Century Textiles and Industries Ltd
BSE:500040
Earnings Call Analysis
Q3-2024 Analysis
Century Textiles and Industries Ltd
This earnings call brings to light several key points that investors should consider. The company has a pattern of maintaining margins around 30%, providing them with a consistent financial outlook. This is underlined by the upcoming real estate project launches like Niyaara Tower 2, with planned launches in Bangalore, Pune, and potentially Gurgaon, indicating growth potential. There is a slight possibility of a spillover, which suggests some uncertainty but also potential future revenue. Further, a strong pipeline of projects in chosen micro markets aims at striking deals worth about INR 20,000 crores per annum going forward, illustrating a robust growth trajectory for the company.
The company's involvement in policy-related opportunities in the textile mill sector, hints at opportunistic financial gains, although predictions are challenging due to market fluctuations. Additionally, the company's real estate project pipeline is substantial, with several phases of ongoing projects like Birla Niyaara slated for future financial years. The company's decision-making appears to hinge on the performance of current phases, which guides the planning and timing for subsequent launches.
Significant margin expansion in the pulp and paper segment was highlighted, particularly a 500 basis points sequential rise in EBITDA margin. This has been attributed to cost reduction efforts, including chemical and packaging efficiencies, which speak to the company's strong operational management capabilities. The production of a record 48,000 tonnes of board also showcases the operational improvements and a strategic shift that reduced unnecessary burdens, further improving cost structures.
Investors should be drawn to the forward-looking statements provided by the company, particularly the presale guidance. The company aims to cross INR 3,000 crores in sales this year and projects a substantial increase in sales to INR 5,000 crores to INR 6,000 crores next year. They also anticipate maintaining an impressive EBITDA margin range from 30% to 35% for these projects, offering a glimpse into the expected profitability and financial health in the upcoming periods.
There's a vibrant outlook regarding the company's future, with a proactive stance on real estate project launches. The executive indicates a flurry of activity with launches that could contribute approximately INR 8,000 crores to INR 9,000 crores from current plans, and additional projects could potentially add another INR 4,000 crores to INR 5,000 crores. This pipeline strength could be a significant driver of revenue, with a calculated yet aggressive approach to new developments and careful consideration of market demand.
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Ladies and gentlemen, good day, and welcome to Century Textiles and Industries Limited Q3 FY '24 Earnings Conference Call hosted by Ambit Capital. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Karan Khanna from Ambit Capital. Thank you, and over to you, sir.
Thank you, and good afternoon, everyone. On behalf of Ambit Capital, I welcome you all to the Q3 FY '24 Earnings Call for Century Textiles and Industries Limited. From the management team today, we have Mr. R.K. Dalmia, Managing Director; Mr. Vijay Kaul, Chief Executive Officer of the Pulp and Paper Division; Mr. K.T. Jithendran, Chief Executive Officer of the Real Estate division; and Mr. Snehal Shah, Chief Financial Officer of the company.
I will now hand over the call to the management team for the opening remarks, post which we can start the Q&A session. Thank you, and over to you, gents.
I'm R.K. Dalmia. Good evening, everyone, and welcome to the earnings conference call for the third quarter of financial year 2024. Let me first take you all through the financial highlights, followed by the business wise operational highlights.
For the third quarter of financial year 2024, the consolidated turnover stood at INR 1,179 crores. The EBITDA for the quarter grew by 124% year-on-year to INR 204 crores with EBITDA margin reported at 17.3%, while the net profit grew by over 10x year-on-year to INR 80 crores. The multifold increase in our EBITDA and net profit this quarter was driven by an excellent overall performance by the Real Estate and improved performance of significant cost savings measures by our Pulp and Paper division. For the 9 months period of financial year 2024, the consolidated turnover stood at INR 3,373 crores. The EBITDA reported at INR 384 crores with EBITDA margin of 11.4% with a net profit of INR 40 crores. Now let me take you through the some of the key highlights across our 3 businesses verticals, starting with the Real Estate business. During Q3 '24, the real estate sector continued to experience consistent growth, owing to a robust economic growth as enthusiastic consumer demand with a significant trend in rising demand of premium and luxury homes offering superior amenities and [ executive ] design.
The Q3 '24, the revenue of Birla Estate grew by 139% year-on-year and 115% quarter-on-quarter to INR 86 crores. The additional other income of INR 78 crores from sale of TDR has brought the EBITDA to INR 63 crores. We achieved bookings worth of INR 189 crores in Q3 '24 at our already launched projects, while collection were INR 182 crores from all projects during the quarter.
During the quarter, we received OC of blocks of Birla Alokya, Bengaluru while we have initiated our first set of handovers, marking a major milestone in our journey. We have received excellent feedback on the product from customers who have already taken up the possession.
We have also received OC in January '24 for 4 buildings at Birla Vanya, Kalyan and at Birla Navya, Gurgaon and the handover sale can commence shortly in both the projects. Our new phase launch of Birla Niyaara at Worli Mumbai slated for launch in Q4.
In other updates, Birla Tisya, Bengaluru was honored 5 Golden Star awards by National Safety Council, recognizing the excellent and exceptional performance in occupational safety and health management system. Additionally, Birla Navya, Gurgaon received National ESH Award from Global Safety Summit hosted by World Safety Forum London, U.K.
Lastly, our commercial project, Birla Aurora, completed 100% transition to green energy, reiterating our commitment to more environmentally sustainable future. Overall, the premium of luxury residential market is witnessing a remarkable surge in demand. Steady interest rates and positive consumer sentiment towards upgrading the bigger configuration and better lifestyle are poised to drive sales to new highs in Q4. Our endeavor of building a superior brand with focus on the premium and luxury segment perfectly aligned with the escalating interest of buyers in premium housing.
Now moving on to the Pulp and Paper segment. The paper, board and tissue prices are more or less stable. However, imported pulp prices, wood and coal prices, they're showing an increasing trend. For Q3 '24, the overall capacity utilization was 104% as compared to 89% in Q2 '24. Both production and sales volumes increased by 16% and 11%, respectively, over the previous quarter, while sales turnover increased by 10% to INR 881 crores over the last quarter. Despite marginal reduction in NSR, EBITDA increased by around 74% to INR 132 crores with EBITDA margin reported at 15% vis-a-vis 9.5% last quarter.
Segment-wise, paper EBITDA remained almost constant at INR 12 per kg, board tuned positive to INR 6 per kg after the initiative in last 4 quarters. And tissue improved to INR 25 per kg from INR 20 in the last quarter. Overall, EBITDA was INR 11 per kg from INR 7 per kg in the last quarter. We hope to achieve more than INR 11 per kg in the last quarter.
Various measures like technology upgradation, production enhancement and other cost reduction initiative has been taken to improve sales and reduce cost of production for the quarter leading to healthy financial performance.
Export volumes in both writing and printing paper and copier paper increased towards end of Q3. Export demand in tissue segment remained subdued due to pressing price in U.A.E. while export demand from Europe, U.S.A. was showing an increasing trend, although disturbances in Red Sea and Suez Canal have cause concern about supply chain disruption, resulting in increased price of raw material.
The company set up a new QSC at Bhiwandi further strengthen service to west zone customer. And we also signed a declaration for providing direct wood to CPP by farmers to secure raw material supply. There were 5.2 million plantation of eucalyptus and poplar seedling and clones carried out in this financial year till date.
Our market outlook. Writing and printing demand is expected to stabilize due to government tender in Q4 '24, while copier demand is expected to increase in Q4 due to seasonality. We expect consistent demand in tissue segment in Q4, although imports are foreseen. Due to lower import prices, our focus really more on domestic sales for better realization.
In board segments, despite rising lower price import demand is expected to remain stable due to rise in pharma, FMCG and F&B demand in Q4.
Lastly, talking about the Textiles division for the third quarter under review. Net sales were at INR 197 crores with an EBITDA loss of INR 19 crores. Q3 '24 overall production and sales volume decreased by 4% and 11%, respectively, over previous quarters. Sales turnover also decreased by 14% over previous quarter. Apparel fabric segment experienced a subdued demand with downward shift in consumer spending on garment and textiles even during festive season.
Home textile segment has only seen marginal improvement in U.S. market with retailers demanding replacement and new products for upcoming seasons. Inventory has reduced significantly on account of Black Friday and Christmas sale. Our collaboration with U.K.-based textile organization, focusing on sustainable product range has been successful and may likely result in the bulk order in near future.
On the sustainability front, conduct an awareness program on women health and hygiene in 5 villages of Jhagadia Taluka. The change in consumer spending dynamics have impacted the entire value chain of Indian organized production house leading to high inventory eventually causing financial crunch. We have restructured our operation by increasing outsourced fabric activity while keeping the important final processing and finishing activities in-house. We have also shifted our focus on new technical collaboration for NPD and VAPs.
With that, I'll now conclude the opening remarks and we can start the questions and enter session. Thank you so much. Over to you, Karan.
[Operator Instructions] We take the first question from the line of Dixit Doshi from Whitestone Financial Advisors.
I have 2 questions. First, on the real estate side. So earlier we were mentioning that in the H2, there will be delivery of 3 projects and we would be recording almost INR 1,700 crores, INR 1,800 crores kind of revenue. So has that got delayed because nothing has come in the Q3? And will everything come in the Q4?
Dixit, this is KT, Real Estate. So yes, so we are -- so there's been a slide giving some of the projects, but we have got OCs for [ 3 ] of the phases of all the 3 projects we're supposed to deliver. So we're pretty hopeful of locking this in this current quarter, Q4.
Okay. So entire will come in Q4? Or you expect that some might go into the Q1 next year as well?
Yes, maybe a slight possibility of a spillover, but most of it should come in this quarter.
Okay. And what kind of margins we are expecting there?
Yes. So usually, our margins are close about 30%. 30% plus, yes.
Okay, okay. Debt to EBITDA margin, you are speaking, right?
Yes, yes, yes.
Okay. Now my second question is regarding the new launches. So just a confirmation, so this Niyaara Tower 2, we have already launch or we are going to launch in the next couple of months. And there were 2, 3 more launches we were planning, like in the RR Nagar, Bangalore; Walkeshwar and a new phase in Gurgaon. So any update on that?
So we are in the process of launching Niyaara Tower B, we got the RERA. The market warming up is going on. Before the end of this month itself, I think we will be launching it.
As far as RR is concerned, RR Nagar, we are waiting for RERA. Pretty confident that we should get the RERA this month, and we're launching it late Feb or early March.
Walkeshwar at is touch and go. We are hoping to get it and maybe we'll try to launch it in March, again, in the last stages. Delhi, I think it is still stuck in that process. So Delhi will not happen this quarter. Delhi looks like next year. I mean Delhi means -- what I meant is Gurgaon. The last station Gurgaon.
The next question is from the line of Amit Srivastava from B&K Securities.
Couple of questions on the Real Estate. One is that, sir, you have booked the TDR sales this quarter. So just wanted to understand what is this regarding? In the past also, we have booked this kind of revenues. So how much more opportunity we will have on TDR?
So Amit, in a textile mill policy, you have to give this 1/3, 1/3 to the government and Madha, et cetera, to BMC, et cetera. So we had some opportunity here, and there was a huge deficit in the TDR market. So just it's an opportunity to take off some of the TDRs, which we are -- which are surplus with us. So it's that one. And this will keep coming on and off. It's really difficult to put a number on that. So we had this. So we just took care of the market demand/supply opportunity.
Okay. Second, sir, in terms of the project pipeline which we have shown. So one is that we have shown the Birla Niyaara Phase 3 in FY '25. So just wanted to understand what is the kind of response you're looking in on a Phase 2 that you will go through the Phase 3 or either it will be delayed in the Phase 2, 50%, 60% sales or whatever the benchmark you are looking at, it will not happen?
Second is that in terms of the Thane project, we have not disclosed the pipeline even in FY '25. So where we are going to delay in that project, if you can explain us?
So Amit, as far as Tower B is concerned now, how we perform in B, we'll know in a couple of months, by March should be pretty clear. So based on that, if it get a pretty strong response, sell north of 70% inventory, then, of course, we look very aggressively at launching Tower 3 also. Otherwise, we will see to calibrate it maybe last quarter of next financial year or we should push it beyond that. We'll take a call once we -- the performance on Tower B is assessed and we get to know about that.
As far as Thane is concerned, yes, Thane, it's a land raw industrial land. There's a lot of work required to clean it up. So that is in progress, it's progressing well. It's a large piece of land, industrial land conversion and all that has to happen. So therefore, we are a little more circumspect there. So we may try to launch it next financial year, but it's a touch and go, so it may spillover. So that's why we have not given a very strong guidance on it for next year. It could happen in next year, but more likely to happen in the year after that.
Okay. So basically, we'll have to pay all these charges also in terms of the clearances and everything into that other than the land clearing...
Yes, some of those expenses that we'll start bearing, right, whatever is required to regularize the land.
The next question is from the line of Sourav Dutta from Minerva Asset Advisors.
Sir, according to Slide 23, around 47 of the Pulp and Paper revenue came from paper. Could you please break it into copier versus writing and printing paper?
Copier [Foreign Language], noncopier [Foreign Language]
It is 30% to -- 30% is about copier, balance is a noncopier.
Got it. Secondly, your EBITDA margin in Pulp and Paper rose around 500 bps sequentially. And this came at a time when your competitors have faced higher BCTMP prices also reported, declines in FPD realizations because of imports, which doesn't seem to be the case with you. So I'm just wondering if you could take me through how have you seen increase in board prices sequentially? And what specific margin drivers within copier or tissue helped in expanding margins?
No, no. We -- as I think earlier also during the investor conference call, I have said that we are -- we have been totally working on the cost reductions. And we have had a lot of cost reductions in terms of chemicals and, in fact, on the packing material, in fact on the various power and the... [Technical Difficulty]
Ladies and gentlemen, please stay connected. The line for the management has got disconnected. Please stay connected while we join them. Ladies and gentlemen, thank you for patiently waiting. We have the line for the management reconnected. Sir, please go ahead.
Yes. So yes, I was telling you that we have been working on the cost reductions, and that has been our strength in the last 1 year. And that's why you will find that we have performed slightly better than others in the present circumstance.
Right. So -- but still, if I were to calculate the net sales realization for paperboard specifically, it is higher while the usual market reports say that board prices have moved lower. So is there any particular reason why this increase happened for you? Or...
As I said, we have worked on the cost reduction. No, realization has not increased to that extent. It is just about INR 1,000 per tonne. So that's not an increase at all. It is basically the overall cost reduction in the board, which has taken place.
For example, our power -- I'm just giving you one example you can understand. Our power consumption earlier used to be about 5.25 kWh per tonne of board production. Today, it has come down to 4.35 kWh. I'm just giving you one example to show as to how much cost saving has been there in board alone.
Similarly, in case of steam, similarly, in case of the productivity. The question is that if you see the -- our quarter average, it is more than 16,000 tonnes every month. That means we have produced more than 48,000 -- around 48,000 tonnes of board, which was never produced earlier. So the efficiencies, the cost of production and the cost of chemicals and the cost of packing, we made some changes in packing, which was unnecessarily a burden to the customer also and to us also. So both are happy.
Okay. Got it. Quickly, a last question also. As the wood supply situation improved in Uttarakhand and nearby areas for you in the last couple of quarters?
The current -- the last quarter, our wood supply situation has been quite good, and we have got a good stock of wood now. And actually, January to March quarter is generally that the wood supply is generally there. But from April to June, it is a bad month because it's a harvesting month. So the wood supply reduces. So that's why I have been -- I have build a stock in such a manner that from April to June, I will not have any problems of wood. And also, we have done certain changes in the pulping process, where I can use different types of woods and I can increase the percentage of certain types of woods, which are available in the marketplace. So that's also a cost reduction element in that.
Right. Understood. And how would prices have moved sequentially for you on wood? And what -- apart from eucalyptus, what are the varieties would you be looking at, roughly?
We have been using even the poplar. We have been using -- we have started using even the bamboo, which earlier, the percentage of bamboo was lesser, but now we can go up to 25%, 30%, which earlier, it was only 15%.
[Operator Instructions] We take the next question from the line of Mithun Soni from Geecee Holdings.
Congratulations on good numbers. Just wanted to understand on this TDR part. So like this TDR we are generating from our Worli project and from what? I would understand, that a lot of what we generated we can use in-house itself. So if you can just explain how do we generate that and where do -- how -- like after using, how much we have left it to sell?
Yes. Thank you, Mithun. So the TDR is basically the land that we have surrendered as part of the Midland development policy to the MCGM. So for that -- that TDR is generated, which are surplus. And we found an opportunity in the market there was a huge demand-supply gap. So we sold it to the market developers. So we've got a good margin. And that is the reason why we have sold this TDR. So it is over and above what we require it in our project.
You're telling -- what you sold is over and above for the tower?
That's right. That's correct.
But sir just to understand, when you will make the towers C, let's say, so would you -- will have to rebuy? Or this is more...
No, no, no. We don't have to rebuy. We don't have to rebuy.
So this is over and above the required for the all -- for all -- Towers B and C put together?
You're right.
Okay. And are we still left with any surplus? Or more or less...
Yes, when it gets generated here and there, we may have a little more surplus. So difficult to quantify at this point of time. So often and when we get this generated, looking at -- I mean, accessing the market demand, et cetera, we'll take that call.
Okay. So we should not build it as a part of the model for the project as such?
No, not at all, not at all.
And sir, second on the Tower B, have you at like finalized the price at which you're looking to launch?
No, no, not yet, not yet.
[Operator Instructions] The next question is from the line of Dixit Doshi from Whitestone Financial Advisors.
The question is regarding the Real Estate division. So what kind of launches we are planning in FY '25?
Plenty of launches, Dixit. Apart from the projects which we're launching currently, we have Sarjapur coming up in Bangalore, Wellesley Road coming up in Pune, IHP land coming up in Delhi. Walkeshwar, we're trying this year -- this quarter. If it doesn't, then it may spillover newer phases of Birla Trimaya. All these are lined up for next financial year. From our existing projects and also hoping to finalize...
Okay. Roughly you can quantify the value of launches?
Difficult to quantify at this point of time, yes. So largely, what is the number? Difficult to quantify. Yes, roughly about INR 8,000 crores to INR 9,000 crores from the existing, and some newer projects are going to happen in the coming quarter and next quarter, we may get another INR 4,000 crores, INR 5,000 crores.
So as whatever launches, new launches you are targeting in FY '25 is INR 8,000 crores to INR 9,000 crores.
From our existing ones, plus we are continuously looking for new projects. So maybe a few -- some of them have come from there to an addition. This is without taking Tower C into consideration. If based on performance of Tower B, then Tower C comes, that is over and above this, there will be another INR 5,000 crores, INR 6,000 crores, around roughly INR 5,000 crores. Yes.
The next question is from the line of [ Ritwik Sheth ] from One-up Financial.
Sir, just one question on the Worli micro market, Worli property micro market. What is the kind of absorption on an annual basis you are seeing? And what is the kind of growth rate is there in that micro market where our flagship product is there?
See as of now, there is no immediate launches coming up. In this particular micro market, we are there. Most of the products are either it is nearing completion or await OC. But maybe in the longer term, there may be some launches coming up in Worli C Phase. A few of the -- the 2 or 3 projects slated to come there, prestige projects closer to date, race course et cetera. But of this stature, or this kind of size that we have, I don't see any serious competition to this project.
Sure. And any sense on the annual absorption in that micro market, probably Worli towards near the race course that particular...
Yes, I don't have any ready numbers as of now, but I can get back to you on that.
[Operator Instructions] The next question is from the line of Himanshu Zaveri from Dhruv Gems. We'll take the next question from the line of Deep Mehta from Bank of India Mutual Fund.
One quick question. How is our BD pipeline shaping up? And what can be the target for FY '24 and FY '25 for real estate projects?
Yes. So far in FY '24, we have finalized projects worth about gross development value of INR 16,000 crores. We have, again, a very strong pipeline and we are hoping that we will be able to conclude a few more projects. It may happen in this quarter. I mean, it happened in Q4, may spill over to Q1. But very strong proposals are there in each of these micro markets that we have chosen. So our target will continue to be -- to strike deals in the range of about INR 20,000 crores per annum going forward also.
Okay. So FY '25 also, we are targeting INR 20,000 crores.
Yes, yes, yes, sure.
The next question is from the line of Nirav Savai from Abakkus AMC.
Most of my questions have been answered. Just one thing in terms of the BD pipeline you said. So what would be the quantum of deals which you are looking out for? Would it be INR 500 crores, INR 1,000 crores, INR 2,000 crores, INR 5,000 crores or any color if you can just give on that.
Largely, we are looking at deals in the range of INR 1,500 crores and above unless some very specific, location-specific, high-visibility trophy projects are there. But typically, we look at INR 1,500 plus GDV projects.
This would be largely joint development? Or would we be buying land? Or how do we see this?
Both. Mix of JDA and we are flexible there. JDA or outright. We'll look at a judicious mix of both.
The next question is from the line of Abhinav Bhandari from Sohum AMS.
Congratulations on a good quarter sir. Just 2 questions. One is how much is the pending payment relating to the land of the various projects that we acquired thus far? And the second question is, how much would be the construction spend for this fiscal and next fiscal, if you could give some direction on that.
So pending land, I think most of the land we are fully paid for except Thane. So that will happen over 4, 5 years. We haven't even started paying for that, but we start paying once we start the regularization of the land. Right now, the spend is largely on the regularization of the land. So that's about INR 600 crores balance.
So is this equal tranches or typically the bulk amount goes out first? Just trying to understand...
[Foreign Language] it's like spread. Maybe first tranche is INR 200 crores and the rest is spread and its 1% at the end of it, temporary share. So yes, so it's largely an equal proportion. And construction cost spend, I think we'll have to come -- and that's number and I have to compute it. So we can get back to you on that.
Yes. So sorry, Abhinav, just one point, mostly, we are cash-neutral in all of our projects. There is nothing as of required. Largely it is funded by our customer receipts, except Kalyan, where there is a little bit of funding required. But otherwise, most of our projects -- or almost all of our projects are largely funded through customer receipts.
We take the next question from the line of Jeet from Pinpoint.
Sir, if I listened properly, you mentioned you're expecting business development of about INR 20,000 crores this year and next year. So on the back of this, what kind of presales ramp-up do you expect? Because you've done around INR 1,100 crores for 9 months this fiscal. So how should this move up assuming you're able to launch new projects from the time line, could you envisage it?
I'm looking at close -- we are crossing more than INR 3,000 crores sales this year. and looking at more doing close to INR 5,000 crores to INR 6,000 crores next year.
Okay, sir. And on a portfolio level, what kind of EBITDA margins do you expect from these projects?
30% to 35%.
On average.
Yes.
[Operator Instructions] The next question is from the line of Karan Mehta, an individual investor.
I just have one question on the paper business. So what would be our full year margins in the paper segment and our margin outlook in this business for FY '25?
Well, this quarter, it was around 15% or so. This year, it will be around 15%. For the next year, we are still working out the numbers. And I think it will take another 1 month before we can comment on that.
Karan, actually, we -- this is Snehal here, every time people keep on asking about the margins. Quite honestly, we don't look at the margin because if you are calculating percentage on the selling price. And generally, the cost also moves along with the selling price. So the right thing to look at is the EBITDA that you get per kg of paper. So our aspiration is to be somewhere close to INR 15 per kg, which is what we feel we should get in the next year. Right now, we are at INR 11 per kg.
The next question is from the line of Saksham Mongia from Ambit Capital.
My question is related to the real estate sector. In the previous call, it was mentioned that our leasing rental is about INR 190 per square feet. As per the latest supported news by Barclays, rented a space in Worli for INR 320 per square feet. Do you anticipate the possibility of seeing rental hike in our using leasing portfolio considering the potential mark-to-market opportunities?
Yes. I mean, the rentals have gone up. The occupancy -- vacancies have drastically reduced. We are working -- we are at a 100% occupancy. No immediate -- this is coming up, immediate releasing or closure is coming up. INR 320, that's a steep -- this thing. I'm not very sure that headline rentals -- or is the effective rental is what, that we need to go into the details. I don't have the details. Yes. But generally, looking pretty good the way the market is pretty strong, the demand for leasing.
The next question is from the line of Depesh Kashyap from Invesco.
Can you hear me?
Yes.
Yes Depesh, we can hear you.
Sir, just wanted to be sure if I heard correctly, you are still maintaining your presale guidance of INR 3,000 crores this year?
Yes, yes.
So in 9 months, you have done just INR 1,100 crores. So in the next 2 months, you're expecting around INR 2,000 crores for the sales?
So Depesh, you are well aware that most of the real estate sales happened during launch, right? Even if you look at our INR 1,100 crores also, it all mostly happened in Q2 when we launched the Trimaya phase, where we did INR 550 crores. So I'm hoping that when we do Niyaara Tower B, and we will do the RR Nagar, together, they are about INR 6,000 crores. So this -- the 2 reasonably well, we should be able to strike this target.
So sir til now you have the RERA approval only for Niyaara 2, right? For RR Nagar and for Walkeshwar, the RERA is still awaited.
You are absolutely right, but we are hoping to get the RR Nagar RERA this month.
Okay. Got it. And sir, any color you can go on Niyaara Phase 2, like what price point are you looking at? Because I think the Niyaara 1 is going at around INR 80,000 per square feet, if I'm correct.
Yes, INR 80,000, INR 85,000. We are selling now in the last -- we sold at INR 85,000. Yes, similar range because it's at launch. So around similar range is what we are expecting.
And sir, how many units are there in Niyaara Phase 2?
149 units.
149 units. Got it. And lastly, sir any color on the collection that you're looking at this year? Til now you have done INR 800-odd crores. So what is the expectation?
Looking around INR 1,500 crores.
INR 1,500 crores, superb sir.
The next question is from the line of Himanshu Zaveri from Dhruv Gems.
So in the presentation, you have shown a booking potential of around INR 45,000 crores. So that includes all the projects shown in the presentation along with the commercial project of Niyaara, right?
Yes, not commercial. Niyaara is not commercial. Yes, not commercial.
Niyaara means the whole project of -- the 14 acre plot what you are building on, right?
Yes, yes.
So that doesn't include the west plot, which you have shown in the presentation on the first week of January, which you have shown, right, 1.5 million square feet?
Right, right, right.
That is separate, right?
Yes.
So that is also a residential one, right, that's going to come up?
As of now, it is, yes.
Residential, right?
Yes, yes.
And my line got disconnected. So I just wanted to know what is the news on the business development front? Like I haven't heard anything in a while. So we can expect this year like -- any update or next year INR 20,000 crores, like what is the update?
So as I was just mentioning, while before to Depesh, we have already finalized in this financial projects were INR 16,000 crores GDV. We are looking at -- we have several proposals in the -- in all segments in all geographies, Bombay, Delhi and Bangalore and Pune. Now negotiations are going on, due diligences are going on. We expect few of them to happen this quarter. Maybe some of them will spill over to next quarter. But we are quite hopeful that we'll be doing some very good deals in the next few months.
Okay. That's good. And one more question. So if I see our GDV, you've -- it's around INR 45,000 crores, right? And we are supposed to sign another INR 20,000 crores, INR 25,000 crores according to what we are projecting, right, the west plot and et cetera, what we have? The other one is separate, right?
As I mentioned, INR 16,000 crores we have already signed. So expecting another INR 3,000 crores, INR 4,000 crores, I mean, as per our target, see the INR 20,000 crores we have done INR 16,000 crores and maybe another INR 20,000 crores next year.
Yes. So what -- my question is that, sir, if we are like INR 65,000 crores, INR 70,000 crores of GDV we have on hand, right? So shouldn't be like now going at the rate of -- slowly at a rate of INR 10,000 crores to INR 15,000 crores a year in the next 2, 3 years? Because now we have a huge GDV, which is there in our hands, right?
See the idea is that we should constantly have inventory to sell. So if I have a GDV, which I can't launch now, but it is 3, 5 years down the line, that GDV is not effective GDV for me. I would like to launch projects worth INR 15,000 crores, INR 20,000 crores, INR 25,000 crores every year. So that's what I'm looking at. Okay.
So project which I'm going to have a sequential, I'm going to launch it because of managing supply. I have -- like in Thane, I can't launch if I have even, let's say, 5 million. But I can launch all of 5 million tomorrow. So I would like to have many projects which I didn't launch simultaneously so that my annual sales can go up. So just saying GDV is INR 45,000 crores, INR 50,000 crores, INR 60,000 crores, that doesn't mean much to me. I should have enough projects to launch every year simultaneously.
What I heard, sir, that next year, you're project INR 5,000 crores, INR 6,000 crores of sales. So in the next 2 to 3 years, should we be there, around INR 10,000 crores of sales a year?
Yes, yes. Yes, absolutely.
A couple of years or next 3 years?
Yes, yes, absolutely.
Okay. And then Niyaara project, you said the Phase 2, right? You said only 149 units. So from what I assume, you're going to make only 4, 5, 6 bedroom, is it? Because the first phase at 2, 3 bedrooms also.
We are largely having 4 and 5, 4 and 5 here and just a few large 3 bedrooms.
In the second phase, is it?
That's correct.
So we'll be having premium -- you're targeting premium segment, right, which is hot right now?
Yes. Totally luxury, ultra luxury.
And any response, like the prelaunch or anything has happened? Or nothing as such right now?
No. We got the RERA, we started warming the market and extremely strong response, but fingers crossed.
[Operator Instructions] We take the next question from the line of Jeet from Pinpoint.
Sir out of the INR 7,500 crore of ongoing projects, how much is sold and what will be the inventory in hand right now?
We have sold about INR 6,300 crores.
Okay. Existing inventory is only INR 800-odd crores.
Hardly any inventory left. Except Kalyan we have about INR 200 crores. Otherwise, most of the places, the percentage inventory is in single digits.
Okay. Got it. And sir, based on the new launch that you're expecting this quarter, broad basis how much percentage would you expect to get sold?
Sorry you're saying what percentage of the new launch do you expect to sell?
Yes, yes.
Yes. I'm hoping depending on when we get the RERA for RR Nagar, if we have enough time, then I think 50% of these should not be a big challenge in today's market, considering the locations and the product that we have.
Okay. Got it, sir. And sir, more long-term question on strategy. So now you have presence across multiple cities. So do you intend to try and scale up and win more market share in any particular city? Or would you want to be opportunistic into the business development and like have a fair presence everywhere, kind of?
As of now, we are very clearly focused to increase and establish and rather consolidate our footprint in these 4 markets. I think these 4 markets still have the largest amount of opportunities among all other cities in India. So we want to really establish ourselves. I think that's the clear short- to medium-term strategy.
And we will keep reviewing this every couple of years and also [indiscernible] wonder how the market evolves. We're also looking at entering commercial market in a much bigger way at the opportune time when we have enough of fund flow or tie-ups, large platforms, et cetera. So that's the medium-term strategy for us.
Okay. Got it, sir. And one last question is for the Textile business. So it's been EBITDA negative for a few quarters. So any thoughts there in the sense that should one expect a reversal in margins, per se?
It depends on the market, how the market improves. So this quarter, running quarter, we hope market should improve. So we may do better, but all depends on the markets and demand/supply.
Okay. But sir, does it make like sense running the business when you're burning cash there?
So the thing is -- I'm sorry, I didn't get your name?
Jeet.
Is it Nitesh?
Sir, it's Jeet from Pinpoint.
Jeet, yes. So Jeet, as you -- I don't know how much you're following the company, but in the last -- the second quarter, we decided to get rid of our spinning and weaving units and move to a completely outsourced model so that we could at least save costs, et cetera, and all that, and we were going for 100% outsourcing model. So now over the next -- the last quarter and the quarter before that, we have seen that we've not been able to really scale up to 100%. Markets are not so good, et cetera. So we are doing a wait-and-watch approach and probably...
[Technical Difficulty]
Ladies and gentlemen, please stay connected. The line from the management got disconnected. Ladies and gentlemen, we have the line for the management reconnected. Sir, please go ahead.
So Jeet yes, so in continuing, so we are keeping a wait and watch. I mean, because we are not reaching our entire full capacity plus we are also spending money on providing VRS, et cetera, to the people that we are reducing. So the losses are mounting. We're keeping a wait-and-watch. If the markets, we feel, that -- unless it improves, and if it doesn't improve, probably somewhere down the line, we may take some other calls.
The next question is from the line of Himanshu Zaveri from Dhruv Gems.
Yes, I just wanted to ask now the real estate business is when it stands up on its own feet maybe in a couple of years down the line. So the real value for the shareholders should be when you demerge the business, right? So are we looking at doing anything 2, 3 years down the road?
So Himanshu, every quarter, this question comes up, and you yourself mentioned that it has to stand on its own feet in the next 2, 3 years. So once that happens -- so right now, it is on its feet with respect to the projects that it has launched, but it is not on its feet yet in terms of growth capital.
As K.T. was mentioning, he has plans for -- Himanshu, for INR 20,000 crores GDV every year, which will require substantial cash and support from the parent company as well as the cash cost that is the paper business. So yes, 2 years, 3 years down the line when we see them perfectly on their own, we will certainly look at unlocking value of both the businesses.
Yes. I just wanted to make one clarification, which was a response to the Depesh Kashyap's question on the GDV of INR 45,000 crores. That includes Worli West also, 1.5 million square feet in Worli West.
Thank you, sir. As no further questions, I would now like to hand the conference over to the management for closing comments.
Thank you all for participating in this earnings con call. If you have any further questions, or would like to know more about the company, please reach out to our IR Manager at Valorem Advisors. Thank you for your support and confidence in the company.
Thank you, sir. On behalf of Ambit Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.