Ashiana Housing Limited (523716) Earnings Call Transcript & Summary

Welcome, everyone, and thanks for joining this COVID-19 Update Call for Ashiana Housing Limited. To take us through this update and answer your questions, we have today with us Mr. Varun Gupta, Whole Time Director; Mr. Vikash Dugar, who is the CFO. We'll be starting the call with a brief update on the current situation, which will be followed by a Q&A session. I would like to remind you all that this call is only to provide an operational update on the current situation triggered due to the nationwide lockdown. We will not be discussing anything related to our quarterly financial or operational numbers. We request you to restrict your questions around the COVID-19 issues -- related issues only. With that said, I'll now turn over the call to Mr. Varun Gupta. Over to you, Varun.

Thank you, Gaurav. Good evening, everyone, and thank you for joining us for this special investor call. I hope everyone in the families are safe and healthy. We are holding this call to give information about how management is thinking about the current situation. These are unusual times for everyone with no precedent in this industry. During the lockdown, construction activity has stopped. New bookings are now 0 and collections are slower. Maintenance activities being essential services and projects continue, and we are focusing on keeping our residents safe and ensuring they don't face any difficulty in essential items for day-to-day living. Fortunately, the company has healthy cash balances and sufficient liquidity at this time. Last year has also been good in terms of project launches and area booked. Currently, we have 4 priorities. Firstly, acting on information and not on assumptions. There is a lot of forecast going on about the impact of COVID on the economy and how things might look like once the lockdown is removed and economic activity restores. We have no capability of forecasting the future. We are working on what we can do as senior management, that we get more qualitative information faster to make quicker and better decisions. Our second priority would be our people, making sure they are safe, and that we are communicating with them and engaging with them. We are also working on putting together protocols for their safety once lockdown ends and normal activity resumes. Thirdly, we are focusing on managing our cash flows. Putting in a system for faster cash flow MIS that we are aware of how our cash flows are gaining as compared to forecast, working to reduce and defer cash outflows and ensuring that our inflows come on time. And fourthly, we are focusing on delighting our customers. We carry out maintenance of our projects and making sure our residents are safe and their daily needs are taken care of. Engaging them in activities online, thinking about activities that need to be done to keep them safe once lockdown ends, and what can be done post-lockdown to delight them even more. Thank you for -- everyone for joining this call. Now the floor is open for questions.

[Operator Instructions] The first question is from the line of [ Ankit Gupta ] from [ Bamboo Capital ].

Any color, Varun, when do you expect the construction activities to restart?

Ankit, we don't have any color on when that will happen. Right now, the expectations are 15th of April because that's what's the official communication is. Again, our focus is more on being prepared to start construction quickly. Once the lockdown ends, and we are committed to do construction. So we are keeping our labor well, engaging them, ensuring that they are okay, they're not returning back. All of that has been taken care of. So we could start construction as soon as lockdown ends. We have no capability of forecasting when it will end.

True. But our laborers haven't migrated back to their home towns or will...

No. Laborers have not migrated, like about, I think 5%, 7% have gone back. 93% -- 90% to 95% of our labor is available on ground to be able to carry the construction.

Okay. That's very good to hear, actually. So is it that is across all the construction sites or is it specifically for us?

See, I am not aware of most developers. A couple of developers that I have spoken to, they have been able to retain labor as well.

Okay, okay, okay. And secondly, Varun, last year, before this COVID issue, we had pretty good bookings for the new project. And with this issue impacting the overall economy as well as the customers, how do you think this event changes the new buyers who will be coming to purchase real estate property? So any color that you can give or your expectations? I agree that it will be difficult to forecast how things will play out, but any sense on how you guys are thinking about this event changing the perception of customers towards real estate?

Okay. So Ankit, let's put -- one thing is during the lockdown period, we're effectively not going to have fears. [ Foreign Language ] like on the -- through digitally endorsed, that might happen and we might transact, but I really don't think that's going to happen. So one thing that is during lockdown, we are not getting easier. Post the lockdown ending and sort of economic activity reviving, I have no way to really forecast how that might happen. There are multiple forecasts going on. There are forecasts going on that real estate might improve with money moving from stock market to real estate because stock market has weakened down significantly and people might want a real asset for safety. There are other people saying that there is going to be severe economic downturn and, therefore, sales will slow and people might want to defer large decisions. Another view for us is that we are far more healthier than the competition, so we should do better than the competition. I don't want to be in this forecasting piece, so these are what people are saying. All I would say is we don't know. And as a management team, we want to be in more thinking as to how can we get information faster that will allow us to know what will happen later better. So maybe we will want to speak to customers directly, as the senior management, once lockdown ends; listen to some calls that our sales executives are having with the frontline customers; monitoring our cash flows, if people are making payments on time, they see there -- most people are considering the things are okay. So a lot of that will depend on how things pan out. And I think really trying to put that together, I have -- honest -- I have zero forecasting capability of this regard as there are too many moving pieces. And then it's -- I don't see the point of trying to forecast that something we can't do. It's completely different.

True, true. But as of now, are we changing any of our pipeline for launching new projects for FY '21? Or as of -- for...

For FY '21, we did not have any launched pipeline. Again, so we will be tight on our cash flow. We would like -- so let me put it this way, today the risks of a slowdown and reduced sales are far higher than they were 3 weeks ago, okay? Whether the risks play out or not, that's a separate issue, the risks are definitely higher today. We will be conservative on our cash outflow and taking cash flow commitments only after having thought through it a lot and validate the data before thinking of a commitment.

True, true, true. So this year, the major focus will be on connections and construction.

Yes. Correct. And that was anyways true from before.

[Operator Instructions] The next question is from the line of Himanshu Upadhyay from PGIM Mutual Fund.

Varun, I have this question on -- see, in this business -- we are in the business of capital allocation and trying to -- and the aim is to increase the net asset value of the overall business over a longer period of time with capital allocation. Today, we may be getting a lot of opportunities for new projects. But looking at the way the company is being evaluated in the market, would not it make a much better capital allocation decision from a perspective to have a buyback sort of thing in rather than looking more projects outside, means how would you look at this perspective and more on capital allocation strategies, if you evaluate or your thinking, just your thought process.

Thank you for the question, Himanshu. We have not evaluated a buyback until now from -- it's your perspective that you're thinking more operationally and about the business than rather thinking about whether to buy back our shares and does that make a more efficient allocation of our capital. Again, a lot of this will depend on how our cash flows pan out over the next 3, 4 months. And what's the sense we get on sales, what's the sense we get on collection, what's the sense we have on construction. At the end of the day, that's going to be our primary driver of how we utilize current cash because we'll get a sense of how future cash was allocated. And as I said, today, it's very hard to forecast that because we don't have any information, which is showing how things will go. We'll get information along the way, and then we will evaluate what to do. We also don't know how land prices are behaving. So there might be a sufficient -- land prices might be discounting a lot maybe in the future, and that might make it more interesting to get a new project. Those are -- that's also an information that's not available to us. The stock price information is available to us. If the stock price has dropped so much, it's an interesting place to buy back, as you put it, but we also want to evaluate the other options, which are not fully evaluated yet before making a choice between two, three. That's the way I would like to put it.

Okay. And once the lockdown gets over, how much time would it take to restart the operations, means majorly construction operations?

About 24 hours.

Okay. So labors and everyone, what you stated were -- they are generally at the site itself, you are saying?

Yes. The labor is mostly at site, yes. We would have inventory of material available from the first, so we could start to work. I think what we need to do is put in the safety protocols in place, and that will take a little bit of time. We're preparing those protocols and -- as we go along. So if we are able to put those protocols in place, then we'll start work.

Okay. And we have, in last quarter, launched -- started with 3 projects, okay, the Jamshedpur. Has construction work started in all those 3 projects?

Yes, yes. All 3 projects which were launched in Q1, Q2 and Q3, their construction work has commenced.

Okay. Okay. And can you give a brief profile of your end customers in these? The end customers, are they very different for us in, let's say, Jamshedpur versus Jaipur or Bhiwadi or Kolkata or they are generally the same profile of customers what we...

They're generally the same profile of customers.

The next question is from the line -- sorry. The next question is from the line of Manasvi Shah from ICICI Prudential.

Sir, you mentioned in your opening remarks that one of the priority is focusing on managing cash flow. So can you give certain examples as to how you're trying to do that? Also the second question is, what is the fixed cost outlay that you would have to incur per month or per quarter assuming that there is 0 revenue?

Okay. So first, on the cash flow perspective, I think that we will be doing 3, 4 things. So one, on the inflow side, which is collections that are to be coming in from our customers, if we have given -- work from home is -- and the demands have gone for April, and we hope to collect part of it during the month. Second, we are also checking on the home loan status of those, and we want to ensure that home loans are with financial institutions where we think they're strong enough to disburse, like the public sector banks or the larger like SBIs of the world or HDFC Limited, the large stronger private sector banks. There is no concern on home loan disbursements at any point of time. Third, we are also -- our systems of tracking the home loans and that system, I would say, were not as robust as it should be. I think this moment has become catalyst to create a better robust MIS there just to track and ensure that we're able to facilitate home loan sanctions quicker than we would have otherwise and those processes. So those things are taken care of. We -- also on the...

Sorry here to interrupt. Just on this, you said that you check home loan status. Now there is some organization which has given a home loan, and you don't really approve of that, you find -- you think that that organization could be under some stress. What is the step that you would be taking?

Ma'am, we haven't come to that because right now seems more or less okay. Most of our home loan-related payments are concentrated between SBI and HDFC Limited. I would say 90% of our home loans, kind of think probably 95%. We haven't come to a situation where we have the cash flows have been stalled, but we'll probably -- if the bank is smaller, we'll go to them and ensure that our funds come in. If they don't disburse, we should have a backup plan that we can go to an SBI or HDFC Limited and get them refinanced from that -- from those institutions if it comes to that. Okay. So right now, it's just getting more information. And again, I don't know if the small banks will be -- will not be able to finance. We are just saying that we should have that information in case they are not able to finance.

Okay.

Okay. They are 2 separate issues. This is more preparatory work, if I would put it correctly. We are also working to reduce or defer outflow. So one good thing about COVID is, I think travel cost will definitely reduce because we'll get more used to working through online and video conferencing methods. We are -- also this has happened. Anyways we are trying to reduce our marketing budgets overall and cut some costs there. Hopefully, even though our loan size is not too large, whatever bank borrowings we have, hopefully, there'll be some interest rate benefit there. And as we pay down the loans, as we paid down last year and as we continue to pay the loans down this year, overall, absolute interest costs should reduce. We are also looking at -- since there might be construction cost reductions with commodity prices coming off, so there would be some benefit on the reduced cash flow side over there. And that kind of thinking is going on as we speak, is there any sort of SAT in terms of cost that we have accumulated, which are not -- which should not have been accumulated in the first place and what can we do. The only thing we are not going to do is not going to have at this moment in time, don't want to look at layoff and look at other costs in general. That's the first thinking that working with our people and keeping them is important. So that's the thinking of cash flows.

Okay. And sir, on my second question about the fixed cost?

The fixed cost would be about -- ma'am according to me about INR 5 crores a month for us, which we are looking to reduce downwards.

Okay. Okay. So they are currently INR 5 crores, and you will be lowering...

Yes, and little bit lower. I don't have a whole fixed idea. We've gotten a sense, there are like -- there are some marketing costs also going on, which can be tapped off completely if you want. But my view is in this scenario right now, we should be having about INR 4 crore to INR 5 crore number per month.

The next question is from the line of Chintan Sheth from Sameeksha Capital.

Yes. Thanks for the opportunity. You mentioned about the maintenance activities and related stuff. That will also entail some cost to you, that includes in the fixed cost?

No. The maintenance activities are not included in the fixed costs because those are again billed to the customers. And we expect that we will get those monthly sort of billings and recover that from the customers.

Okay. Any stresses you are seeing from -- in terms of collection at this point in time? As you mentioned, you are engaging with the customer directly or your teams are engaging with the customers. Any stress in terms of...

Yes. There is stress from collections. I think a lot of the stress from collections has to do with also being -- in execution of the transactions as well. So some stress on the collections are the home loans or the bankers don't want to disburse until they have physically checked the properties. So that physical check of the properties are not going on. Some people are not able to complete the home loan documentation right now that was to be done. Some is also execution, inability to execute digital transfer of money. So those kind of stresses are more. We are not seeing so much stress in unwillingness to pay, let me put it this way.

Okay, mostly procedural related issues rather than...

Yes. At this time, mostly procedural.

Right, right, right. And in terms of -- you already mentioned that you're not looking at very heavy launch in FY '21 anyways before COVID happened. What would you -- as somebody already asked about the capital allocation, were you willing to put more money on buying more assets or land parcels for future growth? Or how are you looking at it?

So as of now, we are working on figuring out how much capital should we allocate to land investments. I think that working is going on. And a little bit also will get crystallized as and when sort of we get a sense of our cash flows over May, June, July -- or April, May, June, July. As we get more color as to how cash flows are behaving, it will be easier for us to take a call. But we would be looking at opportunities on the land side. My preference for land side would definitely shift to low investment joint ventures as a strategy overall. So we allocate less capital, but we are able to get better transaction.

Okay. But what will be the cash balance as of March?

So I don't have an exact number. We -- I know we are a net cash positive firm. So outside of, let's say -- if I netted off any working capital overdraft that we have taken from a cash balance, I think we are about INR 100 crores as a group. And about INR 85 crores as debt repayments outside, again, of overdraft and the debentures issued to IFC, which were more sort of payable when it will kind of cash flow linked to banks, which don't have fixed payment obligations. So that's the situation there. I think hopefully we'll be able to crystallize these figures quickly and send that out to the market.

The next question is from the line of [ Arpit Ranka ] from [ Kovil Investments ].

A couple of questions from my end. So to start with, so already a lot of leveraged players were on the edge in the industry. And this is a stress of an unprecedented kind of a magnitude. So how do you see this affecting the industry, assuming, say, next 3 to 6 months, you don't see things normalize? So how do you see it playing out for the industry as a whole and vis-à-vis our competitive positioning with regards to that? That is one.

Okay. Do you have a second question, you want to go ahead and shoot at us or should I take this first?

So second one is also more or less to -- see, you said we can start the operation in, say, 24 hours if the lockdown is lifted. But see, we are indirectly kind of linked to about, say, 200 ancillary industries, and it's all -- supply chain is all linked up. And what we are reading and hearing is that supply chain is where the maximum pain is currently and to kind of kickstart it in itself, it's never been done, right? I mean that everything came to a halt and then you kind of started. Thankfully, we did well to manage the labor situation and not letting them go. But that may not be the case across the ecosystem. So how do you see -- any thoughts on that? Like in terms of -- is it as severe as we get to read about it or your assessment is that when things do start, they can normalize sooner rather than later?

So again, I'm going in this opinion direction on the second piece. The first question on the industry also is -- again, my views, on the industry side, I think, we were going through a phase of consolidation, where by market share was consolidating into fewer hands. I think that phase of consolidation will get a little bit more accelerated because of this event simply because the consolidation was also a matter of supply reducing. And the lockdown is a supply shock to the economy, right? So there will be -- as you said, supply will reduce and supply chain, and there might be impact on that. And overall, the balance sheet of the real estate industry as a whole, if you look at it as a cumulative, the balance sheet and the cumulative debt that they have and whatever data I got to know from data providers in the industry was that the debt service coverage ratio of the industry as a whole was less than 1. And with that, this kind of a shock coming in, I think consolidation should further play out. Relatively, my view is that we are better positioned than the industry because of basically having a liquid balance sheet, having a track record of delivering on time and not having commitments, which is sort of -- which we see challenges fulfilling, that's the way to put it, and I think we'll get. And also from an industry perspective, I think the value of maintenance that we provide to the customer, I think it's showing more in this time, like we're getting incredible number of compliments from some of our customers as to what the kind of work we are doing in terms of maintenance and it's -- and I think really, really performing at this time in terms of customer delight is going to make a difference from a competitive perspective. That's from our competitive perspective. On the front of supply chain, I am not so sure. See, I hear a lot of people being worried about migrate labor going back. And then we'd not be able to supply things. Again, most of the information that I get on supply chain broken down is from some friends who are in essential services. And they're having challenges getting in logistically, they're having challenges getting inputs. But that is a scenario of a lockdown where the government is also -- and when I say the government, the government official on the ground does not know really what truck to let go, what inputs to allow, what factory to let go, they're also learning on ground, okay? As per the speculation on whether supply chain will be broken and for how long will they be broken once the lockdown ends, very difficult to estimate. My own view is that the -- what you read in the papers or otherwise is an overestimate of the impact on the supply chain. I think most labor -- mostly, labor has probably stayed back for a simple reason, there was no time to go back. It was an -- you would -- it was like, it's going to be only Sundays, it's just a preparation and then you are in lockdown by day 5 effectively in the states and the center made it Tuesday. So I think mostly labor is there. And most of the supply chain should come back pretty quickly according to me. I'm not so worried about it.

Okay. No, that's very healthy.

Yes. But again, as I said, these are forecasts. We will need information systems in place. When I spoke about the first thing that we want to do is act on information, I think we'll need to -- our team will go back and speak to our vendors. How are you doing? Will you be able to deliver? Once that happens, we'll act based on that.

The next question is from the Rohith P from Marshmallow Capital.

And I just wanted to appreciate the efforts that you've taken in arranging this call, it's quite an uncertain and difficult time. And for you take this time out, we really appreciate it. My first question is on -- in general, cancellations. Given the uncertainty and the fact that auto has been in slow down quite some time and economy in itself has been in slow down, so do you see an increase in the rate of cancellations? And how are you handling that situation?

First of all, I have lots of time right now. I guess, most of us do working from home, so there's nothing really to take time out for this. On the front of cancellations, again, we haven't gotten cancellation requests due to COVID at this point. I'm -- nobody has come, "Oh, you know, we booked, and this has happened, and we really want to cancel this now." We had some cancellation requests in March, but they were cancellation requests that were in conversation for 6 months where people were unable to pay and we are working with them to save those bookings, and then we recognized those cancellations. So as of information to date as we -- I shouldn't be worried about this. How things pan out? I don't know. But as of today, that's the state that we are in. And my view is that Indian economy is not as badly in a place as people make it out to be even before COVID happened. The kind -- the state of the economy was not as pure as it was made out to. That's my view.

Okay. That was helpful. And second -- sorry, the second question was -- I mean in general, how do you see the financing stakeholder, the banks and MBSs, which generally have been -- are a major component in financing, means real estate industry. How have they been reacting? Do you see any change in their lines to you or funding to you or in general, how -- and in addition to you, do you -- what do you hear about how they have been reacting to the entire real estate industry -- in general, the real estate industry as well. Any thoughts there?

So there is been no sort of work going on there on the banking side also like the home loan guys, disbursement guys, that part of the banks are effectively not working, okay? Because they have to physically verify the thing that's not happening; they what documents physically signed, that's not happening. There is very little that they can do online and things going on. I think they disbursed the checks, which were already paper or post processed, and that sort of is big bang. So there has been no sort of information at that point of time. We've been speaking to a couple of banks in general. Our view is that we will get access to capital. We shouldn't have a challenge in getting debt capital overall as per our conversation.

And in general -- so with the -- but I'm guessing they will become a little more stricter in case of the -- are they -- I mean in general with the rest of the industry? Or do you not have any thoughts which are on that side of the industry?

I don't have conversations around that as to what's happening with the rest of the industry. I won't be able to comment on it.

Sure. That's helpful. And my last question is, at this point of time, be -- on land purchases or land deals, how are your thoughts on doing a JV or JDA with a partner versus full acquisition of land? Do you have any thoughts right now? Or you're still waiting for information there?

In my view, we could as well prefer JV, JDAs over outright just to be more prudent on allocation of capital -- of the amount of capital, we would have INR 17 crore NCD maturing in, I think, the second half -- first half, like July or August something of -- in July, INR 17 crores of debentures will be maturing. And one large debentures that we have issued, that would partly mature in 12 months from now. And we pay them down anyways monthly based on collections, and there is a fixed obligation if no collections then in 12 months from current.

All right. So from a liquidity standpoint, given that we are net cash company, I think we should be okay on that front, right? Even, let's say, if the lockdown were to be extended, and this is totally hypothetical, but let's say, if the lockdowns were extended till the end of June, we would still be in a good liquid balance sheet situation, right?

Yes. We would be.

The next question is from the line of Manish Jain from Gormal One.

I just had one quick question. This is you can say earlier participant, I think, Arpit asked this question on strategic changes in the industry. Do you fall traditionally in real estate? Well, good players like you have got the construction activity largely funded by customer advances. Based on the current situation and consolidation, do you see even land getting added to the construction where it gets funded by customer advances?

I hope so I wish that would be quite interesting where capital deployment for us reduces. I wouldn't be able to give color on that, Manish, that I don't know how things will change. To fund land through customer advances today is not possible in regular terms. You cannot launch a project without approvals and therefore, you can't take customer advances because of RERA Act, and I don't see that thinking. The interesting part for us is to do -- someone else putting in the capital that is required from the land side, I think that might become more interesting as we go forward and there might be more joint ventures available.

Yes. Because when you are looking at the sector holistically, rate consolidation accelerating, let's say, even if you had INR 200 crores and the bank with you, you will not be keen to put that in 1 single land parcel. You would prefer to do that over 5, 10, 20 line parcels. So everybody will stagger their payments towards land acquisition. So this question was from that side where, if we care of all the approvals...

Yes. So would you do a line -- so a joint venture is similar where your payments are staggered and linked to revenue. In one sense collections -- with payments in lines of revenue, if your collection to your landowners are getting financed through customer advances and are getting collections, again no further payments in the line of revenue. That's a typical revenue fair structure, which we prefer to do. I think that we would like to do more and more going forward.

Brilliant, because that's where my last question was that fundamentally, on one hand, you have accelerating consolidation, and on the other hand a significant component of deployment of capital. If it trends towards getting funded by customer advances, not the immediate term, but medium to longer term, don't you think it's -- the industry is getting set for that situation?

Again, I don't want to take very long-term views, Manish, in general, but my -- that's what we hope to do. If -- that would be a strategic call today to do.

The next question is from the line of [ Osteria ], an individual investor.

I have a question. What margins do you have on your hospitality and maintenance segment of your business?

Effectively, on the maintenance side of the business, we really don't make any money. Whatever margins on the gross side is taken care of by corporate overheads. And we make miniscule maybe 1% or 2%, if at all, we make, and that also includes interest income on some cash line there of business. It's not -- so the maintenance side of the business for us is not really about making a profit on the maintenance side, I think it's about giving great customer service, which entails give us referrals and we get better volumes on our regular businesses there. On the hospitality side, again, it's, I think, overall, a 10% kind of range that we get on top line. Again, but a fixed cost business, sometimes you get good, sometimes things are negative, like this year has been negative for the hotel, I think, overall in losses. And now effectively, there is no revenue in that part of the business at all this year.

The next question is from the line of [ Ankur Jain ] from [ Prayas Capital ].

I have a question around the demand in Bhiwadi. So Bhiwadi is a key geography for us. And my understanding is that Bhiwadi is quite dependent on the auto cluster. So in the situation that the lockdown is lifted and the economy gradually comes back, but the auto slowdown continues to remain there, so I was thinking about the demand shrinkage, which can happen in the Bhiwadi territory. So could you throw some light on what your assessment is that what percentage of our demand in Bhiwadi comes from the auto cluster?

Ankur, okay. So one also -- for Bhiwadi, I think slowly and slowly, more of our business, whatever, in a percentage terms has moved to senior living. I think half our business is really going to go there over a period of time. I think about 35%, 40% has already moved. And also the senior living piece is more profitable on the margin front because we're getting better prices over there than less competition in the market as more all of NCR and not just Bhiwadi. So that's one part, and we will look to improve the volume of sales in the senior living piece going forward anyway. That's one strategy for Bhiwadi. The second piece on the regular demand, I don't have an assessment of how much of that is driven by auto cluster, but I would say majority of it would definitely be dependent on the auto cluster. If it's not the auto companies themselves, it's their ancillaries and entire industrial cluster West of Delhi, like in Gurgaon to Neemrana onwards is highly dependent on auto. And that does create -- there are -- the demand is being driven from that. That said, I think overall, real estate demand in Bhiwadi has reduced to a miniscule amount anyways. I think whatever sales we have also gotten in Bhiwadi has also been driven by market share accretion over the last 3, 4 years because the competition has suffered a lot more than we have just because of their own issues of delivery and over-leveraged balance sheet. And therefore, we just getting a larger portion of the pie on that front. I think that's where things are right now, I would say.

The next question is from the line of Manish Gandhi, an investor.

My question is, see, this is unprecedented times, and nobody has seen in past also. But unlike many developed countries, and we are seeing here what in residential that almost the NCR or many places, it's a 9- or 8-year of the downturn. So even if suppose economy goes for a toss and prices go down, say, whatever prediction, we don't know, so any past examples of what has happened some like in 1991 or, say, any India war situation in India, Pakistan, or any developed country example you give, how long do you see -- suppose if the price goes down, how long the prices will stay down? And how the real state as an asset moves after this kind of situation? I don't know, any historic -- or you can recommend, I would be happy to believe.

We don't know these times. And my earlier view, so let's say this -- these times are not there, okay? This specific COVID lockdown situation was not there, real estate is more driven by excess supply than inadequate demand. And we were suffering not because demand compressed over 8 years. We were suffering because there was excess supply that was created, too many developers enter and then the share got split between too many developers and then we were seeing a supply contraction and consolidation of market share towards fewer developers. And I think that's the cycle we were in. And for me, this shock, as I said, is going to need to -- is a supply shock. So the impact on supply to me should be more than the impact on demand. That's one -- but again, these are assumptions and forecasts, which I've been trying to refrain from doing, is what I would say. So the research that I know in real estate is that the cyclicality of real estate is more driven by supply and less driven by demand. Do I have any historical things to look at? Not really. The only part of downturn that I lived with was the great financial crisis that lasted about 12 to 18 months and things were bouncing back after that. And so I wouldn't say that was even comparable because we were at a high, we get -- 12 to 18 months, we got back to booming. The other regular real estate down cycle was between 1997 to 2004, which lasted 7 years.

Right. So Varun, say, what we have seen in commercial in last 3, 4 years, as you are saying supply and demand side, so do you feel in the medium term, the sector depends more on supply and demand rather than the economy, macroeconomy? Suppose if the economy goes very down, that's a different matter. But it's more dependent on supply demand as commercial has shown us or...

Yes. I would say more on supply than on demand. Okay. Let me put it this way. See, the supply side, the problem with it is supply takes a lot of time to build. So because you know -- once you see demand coming in, it takes time to identify a line, then get approvals. In our country, approvals is also a long -- time-consuming process and then actually get out. That process is overall lengthy. So when demand is good, people respond to it and then build excess and then the returns fall short and then people exit the piece and exiting the piece is also longer. You can't just leave a project midway. And then you have supply gap starts reducing and supply comes down over a period of time, and then things improve again. That's the sort of cycle, which is -- to me, which is more important to follow. So it's the amount of supply that is coming on board in respond to a demand, which is, let me put it this way, which is more critical.

The next question is from the line of Devanshu Sampat from Yes Securities.

Sir, just 2 questions. First is, is there any plans of us sailing into the commercial space? So have you thought about that? One. And second is, what is the kind of investment buying versus self-occupied properties from our customer base? And do you see that shifting, especially in the post demonetization era right now?

Okay, Devanshu, so first answer, we don't intend to do commercial. We don't understand it, and right now there's no intent to understand if we can get to that space at all. The second piece on the front of how much is investment buying as compared to self-occupied, so about 50-50 -- mine has been consistent through the demonetization era and before that in terms of 50% people are buying to self-use and 50% people right now are buying to put it on rent and a long-term investment. What there was earlier before the cycle turned south was these sort of investors, who were looking to flip at possession, so they're buying at launch and flipping at possession. That buyer is not there anymore. And whatever is left between that, the units are getting split evenly between self-occupied and buy-to-let investors. But it varies a little bit market to market for us and product to product. Senior level is, obviously, much more higher of the self-occupiers, probably we have 70%, 75% there. In some markets on -- in regular housing, it's 30% self-occupy, and 70% investors, so there would be some -- some would be the otherwise. So it varies a little bit, on average about 50-50, first.

Which markets would those be with higher investment demand?

It's not only just markets, it's also projects. Some projects within the same market will have a higher investment demand and some will have a little bit higher owner occupied demand.

Ladies and gentlemen, that was the last question. I now hand the conference over to the management for closing comments.

Thank you, everyone, for being here. Well, I hope I gave sufficient color on the company strategy. As I said earlier, these are unprecedented times. We have very little ability to forecast how the future would look like. Fortunately, god has been kind, we are liquid and healthy at this moment of time. And we'll continue to focus on people, information, cash flows and our customers. If you have more queries, please feel free to write to us, and we'll be happy to revert back. Thank you, everyone. Thank you for taking your time out today.

Thank you very much, sir. Ladies and gentlemen, on behalf of Ashiana Housing, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.