Ashiana Housing Limited (523716) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Ashiana Housing Limited Q3 FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Binay Sarda from E&Y. Thank you, and over to you, sir.

Thanks, Muskan. Welcome, everyone, and thanks for joining this Q3 FY '25 earnings call for Ashiana Housing Limited. The results and the investor presentation have been mailed to you, and it is also available on the stock exchange. In case if you have not received the same, please write to us, and we'll be happy to send it over to you. To take us through the results for this quarter and answer your questions, we have today with us Mr. Varun Gupta, Whole-Time Director; and Mr. Vikash Dugar, CFO. We'll be starting the call with a brief overview of the company's performance of the quarter, and then we'll follow it up with Q&A session. I would like to remind you that everything said on this call that reflects any outlook for the future, which may 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 you'll find on our website. With that said, I'll now hand over the call to Mr. Vikash Dugar. Over to you, sir.

Thank you, Binay. Good afternoon, everyone. I hope all of you and your families are keeping healthy. I welcome you to discuss the performance of the third quarter of FY '25 for Ashiana Housing Limited. Thank you for joining us today. Area booked recorded at 6.77 lakh square feet in third quarter of FY '25, vis-a-vis 3.35 lakh square feet in third quarter last year and 7.29 lakh square in the second quarter of FY '25. Area booked in second quarter was higher due to launch of Ashiana Amarah Phase 4 in Gurugram. We had very good bookings across projects this quarter. Value of area booked at INR 454.16 crores in the third quarter vis-a-vis INR 672.54 crores in the second quarter FY '25. Total presales for 9 months FY '25 at around INR 1,362.02 crores vis-a-vis INR 935.68 crores from 9 months previous year and upside of 45.56%. We constructed 5.19 lakh square feet in the third quarter vis-a-vis 4.77 lakh square feet in Q3 FY '24 vis-a-vis 6.01 lakh square feet in the second quarter of current year. Quarter-on-quarter decline of 13.64% majorly due to a position of GRAP-related restrictions in Delhi-NCR. Total construction for 9-month FY '25 was INR 16.11 lakh square foot vis-a-vis 13.7 lakh square feet in the same period last year. We continue to maintain our guidance of INR 2,000 crores of presales in FY '25. However, this will depend on the velocity of bookings since the launch of Ashiana Amarah Phase 5 in the last quarter. On financials, as anticipated, our total revenues were higher for the quarter at INR 139.93 crores vis-a-vis INR 59.53 crores in second quarter, reflecting project deliveries during the third quarter. Likewise, our PAT for Q3 FY '25 stood at positive INR 10.88 crores. It was mainly driven by 2 new phase deliveries, Tarang Phase 4A in Bhiwadi, and Umang Phase 6 in Jaipur. PAT also had a onetime impact of INR 5 crores payout with respect to the GST matter of Treehouse Hotel. It has been shown as an exceptional line item in P&L. But delivery is expected in a more Phase 2 in Amantran, Phase 3 in the last quarter, we are expecting a profitable Q4 FY '25. Pretax operating cash flow recorded at INR 120.42 crores in Q3 FY '25 vis-a-vis INR 78.18 crores in Q2 FY '25. Pretax operating cash flows for 9 months ended FY '25 at INR 273.53 crores. Cash flows continue to be healthy due to higher collections, driven by better sales across projects. Third senior living project launched in Chennai by the name of Ashiana Swarang, located in Nemmeli. Apart from that, Ashiana Ekansh, Phase 4 in Jaipur and Ashiana Amodh, Phase 2 in Pune were also launched in Q3 FY '25. 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. Thank you.

[Operator Instructions] The first question is from the line of Rohit from ithought PMS.

So sir, just a couple of questions. So sir, we had, in the last call, talked about potential land deal somewhere in Bangalore. So any update on that sir? That was my first question.

Okay. So we have -- the deal is moving forward in Bangalore. There is, in fact -- there are some conditions fees that the landlords need to get done on the land in terms of land approval. So once those are through, I think the deal will proceed through.

Any time line on this, sir? I mean.

I'm hoping this quarter, but there are -- they have issues -- their regulatory nature issue. So sometimes it's not just on the landlord, it's also on the government. But I'm hoping this quarter, we should be able to get through. If not this quarter, then next quarter for sure.

Got it. And sir, from a general BD point of view, I mean this -- so I mean, we've been saying that we will go slow given the elevated nature of the land prices, but if you sort of look at our lands available. So it's down to around 25 lakh square feet now if I'm removing Milakpur. So this is, of course, does not include Bangalore in this -- that closes. But just generally, if you can give us a sense on what is going to happen probably in this year? Are there anything that can sort of fill it up back to, let's say, INR 40 lakh, INR 50 lakh that we were sort of saying that we will probably finish -- I mean we feel whatever we are selling every year sort of that kind of run rate. So if you can probably help us on that point.

So we have also disclosed an agreement that we have executed for a 20-acre parcel in Jaipur, okay? So that agreement has been done. That would be another 20 lakhs-plus square foot overall.

So that's not there in this, right?

That is not there in this because, again, it's only in an agreement stage and we have not concluded and there are CCs for the landlord to perform. This was disclosed probably -- in the last quarter, sometime you would have given us a special announcement to the stock exchange that this is happening. We are waiting for the landlords to get some regulatory clearances there for us to move forward. And so that will add. And we are in talks for one more partial of about 7 -- 6 lakh, 7 lakh -- 7 lakh to 8 lakh square foot and those stocks are also ongoing. So there is -- and over and above that 25 lakh square foot, we have about 50-odd lakhs square foot to launch in existing projects as well, 48 lakhs. So there is some -- still have -- we still have 3 years worth of stock. It's not completely off, right? So I thought I'll just clarify that as well.

No, no, no. I mean, I was just trying to say that, I mean, for see -- let's say 50 and 25, 75 and then another -- so I was not aware about this Jaipur. So Jaipur and Bangalore will be closed. That will be implemented 20 lakh each?

No. So Bangalore would be incremental probably between 10 lakh and 12 lakh and Jaipur would be about 20-plus lakh only.

And the 7 lakh, 8 lakh, which you said is also we are pursuing, that's also in Jaipur or?

No, this is elsewhere. This is a senior living project elsewhere. But again, very early stages. I'm hoping that we could do it.

And sir, Amarah has been launched for this quarter?

Amarah Phase 5 has not been launched. We have -- we should be launching in 2 weeks -- 2 weekends from now, probably.

2 weekends. Okay. And sir, any -- I mean, what are you hearing on the ground in the micro market that you are in there, in Gurgaon?

In Gurgaon, the markets are softer than what we were probably 8, 9 months ago, okay? But that said, we're not -- it is -- so we are positive that we should get a good launch. And to me, let me put this way, markets are more normal. They're not weak, but extraordinary exuberance that the market had probably 9 months ago, that is not there anymore and which is fair. Normal markets are probably the best places to be in. Exuberance on either side is not very good. So I think the market is in a good space. But we'll get to know how the launch goes in 7, 8 days, we start and then probably in a month, we'll know how things are actually with real evidence.

Right, right. So INR 2,000 crores is fairly contingent on that, right, I mean Amarah?

It is contingent on that. It is contingent on how that goes. Yes, absolutely.

And sir, just one last question. I mean, any early thoughts on how the next year would be in terms of launches? And anything on presales that you would like to sort of share?

So we do our planning in early March. So that's mid-March, that's where we will exactly plan. What I hope to do is get some new projects going. So we have Aaroham in Gurgaon. We have another land in Jaisingpura and Jaipur. We have this Jamshedpur project. The objective of the company would be to get all these 3 projects launched in the next financial year. And maybe -- at least one of the three that we hope to take up this year that we are in talks of it we have spoken Bangalore, Jaipur and one more, I'll try and get one more of those launched in the next financial year.

The next question is from the line of Himanshu Upadhyay of BugleRock PMS.

I had a question about what we have written in the annual report on Page 46, where we have spoken about acquiring 7 million to 8 million square feet in next 5 years and expect in sales of INR 11,000 crores to INR 12,000 crores and profits of INR 2,000 crores. What it effectively lead to 18%, 19% of PAT margins and nearly 30% of EBITDA margin, okay? Generally, we have seen some of such high margins are only when price of land is increasing and sales value per square feet is also improving, okay? We believe -- are we assuming there are such prices are continuing or will continue to rise in near future and the sales velocity will remain good?

Okay. Himanshu, the assumptions are that we will consume the entire stock that we have right now within the next 5 years. So this is about -- we have 11 lakh square foot of unsold stock in the ongoing projects, about 48 lakh square foot in future phases of -- and about 25 lakh square foot of land bank. And we are assuming by 2030, we should consume all of this. And that consumption is what we will report as revenue is probably including the ongoing projects. Two things are -- have happened. One, operating leverage is kicking in. So margins are improving. If you can see, we are giving a sense of also how future revenue, delivery revenue would look like. And we see an increasing trend next year, 1,300 plus. We are after that 1,700 plus and the year after that, again 1700-plus as compared to the revenues now. And fixed cost will not improve -- increase. So an operating leverage will kick in internal margin improvement. And second thing is a lot of that increasing land prices, apartment prices have already happened. Some of the projects that we have, we picked up in great times in 2021, in 2022. Those projects as and when they kick in, we will have good margins on those projects as they are expected. So I think that expand -- that increase in margin profile should happen in that -- because of that. So we are not factoring in significant price increases going forward in the future projects. We are assuming that now prices maybe -- will probably inch up as per inflation and not anything more than inflation at this point in time. But in these projects, we have already seen that kind of change, like Ashiana Amarah, we had assumed when we picked up the land price and what we are selling at is very different, which is a large kicker, -- similarly in Ashiana Ekansh or One44, Swarang, or Amodh. In all of these projects, we have seen what we are selling are price increases. We have also improved our mix to moving more and more to senior living. We expect to enjoy better margins in senior living because it's a more specialized product, which has taken a lot of time for us to refine. So we have suffered earlier, but now we see improvement there. So there is a whole host of things that is playing out. And I expect to average high-teen margins on the PAT level over the next 5 years. And that is -- that we definitely expect to happen.

So what -- the price appreciation, which has happened that in the traditional lens, what we had, okay, so that is giving us the confidence that we should get that much margin. And that is the one thing what we -- are we seeing in portfolios or leads getting generated reviews or the conversion of leads is taking more time and -- or the prices are -- people are more negotiated in the market when you say that the market is much more stable, at least in Gurgaon and Northern India. So can you give us some...

Not in Northern India, in Gurgaon only, Himanshu, across the world, otherwise, if you look at the last quarter, we had secular sales across projects. This was a quarter, which is not very heavily -- like if you look at Gurgaon's contribution in the -- in Q2. Excluding Gurgaon, we had done probably about 430,000-odd square foot, 435,000 square foot. This year, excluding Gurgaon, we have done 5.5 lakh square foot. And that 5.5 lakh square is more than all of Q1, which was 440,000 square foot and no Gurgaon in that -- in Q1. And so if you look at what is happening, I think, in general, markets are robust and continue to do well. Only in Gurgaon, where I think the markets are a little bit more stable, clothing rates are a little lower, visits are a little lower. But -- it isn't a weak market. We are seeing that in Gurgaon, it's more normal because it -- Gurgaon was in a different exuberance 9 months ago, which none of the other parts of the country we're in, okay? So I think Gurgaon is normalized to how other parts of the country are behaving in general, whichever way we see it. So that is what I make.

And this Ashiana Aaroham, can we expect launch in Q1 FY '26?

No, it will go to Q2 or Q3 of the next financial year. So last-minute regulatory changes happened by which we have gone back on the drawing board of our building plans. And therefore, we'll take some more time to get regulatory clearances happen than we expected.

So has there been change in FSI, sir with rules are just strong?

No, no. It doesn't impact all projects, but we had designed the project in a certain form of fashion and regulation around that specific design change. So there are no changes in FSI.

[Operator Instructions] The next question is from the line of Saket Shah from RBS Advisors.

Am I audible?

Yes, you are, sir.

Sir, I wanted to ask what would be the quarter 4 numbers you can foresee for the FY '25 ending?

Can you repeat that, Saket, please?

For the January, February, March 2025, what numbers we can foresee in terms of revenue and what you can talk of EBITDA margins?

So we don't give out the EBITDA margins.

Yes. Roughly revenue, what would be expecting a rough revenue out of EBITDA in terms of quarter 4?

Roughly, those expected revenues in Slide 15 of our deck, if you have a look at that. And we should end up around INR 550-odd crores for the year maybe including other income, INR 575 crores for the year. So you're looking at about a INR 300 crore revenue to be reported for the last quarter.

INR 300 crores would be reported for the last quarter of this year.

Yes, that's what we're expecting. We need to deliver a couple of projects. They are in OC stages, the 2 big projects are being delivered at Anmol and Gurgaon and Amantran in Jaipur and Ashiana Anmol in Gurgaon, we are in stages of OC. So OC should come in, back complete in terms of development and construction as soon as OC comes in, we deliver that. So we are waiting on that, Amantran, even I think we are ready to delivery all the stock. So that's what we're expecting. However, Q4 is going to be very, very muted on margins, largely because Ashiana Anmol Phase 2 is effectively on after selling costs effectively very low margin or no margin at all kind of a project which has hangover from the over or last cycle highs. I think it's one of the few projects that we are still left with, which still have some drag on the balance sheet for us, right? So that -- and Ashiana Amantran also are not very heavy in margins. So we expect margins to be very muted in FY '25. However, with FY '26, as I was talking to Himanshu earlier, FY '26 onwards, we expect the game to start changing significantly as we have better margin projects getting delivered FY '26 onwards.

The next question is from the line of Rohit from ithought PMS.

Just again, 2, 3 questions. One was, sir, I think -- I mean we had in the last call and I mentioned that I think this was all discussed just back -- just a while back about this INR 2,000 crores cumulative profit that you are kind of hopeful of over the next 5 years over FY '20. So if I see in your slides that you've already sold -- like you have inventory -- I mean you launched projects worth INR 5,500 crores, and of which you like sold close to INR 4,400 crores, which will get sort of recognized over the next 3 years. including this year, right? So next 4 years rather, including FY '25. So sir, from here on, right, so to get the incremental like INR 5,000 crores, INR 6,000 crores of projects to be launched. I mean, to sell them and then recognize them in the ensuing 4 years, I mean wouldn't FY '26 be very heavy in terms of launches?

Well, so -- to me, if we lead to launch all the 3 projects outside of Milakpur, that is in our project list, which is Aaroham, Armaya and Jaisingpura and we'll need to get one of the three projects that we are in talks With. If we get those in, in the next financial year, I think we'll be on track.

So existing 3 plus one of the ones that you -- either Jaipur or Bangalore.

If we get that, we'll be good.

Okay, okay. So this year, that should be one thing we should keep tracking in terms of launches. So the existing 3 ones that you said, right, excluding Milakpur, so any time line on the launches? Will it be H1 or H2, like any thoughts?

They should be in H2, early H2. So then we'll get about 4.5 years to get them in. So we'll have enough time to get them in.

And sir, the other question was, sir, in terms of like last quarter, I think you mentioned that this year, profitability on a reported basis will be very similar to what last year was. So I mean, which would end up and essentially make.

Yes. Sorry, I'll just cut you if there was -- we did guide on that. And so one particular project, which is Ashiana Advik Phase 1, which was to deliver bulk of the profit, even with slow on revenue, it's a very high GP margin project. Historically, we are missing the delivery period by a quarter there. So it was to come in, in Q4, it's gone to Q1 of next year. So some of the things were under our control, we executed. But this year, the graph regulation in NCR were heightened basically the threshold of pollution where they stop construction was reduced, and we lost probably 20, 25 extra days in the construction period because of it this year than our estimates. And that which was we were expecting in March has now gone to May. So that's -- unfortunately, that's what happened.

So basically, next year, in terms of delivery, there will be a bumping up and that will happen, maybe not so much on the revenue side, but more on the profitability side?

Yes, there would be a little bit of bunching up. Yes.

Understood. Okay. And sir, I mean, we don't have anything major in terms of unsold inventory? Only, I can see these two projects, which out of this 2.65 lakh square feet, one in Bhiwadi and one in Jaipur. So in terms of the sample rate, when do you think these two will get over? So what would be I'm saying I'm talking about Surbhi, Bhiwadi and Umang the Phase 2, 5 And 6. It's not very high, but just wanted to get -- because it goes to like 50% unsold inventory, looking very low, but just wanted to get your sense.

So one thing -- so Umang, we continue to sell. I think Umang will be get done in the first half of the next financial year, maybe the full financial year. That's the large context, Utsav Lavasa, I can't -- I don't have any comment on. And the third one being Surbhi. So Surbhi, we were -- so the way we have set up a sort of a crack team in Bhiwadi to get going with a lot of ready unsold stock, and they were targeting Ashiana Town. Ashiana Town has now basically, now we've cleared, it was our heaviest piece. So they have gone after that first. Now with that done, that team will move to Surbhi and they'll probably going to get active. So first quarter of next year is when we'll start getting to get a sense of whether we are able to get results. You see, if our strategy works in Surbhi in the first quarter next year, then we'll be done in the next financial year, if the strategy does not go up, we go back to the drawing board and try something else in the quarter after that. I think that's where we are at in Surbhi.

[Operator Instructions] The next question is from the line of Rahul an individual investor. As there is no response from the participant, we will move to the next question. [Operator Instructions] The next question is from the line of [Nitin Khandelwal ], an individual investor.

Sir, I just wondered to ask the labor area in Amarah and increased by around 1 lakh square foot this quarter's renovation compared to last. So, like, are you adding an extra tower or is it commercial?

No, just -- there was a calculation there in the way the totaling was done. Some parts of the area were missed out in our pivot chart, which we sort of review internally. And so it was an error that was corrected because our phasing plans were revised.

Okay. So it was 5.3 lakh square foot.

Yes.

[Operator Instructions] As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Over to you, sir.

We'd like to thank all of you for being on this call and being so patient with all the questions and answers. If we were unable to take any questions, please feel to write to us directly or reach out to us directly. And with that, we would like to conclude the call. A lot of the material we have spoken about is posted on our website. And you can also e-mail your queries for any further clarification. Thank you once again for taking the time to join us on this call. Thank you.

On behalf of Ashiana Housing Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.