PURVANSEQ2 FY2023November 04, 2022 Puravankara Limited
7,469words
101turns
10analyst exchanges
5executives
Management on call
Ashish Puravankara
MANAGING DIRECTOR
Abhishek Kapoor
CHIEF EXECUTIVE OFFICER - PURAVANKARA LIMITED
Vishnu Murthy
SENIOR VICE PRESIDENT RISK
Neeraj Gautam
EXECUTIVE VICE PRESIDENT
Sanjay Daga
CHIEF OPERATING OFFICER-
Key numbers — 40 extracted
Rs.1304 Crore
g our strong brand builds across the market segments in which we operate. Our sales value grew to Rs.1304 Crores for H1 which is 43% higher than the 910 Crores sales value during a similar period last fiscal y
43%
s the market segments in which we operate. Our sales value grew to Rs.1304 Crores for H1 which is 43% higher than the 910 Crores sales value during a similar period last fiscal year. In terms of volu
910 Crore
s in which we operate. Our sales value grew to Rs.1304 Crores for H1 which is 43% higher than the 910 Crores sales value during a similar period last fiscal year. In terms of volume, we sold 1329 units w
1.75 million
during a similar period last fiscal year. In terms of volume, we sold 1329 units with an area of 1.75 million square feet for half year period compared to 926 units with an area of 1.33 million square feet d
1.33 million
th an area of 1.75 million square feet for half year period compared to 926 units with an area of 1.33 million square feet during H1 of the last financial year. The sales realisations improved to Rs.7454 per
Rs.7454
1.33 million square feet during H1 of the last financial year. The sales realisations improved to Rs.7454 per square foot from Rs.6845 per square foot last year, an improvement of 9% in average realizatio
Rs.6845
ng H1 of the last financial year. The sales realisations improved to Rs.7454 per square foot from Rs.6845 per square foot last year, an improvement of 9% in average realization. In line with our commitmen
9%
s improved to Rs.7454 per square foot from Rs.6845 per square foot last year, an improvement of 9% in average realization. In line with our commitment to deliver our projects within the prescribed
925 Crore
collection from our ongoing projects. The customer collection during H1 FY 2023 was 925 Crores which was 622 Crores a year ago. This is implying an increase of 50% on a year-on-year basis.
622 Crore
ngoing projects. The customer collection during H1 FY 2023 was 925 Crores which was 622 Crores a year ago. This is implying an increase of 50% on a year-on-year basis. We would like to high
50%
during H1 FY 2023 was 925 Crores which was 622 Crores a year ago. This is implying an increase of 50% on a year-on-year basis. We would like to highlight that composition of our collections from the
Rs.550 Crore
terms of our financial performance for the half year, our total revenue from operations stood at Rs.550 Crores compared to Rs.815 Crores for a similar period the previous year. Our EBITDA for the half-year p
Guidance — 20 items
“The aforesaid change in the time of revenue recognition has brought a significant variation in the periodical financial results as the revenue is no longer recognized relatively over the project execution period but recognized upon completion of the project and handover of flats to the customers.”
“Consequently, the financial results do not depict the company’s project execution and sales efforts periodically.”
“This project is under planning and development and will be launched between 6 to 9 months period.”
“My second question is we are constantly maintaining higher levels of debt and is there any plan for reducing debt level going forward?”
“In fact, in the next 6 months, you shall see a lot of this debt is self-liquidity which will also pan out by the end of March or in the quarter of April, May, and June, also with the new launches that we are adding there will be a continuous effort towards repayment of debt and we do have a roadmap of 24 to 36 months which clearly defines our debt reduction plan.”
“This will also improve collection and possession-linked cash flow and help us repay the debt taken for that project .”
“Okay can you give us any kind of guidance on reducing debt level?”
“We normally do not give guidance as you are aware of it but yes to answer the question in specific we have a roadmap for the next 24 to 36 months.”
“This is demonstrated in past, two years ago we had debt of excess of 3000 Crores and today we are down to around 2000 Crores and this trend we intend to continue.”
“Sir, there is some slow-moving project if you can throw light on that Somerset House in Chennai, Equinox in Bengaluru and Emerald Bay and Aspire in Pune.”
Risks & concerns — 6 flagged
Abhishek Kapoor the CEO, Vishnu Murthy Senior VP of Heading Risk, and Neeraj Gautam, Executive Vice President of Finance we also have Sanjay Daga, COO of West.
— Samar Sarda
I am sure you may have visited one or two of these projects and you would realize that there is a road access challenge which is where it is slow moving but the company is working on it and we believe that we will see better sales and better realization say about two quarters from now so there is a solution which is being worked upon currently for all three projects and we will see improved sales in all of them.
— Abhishek Kapoor
Okay and Sir on the AIF side what do you think will go against our strategy or the risk you can save if the project got struck then we still need to pay them a fixed return and still need time to buy back those?
— Chintan Mehta
The first point I wanted to know a couple of reasons for the dip in the profitability, the second was how do you see the impact of the repo rate hike on the 200 Crores of debt that we have so about 190 BPS repo rate hike has happened what would be the impact on that and the third is I was looking at other income so wanted to know any reason why has reduced and how do you foresee that?
— Kalpesh
My first question is can we see any impact of the festive season in the coming quarters like any growth due to this festive season?
— Rohit Sharma
You can see the initial impact of the festive season in the September period.
— Abhishek Kapoor
Q&A — 10 exchanges
Q
Good evening. Thank you for the opportunity. I could see that despite higher sales and revenue is not comparable to sales and that is one thing, of course, you have explained that you cannot shoot the sales until you deliver flats to the customers but still whatever we get the revenue it is delivered only. so what is the outlook for us and when we can deliver the flats to the customers and can we see a positive fact with the fact that we are going deliver?
Abhishek Kapoor
Thank you for the question, so we intend to hand over additional 1500 plus units by the end of this financial year in the next two quarters where we have visibility already of four very large projects and we are expecting a positive PAT at the end of the financial year. My second question is we are constantly maintaining higher levels of debt and is there any plan for reducing debt level going forward? Yes very much. There is a roadmap that is there for reducing debt. In fact, in the next 6 months, you shall see a lot of this debt is self-liquidity which will also pan out by the end of March o
Q
Thank you for giving me the opportunity. Sir, there is some slow-moving project if you can throw light on that Somerset House in Chennai, Equinox in Bengaluru and Emerald Bay and Aspire in Pune.
Abhishek Kapoor
As far as these projects are concerned we have had some road access and approval pending for these projects. I am sure you may have visited one or two of these projects and you would realize that there is a road access challenge which is where it is slow moving but the company is working on it and we believe that we will see better sales and better realization say about two quarters from now so there is a solution which is being worked upon currently for all three projects and we will see improved sales in all of them. As far as Equinox is concerned that is as per the sales plan the AOP. Somer
Q
The first point I wanted to know a couple of reasons for the dip in the profitability, the second was how do you see the impact of the repo rate hike on the 200 Crores of debt that we have so about 190 BPS repo rate hike has happened what would be the impact on that and the third is I was looking at other income so wanted to know any reason why has reduced and how do you foresee that?
Neeraj Gautam
If you look at our overall performance we have done good sales, it is one of the best quarters and one of the best half years, in terms of collection if you look at it is an increasing trend we have collected 519 Crores from projects for the quarter for a total operating inflow basis we have collected 678 Crores. Construction outflow was also more than 500 Crores for the quarter so all these parameters of sales, construction, and collection the quarter have been robust and we are continuously performing quarter-on-quarter basis on an increasing trend. However, in terms of revenue recognition a
Q
As far as new launches are concerned in this quarter we are expecting two, or three projects are already in the launch mode, we are expecting to add two more projects and add them to the launch mode. The three projects are in Bengaluru and Chennai and Coimbatore. Between all of these projects, we will take to market approximately four-and-a-half million square feet in this quarter. Other than your second query on the AIF we are looking at deploying that money in the plotted developments as well as in the provident. The first one has been deployed in plotted development and we are evaluating pr
Submit
Okay thank you so much.
Q
Thank you for the opportunity. Sir my first question is regarding the land purchase cost which I can see on the expense side that is this land purchase, land has been purchased here around 50 Crores has been utilized for it.
Abhishek Kapoor
That land purchase is the plotted development only which we invested in Chennai we mentioned it was temporarily done from Puravankara and then it was moved to the fund. The second question is regarding debt levels itself, so on a quarter-on-quarter basis your debt has increased in Q2 which is almost 333 Crores what is the reason and where is this debt utilized? There are two places you pointed out the first one. Debt was taken which is already repaid which was towards buying this land and it got repaid from the fund the moment that got deployed so it was a temporary debt. The other one was tak
Q
I am chipping with a couple of questions. Debt is clear like we have used it for IFC now I had a question on cash flow sales have been improving, construction expenditure for the first half of this fiscal has been pretty high but the collections are also in line. how is this changed over the second half of next fiscal because we made roughly 69 Crores of operating cash flow which will be utilized in land and then you have to borrow to service IFC, so just help us on the OCF front and how would the collections increase?
Neeraj Gautam
If you look at our cash flow statement and traditionally also cash flow statement has three segments one is the operating segment, one is investing segment, and one is the fixed asset- related financing segment. So if you look at our operating surplus our all ongoing projects all our project expenses are getting met out of our operating collections and we are generating a surplus there as well. However, while doing the existing activity like we mentioned that if I am acquiring land at a particular place or if I am repaying any of the costlier debt there we are borrowing money, repaying higher
Q
Thank you for the opportunity. So one of my questions was on the commercial project so can you please tell me the number of how much investments we have done in the commercial project to date?
Abhishek Kapoor
Again I think we will circle back on this question with exact information. Right away we do not have it handy but we will circle back to this exact information. Sure no problem. Secondly on the BD pipeline so currently how does your BD pipeline looks like if you can throw some colour, especially in the west we have senior people in Mumbai, so can you throw some light on this and any new JDs or JVs that you are doing? So we are very, very actively evaluating and working on opportunities in both Mumbai and Pune these are the main two geographies that we are focusing on. What is very important fo
Q
Sir is there any plan to monetize any land bank or any entire project like the Godrej fund deal?
Abhishek Kapoor
No there is no plan to monetize any land bank for sales. We are in the business of developing our projects and our focus is really to launch all our projects and all the land bank we are working simultaneously to unlock value so we are pretty much on the job as far as our business is concerned. Okay and Sir if you can share the project margin of the three large Bengaluru projects Atmosphere, Park Square, and Tivoli Hills is it possible? We can separately share that with you, one-on-one we will share that. Okay sure Sir where you can see the realization going forward broadly in the Bengaluru ma
Q
Thank you for the opportunity. My first question is can we see any impact of the festive season in the coming quarters like any growth due to this festive season?
Abhishek Kapoor
Yes definitely. You can see the initial impact of the festive season in the September period. Now we are continuing to see that growth and that activity on the ground. Normally as an industry and as a practice, you would see the third and the fourth quarter is pretty big quarters of the year for everybody, so we are pretty much on track and on line with that. Okay fair enough and can you provide the revenue breakup of your other segments like Stallworth and Purva Streaks? We can again share that separately one on one. You can come back. My last question would be what according to you could be
Q
Thank you once again ladies and gentlemen for your time and intention. I hope me and my colleagues were able to answer all your questions. However, if you require any further discussions we are always available for the discussion during the coming weeks. Thank you once again.
Opening remarks
Samar Sarda
Thank you Sree and good evening everybody. Thank you again for taking the time out. From the company, we have senior management led by. Abhishek Kapoor the CEO, Vishnu Murthy Senior VP of Heading Risk, and Neeraj Gautam, Executive Vice President of Finance we also have Sanjay Daga, COO of West. Mr Kapoor if I could request you please start with a few comments on the results, plans and sector outlook before we open for Q&A.
Neeraj Gautam
Thank you Samar. Good afternoon. Thank you all for joining us at Puravankara Limited’s second quarter and the first half year of FY2023 earning conference call. My name is Neeraj Gautam, I am the Executive Vice President of Finance of Puravankara Limited. The presentation and financial results for the quarter that ended September 30, 2022, have been uploaded on the stock exchanges. I presume you have all had a chance to go through the results and detailed presentation disseminated by us. I would like to take you all through the key highlights for the quarter following that my colleagues and I would be happy to answer any questions you may have while listening to feedback and suggestions from you. We believe real estate will continue to witness sustained growth this year and in the coming few years in India. The growing uncertainty in the global economy has had a minimal impact so far in our sector and we are hopeful that it will continue to have a very minimal impact on the economy in