GANESHHOUNSEQ2 FY23OCTOBER 20, 2022

GANESH HOUSING LIMITED

5,798words
75turns
7analyst 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 ADVISOR - GANESH HOUSING CORPORATION LIMITED
Key numbers — 40 extracted
1.2 million
n Speyer for the development of SEZ first phase which would be a commercial development of around 1.2 million square feet. This is Tishman’s first project in Ahmedabad and will enable us to collaborate for S
100%
th of our projects namely Malabar County III, and Malabar Exotica currently under development are 100% booked and running ahead of scheduled completion as we have used precast technology for construct
94%
021. During 19 odd months of actual construction post these approvals we have managed to complete 94% of the construction in this project across six towers. In Malabar Exotica project we have recei
28%
August 2021. During 14 odd months of construction period we have managed to complete over 28% of the project and the project has been progressing ahead of the scheduled completion. As of Se
0.1 million
o inventory in ongoing projects, also ending September 2022 we have unsold completed inventory of 0.1 million square feet, which we would value at around 435 million. Our strong performance on operational fr
435 million
022 we have unsold completed inventory of 0.1 million square feet, which we would value at around 435 million. Our strong performance on operational front led to strong financial performance during the quart
6500 million
rmance during the quarter which has gone by. What is notable is from a peak debt of approximately 6500 million our net debt has significantly reduced to Rs.269 million which is shared over 25 Crores which is
Rs.269 million
table is from a peak debt of approximately 6500 million our net debt has significantly reduced to Rs.269 million which is shared over 25 Crores which is a drop of 96%, whopping 96% I would like to mention onc
25 Crore
mately 6500 million our net debt has significantly reduced to Rs.269 million which is shared over 25 Crores which is a drop of 96%, whopping 96% I would like to mention once again due to improved cash flo
96%
ebt has significantly reduced to Rs.269 million which is shared over 25 Crores which is a drop of 96%, whopping 96% I would like to mention once again due to improved cash flows ongoing and upcoming
3278 million
ort and visibility of cash flow which keeps on track deleveraging further. Our revenue came in at 3278 million for Q2 FY2023 versus Rs.739 million in Q2 of FY2022 which is 344% higher. In half year FY2023 our
Rs.739 million
ich keeps on track deleveraging further. Our revenue came in at 3278 million for Q2 FY2023 versus Rs.739 million in Q2 of FY2022 which is 344% higher. In half year FY2023 our revenue grew at 142% and came in at
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Guidance — 20 items
Rajendra Shah
opening
“This is Tishman’s first project in Ahmedabad and will enable us to collaborate for SEZ development property and lease management in phased manner.”
Rajendra Shah
opening
“Having worked for global giants like Meta, Amazon, LinkedIn, JPMorgan, Accenture, Nike, and certain Indian blue chip companies Tishman would bring along practices of international standard for benchmarking, monitoring project progress and quality assurance.”
Rajendra Shah
opening
“They will also liaison with various agencies in project development and leverage its wide international network for development and marketing of our SEZ project.”
Rajendra Shah
opening
“On the project update both of our projects namely Malabar County III, and Malabar Exotica currently under development are 100% booked and running ahead of scheduled completion as we have used precast technology for construction which is cost effective and helps us in achieving fast and better quality execution.”
Rajendra Shah
opening
“In Malabar III project we have received RERA approval and permission to commence construction in February 2021.”
Rajendra Shah
opening
“During 19 odd months of actual construction post these approvals we have managed to complete 94% 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
“During 14 odd months of construction period we have managed to complete over 28% of the project and the project has been progressing ahead of the scheduled completion.”
Rajendra Shah
opening
“Coming to our future growth prospects, as mentioned previously we continue to have a strong and robust project pipeline of four residential and two commercial projects which are going to come up soon.”
Rajendra Shah
opening
“In Q3 of 2022 the affordability index of city currently stands at 22% we are confident about demand trend to continue in Ahmedabad despite economic growth concerns with our superior execution track record and strong project pipeline we are confident of achieving significant profitability in the coming years.”
Risks & concerns — 3 flagged
Just to give you a perspective of what has been happening in Gujarat is recently wherever areas where we have very large land parcels recently new town planning scheme was announced it is not very long back that town planning scheme was being implemented and till the time you have town planning announced and there are final plots which are available for development with clear mark boundaries it will be difficult for any developer to apply for any permission.
— Rajendra Shah
We are also increasing the price in our ongoing project to some extent, so that way so far market has not behaved in any manner where we see any challenge in terms of the price absorption.
— Neeraj Kalawatia
so that way we do not see any challenge in the absorption of that price increase also because if you see in the Ahmedabad market there is not even a single project which is completed and there is any inventory left except for negligible number which you can say not even 2% of the project.
— Neeraj Kalawatia
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Q&A — 7 exchanges
Q
Thank you for giving the opportunity to ask questions. Can you please repeat your launch plans like I could not hear you clearly earlier?
Rajendra Shah
We have six projects in pipeline of these four are residential and two are commercial projects. These projects are being launched in a phased manner with two projects being launched over the next 6 to 12 months, three being launched over the next 12 to 24 months, and one being launched within the next 24 to 36 months. Thanks for giving that input. Another thing like we have a huge land bank so how are we positioned to monetize like do we plan to go ahead with developing the whole land or do we have any plans to monetize it apart from the development just wanted to understand our strategy aroun
Q
Good afternoon Sir, thank you for the opportunity. Just wanted to understand the launch pipeline that you have given two projects in the next 6 to 12 months any specific indication will it be back ended or something like that because the only thing is currently we are in a good cycle as far as real estate is concerned and our ongoing projects are already 100% booked before the construction is completed so are there any procedural delays or you are taking conscious decision to postpone the launches just wanted your take on despite having land availability from the state or from an investor poin
Rajendra Shah
Just to give you a perspective of what has been happening in Gujarat is recently wherever areas where we have very large land parcels recently new town planning scheme was announced it is not very long back that town planning scheme was being implemented and till the time you have town planning announced and there are final plots which are available for development with clear mark boundaries it will be difficult for any developer to apply for any permission. Now that permission has come in recently and the projects which are there in pipeline one of projects very large project which will give
Q
Good afternoon Sir. My question was that on your new strategic partnership with Tishman would this be limited only to phase one of commercial development or would this partnership be for complete SEZ including residential?
Rajendra Shah
Right now Tishman Speyer is expert in developing IT parks and developing commercial spaces world over their expertise in fact if somebody talks about real estate development of residential project in Ahmedabad actually we are capable ourselves. Right now we have visibility of phase one of commercial and we do not know how next phases are going to pan out that is why our partnership is right now limited to phase one of commercial development; however, whenever we announced phase two or phase three of commercial development we expect that this partnership will continue and it is long-term relati
Q
Good afternoon Sir and thank you for the opportunity. In the Q1 call when we discussed you had highlighted that Gujarat market is a very price sensitive market and price increase do not really happen at a rapid pace, but looking at all the input cost pressures going on the raw material prices increasing so in the last quarter are there any price increases which we are seeing in the market across the players?
Neeraj Kalawatia
During the last call also we have shared also that in our case we have a huge advantage of the land acquisitions in our case the lands are historically acquired at a very low price so we are positioned much better in terms of the price absorption of any increase in the project cost plus whenever we plan for any project cost planning we always keep at least 10% of the contingency towards increasing the project cost that gives us the additional leverage that whenever during the course of the project if there is any price increase we can ourselves absorb that increase in the price. Now only thing
Q
Thank you for giving the opportunity. My first question will be on your strategy on the commercial sales we are planning to launch in SEZ and would it be an outright sale or annuity base and what will be the annual cash flow from these commercial projects we are expecting over like extra projects?
Rajendra Shah
We expect that it will be annuity based revenue which we will collect from the commercial side of the SEZ project and right now it will be too early to predict what kind of rentals we will command but just to give you certain some bit of gross idea a good commercial project in the vicinity is commanding a gross leasable area per square feet monthly rental of above Rs.50 a square feet. My second question is that how much construction cost has gone up for your ongoing projects in the last quarter and how do you see it impacting our projections over the next few quarters are there any surprises w
Q
Thank you for giving me the opportunity. I have a question with regards to the financials. My first question is with regards to the cash flow from financing activities it is having a mention of 220 Crores with respect to changes due to subsidiary so just wanted to know that what is that effect given in the financials?
Rajendra Shah
We have a project in subsidiary company also and there are some land parcel also which we will hold by this subsidiary company so this cash flow is indicating our revenue from those projects as well as the land sale from this subsidiary company which is now figuring here as an indication is because of the subsidiary, but on a consolidated basis it is come in this way only. Just to know that would not it come in the operating activity directly because it is a normal business? It comes in the financing activity because whenever these projects were launched and these projects were keep on going t
Q
On behalf of Ganesh Housing Corporation Limited and my team I Rajendra Shah thank you all for showing interest in our company and thank you for remaining presence and we welcome you. Thank you and see you again in next quarter. Thank you.
Management
Speaking time
Rajendra Shah
20
Neeraj Kalawatia
11
Moderator
9
Pruthul Shah
8
Sourabh Gilda
7
Shivang Joshi
5
Jay Shah
5
Vishal Bagadia
5
Naman Bhansali
3
Rajat Gupta
1
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Opening remarks
Rajat Gupta
Thank you Faizan. Good afternoon everyone and welcome to Ganesh Housing Corporation Limited’s Earnings Call to discuss the Q2 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 floor for Q&A. Thank you and over to you Sir!
Rajendra Shah
Thank you Rajat and good afternoon ladies and gentlemen. We thank you all for joining us on this call today to discuss our Q2 FY2023 results. We are happy to report another quarter of robust performance as you would have seen from our financial performance we would discuss those in details as well. Initially we would like to talk a bit on strategic front. We are extremely delighted to announce our strategic partnership with Tishman Speyer for the development of SEZ first phase which would be a commercial development of around 1.2 million square feet. This is Tishman’s first project in Ahmedabad and will enable us to collaborate for SEZ development property and lease management in phased manner. Having worked for global giants like Meta, Amazon, LinkedIn, JPMorgan, Accenture, Nike, and certain Indian blue chip companies Tishman would bring along practices of international standard for benchmarking, monitoring project progress and quality assurance. They will also liaison with various ag
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