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Ladies and gentlemen, good day, and welcome to DLF Limited Q2 FY '23 Earnings Conference Call. We have with us on the call Mr. Ashok Kumar Tyagi, CEO, DLF Limited; Mr. Vivek Anand, Group CFO; Mr. Sriram Khattar, MD Rental Business; Mr. Aakash Ohri, Chief Business Officer and Group Executive Director. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Vivek Anand. Thank you, and over to you, sir.
Thank you and a very good morning, and welcome to DLF Limited Quarter 2 Financial Year '23 Earnings Webcast. I know it's a Saturday morning. So thanks for joining us early on a Saturday. I would like to start by wishing you and your families a very happy Diwali. Moving on to the results. We continue to perform consistently across all parameters, in line with the guidance. I will now first talk about the financial highlights for quarter 2 financial year '23, which is DLF Limited consolidated results. Consolidated revenue stood at INR 1,360 crores. Gross margin improved to 60%, driven by superior product mix. EBITDA stood at INR 495 crores with margin improving this quarter to 36%. Net profit at INR 487 crores, reflecting a year-on-year increase of 28%. This was primarily due to higher JV profit and significant reduction in the finance costs.
Housing demand continued to remain buoyant during the period. The luxury segment continues to witness sustained demand with a clear shift towards larger homes. We continue to experience further consolidation across the industry in the backdrop of changing consumer preference towards quality offerings from large and credible players.
The interest rate hike was on expected lines. We continue to closely monitor these developments, however, has not experienced any material impact on housing demand so far. We remain confident that our product offerings will remain the preferred choice for customers and will continue to perform well.
Our residential business still delivered a steady performance and clocked new sales booking of INR 2,052 crores, reflecting a year-on-year growth of 36%. Cumulative rule sales bookings for first half financial year '23 stands at INR 4,092 crores, in line with our guidance. We believe that our well thought out strategy of bringing low-rise developments across multiple geographies augurs well in the current market.
We launched 3 new products across multiple price segments and geographies during the previous quarter. The growth in DLF 5 Gurugram, the Valley Gardens in Panchkula, Garden City Enclave, Independent Floor in Sector 93 New Gurugram. All these new launches witnessed importing response from the markets, delivering cumulative sales of [ INR 1,315 crores ] during the quarter. The Camellias, our super luxury offerings, has consistently proven to be the preferred choice, sustained momentum of demand for this product led to incremental sales booking of INR 473 crores during the quarter.
We remain optimistic about the inherent demand in housing given the changing aspirations of consumers for high-quality efficient design products being offered across established ecosystems and continue to work to offer new products across segments and geographies. Surplus cash generation during the quarter stood at INR 409 crores before net outflow of INR 292 crores on account of increased dividend payout. Deleveraging remains a focus area, and consequently, our net debt stood at INR 2,142 crores at the end of the quarter.
I'll now move to the financial highlights for quarter 2 financial year '23 DLF Cyber City Developers Limited consolidated results. The office portfolio is exhibiting steady recovery with improvement in occupancies. The buoyancy in the retail business continues. Rental income grew 20% year-on-year, driven by a strong growth in retail revenue, which grew 54% and office business, which grew 14% during the period. Consolidated revenue of INR 1,369 crores, reflecting a 22% year-on-year growth.
EBITDA stood at INR 1,046 crores, year-on-year growth of 21%. Net profit at INR 355 crores, reflecting year-on-year growth of 54%. We continue to witness a steady uptick in occupiers attendance currently at 67% across the portfolio, along with gradual recovery in our leasing momentum.
Office occupancy levels have moved up to 89% during the quarter, up by 1 percentage point. The first phase, 1.7 million square feet of our next-generation workplace DLF Downtown, Gurugram has commenced operations and has now started contributing to the rental portfolio. It's unmatched location and our ability to offer an integrated safe and sustainable ecosystem has once again scripted a success story. The office area for this asset was completely released even before commencement of operations. We continue to have a positive outlook towards the office business and hence, continue to judiciously put our CapEx to fuel growth in this business.
We have initiated development of an additional office block in DLF Downtown, Gurugram. The development of DLF Downtown, Chennai remains on track. The retail business continues to exhibit healthy growth. Footfalls and consumption trends exhibited strong momentum. Sales growth has been better compared to pre-COVID levels, and we expect similar trend in the near future given the sustained demand and the upcoming festival season. We remain comfortably poised to deliver our business goals, which is well supported by sustained housing demand, quality offerings and a healthy balance sheet.
This completes the results update. Thank you very much. We can now open the floor for Q&A.
Thank you very much. [Operator Instructions] The first question is from the line of Kunal Lakhan from CLSA.
My first question is on Slide 15. So since we have launched about 4.5 million square feet in first half and the second half, we seem to be launching about 3.1 million square feet. Second half, which usually is stronger period seasonally. So how should we look at this? Like would we look at upfronting some launches from '23 or beyond period to which would lead to the second half? Or how should we look at this? And if you can give some commentary on the sales trajectory also in the second half?
So yes. So as far as the H2 is concerned, I think what we are doing is we're going to be maintaining our guidance as to what we had mentioned to you all. Because what happens in a situation like this is that what you are seeing right now has already been preplanned to execute and deliver. And therefore, the entire machinery then goes into putting that whole launch together. So we have good visibility in pipelines and launches for Q3 as well as Q4. Q3, you will see a launch -- another launch in Panchkula. And Q4, we are preparing for the big [indiscernible] launch the 63, which we will talk to you after this quarter.
And as far as the trajectory is concerned, I think we are maintaining the strike rate as we had suggested or promised. Over and above that, for us to refund launches of the next year, I don't see maybe a reason right now in the most immediate future. But we've got things lined up for -- should we require things to happen before we have the, I'd say, infrastructure to support it and [indiscernible] part to kind of execute that. But as of now, I think we are working to our plan, and we'd like to maintain that.
Just a related question on that, Aakash. So on the Phase 5, right, we launched the Grove and we sold it out in a fortnight. How should we look at the subsequent phases coming through in Phase 5? What could be the time line for, say, Crest Phase 2 or something on similar lines?
Yes. So DLF 5, as we call it, for this year, I think we are done with DLF 5's launches. We will, next year, obviously, in one of the quarters, we will announce the Crest 2 that you are referring to. But at this point in time, I think if you see the spread and how we kind of -- we've been working is across geographies. So right now, the focus is for -- to be Panchkula and then it will move to the golf course extension area. Coming back to DLF 5, we will announce it hopefully after Q2 next year. But we will give that guidance before the year starts. So we'll have it much before.
So Kunal, just to supplement what Aakash said, it's before launching a major high-rise like [indiscernible] extension road or of the golf course road. We need 3 or 4 quarters of intensive preparation, not only in terms of approval, but also in terms of awarding of contracts, formation of BOQs, beginning of at least this is the subsoil construction work and all of those things. So we have been on the golf course extension project for the last 2,3 quarters. And I think now we hopefully dispute it enough. So we have a launch in the next quarter. And similarly, hopefully, we should see a Phase 5 highrise launch sometime in the later half of next year, if all goes well.
Sure, sure. My second question was on the collection side. So last 4 quarters, we have been clocking INR 2,000 crores plus of sales consistently. And considering like the new launches, that we have done, have a much shorter monetization period or a construction period of 18 to 24 months, right? So somewhere like your collection run rate has to catch up with the sales run rate. When do you think that will happen when we can reach INR 2,000 crores of collection run rate?
So most of the collections as we had even planned within the system are being done as per plan, if you pull out the 4 quarters collection rate also, you will see it it's at par with what the planning was earlier. With regard to collections at par with sales, this only happens with the construction schedules and that you call for money based on that. So if you've seen this is a little bit of a, I'd say, a dangerous call to do because you need to give the customers a little bit of a beating space before they actually get into the habit of paying.
We are the most aggressive in our calling. If you've seen our payment schedules compared to anybody else in the country. We take a substantial part almost 25% and above most immediately in the first quarter alone. So therefore, I think that is the rate that we would want to. But I don't think falling money more than that right now kind of unnerved the investor and the customer because everybody is doing their financial planning. Also the banks cannot disburse money is based on how they wanted it. We've kept that -- the collection. I don't know, Vivek, say that, but I don't think I would like to keep the collection pace more than what it is today also because you need to give that comfort factor to the investor. But I think that's the pace that we've been doing, but let Vivek answer.
So I think on the -- first of all, on the sales rate of INR 2,000 crores, when do you think our collections will catch up. So first message I want to give is that the INR 2,000 crores of sale includes the one mid-term sales, right? And when we look at the collections, we look at the collections, which are without one that does separate. So therefore, the 2 are not comparable.
But let me also answer that how our collections are picking up and what -- how does I see the collection in the second half. So the first half collections have grown by 15% over the same period last year. So clearly, there is a pickup in collections point number. Second half, we expect the collections to significantly move up, right? That's as per our plan. As the projects, which have been launched are getting closer to there in construction phase, right? We will be raising demands this quarter and in next quarter. And hopefully, that should get collected within 30 to 60 days. So we will see collections improving and we are moving up significantly in second half versus the first half. I don't see that, right? But yes, there will be a significant upside in the collections.
The next question is from the line of Saurabh Kumar from JPMorgan.
Am I audible?
Yes.
Sir, a few questions. So first is on your opening comments, you mentioned that mortgage rates are not having an impact, but maybe that was from last quarter. We've already seen the rates 4% to 8.5% and with the risk that is close to 9.5%. Would you still be confident that demand will not be impacted if rates move to the 9%, 9.5% handle? And also X of Camellias, how much of your customers would end up taking mortgages if you can, if you would have a ballpark idea?
So as for the mortgages are concerned, Saurabh, I've seen a trend that people are getting into or diluting their mutual fund or other investments to route their moneys back into the new sales. I've seen this trend over 1 year, Saurabh. I've been monitoring this closely. Also because I work very closely with the banks with our launches. And I've seen a certain amounts of -- let's say, if I can give you an example, of one of the recent launches, the bank mortgages or the call for that was just about maybe 15% so far compared to what these guys have in hand or whatever.
But to answer your first question, see, it's an opportunity cost at that point in time, if you actually see what these people are going to be investing in. I'd like to answer it in a different way, what I'm reading over the last 2 quarters, and I don't think we can completely negate the interest issue. But what I'm seeing is that we have been -- we are the preferred investment category right now. And when I say we, I'm talking about DLF. I'm not -- I do not talk about the industry right now. So I am seeing that happen where people are consciously breaking or moving that other monies towards us.
So whether that in the near future is going to impact, I don't think again, I don't want to speculate. But what I'm seeing a trend where it's like a [Foriegn Language] for a lot of people coming back to the DLF way of investing and everything because of the commitments that we've done over the last, I think, 2, 3 years, we've demonstrated that we finished projects, we've given people back money should they need it. DLF investment is almost like a liquid fund today. So even if people were wanting to exit, we never kind of held back, we continue to move on. We demonstrated a lot of strength. So the near -- the bank rates have been going up if you see over the last 2 quarters also. But I think the customers are right now, thankfully, very focused in investing with us, and they are looking forward to this.
The second thing that I'm also doing is I am stepping up on the NRI plan. If you've seen our -- mostly our NRI investments are between 12% to say about 14-odd percent, where it has a potential to double. So therefore, you will see an aggressive outreach starting November, where we just had 2 very successful outreaches in Dubai and Singapore. So I see that particular thing also changing because December onwards, December to February, there are a lot of NRIs, who come and visit the country.
So I feel that, that is something that we would like to go pitch in advance and then wait for them to make investments to come and do that. So it's not only a Camellia centric story, but I'm seeing this across the board. And I feel that the customers today refer to be with us rather than investing in other asset classes. So I'm seeing this very clearly, Saurabh.
Got it. The second one is, Vivek, on the pricing. So your pricing across projects, we have seen much better than what we would have estimated at the point of launch of Grove is INR 22,000, Camellias is now [ INR 45,000 ], even your Panchkula is at INR 8,400. So should we expect that now if the stable state margins at DLF maybe 1, 1.5 years out, move to a 40% range from 35-odd or do you think a large part of these gains get reinvested back? .
You're referring to EBITDA, you're referring to gross margins?
EBITDA.
So see, EBITDA this year also, I talked about, Saurabh, that we will be somewhere close to the range of 35%, 36%. And going forward next year, I think we'll surely maintain that percentage, and we will surely build on that. .
But on incremental sales, will it be fair to assume that the margins are higher than 35%?
I think it's a mix, Saurabh, so yes, we'll have to really look at it as a bucket, right, of new launches, right? In some products, yes, the margins are high, some are low. But on an average, right, we are really making sure that we maintain our margins.
The second point Saurabh, which also drive the EBITDA is that to scale up our business. There has been upward investment in costs and the overheads, which for INR 8,000 crores annualized sales level has a certain EBITDA there. Hopefully, at a sales level, which is higher in the following year and the cost level is broadly remain the same, that could also add a couple of percentage points to the EBITDA margin because that gets diluted. [Foreign Language] that with this added costs in anticipation of scaling up is happening now.
And also just to add. Once these new launches, which we did in second half of financial year 2021, once we started achieving position letters for that, right, our revenue lines actually grow, right? That will also help you generate a better margin.
Got it. And sir, last question is on DCCDL. So this quarter-on-quarter growth we are seeing, that's the contribution of the new downtown block. Will that be fair? Or is there any organic element to it as well?
And secondly, the downtown difference was a Cyber Park that's a 25% differential in rents, what would you attribute it to? Because the building quality will be similar. Is this just market definition we have seen in Gurgaon or I mean, is there anything else to read into that?
Yes. Saurabh, your first question on organic versus growth in [indiscernible] . Organic growth is definitely there. In retail, you've seen a major bounce back compared to the same quarter last year and even compared to the first quarter of the current fiscal. In offices, we are now seeing the rentals getting steady to a marginal growth in the new rentals that we are doing. And therefore, the growth that you see is a combination of organic growth and inorganic growth coming from the new projects, basically downtown. On downtown, the rental increases are there because the time of completion of 2 and 3 downtown compared to Cyber Park, there is a gap of 3 years. So if you just take a normal annual growth, you have about a 15% growth. One -- two, very clearly post COVID,the large multinationals are showing the following 2 or 3 trends. One trend is that they are definitely moving to more quality assets, especially in IT Parks, which give them an opportunity for further expansion and growth over the years.
Two, there is no more the requirement of a grade A property. They are definitely looking at a grade A++ property. And three, the emphasis is much more on sustainability, well less the social infrastructure, et cetera, which we have been emphasizing in our office developments for the last 5, 7 years. And these have helped us in good state. And therefore, downtown, which is now fully leased, has rentals, which are about 23%, 25% higher than Cyber Park this time.
So in terms of -- Saurabh, your question of in terms of office growth of 14% year-on-year. Downtown's contribution is almost 4% out of 14%. Then we have new leases contributing 5%, right? And contractual escalations around 5%. That's broadly the breakup of 14%.
One more thing. Camellias is almost touching INR 60,000, not INR 45,000.
The next question is from the line of Sameer Baisiwala from Morgan Stanley.
First question is on DCCDL. We have got INR 19,000-plus crores of debt. So how do you see the interest rate impact over next 12 to 15 months? .
This was a question, which we answered in the last analyst call also. It is very difficult to accurately forecast where these interest rates will go. There is the market buzzes that there will be an increase of 35 to 50 basis points between now and March. But if you take a little conservative estimate, the impact at a PAT level will be between INR 50 crores to INR 80 crores for the full year.
So we see what -- I mean, basically and in fact, Vivek will then elaborate on this. Broadly, the repo has gone up by 1.9 percentage points in the last whatever 6 months and broadly what the team has been able to do, let Vivek and finance team Cyber City is to restrict the impact on Cyber City to about half of it. Vivek, do you want to...
Yes, yes, yes. So this 190 basis point increase in repo in the last 5 months on a gross debt of INR 20,000 crores, theoretically translates to an impact of close to INR 400 crores at a PBT level. But this year, what we've been able to do is to restrict the impact to a little more than INR 100 crores at the PBT level. So there are a series of steps that we've really taken in terms of renegotiation, refinancing, which has really helped us.
Yes. Sure. Sir, the question is how much of this is fixed versus variable and therefore, can we say that the impact can be 100, 150 basis points in fiscal '24 based on your internal workings. And my fear here is that whatever the rental growth that may come, say INR 300 crores, INR 400 crores. A lot of that gets digested by this increase in interest cost.
Yes. So the fixed interest portfolio in this INR 1,900 crores is about 15%, 16%. However, now we are starting to work with the banks, which give us a lease rental discounting, which by their very nature are much more long term to try and see if we can fix the interest rates for the first 2 years or 2.5 years and then they go back to floating. And the treasury teams are working on this. Next year's impact at a PAT level could be about INR 100 crores to about INR 150 crores about depending upon how we exit this year. And yes, it will have an adverse impact to the PAT compared to the earlier interest regime. But I think this is something, which you have to take in our stride as we go ahead. We've had 2 very, very good years of interest rates going down. And probably, we see interest rates at a little elevated level till FY '24 before they start sort of tapering off again in FY '25, '26.
That's very clear. And just make sure you said 15%, 16% is fixed. So 85% is floating at the moment?
Yes. But I would just like to add one thing here. When we talk of fixed, we generally have to approach the capital markets for that, whereas the variable or floating rate is available from the banking system. The banking system is much, much more flush with funds than the capital market for fixed rate instruments. And therefore, the banks which have healthy balance sheets now are very competitive in the rates they offer. So therefore, in my personal view, just to compare the fixed versus floating to take the call will be difficult because of the liquidity conditions in the banking and in the capital markets.
Okay, sir. Very clear. So quick 2 more questions from my side. One is on the residential side. Clearly, the demand momentum has been good, but this is a cyclical industry. What are the 1 or 2 key risk factors that you see that can moderate this demand?
So with regard to the present demand, I am seeing a lot of business coming in from actual users. And that has completely changed the dynamics I can tell you today. So I'm not seeing -- at this point in time, I'm not seeing -- I mean I'm seeing investors, but I'm seeing them in lesser proportions. So what I feel is that right now, over the next year, at least, I'm seeing a lot of pent-up demand, but pent up in a way that people had been deferring. And now people have come down to earlier they were living in homes that were entered or even otherwise not to their liking, but I am right now seeing a trend where people are actually spending a lot of time.
And I'm saying this because -- if you see our launches, there were times where during launches, people won't even come to sites, their brokers and intermediaries would run around, fill up forms, get everything done and we are done. But I'm seeing this change because whether it is a Midtown, whether it is a floor in Phase 1 to 4, whether there's DLF 5 Grove, whether it is even the new Gurgaon launch that we just did Garden City Enclave, whether it was the Valley Garden in Panchkula, I am seeing today that people are not only visiting once but spending a lot of time contemplating, deciding, looking at their -- the orientation and so on and so forth.
So yes, I understand it's cyclical, but we've just come back after 10 years. At least give us some more time because the resi business, if you've seen over the last 3 years, there has been quite a robust demand, but this is not the frivolous demand that used to be earlier. So it's not something that can be passed around. It's what my personal experience has been over this last, I'd say, even 6 quarters, if I can say it to you earlier, I thought it was just maybe a Camellia story.
But then as I traveled, I saw Chennai, which was an average ticket size of maybe starting at just about 40 lakhs or every customer today, whether a mid-level or a high-level customer is spending a lot of time making sure that they are buying something that they like. They can't be pushed around anymore. It's not that you've got the second floor, so I can shut it down. So what I'm seeing right now is I can safely say that I'm seeing a genuine demand right now. So that cyclical nature right now is not something that I'd like to -- I'll keep in the back of my head right now since you mentioned it, but -- I mean, right now, it doesn't bother me.
And if I were to add to Sameer to your question, I will say possibly one of the things, which we are keeping very close is the interest rates. I think Kunal asked this question earlier. But I think if I really -- and that was something we all are at this point in time, watching it very, very closely. But if I really look at the last 3 launches we had in the previous quarter, right, these launches were in 3 different geographies at 3 different price points across the different segments of our customers. I think we've got a very good response.
So sometimes, it's difficult to really predict what is working, what is not working. And if you really see, we are sitting on a repo rate impact, the repo rate has now touched 6.9%, faster than what all the banks had projected sometime in April and May. So despite that, we are seeing that the demand stays as strong as it was before. So therefore, yes, while interest could be one big watch out. But I also feel that all the other fundamental demand drivers continue to play well at this point in time.
Got it, sir. And with your permission, one final quick question. Your intend to generate free cash flow every quarter with a smaller base. I mean, that intent remains, right?
Yes, absolutely. That intent remains.
The next question is the -- next question -- Okay. We have lost question from Mr. Mohit. We'll move on to the next question, which is from the line of Pritesh Sheth from Motilal Oswal.
So firstly, just what -- like are we all set to launch the last tower in one Midtown this quarter? Or it's next quarter?
Well, so it's scheduled for Q1, but we may prepone it to Q4 because right now, as [ Mr. Goel ] is also saying that a lot of preparation goes towards making the -- I mean, working for a new launch, which is a big launch, as you know, which is in Gurgaon, the high rise we were talking about. But the collections and the process that has been down is thankfully quite stable right now. So right now, what we are going to be doing is because there will be a price increase also with this. And just to give you a quick background of what's happening in our adjacent property, the Capital Green, which abuts the Midtown. We've almost in the Phase 3, reached realization, not be -- our investors, our customers have almost reached the INR 30,000 a square foot realization, whereas we right now are selling Midtown, the third tower C was sold at about INR 23,500. So I feel there is a tremendous amount of opportunity here for everybody to invest there. Whether we want to get in now and realize it or we want to stick to the Q1 plan is something that we'll -- I think we'll decide in Q4, but at this point in time, I think, again, as I say, we'd like to work through that plan because we've seen this every time we rush into something, obviously, there's something gets left out. But if we can just maintain this strike rate and our -- work to our plan, I think -- because the entire machinery starts to work prelaunch -- preapproval, first the concept. So just the gestation period for that and within the company, everybody has to align themselves for that particular launch.
So I think the concentration will be here, but should push come to shove and we need to do something there, we will. We are ready for Q4, we are ready for Q1. Thanks.
Sure. And just a follow-up on residential. So I think for next quarter, since Grove is fully sold out. So we already have probably INR 1,500 crores of visibility for next quarter, right, in terms of -- I mean, I guess that project was around INR 1,800 crores, and we have booked INR 300 crores from that project in this quarter in Q2. So given that we have a strong visibility and there are 2 big launches that are coming, one next quarter on Panchkula and in Q4, there would be high rise. So shouldn't -- I mean, aren't you confident that we can do more than INR 8,000 crores of sales and given the visibility we have, we need to upgrade our guidance? Or you will still remain cautious given the environment and stick to that income?
We'll remain cautious given the environment. We don't know how it's -- everything is going to pan out. You're seeing what U.K. is going through and everything else. So I see, again, we are -- right now, at this point in time, I'd rather -- we all be cautious because I think that's the plan we all kind of discuss and set ourselves to do. Yes, if there is opportunity to grab more, you have my assurance that we will leave no stone unturned to do that. But at this point in time, I think the -- I'd say the external environments right now, this -- there are too many variables going on. So if we just keep our head down and continue to at least work to our plan is what I feel that we would like to do.
Mr. Tyagi, you can add something to...
So I think we internally definitely feel confident that we can complete these INR 8000 crores guidance. But given all the externality improving interest rate, I think right now, from an external standpoint, we'd like to conclude the guidance of INR 8,000 crores that we had given with hope full year upside history.
Sure. And one last, in terms of high rise, we already have one in plan and Crest 2 would be next year. What all are the other high rises that are already included in our launch pipeline that we have slated? I guess there is one more in Chennai, if I'm not wrong. And any other, let's say, New Gurgaon that you already have?
So yes, there is Chennai coming. We're all excited about it. That's going to be the first luxury development in Chennai, right in the heart of the city, which will be in the lines of Crest, Crest Plus. So yes, Chennai, we are happy to go back there with this particular product. And there will be something in Gurgaon. Yes. So right now, if you've seen even the portfolios are pretty balanced with low rise and high rise. And I think that's what you will see from us going forward because there is thankfully a market for low rise and there is a market for condominiums, which when we started off, we want -- I mean, there was skepticism all around, but I think if you've seen the results and the acceptance, I think there is now -- it's reasonably established and there are -- both these markets can work concurrently. So I think that's what we'll do.
Sure, but that would be next year, right?
Yes, next year.
The next question is the text question from Abhishek Lodhia from Yes Securities and the question is if I heard rightly from Vivek sir that collection of INR 1,252 crores doesn't include numbers from Midtown, then what is the collection run rate at Midtown and for this quarter?
Yes, Abhishek, you heard me correct. The numbers what we report are DLF numbers and we don't include the JV numbers when we report the collection numbers. So as of September, we collected close to INR 400 crores in the JV. And this quarter, our plan is to collect INR 450 crores. As the construction commences and as we are raising demand, we will be having a good upside on collections this quarter.
The next question is again a text question from Nimit Gala Ace Lansdowne Investments. And the question is any update on REIT time lines? Or is there a change in plan may be due to high interest rate regime and rise in cap rates? I see no mention in the investor presentation.
So there's no change in the plan or the direction. And I think both GIC and we are reasonably committed to the entire team. But you're right, given the high interest rate scenario currently going on and the overall uncertainty [indiscernible]. I mean, this obviously is not the best time for a new reach that lead potential of our size to come into the market, but we are sort of reading all our firepower to it. And hopefully as the market sort of temper and both the shareholders decide, we will bring it to the market. But yes, not in the immediate short term.
So I'll take the liberty of adding one more point to what Ashok mentioned. See, unlike the ways in the capital markets, our raise is not because we need the money. And we are in our planning, have been reasonably self-sufficient last 2, 3 years and plan to be so in the next 2, 3-odd years, where our business cash flows are adequate to service our debt and still give healthy dividends to the shareholders. The race is only to bring the portfolio in the capital markets.
And if I am -- maybe a little important, it's going to be the biggest portfolio. And therefore, we have to do it carefully and ensure that the investors get the best time for the buck. So while as Ashok mentioned, our progression is going on in full speed, it is not that we are under any pressure to do it soon.
Thank you. Ladies and gentlemen, this was the last question for today. I now hand the conference over to Mr. Ashok Tyagi for closing comments.
So thank you. Once again, I apologize for getting all of you out in the Saturday morning. I think this has been a good quarter. And clearly, I think we are hopefully getting on to a consistent good cycle across the industry, across all the 3 segments of the industry, which is residential, offices and retail. Hopefully, to the point of simplicity, I think we are hopefully still at the early stages of an up cycle. And in the offices business actually emerging from a significant down cycle of the pandemic. So hopefully, we still have a few quarters of potentially good [indiscernible] cycle.
As you have seen, the organized players are the ones gaining share in both the residential and the commercial spaces, and we see that trend to continue. We continue to stay focused on generating free cash flows in both residential and commercial segments. And they're obviously deploying them in the residential segment on deleveraging in the commercial segment or CapEx. And I think hopefully, our strategy, which over the last few quarters was still sort of bit synthesis, is now coming together and delivering on a consistent basis. And hopefully, you'll continue being on this journey for the future as well. Thank you, once again.
Thank you, and a very happy Diwali to all of you.
Thank you.
Yes, thank you.
Thank you. On behalf of DLF Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.