Release Date: February 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Total sales for the nine months stand at INR16,333 crores, up by 81% compared to the previous year.
- Collections have increased by 20%, with nine-month collections at INR8,478 crores.
- Average realization has grown 19% year on year to INR10,143 per square foot.
- Highest-ever launches during this fiscal year, with over 30 million square feet of area launched.
- Prestige Estates Projects Ltd (BOM:533274, Financial) has completed and delivered over 300 projects, totaling close to 180 million square feet of area.
Negative Points
- Quarterly revenue slightly down at INR1,970 crores due to fewer handovers.
- Concerns about sustaining growth with limited large launches in the upcoming residential pipeline.
- Delays in project approvals, particularly in NCR and Chennai, affecting launch timelines.
- Debt levels remain almost the same, with a debt-equity ratio of 0.6.
- Lower margins in the residential segment, with current margins at 19%, which is below expectations.
Q & A Highlights
Q: In the nine-month pre-sales of INR16,000 crores-odd, how much is the contribution of the new launches?
A: The bulk of the inventory, around 80%, comes from new launches, especially since there is hardly any inventory left in Bangalore. We do have some inventory in Hyderabad and Mumbai, but new launches are the primary contributors.
Q: Given the rapid growth and the upcoming residential pipeline, do you have enough large launches to support the growth on this INR20,000 crores target?
A: Yes, we have enough and more projects in the pipeline. We are also in discussions for additional projects and have a lot of land offered to us. We are selective in our acquisitions and can turn around projects quickly, within six months to a year.
Q: Any updates on the NCR projects, specifically the Noida and Delhi launches?
A: The Sector 150 project in Noida should have approvals in place within the next fortnight. We have also signed up a 63-acre plot near Indirapuram for Prestige City in NCR. In Delhi, we have projects in KG Marg and Kamla Nagar that will happen soon.
Q: What is the status of the BKC commercial project? Has the financial closure been achieved?
A: The contractor has been appointed, and construction is ongoing at a fast pace. Financial closure is expected to conclude in the next two to three weeks.
Q: Can you explain the sales from Prestige City Hyderabad where the company's stake is 30%?
A: The land is partly owned by us and partly by our land partner. In the SPV, our share is 60%, and the rest is with the partner. The project is managed as a single entity for efficiency, and the listed entity benefits from top-line fees and profitability.
Q: How does the 19% increase in price realization split between price increase and mix improvement?
A: It's a mixture of both. Existing markets saw a price increase of around 12% to 14%, and the contribution from Mumbai, where realization per square foot is higher, also pushed up the average.
Q: What are the launch timelines for Bangalore projects like Southern Star, Varthur project, Raintree Park, and Falcon City Phase 2?
A: Raintree Park will be launched in the next quarter, followed by Southern Star and Falcon City Phase 2. Additionally, we have a project in Whitefield called Pine Forest, which should also launch in the next quarter.
Q: How do you plan to maintain the INR5,000 crores run rate for the next quarter?
A: We have one launch in Bangalore this month and possibly another. The rest will come from sustenance sales. We aim to cross INR20,000 crores in pre-sales this year, and the following quarter will see more approvals and launches.
Q: What is the planned investment for new project additions next year?
A: Most upcoming residential projects are paid for, with a balance cost of around INR800 crores to INR1,000 crores. We are pursuing additional land parcels in Bangalore and NCR, which will be funded through internal accruals.
Q: What is the debt sitting outside the books on JV projects?
A: The debt on JV projects is around INR1,900 crores to INR2,000 crores, with our share being half of that.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
