Century Textile and Industries Ltd
NSE:CENTURYTEX
Century Textile and Industries Ltd
NSE:CENTURYTEX
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Earnings Call Transcript
Transcript
Other Earnings Calls
Ladies and gentlemen, good day, and welcome to the Century Textiles and Industries Limited Q1 FY '25 Earnings Conference Call, hosted by IIFL Securities Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Mohit Agrawal from IIFL Securities Limited. Thank you, and over to you, sir.
Thank you, Sagar. Good afternoon, everyone, and welcome to the First Quarter FY '25 Earnings Conference Call of Century Textiles and Industries, hosted by IIFL Securities.
Today, we have with us the senior management of the company, represented by Mr. R. K. Dalmia, Managing Director; Mr. K.T. Jithendran, MD and CEO, Birla Estate; and Mr. Snehal Shah, CFO of Century Textiles.
I now invite the management to share their opening remarks, which will be followed by a Q&A session. Over to you, sir. Over to you, Dalmia, sir.
Okay. Thank you. Good evening, everyone, and welcome to the earnings conference call for the first quarter of the financial year 2025. Let me first take you through the financial highlights, followed by the business and operational highlights.
For the first quarter of financial year 2025, the consolidated turnover of continuing operations grew by 28% year-on-year to INR 1,140 crores. The EBITDA for the quarter declined by 15% year-on-year to INR 125 crores with EBITDA margin reported at 11%. The net profit on continued operation was INR 28 crores for the quarter.
Now let me take you through some of the key highlights across our business verticals, starting with the Real Estate business. During Q1 '25, the Indian Real Estate sector continued to flourish driven by positive indicators, such as GDP growth, boosting investment and a strong consumer spending sustaining demand. Increasing urbanization and steady property value appreciation are also expected to propel the residential market forward. Within this market, the premium and luxury segments are experiencing rising demand with differences shifting towards enhanced amenities and luxurious spaces.
For Q1 '25, the revenue of Birla Estate grew by over 800% year-on-year to INR 338 crores, driven by continued deliveries at projects Birla Alokya in Bengaluru, Birla Vanya in Kalyan and Birla Navya Phase 1 in Gurgaon. We achieved booking worth INR 262 crores in Q1 '25 at our already launched project, representing a growth of 27% year-on-year. We maintained very strong collection of INR 488 crores from all projects during the quarter.
We did 2 major acquisitions during the quarter, wherein we acquired 13.27 acres of land parcel in Gurgaon with a GDV of INR 5,300 crores. And we also acquired 16.5 acres of land parcel in Manjri, Pune with GDV of INR 2,500 crores. In other updates, Birla Tisya, Bengaluru received a Gold Award at the 16th Edition of the Confederation of Indian Industry - Southern Region Environment, Health and Safety Excellence Award 2023. Additionally, Birla Navya, Mumbai, Birla Navya, Gurgaon received Silver Award at the RoSPA Health and Safety Awards 2024.
In our outlook, we anticipate significant growth in the residential Real Estate market in the coming quarters, driven by a confluence of favorable factors and stable economic conditions, which have attracted robust investment from both domestic and international players. Additionally, infrastructure development and the expansion of smart cities presents a new opportunity for growth. Investors are increasingly viewing the Indian Real Estate sector as a secure and profitable long-term investment with the potential of substantial return.
Now moving on to the Pulp and Paper segment. In Q1 '25, paper, board and tissue prices continue to be a downturn trajectory with average net sales realization down by 14% year-on-year, although they were at par vis-a-vis previous quarter. This impacted sales turnover and EBITDA. Overall, product and sales volumes increased by 7% year-on-year and 12% year-on-year, respectively. Sales volume is lower by 8% Q-o-Q with general election impacting tender orders from government. Sales turnover for the quarter decreased by 6% on a year to INR 786 crores with EBITDA at INR 65 crores, and EBITDA margin reported at 8.3%.
Demand for writing and printing paper was subdued in Q1 '25 due to deferment of government tenders, seasonal closing of education institution and courts for summer vacation. Demand remains subdued for both segments as well. An order flow impacted in the first half of the quarter due to the price increase taken at the beginning of quarter. While the tissue paper in the first half of Q1, domestic demand experienced an upward trend due to seasonal factors, thereby supporting market sentiment with volume picking up. The company continued to take various cost reduction initiatives, like the increased usage of bamboo and veneer chips reduce raw material costs. Also, we use fiber plant pulp instead of imported pulp in tissue machine, aided by suitable chemical program to reduce input costs.
On the sustainability front, the company developed 80 nurseries in 11 districts to increase wood catchment area and achieved around 7.5 lakh plantation in Q1, with an annual target of 1 crore plantations. It also implemented 5 water conservation schemes with approximately saving up 0.5 million cubic meters of water annually. And lastly, compressed methane gas generated from wastewater was utilized in tissue paper machines in place of LPG.
On the market outlook, seasonal factors are expected to moderately revive writing and printing paper demand in Q2. In Q2 '25, order flow in tissue segment is forecasted to be slightly lower in the initial months on account of lean season. However, demand is expected to pick up towards the end of quarter. With upcoming festival season as well as FMCG and pharma segments picking up, board demand is likely to improve in Q2. Also imports are expected to remain subdued due to high ocean freight and issues with container availability. Export demand with Europe, U.S. and U.K. market likely to be impacted by high ocean freight.
In conclusion, Q2 experienced a lukewarm business performance, largely due to rising input costs and global supply chain disruption in the Paper segment and customers postponed of delivery in the Real Estate segment. Despite these challenges, consolidated turnover for continuing business increased by a healthy 28% year-on-year. Looking ahead, we are confident that sustained demand and a strong public investment both globally and domestically will drive robust performance in upcoming quarters.
With that, I now conclude our opening remarks, and we can start the question and answer session. Thank you.
[Operator Instructions] The first question is from the line of Karan Khanna from AMBIT Capital.
I had a couple of questions on the Real Estate business. Firstly, if we consider the company has a GDV pipeline of about INR 54,000 crores. Given where we are in terms of the cycle, how are you internally strategizing as far as launches are concerned? And if you could also reiterate the timeline around the launch of this INR 54,000 crores of GDV pipeline?
Thank you, Karan, for your question. Yes, as you very rightly pointed out, we have an overall GDV of INR 54,000 crores. As you know, we have already launched about INR 12,500 crores out of that, and we have clocked sales of about INR 9,500 crores out of that. The balance will be distributed over the next few years. This year itself, we are planning to launch another INR 12,000 crores of this, in the current financial year. And similarly, I think over the next few years, we will be distributing this. And also, we are looking at adding every year about INR 15,000 crores, INR 16,000 crores of new GDVs every year. And we are looking at a very positive and strong Real Estate cycle for the next few years.
So K. T., just as a follow-up to this, if I look at Slide #17 of the presentation. So FY '20 to FY '24, we've seen launches of about 2 projects a year. But this year, you've laid out a fairly ambitious plan of about launching 9 projects in the rest of FY '25. So how confident are you about these launches as we've also observed delays in terms of launches, such as the RR Nagar project in Bangalore?
No. You're absolutely right. We were supposed to have launched RR Nagar in the last quarter. But because we didn't obtain the RERA, we had to postpone the launch, and we are quite hopeful that we will be able to launch it this quarter. Similarly, Walkeshwar also we are supposed to launch last quarter. However, again, we are waiting for RERA. So for both these projects, we're waiting for RERA. Walkeshwar, I'm sure, we are more confident that we'll be getting in the next few days. RR Nagar, I'm expecting it by the end of this month or early next month. But for that, I think we are pretty confident that we are well geared up for the other launches. And we are quite confident that we'll be able to launch all the ones that we had guided that we will be launching. We are making good progress in all of them. So this was a little unexpected. The RERA person was not there. He resigned. The new person took time to join in Bengaluru. So I don't think this will be the normal course. This was a little unexpected. So -- but I'm quite confident that we'll make up to this.
Sure. And lastly, on your Pune, Manjri project, where you've considered a revenue potential of INR 2,500 crores, and the total area of 3.2 million square feet. So this translates into an implied per square feet rate of around INR 7,800. If you look at comparable projects in the similar vicinity that's at about 20% lower versus this. So the question is what type of product should we be expecting considering the higher revenue and the higher per square foot potential? And any guidance on margins that you will be targeting in this project?
So Karan, as our positioning is that we always aim for the most premium positioning in every micro market. Like in our past, we have shown that in Kalyan, I mean the market was INR 11,000, INR 11,500. Today, we are selling at INR 15,000 per square foot. Similarly, we are pretty confident that here also we will be creating a very premium product. We're looking at a margin of at least about 25% to 30% EBITDA. More importantly, we -- as you know, we always look at very strong IRRs, IRRs -- no, not to 20%. So our positioning is no different here. We are looking at the premium positioning, and we are looking at good margins.
[Operator Instructions] Our next question is from the line of Biplab Debbarma from Antique Stockbroking.
So I have 2, 3 questions. First question is, the launches that you mentioned INR 120 billion, i.e., INR 12,000 crore of launches in FY '25, what are the projects? And how much GDV in which projects would be launched? Can you please give us a breakdown how INR 120 billion would be launched in FY '25?
So Biplab, thank you for the question. So as I mentioned, this quarter, we are hoping to launch RR Nagar and a new phase of Trimaya and Walkeshwar. Together, this must be about 1,000 plus 500, 1,500 plus, 600, so about INR 2,000 crores. In Q3, we are planning to launch the project, which we have finalized in Bangalore, Sarjapur Road. And the last phase of Birla Navya in Gurgaon, which is about INR 1,000 crores and the Pune project, Sangamwadi. So that's in Q3. And in the final quarter, Q4, we are hoping to launch the projects, which were signed in Thane with -- the project we have signed up in Thane. Then the new project, which we have signed in Pune, we are quite confident that we'll able to launch that also, which is in Manjri. And also the last -- the third phase from Trimaya. So these are the broad launches planned for the next -- for the coming 3 quarters.
And Delhi, we are not launching this financial year?
Delhi is difficult because the entire approval process takes a lot of time. There are more approvals than usual. So we are kind of planning it for the Q1 of next year.
That's great. And second question is in the Tower 1 Niyaara, how much cost yet to be incurred, because last I visited it was 22nd or 23rd floor level that you have constructed. So how much more total cost to be incurred in Tower 1?
Yes. So construction costs, if you look at in Tower, we are so far about close to INR 300 crores -- close to INR 300 crores in terms of construction cost, yes.
Any other costs besides construction cost to be incurred in Tower 1?
Obviously, all this -- the premium cost, the [ SSI ] costs, the marketing costs, the sales cost, the overhead costs, so many costs are there, Biplab. All of that will definitely will be incurred. Yes.
So how much to be incurred, sir, total for that?
Offline, Biplab, we can. Accounting numbers could be done offline. Okay?
And on the on the paper side, sir, what would be the steady state EBITDA margin for papers [indiscernible] in FY '25?
You are -- Biplab, you're asking for the entire year?
Yes, sir. What should be the -- because margin has been little bit...
Pretty bad, but we are hoping that with the pulp price increasing, we expect a rise in the NSR, which would contribute to our margin. But I think probably we'll be -- we are looking at right now around 12, to end 12 per kg. So it's very difficult to give me a margin because -- but I can say that our EBITDA will be roughly on average in the year at about INR 12 per kg.
The next question is from the line of Amit Srivastava from B&K Securities.
So my first question is on the balance sheet to Snehal sir...
Sorry to interrupt. Mr. Srivastava, you're sounding a bit muffled.
Yes, Amit, tell me.
Yes, sir, my first question is on our balance sheet. So basically, our net debt number has increased to INR 29 billion this quarter. And...
There is a mistake. The net -- it is gross debt, net debt is INR 2,500 crores.
okay. And second is that, sir, our OCF was negative this quarter of around INR 700 crores. So basically, I just wanted to understand how this will play out for the FY '25, given we have 3 projects we have already signed. And going ahead also, we are going to sign the project. So effectively, if you can give that how the numbers will be on a net debt side and OCF generation for the year, as a full year? Second, in terms of the working capital side, also, we have seen that paper division has significantly increased the working capital by INR 2 billion. So effectively, at EBITDA of INR 50 crores, so we have increased the working capital significantly. So if you can give the clarity on that?
Good question, Amit. Let me answer the last question first. Working capital right now is high because we have suddenly got a lot of linkage coal from Coal India, and we cannot refuse that. So we -- I think this is a peak working capital and gradually, we have planned to reduce it. So working capital will be released in the next 3 quarters. So that's not a problem. But then market being subdued, we don't expect much cash flow coming from the paper business this year because they also have their own CapEx plan, and we cannot hold those CapEx plan because that will impact our profitability in the future year.
So even if you consider, let's say, for a hypothetical case, 0 cash flow coming from paper business we are still comfortably placed because whatever debt the parent has raised, now future financing will come from the subsidiary because they have undrawn construction finance plans, which they have not used even in the parent side because the Niyaara project is on the parent's books. So we have not withdrawn construction finance for the Niyaara project also. So I don't see many major issues in terms of financing our future deals. Of course, the debt might go up a little bit by the end of the year. We may on a consolidated basis cross maybe INR 4,000 crores, but that all depends on how many more projects that we sign. But raising that money is not a problem for us.
Okay. How much is going to be -- we are going to invest for these 3 projects of INR 9,000 crores GDV, which we have recently signed?
So Amit, as I said, the biggest one of here is INR 5,300 crores from [indiscernible]. It's a JDA with just about INR 145 crores payment. It's not a big deal. The other one, which is Manjri, is a deferred outright deal. So we have paid only some INR 200 crores right now. And we also signed a third project, which we announced yesterday, there also INR 170 crores. So it's fine.
Okay. And second, sir, in terms of the project launch, which we have just outlined that around INR 12,000 crores, we are going to launch in FY '25. Whereas presentation -- on a 17 slide itself, you have mentioned around INR 8,500 crores of GDV expected. So I just wanted to clarify on that number, what is the difference between these 2?
Yes. So here, I think we had a -- yes. So I think -- yes, whatever we've now -- whatever I'm telling you now, that's what we are aiming at.
Okay. So any project -- like Birla Niyaara Phase 3 also we were planning earlier in Q4, but now it seems we have postponed.
Yes. We are not looking at this year. Sizing -- the size of it, I think we'll take it up in the next financial year.
Okay. So basically, the one project which you recently we have signed maybe that will come into the picture, which is not...
Yes. Yes. The one in Manjri, that's going very fast. So we are quite hopeful that we'll be able to launch that this year. We had even given that guidance also at Manjri, yes.
Okay. Last question is, sir, on the Birla Estate numbers. If you look at, what is the kind of margins we are making in terms of the project which we are delivering now because whatever the numbers we have looked at the Birla Estate numbers on our sales of around INR 450 crores, numbers on the EBITDA side is almost like 0. So effectively, and that is -- how it's...
Slightly mistaken there. I think we are already -- whatever we have delivered, so far, we are giving a 27% plus margin. Don't look at those numbers because those are the numbers of including all the overheads and the kind of growth that we are currently doing, the marketing expenses of launch, everything includes that, that's not the right number. As we get more scale and we start delivering more EBITDA, this number will go up. But I can assure you that at the project level, each of these projects are delivering at least 27%. Some projects like the NCR product, we are only accounted for the margin for Phase 1. But as you look at the other phases, it's going to be almost as high as 40% plus.
So I don't think margin is a worry. And as I mentioned, margin is, of course, important, but the most important thing is IRR, how quickly we turnaround projects, how quickly we bring in cash so that the growth cycle keeps continuing. And even if there is a -- even if we get caught in the wrong cycle, we are not left with too much unsold inventory. So IRR is the #1 concept. Margin is also important, but margins, I am -- we are pretty safe with a margin that's all at least 25%.
Okay. Okay. No, that's what I just wanted to get clarified on our existing project, whatever we are delivering around 25% plus we are getting it.
Yes, yes. At this point of time, whatever we have already accounted for is about 27.5%.
Okay. And sir, last, on Birla Navya, there was an [ FSI ] thing, which was not getting clearance...
That's clear, now. Yes, that's clear. Government has cleared it. It came in the newspapers. We are all set for the long phase launch now. This year, we'll be launching it.
[Operator Instructions] The next question is from the line of Jojo Shaju from Alpha Invesco Research Services.
Sir, I have 3 questions. First is regarding the Real Estate division. So in the last call, you have mentioned that our corporate overhead was around INR 175 crores annually. So this is increased from INR 100 crores, if I say, a couple of quarters back. So I just want to understand what is the increase going forward? What is the steady state number of corporate overhead in the Real Estate division?
So Jojo, right? So Jojo there's no steady state. As we keep growing, we'll keep increasing. Our corporate overheads will also increase as we have strengthening ourselves in many parts. It's difficult to give you a steady-state number because in several areas, we're kind of strengthening as the scale increases, it's very important for us to strengthen our management team and our controls, mechanisms, et cetera. So -- but largely, I could tell you that it will not exceed about 3% to 4% of our bookings. If that's the kind of a ballpark figure, 3% to 4% of bookings is what we should kind of consider as our overheads.
Okay. So 3% to 4% we can benchmark according to the premium...
Yes, having -- we've have a good benchmark, yes.
Okay, sir. And sir, what is the expected collections in the Real Estate division for this end financial year? And for the collections part, where exactly it is reflecting in our financial statements?
Sorry, for collections? Yes, of course, we give...
INR 2,900 crores our target, right?
Yes, INR 2,900 crores is what we are targeting.
Jojo, our expected target of collection is roughly around INR 2,900 crores. In terms of reflection in the balance sheet, it comes into our inventory for the Real Estate business because we -- it is -- the amount that we spend on construction that is shown as an asset and the collections that we have is shown as a lability.
Okay, sir. Understood. Got it. And sir, what is the construction spending for the next, let's say, 2 financial years, next 2 financial years? What is the expectation?
2 financial year will be difficult, but I think it will be more or less in line of our collections, a little less than our collections.
Okay. Got it. And sir, my last question is, I just want to understand how is the JV with the Grasim performing? Will it have a turnaround in the current year? What is your views?
[ JV ] with Grasim?
JV with the Grasim, yes.
JD with Grasim? So we have no JD with Grasim. You're talking Real Estate business or something else?
No. This is not on the Real Estate. This I think on the...
No, no, that is a joint venture. It's a joint venture with Grasim in the Textile side. So that is the only remaining Textile part that we continue. And that is in the initial stage, Jojo. So it will take some time to generate profits. And -- but it is not a significant ask on our balance sheet. It is more a new thing that we are developing in the country. So it will take some time to absorb. So hopefully, next -- this year also, probably, we don't -- we might not see the light at the end of the tunnel. But certainly next year, we will be starting to show profits from that.
Okay. Got it, sir...
Yes, we had INR 8 crore loss in this quarter from that business, our share of profit.
The next question is from the line of Dixit Doshi from Whitestone Financial Advisors.
Sir, this quarter, we have recognized around INR 338 crores of revenue in the Real Estate segment. So I think there's one portion which is the lease revenue and there's the revenue recognition from various projects. So if you can break this up from -- for us, how much is the revenue from the lease? And what are the project-wise revenue, which is booked in this INR 338 crores?
So it is INR 37 crores from lease rentals, INR 68 crores from Vanya, our Kalyan project, INR 196 crores from Gurgaon project and INR 37 crores from our Bengaluru project.
Okay. And sir, since -- I think this INR 34 crore -- INR 29 crore -- INR 34 crore EBIT that we have recognized, I think there is a portion of corporate expenses, which is impacting this EBIT. So if you can tell us what is the corporate level expenses, which is booked in this quarter? And also, this EBIT also has a portion of lease income. So the lease revenue, how much is the EBIT of the lease revenue in this?
So let me -- I mean, you can probably work out everything else, from -- on the revenue recognition of the projects, from the revenue that I just now mentioned, Vanya, we have got about INR 13-odd crores. [indiscernible] we've got about INR 60 crores, and Alokya, we've got about INR 11 crores. And balance, it's a loss after providing for all corporate expenses. I don't have the exact numbers right now, but we can -- offsite you can ask for this.
Okay. And if you can just help us what would be the corporate level expenditure that was booked for this quarter in the Real Estate segment?
Yes. So we'll provide you offline those numbers, sir.
Okay. Okay. Definitely, I'll come -- get in touch with you offline.
Sure, sure. Please do that.
The next question is from the line of Deep Mehta from Bank of India Mutual Fund.
Congratulations for aggressive [ BD ] for the year. My first question is regarding our organization capabilities. We are planning to significantly increase our launches as well as presales for the year. So how have we already developed, and trying to develop further our organization capabilities in terms of hiring new people for different roles, different geographies and also solidifying some of our processes, if you can talk about that.
So Deep, thank you for the question. So yes, as we keep growing, we have -- creating a decentralized organization. Each region will have their own teams, which will be responsible for their P&L of the regions. So Bengaluru has their regional team. NCR has their regional team. Pune, we are now developing our regional team. Bombay and Western -- I mean, Bombay has our own -- its own regional team, and there is an HO. So as we keep growing, we keep enhancing our operational capabilities, sales capabilities. We already have a very strong BD team, which is doing its job very well. We have a very strong sales team, which is powering the sales performance of the company. Similarly, we have pretty strong operations team. As we keep on scaling up at each region, we recruit the right kind of people, and we have a very strong process of orientation in terms of Birla Estates way of selling or Birla Estate's we have customer centricity or our operations, construction, et cetera, largely construction is outsourced. We go with the best of construction partners.
So it's largely a -- mostly a management monitoring and control systems, where we very strongly do our review mechanisms, and we give a lot of research-backed ideas on to the design, and we have very strong budgeting and quality control system. Execution is our core strength, and the deliveries that we are doing, we have got NPS score of almost 85% so -- which is one of the highest in the industry. So -- and we keep monitoring these parameters to make sure that the delivery and quality and cost and returns are the most efficient.
Does that answer your question, Deep?
Yes, sir. This is very helpful. And my second question is regarding our unsold inventory. So if you can give the value of unsold inventory as of the end of the quarter and also [ break up ] of this year?
Unsold inventory is very little. Also the inventory that we have launched is sold out. If you look at NCR, it's almost 100% sold out. If you look at Bangalore, it's almost 95% sold out. Mumbai is also. So overall, I think about 87% of the launch inventory is sold. So what we are now -- what we have -- the sales performance is a little muted in the first quarter is largely because of lack of inventory number 1 and also lack of new launches. So we hope to make it up in the coming quarters.
Sure, sir, can you help me with the absolute amount of unsold inventory? Rough number will also work.
Yes. So the numbers of these thing, I think we can help you offline with all these numbers, yes. Yes, about INR 12,849 crores is what we have launched, and what we have kind of booked so far is about INR 9,428 crores.
So roughly INR 3,000 crores?
The next question is from the line of Abhinav Sinha from Jefferies.
K. T. sir, a couple of questions for you. So firstly, on GDV, the projects that we are adding, is there a target in mind for the year? So that's question 1, yes, sir.
Yes. So as I mentioned, largely, we are looking at about INR 15,000 crores to INR 20,000 crores this year and would like to continue to look at that sort of number, so that we can keep growing and can do full justice to our sales process also and cash turnaround also.
And how does it break between various markets or nothing specific there?
No, I don't -- we have not put a number on it. Wherever we get the right opportunities, the most attractive, ideally a JDA, et cetera, if not a JDA, then in a great location, and premium locations that we're aiming at. As I said, we are not taking risk in terms of title or location or in terms of speculative future locations, where the markets might emerge. We're not looking at those ones. We're only looking at well-established locations. So from that point of view, I don't want to put a number to each region. Wherever we get the most attractive options, we'll go there. I think all 4 markets are equally attractive.
Okay. And I presume the opportunities are still fairly attractive, and we still have too much competition out there.
That's right. The competition is definitely there. It's increased. So yes. So wherever we think it's the right deal that we are getting it, we are going for that.
Got it. Sir, secondly, and this is a bit of a market question. I mean we have heard in the last quarter, like for example, in NCR, we are seeing a couple of projects, which have underperformed, say, either in terms of pricing or volumes. I wanted to hear your take on that.
See, I think if you price it right, I think you will be able to get the volumes. Market real demand is there. Supply is very few. If the design is right, the product is right, the ticket size is right, I think we should be able to, at the right locations, I think there should be no issue with the moving inventory. If you overprice it or under-design it, then there could be. It's important to get the product right in every market, and the price is also right. I think those combination one has to get it right. If that is right, I'm pretty confident that there should be good traction.
Right. And broadly, so you wouldn't be overly worried or look to change your sales guidance for the year?
No, no, no. At this point in time, we are pretty confident.
Sure. Great, and all the best to the team, sir.
Thanks, Abhinav. Appreciate that.
The next question is from the line of Raj Rishi from [indiscernible] Group.
Can you give a perspective as to what kind of quantum of group properties you can develop over the next 3 to 5 years?
I think pretty limited, not much then in the markets that we have chosen. I think we are kind of maxed out in terms of group properties because largely, the properties are in Mumbai. And I think all of that we have counted. Maybe in Pune, we have about 45 acres in Talegaon. So that kind of develops and the broad -- the town planning rules change, then we may launch that. But apart from that, I can't envisage any more launches from the -- or any more kind of tie-ups to the group plans.
In a previous call, in fact, I had only asked a question, and you had talked about other than the present focus geographies, a lot of like a huge number of group properties there, which can come into the Century Textiles fold. So...
Yes. But as I said, in the next 2 years, we are not looking at expanding into any other region. I think we have got a job cut out in kind of consolidating in these 4 markets that we have chosen. I think we'll be focusing on these markets.
Okay. And I believe you had an aspiration to be in the top 3 or top 5 in the next coming years. That would entail a huge quantum jump in your business, right? So how -- can you comment on that? Like what kind of aspiration? How do you plan to reach there?
Yes. So we are very confident, and we are aspiring to be among the top 3. But more important, I mean, as we scale up, it's also important for us to be as the most reputed player in terms of customer centricity and in terms of quality. We are willing to give up scale for these 2 parameters. What's most important is to give high-quality products in the right -- within the specified time and give the best of customer-centric service. Scale is important. As a group, we have always been the top 3 in every businesses that the group has entered. So we are pretty confident that we'll be aiming for that too, but not at the cost of the other more important parameters. So it will be kind of a balanced approach in terms of scale, in terms of quality, in term customer centricity.
Okay. Any plans for fundraising on the equity side?
We always are looking for raising platform funding for our -- private funding, private equity funding for scaling up our residential portfolio, maybe at some point of time, even the commercial portfolio, but not in the near future for any public sort of funding.
This won't be in the parent -- in Century Textiles, that will be a particular project?
Yes, it will be at the project level.
The next question is from the line Vivek Ramakrishnan from DSP Mutual Funds.
Congratulations, K. T. So my question was on Niyaara Phase 1 and Phase 2. If you see in the last quarter, the percentage sold has gone up from 68% to 71%, and it had like a big bang launch. So what is the ebb and flow of this business? I mean, is this going to take a little more time to dispose of the property? And how does it happen in Phase 1 and Phase 2 because they're entirely different customer bases?
Yes. So thank you, Vivek. So Niyaara Tower is now in terms of units, almost 90% sold out. We also increased the price now above INR 1 lakh per square foot. And I think we will be happy to now sort of really look at the rest of the apartments more towards completion, I think, makes sense also, it's more than 90% gone. There's hardly 20, 25 apartments left. As far as the sellers, the Tower 2 is concerned, we have sold more than 50%, 52% in terms of area -- units. So -- and the traction has been very strong in last quarter. And after that, this election year coming, there has been a slowdown. I think the initial demand has been sucked out. Given that, I think a new round of intergeneration is going on, and we expect to do about 4 -- 3 to 4 apartments every month from here onwards. So that's the kind of velocity we are aiming at.
The next follow-up question is from the line of Biplab Debbarma from Antique StockBroking.
Sir, on the -- you mentioned about Manjri and Sector 71 that you have [indiscernible]. The INR 200 crore and INR 170 crores that you mentioned, are these the cost of acquisition, total cost of acquisition, or these are the initial payments?
No. I think Sector 71, which we kind of concluded yesterday, I think that's a full payment -- full cost of acquisition.
So INR 170 crores cost of acquisition, you have paid, right, sir?
That's right. Yes, it's an outright for...
And for Manjri, what will be the total cost of the acquisition?
Manjri is about INR 340 crores, but it's a deferred sort of payment for the next...
Okay. So out of INR 340 crores, you have paid, so far, INR 200 crores. Am I correct, sir?
Yes. Yes.
And my second question is for FY '25, remainder of FY '25, any more projects, residential projects that could be recognized?
Recognized? No, I don't recognize. Yes, whatever is the balance of the Kalyan and Alokya and a bit of Navya. So I don't -- so the unrecognized ones, but that part is there in terms of handing over is going on. Beyond that, I'm not expecting any new projects to be handed over or any new phase to be handed over this year.
And in FY '26, any new projects that will be recognized?
Yes, yes, in FY '26, maybe another phase of Navya will come up.
The next question is from the line of Amit Sanghvi from [indiscernible].
My first question is related to the inventory left out for these 3 completed projects, which is left out for the purpose of revenue recognition in terms of square feet. And my another question is regarding, it is, in fact, a suggestion that if we can put one more slide in our presentation for the land, which we have acquired, but which are yet to be developed. That is my second question, sir. Okay.
Sure, we can do that, Amit. Yes, we can do it. Yes. And what is the first question, is whatever is recognized and unrecognized...
Yes. We have completed 3 projects, right? Vanya, Alokya and Navya. In these 3 projects, what is the total inventory left out as on 1st July, which is yet to be recognized in the books of accounts in terms of square feet?
Yes. So there is -- I mean, if you want to go into the detail, we can go offline. Yes. So I think we have about -- Navya is about 228 units, of which we have done about 200 and around 28 units are to be recognized. Alokya about another, I think, about 76 units have to be recognized. Vanya is a major portion, about 70 units has to be yet to be recognized.
Okay. And it is going to be recognized in this year itself, right? Because the project is completed.
Yes, yes. So Vanya, I think we have 7 towers of it. We have got OC for 5. There were 2 more towers, which we are expecting the OC in the next -- this quarter and next quarter.
Okay. Okay. So what you said is in Vanya, 700 units; in Alokya, about 76 units; and in Navya, about 220...
Yes. I'm giving you ballpark figures, these numbers. We cannot...
Okay, okay. I can understand it. Okay. Ballpark numbers.
Amit, you can go on Slide 16 of the earnings presentation, you will get the details between the GDV for what we have launched and what is upcoming.
The next question is from the line of Harsh Pathak from B&K Securities.
My question is on the Sector 31 Gurugram that we just acquired this quarter in the first quarter. So what would be our share in the JV?
So it's a 40% rev share, 40% to the partner and 60% today to us.
Sure. And so the indicative GDV of INR 5,000 pertains to just us or it's at the project level?
Sorry, I didn't get you. What was that? Indicate? INR 5,300 crores.
Sir, GDV. Yes. So is it at the project level or our share?
Sorry.
Is it our share or is it pertaining to the overall project?
Total is a gross. That's a gross, INR 5,300 crores is a gross number.
That's gross. Okay, okay. And yes. And sir, my second question is regarding the land availability in NCR. So I think we now have total 4 projects in the NCR market in the NCR region in our portfolio. But this quarter, we have done our first outright purchase in that market. So how is the land availability? And how is our thought process regarding going ahead for outright purchases? What kind of margin profile can we expect? What's your take, sir?
So as I mentioned, margin profile, you're always looking at 30% plus margins. What we have -- what we are more focused on is 20%-plus IRRs for our JDA projects and 16%, 17% IRRs for our outright projects. So we are working well within those parameters and those guidance. Of course, land is very, very scarce in NCR. Very few lands are there. And all the lands that we have kind of finalized is very, very prime properties. Excellent locations. All should be selling above 15,000. Of course, Sector 31 is extreme premium. I think we expect at least INR 6 crore, INR 7 crores per apartment or more per apartment there. So all at a very high premiums. And it's very difficult to get land in NCR today. Supply is very little. And we are very happy to have done these acquisitions.
Sure. So can we expect more kind of an outright purchases? Or our preference is more towards...
So Harsh, we're on the lookout for the right kind of lucrative deal. Very difficult to come by. But yes. And as I said, we'll keep looking for the good deal. So it's possible that for a long period of time, we may not do any deals. And suddenly, we may get the right deals. We may do quite a number of funds. So depending on the quality of the deal, we keep looking for it in the right markets, in the right location. So we have been fortunate that we got this deal at Sector 31. It's a very, very attractive deal. And what we kind of acquired that 71% is also an extremely favorable location at a very good attractive price. So that's why we went ahead and did it.
The next question is from the line of Dixit Doshi from Whitestone Financial Advisers Private Limited.
I had similar questions on the Gurugram projects. But one more question, sir. Sir, in Niyaara Tower 2, I think the last quarter, we had sold around 68 units. So how many more units did we sell in this quarter?
We are at 75, but there has been a few cancellations of that 68 later on. Some people did not go ahead with it, they withdrew. Not many, a handful of them. And now today, we are at 75.
Okay. And sir, the sales of 70,000 square feet and INR 262 crore value, if you can break it up project wise for us?
Roughly INR 225 of that is Niyaara.
The next question is from the line of Himanshu Jhaveri, who is an individual investor.
K. T., I just wanted to ask what do we aspire as a company? And can we expect to a top line of around INR 20,000 crores -- INR 15,000 crores, INR 20,000 crores in the next 3 years? And what do you plan to do differently to make Birla Estates a niche and a premium brand in the market?
Yes. So I think, yes, the next 3 to 5 years, I think it's reasonable to expect a top line of INR 20,000 crores. I think we can easily reach there. We have very strong presence in each of these chosen 4 markets, and I think we could be the dominant player in each of these markets. That's our aspiration. How we want to differentiate ourselves, as I have mentioned, is through superior quality, delivery, extreme focus on execution, extreme focus on design, customer-centric design, these are the most customer-centric organization, be a very kind of experiential driven company, who gives a very superior experience to our customers, taking care of them, doing the -- making sure that even after customers move into our projects, they get a very different experience of living, community building. Our aspiration is to create happy Birla communities, make them a very differently engaged community, enhanced living experience, et cetera. So that's how we want to sort of differentiate our projects in the very long term. I think -- so our endeavor is to get there while building scale through very strong processes and focus and execution.
And do we also plan to have a huge workforce and machinery to launch projects simultaneously across different states in every quarter? Because if we want to reach that INR 20,000 crore mark, We'll have to have a big -- the machinery should be very...
If you are meaning machinery in terms of processes and team, yes, we are all for it. Having a hardcore -- hardware machinery, we are an outsourced company, we are looking at...
Machinery in terms of the teams and sales force...
Yes, yes. Of course, of course. We are in the process of building every year. We add about 40%, 50% more employees. We were at 200 last year. We are at 350 now. We may go up to 500, 550 as the demand for people are there. The only thing is that look a very high-quality team, and there's a lot of training orientation process within the company, create a very strong culture of high performance and customer centricity. It's very service-oriented. So I mean that is the building blocks of the company. And we are also creating a decentralized system, which can move very swiftly, quickly, empowered sort of team.
That's great. And I read an article K.T. in the newspaper the Century Bhavan being demolished. And so -- are we planning a project over there? So...
We are very seriously evaluating it.
So not still fixed anything, right?
No, no. It's under evaluation.
No. Because just next to that, the Oberoi 360 and all are selling at very well and good premium prices. So there's a huge scope to...
Yes, yes, yes. We are pretty aware of that. Yes, we're very aware of that, and we're looking at the opportunity.
So in future, we might do it, right?
Possibilities are there.
The next follow-up question is from the line of Biplab Debbarma from Antique Stockbroking.
K.T., so on the outright purchases, you have been saying that last year also when we compare with the cost divided by the GDV, it is less than 15% and around 12%, 13%. This year also, both Manjri and Gurugram Sector 71, they are less than 14% of the GDV acquisition cost. So is this a normal rate for outside acquisition, like 13%, 14% of the GDV? It seems very on the lower side. So it's a good thing. So I'm just trying to understand whether we can continue to do such excellent outright purchases going forward. That was my question.
Yes, Biplab. So we keep looking for the right opportunities, but it's not just the price, it's also the location, the other factors, how quickly we can launch it, how it will add to the overall brand value of Birla, how we access the other parameters, development potential, growth potential, et cetera. And also, of course, the price. So all those factors together, we look into it. So that's why we are a little patient and take our time to do the BD. So these are the 2 ones which we got into after prolonged negotiations, we were able to conclude it. Yes, but we can't take that 13% is a benchmark. As we said, there may be properties where we may have to pay a higher price, but the location is great, and it makes sense for us. Overall, we try to look at that. We don't pay more than 20%, 25% of the overall GDV to the landowner.
Yes, that's great. Because so far, you have been doing 13%, 14% of the GDV, that's, in my view, is excellent. And my final question is on the Thane project. What would be the -- if you launch a project this year, what would be the estimated rate that you expect to launch the project? I mean in terms of rupees per square feet carpet area?
So it's too early, Biplab, to kind of give a guidance on prices. I know that on a saleable area, we've been looking at least 11,000 plus in that market. It's a very, very strong, very attractive market. We are catering to both Navi Mumbai and Thane, and the allocation is fantastic. It's 2 pieces of land on adjacent both sides of the road. Huge opportunity, but a little early on the -- to give a guidance on price, but at least that's the kind of you're looking at about INR 11,000 to INR 12,000 per square foot on saleable area.
The next question is from the line of Deepak Purswani from Swan Investments.
Sir, my question is related to FY '25 presales. As we have mentioned in the previous call, we would be looking out to double it up the presales. If I were to look in the overall scheme of things, Worli, we said on a monthly basis, we would be looking 3 to 4 units. That would be an annual run rate of approximately INR 2,000-odd crores, which means remaining 6,000 out of the total launch pipeline of INR 8,500 crores GDV. So my first question is, if you can throw some light, how confident are we in terms of quickly turning around the project in terms of the approval and launching project? And secondly, on the sales momentum because it is implying 70% presales of the launch pipeline?
So if you look at our past, we have been kind of doing about, whatever inventory is left, we have only bought -- sold at a national level, about 87%, what's left is only 13%. So that is one part in the sustenance sales. The rest, as I mentioned, have given you overall in the number of launches, which we are planning. On the back of it, what we have planned is almost about INR 8,000 crores, all of which will have to happen mostly all of it in the next 3 quarters. And we are pretty reasonably confident of doing this given our kind of performance in each of these markets and each of these -- whether it is Bangalore, Bombay or NCR. So from that point of view, I think we are pretty confident we were able to achieve this target.
Okay. And secondly, sir, from the -- as we also mentioned about the aspirational target of achieving the presales of INR 20,000-odd crores over the next 3 years. Now with that figures from the business development front...
Yes. I did not mention, I said in the next 3 to 5 years.
yes, yes, 3 to 5 years. With that regard, we also mentioned about the business development activity of INR 15,000 to INR 20,000-odd crores every year. So just wanted to get a sense in terms of what would be the investment we would require for the land for that part every year?
So if you -- I mean, it depends on what kind of projects come to us. If you look at last year, we invested about INR 1,000 crores to add a portfolio of INR 16,000 crores. So even if you do some escalation, that's about 3,000 crores to INR 4,000 crores is what we're looking at. But of course, we are on the back of very strong collections also. I think we are collecting strong as all that internally, we hope that have the gun powder to kind of create that kind of capability to acquire projects. We are also looking for, as I mentioned, the platform funding, private equity platform funding. So all of that should kind of give us the firepower to go for more acquisitions and achieve our targets.
As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Thank you for -- thank you all for participating in this earnings con call. If you have any further questions, I would like to know more about the company, please reach out to our IR manager at Valorem Advisors. Thank you, and have a great evening ahead.
Thank you. On behalf of IIFL Securities Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.