Puravankara Limited (PURVA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Limited Q1 FY '24 Earnings Conference Call hosted by Axis Capital Limited. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Samar Sarda from Axis Capital Limited. Thank you, and over to you, sir.

Good evening once again to everybody, and welcome again to Puravankara Projects Post Results Conference Call. As always, we have the senior management with us led by Abhishek Kapoor, ED and Chief Executive Officer; Mr. Moorthi, Senior Vice President of Risk and Control; Neeraj Gautam, Executive Vice President, Finance. Before I hand over the call to the management, Abhishek, let me congratulate you and your team for crossing a really good quarter on sales cost more than INR 11 billion. OCF has been good, and we have a minor reduction in gross debt as well. So with that positive note, handing it over to the management for the initial comments.

Thank you, Samar. Good evening, ladies and gentlemen. Welcome to Puravankara Limited Earnings Call for the First Quarter of FY 2024. I'm Neeraj Gautam, [indiscernible] Finance of Puravankara Limited. Thank you for joining us today. We are pleased to present our financial results for the quarter ending June 30, 2023. The results, along with comprehensive presentation have already been uploaded to the Stock Exchanges for a review. Today, we will provide insights into our outlook and key initiatives. Before we dive into our company financial performance, it is important to mention the broader economic landscape, both on a global [indiscernible] and national level. This then sets the context in terms of the underlying demand that has consistently propelled our sales performance. Moreover, this understanding will highlight the potential for future growth. The world economy is getting better, especially in places like India. India's economy is doing even better than expected. The international market fund, we had raised its prediction for India's economic growth to 6.1% for 2023, which is higher than the early production of 5.9%. This is happening because of the people in India are investing more money within the country and the economy got a boost from a strong growth in the last part of last financial year as well. Many good things are helping India economy grow. Also, technology, digital changes are happening and new buildings and [ growth ] are being built. People in India are buying more things and the country is handling global challenge as well. Even the property market is doing great, especially for buying and selling houses in big cities like Bengaluru and a lot of [indiscernible] are coming because of the good job opportunities with technology and other industries. This has caused more people to want houses, which is increasing house price and the rent costs. Renting a place to live in Bengaluru is becoming expensive, similar to how it is in Mumbai. Because of this, many people are thinking it's better to buy a house instead of paying high rents. This is making the property market in Bengaluru even stronger and [indiscernible] as well. Interestingly, Puravankara's operational performance quarter-on-quarter is a testimony to this growing trend. On that note, let's dive into operational performance for the period. For our operational standpoint, we have achieved the highest ever sales revenue of INR 1,126 crores in any quarter, the highest ever first quarter of any financial year since inception, up by 119% compared to INR 513 crores in Q1 FY 2023. Out of total sales, INR 715 crores is attributed to Puravankara brand, INR 215 crores to Provident brand and INR 196 crores to Purva Land brand. Moving to the launches for the quarter. We introduced the Purva Raagam Purva land in Chennai, there is not [ 21% ] year-on-year increase in the sales value of Purva Land in this quarter. Our collection sold to INR 696 crores, representing 52% year-on-year increase, average price realization increase by 11% to INR 8,277 per square feet during Q1 FY 2024 from INR 7,436 per square feet in Q1 FY 2023. We have an impressive and robust launch pipeline of approximately [indiscernible] ensuring a steady flow of new projects in the coming period. Non-Bengaluru projects now account for 46% for the share of ongoing and 65% of the launch pipeline. On a division basis, Purva accounts for 52% of our launch pipeline in line with market trends and growth with the strategy. Our net debt stood at INR 2,119 crores in Q1 FY 2024, gross debt has been reduced by INR 55 crores from last quarter and net debt by INR 89 crores. Further, it is worth noting that our best perspective of building [indiscernible] declined from INR 1,277 to INR 1008 per square foot in Q1 FY '24, so keeping our efficient capital utilization. As of June 30, 2023, the balance receivable of approximately INR 3,052 crores, from sold units covers around 74% of our remaining costs needed to complete the inventory open per sale. Furthermore, we have a cash flow viability of INR 6,730 crores in next 3 to 4 years. Finally, turning to our financial performance. Q1 FY '24, our revenue from projects grew by [ 50% ] year-on-year to INR 323 crores. The EBITDA for Q1 FY '24 was INR 25 crores which is 22% EBITA margin. The PAT for Q1 FY '24 was negative INR [indiscernible] crores against INR 35 crores in Q1 FY '23. I would like to bring to your notice that under in [indiscernible] 1 and 5, the revenue recognition is now acknowledged only upon project completion and upon delivery of any rather than gradually throughout the projection [indiscernible]. This alteration in revenue recognition and timing has led to notable disparities in our periodic financial outcome as it is evident from quarter [indiscernible] performance. This concludes my opening remarks, I would like to reiterate that Puravankara is aligned with the prevailing nation-wide [indiscernible] trend, especially notable with the real estate sector. We are well positioned to leverage this growth first through our healthy launch pipeline, which has generated significant customer interest and appreciation. While adhering to financial discipline, we maintain [indiscernible] commitment to timely and exemplary execution. As always, we remain committed to driving value to our stakeholders. Thank you for your attention. Now I will be open for the floor for the questions. And me and my colleagues, Mr. Abhishek Kapoor, Mr. Vishnu Moorthi are here to answer all your questions and clarification and take your feedback.

[Operator Instructions] The first question is from the line of [indiscernible] from [indiscernible] Securities.

Hello?

We can hear you. Good evening.

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[Foreign Language] Board has recommended to remain invested in the business rather than taking out the profit in the form of any dividends.

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[Operator Instructions] The next question is from the line of Ronald Siyoni from Sharekhan.

Congratulations on a very good set of numbers in terms of sales and also there's been a net debt reduction, collections, and install. So sir, on the outlook for FY '24, how do you see this year in terms of sales booking? And what kind of launches we should expect in terms of top line potential or delivery we can expect by FY '24?

Ronald, so we don't give forward-looking guidance. But having said that, let me share with you some data points. Basically, we are looking at a total of about 15 million square foot of launches. In that 15 million square foot of launches, 3.6 is in Puravankara, 7.97 is in Provident and 3.68 in Purva Land. These projects are pretty much on track in terms of the launch. So as mentioned in the ICP, we launched about 1 million square foot in the last quarter, and we saw that the numbers were pretty good. On ground, what we are seeing is there is good traction. And we are expecting that we will take more projects to the market starting this quarter. The work is on track as we speak. And we are quite optimistic for the continuous increase on quarter-on-quarter and year-on-year numbers. And if you see the trend in the ICP, what is also mentioned is whatever we do in the first quarter, we normally do higher numbers in the second, third and the fourth quarter. So I leave you to estimate what our retail numbers will be and the cash flows will be, but the trend is very, very optimistic and very positive.

And 15 million square foot, we should take it over the next 2 years or for FY '24 or something -- '18 to '24? What kind of time line you expect for 15 million square foot?

So you should assume that we will open only up to 6 million square foot -- 6 million to 7 million square foot in this year, and the balance inventory will be opened in the phased manner next year and the year after.

Okay. Great. And this quarter, we have also seen net debt reduction. So I have the management balancing the view that we should also reduce some portion of the debt going ahead. Or this was just a one-off quarter where you had paid off some debt? So is this a constant decision that some part of the cash flow should go post debt reduction?

Look, as we have disclosed on Slide 26 of the ICP of the total debt, INR 2,267 crores of -- debt are now INR 2,200, which is reduced by INR 64 crores in the last quarter it's self liquidating in nature, right? What it means is basically on its own account as we project -- progress the project, it will naturally reduce. What will happen is our composition will change. We will continue to invest in our commercial projects, wherein we'll draw down debt or construction to rebuild those assets. And at the same time, new acquisition strategy is going to roll out. Our aim and goal will be that we will try and keep our debt at similar levels while the ongoing debt continues to reduce as we engage in the market and we deploy capital for new acquisitions. So therefore, what I'm saying is while we keep the absolute debt at similar levels -- similar levels, that's the intent, we will see technically more acquisitions happen. And Second and most important thing is, and I keep saying this every call and every presentation, that please look at my debt per square foot number of area under development. And if that debt per square foot area under development continues to reduce, then the leverage is actually not something that should affect the business because then what we are saying is against an average realization of INR 8,000 a square foot. My cost of debt is say about INR 300, which my average tenure of debt is 3 years on INR 1,000 a square foot, right? That is point number one. Point number 2 is that you look at our cash surplus and if you look at Slide -- I tell you that there is we have so as the total cash surplus of INR 11,200 crores in Slide 28. we are talking about a INR 2,000 crore debt on a 11,200 crores surplus, which is only from projects where -- which are ongoing and which are going to be launched. I think we are in a very, very comfortable position. And as we launch these projects, you'll see the debt [indiscernible] come down and our ability to scale. So our focus is really to expand and grow, and we will remain committed to growth.

Just on that follow-up, you said about business development. So the focus is on getting faster, of course, or churning the land from existing land bank? Or do you want to go for the new acquisitions? Or if you want to go, then what kind of model outside JV [indiscernible].

So we are looking at both. Both first thing is first step has been for us to monetize what we have invested in the land bank. And therefore, you are seeing this 15 million come to a plan being shared with you all, and it's unfolding as we speak in this financial year. As far as new acquisition is concerned, we are absolutely committed to it. We have a fairly balanced mix of business in terms of outright and JDA. We will look at both the models. We are also looking at a lot of redevelopment projects in Mumbai, which is society redevelopment projects. And of course, [indiscernible] and outright acquisitions across all the markets where we are present in, but the model is pretty much in a way where we look at about 30% to 35% of our business coming from the business and about 60% to 65%, maybe up to 70% of our business coming from projects where we would outright purchase and investment because the margins are much healthier and much better and you get to see the appreciation of prices and appreciation of margins as you go along. So that's the balance we're looking at.

Sir, last question on the Starworth, like what kind of contribution was there? And what kind of margins were there by Starworth during the quarter? And also the related one that the order book has reduced. So -- can you help know why the order book reduced from INR 1,600 crores to INR 1,200 crores.

So we are on the job. Last quarter, we added about INR 300 crores of order book.

We did have it. What [indiscernible] this order book is a net order book. It's not a gross order book. That means the order book [indiscernible] what we have built during a quarter or a period. And hence, this order book is net of delivering on billings. That's why it's reduced. The point number one. Point number two, this quarter, [indiscernible] done a turnover of about INR 103 crores and a [indiscernible] negative PAT of INR 2.3 crores.

But having said that, I think what's important is that we are very, very actively pursuing new business. There are a lot of tenders in process we will see the order book go up as we go along in the coming quarters. The focus is really on business development other than the existing operations. We have had some challenges in terms of the slowdown of turnover because of availability of labor supply, which is normally the case in this particular quarter, April, May, June. And hence, normally, the billing cycle reduces kind of [indiscernible] April, May, June because as you may know, labors go back to their harvesting season and the marriage season in the north. So having said that, I think they are pretty much back. We have full scheme going ahead. And our business development activity is now moving at a good pace, we will see in next 2 quarters, our order book increase.

The next question is from the line of Niraj Mansingka from White Pine Investments.

Can you give me the trend of the walk-ins and inquiries that have for the customers that have come in, in the last 1 or 2 quarters? And how do you see that going forward?

So I mean, obviously, the business is going up. So that means there is a lot more site visits and a lot more conversion that is happening on the ground. So we are seeing an increasing trend, including in our sustenance projects. That's what is very encouraging because what's happening is that our ongoing projects, it's not just the new launches that are contributing, but the ongoing projects are seeing increasing traction, both in terms of site visits and conversions. And as we see that and we add the new launches to it, we are seeing the kind of numbers that we are seeing. I mean this is the first time in our history of Puravankara that in the first quarter, we had done our higher numbers than the Q4 of the previous year. So that shows that we have broken that glass sealing that we were kind of under and that's why the numbers look so phenomenally good also when you compare on a year-on-year basis, it's 119% growth. So the point I'm making is that both sustenance and new launches are doing quite well, and we are seeing increasing traction. And I think that's also a result of the [indiscernible] activity that is going on, on site in terms of construction and people understanding and confidence in the quality of work that we do and hence the premium also that we are commanding in the market. So overall, it's a good situation to be in for the [indiscernible]. .

I am aware of that as I saw the presentation, but I wanted to know on the inquiry and walk-ins. Can you give us some statistical number or some thought focus of how you see the walk-ins has it gone down or has it gone up? So your understanding has gone up, but I'm more trying to see on the current [indiscernible] slowdown in the tech sector. So trying to understand from that perspective.

So if you were to compare apples-to-apples, I would give that the number was obviously much higher. It was twice the number in both in terms of site visit, twice the number in terms of inquiries and twice the number in terms of conversion, right? So that percentage will pretty much follow. So if you were to -- let me give you a number. If you were to look at our inquiries through allocations, our inquiries on every 100 inquiries, we have allocations of anywhere between 35% and 40%, which is 35 to 40 or 35 to 40, about between 20 to 25 site visits. And out of that 25 site visits, we are looking at a conversion of anywhere between 3 to 4 conversions. So that's the kind of number that happened. When we do INR 1,126 crores, which is 120% higher on the same statistics, which we are maintaining right now, you will see twice the amount of inquiries and twice the amount of allocation and therefore, twice the amount of site visits and hence, double the number of conversions. And therefore, our confidence on the numbers. Only statistical difference, I can possibly add to this that our conversion has gone up by another and maybe 15% to 20%. So when we were earlier getting our 25 site visits, we are closing maybe 2.5 sales. Today, that becomes between 3 and 4 sales. Are you with me?

Got it. Got it.

So that's the improvement that we have seen because of the brand and the focus on the construction. .

And second question is on the current projects that you're selling. What might be the EBITDA margin that you might be booking, which you would obviously report much later?

So I think if you look at our plotted development, the EBITDA margins will be upwards of 35% to 40%. If you look at our Puravankara margins, you're looking at anywhere between 30% to 35%. If you are looking at a provident margin, it will be anywhere between I would say, 26%, 27% going up to 30%. .

Okay. But then how do you explain this current quarter EBITDA margins? And on the last [indiscernible] quarters, the margins are not supported compared to what we've been seeing.

So, margin is the result of 2 things, right? I think Neeraj explained it in his opening remarks, margins are on account of what you deliver, which gives you the revenue and what you spend which you can't capitalize. So what that means is, we gave a certain number of units and certain value of units as possession. Some of our possession was -- in fact, the projects were ready, but were deferred because of OC or certain local technical issues where I could not do the handover. This will happen now in this quarter and the next quarter. So the revenue booking will go up. . Having said that, what has affected my margin really is my launches. So if you look at the sales number and then you say that we have doubled the -- more than double the sales number. We were at INR 500-odd crores. We are at INR 1,100-odd crores. What that means is that we have spent INR 15 crores more on marketing costs, which has hit us. that INR 15 crores alone, if you just adjust that number almost takes care of the extra losses that we are talking about, plus my G&A, which is also higher because G&A spend basis what I'm -- what business we are doing today, which can be capitalized and can't go into my P&L. So between both of these things and my ability to get my revenue recognition because of handover, the margins looking squeezed. But if you look at the project level and if you look at the way we look at our business, our margins are very much in line with the projections what I suggested, and you will see this unfold as you start doing the [indiscernible].

Okay. So putting in a different way. Next 2 quarters, do you see that margin going back to, say, 20% plus because of what are one-offs that might have happened and you might have booked some costs in this quarter?

So as I said, we don't give guidance. Having said that, we will be doing more launches.

Real estate is [indiscernible] guidance because whatever [indiscernible] revenue. So you will know everything. So there's no forward-looking, forecasting -- we're just asking that see the cost. The reason asking is that the EBITDA margins are not as much as you are just -- when you said about plotted [indiscernible], the blended EBITDA margin comes out to 27%, 28% on this average [indiscernible]. So obviously, that margin should come in next 2-3 4 quarters, ultimately because.

I think if you look at it over the next 3 quarters to 4 quarters, you will see that margin come back for sure.

All we can say is our couple of projects are coming for possession in coming quarters. A large [indiscernible] project by [indiscernible]. There is a project in Chennai [indiscernible] all are coming for possession.

And Hyderabad is coming.

[indiscernible] converted some of the tower [ 2000 ] expecting to get positioned in a few days. That's why we are expecting OC any time. So these projects, we are rising to the completion will start giving handover and that margin will come in the P&L. That is what we can -- at this moment, I can give that kind of information.

So got it. So what you're saying is [indiscernible] completion for [indiscernible] better margins in [indiscernible].

As the accounting norms, the moment I recognize revenue [indiscernible] from every unit, which I recognize will come to the P&L and thereby that was reflecting the margin and the profit for the quarter.

So the last question, the debt that you are talking [indiscernible] crores [indiscernible] will remain sort of flattish over the next few quarters or 1 or 2 years. So why would you not want to repay the debt.

Abhishek mentioned in some other question. The point is that certain amount of leverage is beneficial for the business. As a substantial part of our debt today is backed by ongoing project and which will be repaid in a natural course. If you look at the next 12 months, I'll be naturally paying about INR 600 crores approximately as per scheduled repayment, right? And if you look at this quarter also, which we have given in the slide in the residential business side as it is reducing and hence it will be -- debt management will be in that line. Beside this more and more new launches we are going to get that will reduce our debt per square feet as a business volume, and that will reflect in better utilization of capital. And that will, in turn, will add more value to the P&L as the volume of production goes up and [indiscernible] comes down.

And I think our focus as I mentioned in the beginning of the call is on acquisition and business development. For that, whatever is the capital requirement that we need, we will continue to draw down on that capital. And hence, that's the reason while Neeraj is rightly saying INR 500 crores to INR 600 crores, you'll repay in natural course and we take INR 500 crores to INR 600 crores to add to my new acquisitions. And again, the whole point is that how much debt is relative to how much business you are doing and I think that's the context that you need to put our debt in. And accordingly, you measure the debt. And you will see the numbers in this quarter, in the coming quarter and the next quarter. And obviously, then we can have a conversation.

And besides that, we are also creating 2 big commercial asset for the company. And to that extent, we'll be drawing down debt and increasing the value of asset for the company. .

I think wonderful. I've just 2 suggestions. One can you, in longer term, show the debt as a commercial debt and residential debt, so that we can understand what is a debt for development and what is the debt for longer term.

If you go to our investor presentation Slide #26. There, we have given a breakup of the debt, how much debt is backed by residential business, how much debt is line for our lending.

I saw that.

And how much for the commercial business we have drawn down and [indiscernible].

Got it. Last suggestion is you also should include the [indiscernible] INR 400 crores in that outstanding because that still [indiscernible].

That debt is end of equity in nature. We have taken money from IFC against the project, which is payable and enable structure. Similarly Puravankara Limited has launched our own AIF by Purva Excellence Fund. That fund has invested in 2 of our projects in the form of [indiscernible] and that, again, [indiscernible] and enable structure. And hence, that we are showing separately, that is not equity in nature. That's not essentially being paid [indiscernible] as a manner or [indiscernible] debt like monthly servicing of interest [indiscernible].

Okay. And I think looking forward for improvement, a good improvement in the next few quarters.

The next question is from the line of Sagar Ramchandani from Emkay Ventures.

So out of the 15 million square feet launches that are planned in the financial year 2024, how many have been completed in the first quarter? And what are the plans for the next quarter in terms of million square feet.

So we've launched about 1 million square foot already, 770,000 square foot of plotted development and 240,000 square foot of a villa development that has launched already. And in the coming quarters, starting this quarter, we are expecting additional launches .

Yes. We are expecting in this quarter.

Okay. And the second question being, what is the strategy on Pune and Mumbai, primarily redevelopment aspects of Mumbai. And where are we on that? And what is the revenue contribution, say, from Clermont and the other Pune projects?

So as we speak, we are actively pursuing opportunities of society redevelopment in Mumbai and actively pursuing opportunities for new land acquisition, both on outright and JDA basis in Mumbai and in Pune. Our intent is eventually that we will see of the total revenues over the next few years. We will see 50% of our business will come from Mumbai and Pune. That's the target we are working towards. Today, we are very, very heavily invested in the Bangalore market and almost 60% of our business comes from the Bangalore market. And of course, then we get it from Chennai, Kochi. These are the other markets that contribute, but this composition will change over time. Having said that, today the contribution of Mumbai and Pune is quite low. It's under 10%. But I think that will change with the new acquisitions and the new launches that we are looking at doing in the next 12 months.

The next question is from the line of Rishikesh Ojha from Robo Capital. .

Sir, my first question is, what was the deliveries, unit deliveries in Q1?

We delivered 467 units in Q1.

Okay. And what is our target for FY '24 as well as FY '25 in delivery?

So FY '24, we are targeting about 3,000 units of delivery, that's the estimate we had given. And FY '24, we can come back to you with an answer. .

Okay. And also, sir, just wanted an idea of those 3,000 deliveries, how are the deliveries lined up? Like which projects would contribute mostly? And in which quarter can we see the run rate to really start.

So we will start seeing a pickup of delivery starting from the end of this quarter, which is end of September quarter going into December and the March quarter. And the projects that we are talking about, I think Neeraj mentioned on the call a little bit earlier, Tivoli Hill is a large part or development, which is over 1 million square foot. That is going to come up for delivery starting end of this quarter. Equinox, which is [indiscernible] project. Hibiscus is another project development, [indiscernible] will come up. [indiscernible] Square, which is ongoing. There's another project called Promenade in Bangalore, which will come up. There's another project called Genium, which will come up for delivery in the Jan quarter. There is another project in Chennai called Somerset, which will come closer to the end of the fourth quarter. These are all projects which are.

Lineup for delivery.

Lined up for delivery.

Okay. And also, sir, just wanted an idea. When we say there are some upfront costs that we have to bear due to the new launches, what would they be as a percent of revenues?

When you were asking that question, what do you mean? You mean prelaunch marketing expenses or you mean land approvals and all of those [indiscernible].

So basically, the cost that we have to debit from the P&L due to which -- you have said to the earlier participant that the margins, the reported EBITDA margins are ideally down because of those upfront costs that you have to take because of new launches.

The way you're asking the questions, you would see any prelaunch costs. So there are 2 parts to that cost. There is a prelaunch cost and there is cost of launch. And it depends on the scale and size of launch that you typically do. But for whatever sales contribution you look at, you can easily assume about 1.5% to 2%. So for example, if I was to look at the INR 1,100 crores sales, I would say that I would have spent about INR 15 crores to INR 20 crores in, which I cannot capitalize, right? And of course, prelaunch costs, which I can't capitalize will be to the tune of anywhere between INR 5 crores to INR 10 crores minimum. So that's the range that we're talking about. And you should take a number which I can't capitalize on every quarter's [indiscernible] anywhere between 1.5% [indiscernible].

Okay. So we can say that around normally this level of EBITDA margins, and this should actually increase going forward that you said to the earlier participant because of the plotted development projects will become for deliveries in coming quarters. which have higher margins. So ideally [indiscernible] was the EBITDA margins, the reported basis EBITDA margin should increase.

So yes, correct. You're right. Between Q2 and Q3, it should start reflecting on the EBITDA margins. And it's not just the [indiscernible] development. I named quite a few of Puravankara and Provident developments, which are also coming into projection.

The next question is from the line of Anurag Katta from B&K Securities.

Congratulations on a good set of numbers. I wanted to know what kind of bandwidth do we have in terms of executing projects at one time?

Thank you, Anurag, for the question. So as an organization, we have ability to -- so we are present in about 8 cities, minusing Manglore because we want to get out of that market. That's not a market we want to scale. With a clear focus on 5 cities, which is Bangalore, Hyderabad, Chennai, Mumbai and Pune. And we have 7 lines of businesses. Let's focus on the top 4 lines of businesses, which is Puravankara, Provident, Purva Land, commercial and the Starworth, which is a contracting business. Now if you were to look at the geography for each of the brand in each of the geography at any point in time, your ability to launch is anywhere between 8 projects, which is 2 projects in a year under each of the category, which is 8 projects. So if I simply do a basic math, 8 projects into 540 projects there. And if I take 4 into in the rest of the projects, which I do only 1 launch in each category. You talk about 16, you're talking about at least 56 to 60 launches in a year, is what we are capable of in terms of the potential of business. The question is how do we get to that potential of business. For that, we have set up a P&L structure, where each of the businesses in each of the geographies have focused dedicated teams, which are working and for the brands, which are working only focusing on execution and operations of that business. So I'm not sure if you've seen some of our past. So about 1.5 years back, we deployed a different organization, Matrix organization structure, where we have brought in CFOs, heading different regions and different businesses and different P&Ls, creating independent teams below them to empower them, authorize them. Of course, make them accountable to deliver the results. It's a completely performance-driven culture and the systems and processes that we have implemented enable these teams to be able to deliver the kind of volumes we are looking at. So the bandwidth has already been created. And if you go and research the kind of talent that we've been able to attract in the marketplace, I think that's pretty much akin to the quality of the brand that we have and the vision that we have. So I think we will see this bandwidth display the results, which we are already seeing in the last quarter. I mean there's obviously exponential in nature. We will continue to see something like this unfolding as we go along.

All right, sir. That is a very impressive number. Sir, the reason that I asked this was because as far as last interaction, what I remember is that we are poised to keep our land bank between 40 million and 45 million square feet, plus if we add up the projects that you are working on in a particular financial year. I just wanted to get a feel of how the cash would flow because we are poised to keep our land bank intact at a certain level? Just if we launch additional projects, particularly in Puravankara and how would the business development look like for you?

So to answer that question, are you asking, let me ask you and understand what you are asking. Are you asking how much new land acquisition we will do? Is that the question?

Sir, the question is as our business grows in our bandwidth, how many new projects can we execute simultaneously while acquiring new land?

So as I mentioned earlier, these 15 projects are on the way. The teams are -- respective teams are running these projects, and they're getting launched. It is not one person, it's an organization that's we've built. There are 1,500 people in the organization and they have different P&L heads who are driving their own businesses. So that is one part of it. At the same time, for replacement, we are in an aggressive deal mode where we are evaluating proposals very diligently, profitable margins. Fortunately, consolidation is helping a brand like us to get the right kind of deals in the marketplace. And you will see announcements that will happen. So our endeavor will be to replace whatever it is that we sell within the same year. So that we have replacement of that inventory, what we have sold in the year. So that's how we are, at this point in time, approaching it. And it will be, as I mentioned earlier, mix of [indiscernible].

The next question is from the line of Harsh Parekh from [indiscernible] Ventures.

Yes. My question is with regards to current project mix between luxury and [indiscernible]. And also, can you guide what is the project mix of residential and commercial and [indiscernible].

Sorry, what is the?

What is the current project mix between luxury and [indiscernible].

Okay. So if you look at all the Puravankara projects, you can count them as luxury projects, which are shown, which is to the extent of 3.6 million square foot. Provident, which is kind of mid-income projects, which is about 8 million square foot and project, which is in Purva Land, which is about 3.7 million, 3.8 million square foot.

This is about the launch pipeline. But if you would like to know about ongoing projects, if you go to our Slide #31 at our presentation, there we have specifically mentoring which are the projects under Puravankara Limited, which are the projects in the Provident Housing Limited and which are our commercial projects.

Are you looking at only new launches? Are you looking at the breakup of existing sales as well?

No. Both existing as well.

So if you look at existing sales, when you go to Slide #12, which talks about unit value-wise contribution to sales value. So if you see there, that gives you a breakup of how much units we are selling sub INR 1 crore, and how much is it above INR 1 crore. So sub INR 1 crore, if you look at it, it's about 46% of our business and 54% of our business is coming from our INR 1 crore categories.

Okay. And my next question is with regards to the redevelopment projects. So since you are keen on taking redevelopment projects in Mumbai, what are the margins for redevelopment projects right now going on? And how can you -- I mean, are you in talks with anyone or -- are you still looking to explore these projects?

So for redevelopment projects, our target margin will be similar in nature, which we discussed, which are the EBITDA margins, obviously, which we discussed earlier. Specifically in Puravankara because most of the redevelopment projects will come under Puravankara. That is to answer on margins. And as far as actively pursuing, we are very, very actively pursuing multiple tenders and multiple society opportunities, which are today out there. And we are pursuing, we are shortlisted in a few, and we are negotiating and engaging part of the whole process. So we will see as we go along as we close some transactions. I'm sure you will hear about it.

It will happen in this FY '24 or next FY?

No, definitely in this FY.

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

Thank you very much for joining today's call. I hope me and my colleagues have been able to answer all your questions. And I'm wishing all of you a very happy Independence Day, and thank you very much.

Thank you. On behalf of Axis Capital Limited, we conclude today's conference. Thank you all for joining. You may now disconnect your lines.