Key takeaways of the conference call

Despite a seasonally weak quarter the company has delivered a strong performance in terms of pre-sales. New sales bookings in Q2FY15 stood at 0.6 million square feet (msf), up 32% against 0.45 msf in Q2FY14. And the value of area sold stood at Rs 344 crore in Q2FY15 up 32% compared to Rs 260 crore in Q2FY14. The average sales price realization in Q2FY15 stood at Rs 5748/sft as compared to Rs 5738/sft in Q2 FY14

New sales bookings in H1FY15 stood at 1.2 msf(up 35% against 0.9 msf in H1FY14) valued at about Rs 688 crore (up 45% from Rs 475 crore in H1FY14) with average sales price realization of about Rs 5681/sft in H1FY15 compared to Rs5644/sft in H1FY14.

Against a sales value (including partner share of about 15-20%) of Rs 4199 crore as end of Sep 2014, the gross revenue recognized was just Rs 2944 crore and gross revenue to be recognized or unrecognized was at Rs 1255 crore. Assuming no incremental sales 40% of unrecognized revenue will get recognized in second half.

In Q3FY15 the company expects Kandhwa, Giga Residency, Stargaze (at Bhavdan, Pune) and Jazz I project has to come up for revenue recognition. The company has sold area valued about Rs 160-170 crore in Kandhwa project and the company expects atleast about 35% to come up for revenue recognition in Q3FY15 and balance in Q4FY15. As far as Giga the company has sold stocks to the extent of Rs 80 crore and all will come up for recognition in Q3FY15. Jazz II project will come up for revenue recognition in Q4FY15.

Change in FSI norms in Pune market will positively impact 3 of the township projects of the company resulting in incremental FSI to the tune of 1.5-1.7 msf. Incremental premium cost is not more than Rs 200/sft for the company. The three projects where additional FSI available are Bhavdan (about 0.25 msf), Life Republic Phase I (about 0.6 msf) and Ivy Estaes (about 0.5 msf).

Execution continues as per plan with many of its projects under execution reaching maturity. It expects to see an uptick in its revenue trajectory in H2FY15 as several recent launches hit the recognition threshold.

New launches continue to perform well, meeting expectations of the company. It further saw the launch of the second phase of its Jazz project in Aundh during the quarter which was well received.

Construction cost outflow in Q2FY15 is 90 crore. But there will be substantial jump in construction cost in Q3FY15 and Q4FY15 to about Rs 100-120 crore and Rs 150-180 crore as some key projects move to next stage of construction which involves intense construction activity.

Kotak Securities are the main arranger of NCD issue and as per the latest update there was some interest and expect to close the issue post Deepavali. NCD issue was underwritten to the extent of 75% by two marquee players. The company looks at Rs 70-75 crore from this and will be used to repay existing loan.

No acquisition of land as of now. But the company is confident of winning new redevelopment projects in Mumbai soon.

Steel and cement prices have been stagnant in the first half of current fiscal. That was good for the industry. Seeing some input pressure going forward.

The approaching festive season has boosted sales. The October 2014 sales so far were in excess of Sep 2014. Expect sale performance to be further bolstered going forward with anticipated improvement in consumer sentiment.

With a healthy launch pipeline with all key approvals in place, the company is on a strong footing and confident of successfully executing its strategic vision laid out for long term growth.