Release Date: July 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ganesh Housing Corp Ltd (BOM:526367, Financial) completed the Malabar Retreat exotic project ahead of schedule, resulting in significant revenue booking.
- The company expects a 30% to 35% growth in PAT over FY24, indicating strong financial performance.
- Ganesh Housing Corp Ltd (BOM:526367) has maintained a strong financial position with surplus cash flows despite significant CapEx in ongoing projects.
- The Ahmedabad residential market has shown significant resilience and growth, with Ganesh Housing actively contributing to this sector's growth.
- The company has a robust pipeline of projects, including the phased launch of the Mines residential project and the commercial project One Country, expected to generate substantial revenue.
Negative Points
- Revenue for Q1 FY25 was lower than the corresponding first quarter of FY24, which was an exceptional quarter.
- The company faces challenges in booking revenues from new projects until they are completed, affecting short-term financial results.
- There is a dependency on land sales for revenue, which can lead to fluctuations in financial performance.
- The completion of new projects like Malabar Retreat is expected to take at least 2.5 years, delaying revenue realization.
- The company has significant ongoing CapEx requirements, which could strain financial resources if not managed carefully.
Q & A Highlights
Q: Can you provide details on the Malabar Retreat project, including expected GDP, construction costs, and completion timeline?
A: The total sales value of the Malabar Retreat project is around INR450 crore, with construction costs estimated at INR340 crores. The project is expected to be completed by the third or fourth quarter of FY27. We aim to exhaust 80%-85% of inventory during the construction period.
Q: What caused the dip in revenue sequentially and year-on-year? Can you provide a split between land sales and project sales?
A: The fluctuation is primarily due to land sales. This quarter, INR160 crores came from land sales and INR46 crores from project sales, mainly related to Exotica. The first quarter of FY24 was exceptional, making direct comparisons challenging.
Q: How does Ganesh Housing plan to manage operational aspects of commercial projects while continuing residential projects?
A: We have sufficient cash balance to cover the construction costs of Phase 1 of the commercial project. Residential projects will be funded through pre-sales and existing cash flows. We maintain a strong financial position to support ongoing and new developments.
Q: What is the revenue potential from projects being completed in FY25 and FY26?
A: For FY25, we do not expect significant revenue from new projects as Malabar Retreat will take about 2.5 years to complete. However, we hold inventory from past projects worth around INR40-45 crores. For FY26, revenue will primarily come from land sales and possibly from the Godavi project if it progresses as planned.
Q: What is the current market value of the land held by Ganesh Housing?
A: The market value of our land bank is conservatively estimated at INR15,000 to INR20,000 crores. This value is expected to increase as projects develop and the land is utilized.
Q: How does Ganesh Housing plan to allocate capital between ongoing projects, new developments, and potential land acquisitions?
A: Approximately 70% of cash flow will be allocated to ongoing projects, with the remaining 30% potentially used for land acquisitions. We aim to balance between developing current projects and acquiring new land for future growth.
Q: What are the pre-sales figures for FY25 and FY26 from residential projects?
A: We refrain from providing specific guidance for FY25 and FY26 at this time. However, we expect significant pre-sales from ongoing projects like Malabar Retreat starting from FY26.
Q: What is the expected timeline for achieving occupancy in commercial projects?
A: We expect to complete the commercial project by Q1 FY26, with rental agreements starting from Q3 or Q4 of this financial year. We anticipate 30%-40% occupancy by FY26.
Q: What is the launch pipeline for residential and commercial projects in FY25 and FY26?
A: We plan to launch Malabar Retreat in FY25, with potential price hikes based on market conditions. For commercial projects, Phase 1 is progressing well, and Phase 2 will be evaluated based on the success of Phase 1.
Q: What is the cash balance at the end of the quarter, and will you need to take on debt for future developments?
A: As of the end of the quarter, we have a cash balance of around INR60 crores. We do not anticipate needing additional debt for future developments, as internal accruals and project collections will fund ongoing and new projects.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
