AJMERANSEQ1 FY23August 16, 2022

Ajmera Realty & Infra India Limited

7,558words

118turns

12analyst exchanges

1executives

Download PDF ↗AJMERA stock page →

Management on call

Dhaval Ajmera to begin the proceedings of this call. Over to Mr. Ajmera. Dhaval Ajmera

Thank you Mr. Bavisi. Good afternoon, everyone. Hope everyone is safe and sound. On behalf

Key numbers — 40 extracted

rs,

rformances as compared to other economies. The synergy of first‐time homebuyers, pent‐up demand, preferences for larger homes and second homes, easing of mobility restrictions

Rs. 1,400

00 square feet of carpet area project, which is of 2 towers, with an overall sales value of about Rs. 1,400 to 1,500 crores. With this we have seen that the work also has started in a very robust manner, w

1,500 crore

t of carpet area project, which is of 2 towers, with an overall sales value of about Rs. 1,400 to 1,500 crores. With this we have seen that the work also has started in a very robust manner, where we have

25%

n work of one of the towers is almost done as we speak today. It is also significant to know that 25% of the inventory is already sold as of June 2022.

60%

age project Greenfinity which is self‐funded, and Sikova our boutique commercial office has sold ~60% off its inventory. Both these projects are set to complete in FY23. Our residential development C

100%

Codename Ghatkopar where the land is now completely acquired from Tata Communications through our 100% subsidiary, and the plan is to construct a nice residential tower with a potential of about 95,00

Rs. 250 crore

dential tower with a potential of about 95,000 square feet which will generate a revenue of about Rs. 250 crores in the next three years. Having said that,

Rs. 400 crore

now in the process of launching to sell Ghatkopar and Juhu, which is expected to generate about Rs. 400 crores of topline. So, this shows we are moving in the right track and as we have discussed earlier, we

11.8 million

ext two years. In this we should see an addition from whatever we are launching, we have another ~11.8 million square feet of land bank carpet area, FSI available from our existing land bank. We are als

ghlights where I would like to thank all our stakeholders at Ajmera Realty to help us achieve our 5x growth plan, we are moving towards that and with our recent launches and the new upcoming ones, w

261%

We achieved sales value of Rs. 400 crores, recording an exponential growth of 261% on a YoY basis, and about 2.3x on a QoQ basis, mainly on account of Manhattan presales which is a

2.3x

sales value of Rs. 400 crores, recording an exponential growth of 261% on a YoY basis, and about 2.3x on a QoQ basis, mainly on account of Manhattan presales which is about Rs. 354 crores in the firs

Advertisement

Guidance — 20 items

Dhaval Ajmera

opening

“Firstly, and foremost, our marquee project Ajmera Manhattan in Wadala in the suburbs of Mumbai, we had a very successful launch, which is our main project.”

Dhaval Ajmera

opening

“We are very proud that today Ajmera Manhattan brings a complete; when we started off this name, we made up a theme of New York‐based lifestyle, and New York‐based culture which we wanted to bring to the city of Mumbai, and that we successfully have done and we have seen a great response coming for this kind of a project.”

Dhaval Ajmera

opening

“Manhattan is a ~5,00,000 square feet of carpet area project, which is of 2 towers, with an overall sales value of about Rs.”

Dhaval Ajmera

opening

“Our mid‐stage project Greenfinity which is self‐funded, and Sikova our boutique commercial office has sold ~60% off its inventory.”

Nitin Bavisi

opening

“This strong performance was a result of successful project launches and good traction in our existing project on the sales and execution side.”

Nitin Bavisi

opening

“55 crores includes the first‐time revenue recognized under the POCM method for the part sales value of completion visibility on account of the Greenfinity Project.”

Nitin Bavisi

opening

“All our advanced state projects have been deleveraged with no outstanding project debt.”

Nitin Bavisi

opening

“1500 crores I refer to Manhattan Project, bringing the total revenue potential of about Rs.”

Nitin Bavisi

“55 crores of the top line and that too with a one time or the first‐time recognition of about seven crore revenue recognized for the sale value of the Greenfinity project which is having now completion visibility so that one is also now recognized.”

Nitin Bavisi

“Overall the inflationary pressure is going to definitely put us or for that matter any industry player on the margin pressure side, but the kind of sales which we have generated and the number and nature of projects, the composition of the price point of the projects in which we are launching and the kind of Manhattan Project say as an example, where we have sold about 25% of the inventory.”

Risks & concerns — 5 flagged

We are experiencing since last quarter, tremendous geopolitical scenarios happening and a lot of changes in terms of the US economic slowdown, Europe having some issues, and Russia Ukraine conflict.

— Dhaval Ajmera

The economies of the world are facing tough challenges like supply chain disruption, logistic bottlenecks, and upward pressure on commodity prices.

— Dhaval Ajmera

Overall the inflationary pressure is going to definitely put us or for that matter any industry player on the margin pressure side, but the kind of sales which we have generated and the number and nature of projects, the composition of the price point of the projects in which we are launching and the kind of Manhattan Project say as an example, where we have sold about 25% of the inventory.

— Nitin Bavisi

Yeah, so the last couple of dates, the final petition was to come on the board and was to be taken up for the final NCLT approval, matter could not come on the board because of the heavy pressure on the queue.

— Nitin Bavisi

So, we need to be mindful of the overall cost side also, because overall we are working on the inflationary pressure.

— Nitin Bavisi

Advertisement

Q&A — 12 exchanges

Sir I had a couple of questions. So, my first question was on the total revenue it has significantly declined both as compared to the quarter as well as YoY. Similarly the EBITDA as well. Is there a specific reason for this?

Nitin Bavisi

Let me tell you this particular quarter has the contribution from two ongoing projects, Sikova and Greenfinity which are at the advanced stage of completion and these are the two projects which have contributed, because as you know that all the advanced stage projects of the Aeon, Zeon, and Treon recognized significantly on completion in the last financial year, and we have further launches and which is where the sales book has been generated, those revenue is going to be accounted as well as for the threshold limit achieved in the coming quarters. So, Sikova and Greenfinity projects have cont

Yes, so you are saying that Greenfinity and Sikova have actually contributed to this particular remaining. So, can we assume that these two projects are having EBITDA of 35%?

Nitin Bavisi

No doubt Greenfinity project, although it is a self‐funded, however, it is an affordable product, so it will have the EBITDA or the project level margin of about 20% kind of thing and as well as the Sikova being the boutique office space kind of thing. So, both the projects will have a margin of around 20%. But this time we have given 30% EBITDA. So, that is what I clarified this time, the first time revenue recognition has happened, which is about Rs. 7 crores in the overall Rs. 55 crores topline from the sales value on the Greenfinity project, and that has really contributed to the top line,

Can you please brief on your Bahrain and London projects as to how they are progressing in terms of sales and what would be the value that is expected to be realized in the near future?

Dhaval Ajmera

So, as we have said earlier Bahrain project has already been sold to someone else and we are no more developing the project. As a part of our value consideration and the floor land consideration, we are going to get the area against it, which is due to us and we are getting about 10,000 odd square meters of area from that which is in today's market terms which will be roughly about Rs. 200 plus crores, which we should be expecting to get. The project currently over there is under RCC completion which is that the superstructure almost getting completed and we shoul

Thanks for the opportunity, I have some questions. So, if you can just share some details related to the Pantnagar land acquisition and when we can see the projects or any work to get commenced?

Dhaval Ajmera

So, Pantnagar as we said is a land which we have acquired from Tata Communications. The land was leased by MHADA. It is the MHADA‐owned land and have taken the rights of Tata communications and now we are under development. We have already applied as we speak, we are already on the verge of just applying for permissions. Hopefully, in the next three to four months’ time, we should be able to get those permissions and we should start construction on the same immediately. So, our target is by year‐end but maybe some one or two months here and there but hopefully, by

Just one thing you have written an annual report regarding 5x growth is it on the few things have been mentioned Rs. 4,300 crores accrue the revenue of Rs. 4,300 crores. Is it the pre‐sales of Rs. 4,300 crores in the next two years or the revenue which will be recognized will be Rs. 4,300 crores?

Nitin Bavisi

Rs. 4,300 crores is the summation of the balance revenue from the existing project and as well as the sales value of the to‐be‐launched and fully to‐be sold projects kind of a thing. So, this Rs. 4,300 crores is the revenue number. Is the revenue that will be booked in the P&L account or the presale numbers? As I clarified it is Rs. 4,300 crores which is going to be the revenue number going to be booked into the P&L account. Yes, and how many square feet will be selling in the next two years, sir? So, as you have seen our launch pipeline like we have the existing projects’ inventory available,

Thank you for the opportunity. Sir, I had one macro question. So, as the industry is looking the inventory is coming low. So, how this will affect the industry, I just wanted a take from you. So as the inventory is coming down sir overall do you see that there will be new launches and the realizations also will go up because the demand is, still intact?

Dhaval Ajmera

Well, my take is that real estate has a good steady demand at least what I see in the city of Mumbai. With the new launches or old launches, which were there, a lot of inventory has almost been sold out, ready stock has almost been wiped out from the market. Going forward with last year, there was a good amount of premiums which have been paid by developers and a good number of launches are expected or being done as we did our Manhattan Project and obviously now, we are doing our launch our Juhu project and that's how we are seeing a lot of other developers also launching a good

Good afternoon. I just wanted to know whether there is any clarity on the location of your Central Mumbai project where you say it is around 4,89,000 square feet launched probably March 2023 . I think the brochure said. So, which is the location that is there?

Dhaval Ajmera

Well I would love to say, but I just do not want to reveal right now. When the right time is there, we will be definitely revealing. We just had in the last stages of our permissions and approvals and finalization of documents. So, let us complete that, and then we will announce it. Just in central Mumbai is all I can reveal right now but go beyond that will be once we sign on the dotted lines. Okay, so central Mumbai would be what Ghatkopar that area. That entire central part of Mumbai, starting from probably Dadar to going all the way to Mulund. Yeah, that is one thing that I

Thank you for the opportunity, sir. Sir in the presentation it is mentioned that we have 4 launches in the next two years. So, would you be able to give details of the same in terms of location, size, or timelines?

Nitin Bavisi

So, we have mentioned the sizes of the projects and as well as the code name, and the location Ghatkopar and Juhu, and as we speak, we have already discussed at length about the Juhu, its progress, we received the CC that we applied for RERA and that particular launch is around the corner as we complete this regulatory process, and so is the case with Ghatkopar, we have completed the acquisition from Tata Communication as we speak and alongside we have already started our work on the plans and other regulatory aspects about the approvals. So, in terms of the other two projects that

Are we looking for any private equity in the company or any of its SPVs?

Nitin Bavisi

Yes, we are mindful that you know what private equity players and the deals can make overall credentials about our product portfolio. However, we are as well you know, playing a balancing act on our available cost of debt, because as you know that the repo rate and the overall cost of debt are also increasing. So, we need to be mindful of the overall cost side also, because overall we are working on the inflationary pressure. So, we are playing balance on the credentials of the private equity and as well on the cost side. So, we are taking a very judicious business case and acco

Yeah, just one add on that demerger property that we are planning. Is that, are you planning a purely residential or it will be a purely commercial business center sort of thing?

Dhaval Ajmera

It is going to be a mixed bag. I mean, as of now, we have looked at ~3 million square feet of commercial coming in, but we will still explore it as in how once is done, but right now it is under the planning of 3 million square feet of commercial. Okay, but as being at Wadala is not the residential probably a better sort? See we already have a good amount of supply in residential over there. So, for us as a layout, and when the land is such big, I think it is a mixed‐use development as contains or commands more demand as compared to just residential or just commercial. So, we are trying to mak

I really thank every participant and their questions and suggestions and insightful questions which will definitely help us and motivate us for putting in better performance and coming back with a very good set of numbers. Until then, stay safe and stay happy. Thank you.

Management

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

Dhaval Ajmera

Nitin Bavisi

Moderator

Pankaj Tanna

Vipin Taneja

Raj Shah

Jeevan

Rahul Talwar

Ritesh Kamdar

Mihir Desai

Advertisement

Opening remarks

Nitin Bavisi

Thank you, gentlemen. Good afternoon, everyone. Thank you for joining us for Ajmera Realty & Infra India Limited First Quarter FY23 conference call. I hope all of you, your families, and your loved ones are safe and in good health. We will begin the call with opening remarks on business and financial highlights from the management followed by the 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 and the press release based on the financial results adopted by the board have 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. Ajmera.

Dhaval Ajmera

Thank you Mr. Bavisi. Good afternoon, everyone. Hope everyone is safe and sound. On behalf of Ajmera Realty, I would like to welcome you to this earnings call for the first quarter of FY23. I will be discussing the highlights of this quarter, followed by financial performance highlights from our CFO and then we look forward to taking up questions and answers and any suggestions from your end. So, let me begin by giving you the real estate outlook, which we have seen over the last quarter. We are experiencing since last quarter, tremendous geopolitical scenarios happening and a lot of changes in terms of the US economic slowdown, Europe having some issues, and Russia Ukraine conflict. Having said that, what we observed and what we saw was that real estate in India has seen a resilient performance, and it has always been up the ante, even while all these uncertainties were going on. The economies of the world are facing tough challenges like supply

Nitin Bavisi

Thank you Mr. Ajmera. I will take you through the operational and financial performance for the first quarter of FY23. Ajmera Realty opened the financial year with a very high performance and expects to further accelerate as we move on. We achieved sales value of Rs. 400 crores, recording an exponential growth of 261% on a YoY basis, and about 2.3x on a QoQ basis, mainly on account of Manhattan presales which is about Rs. 354 crores in the first quarter of launch. It is significant to note that it is comparable to the entire annual sales of FY22 which is about Rs. 431 crores. We witnessed impressive growth in sales volume and collection too. Sales volume is about 1,57,000 square feet, which is 155% on a YoY basis and 130% on a QoQ basis. We recorded collections at about Rs. 210 crores, which is an impressive growth of 93% on YoY and 126% on a QoQ basis. The realization has improved to Rs. 25,411 per carpet area, which showcases an upward trend due to the high velocity of Mumbai projec

Advertisement

← All transcripts AJMERA stock page →

Ajmera Realty & Infra India Limited

Market Movers