Release Date: May 17, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Arihant Superstructures Ltd (BOM:506194, Financial) reported a 35% growth in total consolidated revenue for Q4 FY24, reaching INR162 crores compared to INR120 crores in Q3 FY24.
- The company achieved a 37% growth in total consolidated EBITDA for Q4 FY24, standing at INR36 crores against INR26 crores in Q3 FY24.
- Profit after tax for Q4 FY24 increased by 40.9% to INR22 crores from INR16 crores in Q3 FY24.
- The company recorded sales bookings of 759 units, equivalent to 6.49 lakh square feet of area, amounting to INR404 crores in Q4 FY24.
- Arihant Superstructures Ltd (BOM:506194) added approximately INR2,435 crores of new business in FY24, with launches lined up for FY25.
Negative Points
- The company has only 60% economic interest in most of its projects, which affects the total presales figures.
- Cancellations accounted for 10% to 15% of sales across all sites, impacting the net presales numbers.
- The collection efficiency for Q4 FY24 was lower at 30%-32% compared to previous quarters' 40%-50%, due to recent project launches.
- Land prices have doubled in majority of the micro markets over the last two years, potentially increasing future project costs.
- The company has a significant interest outgo projected for FY25, with institutional funds and promoter funds contributing to a total of INR70 crore to INR75 crore in interest expenses.
Q & A Highlights
Q: You recorded INR970 crores in presales for this year. What would be Arihant's share of presales given the 60% economic interest in most projects?
A: The presales figure is spread across the entire company, including subsidiaries. Approximately INR600 crores to INR650 crores will be from subsidiary companies.
Q: Are you still holding on to the guidance of 30% presales growth for the next two financial years?
A: Yes, we are confident in our guidance and target presales of INR1,300 crores for FY25. This is a conservative number, and there could be positive surprises.
Q: Can you explain the GDV of INR8,800 crores mentioned in the press release? Is it for the total projects or only Arihant's share?
A: The GDV of INR8,800 crores is for the total projects we are developing. It includes only the area belonging to us and does not account for the landowner's portion.
Q: How will the economics of the Club 10 Gymkhana work? Will the membership fees be income for Arihant Superstructures?
A: The Club 10 Gymkhana is an asset to the company, and all income and expenses will be managed by Arihant Superstructures. Membership fees will be part of the company's income.
Q: Can you elaborate on the company's strategy for land acquisition and joint ventures?
A: We are open to both land acquisition and joint ventures. Currently, 75% of our projects involve land we own, and 25% are joint developments. We aim for a 20%-25% CAGR in business development this year.
Q: What are the key factors that will lead to the 25%-30% growth you have guided for?
A: The growth will be driven by new project launches and ongoing projects. We have added INR2,300 crores in new projects, and we expect significant sales from these launches.
Q: Can you explain the discrepancy in presales numbers reported quarterly versus annually?
A: The annual presales figure of INR970 crores is net of cancellations, which typically range between 10%-15% across all sites.
Q: What led to the lower collection efficiency in Q4 compared to previous quarters?
A: The lower collection efficiency is due to the launch of new projects in Q4. Collections from these projects will start from Q1 onwards.
Q: What is the company's strategy for managing interest outgo in FY25?
A: We expect institutional funds to account for INR30 crores to INR35 crores in interest outgo, with an additional INR20 crores from promoter funds. Total interest outgo is projected to be around INR70 crores to INR75 crores.
Q: Can you clarify the guidance for FY25 in terms of growth and margins?
A: We expect 25%-30% growth across presales, revenues, EBITDA, and PAT. Premium housing will contribute more to revenues and EBITDA, leading to increased margins.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
