paid upfront under th
Q
Since we all have been speaking about Manhattan, I just wanted to understand what kind of sale visibility do you envisage in the coming year from the project because this seems like a larger project in the portfolio and this is officially launched, so just wanted to understand on that?
Dhaval Ajmera
We are looking at, as usually the real estate cycle we have experienced that it seems that there has been launch phase and then there is the sustenance phase and then there is again a relaunch or other jump which will come to take the project ahead. While we are in the launched phase, we are expecting this to have at least 20% to 25% of our sales to happen in the next the launch phase over the next one quarter or something like that. Then it will move onto the sustained phase, but we are seeing this 20-25% jump coming and then probably it will be a sustenance phase for the next 2 years which w
Q
I have just one question, this is regarding your new launches that are coming up over the next couple of years that is where you have projected a revenue of close to around Rs. 4,000 crores, there was an investor earlier like who had asked about the construction and the approval related cost on Manhattan and I think you had roughly guided to around 7,000 to 7,500 on the total area, so since most of your new projects are in Bombay, wanted to get a sense that would this be the rough cost range for the entire portfolio or the new launches like around 7,000- 7,500 including our approval cost on th
Dhaval Ajmera
No, it will be different. So basically if I have to see because every project is in a different area, in case our approval costs are linked to the ready reckoner rate of a particular area or town, but if I have to look at different projects and different areas, this 2,500 is going to salable because if I convert it into carpet it will come to about roughly Rs. 4,000. To answer your question, if I have to say the range, if I look carpet to carpet basis, it will be between 3,000 to 5,000, but obviously it depends if I am in different cities where the ready reckoners rates are higher, it will be
Q
I have two questions, so first if you can give some update about our Kanjurmarg like any future guidance or like from when we can like monetize this plan or anything on a legal front, so that would be my first question?
Dhaval Ajmera
Kanjurmarg is in the beginning process, while we are at it what we need to do, but there are certain government and the judiciary purposes which are not in our hand, but we expect this to get cleared and happening over this financial year and hoping to launch soon, but in my best estimate, it should be this year or probably next year somewhere around. And my second question is any update from the international projects, are we expecting anything in this financial year 2023, any revenues? Yes, we do expect from the UK market as we have been guiding that market is where the sale traction happens
Q
Sir, my first question is on the Bangalore Nucleus project, since you mentioned that you have moved this project from cash flow generating revenue model to an outright sale model, can you share some light on that?
Nitin Bavisi
Basically, this is about 1,27,000 or 1,30,000 square feet area project and which is we have sales potential of about Rs. 100 plus crores which is going to be expected out of this particular sales of Nucleus Commercial project. And my second question is related to your Pune project Market Yard, so you have mentioned that estimated revenue is around Rs. 340 crores, so is it the total revenue of the project or the share of Ajmera? This is the total revenue of the project kind of a thing and we do have the share of 23% into it, so that is how the stake is going to be calculated based on the revenu
Q
We are seeing that commercial projects on the portfolio are increasing, so what is the expected mix between residential and commercial sales in 2 or 3 years down the line?
Dhaval Ajmera
You are right, we are slowly increasing our commercial portfolio, but there is no such thing. But from what we intent to do is that at least rise it to minimum 10 – 15% or at least 20% and going forward to about one third. That is where we intent to make it forward in the coming future once we have all lines coming in. The commercial projects are primarily depending upon the location of the project of the plot and its demand supply analysis, but overall we see this is increasing to about 20% to 30%. What is your take on ESG and have you published any ESG or sustainability report? As I mentione
Q
Sir, my question was regarding the sales velocity for first month of the next quarter, if you look at last 4-5 months, especially in Wadala area and will be even in other projects, how do you see the queries and closure of deals, is there some kind of a slowdown that you are witnessing in last 2 months vis-a-vis what it was 4-5 months ago?
Dhaval Ajmera
To answer the question, as I said, we are seeing like, if I have to compare any launches I could simply say that the launches, but overall probably this month because of what you call slowdown in 2-3 factors because of the stock purchase also with vacations around, there has been a bit slowdown, not I would expect it to be there usually in the cases, but as compared to probably January, February, yes I would say May would be a little slow. But if I have to look earlier months, January-February-March was good, April was also good sustainable, probably we are seeing a dip now in May, but there a
Q
So as we have mentioned in our investor presentation that we have about 18.2 million square feet of land, so out of that how much land do we have in Mumbai specifically if you can share that number, please?
Dhaval Ajmera
So Bombay contributes to about 80-85% of that and there are other areas, but to answer your question, it will be around 80% - 85% of that should be Bombay. And any like further details about the Codename 1 in Mumbai and 2, so what are the locations if you can reveal or give some details about it and when you are planning to launch any quarter or any month if you can share something to? Mumbai Codename 1 and Mumbai Codename 2. So Codename Central Mumbai 1 and 2 are the different locations in Mumbai and we are working towards bringing this project to particular stage of the launch and we should
Q
I am really thankful to all of the participants for putting us a good set of insightful questions and as well your questions will definitely guide us to improvise further and we have promised we will come back with better numbers and better performance as we move forward. Thank you and till then stay safe, stay happy. Thank you.
Management
Q
E-mail: ir@ajmera.com Website: www.ajmera.com
Registered Office
Ajmera Realty & Infra India Ltd ,2nd Floor, Citi Mall, Andheri Link Road Andheri (West), Mumbai – 400053 Maharashtra. Phone : 022 - 6698 4000 CIN No.: L27104MH1985PLC035659
Speaking time
Nitin Bavisi
22
Dhaval Ajmera
19
Moderator
14
Varun
6
Shashank
5
Gaurav Sarda
4
Meet Desai
3
Ankita Mehta
3
Aditya Mehta
3
Jeevan Patwa
3
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Opening remarks
Nitin Bavisi
Thank you ma'am. Good evening everyone. We hope all of you and your loved ones are safe and in good health. I thank you for joining us today on the conference call of Ajmera Realty & Infra India Limited to discuss company's results for the Q4 FY22. We would like to begin the call with brief opening remarks from the management followed by Q&A session. Before we begin, I would like to state that some of the statements in today’s discussion may be forward-looking in nature reflecting our future outlook and they involve certain risks and uncertainties the company may face. The investor presentation based on the financial results adopted by the board has been uploaded on the stock exchange website and can also be downloaded from the website of the company. I would like to now invite our Director, Mr. Dhaval Ajmera to begin the proceedings of this call. Over to Mr. Dhaval.
Dhaval Ajmera
Thank you Mr. Bavisi. Good afternoon everyone. I hope everyone is safe and sound. As we all know that we are here for the Q4 FY22 earnings call, firstly a big thank you and warm welcome to all of you for joining this call. We as Indians have seen a quiet and eventful year this FY22. As resilient we were, we got through this pandemic and while we were just coping up, we came through the hit of this geopolitical situation which is happening all around because of the Russian invasion of Ukraine. Primarily for us as real estate, this has given us probably a hope it is temporarily effect in terms of the supply chain disruptions, the crude oil prices which has gone up and obviously there has been a direct and indirect impact on the economies across the world. While the COVID was responsible I would say for people to realize the importance of home and definitely its preference towards real estate to investors, buyers and everybody in India has definitely moved ahead and we can see that, over
Nitin Bavisi
Thank you Mr. Dhaval. I would like to now take you through the operational and financial performance for the financial year and as well as the fourth quarter ending March 22. I will begin with the operational performance first. We sold 344 units, sale value of around Rs. 431 crores, admeasuring 3,45,000 plus square feet for the year ended 31st March 22. We collected Rs. 394 crores during this particular year and the average realization per square feet remained Rs. 12,400 plus per square feet. In terms of our performance for the quarter ending March quarter, which is Q4 FY22, we sold 128 units with a sale value of Rs. 122 crores which is an increase of 12% on QoQ basis. The volume of area sold is 90,000 plus square feet which is an improvement of 4% over the previous quarter. Our collection remained stable during this particular quarter as well, Rs. 93 crores which is an increase of 11% on QoQ basis. Average realization increased Rs. 13,400 plus per square feet improving about 8% on a s
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