Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Eldeco Housing and Industries Ltd (BOM:523329, Financial) reported a significant year-on-year growth of 193% in the area booked, totaling 156,335 square feet.
- The company achieved the highest average price realization of INR 6,500 per square foot, driven by luxury and budget bookings.
- Booking value increased by 316% compared to Q2 FY24, reaching INR 103 crores.
- Successful project deliveries included 61,000 square feet handed over during the quarter, up from 38,000 square feet in Q2 of the previous year.
- The company expanded its land bank by acquiring an additional 3.84 acres, bringing the total land aggregation for fresh township projects to 65 acres.
Negative Points
- Consolidated profit after tax decreased to INR 4.5 crores in Q2 FY25 from INR 6.4 crores in Q2 FY24.
- The EBITDA margin for the quarter was lower at 21.8%, compared to historical margins due to the mix of projects recognized.
- There is a potential slowdown in the luxury housing segment, which could impact future sales.
- The company faces challenges in land acquisition and project approvals, although improvements have been noted.
- The real estate market is experiencing a general slowdown, with reduced inquiries and potential impacts on future sales.
Q & A Highlights
Q: With the increasing competition and limited land availability in Lucknow, are there plans to explore land banks outside of Lucknow?
A: Currently, we are focused on the Lucknow market. We have resolved the issue of land banks and future projects, as detailed in our investor presentation. We have enough runway for growth in Lucknow for the next three to four years. (Respondent: Unidentified_3, Chairman and Managing Director)
Q: Are you confident in maintaining the pre-sales benchmark of around 400 crores with the new acquisitions and projects?
A: Yes, based on our current unsold area and fresh inventory under approval, we expect to achieve sales of around 2,600 crores over the next four to five years. (Respondent: Unidentified_3, Chairman and Managing Director)
Q: How do you view the demand for luxury housing in Lucknow, especially with the launch of Trinity?
A: Trinity is our only luxury project and has been well-received, with 30% sold at the basement stage. However, luxury constitutes only 10-15% of the market, and our focus remains on the upper premium segment. (Respondent: Unidentified_3, Chairman and Managing Director)
Q: Can you explain the reason for the lower EBITDA margins this quarter?
A: The lower margins are due to the recognition of revenue from Imperia Phase 1, which has a lower margin due to shared costs with Phase 2. However, Phase 2 has a higher margin, and overall margins should normalize. (Respondent: Unidentified_3, Chairman and Managing Director)
Q: What is the current debt level, and do you expect it to increase?
A: Our current outstanding debt is about 100 crores. We may increase debt to support growth, but it will be repaid quickly due to fast collections in Lucknow. (Respondent: Unidentified_3, Chairman and Managing Director)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
