Godrej Properties Limited (GODREJPROP) Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to the Q3 FY '24 Earnings Conference Call of Godrej Properties Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Kshitij Jain of Godrej Properties. Thank you. And over to you, Mr. Jain.

Yes, hi. Thank you. Good afternoon, everyone, and thank you for joining us on Godrej Properties' Q3 FY '24 Results Conference Call. We have with us Mr. Pirojsha Godrej, Executive Chairperson; Mr. Gaurav Pandey, Managing Director and CEO; and Mr. Rajendra Khetawat, CFO of the company. Before we begin this call, I would like to point out that some statements made in today's call may be forward looking in nature, and a disclaimer to this effect has been included in the results presentation. I would now like to invite Mr. Godrej to make his opening remarks.

Good afternoon, everyone. Thank you for joining us today. I'll begin by discussing the highlights of the quarter, and we then look forward to taking your questions and suggestions. The demand for homes in India is at its highest levels historically and has gained further momentum during the quarter. The positive market opportunity is driven by the overall strength in India's economy, the cyclical upturn in India's residential real estate market, the need for modern homes with better amenities as well as consumer preference towards Tier 1 developers. The RBI's upward revision of financial year '24 GDP growth of close to 7% during the quarter reiterates India's position as the world's fastest-growing major economy. The government's continued focus on housing for rural and urban infrastructures, combined with the fiscal prudence evident in last week's union budget, strengthen our conviction that the real estate sector will continue to do well in the years ahead. The third quarter was Godrej Properties' most successful quarter ever in terms of new bookings with year-on-year growth of 76% to INR 5,720 crores. This was 14% higher than our previous best-ever quarter in quarter 2 of the current financial year. These consecutive record-breaking quarters have ensured that our 9-month financial year '24 sales have already crossed the booking value registered in all of financial year '23, which was our previous best-ever year. We are confident with building on this momentum and going well past our annual bookings guidance of INR 14,000 crores for the full financial year. This strong growth can be attributed to an extremely strong response by customers to some of our new launches during the quarter. Godrej Aristocrat in Sector 49 in Gurugram was GPL's most successful-ever launch, achieving a booking value of over INR 2,667 crores from 1.35 million square feet of area sold. It is noteworthy that the total expected booking value for this project has increased by approximately [ 30% ] from the time we acquired it a year ago. Godrej Ananda in Bengaluru was another project, which achieved more than INR 500 crores booking value during the quarter. Godrej Avenue Eleven in the Mumbai metropolis region was launched in September 2023 and has achieved a booking value of INR 687 crores within 4 months of launch. We are pleased to see the strong customer response to new launches across all the cities we are present in. Cash collections and net operating cash flow, respectively, grew by 43% to INR 2,411 crores and 45% to INR 798 crores in the third quarter. For the 9 months of the financial year, we recorded cash collections of INR 6,743 crores and net operating cash flow of INR 1,726 crores, representing a growth of 30% and [ 34% ], respectively. We remain on track to achieve our guidance of INR 10,000 crores of cash collections during the financial year. From a business development perspective, we added one group housing projects in Bangalore with an estimated booking value of INR 1,250 crores. We now have our strongest-ever project pipeline that can deliver robust growth for the next few years. The most important objective for the company in 2024 will be to launch all of our recently added projects. We believe this will dramatically accelerate our bookings and earnings growth trajectory in the years ahead. We will, of course, continue to do targeted business developments to plug holes in our current portfolio and ensure continued growth beyond the next 3 years. Our reported earnings for the third quarter were healthy, though somewhat muted because we did not have any project completions during the quarter. Our total income increased by 43% to INR 524 crores and net profits increased by 6% to INR 62 crores. For the 9 months of the financial year '24, total income has increased by 126% to INR 2,410 crores. EBITDA increased by 51% to INR 548 crores and net profit increased by 60% to INR 254 crores. On that note, I conclude my remarks. Thank you all for joining us in the call. We'd now be happy to discuss any questions, comments or suggestions you may have.

[Operator Instructions] The first question is from the line of Puneet Gulati from HSBC.

Congratulations on good details. My first question is on NCR market, which has become a substantial part of your sales bookings number as well. The market pricing also has been quite strong. What are your thoughts on NCR market? Do you think this kind of run rate of almost 2,000 crores, 3,000 crores that you are doing from -- on a quarterly basis from NCR will be sustainable? And how do you expect the market to absorb such high-price inventory going forward?

Thanks for the questions, Puneet, yes. I think the NCR market has performed very strongly. We've typically noticed NCR, I think, in all directions of the market cycle, seems to be leading the way. I think, last time, the down cycle there [ was fast ] and quite sharp. We're seeing the up cycle also being [ fast ] and quite sharp. Certainly our portfolio in NCR, we think, will support strong growth over the next few quarters. We've launched. And I think the reason to the very positive momentum we've seen in the past 2 quarters in NCR is we've had a big launch each quarter, 1 in Noida, 1 in Gurgaon. We, last year, added 5 projects in Gurgaon, of which only 1 has so far been launched, so we hope to have 1 project launched in Gurgaon each quarter of this calendar year, including the current one. We also have a second part of the Noida projects that we added last year to launch again, which we hope to launch this quarter. While unfortunately it's been quite delayed, but -- we certainly hope to see Ashok Vihar launched in the first half of next financial year. And I think that will be another big boost to the -- our scale in NCR. So certainly we do feel we have the project portfolio to maintain strong growth in NCR over the next couple of years and are very happy with the kind of response we're seeing there, so we'll also be looking at new business development opportunities where those make sense. I think the level of price increase and sort of heatedness in the market in NCR is something we have our eye on, but my sense is, while we won't see that trajectory continue, there has been a kind of reset in the market to the higher price points. Again the down cycle in NCR was also quite severe, so the base from which prices are going up was, is reasonably low, so our best sense is we won't see the kind of price increases we've seen over the last -- they're very sharp on an ongoing basis but probably more flattish to kind of moderate price growth going forward, but we see, as of now, no concern signs on the demand being overly driven by investors and end users not being interested and so forth. So I think we remain quite confident on the performance of that market, so certainly we'll keep a close watch on how it continues to perform.

Understood. That's helpful. Secondly, on your cash flow perspective, when do you think will the firm reach a situation where operating cash flows will actually start exceeding the business development related expenses? Or do you think that is something that one should not be aspiring for?

Look. I think we're already at that stage. I think, this year, we could be in a state where, if we do business development at levels that is sufficient to kind of replace what we're selling, operating cash flow will, I think, more than cover all those requirements. I think we have intentionally, over the last few years, done a onetime reset given the opportunity we saw, particularly a few years ago when the cycle would -- had still not taken off [ and hence where ] land prices were still quite attractive. We saw an opportunity to completely reset the scale of the business. And we delivered presales growth of 50% last year. We think that's possible again this year. So clearly that will require disproportionate investment more than the cash flows of a smaller base can pay for, but I think, as the cash flows from our current sales starts coming in, which we think have already started, of course, but will gather considerable pace through this year, we do expect to be in that position.

Okay, so when should we see it exceeding the land approval related cash flows, out flows, this year, FY '24?

I -- come again.

I'm saying -- when should we expect the net operating cash flows exceeding the land-related and approval-related outflows, the 583 crore number this quarter versus the INR 1,250 crores of approvals? Should we expect that next year or the year after?

Yes. Again I think it is a function of how much business development is done. I think -- if you look at the booking value that we achieve in a year, if we only do business development roughly equal to that, I think we will already deliver this with what you asked in 2024. If we choose for any reason to do more business developments, that could of course change. And what could get us to do more business development is if sales momentum is even stronger than we'd anticipated and therefore the requirement to replace inventory is larger than we initially anticipated, but I think we are quite confident that cash flows over even the next 12 months will be extremely robust.

That's very helpful. And lastly, if you can comment on the competitive intensity in the business development processes across various markets.

Thanks for the question. [ Essentially, if we see ] in the business development side, most of the leading players are in a stage of similar, which is basically launching their projects. In some geographies, of course, there is renewed interest because some of our peers are doing well, but I don't see as much of a competitive landscape on the BD side like we would see probably in, say, 1.5 years back.

Our next question is from the line of Pritesh Sheth from Motilal Oswal.

Yes. So just continuing on the NCR question, the first question which previous participant asked. So we have roughly 2, 3 more projects now -- I mean in fact 3, 4 more projects now in NCR, including Ashok Vihar, so pretty much sorted for next year's growth. Now considering that NCR is contributing 50% to our overall presales in first 9 months -- now how do you see the visibility of project additions in these markets? Because of whatever you acquired in last 1-odd, a couple of years, a few of the acquisitions where a few of the land was acquired through auctions. So how is the visibility right now? Is there enough opportunity to acquire, keep acquiring projects to fill that gap which will happen over the next 1, 1.5 years?

Thanks for the question. If you see, I think the question is more about replenishment of inventories, NCR specifically [indiscernible] we have done a -- say, about 5 acquisitions in Gurgaon and we had done 2 acquisitions through auction in Noida. Out of these 7, 2 have already got launched and very successfully. And we have -- just by looking at the pipeline, like, 4 to 5 quarters, every quarter, you will see a launch or 2 in NCR. And these -- some of these launches have significant inventory locked in. Like there is a project which should get launched, hopefully, in this quarter which is quite sizable, probably one of the most sizable projects we've done in Gurgaon in the recent times. So one is that is there a dire need to replenish inventory right away. I don't see that, but is there an opportunity to evaluate things at the right valuation? Of course, yes. So that is one. Second is I feel that, looking at how the government is shaping up, we would continue to see auctions coming up in NCR in the next couple of quarters. And we would, of course, evaluate them on valuations. If we see that the valuation is very attractive and we see opportunistic investments leading to more value creation for us, we'll, of course, participate, but it is not driven anymore by a necessity. It's about, more about, can we take the opportunity higher.

Yes, sure, sure. That's helpful. And just on your presales guidance now, obviously it seems like you would reach your full year guidance. And with launches coming up, what is the kind of expectations now we are building in for this year?

While you will not be given a specific guidance, but -- largely, if you see the previous 2 quarters, we've been -- kind of have achieved a run rate of 5,000-plus crores, is something directionally we would want to maintain that in quarter 4, but frankly, this could be better or something around that. So not giving a specific number, but this is something we will logically be delivering, something in that range.

Sure. And lastly, in Bangalore, which is a market where you are targeting a few more acquisitions and try to fill that gap. So any outlook there? Are opportunities coming in-line to your expectations? And so any update on that.

If you see, South zone, internally as we label it, is one of a -- very interesting high-performing markets from a inventory sales point of view. FY '22, it was 700 crore, which became 2,100 crores, 2,200 crores previous financial year. And it is about to reach a similar number in this financial year and will significantly beat that of last year, so yes, you're right. There's a very targeted investment strategy for South. We've just done one acquisition in Yeshwanthpur. And the endeavor is that, in coming months, you will see a couple of other acquisitions in South India.

Our next question is from the line of Praveen Choudhary from Morgan Stanley.

I have 2 questions. The first one is the presales, which I must congratulate. These numbers are very, very good; and exceptional. So you mentioned, last 2 years, you've been growing at 50%. This year should also grow 50% to 60%. I don't think market is growing at that level, so I just wanted to understand the sustainability of presales growth even in FY '25 and '26, considering market continues to be strong. How should I think about it? Is a 20% annualized number a reasonable number? And then you eventually do 50%, 60%. And what drives you to continue to beat the market or your peers? It's the first question. And the second question is related to the gearing. And you have 70% gearing right now, net gearing, and I just wanted to understand if there is a number that makes you comfortable. Or for a short period of time, you can handle even higher because you know that cash flow will eventually come back.

Thanks very much. The growth, I think obviously we are very happy to have seen 2 years back-to-back with like a roughly 50% growth. I clearly don't think those kind of growth rates will be sustainable over the medium term. And I think we'd look more towards ambitious but reasonable steady-state growth in the range of around 20% on an ongoing basis, but I think the opportunity we saw was to kind of reset the scale of the business during the downturn by raising capital; using that to invest when the timing was right, we felt, in acquiring lands. And we did a lot of outright land acquisitions with that same logic in mind, that we are acquiring at the right time. And it will be best to maximize our economic interest in the projects that are going to get developed through a rising market. And I think that's playing out as we have expected. We certainly will continue to aspire for rapid growth. It could be some years like we've had the last couple of years, but probably, over a medium-term perspective, roughly 20% is a sensible assumption and one we can, hopefully, create some positive surprises on. From a gearing perspective, we've indicated that we'd like to maintain a range of 0.5:1 to 1:1. I think, we think that is the range where we are best capitalizing on the scale of opportunity available in the real estate market in India today while also managing our balance sheets prudently. That said, as you rightly pointed out, this is not a [ hard and fast gate ] where we can't go above or below this. We have spent the last couple of years under this level as we raised equity with the intent of disproportionate investment. As that investment has happened, we've now entered the range that we'd like to operate in. I think what I will say is that, if we were getting towards the higher end of that range, we would look quite carefully what we need to do to further strengthen operating cash flow to make sure that we don't go too far past that, but certainly if we see very strong cash flows around the corner and feel that there are also good business development opportunities that we should seek, we would be okay with temporarily going beyond that range as well.

That's very, very clear. If I could follow up with one more question, if that permits, the one question is about ASP expectation. Clearly market is hot. Things are very well and -- doing very well, but the concern is, if the price go up too much too fast, then either we will get speculators in the market or basically affordability will take a hit. What are you seeing in the market at this point in time? And are you worried that, if this continues, maybe it will become less affordable in the future? That's all I have.

Yes, look. I think the real estate sector in India globally has been prone to kind of a cyclical nature. And honestly, I'm not convinced that there's anything that any individual developer can do to change the nature of that cyclicality. And the reason for the cyclicality is also quite clear. It takes, from a supplier perspective, quite a lot of time to respond to what one is seeing in the market. Therefore, in a bad market, developers stop bringing supply. And once the demand picks up, you inevitably get into a situation where supply is a bit short because developers haven't been actively planning for new developments during the downside, so that in turn leads to the kind of price increases we're now seeing. Developers respond to that and supply increases, and you then have the next leg of the cycle, so my sense is that, as an individual developer, this -- a sensible thing to do is to try and understand to the best of our abilities where we are in the cycle, what is the most likely outcome; understand that there cannot be certainty on this, we have to be prepared for all eventualities; make sure that our balance sheet is strong enough to withstand the downturn and, in fact, take advantage of them, and that we have the portfolio scale to fully maximize the opportunity in the upturn. I think, if we look at -- even the largest developers in India, including us and other leading peers, would still have mid-single -- low to mid-single-digit market share, so I think the ability to kind of determine pricing for the market is not as strong as one might imagine. And it is a little bit of responding to what we see in the market. And clearly I think some markets are seeing very sharp progress, again which is nothing that comes as a great surprise to us. This is very typical of the third year of up cycle that we're currently in. I think we should also be quite clear that, 4 or 5 years from now, if history is a good guide, we should expect to see the cycle turn again. Now again that can move up or down [ by a year or 2 for ] various factors, but the basic cyclicality of the sector, I think, is here to stay. And I think it's incumbent upon individual developers to figure out how to best maximize the opportunities in each leg of the cycle and maintain a balance sheet that can withstand any surprises that come along.

Congratulations for very strong results, operating cash flow, collection lines, et cetera.

Thank you.

Our next question is from the line of Kunal Lakhan from CLSA.

My first question is on your business development target. We have retained a full year target of INR 15,000 crores worth of GDV, but does that mean that in Q4 we would see some high spend towards the land acquisitions?

Yes. I think we will reach that target. I think we've already done about INR 8,000-odd crores or INR 6,000-odd crores worth of booking value to be locked in. I don't anticipate a huge spending into that, yes. I think we will be doing some other business development this quarter. I think it's also worthwhile to note that we have a large -- when you look at our deliveries guidance, there's also a large amount of deliveries planned during the quarter. Typically there's quite a bit of cash flow linked to those deliveries, so this should also be a very strong quarter for operating cash flow generation.

Sure, sure. And just a related question on that is like if you look at this year. You'll -- if you increase your sales velocity by 50%, you'd be obviously selling more than what you have -- what you'd be acquiring, in terms of value, right? So in that sense, how should you look at, how should one look at the business development goals FY '25 and beyond? Would it be significantly higher than our FY '24 guidance that we have been giving?

I think, Kunal, it's probably appropriate to come back to you [ on like ] next quarter as we see how the year unfolds from a total sales perspective, what amount of business development is locked in, but I think the overall philosophy of the company has never been around land banking or trying to create multiyear supply beyond which we see immediate launch visibility. And nothing about that has changed. Of course, at the same time, we don't want to be in a situation where lack of inventory slows down our growth, so I think getting that balance right is something we will fine-tune on an ongoing basis. And I think we'll be well -- or in a better position to share thinking for next year once we see kind of "end of the year" both business development additions as well as total sales [ for the year ], which will give us a good indication, but I would say that, especially for the next couple of years, the portfolio is looking very strong. We do think that, even without new business development, this year or next year and to some extent even the year beyond that is looking pretty strong from a bookings perspective, so we don't think there's immediate urgency, but certainly as the market is responding so positively to new project launches, we will have to think about replacing inventory perhaps a little bit more aggressively than we would have been 6 months ago. But we're also seeing quite a lot of opportunity on the BD side, so as to fulfill the -- as and when we decide to increase the pace, the opportunities we do feel are available.

Sure, sure. Just a follow-up bookkeeping question on BD. How much did we spend on land acquisition, pertaining to this 8,400 crores of GDV that we acquired?

Sorry. Come again, Kunal.

How much we spent towards land acquisition, especially for this 8,400 crores of GDV that we have acquired.

So for 9 months, we have spent around 4,300 crores of total outflows, which includes the approval and payment parts. The exact land payment and approval payment trend, I can give you offline.

Sure, sure. Okay...

So this quarter, Kunal, major payments [ was of ] 3 land acquisitions through auctions we won in Gurgaon and a land parcel in Bangalore.

Yes, fair enough, okay. And my second question was a follow-up on the earlier question on debt levels rising. I mean we have seen in the past few years like whenever we have reached -- especially with the last 2 fund raises that we have seen. Like when we have reached closer to 0.8x, 0.9x debt-to-equity, we have raised equity. Would that be something that you would pursue this time around as well?

So it's not current thinking, Kunal. Again I think the significant [ difference ] is also in the project scale-up that has happened this time, launch scale-up, so I think, the operating cash flow, we hope to show very, very strong growth over the next year. Look. I think, [ if markets are very strong, we'd never rule out that idea as well ], but as of now the thinking is that we can deliver, already through the portfolio we've acquired, strong growth for the next couple of years. And then operating cash flows we are generating will allow us to sustain that growth on an ongoing basis. I think the cash flow momentum you should see, I think, [ will be, would have been ] quite positive. And again the way the sector works is, once the business development comes -- then the bookings, then the cash flows, then the profits. I think we've clearly done already the business development. I think the bookings is now, hopefully, very visible. I think cash flow is also starting to become quite visible. We've been growing cash flows each year by 40%-plus in the last 2, 3 years. We expect another good growth year this year and an extremely strong growth year next financial year, so I think, broadly speaking, that positive is still very much on track.

All right, yes. And my last question is to Rajendra. Rajendra, when we look at -- what will be your unrecognized revenue on our books?

[ Hardly ]. Because nowadays we recognize on [ OC ], so most of the revenue gets recognized. Only -- 10%, 15% of the work completion which is towards possession, what is left out is to be recognized. Otherwise, most of the projects where [ OCs ] are received are recognized.

So what I'm trying to reconcile is essentially we have done like almost 40,000 crores of sales in the last 4 years. And we have recognized about 6,500 crores of revenues in the last 4 years, again. I understand a lot of our revenue, sales also happen in [ LLPs ] but still trying to understand or rather reconcile. Like what could be the unrecognized revenue, which should be a substantial number? But I'm just trying to reconcile that with the balance sheet, where I see our current -- or noncurrent financial liabilities which will be essentially customer...

Why don't we take it offline? And we can do a reconciliation. Because it will require going project by project year-by-year. And like you have rightly said, there are projects which are both into JV as well as outright, so we have to see which got recognized into last -- this year or last couple of years. And accordingly, we will have to work out the revenue recognition.

Sure. I'll take it offline.

And on the land payments, just to answer for this 8,000 crores. We have paid around 1,900 crores towards acquisition of that 8,000 crores of GDV.

Our next question is from the line of Abhinav Sinha from Jefferies India.

Congratulations to the team for the strong performance that we have seen on sales. So my question, first, is on the launches that we have planned for fourth quarter. What are the key projects? And how good is the visibility there?

Thanks, Abhinav. So Abhinav, subject to, of course, us getting all the approvals, we have a visibility of probable launches and -- one in Gurgaon, with -- in Sector 89. Then there is one project which is Sector 146, if you remember the Tropical Isle that we sold. There's a plot next to that. We have one more land parcel there. There is western suburb Mumbai we are, again, in the process of getting all the approvals. This will be a very interesting launch for the Mumbai portfolio in Kandivali. And then something in Bangalore we're looking at, in Old Madras Road. So these are like high impact and launches that will create a bigger impact. Of course, we have back-up plans and [ additive plans ] in case any approval [ falls shorter ], but we're gunning for at least these big ones. Then we have plotted opportunities there as well. I'm just talking about the bigger ones.

Okay. And similarly, on deliveries also, if you can help us with what we're expecting in 6.5 million or 6-odd million we are planning.

So we have a series of [ OCs ] planned in cities like -- I mean we can give you the list offline, but largely we have a couple of [ OCs ] planned in Gurgaon, Mumbai. Project names, we will share with you offline, but yes, we have a decent pipeline to get us at 12.5 million square feet of committed -- or guided [ OC calendar ]. I mean, just to enumerate that, I think [indiscernible] I mean this is already part of the earnings, but -- projects like Mamurdi, Mahalunge in Pune; projects like Meridien; parts of Godrej Air; Aspirationally, also Kurukshetra project. So we have a series of projects which we are gunning for. Of course, some will come. Some may flip to next quarter, but 12.5 million square feet of guidance that we have given, we're reasonably confident to deliver and exceed that.

Okay. And you were talking about earlier that the sales value today is much higher 20%, 30% than what we had underwritten, so with that, what are the margins we are looking at now in some of these projects, for example, the Kandivali one or the Gurgaon Aristocrat, et cetera, that we have launched this year?

Yes. Not being specific projects but fair to say that the [ PAT ] margin is in a major expansion across most of our projects which are -- which have -- we launched in places like Gurgaon and Noida. The western suburb project [ is yet to hit ], but historically let's say if our [ PAT ] margin was, say, about 10%, fair to say like-to-like it will be a 15%, 16%, 18% kind of [ PAT ] margin. But of course, it will depend upon how the cost inflation is managed, so with some contingencies, it is a range at which our PAT margins -- of course, there will be -- some projects will be even higher than that. And there will be some projects within the range that I've mentioned.

Okay. And Gaurav, one quick question on NCR. So in Noida we have seen some resolution, right, of the [ stuck ] projects which was being done by a committee there, so -- and some of your projects have not seen a new launch for a long time, so I mean, do we see those moving now? Or that's another issue.

I think there is some regulatory-led resolution which is impacting the entire market. It seems to be that it's in the final legs of conclusion. And that will open up a supply for us and some good-quality developers, which is pending, but that being said, we do have some amount of previously not being able to do a big bang new project launch. But [ sustenance figures, any which ways ], are hitting in some of those projects, but yes, there is a big opportunity. When the government is able to conclude those and give those kind of approvals to all developers, I think we will also have that upside.

Our next question is from the line of Parvez Qazi from Nuvama Group.

Congratulations for a great set of numbers. So I just have one question. For all the land deals that we have entered, what is the pending land CapEx which we need to incur over the next couple of [ period ]?

So the pending land payments, including the installment payment, would be around 1,100 crores to 1,200 crores. Plus there will be some FSI, TDR payments, so in all, around 1,300 crores to 1,400 crores is what we are looking at in quarter 4. This includes payment towards pending installment of Ashok Vihar also which is around 600 crores.

Our next question is from the line of Parikshit Kandpal from HDFC Securities.

Congratulations on a decent quarter. So my first question is on the business development. So if you can give us some color on the premium real estate side, especially in South Bombay. So what kind of land opportunities are available for us? And if we are evaluating those either through joint developments like, in the past, we have done with one partner. But what kind of opportunity do you think can play out over the next 12 months for us?

Thanks for that. I think there is [ good options ] available in South Mumbai. I think we're looking at a combination of joint ventures with other developers or landowners who have land; and quite a lot of activity happening on the redevelopment side, [ priority ] redevelopments. We feel the Godrej brand gives us a lot of an -- a lot of advantage there in terms of the existing residents being comfortable moving out and coming back in, so that's going to be a big area of focus for us. There are also some outright purchase opportunities that we might look at, so I think really the full spectrum of opportunities is available in South Mumbai. And we hope to have some good project additions there over these next few quarters, where we already have seen good response to our first launch in South Mumbai after a while, our project in Mahalaxmi [ which -- or there we took over ] that has been -- that has gotten into difficulties. That project is going very well. We sold about 700 crores worth of inventory in that since it was launched 4 months ago. We hope to launch our project in Carmichael Road later this quarter. So hopefully, we can see a good scale-up in the South Mumbai market alongside our overall plans for BD [ as well to date ].

Okay. And just on some of the key projects which have been, like, lagging behind in terms of launches. So one was a Ashok Vihar, which you said you'll launch in the first half of next year. What about the Worli project? And if you can give us any update on your Bandra project with your partner Omkar. So any movement there? If you can help us with some color on this.

Yes. Actually it's been very positive movement on some of these Mumbai projects. I think our learning from this is perhaps that we were a little over optimistic on time lines on some of the slum redevelopment type of projects, which both Worli and Bandra projects are. A lot of tenants movement has happened actually, in the last quarter, in Worli, so we're increasingly confident that, that project will -- ready to launch in the upcoming financial year. I think, Bandra, also there's been quite a lot of movement [ on size and ] in terms of understanding the current situation with the partner. We're quite confident that we'll see a lot of momentum in that project during the coming financial year, but it's probably not a project that will actually get launched in FY '25. But [ I'm ] feeling much better that, that project will eventually be launched than we were perhaps 6 months ago, so I think there's positive movement there. It is frustrating to see some of these bigger projects have been delayed, including Ashok Vihar. We're obviously doing our best to ensure that those are [ mitigated ]. I'm quite happy with the work the team has done to ensure that, despite some of these plans getting affected, it hasn't impacted the overall growth of the company both last year and this year, gunning for 50% kind of growth in presales. And I'm quite happy to see that, that might be achieved even without these key projects. Overall, something like Ashok Vihar, while very frustrating, if we are able to launch it next -- over the next few months, as we hope, the delay will actually have benefited given the kind of momentum we've seen in NCR on volumes and pricing. And I think what's great to see is some of these projects we perhaps didn't think of as very critical projects in the overall scheme of things, something like a project in Noida or this recent launch in Gurgaon, are actually becoming very meaningful projects for us. If you look at the total scale of the Noida project which we acquired in auction for about 300 crores: We've already sold more than 2,000 crore of inventory in the first phase of that project. There's an equal-sized second phase that we launched this quarter, so we hope to, over the project lifetime, get to 4,000 crore-plus of booking value with that project, which as you can imagine, with a 300 crore land cost, will create very healthy margin for the company once that project is delivered. Similarly, if we look at this Gurgaon project, we've already sold 2,600 crore with pricing premium. That was initially about the expectation we had for the overall booking value of the project. And we still have more than 20% of the inventory in that project. So I think all of these projects are going to become quite meaningful from a bottom line perspective, but we certainly look forward to launching some of the bigger ones like Ashok Vihar, in particular, but also Worli and Bandra. Incidentally, our [ Kandivali ] project is -- we are going to launch this quarter. And that project [indiscernible] expected booking value significantly larger actually than Worli or Bandra, so we're looking forward to [ kicking that one off for the quarter ].

Sorry. For which project you said [indiscernible] I missed it, the last project [indiscernible].

We -- it is the project in Kandivali [indiscernible].

Yes, yes, yes. Okay, Kandivali. [ Okay, got it ]. All right, just last one, on the Vikhroli. So you mentioned on-track launch of [ 0.6 ], but I think Gaurav did not mention that in the high-probable launches for this quarter [indiscernible].

So [indiscernible] to launch that. I think, frankly, from a total scale of launch, it's perhaps not quite as big as the Kandivali one or some of these other ones in terms of what we expect booking value during the quarter, but we certainly do hope to launch that and looking forward to Vikhroli [ getting going again ].

Okay, okay.

[indiscernible] outright and from projects and then BMC [indiscernible].

Our next question is from the line of Eshit Sheth from Anvil Wealth Management.

Congrats to the entire team for very good results. So for Pirojsha, a couple of questions here that I have. If we look at the strategy that you led the team on like to actually lever up the balance sheet just at the start of an up cycle in the real estate market, I think that is showing significant fruits for our company. Now what I wanted to understand was that if we look at the last 2 years. You've always been consistent in saying that our objective is to grow 20% over the medium term when we look at Godrej Properties. Now this -- I mean, if you look at the first 9 months performance, there has been a stark difference between the volume, sales volume, growth; and the sales realization growth. A large part of it is because of the way prices have moved up in a lot of geographies, including the NCR, so when we talk about this 20% -- because pricing is something which is not in our hands, so when you talk about 20%, is it a large part to do with volume growth that we're looking at, when we talk about this 20% growth over the medium term?

A couple things to point out. One is I think our volume growth year-to-date is about 20%. Our volume growth last year was 40%. And another thing I'll just point out is that the pricing growth you referenced is not actually just market pricing growth. It is a complete re-pivoting of our types of projects to more premium projects, so if you look at it, yes, there has also been market price-led growth, but a lot of the [ pricing growth ] that you are seeing [ for this year ] is actually more premium set of projects coming into our launch pipeline. So our project in Gurgaon, for example, we sold at almost INR 20,000 a square foot. Now of course, that is much higher than we are [ underwriting the project at ], but this will also -- even the underwriting was much higher than any previous project in Gurgaon. This is the first project in Golf Course Road. There are similar examples across various cities. So certainly we will be focused on volume growth being strong, but I think there is also a [ pricing growth ] opportunity not just provided by the market but by us becoming focused on more premium areas. I think, in general, this year is probably a good base for that. We don't want to become an exclusively luxury developer, by any means, so we want to have a right mix of premium projects and mid-income projects. And that will continue, but I think, if you look at this year's kind of project mix, we think it's where we would like to play on an ongoing basis. And therefore, going forward, most of the growth in top line should happen from a combination of volume growth and market pricing growth, but I think, if you look at GPL's growth in the last 3 years, it's both some market pricing growth but largely volume growth; and more premium projects driving that growth, so far.

Sure, sir. And the second question is that it just so happened -- in the last 2 years, at the start of the year, we've budgeted or we've guided for some amount of sales as well as deliveries. And it just happens that we've exceeded every year substantially. Now is the team prepared for this kind of execution? Because if you look at the past, we've not executed at this scale. So are we very well prepared in terms of the execution part of it?

Well, I think it's a great question and, [ firstly ], I think something the team obviously spends most of its time on. It is going to be a challenge to scale up execution but one that we've certainly done everything we can to prepare for, whether you look at the structure of the company in terms of how we've set up individual projects and our global team, if you look at the kind of relationships we're trying to build with contractors [ and asset buyers. So I think ] it's a good work the team has been doing. It should be -- should allow us to do this really effectively. I think it's also true that Godrej Properties, every few years, have scaled up very differently from kind of what it looked like 3 or 4 years before that, so I think now with even more rapid scale-up, we will be very focused on ensuring our operational capabilities are matching that. And as you've said also, I think one advantage of focusing a lot on outright owned projects as well as more premium projects is that the scale of operational intensity has not increased quite as much as the overall sales value [ has ]. Gaurav, [ do you want to add anything in ]?

I couldn't agree more with what Pirojsha just mentioned. And I think the essence, if you study why Godrej Properties is probably [ quite best ] to perform in this up cycle, is we're the only company which has had something like a branch-led operating model, which is like every site is a [ P&L for us ]. So we have a very decentralized ecosystem. And of course, governance and control is coming [ from the com central ], but every site is an operating unit to us with a operating team with very well-defined targets being measured weekly and monthly on set of KPIs. So yes, the execution muscle, the governance muscle always have existed for us, but just having the right operating model is allowing us to capitalize in the opportunity of scale-up. And while this looks to be very strong growth -- and very delighted to see that, but if you just see it from our lens: We have 4 business units. Each business unit is run by a sort of a CEO with an executive leadership team, so the problem of execution excellence comes when the scale-up actually is, frankly, much more higher, like some of our peers who operate in 1 or 2 geographies. So I think the potential for us to do better and ensure that each KPI is delivered upon is very [ low hanging for us ] right now, but of course, this is something which we don't take for granted. And [ we will keep pretty strong in that ] and performing strong monitoring mechanisms to ensure it, yes.

Got it, sir. And just one last question I had: At the end of this quarter, we saw the resignation from your uncle, Mr. Jamshyd Godrej. Is there any kind of precursor to some kind of a settlement for the Vikhroli land that we can look at for Godrej Properties in specific?

No, I think the -- we announced the rationale for the resignation along with the announcement, which is that we have a Board policy of our directors stepping off the Board when they turn 75. My uncle Jamshyd Godrej turned 75 about a week or 2 ago and therefore, at that time, stepped off the Board. We're very grateful to all his contributions to the company over that time. He's, I think, the third director in the past 12 months who would have turned 75 and stepped off the Board. So that's the rationale.

Our next question is from the line of Jahnvi Shah from LIC Mutual Fund.

[indiscernible].

Yes. Go ahead, please.

All right. My question was can you give us some updates about the Godrej Summit property in Gurgaon, on how -- like what are the repair works going on? And what is the number of the customers that took up the offer of buybacks?

Yes. The repair works there have gone in full swing. We hope to complete them by the end of this calendar year. As of now we've had about 10% of the customers opt for the buyback option, so we've bought back a little over 100 [ apartments ], so far. We expect to see that go to about 200 over the next few months, based with current visibility.

And out of the INR 155 crores that were like -- that were provided for it, how much did it cost?

We have spent around INR 20 crores, INR 25 crores till date.

Till date, okay.

The next question is from the line of [ Ritwik Sheth from One-Up Fin ].

Congratulations on a great set of numbers, sir. Sir, I have just one bookkeeping question, the cash flow statement that we put out in the presentation. Is the net operating cash flow to our share? Or this is before any share to JV, JVA.

Our...

In our [ share ].

It is our share, okay.

Our next question is from the line of Manoj from Geometric.

Am I audible?

Yes. Go ahead, please.

Okay. Congratulations, Pirojsha, for a great set of presale number; and the kind of profitability it gives, like you said, 18-plus percent, something plus. My -- one is a bookkeeping question. What would be our corporate fixed costs for FY '23? And what would be for FY '24, any range ballpark, any number?

So corporate fixed costs [ pool ] is generally -- after allocation, will be in the range of 3% to 4%, but on overall basis, it will be -- at pan-India, basically it will be like a 6% to 7%.

Okay, 6% to 7%, okay. And my second question is like people are asking about debt-equity gearing. So the kind of cash flows the company is because of these presales and the kind of profitability and all of these things. And even if it's been a different accounting method, like, equity would have changed. How do you think about your BD development with these kind of misrepresented debt-equity? Any ballpark, absolute number of debt do you have in your mind? How do you think about or how do you want to communicate to the shareholders?

I think we've mentioned a gearing ratio that -- of -- anywhere from 0.5:1 to 1:1 is probably our comfort level. 1:1 would be a little under 10,000 crore at the moment, so that's roughly the number we look at. We've also said that, temporarily if we need to be below or over that, as long as we're confident of bringing it back into that frame, we would be comfortable to do for the short term.

Okay. And my last question is can you tell something more about the -- our project Ashok Vihar? What would be the size? And what the kind of offering it would have, if it is possible.

I think, of course, we'll have all the information on it once the project is ready to launch, but it's going to be a large project for us, nearly 4 million square feet of area. I think pricing in NCR has done very well over the last few years, so we're very confident of that project achieving a good [ liquid ] price. I think, given the location of the land, the surrounding area, the quality of the plan we have, we hope to make that a blockbuster launch as soon as our approvals are in place.

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

I hope we've been able to answer all your questions. If you have any further questions or would like any additional information, we'll be happy to give assistance. On behalf of the management, thank you once again for taking the time to join us today.

Thank you. Ladies and gentlemen, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.