Signatureglobal (India) Limited (SIGNATURE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Signatureglobal (India) Limited Q4 FY '25 Earnings Conference Call hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Adhidev Chattopadhyay. Thank you, and over to you, sir.

Yes. Good morning, everyone. On behalf of ICICI Securities, I'd like to welcome everyone on the call today. From the management of Signatureglobal, as always, we have with us Mr. Pradeep Kumar Aggarwal, the Chairman and Whole-Time Director; Mr. Lalit Kumar Aggarwal, the Vice Chairman and Whole-Time Director; Mr. Ravi Aggarwal, the Managing Director; Mr. Devender Aggarwal, the Joint Managing Director and Whole-Time Director; Mr. Rajat Kathuria, the Chief Executive Officer; Mr. Sanjeev Kumar Sharma, the Chief Financial Officer; and Ms. Preetika Singh from the Investor Relations team. I'd now like to hand over the call to the management for their opening remarks. Over to you. Thank you.

Yes. Good morning, everyone. Welcome to the Signatureglobal Investor and Analyst Meet. As has been the trend of the last couple of years today, we have gathered here to analyze our performance during FY '25 and map out our future, which is focused on creating sustained value for all. At the outset, let me acknowledge the dedication of our various stakeholders and express my gratitude to the investors who have reposed utmost trust in our company. Our journey spanning 11 years has been full of achievements and innovation. It is no secret that Gurugram with a robust infrastructure development has been the [ flag bearer ] of the India's residential real estate market, popularly known as a Millennium city. Gurugram is a home to a large number of Fortune 500 companies and also poses world-class educational and health care facilities assets. It is a vibrant job market with continued and abundant migration of NCR, especially from the neighboring states, the demand of premium housing is growing, supported by rising disposable incomes and massive infrastructure in the Millennium city. India's real estate sector is evolving with government policies, urbanization and infrastructure investment playing a huge role in it. The sector, which contribute about 7.3% to the economy today is expected to grow to INR 5.8 trillion by 2047. We are determined to play our part in this as well. Now operational performance during FY '25. It gives me immense pleasure to inform you that the year 2024 and '25 have been full of the achievements for us in terms of operational performance, we achieved the target that we set for ourselves. We achieved our highest ever annual presales of INR 102.9 billion in FY '25, registering a robust 42% year-on-year growth and in the process of surpassing of our presale guidance. Signatureglobal also registered a record annual collection of INR 43.8 billion, reflecting a 41% year-over-year growth at the same. Company's operating cash surplus has zoomed by 79% to INR 16.3 billion in FY '25 from INR 9.1 billion in FY '24. We have also successfully been able to reduce our net debt significantly to INR 8.8 billion at the end of FY '25 compared to the INR 11.6 billion in FY '24. The net debt reduction is despite the significant investment Signatureglobal has made towards the business development. Moreover, during 2024-'25, Signatureglobal revenue from operations stood at INR 25 billion as compared to INR 12.41 billion in FY '24, registering an impressive 102% year-on-year growth. Signatureglobal adjusted gross profit margin has been also improved to 31% in FY '25 from 28% in FY '24, while adjusted EBITDA margin has improved to 14% in FY '25 from 11% in FY '24. Our PAT for 2024-'25 stood at INR 1.01 billion that we have been -- we have seen substantial improvement in PAT margin to 4.1% from 1.3%. The company's average sales realization has also improved to INR 12,457 per square feet in FY '25 from INR 11,762 in FY '24. Launches and land acquisition during FY '25, now we will talk about it. During FY '25, the company has launched 5 new projects, having a combined gross development value of approximately INR 138.1 billion, including Titanium SPR and Twin Tower DXP, premium group housing projects in Gurugram, Daxin Vistas, a mid-income housing project in Sohna and City of Colors, a plotted development project strategically located on NH 8 in strategic micro market. We at Signatureglobal also acquired approximately 48 acres of land in FY '25, including 22.06 acres, which were earlier under JDA for the INR 1,070 crores in Gurugram. The development potential of the land approximately 7.97 million square feet. Now we'll talk about future road map. Looking forward, we will continue to focus on our premium segment and mid-income housing segment and are fully geared up to the emerging market opportunity. Like FY '25, the company will unveil several new projects during FY 2025-'26. One of these projects is scheduled to be launched later this quarter. The [ iteration ] are full of swing and all necessary approvals are in place. With our trust of premium and mid-income housing, we expect our per square foot realization to continue its northward march. We are confident that FY '26 will be another year full of success and achievements. We also remain committed to further improve our market share in the Delhi NCR market. I again thank you for your continued trust and faith in our company. Together, we are on course to achieve greater heights. Thanks, everyone. Now I'm saying to Mr. Rajat Kathuria. Over to you.

Thank you, Pradeepji, for your comments. I'll just take a bit of deep dive into some of these operational numbers for the year. So we are quite pleased to announce that for the first time ever and within this short span of our journey of about 11 years, our company has crossed INR 10,000 crores in terms of sales potential. We ended up achieving the steep target, which was ambitious but doable at the start of the year, but we achieved more than INR 10,000 crores, almost INR 10,300 crores of sales were achieved during the previous financial year. Taking a deep dive into the sales number. So we did about 4,100-plus housing units and at an average price of about INR 2.5 crores per unit. So by and large, playing the mid-income theme because the average price was INR 2.5 crores. That's probably the lower end price point at which housing gets sold in the Gurgaon market in key areas. So we've sold about 4,100-plus units at this ticket size, hence, showing our focus and our determination to be a large and a trusted brand in the mid-income housing segment in our region. This growth was quite significant. We grew more than 40%, 42% almost vis-a-vis the previous year, and the growth came both in terms of volume and value. If you look at volume terms, we sold almost 8.3 million square foot in fiscal year '25, which was almost 33% higher vis-a-vis the previous year, in which we had sold about 6.2 million square foot. So there was about a 33% volume growth. If you talk in value terms, our per square foot realization was closer to INR 12,500, which was -- and year gone by about INR 11,800 a foot. So that also grew about 6-odd percent. We are very pleased with the scenario that while prices continue to go up, and we expect them to go up in future as well due to lack of supply, but the price rise has moderated. We were not as comfortable when the price rise in the previous years were in higher double digits or it was very inordinate in percentage terms. So we are quite enthused that while we are growing in volume, the value terms also, we are witnessing growth. In the forthcoming year, we expect the sales number to cross INR 12,500 crores, which is more than 20% growth over the current year. This is not just the growth projection for the coming year, but even in years to come, we envisage that achieving a 20% plus growth rate in terms of presales over a medium-term basis is an achievable target. So we can -- for the first time, probably, we are suggesting that over a longer term -- medium-term to long-term basis, our target will remain to grow at 20% plus. we have reasonable dry powder with us. We have launches coming up, like Pradeepji said, in Sector 71, 37D and even in the Sohna market, we have inventory with us. So we have launches coming up almost regularly in our key markets. And even if you look at the trend over the last 5 quarters, let's say, since January '24 till date, every quarter in which we have done new launches, we've, by and large, on an approximate basis, achieved closer to this INR 3,000-odd crores of sales within that quarter. Whereas previous quarter, we were planning to do some launches, which got shifted to, let's say, large launch got shifted to the current quarter because of which we didn't achieve that closer to INR 3,000 crores kind of sales, but still we kind of managed to comfortably achieve our annual target. So whenever there are new launches coming, I think that is a good bump up quarter for the sales. And for the current financial year, we are fairly confident that these newer launches are coming up on a steady pace. Collections also have shown tremendous growth over the previous year. So we've collected closer to INR 44 billion, which was almost 40% higher vis-a-vis fiscal year '24. And if you see it as a 2-year trend, our collections between FY '23 to '25, there's a jump of almost 2.3x. We -- our collections stood at INR 1,900-odd crores in fiscal year '23. We've reached almost INR 44 billion in fiscal year '25. And collections were good across newer -- across the markets. On our existing projects, whether they were affordable or Deen Dayal projects or whatever new launches we've done, whether it was Titanium or it was Sohna market, collections have been contributed by all the segments, and there is no segment which did not contribute to these healthy collections. For the coming year, our guidance is to achieve INR 60 billion in terms of collections, which is again, a 35% growth in terms of collections vis-a-vis the current year. To add on to the collection, I think a point to be noticed is our operating cash surplus. So since this is the easiest benchmark to understand the net cash earning or profitability -- underlying profitability of the company, profits are always driven by accounting, which is back-ended when we do completed contract method of accounting. But if we really look at operating cash surplus, so against this approximate INR 44 billion of collections, our operating surplus stood at INR 16.3 billion, which is almost nearing 40% of collections, not exactly there. It's like to be precise, 37%, but we saw a steep rise in the operating cash flow percentage -- operating cash flows as a percentage of collections. Year prior to the current -- to FY '25, this number was closer to 29%. It has jumped to 37%. And in absolute terms, you really see the difference. So the operating cash flow, which was surplus, which was closer to INR 900 crores in fiscal year '24 jumped to INR 1,600-odd crores in FY '25. So that's where with about a 40% rise in collections, we've seen almost close to 80% rise in the surplus of the company, and that shows the healthy state of affairs within the company. Now this operating cash surplus is post considering all hard costs, SG&A costs, taxes, but before any further acquisitions into land. The market conditions stay fairly buoyant. We are very positive in terms of the market scenario even in the coming year. So -- and that gets reflected in terms of our actions as well. So in the year gone by, we've added land almost worth INR 1,060 crores. So in our key markets, whether it be Sector 37D where we've added close to -- more than 5 million square foot of developable area or in Sector 71 where we got an opportunity and we bought the land from one of our JDA partners, our land collaboration partner. We've bought land which has development potential of about 2.7 million. So the underlying current is still very strong. The supply in the market is scarce, and there is huge demand for mid-income housing players -- mid-income housing units. And Signatureglobal is very uniquely positioned to address this demand. We are a very trusted brand. We come up with continuous supply of these units in mid-income housing, and that's why we continue to redeploy the free cash which is being earned. So if you look at the year, out of this INR 1,600-plus crores of surplus, more than INR 1,000 crores went into land acquisition, almost close to INR 300-odd crores was used for net debt reduction. So we added land and we've strengthened the balance sheet out of the surplus, which got created. Even in the coming year, since we are targeting close to INR 6,000 crores of collections, our operating surplus as a percentage of collection will continue to go up. We anticipate it to be close to 40% in the year coming by. As of today, our portfolio looks very good and very much in line with our strategy. So giving some top line numbers, so about 14 million plus is something which we've already delivered. There's another 10 million plus, which is at advanced stages of completion. This 10 million square foot has an underlying revenue -- recognizable revenue of almost INR 100 billion. This is getting completed within this year and the coming year. This number stood close to about 14 million a year earlier, so about 3.8 million square foot got completed. And there's another 10 million with fairly fast pace, which is under fast paced sort of completion as we speak. Besides the delivered portfolio and nearing completion portfolio, there's an early-stage portfolio of almost close to 40 million square foot, 39.3 million to be precise, which could be, by and large, split into 2 subsegments. About 40% of this has been launched over the last 5 quarters, which is about 14.8 million square foot and has a GDV potential of INR 175 billion. The balance 60%, which is at a land stage right now, which is roughly INR 24.6 million, by and large, 40% splitting closer to 15 million and 25 million. So 25 million is something which is a dry powder, which we intend to launch over the next 2 to 3 years, again, has a GDV upwards of INR 400 billion. So we have dry powder enough to fuel our growth for the coming years. And while we are replenishing it, even as of today, we have dry powder comfortably for next 2 years -- 2 to 3 years of launches with us. In terms of -- just allow me one minute, yes, one point to notice in terms of business development is that in the year gone by, we achieved a sales volume of close to 8.3 million square foot, which had a GDV of about 10.3 -- INR 103 billion, which is the sales which we achieved in the previous year. We've again replenished our land almost close to 8 million square foot, but with a higher GDV of INR 125 billion. So in terms of principle, we are using our operating cash flows for our growth and for debt reduction, and we expect the trend to continue. So even in the coming year, as we achieve these surplus in the company, it will be used to replenish land. It will be used to tap newer land opportunities, any large opportunities which come our way or we may choose to further reduce the net debt, which is not significant, but it will get further -- it may get further reduced in the year coming by. In terms of our revenue recognition and profitability, our revenue recognition was almost twice as much as the previous year. We recognized close to INR 25 billion in terms of revenue. As a breakup, we completed close to 3.8 million square foot of area. So roughly at about INR 6,500, INR 6,600-odd square foot of underlying development, the development which got completed had an implied selling price in the range of INR 6,500 to INR 6,600 a foot. The inventory which we sold at those price points gave us good profitability, which was almost closer to 31% in terms of gross profit margin. A lot of our SG&A expenses are basis the current scale of the company. However, even after considering those SG&A expenses, our EBITDA margin was close to 15%. It was about 14.5% to be precise. And even at this level of revenue recognition, we managed to showcase profitability at the PAT level. We've achieved more than INR 100 crores in terms of PAT for the year gone by. In terms of our balance sheet strength, I would like to reiterate that most of the land which is there with the company, this close to 40 million square foot of early-stage developments, which we are doing, the land belongs to the company. More than 90% of the GDV of this underlying early-stage projects will belong to the company. It's much higher than 90%, but yes, 90% is like a very good conservative number. So on the balance sheet, if you understand on the asset side or the inventory side, the 40 million square foot near about with more than 90% of GDV belonging to the company and almost negligible land payments are due, barring something which we bought in the last quarter, some payout may be due in that regard. But by and large, this land is paid for. The net debt of the company is just INR 880 crores. So our gross debt stood at about closer to INR 2,400 crores. Our cash and cash equivalents were in excess of INR 1,500 crores. So our net debt number was less than INR 900 crores, or in terms of as a comparison to operating cash surplus, it was about 0.54x. So in the years coming, even if we very aggressively do business development, we'll make sure that at no stage, our net debt to OCF will not cross 0.5x of the surplus being created by the company. I would like to close this discussion with a quick reiteration on the guidance. So in terms of launches, we are targeting fresh launches in excess of INR 170 billion. We are targeting a presales with an underlying growth in excess of 20%, which should make us cross presales of INR 125 billion. Our collections, again, with a more than 40% rise should be around INR 60 billion for the year. And in terms of our completions, we target 2x the number we achieved previous year, so almost close to INR 48 billion plus of completions we are targeting in the coming year. Whatever sales are being done are happening at -- with an implied EBITDA of 35%, and we are targeting a more than 40% surplus in terms of the collections, which will be done by the company. And lastly, the net debt will not cross 0.5x of the operating surplus being generated by the company. With this, I'd like to end this discussion. But yes, we are, by and large, very, very confident and enthused with the current environment and are very positively looking at the year which has started. Thank you.

[Operator Instructions] The first question is from the line of Pritesh Sheth from Axis Capital.

Congrats on a great year. Firstly, on the launches, INR 17,000 crores, if you can break that up in terms of projects and the time line, so we can keep a track on that, how spread across they are throughout the year? That would be my first question.

Sure, Pritesh. Thanks for asking this question. So in terms of launches, I'll start with the larger ones first. So within this quarter, we are targeting about 1.6 million to 1.7 million square foot of launch in Sector 71, which is Phase 2 of Titanium. Thereafter, we are launching another 3 million plus in Sector 37D. It should be closer to 3.3 million. So between these 2 launches itself, we are launching about 5 million square foot. Adding on to it, there are 1 or 2 smaller launches, one in 37D again by the name of Iconic. And there is some more inventory getting launched in Sohna market. There's some inventory which is with us in project Daxin. There is another project by the name of Signature Global Park in Sector 36, Sohna. So by and large, these launches will happen in the first quarter of the year, and we'll be between 100 million to 110 million of launches will happen within the first 6 months itself. For the second half, there are land parcels, which we are working on the plans, et cetera, but there are more launches coming up in Sector 71 and 37D again in the second half of the year. But this will be like a sustained supply throughout the year, which will happen.

Got it. Got it. That's helpful. So we are -- I think some more will come from the land that you acquire from here on. Is it? Or all of this INR 17,000 crores is there already in the pipeline that we have?

No, this is entirely out of land, which is already with us, and we are fairly advanced in each of these land parcels in terms of approvals. Only those have been considered.

Got it. Got it. On the collections, so I think only miss that we would have from last year would be on collection. We have discussed that in the past as well. But for this year, INR 6,000 crores, which was a similar number you were targeting last year. I think what would be the key milestones? And I'm sure you work a lot on numbers. So if you want to provide a breakup of where this INR 6,000 crores is coming from, from the completions, ongoing projects that you've already sold in last year? So some of those milestones will help us track this number.

Sure, sure. So Pritesh, you're right that we were targeting a much higher number, but that was with the assumption of 2 large launches, both of these Titanium Phase 2 at about 3.3 million plus square foot in Sector 37D, getting launched previous year, which got deferred to the current year because of some, I would say, not just approval delay, but technically more of planning which we ended up doing around these projects. So that was one of the larger reasons for us to miss our guidance of collection in the previous year. Both of these are fairly large projects, almost INR 10,000-odd crores worth of GDV potential exist. In the current year, our collection guidance, of course, is basis both our ongoing projects as well as new launches. So if I may give you the broad split, about 75% odd collection will come out of the projects which we've already sold or -- and 25% is anticipated out of the new launches which we are planning.

Got it. That's helpful. And in general, you want to talk about demand scenario over the last 12 months, 6 months, has there been any change? And how you look forward to in terms of demand? I mean your sales guidance gives us good confidence that you are looking at it as if things are normal. But anything certainly which has changed and which could be key for us to clock this number next year?

Pritesh, In terms of market, we are not seeing very significant competition in this mid-income housing segment. There is some bit of supply and that too by multiple players. If you look at the upper mid-segment to luxury segment, there is supply and there are multiple players who are tapping into that segment. Our focus area is getting more into this early mid-income segment, price points starting from, let's say, about a little less than INR 2 crores and going up to, let's say, INR 3.5 crores to INR 4 crores. So this INR 2 crores to INR 4 crore ticket size -- and depending on different locations, so INR 2 crores will be more in the Sohna market, INR 2.5 crores to INR 3 crores more towards Dwarka Expressway and Sector 37D, and above that number if we come to the Southern Peripheral Road, INR 3.5 crores to INR 4 in Sector 71. So these 3 markets, we have a product and product is fairly good. It's just that the unit sizes are small, but these are very good quality product, which is being delivered or being developed by us. So at these price points, we are not seeing much competition and we are also witnessing good demand. And that's why as and when we are launching these projects, it's safe to say that about 70% plus inventory is getting absorbed within a short span of time. I would say at launch itself, that tends to be a little scary only. But yes, within a couple of months, few months time from the launch, you will see almost like 70% uptake of inventory. And this is real estate. It is like a higher ticket size purchase for anyone. But as we are launching, we are seeing good absorption. And that's why we are confident in giving this 20% plus growth over a fairly good number which we achieved previous year.

Got it. And one last just on that continuation. So at 20% growth for long term, this is the first time you are providing that. But at what point you would think that we'll have to go beyond Gurgaon? Is it INR 12,000 crores or INR 15,000 crores? So your thoughts on that.

No, it's like a moving target, Pritesh. Once you achieve a particular number, it doesn't seem that you've really sucked up the demand in the market and you're unable to sell further. That's not the case. And so it's like a moving target. If you really see we've sold just a little above 4,000 units, which was split across Gurgaon and Sohna market. So it's not that in terms of volume, we've achieved some 10,000, 15,000 units within a year. So Gurgaon is a very deep market. It is seeing a lot of traction. A lot of people are immigrating into Gurgaon for a lot of places in North India, I wouldn't say just Delhi. But in most of North India, you'll find maximum amount of white collar jobs being offered in the Gurgaon market and hence, the very strong migration into Gurgaon. So I'll have to eat into my words if I were to say that, okay, at INR 12,000 crores or INR 15,000 crores, we'll end up exhausting the Gurgaon potential. I don't think it will be fair to make any such comment with regard to the micro market.

The next question is from the line of Murtuza Arsiwalla from Kotak Securities.

I think just continuing from what Pritesh was saying, do you think at some point of time, this 3 micro market sort of concentration would sort of constrain your ability to grow and you would have to look a little beyond not another city, but at least other segments within Gurgaon itself? That's one question. And the second is there is still a gap between the reported margins and the embedded margins. I think at what level or maybe a year down the line or 2 years down the line, do you think the revenue recognition would be of the more profitable projects and one will be able to see the reported margins come closer to what the embedded margins we've been talking about for the last 2 years or so. These are my 2 questions.

Yes, sure. So Murtuza, these 3 micro markets cover a lot of Gurgaon. So if we were to leave the luxury housing segment, which is the typical the Golf Course Road and something right at the start of the Golf Course Extension Road. So if we were to leave that micro market, which has never been our [ play with this inception ]. We are, by and large, covering the relevant micro markets within Gurgaon by focusing on these 3 micro markets. Nothing stops us from adding 1 or 2 larger areas to our city, but we feel we will continue to do good developments in all these 3 micro markets. We are not -- we are giving enough choices to our customers. So Sector 71, we have more than 90 acres of land with us. There's almost like 17 million to 18 million square foot of underlying development potential exists, including Titanium, which we launched last year. So that's like the premium market. On the contrary, there is very little supply on the southern peripheral road as of now, barring 1 or 2 players, there's literally no one in the market who's holding such significant supply potential on the Southern Peripheral Road. There's very little which comes on Golf Course Road or Golf Course Extension Road. This is a very upcoming and promising area where [indiscernible] infrastructure developments which are taking place. So as we speak, the [indiscernible] is being uplifted. There's an elevated highway, which is being planned on top of it. Phase 2 of Metro is going to cross our site from [indiscernible] so that entire area is getting uplifted. We saw something similar happening on the Dwarka Expressway and hence Sector 37D, there was a huge surge in capital value in the previous year and likewise in the Sohna market. So I think these 3 micro markets are fairly representative if one has to play mid-income theme in the Gurgaon market, and we don't feel the need to add a fourth or fifth market. As far as the question around margins are concerned, yes, you're right that there is a gap between the embedded EBITDA margin guidance, which we've been giving and the number which is actually getting reflected in the P&L. So guidance is close to 35%. What is currently getting achieved is close to 15%. There is a direct correlation also in terms of the per square foot, which one can relate to. Our average selling price of the presales number is INR 12,500, wherein we are giving a guidance of 35% EBITDA margin. Whereas in terms of P&L, our realization, the recognition happened on sales, which was at about INR 6,500 a foot on which we've earned close to 15% EBITDA margin. GP margin of almost 30% plus. In the coming year, we are still completing some more affordable projects, which got sold at INR 4,000 and Deen Dayal projects, of course, at higher realization per square foot. So if we are achieving -- I mean once we are achieving this almost INR 5,000-odd crores in terms of revenues, margin profile will continue to improve. It will not hit this 30% EBITDA level plus 35% EBITDA level number in the year like FY '26. But yes, from coming year onwards, we'll start delivering certain projects in the Sohna market, like Daxin, certain plots will start to get delivered. From where all these guidance numbers will take -- will become reality. So margin profile and absolute number profitability is -- will take steep increase in the coming year as in the current year.

So would it be fair, while we may not get a 35%, but we will see the reported P&L showing an improving trajectory, so at least bridging some of the gap between 15% and 30%?

Yes.

[Operator Instructions] The next question is from the line of [ Heath Parekh ] from Ashika Institutional Equities.

So my question is on business development with already 2 to 3 years of dry powder on hand and 40 million square feet of early-stage development, how aggressive we would be in FY '26 in terms of business development? And on the similar lines, how are we seeing the land prices and supply of land, if you could give some highlight to it?

Sure. So see, we are fairly active in tapping newer opportunities in terms of land acquisition. So the good part is that if you look at our sort of history post listing, we've never been tempted to do any subsequent fundraise in the market because operating surplus has been good. Even in the coming year, this operating surplus is going to go through a good rise vis-a-vis the previous year. And hence, since the market conditions are good, sales are happening at a good pace, we do intend to deploy almost INR 1,200 crores to INR 1,500-odd crores. I'm giving a range at start of the year, I can't really put a number to it. But we do intend to give -- we do intend to redeploy anywhere between INR 1,200 crores to INR 1,500-odd crores in terms of fresh business development and keep adding on to the underlying implicit growth of the company in terms of its land bank.

Okay. Perfect. And secondly, sir, on embedded margins, with realization heading towards north, how do we see embedded margins? Is there any scope for further improvement to that 35% number which we are guiding or that is on a higher side?

So that's not on the higher side, [ heath ], there's definitely scope for improvement or rather once we complete these projects which we've launched over the last 5 to 6 quarters, which were at these sort of price points. Last year, our average selling price was INR 11,800. This year, it was INR 12,500. So any of these projects which have been launched at these price points, 35% is not an aggressive number, which we've put in place. Even for the inventory, which is at fairly advanced stage of completion, which is close to 10 million square foot, the underlying revenue recognition is of almost INR 100 billion. So that recognition is at an average of about INR 10,000 a foot. And hence, because of that, the margins will improve as and when these projects get completed.

The next question is from the line of Adhidev Chattopadhyay from ICICI Securities.

So my question, I think last time you alluded that we will be exploring the Delhi City market, right, in terms of expansion. So any update on that? Where are we? Is it still some time away? Or have you already done some work over there? Yes, that's the first question.

So Adhidev, we've been tracking that market more closely. We've been kind of looking at opportunities which are coming in Delhi. But we will stay disciplined in approach -- in our capital outlay approach. So there is more clarity required in terms of the policy framework from the government side, the new state government, which was formed a few months ago. Till the time we don't get absolute clarity on the developability of the underlying land which one can acquire, we'll not put in capital. Having said that, our understanding on the kind of opportunities which exist is much better than what it was 3, 4 months ago. So we are watching that situation, and we'll put capital at the right stage into the market.

Sure, sure. My next question is on the -- if you could just guide us on what has been sort of like-for-like price growth in your ongoing projects in the last year. And overall, on a like-for-like basis, how do you see this panning out over the next 2 to 3 years in terms of balancing volumes and the value of sales?

Like-to-like has been quite good. When we say the price rise was only 6%, it's, of course, on a normalized basis, that INR 11,800 square foot going up to INR 12,500 does not give full picture of the like-to-like price increase because in the previous year, like fiscal year '25, where we achieved INR 12,500 a foot, a lot of sales came from the Sohna market and almost close to 45-odd percent of sales have come from the Sohna market. That proportion of Gurgaon in terms of percentage sales was lower in FY '25 vis-a-vis FY '24. And that's why -- it's a good question, the like-to-like price rise is much higher. So if you look at Sector 37D, we have to do a subsequent launch, but you may very comfortably assume at least a 15% price rise and almost closer to a 20% price rise in Sector 71 vis-a-vis for Phase 2 launches vis-a-vis the launch which we did previous year. So there's a fairly good price rise happening within Gurgaon and in the micro markets where we operate. And just to explain it, it's not that there's any euphoria and hence, it's happening. There is a lot of underlying development taking place in these markets. If you realize in the previous year, Phase 2 of Metro, Gurgaon Metro got a clearance. Now there's a clear path at what all places the Gurgaon Metro is coming. There's continuous improving in the infrastructure situation in Gurgaon. So with all these things, people are ready to pay more for these markets, which are becoming quite established and liveable. So the price rise is healthy.

Sure, sure. And just again, a question -- my final question is on the overall market. So obviously, the Gurgaon market has been doing fairly well in the last 3 to 4 years. So in terms of the competitive intensity, how do you see that panning out because we keep hearing about new players, right, entering the overall market. So have you seen Gurgaon as an overall market size growing in the last year or it has been a fairly stagnant market? If you could just help us understand overall Gurgaon market as you see it in terms of either number of units or value or some ballpark number, which you may be working with?

So see, Gurgaon market is definitely improving. The market size has improved, the number of launches. There's been sustained supply by various players in the market. The sweet spot where we are enjoying a very unique position in the market is that we are the only company which is focusing on mid-income housing and can do a sustained supply of units. There are a bunch of players who are tapping this upper mid or luxury segment, but don't have the rightful amount of land with them to do a sustained supply. So we can do sustained supply, and we want to tap this early-stage mid-income market, which no one else is doing, and that's kind of a very peculiar or positioning for the company, which is getting reflected in terms of our regular year-on-year growth.

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

Yes. We would like to thank everyone to take out time this morning, and we'll be updating everyone, the entire community as and when more progress is happening. But just to end with a positive note that the business scenario is very positive, very good, and we are very positive regarding the current year operations for the company. Thank you.

Thanks a lot.

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