GANESHHOUNSEQ1 FY2023JULY 21, 2022

GANESH HOUSING LIMITED

4,435words
54turns
6analyst exchanges
4executives
Management on call
Rajat Gupta
GO INDIA ADVISORS
Rajendra Shah
CHIEF FINANCIAL OFFICER - GANESH HOUSING CORPORATION LIMITED
Neeraj Kalawatia
VICE PRESIDENT FINANCE - GANESH HOUSING CORPORATION LIMITED
Ravi
CORPORATE AND FINANCIAL ADVISORS - GANESH HOUSING CORPORATION LIMITED
Key numbers — 36 extracted
90 bps
dst the ongoing macroeconomic challenges. Quarter one of financial year 2022-2023 so a cumulative 90 bps of repo rate hike by RBI, we decrease the home purchase affordability however Ahmedabad market
Rs.99 million
p, which kept the housing demand intact. On the operational front, we have registered a sale of Rs.99 million. We have not launched any new projects this quarter and the last two launch projects have not yet
0.09 million
ave no inventory in ongoing projects also ending June 2022. We have unsold completed inventory of 0.09 million square feet, which we value at Rs.450 million. In Malabar 3 project, we have received RERA approv
Rs.450 million
ding June 2022. We have unsold completed inventory of 0.09 million square feet, which we value at Rs.450 million. In Malabar 3 project, we have received RERA approval and permission to commence construction i
80%
21. During 16 odd months of actual construction post-these approvals, we have managed to complete 80% of the construction in this project across six towers. In Malabar Exotica Project,
100%
ogressing ahead of schedule. In both these projects Malabar 3 and Malabar Exotica, we have booked 100% units in both these projects. We are using precast technology of construction, which is cost effe
Rs.427 million
touch upon our financial performance during the quarter and year gone by. Our revenue came in at Rs.427 million for quarter one of financial year 2022-2023 versus Rs.793 million in same quarter last year. Our
Rs.793 million
ne by. Our revenue came in at Rs.427 million for quarter one of financial year 2022-2023 versus Rs.793 million in same quarter last year. Our EBITDA grew at 20% year-on-year and came in at Rs.251 million for
20%
e of financial year 2022-2023 versus Rs.793 million in same quarter last year. Our EBITDA grew at 20% year-on-year and came in at Rs.251 million for quarter one of financial year 2022-2023 versus Rs.
Rs.251 million
rsus Rs.793 million in same quarter last year. Our EBITDA grew at 20% year-on-year and came in at Rs.251 million for quarter one of financial year 2022-2023 versus Rs.210 million in quarter one of financial yea
Rs.210 million
20% year-on-year and came in at Rs.251 million for quarter one of financial year 2022-2023 versus Rs.210 million in quarter one of financial year 2021-2022. Led by operational efficiencies, our margins have imp
58.5%
ncial year 2021-2022. Led by operational efficiencies, our margins have improved significantly at 58.5% for quarter one of financial year 2022-2023 versus 26.5% for period ending quarter one of finan
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Guidance — 20 items
Rajendra Shah
opening
“In Malabar 3 project, we have received RERA approval and permission to commence construction in February 2021.”
Rajendra Shah
opening
“During 16 odd months of actual construction post-these approvals, we have managed to complete 80% of the construction in this project across six towers.”
Rajendra Shah
opening
“In Malabar Exotica Project, we have received RERA approval and permission to commence construction in July-August 2021.”
Rajendra Shah
opening
“We expect to complete this project ahead of schedule.”
Rajendra Shah
opening
“Ongoing and upcoming projects in key location of Ahmedabad provides us with great comfort and visibility of cash flows, which keeps us on track to deleverage further, we have been diligently improving and delivering our balance sheet in over the past few years.”
Rajendra Shah
opening
“Coming to our future growth prospects and guidance, the sales of houses in Ahmedabad witnessed a strong recovery registering a 95% growth in the first half of calendar year 2022.”
Rajendra Shah
opening
“As mentioned previously, we continue to have a strong and robust project pipeline of four residential and two commercial projects.”
Rajendra Shah
opening
“These projects are being launched in a phased manner with two projects being launched in over next 6 to 12 months, three projects being launched in next over 12 to 24 months and one project being launched in next 24 to 36 months.”
Rajendra Shah
opening
“We continue to target developing 8 million square feet of infrastructure and special projects like SEZ township etc., in next four years with total sales value of Rs.30000 million.”
Sourabh Gilda
qa
“Is there any trigger that you are waiting for to launch the project or any other statutory reason behind that?”
Risks & concerns — 2 flagged
Largely it will be the IT or ITES players, but what kind of cliental which kind of corporate will be coming that will be difficult to say at this point of time.
— Rajendra Shah
Yes, names are little difficult to say at this point in time but we do believe all this will happen because with the kind of infrastructure that is being built up there by Ganesh Housing, it has to attract all the players who are otherwise they are in small, small pockets at different places all over Ahmedabad.
— Ravi
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Q&A — 6 exchanges
Q
Sir just wanted to check like we do not have any inventory in Malabar County III right.
Rajendra Shah
Yes, everything is sold. Any reason why we are going slow on launching the Exotica, first like you mentioned that the launch will happen in next 6 to 12 months. Is there any trigger that you are waiting for to launch the project or any other statutory reason behind that? See on the existing project both Malabar County III and Malabar Exotica, they are running on a fast scale construction that is a one target area where we are pushing our construction completion to preponed. Second is on the planning side of the two projects. There has been some planning changes in the ongoing project, which is
Q
I wanted to ask the first question on the revenue; it has declined this quarter, but what would be the revenue guidance for this full year and what are the projects from which sales will come given that we almost has a very minimal inventory?
Rajendra Shah
In terms of the revenue piece, see on a year-to-year basis, the revenue is looking on the lower side because there were a sizable inventory was there from the completed projects during last year, which contributed to the sales and corresponding year cost was also allocated at that point of time, but as compared to that year and now in the current year this quarter, on the revenue say it might be the season on compared to the lower but on the EBITDA side and PAT side, we have improved our numbers as compared to the last year because of that reason only. As far as the guidance is concerned, we n
Q
Thank you Sir. Just wanted to understand the debt trajectory of the company going forward because your debt is down by 85%, 90% in the last few years and now you are going to have a new launch cycle, so what do you think this time the debt that trajectory will be and how it will differ or how it will be similar to the last time.
Neeraj Kalawatia
A few aspects on this, one is that their debt had been very high a couple of years back and there has been a conscious call to bring it down quarter-on-quarter year-on-year and the company has achieved that extremely well in the last quarter having come down to a mere 71, which is only 10% of the peak debt less than 10% of the peak that they had ever. The debt yes as the new projects would come in and there are certain plans, which in the SEZ and all wherein there could be a debt, which can come in but it does not appear that it will ever go to those levels. There is a conscious call to ensure
Q
Thank you for taking my question. I wanted to know about the strategy on commercial development and are we looking to develop a portfolio of rental properties?
Neeraj Kalawatia
We are targeted this 8 billion of the portfolios, which we will be building over next five years there is a sizeable portion which will be coming from the commercial side also largely this portion will be in our SEZ portfolio, which will command a good rental piece also. The bigger advantage with us in terms of SEZ is that this particular project will be in the heart of the city. On a competitive side also, there will be nothing who can lead us in terms of competition. How was the demand from IT sector, are we seeing any inquiries which are related to them? With the development in the gift cit
Q
Thank you so much for taking up my question. I basically wanted to know your view on real estate industry as a whole like now the new challenges are coming up like rising interest rates and many other challenges are there, so I just want to know your views like about for next three to five years on the real estate industry.
Rajendra Shah
The trend is now completely bullish. If you see post this first COVID wave, the demand is on the upside because significantly in Ahmedabad market if you talk about the city specific, the launches and the sales have doubled from the pre-COVID era to the post-COVID era and in terms of the absorption also is the sizeable things are increasing. Now in terms of the price rise all these things are happening, like we see the construction cost and something are getting increased but they are being absorbed by the market also, yes, recently if you could go through one of the top reality research firms,
Q
Participants, I am Rajendra Shah on behalf of Ganesh Housing Corporation Limited I thank you all for showing interest and participating in conference call. See you again in next quarter. Thank you so much.
Management
Speaking time
Rajendra Shah
14
Moderator
8
Neeraj Kalawatia
7
Amresh Kumar
6
Sourabh Gilda
5
Ritu Panag
4
Naman Bhansali
3
Seema Bajaj
3
Rajat Gupta
2
Ravi
2
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Opening remarks
Rajat Gupta
Thank you Michelle. Good afternoon, everybody, and welcome to Ganesh Housing Corporation Limited Earnings Call to discuss the Q1 FY2023 results. We have on the call with us today, Mr. Rajendra Shah, Chief Financial Officer; Mr. Neeraj Kalawatia, Vice President, Finance; and Mr. Ravi, Corporate and Financial Advisor. We must remind you that the discussion on today’s call may include certain forward- looking statements and must be therefore viewed in conjunction with the risks that the company faces. We now request Mr. Rajendra Shah to take us through the company’s business outlook and financial highlights, subsequent to which we will open the flow for Q&A. Thank you and over to you, Sir.
Rajendra Shah
Thank you Rajat. Good afternoon, ladies, and gentlemen. We thank you all for joining us on this call today to discuss our Q1 financial year 2022-2023 results. We are happy to announce another quarter of robust performance amidst the ongoing macroeconomic challenges. Quarter one of financial year 2022-2023 so a cumulative 90 bps of repo rate hike by RBI, we decrease the home purchase affordability however Ahmedabad market remains largely affordable with the positive change in sentiment towards home ownership, which kept the housing demand intact. On the operational front, we have registered a sale of Rs.99 million. We have not launched any new projects this quarter and the last two launch projects have not yet been completed. As a result, we could not book any additional sales on these projects as per accounting standards. Hence our sales have been slightly lower than Q 1 of financial year 2021-2022. As of June 2022, we have no inventory in ongoing projects also ending June 2022. We hav
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