Bengaluru Remains Highest Contributing Market For Puravankara | NDTV Profit - video Dailymotion

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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.

Bengaluru Remains Highest Contributing Market For Puravankara | NDTV Profit

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