Ashiana Housing Limited (523716) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Ashiana Housing Limited Q4 and Full Year FY '20 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Gaurav Sud from Christensen IR. Thank you. And over to you, sir.

Thanks, Aman. Welcome, everyone, and thanks for joining this full year and Q4 FY '20 earnings call for Ashiana Housing Limited. The results and investor update has been mailed to you, and it is also available on the stock exchange. In case anyone does not have a copy of the press release, please do write to us, we will be happy to send it over to you. We will not be holding the annual analyst meet for the company this year due to COVID-19-related travel restrictions, so we are organizing this Q4 call in lieu of that. To take us through the results of this quarter and answer your questions, we have today with us Mr. Vishal Gupta, Managing Director; Mr. Varun Gupta, Full-Time Director of the company; and Mr. Vikash Dugar, the CFO. We will be starting the call with a brief overview of the company's performance, and then we shall follow with a Q&A session. I would like to remind you all that everything said on this call that reflects any outlook for the future, which can be construed as a forward-looking statement, must be viewed in conjunction with uncertainties and risks that they face. These uncertainties and risks are included, but not limited to what we have mentioned in the prospectus filed with SEBI and subsequent annual reports, which we -- you will find on our website. With that said, I now turn over the call to Mr. Vikash Dugar. Over to you, Vikash.

Good afternoon, everyone. Thank you for joining us to discuss performance of the year and fourth quarter of FY '20 of Ashiana Housing. I extend a warm welcome to all of you. Area booked recorded in FY '20 was 19.82 lakhs square foot as compared to 10.79 lakhs square foot in FY '19. This was due to successful launches of greenfield projects, Ashiana Daksh Phase 1 and 2, Ashiana Amantran Phase 1 and 2 in Jaipur, Ashiana Sehar Phase 1 and Ashiana Aditya Phase 1 in Jamshedpur. Area booked recorded in Q4 FY '20 was 4.14 lakhs square foot as compared to 2.83 lakhs square foot in Q4 FY '19 due to launch of Ashiana Amantran in Jaipur. The sales were at 9.78 lakhs square foot in the previous quarter. We handed over 8.76 lakhs square foot in FY '20, out of which 1.78 lakhs square foot was delivered in partnerships. This was against a delivery of 11.78 lakhs square foot in FY '19. Revenue recognized from completed projects in FY '20 was INR 249 crores versus INR 281 crores in FY '19. Total comprehensive income, that is TCI, in FY '20 was negative at INR 28.95 crores, vis-à-vis positive INR 19.1 crore in FY '19. Losses reported during the year due to lower deliveries and also due to some exceptional and one-off items, like impairment of unaccrued selling expenses of INR 17.4 crores, a loss of INR 5 crores on account of write-off due to discontinuation of project in Halol, Gujarat. These items have already been explained in detail in our investors presentation. Area delivered in Q4 was 4.06 lakhs square foot, out of which 2.69 lakhs square foot was delivered in Ashiana Housing and 1.36 lakhs square foot was delivered in the partnerships. This was against a delivery of 2.31 lakhs square foot in Q4 FY '19. Revenue recognized from completed projects was INR 80.37 crores for quarter 4 FY '20, vis-à-vis INR 59.73 crores in quarter 3 FY '20. Revenue recognized from completed projects was at INR 52.79 crores in Q4 FY '19. TCI was negative at INR 8.63 crores, vis-à-vis negative INR 6.39 crores in Q3 FY '20. Pretax operating cash flows was positive at INR 34.22 crores in FY '20, vis-à-vis positive INR 16.4 crores in FY '19 due to healthy collections received from newly launched projects during the year. Equivalent area constructed was 9.85 lakhs square foot in FY '20 versus 7.68 lakhs square foot in FY '19. Pretax operating cash flows was positive at INR 5.14 crores versus positive INR 21.35 crores in the previous quarter. This was largely due to collections received from newly launched projects in the third quarter. Equivalent area constructed was at 3.27 lakhs square foot versus 2.39 lakhs square foot in the previous quarters, and the same was 2.46 lakhs square foot in Q4 FY '19. Our construction has been generally in line with our commitments. On this note, I would like to conclude my remarks. We will now be happy to discuss any questions or suggestions that you may have.

[Operator Instructions] The first question is from the line of [ Umang Shah ] from Asian Markets Securities.

I had one question. So sir, we've taken a lot of time to sell off the inventory, which is at the Anmol project at Gurgaon. So what's the thought process of putting up 7.33 million square feet of Phase 2 and Phase 3 going forward? I think it's the third largest project in your upcoming projects. So -- and I also think this is one of the first project in which you took over the land along with construction. So what have been your learning from this project?

First clarification, we didn't take up a project, which was with construction and land, we had entered into a greenfield joint development of a land for that development, and it's 7.33 lakhs square foot and not 7.33 million square foot of Phase 2 and 3. Right now, the whole idea on Phase 2 and 3 launch is depending on us on, first, clearing whatever inventory we have in Phase 1. We have got some inventory left in Phase 1 itself. Based on the sale there, we will look to launch Phase 2 and 3. We do not want to commit more capital into land without having certainty of sale or more confidence, let's say, if not certainty, confident of selling Phase 2 and 3 quickly.

The next question is from the line of Himanshu Upadhyay from PGIM.

My first question was in this market where the people are not able to move that much, what is your strategy to get consumers or sales and marketing strategy currently? And how do you plan to get more EOIs in the markets where they are present means or can move -- getting the person to your -- or getting him interested in your project? Any views or thoughts on that? And secondly, out of 124 EOIs what we had in Amantran, how many would have been converted to bookings by now?

Himanshu, I'll take up the second question first. We had actually substantially more than expression -- more than 124 expression of interest in Ashiana Amantran. We converted to booking 124 out of the expression of interest that we had received. Unfortunately, the conversion of the bookings happened just before lockdown and some actually during lockdown in terms of documentation. And since then, people have changed -- some people have changed their mind and do not want to continue with their bookings. And we have received about 30 to 35 cancellations. We expect about 45 cancellations from the 124 bookings at this point of time. And on the second question of yours that you had asked around how do we -- or what strategies are we employing in getting people at site or conducting visits, I would like you to say 2 things. One, there is a virtual site visit process that we have kicked off in the company, so people can visit the project virtually where our executives take them through the project over a video conference and walk them through the project. Secondly, physical visits have started across projects. There is proper SOP put in place for the safety and security of the customer and our executives following COVID-related SOP. And people have also started coming to sites physically, some sites more, in some sites less. There are also site issues, like cross-border travel issues, particularly in the NCR-related sites and those are emerging. But as the lockdown has been eased up, we have been periodically seeing increase in physical site visits at site here. They are substantially lower than pre-lockdown levels, but they are moving up. And hopefully, they should become normal soon. Vishal bhaiya, would you like to add anything else for this?

Yes. I think the team has reinvented itself on the virtual site visits. They have also -- so I think, in effect, this has actually helped. So going forward, we are going to have both physical site visits and virtual site visits. We are going to be able to allow larger number of the family members who -- or other decision-makers to come on to the virtual site visit, which will actually help us to reach to a logical conclusion faster for the customer. It will shorten his buying journey, according to me. And second, I think Varun, while we -- you've talked about the cancellation. I think we've had reasonably good number of bookings also that have happened in the last 1.5 months since we've kind of started to reap -- relook at the sales momentum. So I think it's -- the present state is not just about site visit, but in the current scenario, we are able to take the entire journey to a logical end as well.

What would be the success rate in this virtual tour? Means, let's say, once the customer comes and gets EOI -- or, let's say, it will EOI stage, any success rate in virtual versus -- or how are you seeing the customer feedback or success you would see in that? Is it increased, better? Do you think it's too low?

I think it's too early to comment on the process, Himanshu. I think what -- to me what the big learning here is even after COVID and after lockdown, which goes in, a virtual site visit probably will become a part of the sales process in between the inquiry and the physical visit and/or maybe post physical visit for other decision-makers to be able to conduct visits and for outstation sales. I would say that this is a little early to tell. We are also refining the processes and learning as we go along. I think it will take us another quarter maybe before we can give a sense of how the process is going.

And one question on Chennai market. It has been a significant -- or a good new large market entry for us, and you have one project there. What are your thoughts on growing that market? Because as an outsider, if I see, it looks like if we are able to really grow that market, it can be 0.5 million square feet market for us in 3 to 4 years, okay? So -- and this one project last year itself gave us 1 lakh square feet. How -- what are your thoughts on that market? What would be your strategy to grow in that market? And how are you looking? Means, the -- when we entered that market, are we more confident on that market on -- from the day when we entered or we think it has -- it is mixed bag? So any thoughts on that and your strategy with what your thoughts are on that market?

So it is doing well for us, Himanshu. But from where we entered, I would say that Chennai has done well for us in our sort of expectations. It is a market we are looking at -- aggressively looking for one more project to do. We are of the view that in Chennai, we should continue to do more senior living. It's a differentiated project -- product that we have. We have strong capabilities in designing, delivery and maintenance of that project, which is in demand in Chennai. And there, we will also have an edge over local competition and not be competing for the same customers that other developers sort of compete for. So we are looking for one more project of senior living at this moment of time as we speak.

Okay. And one last question, then I'll again get back in the queue. Can you give some light on the markets where you are present, especially the economic activity in consumer segment and -- because we have now -- we are not so familiar with Jaipur and Bhiwadi and those markets? And related to that, we have seen many thought leaders giving general statements that prices need to be dropped by builders, and we've seen a lot of limelight, which is coming into the media, okay? So what impact is it having on the consumer mindset? And how are they reacting when he is coming to purchase or looking at the project? Is this behavior drastically different than what he was talking, let's say, 6 months back? And any views on that? Means, both these things.

Okay. So one, we don't have data to substantiate any views on how consumer markets in the locations we are doing. We are -- and how they are doing. It would be sort of incorrect for us to comment on the same without a substantial evidence of what is going on. And again, the lockdown has just sort of been released in more parts, and economic activity is coming back on. I think another quarter is probably required for us to be able to gauge economic activity in any place. Even in India. I think it's too early to say how economic activity, even in Delhi or Bombay are doing in the larger cities. We need another quarter for basically to judge that, that's our opinion, and let more data come on, then we speak. It's very -- what you see with the eye can be very, very sort of not correct because you might just confirm what you want to confirm and believe what you want to believe. So I don't have on that information. On consumer behavior, there are very different kinds of consumer behavior that's happening. There are people who are buying. So as we said, we have had sales, people who have bought after just doing virtual site visits and not doing physical visits. There have been people who are a little worried about their jobs, so they want to buy, but they are worried about taking a loan and a liability in case they have a salary cut or a job cut. There are people who are actually thinking that maybe what some of the influencers are saying is correct, and it might be a good time to go deal hunting and they're looking for discounts to buy. There are people who are thinking it might be a good time to buy ready to move. And there are people who think it's probably a better time to invest in property over the stock markets where returns have been negative and most savings have been financialized over the last 4, 5 years, and it might move to real assets. There has been thinking around affordability. I know 2 stories in our project where people who had come to rent ended up buying because of decline in interest rates, whereby the gap in the EMI and the rent is lower. So all I would like to say is it's hard to generalize consumer behavior in a generic specific way. Different consumers at this point of time are behaving very, very differently. And everybody is reacting to whatever is going on in very different manners. Bhaiya, would you like to add anything on this?

Not really, Varun. I think also, these are things that will need some time to stabilize and can't paint the entire consumer base, the entire country in one single brush and say like, this is -- I think even within our own markets, within senior living, within regular housing, within Jaipur, within Bhiwadi, there are going to be different markets, which have been behaving differently for us as well. So yes, I mean, I would just very, very -- think very, very similar to you, Varun and give it 3 more months before we can really say which way are we heading.

[Operator Instructions] The next question is from the line of Priyank Sanghavi from 5Y.

Yes. Hello? Am I audible?

Yes, you are.

Yes, you are.

So my question is in -- for town and Surbhi in Bhiwadi, like, the bookings really dropped. So like -- was it like bookings were done and then some were canceled? Or like what happened there?

I -- they were just slow. Last quarter in Bhiwadi, in particularly, Ashiana Town, Tarang and Surbhi were extremely slow in Q4. I don't know what happened. And if any project, which has been doing better than everything else in the lockdown or this quarter where things have been very slow overall has actually been Ashiana Town. So it's hard to comment as to what happened in one quarter to another. We don't know that.

Okay. Fine. And a similar question for Anmol in Gurgaon and the Vrinda Garden in Jaipur.

So Vrinda Garden in Jaipur is an issue of also stock being reduced in Phase 3b. Phase 4 has only a particular kind of units in Vrinda Gardens, which are 3 bedroom, 3 toilet units. We do not have 2 bedrooms or 3 bedroom, 2 toilet units in that phase at all. And Phase 3b has very limited stock now. I think in Vrinda Gardens, when we launch another new phase, which should be reasonably soon, I think COVID delayed the launch of Phase 5. We should be launching soon. I expect Vrinda Gardens sales to pick up. Ashiana Anmol, we are not exactly, again, sure of what has happened in Anmol in the slowing down of sales. We are also working on that to figure out what's been there. It's been again more than one quarter. It's actually happened for 2 quarters. We are trying to figure out what happened over there and what we need to do to fix it going forward.

Okay. Fine. And my other question was the expected completion time that we show in the ongoing project summary, those are RERA dates, right?

Yes. They are RERA dates. So we should complete substantially ahead of that state. We will be looking into -- we might get to -- I will stick to the given timeline, we might start giving 2 timelines, one as per RERA and when we actually expect to finish, so that can give a better sense of where we are. So we might start doing that. We will revert and provide that information as well.

Okay. And there's some data -- extra data that we give in the analyst meet that we have in Mumbai in the presentation. So will those be available some time later?

Yes. We would -- all of that data is published in the annual report. So when the annual report is published, that information will come in. Or -- and we might do an updated presentation of that same nature and provide that data. We will provide the data that you would be looking for. In general, we'll review it once and share that with the community at large.

Yes, yes. So I was particularly looking for those gross profit margin, indirect expenses kind of data that is available in the -- once in the analyst meet presentation only?

It is in the annual reports in the Management Discussion and Analysis section, Priyank and we will publish it again in this annual report as well.

Okay, fine. When is the annual report -- in that case, when is the annual report is to be sent?

I wouldn't have that date on me. We will come back to you. Can I request you to let others in the question queue come up with the questions, please?

The next question is from the line of Manu Rishi Guptha from MRG Capital.

Sir, my name is Punith. I'm representing Mr. Manu Rishi Guptha from MRG Capital. So I have more than 3 question, like 6 questions I have, so if you don't mind. So the first one is like if you can let us know that in absolute numbers, like, what is the sale during April till date for the Q1?

So we would publish that soon. As of today, net bookings to us stand at -- in the single digits because we have had significant cancellations in Ashiana Amantran. So we would have had about 50-odd bookings for the quarter and 50-odd cancellations. Of that, majority of the cancellations, 35-odd cancellations happening at Ashiana Amantran. So as of today, the net score is in the single digits.

All right. Okay. Sir, any new strategies in the post-COVID era? I mean since everything is changing, so I mean are your strategy remains the same? Or are you going to have a new strategy in place? How is that?

According to -- Punith, we are also just reading the situation. Again, I don't think enough information has emerged for us to take decision here or there. But as I've reiterated in the call that we had in late April, early May, that we will act on information and not on forecasts and predictions that are floating around. At this moment of time, I don't think we have enough information to say our strategy should pivot this way or that way. And there might be a lot of tactical decisions that will be taken in individual projects according to the situation, which is very local to that extent. So that's what it is. We are reexamining our strategy. We are discussing at the Board and continuously evaluating what we should do. I would say that there isn't enough concrete information to share what is to be done and make a decision at this point in time. Bhaiya, would you like to add anything on this?

No, not particularly, Varun. But I see -- okay, in my view, I see great opportunity here. I think the reliable developers, developers with good track records, with very strong delivery capabilities, on-time delivery capability should benefit more because I think people will get a little bit more worried about their -- the safety of investment versus the return expectations. So I think money should -- there should be further consolidation towards the more reliable developers going forward.

Okay, okay. Sir, any pricing pressure you guys are facing? And I mean, if so, I mean, will there be any change in the pricing strategy going forward? Or what is the pricing strategy going forward?

So we are, as I said, it's very project-to-project and market-to-market dependent. I would say in Jamshedpur and Jaipur, we are not feeling pricing pressures. In Bhiwadi and like Anmol in Gurgaon, we have felt pricing pressures, but we felt pricing pressures even pre-COVID, and there is pricing pressures there. Some of it has already been recognized over the last 3, 4 years. And we have come out with schemes in those projects to pass on some sort of benefits to the customers and which overall reduces the pricing that we realize in projects. In terms of senior living, I think, again, we don't feel pricing pressure there. And we continue to see that, that's a place where we can probably enjoy more pricing power in the future. And COVID probably has accentuated the need for a lot of seniors to be in a place where care and services can be provided, particularly as they have been living alone in the city and have felt the pain of taking care of themselves. So that's what we sort of overall feel right now.

Okay. So then, I mean, the cost per square feet of construction, will it going to be remain same? Or will it come down since there are like deflationary pressures in the market? How is it?

This is, again, is very difficult comment on this, as there is this WTI inflation figure that people have quoted. Then there is that whole piece, which is going on that labor will not migrate back and therefore, labor supply will be decreased and labor cost might go up. Cement prices have actually increased in a few markets. As of now, our view is that, again, that probably construction costs are remaining stable. As of now, we haven't felt either upward pressures or some cost benefits in the short term. But again, this quarter, whereby supply chains for our suppliers normalize and the labor markets also normalize will be important and giving a sense of where things would go. And if supply of construction reduces, what a lot of people is saying that the real estate industry will further feel pressure, and there is overall lesser construction, there would be overall lesser demand for construction materials as well. But that is also dependent on the infrastructure centers. So all I'd say is there is a lot of things going on right now. Probably need one more quarter to be able to give you information, which is more substantiated.

Okay. So my next question was about the labor strength. And how are you guys getting the labor strength, everyone in the real estate industry are struggling to find the labor? So I mean, are your projects are like now sufficiently staffed in order to complete the project? Or I mean, is there any shortages of labor you guys are facing?

Overall, we haven't experienced labor shortages that is being publicized in media, a lot of our labor at our construction sites, particularly the Rajasthan projects, have done quite good in that, and we don't see any worry. Chennai is a project, Ashiana Shubham in Chennai, there a lot of labor left back to their hometowns, so there is a little bit of a labor supply crunch that we are seeing. And we are looking for solutions on what we could do in terms of managing our construction speed and how do we find labor and long-term efficiencies, what could be done. And in Jamshedpur, we have also had some labor shortages. And -- but fortunately, Jharkhand has a lot of local labor as well, so we have been able to recruit some local labor there and got construction speed movement overall going on. Our view is that we would have done better than most real estate developers in our ability to retain labor and deploy labor and even kick-start construction.

We move to the next question that is from the line of Rohith Potti from Marshmallow Capital.

My first question is on Anmol Gurgaon. I believe one of the conference calls back you mentioned for that project planning to partner with local groups to help sell the project, so is it too soon and is it too short a time that has passed for us to get an -- for you to get a sense of how that has panned out so far?

Yes. Rohith, yes. So we have partnered, it's too soon a time to figure out where that is going and probably the uncertainty during COVID also came in. We had really started working with partners in middle of January. And then this again, it slowed down in this situation. I would say another -- it would take probably 6 to 12 months for us to be able to really comment on that because more than anything else, we will also need to learn how to work with channel partners and distributors. We do not have the skill set and do not know what's the temperament that is required to work with them. So there is a learning curve for the organization. And I would say even 1 or 2 quarters might be less for us to comment on that.

Fair enough. I agree. And the next question is on the Kid Centric Homes. So in the past, you mentioned that senior living and Kid Centric can be relatively higher-margin products for us because they are differentiated. So while we see the average playing out quite well in premium living. And in Kid Centric we have 3 projects -- 3 flagship projects broadly, I believe: one is Anmol, the other one is found in Bhiwadi and the other one in Jaipur. So I understand the Jaipur one is doing well. But the one in Bhiwadi and Anmol maybe for other reasons are not doing that well. So my question is more on broadly the Kid Centric product strategy, do you think it is differentiated enough to earn better margins even today? Or do you think there is more change that needs to be done? And is this a segment that will continue to be a long-term segment for Ashiana?

Okay. So as of now, we are looking at it as a long-term segment and working on Kid Centric Homes to be able to create value and charge higher pricing and get margins by delivering better value to the customers. I would just say in senior living, it probably took us about 12, 13 years, or maybe 14 years before we got to a stage where we could start enjoying the pricing power. That is a very, very long time, and I hope we don't have to repeat that in Kid Centric Homes, but we are figuring out ways, what is it that we need to be able to command better margins in that product in construct. As of now, we have not seen anything in that direction, and it continues to be a work in progress. But we continue to be committed to be finding a way there and looking for ways right now.

The next question is from the line of V. P. Rajesh from Banyan Capital.

Just a question on the Aditya, Jamshedpur, are you seeing any cancellations there also? And in general, aside from Amantran, are you seeing any other major bookings being canceled by the customers? And then I'll ask you one more.

Okay. So in Ashiana Aditya, we probably have had 4, 5 cancellations to the year, but they have been booked immediately. So if the cancellation happened today, we were able to sell it to someone else either today or tomorrow, that kind of a direction, I would say, is we probably have a pool of people we can -- who are probably awaiting Phase 2 as well. So Ashiana Aditya, in particular, that's the thing. In general, outside of Ashiana Amantran, we are not seeing the cancellation, which are in any manner out of the ordinary. In normal course of business, we do have a few cancellations every year. Something or the other happens, which do take place. And that's what's happening right now. We are pretty comfortable across the place. I think in Ashiana Amantran, it was the timing of the booking and the launch, more than anything else, which has had an impact because it was just people's minds were -- they were confirming and committing to the booking when the lockdowns sort of happened, and that has kept a few people in 2 minds there.

So are you seeing the demand now come back for it? Meaning, some people who canceled are coming back or folks who have looked at it virtually are starting to come back? Just if you can give some color on that?

Some sense is coming on that. We think that there are a few bookings flowing in. And I believe we are -- it is going to start coming back as we go forward. Again -- but again, some of those are predictions. Slight green shoots is the right way to put it that we are seeing in Ashiana Amantran at this moment of time.

I see. And you were talking earlier about the supply side. So broadly, at your company level, if you think about the supply, are you back to 60%, 50% across different projects? I know you said Chennai is giving -- Chennai labor probably is still there, but I'm just trying to get an overall system view with respect to your different markets?

It'll be hard to comment on a percentage, V.P., all I can say is that we have made a revised construction schedule across the projects post-COVID. And in my understanding is that all sites, except for Ashiana Shubham and Chennai and Ashiana Sehar in Jamshedpur, all projects are meeting that revised construction schedule that we have made. So we are basically on track to achieve. Some of that -- this factor in a little slower speed in June as compared to what we would have achieved, not only for labor, but also for materials and just building momentum, but we are on track of that and the new construction schedule.

Varun, our reduction would be approximately 20% of what we had planned earlier approximately for the month also. So that's the kind of -- and I think Chennai is hurting a little bit, but most of the other sites are on track. Jamshedpur and Chennai, you mentioned that already. And Jamshedpur, also, because of the local labor, we should get back on track sooner. Chennai, we may still are struggling to find a way out. We -- while we were just about to hit the solution, the second lockdown came about in Chennai. So I think that's going to delay the process a little bit further.

I see. And Vishal, when you said 20%, is it to pre-COVID plan or the revised plan?

So. No, no, no. To the pre-COVID plan. So whatever we had -- what we were expecting to happen in this month pre-COVID, we are 20% lower.

We are overall adhering to post-COVID plan, except for the 2 projects that I mentioned, Sehar in Jamshedpur and Shubham in Chennai.

Okay. And on the demand side, I think it's fair to say that you sort of want to come back on that after a quarter, right, that's the way to characterize that?

Yes. After -- yes, September. The July, August, September quarter would probably the most important quarter in terms of giving a sense of where things are.

The next question is from the line of [Siddharth Agarwal from Prudent Value Partners].

So the first question, Varun, is that our operating cash flow from -- declined from roughly INR 22 crores in Q3 to INR 5 crores now. So what is the status of our cash flows now? And are you seeing any arrears and receives from our customers?

Okay. So one thing that happened in Q4 was basically our collections are sort of -- majority of them happened in the last 10 days of the month. Okay. Because we take out demand at the beginning of the month and people end up paying at the end of the month closer just to the due date. That, basically, in March got completely stalled because lockdown came in, I think the 20th or whatever that day was in March like and then we lost about 10, 11 days of collections there. Secondly, April and May we collected, but it's not been anywhere -- it's not substantial enough to comment. June, again, the last 10 days are still left, where it will be important to see how June collections are. We expect June collections to be substantially better. April, May, the other problem came in with also the disbursements in end of March and April, May was basically, the home loan department of financial institutions were effectively not working. If they were working, they were poorly staffed and they were not able to sort of visit the project site and confirm what's the status of construction before they release or the paperwork. So some of that had gotten sort of stalled. We will get more information, I would say, in the next 13, 14 days as to how things are looking. Our view to overall that is, as I said, cancellations are not substantial in nature. And we should have a good full year -- the full year collection should be good, and our operating cash flows should become healthier as we go forward during this year.

Okay. Great. And Varun, you also mentioned that we had some losses in Ashiana Anmol, in Sohna, project because of the lower gross margins. So what are -- if it's possible, could you please share what are roughly the gross margins in that project? And if Sohna market continues to be sluggish, can -- will it -- is it expected to expect impact our coming results also?

So 2, 3 things. The Sohna market, in terms of further revenue contribution will be lower, the big chunky area delivery in Phase 1 has already happened. And now whatever will happen is whatever booked inventory we sell and the proportion of revenues it will make going forward will generally be much lower than otherwise. So that is one aspect that would like to pertinent. I wouldn't like to share exact gross margins in Ashiana Anmol. But it's closer to half of what we would make on a consolidated basis otherwise. That's the kind of discrepancy that was there in that margin. So whenever Ashiana Anmol does come in, in a larger chunk or when we do Phase 2 and Phase 3, unless and until there is a significant upward movement in price in Phase 2 and 3 as compared to today, in those times, whenever those deliveries you should expect gross profit margin compression. Unfortunately, that's the case in that project.

Okay. Great. And Varun, we also have a comfortable cash balance and on our balance sheet, so roughly INR 150 crores. So do we plan to -- for any debt repayment or given the very attractive stock prices, does a buyback make sense for us?

Well, so a buyback is not something that we have considered internally at all in looking to do a buyback. So I think there are various things that we are looking at. One, we, as a temperament are inherently a little paranoid management gets that's to push it in terms of cash. So we are a little bit always worried in terms of whether and what else could go wrong, one never knows. The current situation doesn't seem to be. But since one never knows the future, so we are -- we'd like to hold our cash a little bit as a management team, probably, which has been in good light given the external shock that has happened right now, and that liquidity does give a lot of comfort today. Second, we are looking to prepay some debt. We have prepaid a INR 10 crores of ICICI's nonconvertible debentures in the month of June. We have another INR 17 crores of debentures to be repaid in July, anyways, which are coming up. So we are looking to overall reduce the leverage in the organization and reduce some of that interest costs. Thirdly, there is also -- the land markets are also becoming very interesting at this point in time, and very interesting transactions are available. So there is, let me put it this way, confusion in the management as to which way to go. And a little bit more information over the next quarter in terms of operational performance will sort of guide our decisions and also the largest strategy which we have and then take calls accordingly over there.

Okay. So basically, we are also evaluating some land deals given the attractive prices that may have come now?

Correct.

Okay. And are they the same cities or anything in newer markets also?

No, the only newer market that we are really evaluating is the Noida, Greater Noida market for senior living. And from my construct, it is a new market in terms of approvals and construction, but from a senior living sales perspective, it is probably a newer product in the same larger NCR market, where we are able to capture some customers who are unwilling to go to Bhiwadi as a micro location, if that's the reason to put it. So that's only other really sort of newer markets we are considering in terms of...

And one last question, Varun, is around our Halol project. So basically, this quarter, I think we charged roughly INR 5 crores to the P&L. What is the reason for that? And we are also planning to exit the market, Halol market. So can you please share your thoughts on the those 2 things?

Correct. Okay. So typically, what happens is when you build a project in phases, some costs, which are basically allocable to the entire phase, we have to build it upfront because you can't modulate it, like, let's say, the example of a clubhouse. A clubhouse we build to a capacity as planned to for the entire project. So if we have 500 units, we will plan a clubhouse which will cater to the 500 families and not 250 families in the first go. So we plan the project and we proportionately charge, allocate those expenses to Phase 1 and 2 and carry the proportionate expense of future phases as inventory as per accounting policies. And so this is -- the clubhouses, for example, boundary walls are another, power stations are another, sewerage treatment plants could be another, guard rooms could be another. So basically, what I would say, external development on common area works. So that we had effectively built out for the entire project, most of it. A very little had to come into the future. So that led to charging of the stocks that we were really carrying substantially. And since we have decided to exit the market, there is no value to that stock to us anymore.

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

Varun, so I had a couple of questions. One was in collection. You alluded to it in the last part as well. But if I may just extend, I'm just trying to gauge if our capital required for the project is going to go up, where in, let's say, we have construction-linked milestones, right, in terms of collections. We collected INR 350 crores last year. Given the circumstances, do you think we would have to, like, tweak those milestones wherein collection comes a bit later, while we may have to spend the money on the construction as is planned? So thereby our IRRs that we expect from the projects will take a hit. And of course, this will not just apply to us, but broadly structurally for the industry. So I wanted to understand it from your vantage point, how do you see that shaping up?

No, I think -- see, again, it would be hard to comment fully on that. Again, a few more months of information might be more correct on it. My first information that we are getting, okay, because we've been tracking who will pay, what's going on, why haven't they paid, what's the status of this, the issue seemed more procedural, okay? In some of the cases we had to collect moneys and then we had to send runners to go ahead and collect the checks as someone was not willing to do online transfers. In some places, the banks had to process and now the banks need a physical signature from the customer for them to disburse. That procedure got stuck. So issues seemed more procedural and less of, let's say, concern of people unwilling to pay or looking to delay payments, in general, on a larger context. Would there be cases of people who are uncomfortable paying at this moment of time? Absolutely, but they are not a large enough number to -- for us to worry about. But again, the next 3, 4 months can also be there. Procedures can also be a great way to -- even to hide not to push those payments. Okay? [indiscernible]

No I understand. So one way to think about it is last 2 years, we've had INR 300-plus crores collection every year. Looking at things as they are today, you are not alarmed about not crossing that figure this year as well, right? Is that a fair way to put it as things stand now? Of course, nobody is going to question you. If it isn't doesn't...

Yes. As of now, I wouldn't be alarmed of crossing that figure right now.

Okay. That helps. So second question I had is, of course, the P&L is something we don't necessarily look to understand our business and our -- what we are trying to do, except that we follow project completion. So it gives you -- it's kind of a report card of what we did, say, 2 years, 3 years, 4 years ago. And if you look at it this year, possibly in 10-plus years, first time, you are seeing, say, EBITDA is negative. It generally used to be 25% plus EBITDA margin. Now -- so of course, this is past. But as you look at our ongoing projects today, especially the projects which we have launched in the last, say, 12 to 24 months, should we say that the LPN (sic) [ P&L ], say, 3 years, 4, 5 years out, 4 years out, do you, for any reason, see that it will be difficult to go back to those 25%-plus margin level as things stand today? Or do you think structurally, I mean, 15% is more realistic? Or how do you -- how should one think about this? Because we don't want to -- at least we should have a range to think about as to the project [Foreign Language] what is the kind of profit that it can generate over the next cycle, say, 5 years, 7 years?

So let me put it this way, let's -- we think less on the EBITDA front because some of the overhead costs are a little bit more jammed up. I would say 2, 3 things that have happened. Let me -- deals which we did, land transactions, which we in did 2013 -- between 2013 and 2015, so that's Ashiana Anmol, Ashiana Tarang in Bhiwadi, Ashiana Umang's extension part, some of the projects that we have done Ashiana Aditya, Ashiana Amantran, these projects have typically had a little more gross profit margin now than what we would have underwritten at. Because typically, construction costs have gone up since that vintage land price, either on an outright basis, locked in or as a percentage has been locked in of the revenues and revenues have not really increased, okay? So there has been a gross profit margin compression in these 4, 5 projects. Ashiana Umang extension, I wouldn't worry so much. We were hoping for more than supernormal margins given what we enjoyed in the month, we may not do that. But typically, we look at a 30% gross profit margin across projects. Of this, Ashiana Anmol is of a different order of thing and that is sort of -- part of its revenue recognition has gone there, part of it will come during the year. Outside of this, the other 4 projects, I would say, are typically in -- which has a 25%, 26% kind of average gross profit margin in these 3, 4 projects. Rest of the projects, I would say, will continue to deliver 30% or more gross profit margins in the future. My view is that we should be on an average and senior living will deliver even better gross profit margins and senior living has started contributing a little bit higher as a percentage of revenues than it used to do earlier. And that will also help overall gross profit margins. So I would say, on average, I think 3 years from now, we can assume that a 30% gross profit margin, we'll be able to maintain going forward. And so that would translate to about INR 1,000 a foot, let's say, plus/minus a INR 100 depending on the mix of the project and housing I'm also assuming that we do not face significant construction cost pressures over the next 2, 3 years. So if there is any significant movement of labor or material upwards that will impact on the margins, particularly we cannot be able to pass-through that further to the customers in terms of pricing. So that's on the gross profit margin a bit. So I think -- and the newer projects that we have done, things are improving. And I would expect that the -- that margin compression that we had felt over the years, that period, to me, at this point of time, is over, and we're going to see margin expansion overall. As we go forward, I -- that was a view pre-COVID, particularly that sale prices should go up and we should enjoy margins. How COVID impacts that? I really don't have to say right now as we go forward. And the other thing that happened on the EBITDA margin if I would continue was on the -- our overhead started ballooning significantly higher. A lot of marketing cost got [indiscernible], therefore we had to charge-off marketing expenses this year. I think that is also coming under control as we go forward. And overall, our marketing expenses we expect to also be controlled in the future. So that's what I would like to articulate overall here. I hope that answers your question

Ladies and gentlemen, that will be the last question for today. I now hand the conference over to the management for their closing comments. Thank you, and over to you.

Thank you, everyone, for joining us for this analyst call. Unfortunately, we are not able to have the Analyst Day this year. Some of the information that we present on Analyst Day, which we may not have shared already, we would publish that onto our website and onto the stock exchanges hopefully soon. Thank you for all your questions. If you have any further questions, please feel free to write to us or contact us directly. Thank you so much for joining us on this call.

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