Sobha Limited (SOBHA) Earnings Call Transcript & Summary

All is well, and I've been knowing the company since IPO time when the company got listed. I was one of the first analysts interacting with Mr. Sharma from that time. So I -- and in my previous firm as well, we used to be owning Sobha. So I've had a reasonable interaction. So thank you so much for taking time out. And maybe I can jump directly into questions.

In the call to us, it looked like you were a bit restrained and probably a bit more conservative. And I'm not sure you wanted to lay the foundation that in the sense that not over guide and then under commitment not being that kind, which is very much possible in the real estate company, who knows how things are going to play out. But just maybe we can start from there in terms of after becoming the captain of the ship, what are you looking at? And what are your priorities? And what are the top 2,3 things on your agenda to get going.

Yes. Thank you, Gaurav. You're right. On the call, I was probably a little bit more cautious. But I mean, we -- I would like to be like Oreo, which is cautious outside, but aggressive insight. So -- but where we are looking at last -- I think last quarter results, you would have seen, we have -- operationally, we have become very, very detailed, far more aggressive in terms of how we pursue our the intensity. So that has reflected in our increase in net cash flow you would have seen, right, and our reduction of debt, that has been our primary focus in the last couple of years, which is -- debt has become a little bit high it becomes little bit in-between, our laser focus was on the reduction of debt. We've seen last FY '21, we reduced by close to INR 180 crores, FY '22 by INR 515 crores. And in that, 60% of it, we have done in just 1 quarter. So all this has happened with far more rigor in the available location, right? So -- and which I think we will continue to do going forward as well. When it comes to conservativeness in terms of -- when you mentioned conservativeness, that must be more in terms of guiding for the -- from a sales point of view, right. If you look at -- we have been very consistent in sales from even FY '19, '20, '21, consistently about 4 million square feet. In FY '22, we have done 4.9 million, which is about 22.5% increase. Now we are already at a slightly higher base. So when I've been -- what we think is also that there is a lot of triggers that have held in doing 2 things. One is increasing the sales velocity for us, increasing in the sales volume in the last year, which is about -- which is what you're seeing run rate of 5 million square feet. From here, there are 2 parts. I think there are a lot of things that are laid out already very well, good factors. So hence, one, we would like to be to -- from an emphasis point of view in this financial year, that is more to do with absorption of the price increases that we have done and which is far more critical for us given the increase in the cost of construction for us. So if the impact out of that is actually will be known to us in a quarter or 2. So it's very difficult for us at this stage at -- when other factors are playing out, which is I have already increased prices, we are on a high elevated sales volume level. Now to build on it and give a -- paint a far more rosy picture, it is -- I would not like to do it till the time there is reasonable evidence which I think we will get in a quarter. So that's where -- that's the base logic for us to be -- to take the stance that we have, which I think is reasonably prudent unless you are seeing any holes in that logic or in terms of what you're seeing on the ground versus us versus others then you can obviously -- if it's you would like to convey that. We'll be happy to take that, and we can go and work on it. But that's what we are looking at it. So that's the basic logic for this kind of stance that we have -- we're externally facing. Of course, even in that, if the demand is robust, continues to be robust and we observe the volumes at this, it's an added bonus. We would not like to leave any stone unturned to not capture them. That is the equivalent. But given that we are at a highly elevated level, we have increased prices, we would like to see how the absorption happens and then take it forward from there. So that's....

Got it. I think Mr. Jai Sahrma's first name is also Jagadish, maybe little different spellings. You both share the first name, but in terms of quality.

The difference is, there is -- his first name is Jagdish. Mine is, it's with an added A. That's the only difference.

He is from more north so maybe that's the way the names are pronounced there.

That's it.

So yes, but in terms of policy or direction, anything else that you're looking at to doing something different or something better -- and does the engagement of the promoters, Earlier, I was probably thinking maybe the Sun wants to come in. Is that kind of playing out? So what has changed in terms of direction for the company? And what direction do want to really take?

See, Sharma ji, you have interacted with him, so the company has been operating for 27 years. Our focus in terms of the -- it's already has been articulated very well earlier as well. So from a direction point of view, there is absolutely no change in terms of certain areas. Number one, focused on residential development, number one, that continues to be the focus. Second -- and growth-oriented, we are absolutely growth oriented. Currently, we are -- we were at 4%, we have become a little bit 5%. We would like to stabilize here, we would like to grow to 7% to 8% in the next 3 to 4 years. So we would like to have far more consistency and execute a disciplined growth strategy for us because these are some of the learnings that we have from the past like to chase things, which still cause a strain on the balance sheet. We would not like to do that going forward. So hence, the -- from a business standpoint, from the orientation towards what kind of businesses that we would like to be in and how we would like to -- we'll continue to discern. How we execute it is slight -- might be slightly different from a little bit more oriented towards making sure that the fiscal -- or the balance sheet is always very, very solid. So that we would not like to compromise this. In that -- and at the same time from a growth point of view, so you know that we have reasonably good land banks earlier from the past. But that, we have not been able to monetize it as quickly as we could have. Now that also we have really started working on.

Gaurav? I think really sorry, Gaurav, we have lost him. But maybe we'll wait a couple of seconds for him to jump back on. Firstly, congrats on the new title.

Thank you.

So thanks for taking the time out to talk to us. So we've been shareholders of Sobha for a few years now. I think -- but giving you a better context, we are shareholders in Sobha. We have watched the company quite closely. So I thought probably a good time to just now that there's a change in senior management. Would you taking the leadership role I think it's a good time for us to reengage and get a little bit better?

Makes absolute sense, Freddie, and I'm very glad that we could meet because in a call or just numbers, it's a little -- it's tough to explain the whole rationale and also it's just too short a time to know the rationale or logic behind what we are doing. But it makes -- I'm really happy that you have taken time to interact with us.

Yes. And I appreciate that you taking this on [indiscernible] , I appreciate that this is a busy period for you with results and with you obviously taking on Sobha. It is a busy period. And like you said, if it is tough to convey all of your messages on the earnings call is a good forum. So...

And to be honest, Freddie, that was my first call. So I was not very -- probably not as articulate as I should have been.

I think people were a little bit worried that like Gaurav mentioned, you did sound very cautious particularly in the context of, I guess, an Indian housing market, which looks like it's in an up cycle, in the midst of an up cycle. So it did sound a little bit cautious. So we just wanted to kind of get a sense.

No, there is an absolute reason for being -- I will not say word cautious, but being -- trying to be consistent rather than to be too exuberant because right now, the focus for us -- mainly because of the cost increases and has corresponding increase in the prices, and we are on a higher base in terms of volume. So I would rather be doing similar volume or slightly higher and generating my cash flow without compromising on my ability to generate cash flow then it is -- we are more comfortable and making sure that that would help us, again, continue to improve our balance sheet and pursue growth opportunities in the long term. It's not -- I would like to be not taking up opportunities or driving volume at the compromise of margins because that's not what I would like to. There have been in the past like you have seen, it's -- the cost increase is real. So you've got to admit it. We want to see how we have to actively address it. That, if you're not talking actively about it, and we're just focusing only on volume, it's a little bit. So that is where when -- like I was explaining Gaurav, it will take a couple of quarters for us to see how it just gets absorbed. So then it becomes much easier for us to get on to the new commentary. Else otherwise, in last financial year, it was very clear. The demand was strong, we could deliver good volumes, good quality of sale, hence generated good cash flows. So all of the positive things have played out really well. And we would like that positive -- some of those positive things to be continued and make sure that our -- we can pursue opportunities and grow the business consistently over a longer period of time rather than trying to compromise anything even during a good upside to that.

Yes. I think we have Gaurav.

Can you hear me now?

Yes, we can hear you now.

Which is what I was trying to figuring out. So basically, the key question which you're trying to address, and we are trying to also figure out more is, there is definitely pent-up demand. There's definitely ability to spend given the savings, IT sector growth, salary growth, all of those macro factors are there. But at the same time, in this longer-term cycle, a shorter-term air pocket of inflation, marginally rising interest rates and the consumers savings getting eaten up in various other places as well. So we don't know how that changes the long-term trajectory. But you would have a better guess than us in terms of how to think on these 2 cycles? And how do you see them playing out for the next 6 to 12 months?

6 to 12 months is too short a period of time, Gaurav. That's what I would like to see how it's going to play out even for us it's going to be a discovery process as we go along. Interest rate increase is not going to be as much of an impact for us, even for the customer about a percentage here and there. I don't think it's going to -- is going to impact as much considering that the -- from -- if someone is going for a loan, the impact is not as high, considering that there has been an increase in the wage levels. There has been an increase in savings. So the extent of loans that you take is also probably slightly lower or your ability to repay the loan faster is going to be higher. So that's why I don't see that being the bigger challenge or what we need to actually see is now that we have raised the prices. So generally, you tend to take a little longer time to decide on to purchase, you go to some place, price is INR 100, tomorrow you come back, it's INR 102, INR 103. So you not immediately like to do it. But once it changed, it's slightly changes, then again, it becomes much better. There are positive things, too, because once someone sees that there is an increase in pricing typically, people tend to sort of -- it becomes a little bit more positive cycle, which is quicker to come over. So that bit we are -- we would like to wait and watch for couple of months. And then we'll be able to have a much better commentary on it. But on all the factors that you mentioned, they are still very positive. And so I don't see any big change because if you look at the leading indicators for us, which is like visits to the sites, our inquiries, all of those look very solid.

But again, on this one, if I look at some of your peers and even in Mumbai and Delhi, people have been taking probably higher price hikes and seem more comfortable in terms of demand at those higher price points. So how do we reconcile with Sobha and ...

So if you look at it, Gaurav, actually, we have started price hikes way much earlier than probably a lot of other people because we could see the cost increase, it will affect much sooner because we are not -- we don't contract it out. We do it everything in-house. So our ability to get the impact is much quicker. So hence, we have started seeing this price increases much earlier. We started doing it in the month of September, October and in the right projects as well. So if you look at the aggregate kind of price increases that we have done probably would have done similar or higher impact.

Got it.

And just one small point I want to add here. See, our prices were already higher than the competition in most of the areas. So if you look at it as a percentage basis, it might look similar, but in absolute level, the price increases have been higher.

Okay. And also, this year, you're talking about a similar kind of a price hike. People have taken it as a hard number of 6%, which is not what you wanted to convey. But what's the sense in terms of timing of these price hikes? Are you looking at like this part of the year? Or is it more towards the festive part, later part of the year?

No, we have already done majority of those.

Okay. So what you're talking for this year. Most of it -- Okay.

Yes. So we are not trying to average it out or trying to work on hope that there might be a reduction in the cost or anything of that sort. Hope is not a strategy that we are like to -- we would like to follow. We are trying to see if we can -- if anything -- so if there is any reduction in the cost or -- I mean, any crisis provides opportunities, right? So 2 parts is, which is one, you will -- our ability to sell similar products at a slightly higher price, it improves our capability in the skill set terms of -- from a sales point of view. Second, it also gives us the opportunity to try and economize, rationalize our costs as well in multiple ways, probably one from a design optimization. Second, to go and look at all the pockets where we can reduce our cost through procurement or through any kind of other efficiencies in the methodologies, in the time that we can execute. All those actually will also help, but any kind of upside is margin expansion for us or, let's say, protection for us from what has happened in the last 6 months.

Got it.

Price hikes that you took in September and October last year, have you seen any kind of noticeable change in demand for the properties that you have increased prices for. Has there been any noticeable demand changes or impact from the price hikes that you took in September or October last year.

So Freddie, for last financial year when we did it all these price hikes, there has been absolutely no challenge in terms of ability to pass on the price hikes and continue the sales volume that we have done. So -- but now we are doing it on that base, right? Higher base, right? So hence, we are -- we would like to see how it is going to play out. As of now, it doesn't seem to be as -- I mean, there is any big change. But if it is continuing like this, it's all great.

But the price hike -- have the price hike been enough to offset the rise in construction cost that you mentioned.

Freddie, there are 2 parts to it. One is for projects which are already where we have already sold, right? So it's a project basis. But -- so there it's already sold. So there is no change in the -- we can't go and change the prices. So hence, there will be a little sort of price -- the margin impact for those projects. But for projects where we are -- where there is inventory where we are selling. So we are able to cover enough -- reasonably enough all the cost increases.

Okay. That's something which I want to discuss a little bit more. So let's say, within your projects under sales and under construction, 40% is sold out and 60% is yet to be sold. And within 40%, you're getting money on a completion basis where you're saying the selling prices mix, we can't change it. There, the inflation will hit.

That's true for any of them, right?

Yes. But the one that you've not sold inflation is going to hit you in only certain buckets and the selling price moves up for the whole system.

Absolutely, you're right.

So in that sense, how should we look at price hike in an inflationary environment? Is it, in general, beneficial for you guys? Or is it at the margin negative because inflation is going to hit existing projects, but projects with there's unsold inventory, you've already constructed as all steel cement is already put in, if you can get a higher price point, it completely changes the margin profile. So at a net system level, how to look at it?

Yes. So Gaurav, there, you have seen that we have very limited inventory, which is to be essentially so where -- which is completed but unsold. So most of it is already there, right? We typically sell during the course of the projects -- don't leave any of the inventory till the project is completed. So that way, there is not much in terms of where we can take a much higher price hikes in the completed inventory..

Got it. Sorry just one second. In general, how should one look at it? So let's say the construction and all the hard manufacturing costs would be 30% and let's say, labor is another 20% and land is another 20%. How should one look at the cost components? And if inflation is more on the manufacturing goods side, right?

Yes. In the construction cost itself, you can take roughly about 60% to be the cost of the materials and 40%. So -- I mean 60% to 65% and about roughly 35% to 40% as some component of people involved.

And then land cost, where would you put land cost?

So land costs typically on a selling price, it's roughly about 30% again.

Okay. So 30% in the land.

Between 30% to 40% on an overall mix. I'm not saying -- I mean we have but -- sorry.

On a 100% cost basis, would you say like 30% is land, 40% is construction and 30% is people related, very rough cut if I have to just...

No. And the cost price, yes. And remaining 30% being roughly the margin, yes.

30% being the margin. But I'm saying on a 100% -- on 100% of the cost element.

Of the total cost, let's say, if it's total cost, then it is, say, 30% -- yes, you might roughly do -- what you're mentioning there is right.

Okay. Okay. Then how should one look at price hikes? So even if you have a 10%, let's say, blended price at the same...

The total cost that we have -- the cost increases that we have seen is roughly, let's say, 15%. 15% is roughly about 7% to 8% of our price, so which we have mostly covered in terms of the price hikes.

Got it. That's understood.

You said 30% increase in the construction costs. Is that right?

That's right.

Okay. Okay.

15% increase in the material prices, which is the 60% of the...

Overall construction costs says about -- it's an increase of about INR 600 or so. So it will -- the impact of that in pricing is roughly about 7% to 8% -- 6% to 7% on an average, my pricing is about 7,000 plus. So it's about, 6% to 7% or 7% to 8%. So that's roughly and that's the price increases also, we have done.

Got it. Incrementally, this quarter, you had a very massive debt reduction. How should one look at the next year going forward? You've not given any specific targets, but the run rate seems to be suggesting that if you maintain the execution run rate and sales stays reasonably okay, you can have a significant debt reduction in the next few quarters.

Yes. From a cash flow generation point of view, there will be -- there -- we can probably do similar as what we have done. Now it's about allocation of capital, whether to reduce net -- we allocate some of it for -- in new opportunities. So that's based on the pipeline of the opportunities that we will see. But I think we would like to at least reduce the debt by INR 250 crores.

For the full year or for the quarter?

For the full year, which is very clear, but unless if there are any opportunities which we can go after and invest, we will do that. But in the next couple of years, we would like -- in the next 3 to 4 years. See, 1 is, of course, you're all -- we're all focused on 2 short term, right? I have a little much ahead a few more years. So I don't want to comment specifically on each quarter. I mean that becomes very -- operating leverage becomes very big.

Sorry to bother on the small, small issues.

Not small. I would not say small, but those -- I mean I cannot -- I mean, of course, it's one way for you is to just look at those -- but my -- if I take a step back, right, what I would like to convey is our debt to equity, I would not like it to take it to -- again, go back to the old levels at any point of time. So I'd like to be probably 0.7, 0.6 going forward. What's the timeframe for that? It can -- if it happens sooner, nothing like it. But at the same time, I need to balance it with our ability to continue to invest and have a consistent [indiscernible] . So that's why it's a disciplined growth strategy. It's not just one-way route. Last 2 years has absolutely -- we have been clear that it's a one-way route of reduction of debt. So every bid that we're generating, it's all going into reduction of the debt, which has really helped us in much better balance sheet, if you can see -- I mean, I don't know if you agree with that or not. But that's one of the concerns we have and probably a bunch of investors had in terms of leverage. So that's something we would be actively addressed without unlike many of the other players, without raising any external capital, without significantly high amounts of cash flow coming in through asset sales. So largely from operations. So that, I'm hoping people are able to understand it when it comes to the way we have tackled it versus a bunch of others.

And in that, it seems that you are more on capital allocation, you would -- you're more inclined towards lesser debt profile than Mr. Sharma earlier. In that context, why have you guys still not used your existing land banks more aggressively? And I'm talking about all the historical land banks which are some of the bigger land banks, which are now becoming slowly mainstream in Bangalore, Ascot and all of them.

You're right, Gaurav. That's where we are going to incrementally invest to consolidate, convert, to make sure that they are far more monetizable as quickly as possible.

And historically, unlike Prestige and [indiscernible] you guys have not done too many JD, JVs as well, which reduces the strain on balance sheet and immediately scales up land banks. Is that something which you guys are going to focus more on? Is there something happening concrete directionally more on that side?

Yes. It's both a combination of both Gaurav. Good thing is that we have good land banks, right, back up our -- even our existing debt profile kind of thing. So we have that, and now the focus for us is, of course, how to monetize it as quickly as possible as -- in whatever form it can be done. Now that requires a little bit incremental capital. It requires effort. It requires a little bit of patience because these are not something that it gets switched on just like that. It needs those and -- so while we are at that, so that is one definite area, which we are working on. Second is, and like you mentioned, you are right, that since some of these are in good locations or the depreciation in the pricing, et cetera, is going to be extremely beneficial for us. While we are doing that, I am not -- we are not waiting or doing anything for adding more projects into the pipeline in the form of new business development, whether it's joint development or if the right opportunities come up, buying of land as well. So that's where I say -- when I say that there is a reduction of debt of x amount or where we were targeting, the remaining, I would like to keep it if there is a possible take, I can do it. If there is not, then we will, of course, go into -- it will go into production. And whenever there are opportunities, we'll be able to use that limits.

Got it. From a price point of view, when you're saying, let's say, 8,300 blended right now, take another 5%, 6%, you're crossing 8,500. What's the ability of particularly Bangalore to absorb this kind of pricing because other markets understand, Delhi, Bombay buyers understand price hikes, and they've seen it historically, but Bangalore typically does not see too many price hikes. So what's your sense of the Bangalore customer and their ability to...

I think you have answered one of my questions, which is essentially what -- how does it affect? So that's what we are looking at. But I would be very cautious in terms of doing more price hikes. Don't want to do it indiscriminately. It has to be a little bit calibrated, which we have done. Now beyond that, it might be a little tough. I would not likely do it unless I see solid evidence towards it.

Right, right. Got it. One the...

Historically, it's been like this. And I would -- otherwise, you would -- it will become -- we would do it in line with the kind of demand that we are seeing. It's not that we should do it indiscriminately.

Have you seen sort of evidence of demand being there to absorb further price increases in Bangalore?

Sorry, Freddie, could not fully hear.

So you're saying that you may see solid evidence to justify price hikes. I guess my follow-up...

More price hikes.

Exactly more price hikes. Have you seen the evidence that you need in terms of demand in Bangalore to justify the price hikes I guess in the new term?

Yes. So we have recently done it, Freddie, so it's tough for me to gauge that yet. That's why I was saying earlier in the call, we will take a couple of quarters to figure that out. But these hikes itself have largely covered our margin concerns. So unless there is continuous increase in demand, then, of course, we'll try to maximize the price realization as well.

Just to play devil's advocate, what if raw material continues to increase. What will your strategy be in the next couple of quarters, we get another surge in raw material prices, whether it be steel or cement or any other raw materials that you use. What will your strategy be in terms of pricing and how you're going to think about your margins?

Yes. Freddie, it is -- we have been more proactive in this, in addressing the raw material cost increases by price hikes much earlier. And that is one of the reasons why we are being more prudent in terms of sales volume versus margin protection. If I have to pick between sales -- significant volume growth versus margin protection, this time, it's going to be -- I would pick the latter because I'm already operating at a slightly higher volume base from past years. So the goal is to have a -- strike a good balance between growth and profitability.

Okay. And you mentioned earlier on that you're aiming to do 7 million to 8 million square feet of sales in the long term. What, I'm interested to hear, what other things that you think will be needed in order for you to achieve 7 million to 8 million square feet or so because you did say on one hand, you did almost 5 million square feet in FY '22. You're operating off this elevated base was historically done circa 4 million square feet. So 7 million to 8 million square feet, is then another step change in terms of your sale trajectory. So how -- so I guess to ask a question, one is, what do you think you need in order to be able to change 7 million to 8 million square feet consistently? And then secondly, kind of the timing in terms of when you want switching 7 million to 8 million square feet?

Good question, Freddie. So 2 things. First is we will have to -- in order for us to achieve the higher number, we need to bring in more inventory into the market. Inventory, the way we are going to get into the market, it is on 2 ways. One is to continue to work on our existing land bank, incrementally invest in it and make sure that it comes online. Second is continue to use some of the -- do a little bit different capital allocation than what we were doing in the last couple of years to incrementally invest in the new opportunities. So these are the 2 things. And if we do it consistently, I think in the next 3 to 4 years, we should be able to get to the next level of consistent volume.

On the EPC side, is this a structural change you guys are talking about going a bit slower there and probably changing the focus to do more in-house deliveries for the residential side rather than EPC side because you seemed a little bit -- or not even conservative like more negative on the EPC business in the current inflationary market?

Yes. So EPC negative in the sense it's -- I have -- clearly, what I wanted to mention was that the price increase -- the cost increases that we have seen in the last 2 or 3 quarters has immediately impacted our EPC business because that's something that is that -- where I cannot make any -- I mean, I don't have any leverage too much on the -- on my ability to protect margins. So hence, there has been a slightly -- and you have seen that there has been a margin decrease also in the past quarter because there has been a decrease in the EPC side. So hence, that is something that I wanted to convey that has affected this particular last quarter. And also, that makes us again have a relook at how we can -- how -- what is the vein which we can we relook at how we do our business development or pricing such that these problems would not occur in future. If that is the case, then we will have to see how -- the kind of opportunities that we can pursue. Now if I go in that path, then we will have to again look at -- if I had a number of opportunities, if I was going after 50, then if I have to again rationalize, I might not go after 50, I might choose to go after 25. That's the kind of messaging that I have because we have reasonably good execution. For us, it's a good execution capability. Gaurav, the main thing is, for us, we have a flexibility in-built in our -- because of our execution model, wherein I can use my resources in both sides. Unlike stereotypical EPC contractor, you will have to -- so hence, it -- for me, given that flexibility, I can always use the resources these either ways. And going after the -- we have a good pipeline of business for the next couple of years. So we will again have to see how we can bid, how we can get these contracts in the terms which are slightly better than what we are today so that we don't end up in a tougher situation going forward.

How much is your...

It's not necessary that we would completely deemphasize because if you look at our entire -- the manufacturing and contracting it's roughly about between anywhere between INR 700 crores to INR 1,000 crores, out of which manufacturing alone can contribute between INR 300 crores to INR 500 crores and remaining comes from a bunch of contracts. So I think even if there is a -- even if I choose not to do certain projects, it will not impact too much in terms of the overall revenue. It may be about INR 100 crores here and there.

And manufacturing would be more profitable than EPC. So is that case?

Yes, absolutely.

Okay. How much of your order book is fixed contract and cost plus?

In the contractual side?

Fixed price and cost plus.

Now cost plus is very, very minimal now. It's no longer -- but of course, there is -- in every contract, there is always escalation clauses for various material and situations, which are built-in.

So you'll be getting some cushion from those cost escalations?

Yes, absolutely.

Yes. Okay. Okay. Okay. So going forward, we should have a broader view that the deliverables and the execution will move more in-house and less focus on external EPC contracts, at least for now?

Not in the immediate -- in the next couple of years because I already have an order book, which I'm executing and you look at some of the -- extending some of these clients that I work with. So that's where I think the messaging was not crystal clear in the sense we had -- there is reasonable visibility for the next 2 years. Going forward, I don't need to decide whether to do it or not today, right? There is a -- the pipeline can keep getting built. So at the same time, we do recognize that India, there is a good CapEx cycle that started, so there can be good opportunities, right? So hence, we need to look at, again, relook at how I address those opportunities properly, given my capability.

If I might ask Mr. Sharma, is he joining somewhere else? Or has he retired or...

As of now, he's -- I've been talking to him on and off, but he's -- right now, he seems to be in -- he seems to be taking it easy and he is talking to a bunch of people. So probably you will get to know sometime soon. But as of now, I have not -- he has not mentioned anything of that sort.

Okay. My questions are pretty much done. We are running close to time. Freddie. Any other questions from your side?

Just one final one. I guess, since you've taken on the new leadership role, how -- I mean investors that you've spoken to since it's come on board and then obviously in that new leadership role. What do you think investors are most concerned about with your company at the moment?

They were pretty concerned a little bit on the leverage and probably similar is the concern a few quarters earlier also. But right now, if at all, I mean, circa the investors what their concerns are -- I mean there -- what you can say is that their parameters are different from what my parameters are to run the business -- not necessarily -- they are aligned. But this is one concern that they had, which is on the debt side, which I think we partially have adjusted, and I think it -- we will be able to address it better. And second concern, Freddie, what they have -- they had, of course, is the continuity of or any changes that would happen in the way we work or in the way -- is there any reorientation of the business. That also -- most of the people I could explain and probably convince -- or I mean I don't need to convince but at least explain clearly that the focus continues to remain the same. And in fact, execution has become sharper helped by the demand surge.

Okay. Okay. That's very clear. Thank you. Appreciate your time.

Any other key message that you want to leave us and key takeaways for the investors in general.

Gaurav, I'll just reiterate again. I am -- the way we look at it, it's long term, we like to be very disciplined in terms of both balance sheet and P&L. We would like to be consistent and bring in the products which are world-class and acceptable to the customer so that in good times, we get the best benefit out of it. And in the tough times, they'll continue to better than the market. This is my focus because we are a residential player. Ultimately, what is before, my core is selling homes, right? Selling homes. It has got a bunch of parameters for the end customers. And if we can meet all those parameters, make sure that they get those products online in the most financially efficient manner and which is a win-win to both from a company standpoint and for the customers, we will always win. And there is -- the outlook is long term. It's not just short-term-ish or anything of that sort. And second is absolutely growth-oriented, but given in a disciplined manner. So these are the 2 points. And we will continue to improve on our capability to deliver better, cheaper or more economic fashion and improving our designs, improving -- wherever all the small pockets where there can be improvements we would have laser focus on -- in terms of improving there, to make sure that the product, what we bring to the market is always better than what we are. Because I'm sure you have seen we are known for high-quality homes. And there is obviously competition catching up in terms of a bunch of other things we would like to be ahead in the market. So focus is to do there while we correct our balance sheet and get much better in terms of financial health from -- on the tech side. And we continue -- and focus is -- second is on continuous cash generation that gives us the leverage to go after right opportunities and deliver. And again, create these homes for the customer market. And -- of course, like I said, growth where we will continue to evaluate both operating -- largely, the focus will be on the operating locations, and we'll see if there are any great opportunities outside our operating locations also. But the focus will be on the current operating locations where we at.

So thank you so much. Wish you all the best and a lot of success in your new role. Do stay in touch, and thanks a lot for taking the call.

Thank you. Thank you, Gaurav. Thank you, Freddie. I hope I could probably articulated and get some of the messages clear. If it's -- still you have more questions, we'll be happy to interact some other time.

Definitely. It's been really helpful.

Thank you. Thank you, Freddie. Thank you, Gaurav.

Thank you.