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00:00Now we're going to talk to Abhishek Kapoor, who's the Group CEO of Purvankara.
00:04Purvankara came out with its Q1 FY25 numbers.
00:08Good set of numbers. Abhishek, welcome to the show.
00:11My first question to you is that, you know, there's a 2x jump in the revenue.
00:16And, you know, you have a target of delivering roughly 3,500 to 4,000 units this year.
00:23What is the kind of units that you've delivered in this quarter particularly?
00:26Well, thank you for having me on the show.
00:30So we've delivered over 900 units in the last quarter,
00:34in line with our plan for delivery, as you rightly said, 3,500 to 4,000 units.
00:39And we're quite excited now with the future launches that are coming up.
00:45So the quarter has been very good.
00:47Our collections have been very good in excess of 900 crores.
00:51Cash balance is over 1,000 crores.
00:53We have deployed over 700 crores in new acquisitions.
00:56We have added about 4 million square foot of area for development in the last quarter itself.
01:04And of which about 50% is added in terms of investment is in Mumbai.
01:09So overall, I think we're very, very excited with the last quarter
01:12and looking forward to the next.
01:14Hi Abhishek, Anushi joining in.
01:16Glad to connect with you again.
01:17So this is just a follow up on what you've mentioned,
01:19900 units that you said we have delivered.
01:22Again, with this, do we expect in the next consequent quarters also
01:26to this 2x kind of growth continuing in terms of revenue?
01:30Along with this, I also want to address the booking value.
01:32So booking value overall has remained flat over this quarter.
01:35So what's your outlook?
01:36Are we seeing some delays happening over here?
01:38Because we have 14 million square feet of launches planned for FY25.
01:44Look, as you know, our launch plan is pretty much intact.
01:48Yes, there was some deferment of few launches.
01:51But the launch plan is very much intact.
01:53These are all projects which are in advanced stages of approvals.
01:57And we are expecting in this coming quarter and the next two quarters,
02:01which is actually the peak period for the business generally,
02:04we're expecting all those launches to happen.
02:06So that's as far as launches are concerned.
02:08And relatively, it was flat because we did not do any new launches in the last quarter.
02:14Having said that, you know, our sustenance numbers have been pretty good.
02:17Our realization went up.
02:19And, you know, so on the sales bit, I think we will see
02:24these launches coming in to bring in more value as we go along.
02:28And as far as position is concerned, as you rightly said, you know,
02:30we have about 3,500 units to deliver this year.
02:34And we are confident that we'll be able to complete those and hand over.
02:37And therefore, you know, relevant revenue recognition, therefore, will happen
02:42versus about, I think, 2,200 odd units that we delivered last year.
02:47Abhishek, just curious, I want to understand how margins for you evolve.
02:53You're currently at 20.
02:55You have three categories of product that you work with, if I can call it product,
03:01but three categories of product.
03:03How are margins in each of those?
03:05If you can just give us an understanding.
03:08Look, you know, when you see our current margin, which is at around 22%,
03:12what is it that we are taking a hit off?
03:14And consistently, we have been on these margins.
03:17Today, it is looking relatively lower because a lot of sales marketing
03:22and expansion overheads hit our P&L as of today,
03:26even though we can't recognize those revenues today, right?
03:30We can only recognize what is being delivered today.
03:32So those costs hit us today, and therefore, it looks relatively lower.
03:37Companies...
03:42And therefore, you know, we are continuing in that direction.
03:46If you look at it brand-wise, typically, Provident is somewhere between 27 to 30%,
03:51Purvankara between 30, 35, and, you know, if you look at Purva Land,
03:55it will be in excess of 35%.
03:57So on an overall basis, blended basis, we continue to target our margin of 30%,
04:02but that will evolve over time as we, you know, this gap of high expansion
04:08kind of narrows down a little bit, because then you're...
04:11and the delivery picks up a lot more.
04:13So I think it's just a matter of time when we are going to be able
04:16to see those margins on the paper, once we start delivering a lot more.
04:20Understood.
04:21You know, Abhishek, now I want to shift focus to, you know,
04:23balance sheet side of things.
04:24You know, your net debt has marginally gone up.
04:28So from a longer-term perspective, I want to understand that
04:31what is your trajectory going to be like when it comes to your total debt?
04:38Look, that's a good question.
04:40So while you say it has gone up marginally, you know, what has happened?
04:44So the investment has happened in two spaces, right?
04:47I mentioned a little earlier.
04:48We have deployed about 760 crores in new acquisitions,
04:53but the debt has only gone up by 86 crores.
04:55Plus, we continue to build our commercial portfolio,
04:58where we have added, we have not generated any revenue,
05:01but that construction goes on where we have created capital asset
05:05of another about 40 plus crores.
05:07So if you look at it, you know, I think on an overall basis,
05:10the debt hasn't gone up, but investments have significantly gone up.
05:14And of course, the good part is you're still sitting with,
05:17you know, a cash balance of more than 1000 crores,
05:20which allows you more deployment in the coming quarters.
05:22The idea here is that you continue to scale your business,
05:26you continue to do new acquisitions,
05:29and ensure that you replenish your land bank for future growth
05:33while keeping the debt at similar levels.
05:35And that will make sure that, you know,
05:37your overall business is so much higher,
05:39the debt relatively becomes, you know, irrelevant,
05:41as long as we try and keep it in similar range.
05:45That is one way to look at it.
05:46That's in absolute numbers.
05:48But if you look at it in another context,
05:50we look at debt on per square foot basis of area under development.
05:53When we look at that figure, what we see,
05:56and that is so relevant in the context of the business,
05:59because debt and business has to be looked together.
06:02If your business is scaling up really quickly and a lot more,
06:06and the debt remains under a, you know,
06:08range bound limit of area under development per square foot,
06:12which is less than 1000 rupees,
06:13we should be always very, very comfortable
06:15because basically your average realization
06:18is excess of 8,500, 9,000 rupees per square foot.
06:20And that is a very good position to be in.
06:23So I think we'll always keep that balance
06:25and make sure that, you know, we continue to grow.
06:28Our focus will continue to be on growth.
06:30Right. So again, it should remain below the 1000 level,
06:33as you mentioned.
06:34But now I want to get a perspective
06:36on the whole real estate sector in general.
06:38Now with the budget announcement of the indexation benefit,
06:40which has been scrapped,
06:42what do you think about this announcement?
06:43How is it for a company like Purvankara,
06:46how do you look at it in that manner?
06:49Look, the way I see it,
06:50it's actually fantastic for people
06:52who are sitting with long-term gains,
06:53which is for property,
06:55especially bought before, you know, 2010.
06:59I think a lot more upgrades will happen.
07:01I think a lot more demand for larger units will come in
07:05where people will look at, you know,
07:07offloading their current,
07:08because it's a big tax break that's been given.
07:11In fact, for people who are sitting on assets
07:14which are older than 2010.
07:16And I think it's a good opportunity
07:18for all of these, you know,
07:20people who have invested in the past to upgrade
07:23and look at, or look at new acquisitions.
07:25So I think it's very, very positive
07:27for the real estate sector.
07:28And of course, for Purvankara.
07:30Okay. Mr. Kapoor, last off, any equity raise plans?
07:37So, you know, we have had a board approval
07:40and a shareholder approval for a QIP.
07:43And we will update as and when
07:45we can share more information with you.
07:48Having said that, you know,
07:49all our options are always open in terms of capital raise.
07:53We've recently done a platform with HDFC.
07:56In the past, we have had investments from IFC.
07:59And of course, we've had partnerships with Capital Land.
08:02So we'll continue to look at those opportunities.
08:05Of course, we have our own AIF.
08:07And then, you know, all of the public markets
08:09always an option to look at.
08:11So we'll continue to look at all opportunities
08:13because, you know, as I mentioned earlier,
08:15we are really focused on growth.
08:17Understood.
08:18And the other piece is that,
08:20will this mean promoter ownership will fall?
08:23Look, so, you know, if you do the QIP,
08:26as long as the company decides to do it,
08:28yeah, marginally it should come down.
08:30Got it.
08:31And collection pipeline or collection expectations,
08:34if I can call it for FY25 with the launch pipeline?
08:38So look, as I said, you know, in terms of focus
08:43is first monetize your existing land bank.
08:46And the 14 million you all spoke about a little earlier,
08:49which is our launch pipeline is in that direction.
08:51And of course, there are some new acquisitions
08:53which may get added to that launch pipeline as well,
08:56including the, you know, phases that we are doing.
08:59So in fact, if you look at including
09:02the phases of earlier projects,
09:04it will be about 17 million square foot
09:06that we will take to market in this year now.
09:09So that is really the idea there is to unlock the equity,
09:13which is already invested in our projects
09:16and the margins thereof,
09:17which will enable us as I mentioned and demonstrated,
09:21you know, in the past two years,
09:23that today, if you look at your collections,
09:25that is in excess of 900 crores,
09:27closing to a thousand crores almost.
09:29And then your cash and bank balance
09:30is almost about a thousand crores.
09:32And still you're continuing to invest
09:34more than 700 crores in a quarter.
09:36So I think that surplus and reinvestment
09:38and making sure that your capital churns
09:40is critical to our business.
09:42So our focus will remain in ensuring
09:45that we monetize our investments
09:46and we continue to deploy capital
09:48and churn the capital as quickly
09:50and as many times as possible.
09:51Therefore, hopefully as we go along,
09:53better return on capital.
09:55Right.
09:56Well, Abhishek, thank you so much
09:58for giving us those elaborate answers
10:01and taking our time and speaking with us
10:02at NETV Profit.
10:06Thank you.