Century Textiles and Industries Ltd
BSE:500040
Century Textiles and Industries Ltd
BSE:500040
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Earnings Call Transcript
Other Earnings Calls
Ladies and gentlemen, good day, and welcome to the Century Textiles and Industries Limited Q4 FY '20 Earnings Conference Call hosted by Nuvama Wealth Management. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Parvez Qazi from Nuvama Wealth Management. Thank you, and over to you, sir.
Good afternoon, everyone. Welcome to the Q4 FY '23 Results Conference Call of Century Textiles and Industries. Good day. We have with us from the management side, Mr. RK Dalmia, Managing Director of the company; Mr. KT Jithendran, the CEO of the Real Estate division; Mr. Vijay Kaul, the CEO of the paper -- Pulp and Paper Division; and Mr. Snehal Shah, the Chief Financial Officer of the company. Without much ado, I will hand over the call to the management for their opening remarks. Over to you, sir.
Thank you. A very good evening to everyone joining us today. It is my pleasure to welcome you all to the earnings conference call -- the earnings conference call for the fourth quarter and financial year ended 2023. Let me first take you all through the quarterly industry and financial highlights. A plethora of challenges, geopolitical tension in the onset of Russia-Ukraine conflict, weak global macros and higher inflation impacted financial 22. This fiscal year turned out to be highly volatile and ended with higher interest rates, reallocation of FII flows from India to other emerging markets. Domestic consumption slowdown as well as the U.S. and European banking crisis. Despite the macroeconomic trends, we have delivered excellent overall performance.
Coming to the financial performance for the fourth quarter of financial year '23, the consolidated turnover stood INR 1,187 crores. The EBITDA increased by 99% year-on-year to INR 265 crores with consolidated EBITDA margin of 22.3%. And the net profit after tax grew by 69% year-on-year to INR 142 crores. This was due to onetime exceptional item of INR 134 crores profit made on lead reassignment of land at GIDC [indiscernible] Gujarat belonging to our pulp and paper division. For the financial year ended '23. The consolidated turnover grew by 16% year-on-year to INR 4,719 crores, mainly due to significant revival in paper business. The EBITDA for '23 grew by 38% year-on-year to INR 687 crores with consolidated EBITDA margin of 14.6%, and the net profit after tax grew by 64% year-on-year to INR 265 crores.
Now let me take you through some of the key highlights across our 3 business verticals, starting from real estate business. The residential sales across all key markets in the country were at an all-time high in the past quarter resulting in doubling of the residential real estate industry in the size of last 3 years. The sector exhibited robust demand during Q4 financial year '23 driven by strong [indiscernible] across all categories, including high-value units. Our commercial real estate sector experienced a stable and healthy demand across cities. Birla Estates achieved higher sales worth INR 806 crores in Q4 finances at '23, which was the highest quarterly sales ever for the company, with a strong collection of INR 215 crores, and the entire financial year of 2023, we achieved sales of approximately 1.2 million square feet, worth INR 2,183 crores, registering a growth of 14% year-on-year and collection were INR 861 crores with collection efficiencies of 98.9%.
The project front Birla Navya, Gurugram continues to sell at an exceptional pace with the third phase achieving a booking value of more than INR 200 crores in just 2 weeks of launch. At our already launched [ projects ], projection [ education ] is in full swing across all projects. Birla [indiscernible], Birla Vanya, Birla Navya Phase 1 are due for delivery in coming years. Furthermore, the key new projects announced in Bengaluru are progressing well, and we expect to launch both of these projects in the financial year '24. As announced in April 23, the company expanded its footprint in Pune by acquiring 5.76 acre plot, which has a revenue potential of more than INR 2,400 crores, growing is to spread in Bangalore on acquired another 10.35 acres plot with the revenue potential of more than INR 850 crores. Our 2 commercial assets, Birla Aurora and Birla Centurion continue to generate stable rental as well. The demand fundamentals remain robust and are expected to continue in the next financial year.
The global economic slowdown and its impact on the Indian macroeconomics situation is yet to be a certain, though the domestic consumption is strong, remains -- consumption history remain strong. The mortgage rates are expected to remain stable at current level as the industry outlook remains positive. Moving on to our pulp paper segment, the quarterly for, we improved sales from that up last quarter. Board market is improving due to pickup in pharma, [indiscernible] mainly Cup-Stock and FMCG Rural segment. Export demand has also slightly improved from [indiscernible] holiday opening. Copier demand increased due to a jump in Q4, where the writing and printing demand was supported by government tender order.
For the fourth quarter, the overall capacity rise 93%. Sales volume witnessing a decline of 12% on year at 1,06,668 metric tons. In Q4 '23, the left grew by 10% year-on-year to INR 910 crores, primarily driven by better realization. While EBITDA stood at INR 298 crores with margin of 32.7%. It is important to note that the EBITDA includes a onetime exceptional item of INR 134 crores profit made on sale of land at GIDC [indiscernible] Gujarat. During Q4, there was an increase in NSR by 8.4% in tissue, but significant reduction in board NSR by 15.8%. However, there was no major change in paper NSR. So average utilization price as compared to Q3 reduced by [ 4.4% ]. For financial year '23, our net sale grew by 27% year-on-year to INR 3,572 crores, while EBITDA grew by 71% year-on-year to INR 725 crores and EBITDA margins at 20.3%.
Writing and printing paper demand is expected to remain low in coming quarters due to seasonal impact of closure of educational hub for summer holidays, while tissue and board segment is expected to have a stable demand. Cost pressure are expected to persist in domestic market due to low-priced import and excess supply from domestic mills. Export demand from Europe, U.S. are expected to remain low due to recessionary impact. Lastly, talking about textile division for the fourth quarter under review, net sales declined by 28% year-on-year to INR 222 crores with an EBITDA loss of INR 25 crores, while financial year '23 sales stood at INR 951 crores to the EBITDA loss of INR 38 crores.
Q4 financial '23, demand in the domestic market continued to render pressure with low to medium footfall across the segments in the retail sector. Exports inquiries orders have not shown much improvement and orders from U.S. and Europe were considerably down. In addition to the above falling raw cotton prices resulted in a sharp decrease in the cotton and yarn realizations too. [indiscernible] sales were stood in H1 of the year. However, pressure increased in still because of low demand and second drop in cotton prices. Production capacity was utilized almost fully throughout the year, but margins were under pressure in H2 due to heavy competition in the market.
For bed linen the importers in USA were reluctant to issue new orders and where liquidity in their inventory at throw-over prices. Cotton net [indiscernible] had to compete with product made of manmade fibers which are substantially cheaper. And until the market sees stable raw material prices scenario and the stabilization in yarn and fabric demand, it seems that demand will continue to be under pressure. With that, we can now open the floor for question and answer session. Thank you very much.
[Operator Instructions] The first question is from the line of Data from the line of Sourav Dutta from Minerva Asset Advisors.
I just had 3 questions on the board side. So you saw mid-teens price decline sequentially. I just wanted to know, is this a national trend [indiscernible] announced and saw that increase? Secondly, was this trend...
Mr. Dutta the audio is clear from line. Please use the handset mode, sir.
I am on the handset mode? Is this better now?
Yes, sir.
So I have 3 questions on the board side. You saw mid-teens price decline sequentially. So would you characterize this as a trend nationally or was it more of a regional trend? Secondly, was it more pronounced in certain industries versus others? And finally, you mentioned about imports impacting pricing negatively. So just curious as to what kind of board buyers are moving into imported boards because usually the pharma and CPG guys prefer domestic boards because their requirements are met fortnightly. So you have 3 questions on the board side.
Yes. Thank you. Now the questions on the Board. Number one, well, the prices were low. In fact, I would say in all these sections, whether it was pharma, FMCG or any other -- in the food segment also to that extent. And it was throughout the country. It was not only limited to a particular region. Because the -- our factories which are making board are distributed throughout the country and all were facing the same kind of issues and problems. And as regards to the imports of the board because the board prices were quite high because of the raw material prices being very high. But as -- when the demand has got -- and the demand was in trouble, so the high prices didn't mind.
So they were -- so the imports came at a lower price, that's why for some time. That's why the prices were low and the decline of the prices started. So it is a worldwide phenomenon. It is not a phenomenon only in India also. That's what it is. So if you've got any further thing on that, I can answer.
Right. So just wanted to understand, was there any specific subset industry that was buying imported boat or it was across the board, CPG...
No, not really. It was throughout the -- because the particular type of Board, the Board which we are making is an original board and a hard board. So that whatever people are importing that goes to the same industry. So it's not in a particular industry. It can go to different industries.
Understood. Secondly, I had a question on the caustic soda prices. Caustic soda prices were down 20%, 25% sequentially. So did the benefit flow into this quarter -- in the past quarter or would you see this in the June quarter? And could you quantify the gross margin impact in the fourth quarter of March if you saw some impact over there?
You see, let me -- because there's a dichotomy in this whole thing. The caustic soda, we are using mostly in making the pulp and not in making the paper. So when we made the pulp production, the caustic soda prices will come into the picture and the cost of the pulp is accordingly denoted and all that. But if you see the pulp prices, the imported pulp prices and our internal pulp prices has gone up considerably because the wood prices has gone up. So the difference in the caustic price was not that big that it could make a difference in the costing to that an extent. Yes, definitely, the drop in the caustic prices, reduce the prices to some extent. But overall, the pulp prices are so high that it did not make any difference. So that's an extent.
The next question is from the line of Shalini Vasanta from DSP Mutual Fund.
This is Vivek Ramakrishnan. Given the volatility in your various businesses, would you be looking at any major CapEx apart from the construction in the real estate business is question number one. And question number two is, you've also been very prudent about debt levels and the outstanding loans have come down from about INR 1,030 crores last year to about INR 1,000 crores this year. So I just wanted to know how it is going to track going forward?
So Vivek, good question. Thank you. Thank you very much for the appreciation on the debt management. Yes, most of our free cash flow from particularly our pulp and paper business will go into supporting the real estate business growth. The free cash flow, which comes from the real estate business are after providing for whatever CapEx that is required by them. So we always bug in some number over a 3-year period, say, about INR 500 crores for the CapEx plans of the paper business. Most of the CapEx is directed towards marginally improving the efficiency, the productivity of the business as well as some cost saving measures.
So that would probably going forward, help us in increasing the capacity, reducing cost, et cetera. But no major at the moment, plans for the pulp and paper business in terms of a huge CapEx expenditure where we might require borrowing. So most of it is through the cash flows of the business itself and whatever excess comes up, we actually use it for the purpose of our real estate business. So the real estate business is now going forward, as we say, is the real estate arm of the Aditya Birla Group and the growth engine of Century Textiles and Industries Limited. I hope that answers your question.
The next question is from the line of Karan Mehta from Nirzar Securities.
Mr. Mehta, please go ahead.
Yes, Karan, go ahead. We can hear you.
So I just have a couple of questions. Firstly, if you can please provide the volume for paper business for this quarter and the previous quarter?
Sorry.
If you can please provide the volume for the paper business for this and the previous quarter?
This quarter, it was 111,000 tons in the quarter and the last quarter was about 100,000 tons.
Okay. Fine. And secondly, we have incurred a loss in the textile business in this quarter. So is this an inventory loss? And -- or what is the nature of the loss? And is it of recurring nature? Or -- and if it is not, then will it reverse in the future?
So yes, I think, Karan, some of the losses or business process are almost like 50% is business office and 50% is onetime losses, provisions for inventory or term doubtful debt, it will be, I think, doubtful that may be recoverable as per audit standards, we have provided, but it is recoverable in future. And inventory at the first price or whatever NRB [indiscernible] audit standards we have done. So on those 50% losses are there, and that is a onetime expenditure.
Okay. Okay. And sir, if I can squeeze in one more question. So we have recently acquired land at South Bombay and Pune. And so how do we intend to develop these land? And when do -- when can we expect revenue from these projects?
Yes. So Karan, the vacation land in South Bombay, we expect since it's a smaller size, we expect that to launch in this financial itself. While the Pune, which is a larger thing, it has got -- where the plot size is larger, so it has a more gestation period for launch. So we expect that to launch in the next financial year.
Okay. And what about the Bangalore land?
Bangalore land, we will be launching it this financial year. We are planning to launch this financial year.
The next question is from the line of Amit Srivastava from B&K Securities.
Sir, congratulations on Birla Niyaara successful 80% sales last 1 year. So just wanted to understand that the remaining 20%, how is the inventory? Is it going to be a higher ticket size, and it will take some time to get monetized? And second, given the 80% is already sold, can we reform the second phase launch, how it is a planning for the second phase? And if you can give the road map for the FY '24, which are the projects are coming for '24 launch?
Yes. Thank you, Amit, for the question. So yes, as you know about Birla, Niyaara Towers, 80% sold, [indiscernible] about 16%. So definitely, this call for a price increase, which we have done it currently sell price product at average of INR 75,000 per square foot. So we expect this -- we expect balance inventory to be sold at an easier phase than what will happen until now. Also, we are in the process of launching Tower B.hopefully, by December of this financial year, we should be ready with all approvals and RERA clearance for launching that. So either to be late Q3 or early Q4. The other launches are the Bangalore projects, which we are planned. One is the 2 projects that we acquired, one on a JV in near [indiscernible] the other one in RR Nagar, both we are expecting to launch this financial year. Also, the -- in Q4, we are hoping that we'll be able to launch the [indiscernible] of projects also and the last phase of Birla Navya and NCR. All these projects are slated for launch in this financial year.
And second, sir, in terms of the bio Banner Kalyan, our first phase, we have sold in a very remarkable time. However, the sales momentum in the next phase is very slow and growing quarter-on-quarter on a slower pace. If you can give on a broader light what is happening over there?
Yes. So the sales is at a slower pace than expected, we have sold about 832 of the 1,200 apartments. So the balance, we are hoping that we'll be able to cover up the rest of this year. The prices are now quite high because initially, we sold at very attractive prices. But now the prices are really playing for margins. So we expect this to go on a slower trail. And we're also approaching the finishing line this year, we expect to give possession of the property also. So I think with that completion, I think the pace should pick up. So we are quite confident that we will sell the balance at very premium prices.
And sir, in terms of the project like South Mumbai, we have already the large land parcel and then we have taken one more project. So if you can tell us that what is the strategy over the South Mumbai that we will take more projects in that area? Or we'll try to diversify towards Western Mumbai and [indiscernible].
So we are very bullish on Mumbai as a market. And I think all in attractive locations, we are always excited by that, whether be it in [indiscernible] or South Mumbai. So this was a very boutique project right in the Walkeshwar road extremely premium. So I thought this could give us a huge amount of visibility and brand pull. So that was a clear reason why we thought -- and it was a very attractive deal also. So all that culminated into us getting into this deal. So that is very well within our strategy of getting into very premium, high-end projects. So there is nothing like how many projects, wherever we get a good opportunity, good at a good price, attractive valuations, we are always game for that.
Sir, last one clarification from Snehal. Sir, in our cash flow, we have given a project development cost, which is around INR 900 crores in FY '23. So if you can give this breakup, what are the things it includes?
So this project development cost of INR 900 crores certainly includes the various costs on of construction and development and then purchase for all the current products which are currently going on.
So it's a payment also.
It's all on the payment. That's right.
The next question is from the line of Dixit Doshi from Whitestone Financial Advisors.
My first question is regarding this Pune land of 5.76 acres in Bangalore land of 10.35 acres, how much square feet will be doing then?
Yes. So broadly, of course, these are still under planning. So we have expecting about 1.5 million in the Pune, 1.5 million square feet. And about 1 million square feet in the Bangalore RR Nagar project.
Okay. And how much would be this Walkeshwar project?
Walkeshwar about 60,000 square feet.
Okay, 60,000 square feet.
Okay. And just one last question. So now since the MD sir also mentioned that most of the free cash flow from the paper division are used for the real estate division. So it is very clear that our major focus area is the real estate in Century textile. So any thoughts on transferring the textile business to, say, Aditya Birla fashion or any separate demerger, anything we are thinking on that line?
Dixit, you said, right? At the moment, we are not planning anything of that sort. We will keep on -- keep our watch on the textile business. Textile business keeps on having cycles, et cetera, it might suddenly become more profitable going forward. So at the moment, there are no plans, we'll continue as we are. I accept that we won't be allocating a lot of CapEx on the textile business.
Okay. And just one last question. So if you can just help me with the location of this Walkeshwar plot?
Yes. This is very close to the Governance Bungalow about 150 meters from there.
Governor Bungalow.
Yes.
The next question is from the line of Sara Gildan from Motilal Oswal Financial Services.
Am I audible?
Yes, you are, but maybe you can make ourselves more clearer.
Is it better now?
Yes, yes.
Yes. So just one small question, like whatever launches that you're planning for FY '24, what would be the cumulative value of it, sir?
Sorry, what was the question.
No, no, no. The launches that we are planning in FY '24 across various projects. What could be a launch size in terms of rupees -- crores.
So Tower B in Niyaara will be in the range of about INR 3,000 crores. Navya will be about INR 500 crores. Similarly, about INR 500 crores in the Bangalore first project and about another about INR 500 crores in Bangalore 2. So 1,500 plus -- INR 4,500 crores of new launches.
Yes. And sorry, Walkeshwar another about INR 500 crores. So about INR 5,000 crores.
The next question is from the line of Raj from [indiscernible].
I wanted to know the overall outlook for FY '24.
Which business?
Overall, sir. All the businesses.
So I mean we are quite bullish on the real estate business as you have already heard. So that is one thing. We don't expect any major slowdown in the real estate business at least in FY '24. We see good business coming from the paper business, particularly on the writing and printing paper as well as the tissue paper. We are keeping a watch on the improvement in the board business. Textile business, we expect some momentum on the upward side in the second half of this particular year.
Right, yes. And looking at 3 to 4 years down the line, how do you see company unfolding overall like...
So company probably now from a turnover perspective, 75% of our turnover roughly comes from the paper business and about 25% comes from the textile business. The accounting principles don't allow us revenue recognition from our real estate business till we get an OC and start deliveries. But going forward, we see a considerable improvement in the -- as we keep on delivering projects that we've already launched. I think the contribution in the revenue from the real estate business is going to grow tremendously. And maybe in about 5 years' time, probably will be more than INR 10,000 crores company.
INR 10,000 crores overall top line company.
Top line, yes.
The next question is from the line of Amit [indiscernible], an individual investor.
Am I audible?
Yes.
See, my question is that in the opening remarks, we have said that Birla Vanya, Birla Navya and Birla Alokya. These 3 are due for delivery in coming financial year. Just I wanted to know, it is in financial year '23/'24 or '24/'25.
For this financial year.
This financial year '23/'24.
The next question is from the line of Govinda Lal [indiscernible], an Individual Investor. Please go ahead.
My questions are on paper sector. So you've given good slides in your presentation PPT.
Hello.
The current participant has left the question queue. We'll move on to the next question from the line of [indiscernible] from [indiscernible] Wealth Management.
Am I audible?
Yes.
Yes. Sir, just wanted to understand more on the paper side because when I was just seeing your commentary, it's a little bit of mix wherein one side, you are saying that the imports are kind of increasing and the net realization in the board has obviously come down. Whereas on the paper side also, it is slightly -- it has declined a bit right? So going ahead, even if I see our, sir, EBITDA per ton, what we did last 3, 4 quarters, currently, it is at INR 15-odd, right? So INR 15 per kg, if you can just like give us more clarity over year. How are you seeing in terms of overall prices and on the margin side also.
Yes. The -- you see that we made 3 products. We make paper we make board and we make tissue. So all the 3 have got their own complexities and it has got its own market potential. As far as paper is concerned, because we make distinctly 2 different things in the paper. One is the copier and the other is the printing -- writing and printing paper, okay? That's those sort of things. So as far as copier is concerned, there is no problem of demand that anything come import. So there is still a large gap in the market for the copier paper. As far as writing and printing, you know it very well that it is a seasonal kind of a thing.
Presently, there is no demand. But after June, the demand will go rising like anything. So we have to prepare for that kind of [indiscernible]. As far as board is concerned, it depends upon the pharmaceutical industry in the E3 industry and FMCG and whatnot. So there -- there is always sometimes the imports come in because somebody has put up a plant outside and he wants to offload some material. So these are -- these things will do happen. Though the government of India has put a restriction that now you have to first apply [indiscernible] your quality credentials, then only you can supply in this country or import into this country.
So because of that, sometimes the imports do come but overall, the board demand is, I would say, quite reasonable. But yes, we have to keep our cost down, and we have to ensure that we are in the market and supply the right quality at the right price and at the right time, basically. So we are not hearing that back, but we have to keep telling the market that these are the situations but we are trying and managing those kind of situations. And tissue market, we are the leader in that. We have got a 44%, 45% market share. So we are doing quite well in the tissue market. So that's the story about all the 3 products that we make.
Okay. Okay. Because, sir, when we see the NSR in the writing and printing so a couple of years back, it was around INR 50-odd and now it is at INR 87, INR 88.
Yes, you are right.
Yes. And most of the input cost, which had kind of gone up and hence, the realization has also gone up are kind of correcting, so the chemical prices, the freight and the power and fuel right? So going ahead, are we -- sir, do you all also expect that this -- on the writing and printing side, we may see the price correction? Or this can be a new normal.
Price corrections will keep on happening, depending upon the raw material prices. This will keep on happening. Now the question is what is the demand and what fast -- how fast a particular person wants a particular product. So it will depend upon that. So price corrections will keep on happening, and that is a part of the process. Yes. So but we have to keep ourselves abreast with the -- whatever best cost we can get best productivity and efficiency we can have so that we are upfront in the supply status. That's it.
Okay. Okay. And sir, post March, have you all taken any price cuts or it's same?
As far as paper is concerned, we have increased the prices by INR 1,500.
We have increased the prices, okay?
Board, we have kept the prices here. Tissue, we have increased by about I think maybe INR 1,000 to INR 1,500 per ton.
Got it. And sir, just last question was on the margin side. So on the margin, sir, this overall INR 15.5, INR 16 per kg on the net side or we've done. So do you all think that this is sustainable? Obviously, if the prices remain real or there is certain -- or on the pulp side, you are expecting the cost to go.
No. I think the margins will go up this year as compared to last year, what you have seen. But it's very difficult to say how much and when it will happen. But definitely, one thing is sure that the margins will go up this year. What margins you have seen this year, next year will be definitely better than that. Next year means the current year, what '23, '24, I'm talking.
Great, sir.
The next question is from the line of Nirav Savai from Abakkus Asset Manager.
Sir, my question is regarding this or [indiscernible] Bangalore, which Aditya Birla group acquired. And we understand that Birla Estates is only real estate. So is there anything where Birla Estates would be working on in Bangalore either through a JD model or DM kind of a model? Or how do you understand this deal?
No. Birla Estates is not going to work on this project. That is going to separate us -- really nothing to do with the real estate business.
Right, right. So it has nothing to do with Century at all? Another thing is that we had a milestone of about INR 5,000 crores of sales in next 3 to 4 years. And based on that, any targets that we have assigned for FY '24 in terms of the new BD acquisitions? And going forward, how will it pan out? Because this year, in the month of April for the entire year, there were no big announcement. So last announcement we had seen last year in the month of April. And followed by this month in April. So how do we see this for FY '24 and '25, we have an internal targets in terms of BD acquisition?
Yes. So as I mentioned last year, we acquired 2 projects in Bangalore. This year, in April, we have acquired again 2 projects, 1 in Pune and 1 in South Mumbai. And we have several more projects in the pipeline which we are looking at and we're pretty excited about the opportunity there, and we are -- we'll be going pretty aggressively to acquire projects in our chosen markets. Difficult to put a quantitative number to it. So as we keep finalizing projects and announcing it, we will let you know.
Right. And sir, any guidance which you all would like to share?
I don't want to put any particular target for it because we are very particular that whatever deals we do, they do the right deal because we put a target and start chasing then we don't want to put too much money into it but we want to just go ahead and do the right projects. Focus is on BD. We are not privy to announcing internal targets. We can't announce that outside at this point of time. However, I would just give you the confidence that we're aggressively looking at expanding into all of our chosen markets.
Okay. So any guidance in terms of sales, if you could share?
No, no guidance. We are not sharing any guidance at this point of time.
The next question is from the line of [indiscernible] from [indiscernible].
Just had a question on the paper business. I missed the point regarding the price increase in the tissue segment. Could you just quantify what was the price increase taken in the tissue segment?
It's about INR 1,500 per ton.
In the tissue business.
In the paper and tissue, we have taken INR 1,500 per ton.
Okay. Okay. And what is the margin now? Is it the tissue business would be a bad margin at EBITDA level?
No, that's around, I think, 14%, 15%.
Yes. And the writing and printing paper?
Writing and printing paper, around 20%.
The next question is from the line of [ Pravin Gala ] from [ Sage One ].
The question is for KT Sir, currently what is the active number of proposals in the real estate? I mean on the BD side that you're actively considering which is there in your hands.
See, roughly, we have finalized currently in progress about 10 projects, which is under work either in various stages of launch and construction, et cetera, considering the last 2 acquisitions we did in April. We are -- again, I said I don't want to quote a number to it. But as I mentioned, in each of the target cities, we are looking at least 2 or 3 very, very active proposals.
But for in the current scenario where real estate is now prices are going up, even land prices are going up. Are we able to support the projects with the targeted IRR that we typically want? Or you are ready to make some compromises there?
We are not willing to make any compromises. We are patient enough to wait for the right project with the right financials, the right locations. So we are not in a hurry to grab whichever projects comes our away. We are looking at the valuations. We are very particular about the valuations and the location. So with that clarity in mind, we are moving ahead with our acquisitions.
Okay. And sir, lastly, for FY '24, what is the approximate sales number that you're looking for?
We are not giving any forward guidance at this point of time, Pravin. So once we start doing the practice, we'll let at this point of time, we are not doing that.
I mean last year, you had said approximately you wanted to cross that 2,500 above.
Yes, on a broad guideline, over a period of time, the next maybe 2 to 3 years, we are looking at crossing INR 5,000 crores or even more than that. I think there's great potential in the market. I think this market will continue for several years, this up cycle. And we are quite excited that the way we -- that if we continue acquiring new projects, we will reach there sooner than later. So I can give you a broad 2 to 3 horizon, we are looking at a INR 5000 cores to INR 6,000 crore annual booking.
I think as is in my guidance earlier, somebody was asking a question about the future. So when I said INR 10,000 crores, I said roughly half of it will come from paper and half will come from real estate.
Next question is from the line of Biplab Debbarma from Antique Stockbroking.
Good afternoon, sir. My question is -- first question is on the Gurugram project there in the PPT on the Slide 9, you have mentioned that total Phase I and Phase II is INR 9.4 lakhs and total is 17.8 lakhs. And is it the last phase, INR 17.8 lakhs minus INR 9.4 lakhs more than INR 8 lakhs would be the last phase? Or there would be multiple phases you will be launching the remaining.
It could be the way we -- so it could be either 1 or 2 phases. And depending how the approval comes, etcetera.
Okay. And when you mentioned INR 500 crores in Birla Navya, so you are mentioning the entire remaining phases or -- what is that [indiscernible]
Not the entire meaning then just talking about the next launch, which...
Next launch. And sir, this project is a 50-50 JV. So if -- am I right, this is a 50-50 JV, right?
What is that? 50-50, yes, you're right, 50-50 profit sharing JV.
Profit sharing JV. Okay. And my next question is on Birla Niyaara. Sir, Birla Niyaara, in the second phase that you are planning to launch. That -- would there be any difference suppose, at that point of time in December 2023, when we launched Birla Niyaara Tower B and Birla Niyaara Tower A is selling at INR 75,000 per square feet. Would you be launching -- you would be selling tower at the same price or is a differentiated price? Because I assume the product could be different in terms of per square feet.
I think what you're planning to launch Birla Tower B. Niyaara will be in more of premium positioning, which we're expecting to launch premium to Tower A. At a higher premium to cover it.
The same location, another tower, but per square feet basis, it will be higher right?
That is absolutely right. The product will be differentiated with larger format products.
Okay. And like what -- some numbers, 10% approximate ballpark -- for 10%, 15% higher than the prevailing...
Predict -- Biplab, we will take that call closer to the launch.
[indiscernible] and my final and last question is on the business that I missed that part. So now after the closure of this projects. What are the projects -- how many active being left that you are -- how many deals are there in active discussion?
Again, difficult to put a number to it, but I can only assure you, as I mentioned just now that we have several exciting projects in our -- considering at this point of time in each of these target markets.
And one more clarification. This [indiscernible] Walkeshwar it is a JDA readable account or outright, right? Okay. And for both Pune and Walkeshwar, we have [indiscernible] -- both Pune and Walkeshwar , you have paid the money?
Yes, yes, yes.
The next question is from the line of Jiten Parmar from Aurum Capital.
Yes. My question is on one of the previous questions. You mentioned that paper margins for FY '24 will be higher than FY '23. I wanted to know, I mean, will it be higher for -- than the Q4 margins be achieved?
Yes. It will be higher than the Q4 margin.
Q4 margins in the presentation is mentioned 32.7% But I think...
Only 18% because the rest of the percentage is coming from the sale of land at [indiscernible].
Okay. Okay. And what is the breakup of capacity among the 3 sections we have in paper, the tissue, board and writing and printing and copier?
Sorry, I didn't get your question.
What is the breakup of capacity?
Breakup of capacity. The paper is the highest capacity. That is about 240,000 tons approximately. Then the board is 200,000 tons, and the tissue is about 55,000 to 60,000 tons.
The next question is from the line of Rahul Shah, an individual investor.
Yes, sorry, I think that happens on you. My questions have been answered.
The next question is from the line of Himanshu Zaveri from [indiscernible].
I just wanted to ask like what is the construction cost in our Niyaara project. It should be around 20,000 square feet that includes the construction plus the premiums, everything all inclusive, right?
Yes, you're right.
So that includes everything, nothing more.
Yes.
Okay. And one more thing about the NCR region, the only project we have right now is Navya one, right? We have signed a project in Pune and one in Mumbai right now and 2 in Bangalore. So what are we -- because -- what I hear, NCR has been a fast-moving market right now and the price appreciation has been also quite high from what I know. I think the prices are by 30%, 40% in the last 2 years. So are we actively looking at that particular region because there the market is very good from what I know.
Yes. So we are looking at quite a few number of projects in the NCR both in Delhi and Gurugram and Noida and we expect to close some of these projects very shortly. Okay.
And I wanted a guidance on margin front. I just want to know, like, see, there are companies in the real estate business in India. Like you can compare a reality to [indiscernible] properties. So the [indiscernible] people are very highly on the margins because the net profit margins are very, very high. And the [indiscernible] go on the volume, like 10%, 15% margin. So on what -- are we going to be like a mixture type or we are going to go more on the [indiscernible] type of models?
No. So we are looking more at quality of projects. So we are careful about both the returns in terms of the IRRs and also on EBITDA margins. We are focusing on both.
My reason to ask you that because the phase of signing of deals in our company has been pretty like slow in the sense of -- if I see our [indiscernible] property which have signed like INR 25,000 crore, INR 30,000 crores of project like revenue potential in the last 6 months to 1 year. So I just wanted to know like we are going more on the margins, right? That's what we are trying to say.
Himanshu, we are focused on the quality of the project in terms of location, in terms of size, in terms of financials, in terms of joint venture partners. We give a balanced approach that we are particular about each of these parameters because in the long term, the success of the project, we make sure that -- at least we want to make sure that we give adequate attention to each of these parameters, whether it's the financials, it's the cash flow, it's the risk management and the project a JV partner, if there is a JV partner and most importantly, location access all of those, right?
So basically you want to build a good brand for a long term.
Absolutely.
And are we confident about the Niyaara project of sustaining these prices because INR 75,000 per square feet is quite high, right? So are these?
I don't think so. We have projects around which the possession today are selling at more than 1 lakh per square foot. There's a huge demand. We did almost INR 225 crores just in the last 1 month in March. So there's been a huge amount of demand.
But that isn't because of the tax break also. Do you feel or no?
I don't think so. Not because of the tax. There have been all the capital gain stuff that within very few people of that.
So you are confident that we are able to sell the project?
Great product. The people have understood the product, a great location from -- coming from a strong brand. And I think very confident that this project will touch much higher prices in days to come.
And this is the 2.4 million is the whole Niyaara one, right?
Yes, you're right.
There's another parcel also at -- we have another parcel also at [indiscernible] , right?
No, you're right next to this other parcel about 1.5 million. Here in Niyaara itself is about 2.4 million. So it's another 1 million opportunity for commercial is also there.
In Niyaara?
Yes.
The 1.5 million you said is there?
That is adjacent to Niyaara, another land [ Vikhroli ] West we call it. The parcel next to this -- adjacent to it.
So that is also right? That will develop in the future.
Yes.
And the Prabhadevi and the Pune also we have, right?
Those are potential for the future.
The next question is from the line of Nishit Shah from Equitas Investment.
My question relates to the paper segment. So what was the export contribution over year and compared this to the last quarter?
What is the contribution of exports?
Yes.
We don't export much. We don't -- we only do about 10% to 12%, maximum 15% we have done in one quarter. I think in the last quarter, it was not more than 10%. So 10% is hardly about 7,000, 8,000 and 10,000 tons, not more than that. So our contributions in exports are equal to the domestic contribution. In fact, slightly better also in exports.
Okay. That's it.
The next question is from the line of Vishal [indiscernible] Abercrombie and Kent.
This question is for Mr. KT. I just -- I was just wondering what will be the total revenue which you will be generating from the 3 phases you will be delivering in the current financial year?
I think depending on what sales we do this year, I expect about INR 1,500 to [indiscernible].
The next question is from [indiscernible] the [indiscernible] Financial Advisors.
Just wanted to know if you have shared how much we have paid for the land parcel in Pune, Bangalore and Walkeshwar?
Yes. Overall about INR 500 crores, both projects together.
Which one, Pune?
Pune and Walkeshwar.
Pune and Walkeshwar put together INR 500 crores. And how much for the Bangalore?
Bangalore, about INR 100 crores, INR 120 crores.
Okay. And I assume that in this INR 500 crores, I mean, Walkeshwar would be the major part.
No, Walkeshwar is a very small plot.
Okay. If you can help me with the separate in INR 500 crores?
I will get you offline.
The next question is from the line of Amit an individual investor.
My question is already answered. Okay.
The next question is from the line of Himanshu Saverio [indiscernible]
I just wanted to ask like in the future being shareholders, what is the views on the demerger of the business because in the end, the value is only created if you demerge your real estate business, which is Birla Estates, right?
So hello. So you're right, somewhere down the line, we have to unlock the value. But as of now, there are a couple of reasons you have to understand. One is we are dependent on the cash flows from the real estate -- from the paper business to support the real estate business, clearly, it becomes self-sufficient in terms of its own cash flows and borrowing. Number two, we have to have sufficient, what we call it, deliveries, executions of our projects to demonstrate our capabilities, et cetera, and the product qualities, et cetera, and all that stuff.
So I think you're right, but this is something you have to wait for some time. It won't happen immediately.
No, I understand waiting is okay. But like we have something in the pipeline, right, in the near future, maybe 1, 2 years down the line.
I mean, it's at the back of our mind, not in the -- on the joint table or on the table. We're not really thinking of it very seriously at the moment because I don't think it's [indiscernible] time to do that.
But the revenues you said from the real estate business, the major ones are going to only start when the Niyaara one, the revenue comes in, right? The other ones are pretty small right now.
As I mentioned, we are expecting with these 3 positions, this not about INR 2,000 crores of revenue this year. There's nothing from Niyaara.
Right. But Niyaara is like 3, 4 years down the line 3, right?
You are right. You're right.
Until then we are dependent on these 2, 3, 4 projects only, right, for the revenue?
I think we have about -- Yes. revenue, but cash flow is coming from all projects. So we have about 10 projects as of now.
So Niyaara also, we get only [indiscernible] right? Phase-wise revenue.
Absolutely. Every [indiscernible] rule. Any project, whatever is the RERA only completion of a particular phase you can recognize revenue cash flow keeps coming. It's only the recognition of EBITDA and revenue, profits and revenue, which comes at the end of the...
As a shareholder, please consider the demerger also future -- in the future, whenever you feel comfortable?
Yes. I mean we are all going here to take out the best interest of the shareholders.
As there are no further questions from the participants, I now hand the conference over to Mr. Parvez Qazi for closing remarks.
Yes. Thanks, everyone, for an enthusiastic participation in the call. I would now like to hand over the floor to the management for their closing remarks. Over to you, sir.
Thank you for all participating in this earnings con call. I hope we have been able to answer your questions satisfactorily. 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. We are thanks -- we are very thankful to all our investors who stood by us and have the confidence in the company's go-to growth plan.
With this, I wish everyone a great evening. Thank you.
Ladies and gentlemen, on behalf of Nuvama Wealth Management, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.