MANINFRANSEQ4 FY23May 10, 2023

Man Infraconstruction Limited

8,822words
115turns
11analyst exchanges
4executives
Management on call
Parag Shah
Chairman Emeritus
Manan Shah
Managing Director
Ashok Mehta
Group Chief Financial Officer
Yashesh Parekh
A.G.M. - Investor Relations & Corporate
Key numbers — 40 extracted
INR1,448 crore
r of milestones, in a single year. We have recorded one of the strongest collections this year of INR1,448 crores. This year, our company has set the bar higher again by delivering not only one or two projects
rs,
ted near Dahisar check-naka, delivered on November 2022, here we handed over four residential towers, out of total six. Secondly, we delivered a commercial tower naming ‘Aaradhya Primus’ at the same l
50%
the upper income segment, and I am very happy to announce that, the project is already more than 50% sold out during our launch period. MICL Group has also launched an ultra luxury project in the vi
65%
in the vicinity of Juhu called ‘Aaradhya Evoq’, and in which, that project is also sold more than 65% as on date. In our other project at Mulund, naming ‘Atmosphere O2’, we have recently launched a n
INR992 crore
sold 4,34,000 square feet of carpet area, across all our ongoing projects, with a sales value of INR992 crores. In this approximately 60%, of the sales were contributed by our new projects launched during th
60%
area, across all our ongoing projects, with a sales value of INR992 crores. In this approximately 60%, of the sales were contributed by our new projects launched during the year. Now heading toward
90%
ime, we have developed a strong goodwill amongst our customers, channel partners, where more than 90% to 95%, of our inventory, in majority of the projects and the entire inventory, in few of our pro
95%
have developed a strong goodwill amongst our customers, channel partners, where more than 90% to 95%, of our inventory, in majority of the projects and the entire inventory, in few of our projects,
2.9 million
the most important factor that, each project is delivered before time. Currently, we are having 2.9 million square feet of portfolio in ongoing and upcoming projects, catering to diversified customer group
1.7 million
Vile Parle. This displays a diversity of catering to varying income groups. We also have another 1.7 million square feet of projects in the pipeline. Moving on to the EPC division, we delivered phase II o
1.2 million
delivered phase II of the IPRCL project measuring 10 hectares. During the year, we also delivered 1.2 million square feet of construction area in ‘Aaradhya HighPark’ project by completing four out of six res
INR980 crore
on track and ongoing as per the schedule. Currently, the order book of the EPC project stands at INR980 crores plus, as on March 2023. Now sharing some light about our international portfolio, in the last
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Guidance — 20 items
Manan Shah
opening
“We have also delivered another residential project, ‘Aaradhya One Earth’, which is located at Ghatkopar East, in January of the year 2023, where we completed and delivered two residential towers out of seven.”
Manan Shah
opening
“Our latest completion also included a luxury collection project, ‘Insignia’, which is located at Vile Parle West.”
Manan Shah
opening
“We have also launched a project called ‘Aaradhya Parkwood’, measuring approximately around 3,00,000 square feet of carpet area, which is located near the Dahisar check-naka, where we are targeting the middle income and the upper income segment, and I am very happy to announce that, the project is already more than 50% sold out during our launch period.”
Manan Shah
opening
“MICL Group has also launched an ultra luxury project in the vicinity of Juhu called ‘Aaradhya Evoq’, and in which, that project is also sold more than 65% as on date.”
Manan Shah
opening
“In our other project at Mulund, naming ‘Atmosphere O2’, we have recently launched a new tower and we are experiencing a flow of steady bookings for the same.”
Manan Shah
opening
“Now heading towards our most awaited project launch, ‘Aaradhya Avaan’, which is located in the region of South Mumbai, Tardeo.”
Manan Shah
opening
“We have acquired most of the approval for the launch of this project and we shall hit the market soon.”
Manan Shah
opening
“The launch of ‘Aaradhya Avaan’ project shall create history and we are very proud to say that, this can be the tallest tower of India.”
Manan Shah
opening
“We have envisioned this project as an architectural icon, which will set the mark on the global skyline and we are confident to achieve this vision, with a record breaking timeline, as our previous projects.”
Manan Shah
opening
“In such a short span of time, we have developed a strong goodwill amongst our customers, channel partners, where more than 90% to 95%, of our inventory, in majority of the projects and the entire inventory, in few of our projects, is sold out and not forgetting the most important factor that, each project is delivered before time.”
Risks & concerns — 13 flagged
Like-to-like consolidated net profit has registered a robust growth of 137%, year-on-year to INR259 crores, for financial year 2023, after removing the positive impact of the BOT claim, which we received in the fiscal year of financial year 2022.
— Manan Shah
And sir, how about, since you are a major player in redevelopment projects, has the velocity in getting those redevelopment projects, has it become more difficult of late?
— Amresh Kumar
Because it's a difficult question for me to answer on a phone immediately.
— Parag Shah
But then wouldn't that put you at a greater risk with regards to the commodity price, volatility?
— Ashit Kothi
And we should take that 1% or 2% or 5% risk or more, it's fine.
— Parag Shah
So that much risk we should always take rather than paying bank interest.
— Parag Shah
Other than the normal risk people talk of in terms of recession etcetera.
— Lakshminarayanan
See, in India, doing a business is a risk.
— Parag Shah
But how, you manage your risk, that is important.
— Parag Shah
The risk will always be there, if some government policies will change.
— Parag Shah
But how much risk you are taking all depends on you.
— Parag Shah
We are very successful in managing the risk.
— Parag Shah
So for me, Aaradhya Avaan is a zero risk product.
— Parag Shah
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Q&A — 11 exchanges
Q
Yes. Thank you for the opportunity and very strong set of numbers for the financial year 2023. Many congratulations to Manan and your team, to deliver strong operating performance. My first question on the EPC order book side, so the order book has declined from the December 2022 from INR1,325 crores to INR980 crores in March 2023. So how one should think about the order book growth and the EPC revenue growth in FY ’24 - FY ’25, over the medium term because we are continuously increasing our real estate portfolio. So how should we look at this revenue, this line of business in terms of growth,
Parag Shah
Good afternoon. This is Parag Shah. As far as the EPC order is there, we are in a pipeline of a few orders on the infrastructure side. We are expecting the few orders to get confirmed by this month end and the tender process is already over. So let's wait for that, as far as the infrastructure side is there. We also have our own EPC contracts from our own real estate division, which we are expecting to start 2 to 3 new projects in the coming six months time. So that order book will also continue. I am not worrying on that the order book will reduce. In fact this year, we believe that, the orde
Q
Sir, thank you for giving me the opportunity. So my first question is like, it's surprising to know that there is no debt in your book. So just wanted to understand that, how sustainable it is going forward because we have Tardeo project kicking in and also the EPC order book. There also, we may be having some working capital requirements. So do we expect that, going forward our debt would be increasing and when we receive this project or will we be having more debt going forward also?
Parag Shah
Many people are surprised many times that how this company is performing without a loan. But mainly like as far as what, we had asked the question on Aaradhya Avaan, there also we are on a DM model. The equity participation from our side is completed. If the further equity will be required, there is a bank loan provision, but that loan will not come on the balance sheet of ‘Man’ because the loan will be taken by the landlord. So on his company, the loan will be there. So we do not have any burden of loan. As far as last 30 years track record, yes, we have been able to perform without debt. At
Q
Thank you for the opportunity. My question is on the expenses side. Margin was disturbed due to the increase in the expenses. The cost of materials and the other expenses increases, during the quarter and the year. Is there any reason for that, sir?
Ashok Mehta
See, for EPC and real estate, what we have to see is on the annual basis, what we always say. Because on quarterly basis, from project to project basis, then it is combination of all the projects. Some projects may be there at initial stage. Some may be at the advanced stage. Some may be at the closing stage. So, if you look at historically, you know that on annual basis, the margin for EPC as well as real estate, they both are maintained. So, we always try to make sure that those numbers are achieved. And we always advise everyone, in my any previous phone calls also or on personalized meetin
Q
Sir, thank you for the opportunity. Sir, first question is on two years, three years down the line. How we should look at in terms of revenue contribution from different verticals like EPC versus non-EPC? And how are these order book as well as your outlook, not from next one year point of view, but three years, four years kind of horizon point of view?
Parag Shah
The projects which are under execution, the projects which are under the negotiation, and the projects which are about to get start, yet not started because of some of the government approvals. If we look into that, we have a pipeline of more than one crores square feet in-house jobs as far as the EPC contract works are there. But wherever we are a developer and where it is our 100% subsidiary company, we do everything under the one umbrella. So you will not see the EPC side different and the real estate side different because we are a real estate developer also and we are doing our in-house E
Q
Good evening sir. First of all congratulations for this fantastic set of numbers. Most of the questions have been covered. Just a view on one thing. Mumbai is going through major redevelopment dry. Am I audible?
Parag Shah
Yes. Yes, Mumbai is going through major redevelopment dry. Your view on that? Inventory, do you see inventory will start piling up? And which ticket size? The second question is which ticket size are we targeting? On the real estate side. See, we are focused at this moment. Dahisar also, Mulund also, Vile Parle, Ghatkopar, South Mumbai. Everywhere the product sizes are different. Like if you talk about the Dahisar, Mira Road side, where the price is ranging between INR90 lakhs to INR2 crores. As far as the Mulund is concerned, the price is ranging between INR1.5 crores to INR4.5 crores. The Gh
Q
Thank you for the opportunity, sir. Congratulations on a great set of numbers. I just wanted to understand one thing. Almost two-thirds of your ongoing project is already sold out. So not much inventory left for you on those ongoing projects. And now that you have sold out all those projects, you must be having some idea of the cash flows. As to how much you are going to accrue in terms of cash flows? How much you are going to incur in cost and etcetera? So if you can give some idea of how much cash flow will come to the balance sheet? And how are you going to spend it? Either in the new proje
Parag Shah
See, it's a dividend-paying company. Every year we pay dividends. And in fact we declared the interim dividend yesterday only when we had a board meeting. We had already given 18% first interim dividend for current year. We have a liquidity. We are looking for the new projects also. And there are so many projects which are under pipeline. So which may start in two months to three months' time. So we have enough cash flows. Till now whatever the projects we have in hand. We have a financial closure for that. So I think we are sitting on a cash liquidity of INR300 crores plus. So we have still m
Q
Congratulations sir on very good set of numbers. I wanted to know, what is the run rate we are seeing for FY ‘24 for delivering? How many lakhs square feet can we deliver in FY ‘24?
Parag Shah
In next five years’ time we will be able to deliver more than 5 million square feet. But we can't commit up to every six months. Because it's a difficult question for me to answer on a phone immediately. Okay. Thank you sir.
Q
Congratulations on all the fronts, sir.
Parag Shah
Thank you very much. Sir, one simple question which I just would want to ask you is do you expect any major policy changes at a government level or at a BMC level on a redevelopment which would benefit the company more? And second, do we expect to have the same run rate what we have reported in this quarter going forward? Your first question's answer I won't be able to give because I am into politics also. So I don't want to go into any controversial statement where my business and the BMC policies are concerned. But I can only say that the current government is really doing a good job. And it
Q
Thank you. Two questions. First is from a capital deployment point of view. Outside India, what is the total capital you would like to deploy? How much will be deployed and how much you think, will get deployed over the next three years to five years? That's my first question.
Parag Shah
Till today, we have invested somewhere around $29 million in US. But we have $15 million as a liquidity also over there. So we have invested $14.5 million till now. And $15 million, we have a bank balance over there for the future projects. Or the projects which we have already taken. The next capital installment, when it will come, that money has been transferred. So there we are not expecting to transfer more fund now. Because at least for the next one year, we don't need any more capital there. Got it. The next question is that, you have generated good free cash flows this year. What is an
Q
Congratulations on the good set of numbers to the whole team first. And thank you for this opportunity. Sir, I actually had a question regarding your portfolio share. I can see in the presentation that, the mid-premium segment is around 24%. And the premium segment is around 71%. So how do we see this going ahead? Is this share going to differ, if you have any plans as such? The reason is I wanted to know the return on capital. If there is a big difference, in these two segments as such?
Parag Shah
Frankly speaking, what we are saying a luxury product or a mid-premium product, is all definition of what is a luxury. People like to read luxury products. So my team may have written, it's a luxury product. INR35,000, INR40,000 rate or INR45,000 rate in Mumbai, is no more a luxury product. But yes, we have projects as I mentioned that, it varies between INR17,000, INR18,000 carpet per square feet to around INR45,000 .INR50,000 per square feet. But it's not a very high premium product. And these are the standard projects like INR35,000, INR45,000 rates are going on in Borivali also. With the s
Q
Thank you everyone for participating in the earnings call of Man InfraConstruction Limited. We will see you next quarter.
Management
Speaking time
Parag Shah
47
Moderator
13
Amresh Kumar
10
Manish Ostwal
6
Mitul Shah
6
Abhay Shah
6
Ashit Kothi
6
Lakshminarayanan
5
Mayur Liman
4
Bhavana Jain
4
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Opening remarks
Manan Shah
Good afternoon to all our listeners. I, Manan Shah, the Managing Director of Man InfraConstruction Limited welcome you all to this Earnings Call. Financial year 2023 has been one of the most eventful years in the history of MICL Group, where the company has achieved a significant number of milestones, in a single year. We have recorded one of the strongest collections this year of INR1,448 crores. This year, our company has set the bar higher again by delivering not only one or two projects but five, in an attempt to break the records in the real estate industry. We have delivered three residential projects and two commercial projects in the year 2022-2023. First, ‘Aaradhya High Park’, located near Dahisar check-naka, delivered on November 2022, here we handed over four residential towers, out of total six. Secondly, we delivered a commercial tower naming ‘Aaradhya Primus’ at the same location near Dahisar check-naka. We have also delivered another residential project, ‘Aaradhya One Ea
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