Puravankara Limited (PURVA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q2 FY '23 Earnings Conference Call of Puravankara Limited, hosted by Axis Capital Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Samar Sarda from Axis Capital Limited. Thank you, and over to you.

Thanks, Ashi, and good evening, everybody. Thank you again for taking the time out. From the company, we have the senior management led by Abhishek Kapoor, the CEO; Vishnu Moorthi, Senior VP of Risk and Control; Neeraj, who is the VP of Finance; and we also have Sanjay Daga, CEO of West. Mr. Kapoor, if I could request you to please start with a few comments on the results, plans and sector outlook before we open it for Q&A.

Thank you, Samar. Good afternoon. Thank you all for joining us at Puravankara Limited Second Quarter and First Half Year of FY 2023 Earnings Conference Call. My name is Neeraj Gautam. I am the Executive Vice President of Finance of Puravankara Limited. The presentation and financial results for the quarter that ended September 30, 2022 have been uploaded on the stock exchanges. I presume you have had a chance to go through the results and detailed presentation disseminated by us. I would like to take you all through the key highlights for the quarter. Following that, my colleagues and I would be happy to answer any questions you may have while listening to feedback considerations from you. We believe real estate will continue to witness sustained growth this year and in the coming few years in India. The growing uncertainty and [indiscernible] in the global economy had a minimal impact so far in our sector. And we are hopeful that it will continue to have a very minimal impact on the economy in general, particularly on the real estate sector. Coming to our performance for the half year. We have started the fiscal year on a good note, and we concluded H1 on an even better note. We are delighted to say that the company has achieved the highest ever sales for the second quarter and for the first half year of any financial year. This is [ evidence this feels ] that our strong brand [ will ] across the market segments in which we operate. Our sales value grew to INR 1,304 crores for H1, which is 43% higher than INR 910 crores sales value during the similar period last fiscal year. In terms of volume, we stood at 1,329 units and [indiscernible] area of 1.75 million square foot for the half year period compared to 926 units with an area of 1.33 million square feet during H1 of the last financial year. The sales realization improved to INR 7,454 per square feet from INR 6,845 per square feet last year, which is an improvement of 9% in average realization, in line with our commitment to deliver our projects within the prescribed schedules that construction at all our sites is in full swing. This is reflected in the increasing in sales and customer collection from our ongoing projects. The customer collection during H1 FY '23 was INR 925 crores, which was INR 622 crores a year ago. This is implying an increase of 50% on a year-on-year basis. We would like to highlight that composition of our collections from ongoing projects has increased. If we compare collections from our under construction projects, it has doubled for half year period compared to a single period last financial year. This is reflecting our continued focus on faster construction and efficient working capital management. In terms of our financial performance, for the half year as total revenue from operations stood at INR 550 crores compared to INR 815 crores for a similar period previous year. Our EBITDA for the quarter -- for the half year period was INR 197 crores compared to INR 489 crores in the similar period previous financial year. Total comprehensive income for the half year period was INR 17 crores compared to total comprehensive income for the similar period year ago was INR [ 166 ] crores. In coming to our quarterly performance, we have registered the highest ever second quarter sales cost of INR 791 crores for the quarter, which is 33% higher than INR 597 crores similar quarter a year ago. We have sold 776 units with an area of 1.07 million square feet during the quarter, which is implying 18% growth on year-on-year basis. The last year in the similar quarter, we sold 630 units with an area of 0.91 million square feet. The performance in ongoing projects continues to encourage us, with around 90% of our sales booking coming from only ongoing projects during the quarter. We collected INR 518 crores from our rental sales during the quarter, which is 52% higher than the INR 341 crores collection for the similar period a year ago. Coming to the cash flow. Our consolidated operating inflows was INR 678 crores, which is compared to -- 77% compared to a similar period a year ago. A year ago, in the similar quarter, we collected INR 383 crores. Our operating inflow also doubled -- our operating outflow -- sorry, our operating outflow also doubled to INR 300 crores in this quarter compared to similar quarter a year ago. This reflects our spend on ongoing projects. Coming to our profit and loss performance for the quarter. Our consolidated revenue for the quarter was INR 253 crores. EBITDA was INR 58 crores and EBITDA margin was 23%. Total comprehensive loss for the quarter was INR 21 crores. Here, I would like to recreate that upon transition to Indian Accounting Standards, including Ind-AS 115, the company had moved from a [indiscernible] method to revenue recognition to a completed contract net of revenue recognition. The aforesaid change in the timing of revenue recognition has brought a significant variation in the periodical financial results as the revenue is no longer recognized ratably over the project execution period, but recognized upon the completion of the project and handover of flats to the customer. Consequently, the financial results do not depict the company's project execution and sales efforts on the periodic basis. The above accounting impact is very evident in our current period financial results. However, our 4 projects are scheduled for delivery during the second half of this financial year, and that will reflect in the revenue recognition in the third and fourth quarter of this financial year. Coming to our debt and liquidity position of the company, the balance collection from sold units in all launched projects was INR 2,640 crores as on 30 September 2022. The balance was to complete these under construction project was INR 2,933 crores, combined with unsold [indiscernible] or unsold inventory INR 4,684 crores from launched projects. We have an estimated projected operating surplus of INR 4,391 crores on the launched portfolio, which compares very favorably against the current outstanding net debt of INR 2,144 crores. Besides this, we have [ not opened ] for sales inventory in existing projects with an estimated surplus of INR 1,653 crores. We would like to update you that during the quarter, ICRA reaffirmed our rating credit ratings to A-minus stable. This shows our resilience given in the current environment of rising interest rates. I would also like to give you an update on the business development side on the -- during this quarter, we have deployed the first tranche of real estate fund of INR 93 crores and acquired a land parcel of INR 52 crores in Chennai. This project is under planning and development and which will be launched between 6 to 9 months period. We are also [indiscernible] a few more opportunities to deploy the funds raised through our real estate fund. Besides this, many more opportunity are under construction as well. Coming to the overall business outlook on the economy -- the state of economy. The Indian economy is showing the stability and resilience, and we are bullish on it. We are upbeat about our new launches, and we will continue to focus on scaling in our operations while maintaining a healthy balance. We are determined on 2 aspects, new launches in each quarter and continuous construction and delivery for ongoing projects, which will keep increasing with each launch. As an organization, we are committed to giving back to the environment. We operate in, and we believe that strengthening the ESG framework is essential to ensure business continuity. We will continue to focus on necessary [indiscernible] points to imbibe the ESG framework for our business. Our business transparency, innovation, strong leadership, engineering equipment and brand value will continue to create value for our stakeholders. We are confident of continued improvement in our performance over the long term and the company's stability to deliver consistent, competitive, profitable and responsible growth. With this, I conclude my remarks. Thank you for joining the conference call. We are now open to questions that you may have.

[Operator Instructions] We have a first question from the line of [ N Chandrabanu ], an individual investor.

So can you hear me?

Yes, we can hear you.

Yes. So I could see that despite of higher sales and the revenue is not comparable to the sales, and that is one thing. Of course, you have explained that you can't really show the sales until you deliver the flats to the customers. But the -- still, whatever we get the revenue, it's delivered only [indiscernible]. So what is the outlook for us when we are able to deliver the flats to the customer? Can we see a positive PAT with the flats we are going to deliver?

Thank you for the question. Yes. So we intend to hand over additional 1,500-plus units by the end of this financial year, the next 2 quarters, where we have visibility already of 4 very large projects. And we are expecting a positive PAT at the end of the financial year.

Okay. I have a follow-up.

I'm sorry, we are not able to hear you. [Operator Instructions]

Yes. Can you hear me now?

Yes. Yes. Yes.

So my question is -- my second question is, see, we are contracting [ maintain ] higher levels of debt. And is there any plan of reducing debt levels going forward?

Yes, very much. There is a road map that is there for reducing debt. Currently, the debt impact in next 6 months, you shall see a lot of this debt is self-liquidating, which will also pan out by the end of March or in the quarter of April, May, June. Also, with the new launches that we are adding, there will be continuous effort towards repayment of debt. And we do have a road map of 24 to 36 months which clearly defines our debt reduction plan.

And these projects which are scheduled for delivery in this financial year, which Abhishek mentioned, about 1,500-plus units, we're going to deliver. And that will give up [indiscernible] collection and cash flow. That will also help impair or repay that debt taken for that project, specifically for that particular project.

Okay. Can you give us any kind of guidance of reducing debt level?

See, we do have a road map. We normally do not give guidance, as you are aware of it. But yes, to answer the question in specific, we have a road map for next 24 to 36 months. This is actually demonstrated in last, in fact, 2 years. We had debt of excess of INR 3,000 crores. And today, we are down to around INR 2,000 crores. And this trend, we intend to continue. If you see, we have been stable at a debt level of about INR 1,850-odd crores from last 4 quarters. And this current increase is also expected to self-liquidate because it is against -- it was basically taken to repay IFC, which was an investment made by IFC. And of course, there was one big capital which has taken, which is also already repaid. So the fact of the matter is that this is temporary in nature. And as we go ahead with our launches, the road map will look much, much more visible to all of you, quarter-on-quarter basis. But the additional debt that you see between, say, last quarter and this quarter, this will liquidate in the next 6 months.

[Operator Instructions] We have a next question from the line of Chintan Mehta from Prudent Broking.

There are some slow-moving projects. If you can throw light on that Somerset House in Chennai, Equinox in Bangalore, and Emerald Bay and Aspire in Pune.

So as far as these projects are concerned, we have had some road access and approval pending for these projects. I'm sure you may have visited 1 or 2 of these projects, and you would realize that there is a road access challenge, which is why it's slow moving, but the company is working on it. And we believe that we will see better sales and, in fact, better realization from in, say, about 2 quarters from now. So there is a solution which is being worked upon correctly for all 3 projects. And we will definitely see improved sales in all of them.

So in all 3, you...

As far as Equinox is concerned, that is as per the sales plan, the AOB, yes.

Yes. And Somerset is a high-end project. It's a one-of-a-kind at a premium location and very high ticket project, and that's a high ticket project. It will -- more sale happens during the completion. And you will see sales in coming quarters projected that...

It's already picked up, in fact. I mean the sales have already picked up and Chennai as a market, especially in the city center, high-value projects normally sells closer to possession. So that you will definitely see an improvement in the coming quarters itself.

Okay. Okay. Got it. And if you can just throw some light on the commercial front for the next 2, 3 years. And then for the next 5, 7 years in terms of development area and in terms of strategy as well that we want to be renting or selling side?

So on commercial, we have one asset, which we have already taken to market, which is about 800,000 square foot, which is currently gone under construction. The other asset we are taking into construction, which is about 2.1 million square foot by the end of this quarter, early next quarter. Other than this, as far as the new addition of projects is concerned, our strategy is to look at city center projects, where we believe that the demand and the value that the project brings to the organization and the platform is significant. And we are currently also, as I think have mentioned in the past, are in the process of looking at the platform for the commercial assets, which will enable us to scale up our commercial development opportunities.

So commercial platform means REIT or something?

No, commercial platform at this point in time would be with a private equity partner. And then, of course, at some point in time, we will see how to look at the exit or evaluate our options. But currently, it is in the mode of scaling up for which we are looking at a private equity partner.

Okay. And sir, on strategy side, we want to be sell side or we want to lease it out?

So it's -- for the Somerset House property, for example, will be a strata sale plan, which is 800,000 square foot for the 2.1 million square foot. That is a lease and hold plan at this point in time, and the new assets which we are looking at partnering on will also be on a lease and hold platform and plan. However, we are extremely cognizant of debt and leverage. So in case if we want to look at some of the -- maybe out of 4 towers, we want to exit one tower and make sure we are balanced on our leverage, then we will always take those calls -- strategic calls. But at this point in time, it's mostly a lead strategy for the 2.1 million and the platform. And for the 800,000 it's a strata sale.

Okay. And sir, on the AIF side, what do you think that can go against our strategy or the risk you can see for the -- I mean if the project got stuck, can we still need to pay them fixed return and still need to tie into buy back those?

So the way we have looked at the platform, the AIF platform and the capital we are raising, it is basically going to be deployed in only 2 categories of projects, which is project development where you would have seen that our ability to turn around the cash flow and repay is very, very quick, and it creates significant value. So our objective there and second opportunity we are looking at is Provident. Again, the speed is of the essence in terms of our ability to start returning capital. Now from a project evaluation point of view, we are extremely careful. I mean I'm sure you know, in the history of Puravankara, there is not a single project that today you can say has been launched and is stuck or an investment which is -- which cannot be unlocked. So we've been extremely careful in the way we are choosing these projects to make sure that we try and take these projects to launch very, very quickly from the date of deployment. And of course, the cash flow starts turning around very, very quickly. So we don't really see -- envisage any significant risk because of the choices of projects that we are making. Like for example, I think Neeraj mentioned that we have deployed our first capital for a plotted development in Chennai. I mean in the last project that we did in Chennai, which was a plotted development, we sold out in 3 days, right? So we are very, very confident of the projects that we are investing in because we believe that this is a long-term pool of capital for us, which will continue to scale in times to come, and we want to ensure that the investors do get their capital back and in a healthy way and a quick way.

Okay. And sir, one more question. On the start of infrastructure, currently, how much percent of our construction work is going by the precast?

So currently, we have one project, which is about 2.7 million square foot, which is under construction in precast. We have our own precast factory under Starworth. But basically, Starworth is doing multiple projects and all kinds of projects, special projects. It's a full EPC company. And as far as the business is concerned, it's just -- I mean their larger business interest is in clients like JSW Steel where they're doing blast furnaces, we are doing metro stations. We are doing Taj at the Bangalore International Airport and multiple such projects. So the idea is to scale up that as an independent business. And I think the business is doing pretty well in terms of its performance and billing as well as collections.

We have our next question from the line of [ Kalpesh ] from Spark Capital.

First point was that is -- I wanted to know a couple of reasons for the dip in the profitability. Second was, how do you see the impact of the repo rate hike on the INR 200 crores of debt that we have? So about 190 bps repo rate hike has happened? What will be the impact on that? And third, I was looking at the other income. Other income is also reduced. Any reason why that has happened? And how do you foresee that?

If you look at our overall performance, sales, we are great. It's one of the best quarters and one of the best half year. In terms of collection, if you look at the increasing trend, we have collected INR 519 crores for the quarter. For a total operating inflow basis, we have collected INR 678 crores for the half year basis. So all -- and if you look at even construction [indiscernible] also more than INR 500 crores for the quarter. So all these parameters of sales construction, collection, the quarter has been robust, and we have continuously performing quarter-on-quarter basis and an increasing trend. However, in terms of revenue recognition, as I mentioned in my opening remarks, in this quarter, we have been able to hand over only very limited units and thereby earn less GP. However, my various launch and sale of ongoing projects and new launches, the marketing expenses and the overhead, which is periodic expenses and it was charged against the lesser GP earned from the lesser units and thereby which resulted [indiscernible] loss for the quarter. However, as you mentioned, the remaining period of the 6 months, we are targeting to give a position of about 1,500-plus units and thereby, we are going to recognize revenue from those 1,500 units plus the GP out of it and thereby will be positive or profitable as a year as a whole basis. Hope I clarified your [ questions ].

On the other income, I think the other income was largely on account of...

It was exceptional income for last quarter from small exits from the one metro cash and carry project we received the money. And in our case, the income is -- normal regular other income are interest on FD plus any compensation, any interest we collect from the delayed cases. That is a normal part of our other income And it's good that our other income is less and operating revenues are more. I hope that clarifies your query of the reduction of other income compared to the immediate previous quarter.

Yes.

We have our next question from the line of [ Sumit ] from Emkay.

I just have 2 questions. How much square feet are you planning to launch in the coming quarter? And my second question is, what are the plans for allocation of INR 700 crores of AIF? So how much of -- will you use for affordable? And what is the time line that we have in our mind? And how is the revenue sharing agreement for the same?

Okay. So as far as new launches are concerned, in this quarter, we are expecting 2, 3 projects are already in the launch mode. We are expecting to add 2 more projects in the -- and add them to the launch mode. The 3 project are in Bangalore and 1 in Chennai and 1 in Coimbatore. Between all of these projects, we will take to market approximately about 4.5 million square foot in this quarter. Other than that, your second query on the AIF, we are looking at -- we are basically looking at deploying that money in the plotted development as well as in Provident. The first one has been deployed in plotted development, and we are evaluating projects which we can take to market very, very quickly because we want these projects to be launched very, very quickly. The time frame for this deployment will be between 6 and 9 months. And from the revenue sharing point of view, the expected return should be met and this revenue share is being worked upon in a manner where the investors land up -- or the fund lands up making a return of early 20s. So that's the target with which we are working as far as IRR and the revenue share is concerned for these projects.

[Operator Instructions] We have our next question from the line of Harsh Parekh from SMC Global.

So my first question is regarding the land purchase cost which I can see on the expense side. What is this land purchase, like this land has been purchased here, around INR 50 crores has been utilized for it?

That land purchase is basically the plotted development only which we invested in Chennai, which we mentioned. It was temporarily done from Puravankara and then it was moved to the fund.

Okay. Okay. And the second question is regarding debt levels itself. So on quarter-on-quarter basis, your debt has been increased, like in Q2, it's almost [ INR 3,033 crores]. What is the reason like -- and where is this debt utilized?

So there are 2 places. You pointed out the first one. Debt was taken, which is actually already repaid, which was towards buying this land and it got repaid from the fund for the moment that got deployed. So it was a temporary debt. The other one was taken to repay IFC where we have receivables against that project. That project is almost more than 80% sold out. And we have receivables, and we are targeting giving possession by between March of this year and June of the next financial year, April, May, June quarter. So that is a self-liquidating. The purpose was really to repay IFC because IFC was an equity investment and obviously, the cost of capital was higher. This reduces the cost of capital, and we are able to, in fact, save and add to our bottom line as we have repaid that capital with a much lower cost of debt, which has come at -- with on a secured receivables. So that was the logic behind repayment of IFC business capital. And obviously, as I mentioned earlier, it is self-liquidating. So this -- you will see, again, I mentioned earlier also in the call that you will pretty much see this go down very, very quickly in the next 6 months.

What is the cost of the capital for this [ INR 3,033 crores ]? How much should be added to the finance expense cost in next quarter?

On an overall basis, if you look at our average cost of debt is 11.02% as on 30th September 2022. These incremental debt we have borrowed, about 10.5% to 10.7%, because part of this also consists of our construction finance rate and part money as Abhishek mentioned. We have taken from against our self-liquidating project, it was plotted product development project, which is scheduled for completion this financial year. And during some other questions of other participants, Abhishek has very clearly maintained what is our strategy about liquidating or paring down debt over a period of time, 6 to 7 months is how our -- what is our strategy and 24 to 36 month time frame, what is our strategy.

Okay. And my last question is, do you foresee any change in -- I mean is there any change in the rising cost of the -- because since interest rates are getting higher, is it impacting the -- our buyers are willing to buy a flat at these rates?

So currently, as you can see from the sales trend and what we are seeing on the ground, we are not seeing any change in terms of the buyers' intention to buy at the current interest rates. So we are continuing, I think Neeraj started with that commentary saying that we are quite optimistic that right now, quite encouraged with the way the sales are moving. We are right now seeing at this point in time, really no impact on our sales. I think the customers have become very intelligent in the way they are managing their cash flows and their planning. And I think the fact or the proof of the pudding is in the fact that you are seeing quarter-on-quarter increase in sales across our business.

We are. And probably we can say that this is now related to the interest rate increase for last 2, 3 quarters. Home loan interest has increased still every quarter, but still home loan sales has been growing across the industry.

We have a next question from the line of Samar Sarda from Axis Capital Limited.

I'm chipping in a couple of questions. [indiscernible] muted for IFC as well as dividends. Now I had a question on cash flows, actually. Sales have been improving. Construction expenditure like for the first half of this fiscal has been pretty nice. [indiscernible] How will this change over the second half or next fiscal, because we made roughly INR 68-odd crores -- INR 69 crores of operating cash flow, which is utilized in land and then that you had to order to service IFCs. How would [indiscernible] INR 500-odd crores...

Please use the headset, please.

So if you could just help us on the OCF trajectory and how will the collections increase?

If you look at our cash flow statement, and traditionally also cash flow statement has a 3 segments. One is the operating segment, one is investing segment and one is a fixed asset-rated financing segment. So if you look at our operating surplus, at all ongoing projects, all our project expenses is getting net out of our operating collections and we are generating a surplus there as well. However, we are -- while we do the existing activity, like we mentioned, that if I'm acquiring a land at a particular place or if I'm repaying any of the costlier debt, we are borrowing money, repaying higher cost debt or borrowing money and investing in the acquiring new debt. So that is my investing activity. And any increase in debt is coming out of my investing activity. As far as the operation is concerned, we have been able to meet all our construction at a faster pace, and still generating a surplus.

Samar, I'll just add a couple of points here. And you will see as we go along with the new launches, the operating surplus only going up. You will also see the construction burn continuing to go up because that is the trajectory. The more we sell, the more we launch, the more we construct, the more the cash flow. So it's going to be a continuous process, and you will see these collections continuing to grow quarter-on-quarter as we go along. And that is the intent when you scale business to ensure that your operating cash flows continue to be positive surplus and it keeps increasing. And that is how, over a period of time when I was earlier also talking about debt reduction is the kind of road map that you will see because what will happen as you do these launches is, all of your equity in these projects plus the profits of these projects will start coming back to you in the surplus form. And as that happens, you will continue to pay down debt. So the point I'm making is, essentially the trajectory that you are seeing, which is basically last year to this year, we -- our collections, operating corrections have gone up by over 50% -- almost 50%. You will continue to see that trajectory.

All right. Abhishek, if I could just elaborate on this because our operating outflows like for the first half are like nearly INR 1,000 crores, whereas the entire last year was INR 1,350 crores. So collections have, of course, increased, but I think your expenditure has increased more than that. The other query is, these are consolidated cash flow. So this would also include collections from [indiscernible], right?

Absolutely, you're right. And also, you have to keep in mind that my outflows are including my investments into new projects, launches. So those launches are happening right now. When I'm paying for any clearances, any approvals, design, launch, a whole lot of expenses that I'm doing today is getting booked in my outflows today. That's where I'm spending my money, which basically means that this will result into larger inflows as we go forward. So don't look at the burn as only the operating burn, as in the burn in the project in which I'm already under construction. Look at the operating outflow which is getting invested in launching new projects, and therefore, it will give you much more substantial surplus as we go forward.

And at the same time, a more operating outflow means more faster construction activity. Faster we are reaching towards delivery, and that will keep us closer to revenue recognition and completion of the project. So it's good that whatever we're collecting, we're deploying on the [ online ] projects itself.

Sure. Sure. And just one last thing. The 4 projects around about 1,500 units, which you're delivering like in the second half of this fiscal, what is the collection which is like due from the sold apartments from such high delivery?

I think we'll have to come back -- come back and we'll send you the details separately on this one.

However, you can go to our slide in our investor presentation. On an overall basis, we are giving a detail about what is our balance collection from sold units and what is balance [indiscernible].

Talking about specific projects. We will send that data out separately.

Separately.

[Operator Instructions] We have a next question from the line of [ Mihir Desai ] from Desai Investments.

Sir, one of my questions was on commercial project. So can you please tell me a number of how much investments which we have done in the commercial project till date?

Again, I think we will circle back on this question with exact information. Right away, we don't have it handy, but yes, we'll circle back with this exact information.

Sure. No problem. And secondly, on BD pipeline, sir. So currently, how does your BD pipeline looks like? And if you can throw some color in the -- especially in the West. As you know, we have hired senior people in Mumbai. So can you throw some light on this? And any new JDs or JVs which you are doing?

So we are very, very actively evaluating and working on opportunities in both Mumbai and Pune. These are the main 2 geographies that we are focusing on. What is very important for us to keep in mind is that we are looking at projects and business in a manner where we should be able to take it to market quickly. At the same time, there should be value and margins in the business. So basis that, we are evaluating opportunities for both Provident and Puravankara, and both between asset-light and outright purchases in both Pune and Mumbai. Mumbai in fact, we're also evaluating certain brownfield projects which have come to us. So it's a mixed bag of projects because opportunities are good there, and the idea of putting a leadership team there and investing in that is that while we have our ongoing projects, we need to add a new pipeline of business, and we are pretty much on track with that. So we will continue to evaluate and deploy in our own basis, our own evaluation.

Sure. Sir, lastly, I just wanted to go on to land banks. So are we looking or exploring to -- for any new acquisitions on the land bank front?

No, it's a continuous process. Our land for us is like raw material for any other business. So it's constantly churning for us. As we produce more, we deliver more, we keep adding more pipeline, and we'll continue to do that.

The question I asked is because sir, recently, the land prices have gone up. So that's why I just wanted to check with you. Like that is -- currently, it's not looking...

Yes. Which is why, I think, 2 things. One is, you always keep in mind when you're evaluating your margins on the replacement cost of land. And therefore, you factor that in when you're pricing your projects. And therefore, you're replacing. You know that the surplus should be able to replace the inventory that you are selling. That is one. The second is we are very, very mindful on the value that we want to pay. If we see an opportunity which the values do not stack up for us, we have an opportunity to move to the asset-light model where we protect our margins, and we shift that -- the revenue share of the area share then takes care of the landowners' interest. And if we believe that there is sufficient margin and the project makes sense to put out our own capital and it's coming at the right value, we will outright buy. And of course, we have multiple pools of capital, as we mentioned earlier, and that gives us the flexibility to deploy in all kinds of deals.

We have a next question from the line of Chintan Mehta from Prudent Broking.

Sir, is there any plan to monetize any land bank or any entire project like Godrej fund deal?

No, there is no plan to monetize any land bank per se. We are in the business of developing our projects. And our focus is really to launch all our projects, and in fact, all the land bank, we are working simultaneously to unlock value. So we are pretty much on the job as far as our business is concerned.

Okay. And sir, if you can share the project margin of the 3 large Bangalore projects, Atmosphere, Park Square and Tivoli Hills, is it possible?

We can separately share that with you. Yes, one-on-one, we'll share that with you.

Okay. Sure, sir. Sir, where you can see the realization going forward broadly in the Bangalore market?

So I think Bangalore market is a very, very steady market in that sense. And this market produces a lot of volumes and produces a fairly balanced profitability. So we continue to see that. I think the margins will stay protected. We possibly see there may be a little bit of a shortage of supply. And maybe on an opportunistic basis, you will see increased prices in some of the projects. And it also depends on the ability of a brand to command a premium. I mean you took the example of 1 or 2 of our projects where we are commanding maximum premium and moving maximum inventory in that market, right? So it depends on the project, the brand and its ability. But if I have to answer, generally, Bangalore as a market is a very steady market, and we'll continue to see the volume scale up.

Okay. And sir, for the upcoming -- the project that we have large of 15 million square foot of project, how much regulatory permission is pending?

So as I mentioned, I think the -- yes, this is basically all of this is under approval, different stages under sanctions. As I mentioned, of this, almost 5 projects are in -- going to be in launch mode in this quarter itself, and then we will add the rest of them in the March quarter. 3 of them have got RERA and are under launch mode, 2 more we will add in this quarter. The rest of them are in advanced stages of approval. And as we get RERA approvals in the next quarter, we will take that to market. But investment activity in those projects is already going up.

Okay. Okay. And how we are planning to fund this project? Any -- I know it could be made by your other operations?

Yes. So all of these projects, basically, we have already paid for land, right? So there is no land cost per se for these projects. This is only going towards clearances and launch expenses. So that is coming from our operating income. I think I mentioned it earlier also, somebody asked this question as to your outflow. The outflow is going towards these projects as well, new launches.

Okay. And sir, on the revenue, I mean on the P&L side, is this land the cost we are passed on, it will be recognized lately or it is already passed before the...

Sorry?

The land, which -- the 5 project land cost will come to the P&L when we launch it, or it is already under when we purchased it?

No, what has happened is, while we recognize revenue, then only cost of revenue will come to the P&L. However, as it [indiscernible] a complete requirement [indiscernible] during the quarter, on a functional basis, we have to report in the profit and loss account. So if you look at this quarter's P&L, there is a INR 50 crore land payment is being shown. However, that rent payment is not impacting this quarter, profit and loss account. It is basically added to the inventory, [indiscernible] and in the balance sheet level.

Okay. Okay. And sir, just I have one request. If you can add one more thing in presentation of expected date of the new launches and position date, if it's possible, then it will be a great help to us.

Date of launch is there. If you look at our Slide 14, for [indiscernible].

Are you asking about for launch date or possession date?

On both, I think, I...

Okay. So launch dates already on like November 14th. The possession date as it [ January ]...

As a regulatory -- see possession date as a regulatory, as in when we go and formally launch the project, before launching the project, we have to obtain the RERA registration. As you know, that will not applied across the country. And while [indiscernible] we have to [indiscernible] declare the date of possession, date of completion of each project and which we possess. As soon as we launch, we'll publish on the RERA website and have access to all, including our customers as well as investors.

We have our next question from the line of [ Rohit Sharma from Zen Wealth ].

My first question is, can we see any impact of festive season in the coming quarters? Like any growth due to this festive season?

Yes, definitely. I mean you can see the initial impact of the festive season in the September period. Now we will -- we are continuing to see that growth and that activity on the ground. So we expect normally as an industry and as a practice, you would normally see third and the fourth quarter are pretty big quarters of the year for everybody. So we are pretty much in track and online with that.

Okay. Fair enough. And can you provide the revenue breakup of your other segments, like Starworth, [indiscernible]?

We can share that separately, one-on-one. Come back -- we can come back to you, yes.

Okay, no problem. And my last question would be like what, according to you, could be the differentiating factor for Puravankara in an already competitive market of this Mumbai area? What would be that?

So I think Puravankara as a brand, it carries a legacy of 47 years of strength of delivery and quality, and what we bring in the way we look at customers' needs and the way we look for solving it. I think brand has also moved towards servicing the customers, and it's built, of course, on trust that we have always delivered our projects. So I think as a brand, with the strength of quality and strength of delivery and track record as well as our ability to address customers' needs and service the customer needs, is a clear demarcation. When I say solve for the customer needs, we are constantly innovating, we are constantly changing what product we are bringing to the market because we are addressing the needs of the customer. I mean this is historically visible. We were one of the first to do multi-story buildings, one of the first to bring international experience into our home projects, one of the first to bring in a manner affordable housing, precast, first to bring technology in people's homes. We have something called BluNex. So we've done a lot, of course, and that continues to -- as we carry on with that innovation and the passion of design that we bring on the table for the customer, I think that is what stands out for the consumers. And that's a differentiating factor even for the Bombay market. It just cuts across. And the fact that we have delivered more than 45 million square foot, I think we can count on our fingers how many developers in the country have done this kind of business. So I think that makes big strength, and that will continue to be our mainstay.

And for our brand providence, we are right now competing more, for sure. For every new customer paying, we are committed to deliver more for every penny customer pays for our flat. Hopefully, you have seen our [indiscernible] and other social media for Provident Housing Limited.

As there are no further questions, I would now like to hand the conference over to management for closing comments. Sir, any closing comments?

Thank you once again, ladies and gentlemen, for your time and attention. I hope me and my colleagues were able to answer all your questions. However, if you require any further discussions, we are always available for the discussion during the coming weeks. Thank you once again.

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