Arihant Superstructures Limited (506194) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q1 FY '23 Earnings Conference Call of Arihant Superstructures Limited, hosted by Dolat Capital. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Tejas Sonawane from Dolat Capital. Please go ahead, sir.

Thank you, Ryan. Good afternoon, everyone. On behalf of Dolat Capital, I would like to thank the management of Arihant Superstructures for giving us the opportunity to host their Q1 FY '23 earnings call. We have with us today Mr. Parth Chhajer, the additional Whole-Time Director; Mr. Abhishek Shukla, the Chief Strategy Officer; and Mr. Deepak Lohia, the Chief Financial Officer. Without further ado, I will now hand the call over to the management for their opening remarks. Thank you, and over to you, sir.

Thank you, Tejas. This is Abhishek here. Good afternoon, everyone, and thank you for joining Arihant Superstructures' conference call to discuss Q1 FY '23 results. First, I will go through key operational updates for the first quarter, followed by financial results of Q1 FY '23. The quarter has been good for new project acquisitions. During the quarter, the company has added 1.2 million square feet to our existing portfolio, which will add INR 640 crores of gross development value. With this, we have crossed 14 million square feet of development potential in our ongoing and forthcoming projects. We will provide you with more details in the later part of the call. With this, we have demonstrated quick and efficient use of capital raised within the same quarter. The company is able to maintain the sales momentum despite challenges of inflation and rising interest rates. For Q1 FY '23, we have sold about 533 units, which aggregates to 4.05 lakh square feet of area. And in terms of value, it is INR 234.8 crores. This means a year-on-year growth of around 85% in both volume and value terms. The total collection stood at 17 -- it stood at INR 110.6 crores, which is a growth of 17.7% year-on-year. On the financial performance, the total revenue stood at INR 89.61 crores as against INR 84.64 crores in Q1 FY 2023. This is a year-on-year growth of around 6%. EBITDA in quarter 1 stands at INR 19.09 crores as compared to INR 15.38 crores in the same quarter last year, with a growth of 24.1% year-on-year. EBITDA has also improved 11% quarter-on-quarter from INR 17.2 crores, in spite of Q1 being generally a weaker quarter as compared to Q4. EBITDA margins increased by 313 basis points to 21.3% in Q1 FY '23 as compared to 18.2% in Q1 FY '22. The profit after tax stood at INR 10.7 crores in Q1 FY 2023 as compared to INR 8.28 crores in the same quarter last year, which is a growth of 29.2% year-on-year. Again, we have witnessed a marginal improvement over quarter 4. PAT margins increased by 215 basis points to 11.9% in Q1 FY '23 as compared to 9.8% in the first quarter of last financial year. We are excited with our launch pipeline and are looking to rapidly scale the business in the next few quarters, while keeping our focus on value-accretive new acquisitions. We have also new development I would like to share. Mr. Parth Chhajer has been appointed as the additional Whole-Time Director of Arihant Superstructures, a Bachelor of Science, Economics from Pennsylvania State University, USA. Mr. Parth Chhajer has begun his career with leading capital markets and investment group, CLSA, in equity research before joining Arihant Superstructures Limited in 2018. He rose through the ranks after gaining knowledge across various business functions operating within the organization with a special interest in product design, sales and finance functions. Under his leadership, the company has more than doubled the sales between FY '20 and FY '22 by rolling out various innovative schemes, strengthening the sales infrastructure and undertaking digitization of processes while keeping in mind focused product development and more engaged customer interaction. With this, I hand over the call to Mr. Parth Chhajer.

Good afternoon, everyone, and Welcome to the Conference Call of Q1 FY '23 Earnings and Business Update. Thank you, everyone, for taking time out for this call. We are happy to see business growth despite the inflation rising costs, supply chain disruptions and higher mortgage rates. In this up cycle, there is a stellar growth in sales bookings in this quarter, which were to the tune of 533 units equivalent to 4.05 lakh square feet, valued at INR 234 crores. Collections also have been growing constantly, as highlighted by Abhishek, with an increase in the engineering spends. This quarter, we received occupancy certificates for 2 projects at Taloja, which -- marking the total delivery of 390 units in the quarter. We also launched our new project, Arihant Aakarshan at Taloja, which is very close to the existing projects and we've witnessed a very strong and positive response from the customers. The reliability, trust, local advantage with a proven track record -- track record of deliveries in this micro market has created the difference to boost our sales to almost 60% of the total inventory that has been opened. So 266 units have been sold as on date out of the 439 units, which have been opened for sale. On the business development front, we have ventured into new micro market, Titwala, which is fitting in our strategy to expand our presence in the new micro markets of the Mumbai MMR region, focusing on the affordable housing segment. Our estimated salable area from this project should be a 374,000 square feet, with a revenue potential of around INR 220 crores. Titwala is a new and new emerging market with average volume transactions on a yearly basis. We believe that we can leverage our brand value and create a difference in this market with a quality product coming in at an affordable price. We have also ventured on an asset-light model basis at Shil-Phata, which is where we already have our existing project Arihant Aarohi. So this new project is 200 meters away from Arihant Aarohi and is going to have a total salable area of 680,000 square feet in our portfolio, with a revenue potential of INR 400 crores approximately. Shil-Phata-Dombivali well-built today is one of the largest and highest selling markets by unit sales in the MMR region. And we are excited to expand our presence in this micro market, which falls under the mid-income housing segment. So this is fitting to our strategy for expanding into newer localities or expanding in the existing localities where we are already witnessing good sales, good velocity and the projects have been able to be -- again, we are able to implement the projects in a better manner. In this new project, we can -- we feel we'll be able to make a difference with the unique product that we'll be able to offer to the home buyers and achieve a higher velocity. Apart from this, we continue to look for new transactions and new lands across the MMR region, and our goal is to now move into more newer micro markets where we have not yet done anything till date, but where markets -- where people are able to do good business is where we are looking at as a company to venture out to. In the launch pipeline, we also have scheduled an aggressive launch pipeline of many launches, many units to be opened up for sale, so approximately 2,400 more units are lined up for opening up for sale in the next 3 quarters. In Q2, we expect to get approvals for the Titwala project and we shall be opening approximately 200 units. In Kalyan, where we have already received the approvals, which is an 80IBA project, we expect to start the sales in the month of September. We've already started the construction for the project. We also shall be opening up some new buildings in Arihant Amisha, which we looked at Taloja, MIDC. In Q3, we expect to launch one more tower of 43-story at Arihant Aspire in Panvel, which will have an inventory of 370-odd units. And alongside that, one more tower shall be opened for sale in Arihant Anmol at Badlapur, and some more inventory shall be opened up in Arihant Aakarshan in Taloja as well as Arihant Arshiya in Khopoli. And in Q4, we are optimistic that we should receive approval by December for our Shil-Phata project, and we shall commence the sales for the same in fourth quarter in the month of January, February. Apart from that, we'll be having a small -- one more new tower launching at Arihant Aloki in Karjat. This will be the second last tower in the project. So we are looking at a good pipeline of opening up almost 2 million square feet of area in this financial year, which will have a total revenue potential of INR 1,100 crores. As per the sales guidance, we are looking at a CAGR of 45% to 50%, as we indicated earlier also to the FY '22 figures on all parameters of sales, revenues and others. So I would like -- now like to throw the floor open for questions.

[Operator Instructions] Our first question is from the line of Balasubramanian with Arihant Capital.

My first question is [ related to ] fundraising of INR 500 crores towards private placement. Could you please share more details about the fundraising? What kind of rate and how the funds will be utilized? What kind of value we are expecting?

No. So that is just an enabling resolution to take up any kind of -- to raise up any kind of funds up to the tune of INR 500 crores. So this is an exercise which we do every year and which requires a Board approval. So it's just an enabling resolution.

Okay, sir. And sir, like the company has consistently delivered around 700 to 900 units per year. What kind of run rate we will expect next 2 to 3 years?

So next 2, 3 years, we are planning to scale this up. The run rate should be to the tune of 1,000 to 1,200 average for the next 3 years -- 4 years. 1,200, 4 years.

Okay, sir. And sir, Arihant Aakarshan at Taloja has received a very good response. I think within 2 months, more than 50% of units were booked. What kind of conversion rate right now in Taloja markets? In overall, what kind of conversion rate we will expect going forward?

So right now, conversion rate from a visit to a booking is to the tune of around 14% on the total number of walk-ins that you get on site. So the number of visits have been growing constantly. Going ahead, we expect the same momentum to be kept when it comes to the realization on the conversions, although our team has been given a target to take this up to around 20%. So we'll try to achieve the best possible. But as a market, Taloja is looking good for us. We have a very large market share of around 50% in that total locality. And being -- having a good track record of delivery in the nearing area to Arihant Aakarshan, we feel that this project has taken off very well and we'll be able to implement it quite smoothly. Although it's a large-size project and is falling under the 80IBA category, we feel we are confident of doing this entire project in the next 4.5 years.

Okay, sir. My next question, the previously guided sales early around INR 6,600 crores. The new launches, the sales early round INR 1,090 crores, which comes around INR 7,700 crores. So could you please share more details about new launches like a completion time, average construction cost per square feet, approval admin and sales, this kind of costs and approximately?

Yes. So the total portfolio today is to the tune of INR 7,680-odd crores. This is as per today's sales value that we have considered and like, obviously, accounted for the inflation coming ahead, the total -- so what was your question, again?

So could you please share new launches, details about completion time, average construction cost, approval and admin sales and marketing costs on an overall basis.

Okay. So the costs vary from project to project. So because we have a wide range of projects that we do, so we have projects that are of 7 stories and we have some projects that are 53 stories. So we have to average it out, and the total -- average on the total area that we have today for the construction cost would be around INR 2,850 square feet. And the land that we have in our books is to the tune of around INR 300 per square feet. And going -- adding to this, there is the other cost of administration, which would be around INR 200 square feet, marketing cost would be around INR 200 square feet. And so it's an average of various project. So it differs from project to project.

So averaging, we can expect around INR 4,000 per square feet in overall cost?

No. So our average selling price today is around INR 5,500. And average cost to complete would be around -- inclusive of land, inclusive of administration, interest, marketing expenses, all these costs would total to around INR 3,800 square feet. So we should have an EBT of around INR 1,600-odd square feet.

Okay, sir. Sir, like I think I missed during the early call, 4,150 square feet land acquired at Taloja. What was acquisition cost? It is INR 232 crore or...

No, I didn't get you.

Sir, 4,150 square feet land acquired at Taloja. What was the acquisition cost for that land?

The new land, okay, yes. So that is to the tune of INR 2.5 crores.

INR 2.5 crores.

Our next question comes from the line of Gaurav Lohiya with Bowhead India.

Yes. Yes. Am I audible?

Yes. Yes, we can hear you.

Parth, congratulations on your elevation as Executive Director. So Parth, I missed out the initial -- timely launch of your initial remarks. So if I'm repetitive, I would like to request you to bear with me. Just 2 things. So it seems like that we are scaling up very nicely and we do have plans to scale up even further. So I just wanted to understand what are the challenges you foresee when we scale up? And if you have taken any steps to address those challenges? What makes you confident that going forward -- since our size was different and going forward, it will be very different, we would not face any challenges when we scale up?

No, the biggest challenge today is also implementation of the project, so that will always remain the most difficult challenge. So how well we can implement the project is going to make it different. And today, Arihant has a team of around 350-plus people across all verticals. And mostly, it is all handled through the head of the departments, who really are able to drive things very properly, very efficiently, enabling us to implement the projects at a good space. Sales is doing well. Sales is the first thing that needs to start taking the entire cycle for a project. And the engineers also are now able to implement the projects in a proper time frame. We feel that the team, the systems, the processes of the company are ready and well equipped to even scale up from here and implement the project that we are currently having and even think of implementing the new projects that we are planning to take or have taken in a very efficient manner. So the most important thing is to have the correct people, the correct strategy, the correct processes. Still today, as a company, we have even done a lot of changes on the technology front. So we've been using Salesforce for our sales team, the entire sales. The presales is governed through the Salesforce. Using a lot of technology. Farvision is being used for all the engineering as well as the collection department. So technology with the correct human resources is going to help us drive this going forward and scale up from even a year on. So that's going to be the most important factor in implementation of these projects.

And you said that our team size is 300, right? We have 300 people. What would this true figure be, let's say, 2 years back? Or how many people would have added -- you would have added in the last 2 years? And if you can give us the same number for, let's say, sales team separately.

So 2 years back, I think our team was to the tune of around 220-odd people. So there's been a lot of churning. But at the same time, we've been able to add up new people, add up more responsible managers under the people, and that's been able to drive it up in a better manner. Even the sales team earlier used to be around 35, 40 employees in the COVID times of 2020. So now it has increased to around 120-odd people. So the main thing in this increase is that we've subdivided the team in a very systematic manner, where we have people today just doing channel partners sourcing, we have people today focusing on just the clients closure and viewing. We have a team who is just dedicatedly doing telecalling. And these things were existing before also, but we have been able to expand very largely, which has been able -- which has helped us increase the total number of bookings, the number of sales that we have done in the last 2 years. Also, the technology has helped us scale at a very efficient manner. And your second question, I didn't get it.

Second, for sales team, I wanted to check what is the number right now? How many people do we have in our sales team? And what was the number 2 years back?

Yes, 2 years back, it was around 40 people. Today, it is around 130-odd people, including the presales team. And the recovery team and the back office documentation is around 30 more people. So total people focusing on the sales, presales, bookings and collections is 160 people today.

And this is versus 2 years back, how much did you say?

Total used to be around 50.

So we have almost tripled our team...

We have tripled our team, we have tripled our sales also -- almost tripled our sales from 2 years ago.

Understood. And in terms of land bank addition, over and above what we have added in Q1, can you give us a guidance for, let's say, next 9 months where we have, let's say, significant visibility? And what are plans for, let's say, FY '24 and '25 for land bank additions?

So we continue to look at land parcels on a daily basis, and we have a very special team working just for new acquisitions. But it is not that easy, even if we have the money to get a good land parcel, it's difficult. But our aim for the next 1 year is to take it up to 20 million. So we are currently evaluating a lot of deals, but nothing can be officially announced yet. But the pipeline look good and we...

Sir, what exactly do we look for when we are going for land acquisition or JVs? What exactly do we look for in terms of, let's say, return ratios or partner, what does your partner bring in? What exact capabilities do we look for?

So largely, when it comes to affordable housing or mid-income housing also -- affordable housing, firstly, we look at an outright purchase of land. That's the first thing that we look at. We don't really want to go in for a JV model or an area sharing or something with the land owner. We prefer to buy the land. While buying, we obviously evaluate the potential of the land, how much FSI is there, what can be the developable area. Apart from that, we have to look at the neighboring localities also to the land. So if it is in an urban area, partly developed area or non-developed area. So these factors need to be evaluated. And accordingly, we have to figure out that this could be a tentative pricing for a product that we can make. So it is not like in our wish list to do a 14-story tower everywhere. We are happy to do a 7-story tower. But we look at realization in terms of time, in terms of how much time we can buy the land, how much time we can get the approval, after the approval, how much time we should take up to implement the project for -- by sales and -- by doing sales, by doing the engineering. And we usually would like to have a PAT margin of at least 20% on the total revenue that we are able to generate from the land.

So whenever we look for land, we generally try to launch it within 2 or 3 years of acquiring the land, right, not beyond that?

No, we try to do it within 1, 1.5 years. Like this Titwala project, we purchased the land in May, we are looking at the launch in the month of September. So we try to do it within 3 to 4 months, wherever possible. But in some locations, approvals take slightly longer and clearances also take time. Average 1 year is what we look as a good time from the day we purchase the land until the day we start doing the sale. Beyond that, we don't buy any land with a very long horizon of 3 years, 4 years, 5 years because land is a raw material...

From completion -- we generally look for 4 to 5 years kind of time, right, from acquisition to completion?

From acquisition, we look at a time line of 5 years. From the day we start the bookings, we look at a time line of 4 years.

Understood. And in terms of guidance, you said that you want to scale it up to 1,200 units or deliver 1,200 -- not deliver, well, book 1,200 units a year, right, in 2 years down the line. So in terms of, let's say, rupee value, how much that would be? Or in terms of square feet, since we can take a realization of INR 5,500 or INR 6,000 per square feet, let's say, if you have to calculate the value, how much would that be?

No, so we indicated that we'll be delivering around 1,000 to 1,200 units over the next 3 financial years from the existing inventory that is ongoing. So we have some projects which are very large and they take -- they're like 40-story, 50-story towers. So they are due for completion for the first phases next year. So that will add up to the completion. For sales, we were at 1,600 -- 1,628 units last year. And as a guidance, we are looking at around 2,400 units for this year. And in terms of value, it was INR 764 crores last year. We are looking at around INR 1,100 crores for this year as a guidance.

Understood. So let's say, FY '23, you said what? INR 1,100 crores. FY '24, '25, can we take a CAGR of, let's say, 30%, 40%, as you mentioned in your initial remarks? Or could it be lower or even higher than that?

For FY '24, '25, we can take a CAGR of 30%.

Okay. Understood. Sorry, I misunderstood you. I've mistaken it for sales within numbers instead of deliveries. I think you did say deliveries, but I thought it's total numbers. So I thought confusing. Thanks anyways, Parth, and all the best.

Thank you.

Our next question comes from the line of Ketan with Ketan Kotecha & Co.

First of all, congratulations for the fantastic result, especially considering the quarter 1, and Mr. Parth being appointed as a director in the company. My question is in the same line. We do understand that every person has an individual way of thinking. So since you've recently joined the Board, what additional steps or initiatives you personally would like to take? Or is there any particular area that you want to address in Arihant Superstructures?

Yes, I've been working here since 4 years and I've been doing sales, marketing, then even investor relationships, project designing, collections for the last 4 years. So slowly, steadily, I've geared up to these levels. And the idea is to focus on operations, focus on the implementation of the projects. And being a Whole-Time Director, that is the major role that we have to play as the Executive Director of the company. We also have independent directors who can guide us because they are being watching -- they are watching us. So they guide us on the other parameters. But our goal will be to focus on the operations to scale up the business, to increase the sales, increase the engineering and make sure that the governance is to the highest level across all the verticals of the company. That is the goal that we have.

[Operator Instructions] Our next question comes from the line of Faisal Hawa with H. G. Hawa & Company.

In our books just now is unsold for more than 6 months. And if you could give the value as well as the square feet for it? And my congratulations to Parth Chhajer upon being appointed as the MD. So may I know what the KRAs of the MD are and what is the new management structure now with regards to Mr. Ashok Chhajer and that was of Mr. Parth Chhajer also? Third is, will we get any kind of warehousing or logistics space also? And at all yes, which areas will we focus on in new Workday? And how are we looking at social media and the handling of the company? And who are our bankers? What is our interest rate being charged? And what is our rating from the agencies? And if you could give the total debt on the books?

Total -- so I'll take the first question of your lineup. So the management structure as of now, as we may have seen from our current presentation, we have 3 executive directors now and 4 independent directors. So within the 3 executive directors, Mr. Ashok Chhajer, who's the CMD, will continue to focus on land acquisitions and business operations. Mr. Parth Chhajer, who has recently joined the Board, he will have the responsibility to drive the sales functions, architecture and product development functions, back-end operations, including collections and back office operations as well as the marketing aspects of the project. And Mr. Nimish Shah, who is the additional director on the Board, Whole-Time Director. He would be focusing on approvals and construction and engineering. So this is from the executive capacity. And coming to your other question in terms of digitization and social media, I'll just hand over to Mr. Parth.

Yes. So we've been actively doing our social media campaigns, marketings for all the projects. So that happens at a -- on a regular basis across the various platforms of Facebook, Google, Instagram and so on and so forth. So that is from a proper lead generation marketing perspective. Technology, so we've been using Farvision, we are using Salesforce right now to drive the entire sales and engineering functions in the organization. I can't forget. Can you just repeat the other 2 questions you had?

Yes, yes, yes. So one was what are the KRAs of the new MD? Then when I meant social media, I wanted more specific answers on what we are doing because, I mean, these are like, with due respect, very general answer. And I would also like to know how we are building up the brand of the company because it's now very important that we stand against now pan-India competitors who may be entering our door any moment from now. And the last question was whether we will enter into any kind of warehousing or logistics space, and also who our bankers then and what is our interest rate being charged and what's your total debt?

Yes. So there is no new MD in the company. There is just a Whole-Time Director where I have been appointed as the Whole-Time Director. The MD is Mr. Ashok Chhajer and he will remain to be the MD of the organization, as highlighted by Abhishek. So my role is -- has been and will be going forward to handle up the entire Investor Relations, the sales, marketing, collections, project designing, which I have been doing for the last 3 to 4 years, and we're continuing to do that. And the other questions were on the social media. So we do a lot -- so obviously, it is not happening in-house. We have an agency who handles the entire social media marketing strategy in terms of doing campaigns, doing activities to generate leads across the portals, across the platforms that we are working on. So it's like a cycle where we have to identify the client. We obviously have to give a brief to the agency first that this is our project, this is the location, this is the place where the clients are usually coming from. So we tell them that we need to focus on this kind of a top salary range, this kind of a locality to generate inquiries for that particular project. So the brief goes from our team and then the campaign is run by the agency. So we don't get largely involved in how they'll do it. We care about the results that are coming in by way of the leads that we generate. And from there on, it is our key sales team and the sales team who take it forward. I hope that answers what you were looking for. And the bankers to the company, today, we have HDFC Limited. We have ICICI Bank. We have also taken loan from ICICI Ventures recently. Federal Bank is also doing our banking. So we have these as our bankers since a long time. And the interest rate differs because the use of the fund decides your interest rate. So HDFC Limited is at 11.6% today, which is a construction finance for the Arihant Aspire project in Panvel. For ICICI Ventures, the interest rating is around 16.43% because that is a pure takeout money, which we utilize to purchase new lands, which have been highlighted in the Titwala and Shil-Phata locations. The total debt of the company -- the total net debt is INR 275 crores today. The debt attributed as for the shareholding pattern of ASL is 208 crores.

And sir, about the question about, sir, unsold inventory, which is more than 6 months not sold, ready but not sold for more than 6 months.

So what was the question then?

Yes. So I'll just take that question. The total inventory from the completed projects is about -- close to 90 units. And that in terms of square footage area, it would be close to 60,000 square feet. From a value perspective, the total potential of the balance inventory would be about INR 20 crores. And total receivables from the sold and completed projects would be another INR 32 crores. So total estimated receivables from completed projects would be INR 52 crores.

Okay. So that's pretty much in control, I mean, hardly anything.

Yes, yes, pretty much. Only 90 units are left unsold for completed projects. And that includes the 390 units which were delivered in this quarter.

This is across all projects?

Yes, across all projects.

And particularly because our flat sizes are of much -- that is ticket sizes [indiscernible].

Yes, correct, correct. So it's affordable category and affordable category is moving quite well.

Correct.

And sir, any new construction method that we have adopted and how are we dealing with the sudden rise of cement and steel prices? And have we resorted to price increases? And do you still feel that the markets are still warm enough even in spite of the interest rate increases?

So construction-related steel prices have cooled down in this quarter by around 20%. So today, it is around INR 68 average per kilo for steel, which was INR 85 in the quarter of FY '22 Q4. It went to around INR 85. So steel prices have cooled down. Cement prices are more or less the same. Construction cost has a small impact now due to the change in the GST rates, which have come in last week for even the smallest of the materials. So that will have a construction cost impact of around INR 125 per square feet on the salable area. So we'll be taking up the measures to change it in the pricing in the coming month onwards for the new sales that will happen. And the inflation will continue this way. So as -- because India is going -- India as well as the entire world is going through a very different time today. But it's part of the cycle, and it will not have a large impact on the sales. I would like to also highlight that the interest rates have also gone up in this quarter by 90 basis points. But even after that, we have not witnessed any slowdown in the walk-ins, in the sales, in the bookings that have happened in the quarter. Because of the segment we are in, right now is the affordable housing, mid-income housing segment, this is where a customer is usually staying in a rental apartment today and is looking to buy their first home. So for them, the agenda is to purchase the home at the best possible price considering the location, developer, products, et cetera. And due to the average age of the purchaser being in the lower 30s today in our products, they get a loan funding of up to 25 years, which eases out the EMI burden. We believe that in the -- even if the interest rates go to around 8.5%, the homebuyer's decision to purchase a home will not have a large impact. But delays to purchase -- delay in making the decision to purchase the apartment will have a larger impact on the ability of the homebuyer to purchase later on.

Our next question is from the line of [ Abhishek Gautam ] with Alpha and Wesco.

Yes. Parth, many congrats on joining the Board. So also, I just wanted to know what is the value of land bank still unutilized or still yet to be launched on our balance sheet? Second, I wanted to know what shall -- do you want entering the -- mostly focused on affordable housing? So do you want entering the premium segment of Navi Mumbai higher ticket size? And what -- how do you view the dividend policy of the company for that?

So we have a land parcel of around 55,000 square meters in Panvel. So today, it would be valued at around INR 125 crores. And once the project is put on the design board, we estimate that it can have a total revenue potential of INR 780 crores, which is located in Panvel, near to Arihant Aspire. And so the second question on the unlaunched area, that is total -- unlaunched inventories of around INR 5,300 crores, wherein we have purchased the lands and most of the projects have received the approvals also, apart from the 2 new projects and the third land bank project. So out of the INR 5,350 crores of revenue, we have today, approvals for around INR 4,000 crores of inventory, wherein, if required, we can go ahead and open up the inventory. But we'll be doing up -- doing that up as and when the demand also changes and as and when we complete the existing inventory.

So just unlaunched inventory is around INR 5,300 crores, wherein out of that, we have approval for INR 4,500 crores.

Yes.

Around INR 4,000 crores.

Yes. My second question was what's the sort of your view on entering the premium segment of MMR Navi Mumbai, and currently which is focused on affordable. So what's your view on that?

So we are already doing one project, which is in the premium segment, which is located at Sector 9, Vashi. So that's a premium profile product, where the selling price is around INR 15,000, INR 16,000 per square feet. So we're already doing that. We as highlighted before and as highlighted in the presentation also that we do, we take up the project as per the population metrics of the total population in the particular city. So today, in the Mumbai MMR region, the majority of the population, which is below the poverty line, 66% -- 60% of the population falls under the EWS LIG category, around 35% falls under the mid-income group MIG category and 4% is in the higher income group and around 1% is the richer class. So we keep taking up projects in our portfolio as per the population metrics of a city rather than just putting all eggs in one basket. So today, we are focusing on affordable because the population of the city of Mumbai MMR is also majoritily requiring an affordable housing house, which is below INR 5,000 per square feet. And around 35% of the people staying or who are looking for a house, purchase for a mid-income housing, which is ranging from INR 5,000 to INR 8,000, INR 9,000 square feet of an apartment. So that's how we have diversified our portfolio. Going forward, we'll be working on the same parameters while selecting a project, while purchasing a new project. So that is the strategy of the company going forward as well.

And just last, I just wanted your views on how do you view the dividend policy of the company?

Yes. So with respect to the dividend policy, we have had discussions at Board levels. And Board is amenable to the idea of dividends going forward in -- I would not want to speculate what can happen in the coming 1 or 2 years. But yes, I mean, this matter has been discussed at the Board level. Right now, the priority of the company, at least for FY '22, was to invest the surplus amounts for new acquisitions and new growth prospects because the real estate has moved into the up cycle. And we look forward to favorable dividend policy in the coming year.

[Operator Instructions] Our next question comes from the line of Tirath Muchhala with Elusividya Advisory.

Congratulations to Parth for the elevation to the new post. Parth, so my question is that when you look at Slide 18 and 19 and 20, right, what we have is like a 10 million to 15 million square feet launch pipeline. And the question is that this is as big as some of the larger players who are, let's say, more valued on the stock market. My question is that from the size you were at 2 or 3 years ago and now we are trying to launch so many projects, do you think the company has the team in place to be able to execute all of this because it's a difficult industry and I don't think it's easy to do such big projects so quickly?

So as you can see from the same slides, all the projects are fairly distributed across different geographies. So our strategy has been to acquire land parcels right from 5 acres to 20 acres. None of our projects are like 100 acres townships and the kind. So we are fairly distributed across 11 different micro markets. And none of the project sizes are such that it can take beyond 6 to 7 years of time frame to execute. In our engineering team itself, now we are more than 80-plus strong team in engineering. So engineering team has ramped up. We have put more contractors and vendors have been onboarded over the last 2 years. So as compared to maybe 3 or 4 contractors doing most of our work, we now have more than 15-plus civil contractors on board who can -- who are just a call away whenever we want to launch a new project. So while this 9.5 million square feet looks mammoth compared to the current size, but I would like to also put a note to that effect that we want to execute this over a period of next 7 years of time frame, which means on an average of about 1.5 million year-on-year. So from an execution perspective, we want to scale up from the current 1 million square feet of construction capability, we want to take it to 2 million square feet in about 2 years of time frame. So FY '24 onwards, we believe we should be able to execute 2 million square feet year-on-year. And the sales capabilities will -- is already there. We have already sold 1.4 million square feet in the last financial year. This year, we are looking at 1.8 million to 1.9 million square feet. And by [ FY '20 ], we are looking to expand it to about 3 million square feet. We have already tripled our sales team size and doubled our engineering team size. And we are currently seeing good talent coming on board. So whenever we acquire a new project, we have set SOPs in place to onboard the entire team right from execution, sales, building, presales as well as back office on a project-size basis. And this is being done immediately after the land has been acquired. So by the time the land is acquired and by the time we get approvals, the team is being formed at a rapid pace.

Okay, superb. And my second question is from Slide 19. These 3 of our projects, which are Aalishan, Aspire and Advika, they seem to be making a big chunk of our receivables and revenue. So how are these 3 performing on the sales front and the construction front?

So I would also like to draw your attention on Slide #40, 41. So Arihant Aalishan, which is 4 towers. Out of that 2 towers, we have completed the RCC works and finishing work is ongoing. So while the sales booking for the entire project is about 46%, completion status for Phase 1, which is these 2 towers, is 54%. And Phase 2, we have already started where completion as per revenue recognition is about 7%. So sales and completion that both are going in tandem. And with respect to Arihant Aspire, again, we have launched 3 towers. The third tower was launched as recently as February '22. The 2 towers were launched about 3, 3.5 years back. The sales booking in this -- all 3 towers combined, including the new tower launch, is 63% of the total. And completion status as per the revenue and revenue workings is 55%. So sales booking is like 7% to 8% ahead of the construction, and I think that is a very healthy ratio to achieve. With respect to your question on the third project, which is Arihant Advika, we have done a soft launch already right now. It is a redevelopment project. So the society has been vacated in the month of June 2022. Right now, we have started the excavation works. So the civil construction work should begin in August. And as regards to the sales in this particular project, we have already done sales booking of about INR 59 crores. The project has just been soft launched. So I think we are well ahead of our sales schedule as well. And I think going forward, I'll hand over to Parth to give you a brief overview.

So in terms of sales of these 3 projects, so it's -- if we talk of Aspire and Aalishan, which is in Kharghar and Panvel, there, the main key factor is that we should first -- the first phase delivery is going to be a very, very big game changer. So in next year, we'll be delivering the first phase of both these projects by the end of calendar year FY '23. Both the first phases will be delivered. And that will bring a very big change because when people can come in, they can walk and see how the lobbies are, how the car parking is done, how the clubhouses are looking, how the apartments are coming to a good shape. So that will change the confidence of a buyer in making a decision. And as and when a project gets completed or even the first phase gets completely filled up, that changes the entire magnitude of the other prospective buyers for making a decision to purchase in this project. We have witnessed this in our existing projects, Arihant Anaika, wherein after the readiness and the completion of Phase 1, Phase 2, Phase 3, Phase 4, 5 have been implemented very perfectly, very smoothly. And the same case is going to happen in Aalishan and Aspire, which will help us scale up the sales in both these projects to a very different level. And the implementation will be done in the time frame that we have thought of for the balance phases as well.

Okay. And the last point -- in the last call, I had mentioned something about you guys need to start giving a quarterly cash flow statement, just like our listed peers. So Abhishek, if you can look into that.

Yes, sure.

Ladies and gentlemen, that concludes our question-and-answer session. I would now like to hand the conference over to the management for closing comments.

Thank you, everyone, for joining on this call and feel free to get in touch with us if you have any queries, me and Abhishek, we are accessible. And anything you have, just shoot us an e-mail or you can call us. Thank you.

Thank you. On behalf of Dolat Capital, that concludes this conference. Thank you for joining us. You may now disconnect your lines.