Ashiana Housing Limited has informed the Exchange regarding Analysts/Institutional Investor Meet/Con. Call Updates - Submission of Transcript of Conference Call held on 13th February, 2020 at 04:30 p....
“Ashiana Housing Limited Q3 FY20 Earnings Conference Call”
February 13, 2020
MANAGEMENT: MR. VARUN GUPTA-WHOLE TIME DIRECTOR, ASHIANA HOUSING LIMITED
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Ashiana Housing Limited February 13,2020
Moderator:
Ladies and Gentlemen, Good morning and welcome to the Q3 FY20 Earnings Conference Call
of Ashiana Housing Limited. As a reminder, all participant lines will be in the listen-only mode
and there will be an opportunity for you to ask questions after the presentation concludes. Should
you need assistance during the conference call, please signal an operator by pressing ‘*’ and
then ‘0’ on your touchtone phone. Please note that this conference is being recorded. I now hand
the conference over to Mr. Gaurav Sood from Kanav Capital. Thank you and over to you, sir.
Gaurav Sood:
Thanks Margreth. Welcome everyone and thanks for joining this Q3 FY20 Earnings Call for
Ashiana Housing Limited. The Results and Investor Update have been mailed to you and it is
also available on the stock exchange. In case anyone does not have a copy of the press release,
please do write to us we will be happy to send it over to you.
To take us through the results of this quarter and answer your questions we have today with us
Mr. Varun Gupta – Whole Time Director of the company. We will be starting the call with a
brief overview of the company’s performance and then we will follow it with a Q&A session.
I would like to remind you all that everything said on this call that reflects any outlook for the
future which can be constituted as a forward-looking statement must be viewed in conjunction
with uncertainties and risks that they face. These uncertainties and risks are included, but not
limited to what we have mentioned in the prospectus filed with SEBI and subsequent annual
report which you will find on our website.
With that said, I will now turn over the call to Mr. Varun Gupta. Over to you, Varun.
Varun Gupta:
Good afternoon everyone. Thank you for joining us to discuss performance of third quarter of
FY20 of Ashiana Housing. I extend a warm welcome to all of you.
Area booked in Quarter 3 of FY20 was 9.78 lakh square feet as compared to 2.55 lakhs square
feet in Q3 of FY19 due to launch of Ashiana Daksh Phase-I and II in Jaipur, Vrinda Gardens
Phase-IV in Jaipur, Ashiana Aditya Phase-I in Jamshedpur and Ashiana Nirmay Phase-III in
Bhiwadi. The sales were at 2.37 lakh square foot in the previous quarter. We handed over 1.5
lakh square foot in Quarter 3 out of which 1.45 lakh square foot was delivered in Ashiana
Housing and 0.5 lakh square foot was delivered in the partnerships. This was against delivery of
3.31 lakh square foot in Q3 of FY19. Revenue recognized from completed projects was Rs.
59.73 crores for Q3 FY20 versus Rs.58.59 crores in Q2FY20. Revenue recognized from
completed projects was at Rs. 48.65 crores in Q3FY19. Total comprehensive income was
negative at Rs. 6.39 crores this quarter versus negative Rs. 9.05 crores in Q2FY20.
Pretax operating cash flows for the company was positive at Rs. 21.35 crores versus positive Rs.
3.32 crores in the previous quarter largely due to connections received from newly launched
projects in the quarter. Equivalent area constructed was at 2.39 lakh square foot versus 2.04
lakhs square foot in the previous quarter and which was 1.62 lakh square foot in Q3FY19.
Our construction has being generally in line with our commitments.
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On this note I would like to conclude my remarks. We will now be happy to discuss any
questions or suggestions that you may have.
Ashiana Housing Limited February 13,2020
Moderator:
Thank you very much. We will now begin the question and answer session. The first question is
from the line of Rohit Potti from Marshmallow Capital. Please go ahead.
Rohit Potti:
So my first question is obviously on the excellent performance by the new launches, so I was
curious to know why these two projects did so well when we have other projects which, at least
in Jamshedpur, Sehar was launched quite recently and Jaipur we have other projects as well, but
one of them has seen the responses that these one have, so what is particularly different about
these projects?
Varun Gupta:
I’m also not aware as to what is the differences here. In Ashiana Sehar in Jamshedpur I think we
bungled up the launch a little bit at our end in terms of just doing the preparation in the marketing
effort and understanding the consumer as well. So some of the learning were taken from there,
the other reason I think these projects do well as compared to existing projects is that we have
been able to reconsider some of the project in terms of unit sizes, the facilities, the pricing, the
location and all of that just did make a difference. Like in Jaipur, it is probably the best located
project that we have done till date in terms of proximity and access to the city and stuff like that.
So, I think a little bit of differences on that front which a new project allows us to do and sort of
recalibrate the design, the pricing and the location and we fixed that in the beginning.
Rohit Potti:
So does that mean we can take learning from these extremely good launches into the newer
phases which can come up in other projects for those locations?
Varun Gupta:
So some learning yes we can take, some learning is not possible to be taken into new launches.
We are understanding what learning to take and also make better success of new phase launches
of existing projects when we go ahead and do that you know either during this quarter or you
know the next year itself. I think that is important also we will take some learning into launching
new projects further in the company. So some pipe is with us and some pipe we will have to
create, but some learning will be taken there as well.
Rohit Potti:
On the other part sir I have noticed that generally when your area booked is higher than the
equivalent area constructed that is when you sort of get the confidence to I believe increase the
prices, so I noticed that over the last few quarters this has been generally true, so do you think
the price increase is still far away or in specific projects like the ones which have been so
successful recently you think you will take a price increase in the next phase launch whenever it
happens?
Varun Gupta:
Yeah some price increases will be taken in the next phase launch when we happen to do that. So
as I have been saying earlier as well I think overall in my view the market is going to absorb
price increase going further and as we launch more phases, but the kind of increase that we saw
probably in the year in the different boom times that kind of price increases is still far away.
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Ashiana Housing Limited February 13,2020
Rohit Potti:
The third question I have is, so I believe at least in my opinion, there is a difference in the run
rate I mean there is a difference in how the new projects have taken off versus the old projects
where I believe the momentum has come down, so I am talking about projects like Town and
Anmol, etc., so any thoughts or comments there?
Varun Gupta:
We do not know exactly what is going on completely, some of it is also got to do with the
attention of the team being on new launches and the focus there and that is hurting a little bit. So
there are some challenges on that front we will have to fix those as we go forward we are looking
for solutions, but we have not been able to find a solution till now. So just the only place where
we see some momentum is on the senior living front I think we will continue to see good
momentum there.
Rohit Potti:
So broadly other than senior living and a few projects in Jaipur the other existing old projects if
something which you are concerned about I would guess right?
Varun Gupta:
Yes we are.
Rohit Potti:
Just a follow up on the Kolkata launch is it still on track for the first quarter next year
Varun Gupta:
It is on track hopefully we will know closer to the end of this quarter where it is, there are silver
linings therein, things are moving.
Rohit Potti:
And last question is on Amantran, how is the expression of interest going for that project I
believe it is to be launched on March 12 right?
Varun Gupta:
So the expression of interest there is moving as per expectations, speed of things are good.
Moderator:
Thank you. The next question is from the line of Vivek Joshi from Bandarpoonch Capital LLP.
Please go ahead.
Vivek Joshi:
In the launches that you have just done in Daksh and Jamshedpur could you let me know when
are the possession dates for them like I am assuming that is when the revenue will be recognized?
Varun Gupta:
So we give possession dates as per what we give in the RERA filings. So the possession dates
for Ashiana Daksh as per RERA is in FY24 and Ashiana Aditya in Jamshedpur is in FY23 I
would expect both these projects as per internal estimates to get delivered in FY23. For Daksh
there might be slight possibility of even getting into FY22, but I would say early part of FY23
is when we start delivering it.
Vivek Joshi:
Which month if you have it?
Varun Gupta:
Too hard to say right now.
Vivek Joshi:
But in RERA what has been given like?
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Varun Gupta:
In RERA it has been given Q2 of FY24 for Ashiana Daksh Phase-I, Q3 of FY24 for Ashiana
Daksh Phase 2 and Q3 of FY23 for Ashiana Aditya Phase-I.
Ashiana Housing Limited February 13,2020
Vivek Joshi:
When you say 23 it is like 23, 24 or like how do you…?
Varun Gupta:
It is FY23.
Vivek Joshi:
And one more question. Is the launches going forward is expected to be at the same pace, or this
is like spike? And if you can give some idea as to how the booking is going to go like that is
what I wanted to know?
Varun Gupta:
It is a spike because we had two projects to be launched in this quarter. The fourth quarter is
seeing Ashiana Amantran launch. So, the fourth quarter would be better than let us say the first
two quarters of this financial year but will not be as good as the third quarter. In terms of yearly
numbers I would say this year was a little bit of spike, I would say a little bit of a trough next
year back down because you will not have as many launches, but the good part with these
launches coming in our comfort on future cash flows has increased substantially which will
allow us to take some risk in getting projects that we can start, you know, acquiring projects we
have been talking, negotiating, discussing a lot of projects but not signing off or moving
aggressively as much because there has been uncertainty on our own cash flows with a lot more
certainty coming in cash flows, we will look to take more projects up and hopefully FY21-22
i.e. 31st March 22 ending financial year would also become very well because now if we sign
off some projects now going forward we will have a lot more launches coming into that year
given the time approval it takes so that is the sort of view I would give in the way the bookings
will move.
Vivek Joshi:
My third question was regarding Joint Development (JD) and all other real estate company.
Anecdotally, I have heard that they are getting lot of discussions and lot of people for coming
for JD because this RERA and all this consolidation with the organized players, so in which
geographies are you in discussion or it is going to be the same geography?
Varun Gupta:
So, in Pune we have had a land earlier where now approval seems to be moving a little faster
than that was. That framework is on launch, otherwise the new acquisitions we are in
conversations in Chennai for one more senior living project, we are in conversation in Gurgaon,
we are in conversations in Jaipur, yeah those are sort of the locations we are in and in NCR also,
we are to do one more senior living project. We are in conversations.
Vivek Joshi:
And when do you think we will be back on a PAT basis profitability how many quarters where
are we?
Varun Gupta:
So Q4 would be profitable otherwise I do not know. So I do not think FY21-22 is where we
would look for profits coming into the company and if not that, then FY22-23 definitely. In
FY20-21 I do not think there will be a profit. I think in FY20-21 also, will be a reported loss
here.
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Ashiana Housing Limited February 13,2020
Vivek Joshi:
FY20-21 will be reported loss, and FY21-22?
Varun Gupta:
Should be a reported profit. We have not crunched the numbers yet. We will crunch the numbers
and come back. Internally we spend more time on cash flow projections and not on profit
projections as much and this quarter we had 21 crores of operating cash flows and we are looking
FY20-21 to be substantially better in terms of having operating cash flows that is where more of
the internal thinking is around at this point of time.
Vivek Joshi:
Sir, one last question how much debt is there on the book including everything like all working
capital?
Varun Gupta:
So I think total debt on the books is about 121 crores including debentures issue to IFC for the
Ashiana Daksh project and this is all the long term borrowings that we have as of today.
Vivek Joshi:
And what is the working capital like roughly
Varun Gupta:
I am unaware of working capital. In this also, 7 crores of long term debt is sort of a working
capital structure where we can keep prepaying the long term debt and drawing again. And at 121
crores , about 7 crores is working capital other than that if there is any working capital loans
they are all against sort of liquid investment so that is as good as drawing down cash.
Moderator:
Thank you. The next question is from the line of Rohan Advant from Multi-Act Equity. Please
go ahead.
Rohan Advant:
Sir my first question is on land. We have not seen any meaningful land purchases, so do you feel
constraint now in terms of land availability if we were to get to our aspirational yearly booking
targets of 4 million which we stated in the past and you know should we expect any significant
land purchases in the coming months / quarters from you now?
Varun Gupta:
Now having land will become an important ingredient and you should expect transaction
announcements from us in the next 12 months. Over the 12 months we should be announcing
transactions.
Rohan Advant:
And could you share your launch pipeline for FY21, I got Kolkata, but apart from that Pune do
we plan to launch? And other phase extensions if you could give the names of the projects and
the quantum that we plan to launch?
Varun Gupta:
Yeah, we will launch the two projects in Kolkata - one senior living and one regular housing,
Ashiana Maitri and Nitya and we will launch Ashiana Umang Extension in Jaipur. Then those
are the sort of three launches that we are looking at in terms of completely fresh projects and
phase launches. We will have phase launches; in Vrinda Gardens Phase 5 will be launched,
Ashiana Daksh Phase 3 should be launched, Ashiana Amantran Phase 2 should be launched,
Ashiana Shubham Phase 4 should be launched, Ashiana Aditya Phase 2 should be launched. So
there are multiple phases which are going to get launched outside of that.
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Ashiana Housing Limited February 13,2020
Rohan Advant:
So sir in one of your earlier comments you said that FY21 should be like a tough year, so on a
YoY basis you expect our bookings not to grow in FY21 versus FY20 or would it be flat?
Varun Gupta:
I would expect a certain decline actually in FY20-21 over FY19-20, square footage numbers you
know in FY20 we are looking to hit about over 2 million square foot as a company. In FY20-21
I think we will be closer to 1.5 million square foot.
Rohan Advant:
Sir, in Pune land I did not get that properly?
Varun Gupta:
So Pune we have a land in an area called Marunji. So we are there, the approvals are finally sort
of coming in and in terms of zone conversation our zone had to be converted then we can file
for buildings plans and environmental clearances. So Pune I expect to launch in the first quarter
of FY21-22.
Rohan Advant:
Sir lastly on the land purchases that you said would be willing to acquire more land in Jaipur or
are there any other geographies?
Varun Gupta:
We are in active conversation in Jaipur, Gurgaon, Chennai as on date and also other parts of
NCR for a senior living project.
Moderator:
Thank you. The next question is from the line of Shankar Dutt, an Individual Investor. Please go
ahead.
Shankar Dutt:
Sir, you mentioned that senior living projects are doing well, so do we expect this to continue
going forward?
Varun Gupta:
Yes Shankar I would expect senior living to continue to do better. Overall, we see the inquiries
are good, the customers are happy and there is a better market for senior living which is sort of
developing and people are getting educated about it and the overall interest level seems to be up
over there.
Shankar Dutt:
And sir could you also speak a little bit about the competition intensity in our micro markets
where we are doing the launches, are there other players who are also doing launches in the same
micro markets?
Varun Gupta:
So, the competitive intensity across micro markets have reduced. There is very little to say in
terms of new launches. Overall things are more quiet today than it was three, four years ago. The
things continue to be quiet over there which is a good thing.
Shankar Dutt:
And sir for our existing projects, so how do we plan to improve our sales velocity in our existing
projects?
Varun Gupta:
Yes, they are what they are. Right now, we are looking to do what can be done. One thing is we
have lots of phase launches coming up in existing projects. So, in those phase launches, can we
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Ashiana Housing Limited February 13,2020
take something from here and do that well. That is one piece we are exploring for the first-time
doing sales through channel partners in our projects in Gurgaon, Ashiana Anmol and want to
see how that goes. So there is some experiments being run across different projects to see what
works, what does not work.
Shankar Dutt:
And sir our relationship with IFC, so what kind of investment we have done together till now?
Varun Gupta:
Yeah up till now we have only deployed a little bit over 18 crores from their end which was in
the Ashiana Daksh Jaipur project. As I said, we have been overall little quiet in deploying capital
till now because of our own sense of our cash flows. With that now getting bit more resolved
and we are getting a better sense over there, we are in active conversations for transactions where
we can deploy a significant chunk of IFCs capital going forward.
Shankar Dutt:
And finally sir the last question is what kind of our debt level or debt equity ratio are we
comfortable in running?
Varun Gupta:
Let me put it this way if I exclude IFCs debt which are more project linked, cash flow linked
debentures with very limited or no fixed servicing obligations; on debt which has fixed cash
flow servicing obligations, I think we are comfortable with Rs. 150 Crores of debt right now.
That is where we will be comfortable with overall.
Moderator:
Thank you. The next question is from the line of Meeshal Mehta from Pliris Capital. Please go
ahead.
Meeshal Mehta:
Couple of questions, in these new launches that you are doing, are we still at the same kind of
gross margin levels that we have been kind of making, say 30%, 35%?
Varun Gupta:
So in Ashiana Aditya, Jamshedpur, it would be early 20s actually or a little lower, Ashiana Daksh
in Jaipur and Ashiana Sehar in Jamshedpur we will have that 30%, 35% gross margins. Ashiana
Aditya was actually an old sign off on the project which was about four years ago. Basically the
projects which we had signed between 2013 and 2015, whether launched now or launched
earlier, overall gross margins in those projects are a little bit of a concern.
Meeshal Mehta:
Is that because of increase in construction cost and material prices?
Varun Gupta:
Yeah that is what has happened over the four years, basically our land cost got locked in, our
sales prices have not increased and in the four years the cost of construction has increased. So
that really shaved of the margins in that four year period that is what has happened. So new
projects that we are underwriting now, we are taking sort of increased construction cost in our
calculations and going ahead with that.
Meeshal Mehta:
So out of what is likely to be launched in or out of the total projects that are coming up, how
much more would be at these type of margins that would kind of forced to do at current prices,
how the markets are right now?
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Ashiana Housing Limited February 13,2020
Varun Gupta:
So Ashiana Amantran in Jaipur which is getting launched I would say again would be about late
20s in the gross margins as per my expectations and now after that going forward whatever we
are doing are now going to be fresh sort of land that we will acquire. So you know that 30%
gross margin kind of number we look for.
Meeshal Mehta:
So Amantran will be last of the projects that will get launched, which have not been launched &
will get launched and will have this kind of margin?
Varun Gupta:
Yes, the Kolkata project will also have about 30% numbers, yeah maybe late 20s you know 28%
to 32%. We do not know the exact sale price of launch right now. So that project will get a little
bit more clarity closer to now.
Meeshal Mehta:
We have been increasing marketing cost over the last couple of years now it looks at least from
this quarter that seems to have stabilize at some level is that correct or are we looking to increase
cost on that front as well?
Varun Gupta:
So, as a percentage of revenue front, the marketing cost should now stabilize hopefully, I think,
but we will get a little bit more sense in the next two, three quarters as per our spent. Our reported
selling expenses are actually linked to when the revenues are recognized, not when areas are
booked. So our reported selling expenses as a percentage of revenue will continue to be at this
level or higher for the next sort of I would say five, six quarters.
Meeshal Mehta:
There were some cost that were more general and not linked to projects which had gone up over
the last couple of years I am talking about those cost we had the discussion last time?
Varun Gupta:
They will be more stable going forward.
Moderator:
Thank you. The next question is from the line of Rohit Potti from Marshmallow Capital. Please
go ahead.
Rohit Potti:
I just want an update on the Dwarka project in Jodhpur you mentioned there was some issue last
quarter has that been resolved now?
Varun Gupta:
Not completely Rohit, but things are getting better so I would say Q4 should be better in terms
of sales in Q3 so it is partially resolved.
Rohit Potti:
I was also curious to know how has been the feedback from the residence at Ashiana Anmol, is
the lack of access road, etc., which you were talking about last quarter I mean affecting them or
how has been the whole experience generally so far?
Varun Gupta:
Our feedback is that it has been overall been good. We have about 70 odd families as of now at
Ashiana Anmol residing maybe a couple of more over the last couple of weeks that I am not
aware of, but so I would say we will get a little bit better sense in the next couple of months. We
are going to get little bit more feedback and we will speak to them directly. So, a couple of senior
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members of the team will actually go meet a few residents to get a sense of how things are, but
we do get referrals. So since customers are referring us, that is a good sign.
Ashiana Housing Limited February 13,2020
Rohit Potti:
So broadly the referral numbers are tracking your other projects?
Varun Gupta:
They are not tracking the other projects yet. Therefore, the sales numbers are challenging, but
the base is also much smaller, the other projects have a lot large base. So, let me put it this way,
the referral generation is a very important engine of the company. That is the key driver for our
sales overall. It has started in Anmol which was not there anywhere earlier without people living
in there, it has started but it has not gained the momentum that we would like for it to gain. Like
in Chennai the feeling is that for a single project location for us, we have gained a lot of referral
momentum and that is why sales are good in senior living there. Here we have not been able to
acquire referral momentum of the nature we would like.
Rohit Potti:
And the last question from me, so in the last conference call you had mentioned that you
generally like to look to do senior projects around major cities and that in case of Pune, Mumbai
somewhere between Pune, Mumbai is generally the area that you would want to look at. So, I
was curious in the active search for land parcels for acquisitions that you are talking about, you
did not mention about Pune or Mumbai, so is that an area that you are not looking at right now?
Varun Gupta:
Yeah, we are looking at it. It is a place of frustration for me personally. We have signed four
term sheets there and not been able to conclude the transaction. I do not know what has been
wrong, so that is where things sort of stack. Yes, we are going to begin the active conversation
again. So in Mumbai-Pune something or the other happens where we keep losing time because
we sign a term sheet, so we stop actively looking for new transactions, but they fall through for
some reason or the other. We are going to initiate discussions there again.
Moderator:
Thank you. The next question is from the line of Vivek Joshi from Bandarpoonch Capital . Please
go ahead.
Vivek Joshi:
Since you mentioned that you are not sure of cash flows for taking on more risk or like more
projects which are coming your way or whatever, have you thought of like raising equity by
rights or something like that so that you can be a little aggressive on that front that way?
Varun Gupta:
No, we have not thought of at this point of time raising equity. I do not think the company is
valued where selling equity at this point of time will also be justified personally.
Vivek Joshi:
So rights would not be dilutive that’s why.
Varun Gupta:
That is always there, but I think getting the larger bid has been thinking how to get the internal
accruals going forward to do this and which now seems to be kicking off.
Moderator:
Thank you. The next question is from the line of Rahul from Multi-Act Equity. Please go ahead.
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Ashiana Housing Limited February 13,2020
Rahul :
You were explaining the reason for lower margin in the Aditya project to one of the participants
earlier I missed that, can you please explain that again?
Varun Gupta:
So basically Ashiana Aditya the project was signed-off four years ago and when we underwrote
the project we assume the sale price, we assumed the cost of construction and then we gave a
revenue share to the land owner and that had 30% gross margin build into it, but over the last
four years sale prices have not increased at all. So our sale price assumption has not changed
even though the project got delayed, but our cost of construction has gone up that cost of
construction increase it is hurting the margin because you know your revenue share percentage
is static, your cost of construction as a percentage of sale value is more than what you thought it
would be and therefore a gross margin will be lower.
Rahul:
My second question is on Aangan Neemrana so any plans of launching there
Varun Gupta:
Not as of yet anything Rahul there no plans.
Moderator:
Thank you. The next question is from the line of Manish Jain from Gormal One LLP. Please go
ahead.
Manish Jain:
Just wanted to learn about qualitatively on the affordability side for the customer, if you have
broadly got to look at the most affordable market amongst the markets that you are present in
how would you really put in order of affordability the four, five key markets that you are present
in compared to say five years ago?
Varun Gupta:
The affordability index of customers today is significantly higher than what it was five years
ago. You know people could afford 50% more probably today than they could afford earlier.
Basic sales prices have more or less remained constant and I would say on an average, people
affordability, I think, would have gone up by about 6% to 8% a year you know even though
starting pays in most organizations have not gone up, but I would say people over there has seen
increased affordability there and with sort of some interest rate benefits and in that sort of grown
in. Affordability is better across the board and Jaipur I would say is seeing even more improved
affordability than elsewhere.
Manish Jain:
And on land as a source of raw material we have seen that land prices and expectations of land
owners have been getting corrected consistently overtime, is this a permanent correction in your
view on land as a raw material or it is transient till the upside when the sector comes back?
Varun Gupta:
It is transient. It is basically a cycle going on where the demand for land is lower than the supply
of land and therefore prices has sort of corrected and these things will change as and when the
cycle change.
Manish Jain:
And what kind of IRR on your new launches, not the new phases, but assuming the prevailing
selling prices, what kind of IRR conservatively you are looking at?
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Varun Gupta:
Manish, we do not do an IRR math on any specific project. But in Ashiana Daksh we needed to
Ashiana Housing Limited February 13,2020
do this math because IFC is an investor and they look for that specific math where the pretax
IRR for us will be in like in the low 20, but overall I would say doing IRR math on specific
projects is not a great scenario because the new projects are not consuming a very large chunk
of the company’s capital and therefore on a weighted average return on capital basis of the
company we will not give a good sense of where we are. What we have now started tracking
internally, is something called an Economic Profits that the company makes and where do we
see pretax return on capital or return on capital employed moving within the company and which
direction that is going in. So, that is where I think the ambition of the company is to get that into
the teams. We would be probably in the high single digits going forward as per what things are
and how things are looking right now, and we are putting in plans to get that into their teams
that is the way to put it.
Manish Jain:
And the last question is what is the current average cost of funds and incrementally if we have
to increase your leverage what will be the cost for you?
Varun Gupta:
So, in general cost of funds right now is about I think 10.5% to 12% weighted average basis
there. I think fresh financing will be anywhere between 11% and 12% except for land acquisition
financing which will be closer to 15% so if we do the client acquisition for that.
Moderator:
Thank you. The next question is from the line of Meeshal Mehta from Pliris Capital. Please go
ahead.
Meeshal Mehta:
Couple of follow up questions when we were taking booking right now what kind of booking
amounts are we taking, are they the same as we should take, or you had to kind of change that
around a little bit?
Varun Gupta:
Instead of booking amount that we take right now is 10% because that is stipulated by law. Now
with RERA you cannot take more than 10% without registering agreement to self. We are 10%
or lower and then we do the agreement to sell and we get the rest.
Meeshal Mehta:
And what was our practice earlier on this?
Varun Gupta:
Practice is to quickly to take 20% within 60 days.
Meeshal Mehta:
So that changes the cash flow profile?
Varun Gupta:
Yes, that changes the cash flow profile.
Meeshal Mehta:
Can we make this up by accelerating the registration of agreement and then the next slab is
higher so that at least in two slabs you get to the same where you used to be earlier?
Varun Gupta:
There are provisions like that you know earlier we did not have to register agreement to sell. The
registration infrastructure in the government is also slow so we have got in so many bulk
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Ashiana Housing Limited February 13,2020
bookings that process also takes a little bit of time which is not expected as it can go at its pace
a little bit. So we expect Ashiana Aditya and Ashiana Daksh agreements to get registered by end
of this quarter.
Meeshal Mehta:
And just last thing, just a housekeeping question this quarter would it be just trying to get to the
number of how much money you got in through bookings my estimates is about 90 crores would
that be broadly correct?
Varun Gupta:
Broadly correct.
Moderator:
Thank you. The next question is from the line of Rajesh Disale from SBI Mutual Fund. Please
go ahead.
Rajesh Disale:
Basic questions just wanted to know what is your balance cash collection the ongoing project as
well as the company old inventory?
Varun Gupta:
So balance cash collection is from ongoing projects is 400 crores I do not have the completed
construction inventory number, but I would estimate that to be around 40 crores.
Rajesh Disale:
And what would be the timeline on this, when would you be collecting on this amount?
Varun Gupta:
The 400 crore should mostly come in the next 24 months and 40 also should come in a little
earlier within the next 12 months.
Rajesh Disale:
So next 12 months?
Varun Gupta:
Yes.
Rajesh Disale:
You talked about the launch pipeline for FY21, but how much would that translate in terms of
million squares?
Varun Gupta:
I do not have that number with me as to how much we are launching, can you give me a minute.
We are looking to launch about 2 million odd square foot next year across stages.
Moderator:
Thank you. Ladies and Gentlemen that was the last question. I now hand the conference over to
the management for closing comments.
Varun Gupta:
Thank you everyone for being on this call and being so patient with the questions and our
answers. If we were unable to take any questions, please feel free to write to us directly or reach
out to us directly and with that we would like to conclude the call. A lot of material we have
spoken about is posted on our website and you can also email your queries for any further
clarification. Thank you once again for taking the time to join us on the call.
Moderator:
Thank you. On behalf of Ashiana Housing Limited that concludes this conference. Thank you
for joining us and you may now disconnect your lines.
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