Shriram Properties Limited (SHRIRAMPPS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Shriram Properties Limited Q3 and 9 Months FY '24 Earnings Conference Call. This conference call may contain certain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on the date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Murali Malayappan CEO and MD from Shriram Properties. Thank you, and over to you, sir.

Thank you. Ladies and gentlemen, a very good evening to everyone. Firstly, let me extend a warm welcome to all our esteemed investors and analysts. The meeting provides me an opportunity for us to connect, share and discuss about our operational and financial performance. Earlier today, the Board has adopted Q3 and 9 months for FY '24 financials. We will discuss about the financial performance in detail. Before that, I would like to announce about our entry into Pune region. It has been some time we were constantly evaluating new market opportunities. And finally, the deal is crystallized and we will be launching the project during late March or early April this year. Pune has been among top performance in Tier 1 cities. And we are confident Pune region will contribute significantly towards the growth of the company. Coming to our operational performance, we recorded sales of 1.1 million square feet during the quarter. With this, our 9 months for FY '24, sales stands at 3 million square, feet which transitioned to year-on-year growth of 12% for 9 months. We also reported highest ever 9-month collection of INR 1,055 crores -- INR 1,055 crore collection. During the quarter, we have successfully prelaunched first phase of Shriram 122 West, Project in Pune -- Chennai. During our launch campaign, we saw a presence of over 800 channel partners in the event, which is tremendously encouraging. During the quarter, we reported total revenues of INR 241 crores with a net profit at INR 18.5 crores. The slowdown in receipt of OC lead temporary slowdown in hand over and revenue recognition momentum during Q3. I strongly believe our earnings will gain significant momentum as we have packed schedule of handovers in Q4, which will boost Q4 revenues. The company is optimistic about its future. There is a promising demand for housing, especially in the midmarket and aspiration segment and positive market trends are encouraging. With the robust operational foundation and solid pipeline of projects, we are well positioned to take advantage of industry's ongoing consolidation. I would like to ask my colleague, Mr. Gopal to briefly discuss the performance in detail with you. I'll be happy to answer any questions you might have thereafter.

Thank you. Good evening, everyone. As Mr. Murali pointed out, we had an earnings announcement earlier today. Subsequently, our presentation is made available on the website of the company and the stock exchange. I assume all of you have access to it. If not, please access them from our website or the exchange website. I'll be using those -- that presentation for walking us through the performance over the next 30 to 40 minutes. I'm looking at Slide #3 of the presentation on the public domain. It basically summarizes the key performance areas. As was pointed out by Mr. MaurliMurli, we ended the quarter with about 1.11 million square feet of sales roughly about 6% growth year-on-year. Sales value is almost flat at around INR 588 crores. Collections are at about INR 334 crores, well above INR 100 crores per month mark and reflects a 34% growth year-on-year. Handovers were about 787 units got handed over during the quarter reflects a growth of 48% year-on-year. While we have seen a meaningful growth, the growth -- quantum of growth has been muted, and it has been muted in Q3 due to some adversities. I'll explain them in this next slide. primarily those external factors delayed or deferred some of the launches as well as delayed in receipt of OC that's forcing us to postpone the registration -- handovers and registrations, thus income recognition got hurt. I will explain them in the next slide. Before I do, I wanted to just summarize the -- summarize the whole performance on a year-to-date basis. For the 9 months ended December, our overall volumes now stand at 3.03 million square feet, up 12% year-on-year. Sales value was around INR 1,654 crores, up 22% year-on-year. Collections are at about INR 1,000 crores mark, and our handover today stands at about 1,619 units, reflecting a 30% -- 29% year-on-year growth. More importantly, on the sales volume, value and collection, we are in the 70-odd percent of overall annual targets. So we have about 30-odd percent to be captured. We are very confident of doing that, and I'll explain that in subsequent slides. Moving to Slide 4. I talked about the mutual growth in Q3. There are primarily three or four factors that hurt us and made it a challenging quarter for us operationally. And there are primarily external factors beyond our control in Tamil Nadu or in Chennai market, we have unprecedented rains and huge floods in Chennai as well as in some other part of Tamil Nadu, but Chennai floods had a direct impact on us. Unfortunately, that happened just before the inauspicious months, which starts by mid of December, the [ Marghazi ]. So therefore, we nearly lost about 40, 45 days of momentum because customers or the people target audience is focused on the flood-related issues and then [ Marghazi], which is considered inauspicious period for any -- doing any large significant activity. Therefore, we had to slow down our launches, and that actually moved a lot from November to December end for one of a project called Shriram 122 West, which is the only launch we had last quarter. This is a second project on the ASK platform, which got launched -- soft launched in December end. And this otherwise could have generated some volume, I'll explained the volume loss as well. We also had delayed plan approval or subsequent RERA in one of the projects in Bangalore, where prolonged process at the BBMP, at the regulators level or the authorities level, as well as certain jurisdictional ambiguity that was faced in terms of whether BBMP should approve or the local authority should approve. That caused the delay in one of our project called Shriram Sapphire, which was originally called Summer, but now it's called Shriram Sapphire, that is getting launched now. But both these RERA came in well into January. And therefore, these delays had to be delayed or deferred to Q4. So Chennai got launched, but towards the end of the quarter. Bangalore got deferred to Q4, which we will be launching in February. We got that RERA yesterday. Similarly, the same bureaucratic, there are certain issues. I'm sure all of you have heard from our industry peers on what the Karnataka regulatory environment is facing. We had some delays in the OC -- receipt of OCs that impacted us on a handover of the units, and therefore, income recognition got pushed. As I said, we could handover only 780 units during the quarter. That could have been much higher because, just to put it in a context, we've got 1,000 units related OCs were received only towards the last week of December or early January. So that's the kind of quantum of the revenue recognition of the handovers that got pushed to Q4. As a result of all of this, actually, we had volume, value and income recognition impact. Almost we -- on a conservative basis, if I look at what could have these volumes done, we lost at least 250,000 square feet of volume from what could have been done in Q3 got moved to Q4. It's not lost. It's just deferred. So we are not that worried. But from a quarter-to-quarter perspective, we got a hit on it. from a volume perspective. Similarly, hand over, as I said, got -- we lost the opportunity to hand over and revenue recognized. The quantum of the revenue recognition should have been about INR 130 crores to INR 145 crores of where revenue recognition got deferred, and that's a quarterly -- quarter-to-quarter mismatch, but it's not a loss to our revenue for us. We are confident of capturing this in Q4. But on a Q3 basis, we lost it. Collection also was lower to some extent if these launches have happened, if the handover had happened, those related collections should have come to us in December. So that's the kind of impact we went through. Despite that, we managed to close the quarter with a marginal growth in volumes, near flat revenue, sales value and a meaningful growth in collection. But for these four factors, we would have actually done even better in terms of both volume, as I said, 0.25 million square foot got lost, which put us in a very strong double-digit growth in volume terms in Q3. Slide 5 actually gives the same message but goes into detail of each project, what happened. As you would see from Slide 5, most of these external factors have now come under control. Obviously, the flood issues also over and now behind everybody now. But the OC and approval-related issues are behind us, except for Adde Vishwanathapura, which is a launch that was originally planned for Q4 -- is still being targeted for Q4 where we are at an advanced stage of plan approval. And beyond this one, remaining three projects are well under control. So we think we should be able to end there -- end the quarter with four launches -- I'll explain that in a subsequent slide. But other than that, most -- most of the launch and volume-related factors are within our control now. No regulatory or licensing approvals required at this point of time. From a OC perspective, all of these OCs have come except for one project and for one phase of Park 63 in Chennai, which is still awaited from CMDA, which is regulator -- the local body in Chennai. All other OCs have been received already with a 30, 45 days delay, but it is in our hand right now. And the registration has started commenced already from January. And efforts moving at a full pace, and we are therefore confident that we will most like -- we will recover most of the 3,000 unit handover target that we had for full year. We are currently at 1,600 plus, as of the December. We are very confident that we will be in the 2,800, 3,000 unit handover targets by the end of March. Moving to -- I made a comment in the earlier slide, saying 9 months performance is about 70%, 70% -- around 68% to 70% of our annual targets. Slide 6 actually tries to give you the comfort that this is not an unusual number. The 30%, 35% of the annual target to be recovered or to be achieved in Q4. It's not an unusual number for us. We have -- Q4 is traditionally the strongest quarter for us, both in terms of sales volume and value, therefore, we remain very confident of capturing that gap. And we are targeting, as I said, four launches of a 3-year -- OCs that are planned approvals, then RERA done. One project is awaiting for the -- is an advanced stage, where it is likely to be receive the demand node anytime soon, which will put us in a reasonable time for launching this first project by end of March in Bangalore. I have another slide to explain the individual project details. So overall, we believe Q4 targets are in sync with our historical Q4 trends with all the factors, most of the factors are under our control now. We believe we should be able to catch up and therefore, deliver a full year number, give or take small variances, but we should be well on track to achieve our full year numbers as we speak. Looking at the overall snapshot for 9 months in Slide 8, as I said earlier a couple of times, 3.03 million square feet of total sales so far, 12% growth year-on-year. Aggregate sales value at INR 1,654 crores, 22% growth year-on-year. I explained about the Q3 already. Collections are above INR 1,000 crore mark reflects 20% growth year-on-year. Construction momentum has been very encouraging and strong. We have commenced construction activity, as we said in our last earnings call. We are going to start construction of some of our newly launched projects in Q3. I think those constructions have started including our latest project of Esquire in Koramangala, has also commenced activity. So all the new projects have gone on to construction more now. And majority of the focus in the last quarter was on completing post-project -- project completion and handover related activities. And therefore, the mission was excessively focused on Q3 completions and most of the projects have now reached that OC stage. Whatever is due for FY '24 income recognition have all reached that OC stage by end of December, early January. So I think now the mission will be full blown focused on ramping up activity in other ongoing projects. So very, very comfortable with the construction activity. In a subsequent slide, you will note that you will be seeing the fact that all the handovers that we are doing this year are all ahead of RERA time lines. And that's why the internal mission was being pushed to achieve a deadline, which is an internal deadline to ensure that we are able to demonstrate the customer as well as a larger customer base that we are now delivering ahead of RERA time line consistently on projects. I think we have reached that milestone very comfortably during Q3. Focusing on financial performance has been a satisfactory 9 months could have been better, but for the Q3 adversities. But we are very confident, as I said earlier, it is not a lost revenue and lost volume. It is only a deferral. We are very confident of catch-up in Q4. Therefore, I think 9 months seems reasonably comfortable or satisfactory for us. EBITDA is up by 14%. PBT is up 11%, PAT is about INR 55 crores compared to INR 68 crores for the full year last year. So I think we have covered a large part of the ground from the financial perspective as well. But I'm not saying we have reached there. I think Q4 has a lot of work to be done. -- and -- but we are confident of getting the work done and delivering strong earnings growth for the full year. EBITDA margins are stable at around 25% as we have always maintained. We are confident of maintaining our EBITDA in the mid-teens -- mid-20s. I think 9 months this year also is very close to that benchmark. It moved up from 20% to 23% last year, 9 months to about 25%. So I think a very comfortable picture on the margin front. As I said, earnings could have been stronger or would have been stronger, but for delayed OCs and -- now that the factors are within our control now, I think we should catch up. Cash from operations is an interesting trend there. The free cash from operations has been around INR 178 crores compared to about INR 115 crores for the entire full year FY '23. So there's a reasonable pickup on cash unlocking from the project side. And I think that had got utilized for pre-paying or repaying some debt as well as we did a reasonable investment on the new project investments. I'll show you a cash flow side subsequently. Interest costs have been flat for the 9 months, including onetime costs that we incurred and the non-cash Government of West Bengal royalties that we provide every quarter. Overall, finance cost for the 9 months is up about 15% but that's largely because of that -- interest costs associated with the acquisition of a project in Chennai. Shriram 122 West is now -- as it is called now. That acquisition has some interest until we transfer this project to ASK platform. That onetime cost is what is creating the disruption. But otherwise, actual interest cost is almost flat. Cost of debt is stabilizing around 11.5%, and we believe we reached a reasonable stability, continuing to work on further reduction, but I think the incremental progress will be slow, because I think the market -- we have reached a kind of a plateau in terms of what we can do in the current markets. But our efforts on refinancing and refinancing activities are continuing to bring down the rates apart from gross debt itself. On the Business Development, as Mr. Murali pointed out, the Board today approved the entry into new markets, the Pune market. I have a couple of slides down the line. I'll explain that more in detail. But an exciting moment for us after a reasonable gap, we are making an entry into a new market. So this Pune, we are all focused on making it a successful entry. But the Pune market reflects very similar to our current operations. I'll explain that in the subsequent slide in a few minutes. Project pipeline remains strong despite all the completions that we are doing with about 44 million square feet of development potential, out of which 23 million, 24 million is ongoing, and therefore we have 20 million square feet of future potential, comprising of some deferred projects of about 7,8 million and about 12 million, 13 million square feet of project getting ready for launches. So overall, it's a meaningful pipeline that we have, and therefore, growth momentum should sustain. Logos, I'll explain that whole thing in detail about logos, which still -- the only thing we are waiting for is the Government of West Bengal approval, where we have some reasonable traction on it in terms of the approvals as well as our ongoing discussions with them on the other aspects of Bengal, which is the Government of West Bengal litigation that we have, royalty payments and all that. We'll give an update towards the end of this presentation. But overall, therefore, but for some minor time deferred activity or by minor setback in terms of deferral of some volumes and revenue recognition. Overall, the trend for Q3 has been good as well as the 9 months has been satisfactory in that context. Slide 9 just captures exactly what I said earlier in a graphical form. So I'll kind of skip it for now. If you have any questions we'll discuss. Launch, I want to spend a minute on this slide 10 on the launches. I would like to focus on the bottom table. As I said, we are targeting four launches, out of which Shriram Sapphire, which is the Bangalore project that I said, got deferred from Q3. Now the OC has been -- the RERA itself has been received earlier this week. So therefore, the project will go live now. Shriram Shubham, which is a new product development adjacent to our existing project called Shriram One City where we have done reasonably well in terms of sales velocity and pricing of plots. This is adjacent where the acquisition and all the process is completed. Launch preparation is underway already. Pune, as I said, this project is at a near ready stage, last mile activity spending, but we are confident of launching by end of March, if it delays for some reason, April. But Adde Vishwanathapura is a project that I think is in the last leg of approval, demand note is expected any time soon. So market seating will happen sometime in March. There are -- if you may recall that some people have asked us in the earlier call -- that you used to have a few more launches planned for FY '25, what happened to them? As you could see from the right-hand side box, most of these were related to Kolkata because of the ongoing positive development in Kolkata, we have deferred chasing these approvals. Therefore, they got postponed to a later date, most likely in FY '25. But the volume impact of this Kolkata will not be significant -- because the project itself. The entire salable potential in those projects would have been about 700,000 square feet. So we're not that unduly worried about the number of launches because the square foot involved in those projects are very small. Moving to Slide 11 on the pricing. We have consistently shown this earlier. So, you have seen this earlier. For a 9-month period, the average price improvement to us as a product portfolio level is about 15%. Adjusted for a couple of projects that have been removed, because that will disrupt and distort the number because they were high priced projects, high ticket type, high per-square-foot realization projects. So on a comparable basis, at a portfolio level, I think we are about 15% higher compared to about 7% -- 6% to 7% that the Bangalore market have seen, about 4% increase that Chennai market has seen. Based on whatever the publicly available research report from large property research companies. So overall, the bottom line is we seem to have done better than the market average price improvements. That's a reflection of our conscious effort to upgrade the portfolio as well as keep moving up the price curve to bring down the gap between us and our competition in respective segments. Another important factor in the pricing front is that we remain meaningfully above the 6,000 mark in the mid-market product. As some of you may recall, your queries and questions about low pricing that we used to sell earlier. Just as a benchmark, we use to sell our average mid-market products were below INR 5,000 mark in FY '21, '22. So from there, we have come up all the way to INR 6,200 over the last 2 years or so. And that's an encouraging trend. We are confident that the game is not over as yet. And I think we are on the right track. We need to move up the price curve further to bring down the gap between us and our competition, and we'll continue to work towards it. On the execution and handover, Slide #12. As I said, most of the OCs have now come in our hand. Therefore, we are very confident of capitalizing on this 1,400 units that will be ready for -- that is ready for handover and OC are now received. We wish that it was received in November and December, but be that what it may. We have now received them in end of December, early January. Team is working hard to clock all the registrations in each of these projects. Shriram Greenfield, Chirping Woods, Liberty Square and Southern Crest. The four projects are in Bangalore. Temple Bells and Park 63 2A, is a phase -- this is in Chennai. And Park 63 2A is the only project where we have commenced the registration in few towers, and we are expecting the partial OC for remaining towers in the next few days. So once it comes, that will also be done except for this one project -- a few towers of 1 phase. All of the OCs are under control with us. Shifting attention to Slide 14. Financial highlights, 9 months. As I said earlier in the summary, satisfactory 9 months, we have flat revenues. EBITDA is up 14%, PBT 11%, a net profit of INR 55.3 crores, marginally higher than 9 months last year. I explained most of it. Therefore, I would not repeat and I'll explain the numbers as I go to the next slide. But suffice to say that our Q3 suffered, but we are confident of recouping them because they are all just deferral of volumes and revenue recognition to the next quarter, not lost, and therefore, we are confident of our full year numbers. The big delta which happened -- even that happened in the 9 months is the -- apart from the acquisition of projects and dropping it into the ASK platform. The big acquisition -- big event for us in the 9 months was the acquisition of -- reacquisition of JV interest in Shriram Park 63 from [ Mitsubishi ] Corporation -- our [ SOL ] partner in the project. I think that's already showing up to some extent in the financials, but the project came with a big opportunity as well as some burden along with it. The opportunity was very simple, but it was de-risked completely. Almost 75% sold. Phase 1 is handed over. Phase 2 is at an advanced stage of construction. And therefore, a derisked project, if we acquire a 75% -- 70% interest from Mitsubishi -- we got INR 500 crores of incremental revenue potential for SPL because that becomes -- from a JV, it becomes a subsidiary. So we'll be capturing the entire 100% revenue interest for us. And that's why we acquired this project and associated profitability. The pain -- the burden that I referred -- or the pain that we will be incurring as a result of this would be the fact that our gross debt gone up from INR 350 crores in Q1 this year to about INR 500 crores in Q2 this year, and that's the burden that we carried, and therefore, associated interest will continue for a couple of more quarters, till we give them a full exit in December '24. We have given them two payments, two tranche payment out of the three tranches available to be paid September and December '23. Two tranches were paid already to Mitsubishi. The last and final settlement will happen in December '24. We expect to do that from project cash flow because projects will be ready for handover by them. So we'll have a complete handover to customers and unsold value gets recognized. We'll accumulate this cash flow to pay Mitsubishi, the virtual -- self-feeding mechanism. DM has shown significant stability. Remains a large contributor to volume, remains a 10% share of revenue as a DMP. And therefore, that stability is an interesting one and is gaining further momentum with some of the new long projects to be launched are coming from DM segment. Shifting to actual numbers, Slide 15. You would have seen this already. I will give a brief highlights on these numbers, 9 months '24 versus 9 month '23, first two columns, revenue growth is muted primarily due to the OC-led handover delay suffered in Q3, as I said a couple of times already, 60% of the revenues to date were driven by some recently completed projects. So the first 9 months of all the completion that we have done as well as some of the OCs that have come towards the end of December. All of that has helped us in talking decent revenue, could have been better, but it has still been a very encouraging revenue for us. DMP accounted for 10% of revenues, driven by three Bangalore projects, new projects in Chennai, which is we did a soft launch in December, that will start showing impact now. We believe the cost of revenue has dropped 14%, primarily reflects the project mix because the project -- those reached revenue reduction threshold were high-margin businesses, and therefore, the proportionate change delta and cost is lower than lower than the revenue that came up. Overall finance EBITDA margin is about 25% compared to 21% in 9 months '23. We have increasing confidence on stabilizing this margin at around mid-20s, not just in '24, but also in the coming years. As I said earlier, Overall, finance costs is up about 15%, but interest cost -- interest expense alone remains flat. Just to differentiate, the finance cost includes two other components other than interest expense. One is the unwinding impact of the Government of West Bengal royalties that we keep accumulating. So that unwinding effect is almost flat. The big delta came from this INR 12 crore burden that we associated with the acquisition of new projects Shriram 122 West that I explained 1 minute ago. So therefore, interest expense is nearly flat, and that gives us the comfort. I'll come to the Q3 in a minute. I talked about the Mitsubishi already. The coupon is also part of it, and therefore, there are a more prominent impact in Q3. I'll explain it when I come to it. So PBT is marginally higher at about INR 64 crores. Share of JV is nearly 0. The income recognized in Park 63 now is being a subsidiary will go into total revenue, share of JV, therefore, reflects all of the other partnerships, three joint ventures with the landowners in Bangalore, two joint ventures with ASK in the financial -- as the financial investor or financial partner. These are the five JVs that we have. Net profit is at INR 55.3 crores -- my apologies, is up 5% year-on-year and despite a deferral of revenues. 9-month EPS is about INR 3.24 and compares well with the overall full year EPS that we had for FY '23. So I think with the end of -- by end of this year, we'll show a meaningful growth in net earnings as well as earnings per share for the full year FY '24. Just looking closer at Q3, as I said, was a bit of a setback or disappointment for us. Q3 financial -- our revenue recognition is affected by these adversities that I spoke a couple of times in the last 10 minutes -- or last 15 minutes. Therefore, I'm avoiding the duplication of it. It suffice to say that we lost nearly INR 145 crores of revenue recognition potential because of deferred handover. And therefore, you can visualize -- even at a 9%, 10% PBT margin that we have lost about between INR 12 crores to INR 13 crore, INR 14 crores of PBT potential, but that's not completely lost as a company or as a financial year. We'll recoup them in Q4, and therefore, we remain optimistic of full year number. Shifting attention to the cash flows on Slide 17. We had -- overall, you see the chart on the right, which shows enterprise-wide collections, of which what belongs to Shriram consolidated financials, is what is the bottom most part of the pie of the chart. For 9 months, INR 499 crores belongs to Shriram consolidated collection, remaining collections belong to joint ventures as well as DM INR 450 crore at joint venture level and INR 124 crores at the DM level. So overall operating cash flow -- free cash flow -- cash flow from operations remained strong at INR 178 crores, which is far ahead of our -- far significantly above full year operating cash flow that we had last year. That puts us on the right path as we have always said and believed FY '24, '25 and '26 with all the handover, which is coming through, we are very confident that the cash significant unlocking of cash will happen, from these projects. And therefore, this just reaffirms our belief, the first 9 months reaffirms our belief. We prepaid our scheduled repayment as well as prepayment together is about INR 189 crores of net outflow towards repayment of debt and interest expense, obviously, on top of it. Therefore, even after this servicing, we had a free cash flow of INR 27 crores from the operations, and we utilize about INR 86 crores between this free cash flow and the cash balance, treasury cash balance to make new project investment in terms of acquisition of development rights, and that's towards augmenting new project pipeline. So overall, therefore, meaningful cash unlocking from the projects, mostly used for new project acquisition and debt repayment. And therefore, we -- liquidity -- the overall liquidity conditions are fairly satisfactory at any point of time during the quarter, we were between INR 60 crores and INR 80 crores on a daily basis. So that gives us the comfort that we have a comfortable liquidity for meeting our operational requirement, our growth requirements. Shifting to Slide 18 on the debt. As I mentioned, the debt has moved up because we acquired the debentures from Mitsubishi Corporation that they were holding towards their economic interest in Park 63. Even with that, our debt -- gross debt is about INR 500 crores, which as you may recall that it dropped to INR 360-odd crores, net-debt of [indiscernible] -- about INR 400-odd crores of gross debt somewhere around Q1, Q2. It moved up thereafter because of this acquisition or conversion of JV into subsidiary. But with that also, we are below March '23 levels in terms of debt. Our net debt remains is around INR 440 crores. We believe it should be on a declining path in the coming quarters again. The equity ratio, 0.36, very comfortable. And as you would appreciate, it is one of the lowest in the sector. And I'm sure -- based on the publicly available data. And we believe 0.36 will now be on a declining mode again in the coming quarters and next fiscal. And cost of debt, as I said, I think, has plateaued around 11.4%, 1.5%. While we are continuing to work on refinancing activities, given the interest rate markets conditions, I think the incremental drop will be a smaller marginal drops. Therefore, I believe it's plateaued. While we are continuing our efforts to bring down further, even a State Bank of India construction loan, which is usually considered a benchmark for the bottom. When we entered SBI 18, 24 months ago, we were at about 10.2% 10.3% today, those loans are now costing us about 10.8%, 10.9%. So the new loans are coming at between 10.8% to 11.2%. So the benchmark bank rate itself has gone up post 200 basis point increase by RBI and the benchmark rates over the last 24 months. Therefore, we think the incremental drop will be marginal. But our efforts are still continuing in terms of bringing it down. Spending a couple of minutes on the new market entry as -- after a long gap -- we have -- as you know, we have been exploring new markets like Hyderabad and Pune for more than a year or more than 18 months. After careful evaluation of the market, our competitive advantage in that market what would be. And looking at various projects, we have proposed and the Board has approved entry into Pune markets earlier today. And as you can see from Slide 20, Pune is a very promising market for us, primarily because the market substantially reflects a similar characteristic as to our core markets. In terms of customer profile, in terms of demographics, in terms of the product ticket -- realization bank in terms of the ticket sizes and the size preferences. The market is majority dominated by mid-market and to some extent, is affordable, that together account for about 75% of the market. And Pune is the second largest market by absorption among the top seven markets in residential real estate. So it's a large market, has a very strong domination for end user-driven demand, has a very strong bias towards salaried class, self-use house, 2-bedroom, 3-bedroom kind of apartments. INR 5,000 to INR 8,000 a square feet kind of pricing. Therefore, a ticket size of around INR 60 lakhs, INR 50 lakhs to about INR 80 lakhs or INR 90 lakhs, also INR 1 crore. So it's kind of very similar to our Bangalore and Chennai markets, and therefore, we think it worked very well for us. Shriram, as a brand is very well known because our financial services as a group business. We believe we should be able to leverage that and -- penetrate this market very successfully. Slide 21 talks about the opportunity that we have. There is a project that we have identified in Umari, Southern part of Pune. It's one of the most sought-after location, sort of a micro market. Large tracks of lands are available for future development, so that macro market should support us to grow stronger in the coming years. Market dynamics I just spoke about, very similar to Bangalore, Chennai markets. And this project is about -- spread over a 14-acre land, 1.7 million square feet of residential and 0.3 million square feet of commercial associated with the plan approvals are there. We are in the -- because we are entering as a DM partner. So this is a project on the DM model. Since they are entering the DM partner, we need to get the plans re-endorsed -- reaffirmed. So we are in the process of getting that process through. And once that final lack of approvals clears, from a new relationship that we have in the plan because we will be part of the RERA and so on and so forth. So then we will be applying for RERA and we are -- we are looking forward to a formal entry somewhere around March. This project has a total revenue potential of about INR 1,300 crores of sales value, and it has deemed at around 18% DMP implicit of marketing costs. So very attractive, low capital-intensive opportunity that we have identified. We are making good progress, and we'll make a formal announcement on the launch very soon. But today, the Board approved both the project as well as entry into Pune. Looking to shifting gears to the outlook and what we see for not just '24, but what do see for '25? I think we see -- Slide 23 gives you the comfort on the fact that our overall target remains same. Strategically, we will work towards delivering a 20% average growth over the next 2 to 3 years. We'll progress towards maintaining our profitability and move towards 0 debt. As you have seen or heard us so far in the a couple of times in the last -- in this call, that the debt has moved up in Q2 towards the end of Q2, it moved up on Q3, it's around same INR 500 crore level. The intent is to bring it down. as well as the proposed cash flows from monetization activities, which should be in a net 0 debt -- net debt -- 0 net debt position sometime soon, definitely in the next 18 months. Max 24 months. But it's a combination of large cash balance as well as declining gross debt from where we are today. '24, I think, as I said earlier, we have a good confidence on Q4 -- and therefore, we have -- we remain positive and confident about delivering our full year numbers. '25, I think we have a good lineup, we will be ending the year with about around 5 million square feet of unsold area from our ongoing projects. Just to recap, as you know, we have 54 million square foot pipeline, out of which 24 million square feet is launched ongoing. Out of this 24 million, our share will be 23 million. Out of 23, we have almost sold 80% of it. Therefore, we believe we'll end the year with opening inventory of roughly about 5 million square feet. We are targeting to launch another 6, 7 million square feet over the next year. That should feed a growth in FY '25. So therefore, we have a reasonable visibility on volume potential for FY '25. On revenue side, obviously, as you know, our revenue recognition is 3 years from the sales. And therefore, '24, '25, '26, we have a very good visibility. 70% aggregate revenue is coming from volumes sold already, and therefore, that should keep feeding us in terms of overall revenue recognition potential and therefore, FY '25 should show a meaningful growth as well. 24 Slide, just captures the same fact in a graphical form. So I'll pass this for now. And Slide 25, an interesting aspect that I want to draw your attention. Non-financial, but as part of our committed efforts to ensure sustainable development as well as a green building in our overall residential development portfolio. I'm sure all the commercial activities are green building focused or certified. But resi, I think there's an increasing trend towards moving towards green buildings. As for overall sustainable development activities as well as a customer preference towards green buildings. And we have embarked on edge as our preferred framework for residential Green Building Certification. This is the IFC World Bank Group certification framework. As a good encouraging start, we already got three buildings recently completed buildings. Three of them were certified as [ 3A ] certified. Shriram Guru which is, as you know, we got the handover process started during this year. Southern Crest a significant part, we handed over during the year. And Park 63 is coming in phases. Phase I was done earlier. Phase 1B and 2A are being handed over now. All these projects have got -- have been certified by [indiscernible], and I think that's a very encouraging start for us. We are confident of continuing this accelerating this momentum further to be one of the leading players in the resi play -- resi field that will actually focus on green building for all our projects. Last slide before I wind up is the pipeline. I spoke most of it already -- and therefore, I just want to draw attention to the fact that 1.8 million has got completed and moved out of this pipeline. It has become our completed category, and we have added about 1.9 million square foot. Therefore, we are remaining almost same at about 53 million square feet, of which only about 8.5, 8.6 million square feet are what we call is deferred primarily where some last mile land-related activity still pending. But the remaining 12 million, 13 million square feet -- remaining 20 million square feet is available for launches, and a large part will be launched over the next 18 months, 24 months from now. Shareholding, of course, all of you have seen, there's no change in shareholding and the discussion that we had on the promoter stake quantum remains unchanged. The discussions are still continuing. Promoters will continue to own 28% of this company. And -- and the rest of this is, we had some change in the private equity holding. And now this current shareholding reflects a more stable. We have a strategic investor with about 14% stake. Institutional investors own 10% of the company. Public and body corporate own 36% and 12%, respectively. So that's fundamentally what I had to share. Slide 29, just reiterates the overall investment team here. well-governed, listed branded trustworthy branded player, proven track record with a strong growth outlook has scaled up well post RERA from 1 million square feet to 4 million-plus square foot sales, has further potential to scale and has a demonstrated capability to scale, capital will not be constrained because it's pursuing an asset light model. The big beneficiary of RERA capitalizing on that opportunity to be a consolidator, meaningful leverage and has accessed the capital. And therefore, we believe we have a good platform and a canvas. Industry outlook is positive. And therefore, we should be able to combine these two and deliver a meaningful value for our shareholders going forward. I'd like to stop here the industry outlook, you all have much better visibility on it, but we have just shared our view from publicly available data. I'll stop here, and I'll be -- I'll -- myself and Mr. Murali very happy to take all your questions and try and answer as quick as we can. Thank you, and over to you.

[Operator Instructions] First question is from the line of from Rohit Kapoor from Systematics.

Yes, congrats on your Pune launch. So given the fact that you're looking at commercial in Pune, I want to know like, is this a shift from the earlier company's policy of only focusing on residential -- so can we look at the more commercial projects in the near future?

No, as we said earlier, right, we will remain focused on resi and that two -- and mid-market affordable resi. If the project plan approval already has some commercial activity, being a DM project, right, which it comes as an integrated parcel. So we'll have to develop them. So our role will be restricted to developing that commercial part of it, and that's not a very complicated because, as you know, as a DM, we have done very large commercial projects, right, in Chennai and other places. So it's not a core -- strategy does not change. It is just that -- this asset comes along with a small -- very small, right, 0.3 million square feet of commercial. So therefore, that does not move us away from resi to commercial.

It is not a commercial development but say it's a township part of the residential development, a little bit of retail. A very small office space -- office space. So this has been our forte. And the Pune market was that way. Pune, there is a good demand for the, I mean, [ high street retail ]. And we are building about 1.5 million square feet. That micro market has got a good supply of apartments close about 30,000 units in and around within about 500, 600 meters range. So all that will serve, and this is on the main road. So it's going to be a good value add for us.

Okay. And secondly, on the [ ASK ] development platform, I believe that the 12-month period as the last. So what is the update on that, like I think 40% is yet to be deployed. So there's extension regarding that?

Yes. So we are evaluating projects. We will find -- we can actually pump another one large project into the platform. Both partners are fully engaged. So I don't think a time line will be an issue, but the intent is to deploy as quickly as we can. Since we have deployed INR 200 crores from the platform on acquisition of the Chennai project. The entire JVs, their focus -- both partners focus like ASK is focused as well as Shriram to support that thought process was on ensuring a successful launch of this project in Chennai. So that we can move energies towards the next opportunity under the platform. So we are looking at evaluating a few, we will be deploying that in the coming quarters. We may take a couple of quarters to apply.

Okay. And lastly, like given the industry tailwinds and strong brand and track record. Don't you feel the company being conservative in terms of new signings. I understand you have a strong launch pipeline. But in terms of launch velocity also compared to our peers, we are slightly a bit slow. So could you comment on that?

We see a big potential. We are ramping up to reach up to this, I mean, demand today. Yes, we agree there is a big potential for growth today and even and, we are on our path.

Okay. So can we expect some new signings like in next 1 year, like some aggressive signing?

Next 1 year, we have got good plans. Next 12 monts, we got a very good planned ramp-up plan.

Okay. And any new geographies are being planned?

No. Currently only Bangalore, Chennai, Pune will be our major focus.

[Operator Instructions] Next question is from the line of Dixit Doshi from Whitestone Financial Advisors.

This is [ Richa ] from Whitestone Financial Advisors. My first question is how many square feet are we planning to deliver in Q4? And then what would be the revenue that would be recognized on account of this in Q4? Then I also want to understand the noncash charge, basically the unwinding impact that we have on our books. Till when this would be there? And how much of it is still left? And sir, then my third question is, so when we give our realization, the average realizing per square feet. I want to understand, this is basically on built up, right. So carpet, it would be around INR 9,000, INR 10,000, Am I correct in assuming that? And so then I have two more questions.

You're talking about selling price you're talking about?

Yes.

Selling price, each market difference -- behaves differently. Because in Mumbai, everything is priced on carpet. Here, in Bangalore, it's all in super [ built up ] SBA.

So when, we gave out the INR 6,000...

All of our peerrs are also doing the same, right? So the comparison would be still relevant because just for taking some names, Sobha, Prestige, Puravankara, Brigade, all of them sell in South India, right? Bangalore, Chennai, will all have a similar price benchmarks. Unless they go to Pune -- unless they go to Mumbai like Prestige's Mumbai projects may quote on a carpet area. But most of the mid-market -- most of our other regional players will -- our numbers are comparable.

Yes. So built up, right, sir? And then can i assume carpet would be around INR 9,000 when we say our average realization is INR 6,000. So carpet would anyways be higher than that, right?

Yes, the ratio of 25%, 30% built up to carpet, that discount. So I'm sure all of us can put backwards. You have two other questions. I'm going to start with the first one, we started about the total area. So based on the current plan, we should be completing and roughly about 5-odd million square feet of area to be completed. And that was -- and with 3,000 square feet handed over would be from -- would add about 5 million to 6 million square feet and over. Your second question was about the unwinding impact. So this is truly related to government of West Bengal royalty charges that we provide. We are quite -- as you know, as you may have read already from the previous presentations, we have this royalty obligations on our Bengal development, where the overall liability aggregates were INR 250 crores to be paid over a period of time. So in the balance sheet, as you may have seen, we accounted for NPV value of this number as a liability. So every passing quarter, we will have about INR 5 crores roughly being impact of unwinding, which is basically NPV adjustment so that the balance sheet liability keeps moving up and becomes a correct number -- correct absolute current number on a current basis, when we pay them, that will be reflecting the full liability. That's the whole logic which is used -- having said that, I recall -- I did mention that we will brief about Kolkata subsequently. We have -- as you know, we have challenged this number in the courts because this 4% royalty itself came in lieu of our indirect way of non-compete fee, which were otherwise were supposed to be paid to [ Hindustan ] motors as per our original agreement. Now that the non-compete period was over as well as [ Hindustan ] motor themselves, we're monetizing the remaining land that they had with them out of the full Ambassador factory, part was given to us and part was retained by them. And therefore, we had gone to the court against the Government of West Bengal -- against the parties, that the non-compete is not payable and therefore, why should I pay as a royalty. We are -- as we mentioned in the last quarter, we are in discussion with the government in terms of finding an amicable way of solving this problem. And we believe we have made a meaningful progress. We are hopeful of explaining the whole story in detail to you in the next quarter, hopefully. Or if it's not -- maybe in the next couple of quarters, we expect to see visibility on it. And until that visibility comes, if the visibility comes on settlement, then this charge might not come up. Assuming it doesn't come at all, this unwinding will continue for a couple of more years, till we reach that [ resi ], as of March '23, our balance sheet showed a total liability of INR 220 crores. So the remaining INR 30 crores has to be unwound and therefore, it will continue for another fiscal at least.

Okay. If we don't have visibility?

If we don't have a resolution. But I think we are -- our desire is also to solve it amicably. So we are hopeful of reaching a meaningful conclusion in the next quarter or two.

Okay. So for 1 more year, INR 5 crores every quarter we will have to do if there is no resolution, right, sir?

Yes.

And sir, just coming back to the earlier question that you answered, you said we'll be delivering 5 million square feet in Q4, is it?

No, no, overall full year. So far, we would have done about 2.5 million already. Because we've done almost half the handover, right? 1,600 units were handed over. We are looking at handing over about 3,000 units this year.

So that would be how many square feet? The 2.6 million square feet is what we are going to deliver in Q4?

No, no. 1,600 units have already been delivered. I don't have a ready number, but I assume it will be about 2.5 million square foot roughly. In the first 9 months -- in the first 9 months. So the remaining 1,500, 1,400 or thereabouts, is what we are targeting to hand over during Q4. I suspect that will be about another 2.4 million, 2.5 million square feet.

And I just have two more questions. So in Slide #10, we have listed the projects, Shriram Esquire and Hebbal. Now sir, both these projects were actually launched in May '23. And the slide mentions that we have sold 44%, 45% till date. So just wanted to understand that are we on track for this project? Or it is a little slow, like the project -- the pickup of the project is just low or in normal course of business, typically in 1 year -- is what typically we sell like 44%, 45%?

No, I think you got the table slightly incorrectly. This is the sold volume percentage in the 90-day period, not to date. So Shriram Esquire, as we speaks at the end of December or January. At the end of December, Shriram Esquire is 70% sold. Shriram Hebbal One is fully sold. The table here is intending to show -- what is the first 90 days performance. So there is a common metric, right, is comparable number, that's right. So as of now, Esquire is about 70% sold. That's about 85,000 square foot has been sold already. And Hebbal One is completely sold, 144 is sold.

Okay. So then my question is on Slide #12, where we talk about the handover readiness. So in that, there are three projects: Southern Crest, Temple Bell and Park 63. For this, we have actually not yet received the OC. So I just want to understand -- are you on track for these projects? Or because we are saying that you are going to hand over these in Q4, but still the OC is not received.

So, let me just try to explain that. So Greenfield, Chirping Wood Tower 5 and Liberty Esquire, they're all in hand. They account for most part of the proposed handover, if you look at, right, because these are the new projects, right? INR 1,400 -1,400-odd crores coming from these three alone. Southern Crest Tower D, et cetera, it is at fairly advanced stage, and there is one minor hitch, which is holding it back. And even if it doesn't come, it's a 50-unit difference. So we are not that unduly worried. It's not going to change the overall outlook for the Q4. But we would like to have it, not that I'm ignoring it. but that's linked to some other challenge that somebody has put locally. And so we're trying to solve that local issue. If it doesn't come 50 units -- is at stake, not more that. Temple Bell is actually fine. In Chennai, it's a partial OC, is fine because [indiscernible] is a very large project of ours. So every phase when we complete, we get a partial OC. So the Temple Ville is fine. Part 2A is a bit of a challenge that we are facing, the 250 units, where we had some issue with CMDA, the local body, and there were some shelf impact related challenges that between us as a developer and as a regulator or as a local body, we've been having changing. Since their OC were getting delayed, we went to the court, we have taken the -- we have given -- we have been given a favorable order by the court advising CMDA to issue the OC. In January, we got that. So we are looking forward to receiving that soon because the court order as well as a follow-up order. There are two orders are there. As there only -- now it is at the desk of CMDA again. We're hopeful that we'll get this OC. But this is very common. We go through this from time to time. It's not unusual. But yes, to that extent, if you look at overall, 1,800 units that are there in these five projects, about 300 units are at stake. But if you assume entire 300 is not coming through, then we will end up with 50 units lesser than 3,000 targets that we have for full year. If it comes through, then we would be able to meet that number.

Okay. So one last follow-up regarding the Konin. I think you did mention that INR 1,300 crores is the revenue potential and 18% is the DMP including the marketing fee. So if you could just give me what kind of delivery date are we looking for this project? And what kind of margins do we have in this?

No, it's a DM project. So only DMP matters to us. And it's a 3 to 5 years is the overall time line that you can expect for these kind of projects. 3 to 5 years. Of course, RERA would tell you 5 years.

[Operator Instructions] Next question is from the line of Anand Jay Mishra from Sunidhi Securities.

So in -- so far in terms of area, we have lost close to 2.2 million square feet. And if we add two more projects which is going to be launched. So we'll be launching close to 3.2 million, 3.3 million square feet, against which we are targeting 4.8 million square of sales. So most of the sales, I mean, some sales coming from the sustenance sales. And when you were saying that 20 million square feet, which is upcoming projects, which we are targeting to launch in the next 18 to 24 months. Even if we assume phase-wise. So can we expect some 13 million, 14 million square feet kind of launches in next 2 years? And how would be sales in FY '25 or FY '26? Given the current project and current inventory -- and for inventory and upcoming launch?

Sure. Sir, I didn't get your -- what is the 2.2 million lost?

You have launched two. -- From four projects. This is Esquire, Hebbal...

Understood, sir. Okay. "launched" your talking about.

So you have launched 2.3 million square feet, and you have sold 3.13 million. So normally, launch figure should be higher than the sales figure. Because we are -- I mean, in terms of overall target and we have all these deferment, we are on a lower side in terms of launches. But when we say that now all things are behind, and we are targeting to launch close to 15 million to 20 million square feet of inventory in the next 2 years. So what could be the -- this launch phase well yes, for next 2 years?

Yes, sir. Let me attempt this in two different parts. One is about FY '24, right? So yes, we have launched 2-point-odd million square feet in the first 4 projects, and we intend to launch another let's say, not all of them will become effective in one quarter. four projects are getting about 2.9 million, 2.8 million square feet. Some part will be sold this year. But this is not alone because we still have ongoing project unsold inventory, right? When we opened this FY '24. So the sales that is achieved so far and what we are targeting for the full year is not only from the launches. So there's a sustenance sales as well. When we opened this year, we had about 3.8 million, 3.9 million square feet of unsold inventory with us. right? And therefore, that is also available for sale. That is the combination of -- yes, you are right in the fact that when you launch, you tend to sell much higher, then the sustenance inventory starts supporting -- sustenance inventories start supporting. So combination of two only is giving us this 4.5 million, 4.6 million square feet of volume currently. When I look at next year, based on the launch readiness, we have a schedule of when we want to launch what projects. We believe over the next 18, 24 months, we should be launching at least about 11, 12 million square feet. Coupled with the fact that I just said in the call about -- we expect to end the year with about 5 million square feet of sustenance inventory, volumes that have been launched, net of whatever we have sold, carry forward to next financial year. We believe we will be starting on 1st of April, we should have a sustained inventory of about 5 million square feet from all these projects. And therefore, this 5 million was under 11 million, 12 million of new projects that is supposed to be launched in FY '25 and '26. We should have enough headroom for growing this 20% target that we have in our mind, because what -- if you look at it, it's basically about 12, 13 million square foot have we sold in the next 2 years, right? So therefore, the current 5 million plus new launches should support that kind of volume over the next 24 months.

And this pre-sales number, which we are going to achieve close to INR 2,300 crores. So how this will look like in FY '25 or '26? Can we expect a 25% growth in pre-sale number?

I would request for some time on it next time when we meet, we will -- once the board approves the business outlook for FY '25 and '26. They will be meeting only in March I will definitely share this with you at an appropriate time, not right now.

And second, with respect to Pure project, is it a complete new land or it is some under construction projects, that we have taken over from some other builder or how is it?

It's a completely new land. It's a greenfield land. It's a vacant land now. We have made -- we had done the entire planning, and we have got the approvals now. We are looking at launching end of March, early April.

Okay. So once we launch -- once we launch, let's say, in April, and we are expecting close to INR 230 crore kind of DMT over the next 4 years. So this DMT will flow every year from FY '25 itself for us in terms of revenue recognition?

Yes, DMP is a very standard process, standard accounting process for us. The DMP will come to us. So in the DMP, there are two components there. I specifically said 70%, 18% includes marketing cost as well. So the marketing costs will be paid by the SPV and charge to us so that we avoid double GST here. So net to us, we think that on an average, we spend about 5% to 6% on marketing. And therefore, we should be getting about 10% to 12% as a net DMP to us. Just as an illustration, if I say, in most -- based on what we do for most DM projects, half of this DMP will be accounted on a quarterly basis, based on the cumulative progress on sales. So it's basically sales linked, as we progress till we start recognizing the income to that extent. The remaining DMP will be recognized as we cumulatively progressed the construction activity. These two are the income recognition criteria. The third angle to this the collection, as the -- proportionate to the customer collection, we'll start getting the DMP free to us. So we'll go on booking the DMP based on the sales progress and construction progress on a quarterly basis. And we will get actually cash inflow into -- from this -- from this project to -- Shriram property. We'll get the DMP cash receipt as and when the customer collection comes in. 3 to 4 years.

Even if we take 10%, so that is close to INR 130 crores or maybe first year collection may be lower. But we will have some cash flow, maybe INR 10 crores, INR 15 crores in the first year or then higher cash flow, and that will directly reflect to our PBT, right?

Yes, sir.

[Operator Instructions] Next question is from the line of Karan Mehra from Mehta Investments.

My question is with regards to like you have mentioned -- that you have recently ventured into the Pune market. So will the margin profile be better than in the other regions down south? And also if you can elaborate more on the demand in the Pune region and the rationale behind exploring the market. And like with so much competition by local Pune players, what is our confidence level on penetrating in that region? And what gives us the confidence to do so? And a follow-up on that is that the -- what business model will be functioned within the Pune region, if you can help with some.

Basically, Pune carries a similar market potential of Bangalore. As you know that we are pioneer in Bangalore and we're in the top 3 or top 5 developers in Bangalore. So we see a lot of similarity between Bangalore and Pune. In terms of customer behavior in terms of demand, in terms of ticket price, in terms of product design and also Shriram has got a deep presence in region that is a added advantage for us compared to other real estate developers. Shriram Group has got a very deep presence in the Pune market, or I mean in financial service business. So we'll take advantage of that and so develop the market in Pune. In terms of growth potential, yes, Pune offers a big potential similar to Bangalore for us. Branded large corporate developers will have -- I mean, their own market share. So we are banking on that. And we have put together our team now, putting together a team. We are confident that we'll be able to create a good success in Pune market.

And sir, what business model will be functioning in this region?

We'll be mostly looking at either development management or joint development.

[Operator Instructions] Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to the management for the closing comments.

Yes. Thank you. Thanks, everyone, for your time today and joining us to hear our story on Shriram Properties current quarter as well as forward outlook. We sincerely appreciate your time and support. Look forward to interacting with you on the next conversation in the next quarter. Thank you.

Thank you very much. On behalf of Shriram Properties Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.