MAHLIFENSEQ1 FY23August 1, 2022

Mahindra Lifespace Developers Limited

7,268words
80turns
8analyst exchanges
4executives
Management on call
Arvind Subramanian
MD & CEO, MAHINDRA LIFESPACE DEVELOPERS LIMITED
Vimal Agarwal
CFO, MAHINDRA LIFESPACE DEVELOPERS LIMITED
Sumit Kasat
HEAD (INVESTOR RELATIONS)
Rabindra Basu
SR MANAGER (INVESTOR
Key numbers — 40 extracted
rs,
and Mahindra Happiness as well as from our IC & IC business, which is Mahindra World City Developers, Mahindra World City Jaipur and Mahindra Integrated Park, none of them are consolidated on a line-b
Rs. 602 crore
r performance in the first quarter of the year. On the Residential business, we achieved sales of Rs. 602 crores versus Rs. 145 crores in the same quarter last year which is over a 3-fold increase. Sequential
Rs. 145 crore
irst quarter of the year. On the Residential business, we achieved sales of Rs. 602 crores versus Rs. 145 crores in the same quarter last year which is over a 3-fold increase. Sequential quarter wise also, we
85%
r last year which is over a 3-fold increase. Sequential quarter wise also, we have grown by about 85%. That as all of you is contrary to what the typical trends in this market are Q4 tends to be stro
50%
work Biophilia-inspired homes, again has received great response, 250 units launched, more than 50% were sold within a month. We expect to launch two new phases of existing projects in Mahindra Wor
2.1 million
we announced acquisition of 11.5 acres in Pimpri. This has a total development potential of about 2.1 million square feet and a gross development value of about Rs. 1,700 crores. We are seeing a co
Rs. 1,700 crore
pment potential of about 2.1 million square feet and a gross development value of about Rs. 1,700 crores. We are seeing a continued strong pipeline in BD roughly Rs. 5,000 crores worth deals in various
Rs. 5,000 crore
value of about Rs. 1,700 crores. We are seeing a continued strong pipeline in BD roughly Rs. 5,000 crores worth deals in various stages of the pipeline. Interesting spaces that have opened up significan
Rs. 271 crore
will make our first foray into society redevelopment. Collections has also been extremely strong, Rs. 271 crores of collection during the quarter continues to be an area where our internal cash accruals are ex
Rs. 297 crore
the IC & IC business continues to be an area of great momentum. We had ended last year with about Rs. 297 crores of leasing. We have started this year in the first quarter itself with Rs. 118 crores of industr
Rs. 118 crore
with about Rs. 297 crores of leasing. We have started this year in the first quarter itself with Rs. 118 crores of industrial lending. This is a business as I have mentioned in the past where we have strong p
Rs. 117.3 crore
will move onto the financial performance for the quarter. The consolidated total income stood at Rs. 117.3 crores as against Rs. 154.2 crores in Q1 FY22. Consolidated EBITDA including other income, a share of p
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Guidance — 20 items
Arvind Subramanian
opening
“Over the next several months, we expect to launch quite a few new phases as well as new projects.”
Arvind Subramanian
opening
“We expect to launch two new phases of existing projects in Mahindra World City Chennai in the coming months and are also looking to launch the larger Pimpri land which we acquired in April as well as the Kandivali project in the second half of this year.”
Arvind Subramanian
opening
“This is a business as I have mentioned in the past where we have strong powered visibility given the long sale cycles and we are quite confident and hopeful that this year will be very strong year for the IC & IC business.”
Parikshit Kandpal
qa
“Congratulations on an outstanding performance, I really don’t have many questions, you delivered on all the accounts, but just if I annualize the current quarter momentum on pre-sales and the leasing, it seems to be too ahead of your FY25 guidance of Rs.”
Parikshit Kandpal
qa
“Are you upgrading your guidance now, are you preponding it, so how are you looking at this number, these two numbers?”
Parikshit Kandpal
qa
“We have two major launches coming up, one in Pune in Kandivali in the second half, so all possibility looks like it is going to be a record yet, so is it like we are still waiting for more clarity on this to fall on this timeline, then you will increase your guidance, I am not able to understand?”
Parikshit Kandpal
qa
“5,000 crores is what looks like, so it would be pretty much there in the last quarter also, so thing is that nothing has got target here, so if you can give some sense, little more granularity here if you can give a breakup of MMR Bengaluru and Pune and the probability wise, if you can say are we like really high conversion could happen here like say 60-70% because last time you did mention 50% of it can get converted, so if you are seeing the probability increasing here on the conversion side?”
Arvind Subramanian
qa
“1,000 crores that are at an advanced stages, hope for it to close them towards the end of this quarter or in the next quarter.”
Parikshit Kandpal
qa
“And the balance 4000 are still like high probability conversion kind of target, so which can be….”
Vimal Agarwal
qa
“30 crores on the IC side to acquire some of the smaller land parcel this spend now, so full year visibility is concerned, I will request to stay with the guidance which Arvind mentioned in terms of visibility of land transaction.”
Risks & concerns — 3 flagged
It continues to be a challenge while there is suddenly a softening in steel price, etc., but it is not to be extent where we can feel that we are out of woods yet so cost continuous to be strong area of focus for us.
— Arvind Subramanian
My first question is on launches, we have obviously spoken about you’ve partly uncertain in last couple of your questions, but if you can get exact clarity on what sort of launches can come this quarter even 3 months plus, minuses, it is okay, but what are the near-term launches that we are looking at?
— Pritesh Sheth
Yes, those are constant calculations and scenarios that we keep creating and playing with, you are absolutely right, it is very hard to be deterministic in an uncertain cost as well as price environment so we do our classical sensitivities and scenarios to understand what elbow room we have.
— Arvind Subramanian
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Q&A — 8 exchanges
Q
Congratulations on an outstanding performance, I really don’t have many questions, you delivered on all the accounts, but just if I annualize the current quarter momentum on pre-sales and the leasing, it seems to be too ahead of your FY25 guidance of Rs. 2,500 crores pre-sales and Rs. 500 crores of leasing, so where do we go from here? Are you upgrading your guidance now, are you preponding it, so how are you looking at this number, these two numbers?
Arvind Subramanian
Parikshit, I fully expected you to annualize one quarter. It has been a great quarter. We are extremely delighted with kind of response we got with. Let us not get ahead of ourselves. As I mentioned, a lot of that two new launches which we did, so the key focus is to pay that balance in the system where we bring enough new opportunities, continue to drive sustenance sales that their entire balance in the system is very important. We are still at early changes of that journey, so need to fill in the top of that fund. We have two major launches coming up, one in Pune in Kandivali in the second h
Q
In the first quarter, quarter 1 we could spend roughly about Rs. 40 crores on the _15.32 Resi side and another Rs. 30 crores on the IC side to acquire some of the smaller land parcel this spend now, so full year visibility is concerned, I will request to stay with the guidance which Arvind mentioned in terms of visibility of land transaction. The nature of those transactions is a kind of transactions will happen whether it is JV or any other JDA or revenue share that is something which will emerge and based on cash outflow we get.
Arvind Subramanian
Sorry for the technical glitch. Adhidev, you were asking about funding of land transaction, so. Adhidev Chattopadhyay: Rs. 40 or Rs. 240 crores just before you proceed for this quarter, I couldn’t get that? 240. So, very comfortable with going forward as well, so as we had said we have done Rs. 1,700 crores of B2B accretion in the first quarter even if we were to do a similar value in the entire rest of the years. It would mean another similar amount of Rs. 240 crores, even that Kandivali land there we purchased as you are aware is the staggered payment structure, so from a cash funding perspe
Q
Many congratulations for a great set of performance. My first question is on launches, we have obviously spoken about you’ve partly uncertain in last couple of your questions, but if you can get exact clarity on what sort of launches can come this quarter even 3 months plus, minuses, it is okay, but what are the near-term launches that we are looking at?
Arvind Subramanian
In Chennai, we are looking at launching two new phases in the next 2-3 months. We launched one earlier this month which was in Aqualily, we are launching the next phase of Lakewoods and the next phase of the balance of Happinest MWCC in the next 2-3 months which is sequencing on it out so that we don’t do all three together. Those will be the eminent branches. And given how Kanakpura this one been, are we looking at the second phase this year itself because we are almost like 75% sold out in that, so we will be launching that another phase this year or probably we will go slow and launch it ne
Q
Congratulations on very good set of numbers this quarter. Sir, I think I mean if you could share your thoughts on the recently proposed bill, DESH which would come to replace SEZ how do you see it impacting our IC & IC vertical especially Jaipur SEZ because as far as I understand in the DTA part won't see any material damage essentially because you don’t get any tax benefits, but the SEZ part, would you be required enough and if you requires go for DESH get that re-notified or you will get automatically re-notified and come under the new bill, any initial thoughts, I understand it is still ear
Arvind Subramanian
I feel glad you picked up DESH, I think it can be a significant upside for us in Jaipur given we have a large SEZ there and SEZ demand has been muted over the last few years as some of those benefits have subsided. so I think DESH offers a wonderful window of opportunities to revitalize the SEZ area. The rules are still not clear, the draft bill was out for review, but the rules were still being framed when we last checked, so unclear whether existing SEZ automatically migrate to DESH or whether it needs to be re-registered or re-notified in some form, but broadly what it allows us to do is as
Q
Congratulations on very strong quarters, so first question on the launching you said 75% got sold in this quarter and that sounds quite high, so if you can just go a little more in detail as to whether that was by design or we ended up selling more because the demand was so good, just wanted to get some more color on that and is that sort of the rhythm you want to be on going forward?
Arvind Subramanian
So, Rajesh, just to clarify, I think the point being made was 75% of our sales in the quarter, out of this Rs. 600 crores, roughly 75% was contributed by the new launches and primarily Eden and Luminare and Tathawade. Tathawade has a smaller value in the overall scheme of things, but yes in fact in Eden, we have sold more than 75% of the inventory and it is by design. We would like at every launch to sell maximize the sales given our focus on cash flow and IRR much more than on accounting profit. It does very well for us if we sell strongly a launch. Of course, that is subject to getting the c
Q
Congratulations, great set of results after a long time, it is a positive surprise, really appreciate the numbers which have come. My first question is on the Jaipur SEZ or the lease area which is happening, you see pretty means let us say a few years, traction was more generally on the Chennai side and Jaipur was slower, now you have seen a significant improvement on the Jaipur side, but Chennai is slightly lower. What leads to a faster absorption in a particular market and will it be also let us say the newer launches which will be, let us say, Ahmedabad or Pune and new things which will hap
Arvind Subramanian
Yes, many factors go into that, I think first and foremost is the team on the ground, so I will give a lot of credit to Raja Ram and his team, Manoj who leads the business development in Jaipur, they have really put on the pedal and the result is strong trajectory of leasing in Jaipur, but yes, there is external factors as well state quality, how attractive is the state for investment, what kind of industries are they quoting and is there a momentum in that industry, for example, right now we are seeing lot of enquires in renewables and EV electronics so kind of spaces, so there is a combinati
Q
Team, congratulation on the numbers, we are really happy to see this thought progression on the residential side, I have one small question, most of the questions are already answered, so this is one small question on the origin of Chennai part, I see it has been missing our sales for the past one whole year, financial year 22 and the first quarter 23, so any strategic reason as to why are we not aggressive on the IC side in Chennai, it is going forward we are close to 300 acres in this 46.01?
Arvind Subramanian
Shaleen great question and your observation is absolutely right and I will only answer with watch this phase, as I mentioned pipeline is building up nicely in Chennai, we should be able to show some significant change in trajectory there in the next 2 quarters. Secondly on the Eden side, the project, the whole idea seem extremely good and going forward, are we aggressive on this side, do we plan to launch more of Eden around that area in Bangalore may be MMR, Pune, etc.? Yes, if you are referring net-zero as a concept, yes, as I mentioned we are committed by 2030 that all our projects will be
Q
Thank you Jacob. Thank you to all of you for participating in the call. As we discussed, we had a very strong quarter, set up us extremely well for the year. Always when your first quarter is good, you walk forward with a lot of confidence. On the residential side, we are seeing good pipeline of both land acquisition as well as launches of land that has already been acquired and on the industrial side, we do expect this to be an extremely strong year and matching our bettering the performance with the previous year. So, fingers crossed with your good wishes and blessings, looking forward to co
Management
Speaking time
Arvind Subramanian
40
Moderator
10
Pritesh Sheth
7
Parikshit Kandpal
6
Prem Khurana
5
VP Rajesh
4
Himanshu Upadhyay
4
Vimal Agarwal
2
Shaleen Seth
2
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Opening remarks
Arvind Subramanian
Thank you Jacob. Good morning and welcome to all of you to our Q1 FY23 Earnings Call. As you all know, many of our key operating entities from the residential business like Mahindra Homes and Mahindra Happiness as well as from our IC & IC business, which is Mahindra World City Developers, Mahindra World City Jaipur and Mahindra Integrated Park, none of them are consolidated on a line-by-line basis. Now, it is customary to start with a little bit of a macro view on the economy and the sector, but I am going to dispense with that because many of you are deeper and more expert on the macros and I am in fact, I will use some of the Q&A time to ask you some questions for a change on that. Let me share some of the key highlights of our performance in the first quarter of the year. On the Residential business, we achieved sales of Rs. 602 crores versus Rs. 145 crores in the same quarter last year which is over a 3-fold increase. Sequential quarter wise also, we have grown by about 85%. That a
Vimal Agarwal
Thank you, Arvind. I will move onto the financial performance for the quarter. The consolidated total income stood at Rs. 117.3 crores as against Rs. 154.2 crores in Q1 FY22. Consolidated EBITDA including other income, a share of profit from JV stood at Rs. 53.7 crores as against the loss of Rs. 16.8 crores in Q1 FY22. The consolidated PAT after non-controlling interest stood at Rs. 75.4 crores as against a loss of Rs. 13.9 crores in Q1 FY21. Company has debt of Rs. 327 crores at consolidated Ind AS level while cash in hand and bank balance is Rs. 402 crores. Our cost of debt stood at 6.79% on consolidated basis while standalone cost of debt per MLDL stood at 6.3%. I will request if the floor can be opened for questions now. Thank you.
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