Key takeaways of the call

The company recorded pre-sales of 0.32 msf. or Rs 195 crore in Q3FY17.

The company continues to focus on execution and cash flows across all its projects. The company has offered 0.46 msf for possession during Q3FY17, taking its total tally for 9MFY17 to 1.7 msf. Similarly the strong focus on execution and cash flow has resulted in strong collections of Rs 247 crore for the quarter and Rs 711 crore for 9mFY17.

Prior to demonetization, on the back of buoyant festive season there were signs of clear revival in sales volumes in October 2016. Sales were impacted post the announcement given the uncertainty that prevailed in the market. The customers chose to defer their purchase decisions.

Demonetization of Rs 500 and Rs 1000 currency notes will create a level playing field and in the long run benefit all organized developers including the company. Further several initiatives like the implementation of RERA, passage of GST and simplification of environmental laws etc is to trigger the shift from unorganized developers to transparent, strong developer brands and the company being one of the repute is well-positioned to capitalize on the shift.

The company is confident that the slowdown will be a temporary phenomenon and have already started seeing an uptick in the volumes in the ongoing quarter. Expectations of a steep reduction in interest rates and fall in inflation will improve consumer sentiment and spur demand. Additionally, several initiatives announced in the Union Budget will aid sector recovery.

The average price realization in Q3FY17 was up by 5% to Rs 6150/sft facilitated by greater share of luxury and few commercial sales in Pune as well as contribution from Mumbai portfolio.

Of Q3FY17 revenue of Rs 226 crore about 28% is accounted by Wakad, corolla 15%, 14% by Downtown, 8% each by Three Jewels and Tuscan Phase I & II.

Gross debt as end of Dec 2016 was Rs 774 crore and Net debt was Rs 459 crore. In 9mFY17 the company has repaid about Rs 22 crore.

Staff cost is higher for the quarter due to annual salary increment and bonuses. While the marketing cost was higher due to advertisement and promotions of some of Pune projects.

Recognizing waked Q4FY17 few of the phases, life republic Bangalore project will start contributing to revenue from Q4FY17.

Out of collections of Rs 711 crore in 9mFY17 about the company spent about Rs 425 crore toward construction and approvals, 82 crore is towards overheads, about Rs 80 crore towards interest, Rs 29 crore towards mutual fund investment, Rs 47 crore towards tax payments and Rs 22 crore dividend payout.

Company is planning to launch another project in its Mumbai redevelopment portfolio at Dahisar West, named ‘Breeze'. In Pune market the firm launches planned in Q4FY17 are IVY Estate and Life Republic (further Phases).

Company is also targeting launch of two projects at prime locations in Bengaluru, at Kormangala (0.22 msf) and Hosur Road (Exente project with 0.59 msf) respectively. The company will start pre sales through digitally in Q4FY17.

Evaluating potential expansion in Affordable Housing within existing portfolio. Of the projects which is already got plan approval, about 95% of stock in Ivy Estate will come under changed Affordable Housing project. Similarly the further phase launches of Life Republic can be brought under Affordable Housing new definition. But the clarity has to come whether this is applicable for ongoing projects.

The company is diverted majority of cash flow or collections towards construction to increase delivery before RERA comes into implementation as far as ongoing projects.

Till date 10 projects with million sft of developable space. Out of 10 projects two projects are under execution.

The company will continue to maintain its thrust on execution and cost efficiencies at all projects and utilize the cash flows to further strengthen its balance sheet.