Mahindra Lifespace Developers Ltd
NSE:MAHLIFE
Earnings Call Analysis
Q2-2024 Analysis
Mahindra Lifespace Developers Ltd
The company has expressed confidence in the growth of their Industrial Clusters (IC) & Integrated Cities segment, stating momentum is strong, with a promising pipeline of Letters of Intent (LOIs) to be gradually converted into leases. They anticipate the conversions to largely occur in the second half (H2) of the year. In terms of the company's financials, there was a reported consolidated total income of INR 25.7 crores, down from INR 73.8 crores year-over-year, with a consolidated loss of INR 19 crores. However, their net operating cash flow, excluding land-related outflows, stood at INR 249 crores in H1, indicative of robust collections in residential and IC business.
The company has planned launches with a Gross Development Value (GDV) estimated between INR 2,500 crores to INR 3,500 crores for the current financial year, despite potential spillovers into FY '25. They mentioned the signing of a redevelopment project in Malad, and are still working on the launch in Santacruz. Furthermore, they outlined a clear strategy for their Thane project, citing delivery of residential units contingent on equivalent commercial space as per ITT policy. The company is still evaluating whether to continue with the Dahisar project, which is seeing delays in necessary clearances. The company's geographic allocation for business development remains focused with a 60-20-20 split among Mumbai, Bangalore, and Pune respectively.
Presales guidance for the Financial Year (F) '25 is posited at INR 2,500 crores from residential projects and approximately INR 500 crores from the IC segment. The company remains on track with its business development, aiming for INR 5,000 crores to INR 6,000 crores, and continues to assess redevelopment opportunities based on several strategic metrics to ensure commercial returns and shareholder value.
The Kandivali project launch is imminent, contingent on receiving approvals which include RERA. The company is confident in the revised timelines for this project. Origins Pune is scheduled for launch in F '25, with progress reported on key issues such as access roads and requisite approvals. The recent Citadel Phase 2 launch has already seen promising early interest and Expression of Interest (EOI) registrations. The company remains optimistic about an increase in presales supported by healthy footfall and potential high conversion rates from the live marketing initiatives.
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Good morning, ladies and gentlemen, we welcome you all to Mahindra Lifespace Developers Limited Q2 FY '24 Earnings Conference Call. On the call we have with us today, Mr. Amit Sinha, MD and CEO; Mr. Vimal Agarwal, CFO; and Mr. Rabindra Basu, Head of Investor Relations. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Amit Sinha, MD and CEO, Mahindra Lifespace Developers Limited. Thank you, and over to you, sir.
Thank you. Good morning, everyone, and welcome to our quarter 2 financial year 2024 earnings call. At the outset, I would like to welcome everybody for the call and thank everyone for participating. Also my best wishes for Dussehra and Diwali. Also best wishes to India for the World Cup for all our collective behalf.Let me cover a few things very quickly. I'll cover a few highlights that we are seeing in the industry overall, will quickly cover presales on the resi side, the launches that we have done are in the process of gearing ourselves for the H2, the highlights of business development, the update on the IC & IC side, and I'll then request Vimal to jump in for the financial split. So those are the few topics that I'll quickly cover along with Vimal.So let me just start with industry very quickly. We continue to see a huge amount of momentum in the real estate industry. I would call it a purple patch for the industry given multiple strong drivers in the market. The macros are strong. The GDP growth is contributing significantly. The per capita income, the per household income, et cetera, are driving the growth. Post-COVID, we have seen a significant interest in home buying, not only in buying home, but also buying larger homes, upgrades are also becoming a key part of the buying behavior. Typically, the industry, real estate industry has 6-year to 8-year cycle. We are second -- we finished 2 years into it, now, entering the third year, but it has many years to go. We continue to see steady demand growth across the markets. One of the interesting thing that we track on a monthly basis, the inventory overhang across each of the key markets, and that continues to reduce. That's very interesting because this year is going to be a strong year, we probably cross 5,00,000 units, maybe even more 5,50,000 units, but the inventory overhang continues to come down, which is healthy for the industry.Just as a comparison, in China, in the -- the best years had 1 crore homes. So 20 times more home sales sold in China as a reference. So we have a huge amount of headroom to grow as a country, as a real estate industry. Typically, the industry contribution is 12% to 14% in developed -- more developed markets. India's contribution from real estate industry is roughly 7% to 8%. So we expect that contribution to go up significantly. And the expectation from many sources is that from $250 billion, $260 billion industry that it is today, primarily residential will become a trillion-dollar industry by 2030. Just for reference, China was $500-odd billion in 2009. China was $2 trillion in 2019, and there has been a lot of challenges with Evergrande and Country Garden since then, but it shows you the kind of size that you can expect in a country of China size or India size.So huge headroom for growth. We also see a lot of flight-to-quality that signify the branded players, let's say, players like us would benefit from the governance thresholds that have been put in place, the regulatory improvement, statutory norms that have been put in place, we'll continue to leverage that to our advantage. So flight-to-quality is a key part of how the industry is shaping. So that's one quick first point on the industry. Coming to Mahindra Lifespaces, on the sales side, especially on the residential side, we have achieved a quarterly pre-sale of INR 455 crores versus last quarter 2 INR 399 crores. So some improvement there. On a half yearly basis, we stood at INR 800 crores for the first half of this year compared to H1 this last year -- H1 last year was INR 1,000-odd crores. Important point to note here is that our H1 2024 sustainable sales contributed more than 80% of this INR 800 crores versus last year H1 sales, where we had reported pre-sales of INR 1,001 crores with almost 80% coming from new launches.So the mix of sale has -- is very different in this -- first half of this year. And this fundamental reaffirms the fact that strong brand coupled with solid on-ground distribution and deeper relations with channel partners keep us in good state as we get in H2 with a series of new launches planned. I had in the last call, I'd promised 9 launches, we have done 1 in quarter 1, 1 in quarter 2, and then just in this month, October month, we have done the third launch, but we have a series of launches planned later in the year, and I'll touch upon them. But as I mentioned earlier, having a strong engine, distribution channel partner and the brand allows us to capture not only sustainable sales, but also the sales that come as a result of new launches. So strong pipeline in plan.Let me touch upon the part 3, which is the launches. As I mentioned, our first plotted redevelopment or plotted development was launched at the end of quarter 1 in Chennai. We have never done a horizontal development before. We received a phenomenal response. It was launched at the end of June. So most of the impact was only seen in quarter 2 of this financial year. We sold 85% of our inventory in the first 3 months, 244 plots out of 282 plots. At the end of Q2, we launched Phase 3 of our Happinest Tathawade project in Pune. We are seeing very strong momentum. I'll share more details in subsequent calls. We also -- we will see a fairly busy H2 in terms of launches. Some of the launches were delayed because of statutory and regulatory requirements, some Supreme Court rulings about the RG area on Mother Earth, et cetera. So they had deferred, but we'll expect Codename Malgudi in Bangalore very soon.Province in Kandivali, Happinest Kalyan 2 Phase 2, Happinest Palghar 2 Phase [ 2.2 ], and Codename Navy, which is a redevelopment project. And then we might have a delay in one of the other redevelopment, but to make it up we are fast track 2 or 3 of other projects, so that we -- what we have committed to you now in terms of launches is 9 launches this financial year, we should be able to achieve that without any problem. We also just last week did a industry first launch of our very exciting projects that you know of Citadel Phase 2 was launched through Metaverse with very exciting new technology trends through 500 drones that lit up the sky with a lot of exciting ways to understand the markets, understand the customers and understand -- create a pull factor from the customers. It's been very well received by channel partners and customers alike. So we hope to see more such exciting things to come from MLDL in future launches as well.Let me cover the next part, which is part 4, business development. Continue our business development upwards, we continue to maintain a very healthy BD pipeline of INR 5,000 crores to INR 6,000 crores. Just to highlight a point around the Navy redevelopment project, we had acquired the project in April of this year. We got all the documents in our hands end of April. But as of last Friday, the development agreement has been signed by 170 flat owners, 135 plus registration was done on Friday itself. This is one of the fastest redevelopment market -- bring to market effort that I've seen, and we are very thankful to the society members who also showed the speed that we want to demonstrate from our side and really hope to bring this to market in this financial itself -- financial year itself.We also want to highlight one of the acquisitions that we did. It didn't happen exactly in quarter 2 or H2. It happened 10 days -- 12 days later. We acquired a land parcel, 5.4 acres in Wagholi, Pune, which has a development potential of 1.5 million square foot saleable area. Pune continues to be a strong market for us. And this acquisition gives us the opportunity to leverage our brand in the micro market that we were not present. So this will allow us to participate on the Eastern side of the Pune -- Pune city area. We will see the launch of the same project in the next 4 weeks to 6 weeks. That's the speed we want to have for as many of our launches as much as possible. As we go forward, the pipeline looks very strong. Our much awaited Thane land has been a phenomenal boost in development potential, which I touched upon in the last call. We are in the process of getting a set of approvals that allow us to get us ready for a launch likely next financial year. So that's on the business development side.Let me also quickly cover the final part from my side, IC & IC business update. IC as you know is a lumpy business. We had a -- we -- as anticipated, we will -- we had a very strong H2 of last financial year and H1 of this year was a little bit subdued because it's lumpy, it comes in waves, but we are seeing strong amount of domestic consumption-driven manufacturing, China Plus One related opportunities. So we see strong momentum. In fact, we have a healthy pipeline of LOIs, which we are in the process of converting slowly and steadily across all over world cities and origins, industrial clusters. A few approvals are awaited, so that we can close those LOIs into the lease opportunity. We'll keep you updated. Most of that will happen in H2. I'm hoping that when we talk next, you'll get to hear the momentum, although lumpy in the IC business is getting converted into sale opportunities that we'll be able to see in the numbers that we put out. So that's on the IC side.Let me hand over to Vimal for the [ sixth ] part, which is the financial part.
Thanks, Amit. And good morning, everyone. As you all know, many of our key operating entities from residential side and IC & IC side are not consolidated on a line on line basis. Moving on to the key numbers here. The consolidated total income stood at INR 25.7 crores as against INR 73.8 crores in Q2 F '23. The consolidated PAT after non-controlling interest stood at a loss of INR 19 crore as against a loss of INR 7.7 crore in Q2 F '23. Your company has a debt of INR 291 crores at consolidated level, while cash in hand and bank balance including investments is [ INR 65 crores ]. The cost of debt stood at 8.1% on a consolidated basis. Our net operating cash flow without land-related outflows was INR 249 crores in H1, reflecting the strong collections in the residential and IC part of our business. These are few of the key points.I'll now request if the floor can be open for questions from the participants, please. Thank you.
[Operator Instructions] The first question is from the line of Adhidev Chattopadhyay from ICICI Securities.
Yes. Sir just to start off on the launches, whatever launches we have planned for second half, could you give us some quantification what is the overall GDV of the -- cumulative GDV of the launches you are planning? And just to clarify the redevelopment is on the Santacruz project right which you touched upon where the signing has happened? Yes, that's the first question.
So let me -- thanks, Adhidev. I think let me clarify the second part quickly. The signing has happened for the Navy Colony in Malad, so -- where Santacruz is actually, we are working on it. It's 2 different societies, amalgamation, the process is slightly longer. So we are still trying to accelerate that but it is taking more time than we anticipated but the Navy part is done. Navy one is launched -- Navy was announced in April, and we've done the registration as of last Friday. So hopefully that answers your second part of the question.And coming back to your first part of the question, I think the GDV, so we have -- so we had initially planned 9 launches. We have potentially 2 of those launches may spill over to FY '25, and one of them we just talked about Santacruz might just given the time it's taking to get the process done. But we have 3 additional projects that we've added to this year's pipeline itself. So that we should hopefully be able to not only meet 9, but hopefully, do more than 9 as part of our launches this year.The total GDV from this that we are bringing into the market. So let me just clarify like province will have a INR 2,500-odd crores GDV, but we're only bringing the Phase 1 of that launch in this financial year. Next, Phase 2 will be in the next financial year. So if I add up all the phases that we have planned, so not the whole project in this financial year, it will be between INR 2,500 crores to INR 3,500 crores in GDV for this financial year based on the launches.
Okay. INR 2,500 crores to INR 3,500 crores. And sir, Kandivali, when do we see the launch happening? It will be within this quarter or it is towards next quarter?
This will likely get to in the next quarter. Given, we also want to time it and make sure the market is also prepared well. So we are awaiting the approvals. And as you know, we had to redo a lot of things given some of the changes that happened. Most of the things are going in the right direction. Even though we might get approval this year, which we are hopeful, this quarter, we want some time to warm up the market. So my best guess is we want to do it in January rather than this quarter. I don't want to rush into it given it's such an important project for us.
Okay. And sir, just the 2 redevelopment projects, so Malad may be launched this year itself and Santacruz in H2, right, to understand correctly?
Yes. Navy, we are pushing to launch this year. Next year also, we're trying to -- we've not given hope. We are pushing hard. But just knowing the process, it might spill into next financial year.
Okay. But this INR 2,500 crores to INR 3,500 crores is a conservative guidance you are giving, right, factoring in any delays or this is the, what do you say, lower end, upper end, how do we -- should we look at it? Sorry to press on.
This is the best guess that we have based on the launches we have. INR 2,500 crores is the -- is on -- is a good -- last year, we did INR 1,812 crores, just for reference, right? So, and next financial year, we have INR 2,500 crores guidance, right? So I think -- but launches versus sales conversion, there is a ratio which we'll know depending on the success of the project.
[Operator Instructions] Next question is from the line of Pritesh Sheth from Motilal Oswal.
Yes. Thanks for the opportunity. Firstly, on business development. So you mentioned about INR 5,000 crore to INR 6,000 crore of pipeline. And I think as per the plan that the company is having of 5x growth in 5 years, I think every year, we would -- we should be doing around INR 6,000-odd crore of business development. So how is it looking for this year? We have already signed up 1 project in Pune, but in second half, will this traction be more positive, and will we be achieving this by INR 5,000 crore, INR 6,000 crore of BD this year?
Yes. So, thanks, Pritesh. I think just wanted to clarify one thing before I specifically answer the question. This INR 5,000 crores to INR 6,000 crores, as I explained in the last call also excludes Thane. So we had not included Thane, which is -- which has huge potential, but we will target on the traction of the full FSI potential given it's a beautiful site, it has a lot of trees and greenery that we want to preserve. Yes. So we had talked about INR 8,000 crores just from Thane, 50% residential, 50% commercial. So that is not included in the number that you just mentioned that I mentioned earlier.And we -- since I came over, I think we put a huge amount of effort in the BD process completely given where the market is. So a lot of discipline, a lot of efforts and outreach to get to see as many deals that are there in the market, it's good that we are focused on MMR, Pune and Bangalore. So it allows us to understand the market sentiment and how the markets are shaping up really well. But I just want to be -- so we are on track in terms of the volume and the flow of deals that we're seeing. But I'm also very careful about signing the deals that only makes sense to us, because, as you know, the market is so hot, the expectation of land owner in terms of pricing is very different. So I don't want to sign up a deal and then have the winner's curse, I got the deal, but when I'm bringing them to the market a year or 2 years later, they'll slow down unanticipated.So just being very careful and disciplined about how we -- how we triage through the deal, how we filter through the deal economics and make sure that we sign the right deal that makes more sense for us in achieving our aspiration. So, 3 points. One is the Thane part was not included. Second, we see enough flow and -- of the deals across these 3 markets that allows us to triage through. And third is, I want to be very careful on the deals in terms of economics, so that we don't sign a deal that is -- that will cause winner's curse.
Sure. And beyond Thane, Kandivali, like deals are large in size, you would be happy to get this among INR 5,000 crore to INR 8,000 crore kind of deals initially or for now since you have Thane and Kandivali in place, those large-sized deals are largely out of our contention right now, what's the strategy there?
Yes. Se have a good flow of large deals, medium-sized deals, we call it mega deals. In the Thane, the mega deal for us, we have Category A, Category B and Category C. And given the market, we look for all kinds of deals that meet our thresholds. So we don't want to do too many small deals. And then we also don't want to be chasing deals that may not have the economic threshold that we are seeking. So we're always trying to balance that. So as part of that, we will be open to all kinds of deals as long as they make our economics and thresholds work.
Sure. Got it. Just -- since you touched upon Thane, and you mentioned about that project being ready for launch next year, but has there been any clarification on how that 50:50 component is going to get developed? I mean whether it is supposed to be delivered together or whether it is supposed to start together? Any clarification on that?
Yes. So...
And also you can touch upon Dahisar project as well, if -- how is the status of approvals there? Yes.
Yes. Got it. Let me cover Thane first. I think a great question actually. That's something we have to carefully plan for. The way the law tells us is that you can sell and construct asynchronously, so they can happen at any point of time. But the OC part has to be joined together. So I cannot deliver a single square foot of residential till I have delivered equivalent square foot of commercial as part of the ITT policy. So even though I can sell earlier, but I have to make sure that they get delivered. And typically the commercial has a shorter construction 2 years versus 4 years for resi, we have to plan for that very carefully.And that's why I think, as I mentioned, we are not only getting some approvals to make sure that area is fully ready, but also we are -- commercial point of view, we're thoughtful about working smartly with this constraint in mind. I don't want to start something on resi till I have some clarity on commercial, at least part of it. We will do it in phases, so that we -- we're not locked in a situation wherever resi is ready but we can't offer possession to our customers. So that's on the Thane piece. So that's part one. I think on part 2 on Dahisar, we have not seen any major improvement in the clearances that were required for us to launch the project. And that's why in the next 30 days, 60 days, we'll take a decision whether we want to be -- whether we want to consider, including Dahisar or we want to drop it for -- from our pipeline and see that is ready and look at other projects also that our -- that will be more exciting from a timeline point of view. I know that may not require this kind of specific approval.
Got it. Very clear. And just one last on IC & IC. So I saw some 70-acre decrease in SEZ piece in the Jaipur part, that -- the size of that land has reduced. Any reason for that?
Just say that question again? I think we lost the last part of your question.
Sure. So, yes, Jaipur was last quarter, 2,000-odd acre somewhere around there. Now it is showing as 1,900 acre. And I saw -- I mean in terms of the SEZ part of that land, that has reduced by 70 acre. So any specific reason for that reduction?
Yes. I think there -- so let me highlight 2 things. We have to always abide by the government rules. So there is some tweaks that are happening from 65% or 67% to 65% in terms of how much is leasable compared to the growth area. So there is some adjustment that we always do based on the latest and the greatest guidance that we get from the government. And then we have some healthy SEZ pipeline also that we are tracking well. We are also looking for some denotification that will allow us to -- there's more demand on the DTS side compared to SEZ. But we will have to -- will have to get the right approval before we can talk with a lot of confidence. And as you know, the DESH Bill will also hopefully help us not only help us, but any SEZ entity to benefit from if that comes into. So we are working with the government or the industry bodies to explain how this should be done, which is equitable for all the stakeholders involved.
[Operator Instructions] Next question is from the line of Himanshu Upadhyay from o3 Portfolio Management Service.
Yes. My first question was you stated that the real estate market cycle is now in the third year of move, okay? We are seeing prices of residential flats, et cetera, move up or the end product, okay? And also the price of land has been increasing. How are the basic assumptions like realization, salable area and costs, which are also increasing because of inflation changed in the assumptions what we are making for the projects or we are bidding for, okay? Can you elaborate on that? And what does it mean for you? Are we still in the spot at the end realizations are much ahead of the land prices and costs or do you think the fine balance is moving on the other way, some idea in all the 3 markets where we are focusing on, okay?
Vimal, you want to jump in.
Yes. So, Himanshu, a couple of points from my side. One is, so far as the realizations are concerned, as we have mentioned in the last call, we see a lot of discipline. Although the trajectory is upwards, but it's not sort of seen price increases which we are experiencing, but it's in the positive sort of trajectory. Land, yes, continues to be something which is a critical raw material for us. And there is some hardening of pricing which we are experiencing.At the same time, sort of middle of the P&L cost lines, which are there. Last 1.5 years has been much better than what we saw post-pandemic. And to that extent, from, say, a guardrails perspective, we are looking fairly strong across all projects which we are signing up for or the projects which are coming up for launches. Right, Amit?
I'll just -- very well. Himanshu, let me just add 2 more things. So -- and there are many more things and maybe we can explain more in detail when we have more time. But I think there are a few things that we are trying to do at our end. First is the size of the project. I think it's -- as we -- I think, Pritesh, your question was -- one of the question earlier, we should have the optimal mix of project, and ideally the size of the project should go up. So from a scale point of view, if you're doing a INR 500 crore project, we should ideally go to INR 1,000 crore project and INR 1,500 crore project. When you do scale projects, automatically, you have the ability to leverage a lot of common overhead, fixed costs, et cetera.And that's something that we are consciously doing across all the 3 markets and have clear thresholds for what is the right project looks like. If it is smaller than that, then we should be -- there has to be a very strong strategic reason, otherwise, we should not do it because economically, it will put some other constraints that you touched upon. So that's one. And then the second part on the cost side, I think the volatility is a challenge in our business because our price gets locked in upfront and costs we have to endure for the 4 years before we deliver. So it's extremely important for us to manage our cost of construction really smartly.And one of the things that we have seen, and we are trying to bring the manufacturing mindset into our project mindset, project operation is, how do we do the standardization. So standardization of, let's say, apartment sizes, standardization of building layout, standardization of MEP, standardization of parking lot, standardization of component, standardization of all the finishes. And these are things that are typically seen at a very high level of sophistication in, let's say, manufacturing industry. In projects, everything becomes bespoke and it's not industrialized at all. So with the help of my colleagues, especially Jitesh and Viral, Jitesh leads design and Viral runs marketing. We are saying that how do we standardize our products so much so that it allows us the efficiencies in the constructed area to the [ R&A ] area that you don't want to construct too much for the same amount of R&A, which is where the selling happen.So these 2 things I just want to add to what Vimal said to make sure that we are able to -- one of the -- on the size of projects, we are increasingly trying to take it up. And then the biggest driver of profitability is the ratio of R&A versus construction area, how do we standardize and reduce and get the efficiencies on the cost side.
Thanks for the detailed reply. It was very helpful. Second thing was on -- it is slightly longer question. Can you give an idea of how is the capital allocation strategy evolving means what -- because in our presentation on the ambitious goal slide, we have stated that we are working on a lot of [ 6, 7 ] sectors, there are [ 6 ] sectors. And what does it all mean, okay? And how does the bold ambition that you are elaborating does it mean on customer segments, products? And what are becoming down with experience more no-go areas for us or we would have seen that these are the things we used to do in historically, but I think the return ratios do not need for us, that is one part on capital allocation.And secondly, how does the KRA change in the organization structure or model change based on what you are trying to achieve and -- or the bottom, how is this revaluation impacting or positive development is happening, let's say, on the people front and capital allocation and the [ SCR region ]? So some thoughts on that will be helpful.
So, Himanshu, a great question. I'm glad you touched upon. I'll try to be brief here because it's a question that requires longer -- more detailed answer. But let me just try to give a summary on both the points that you raised. The aspiration that we have set up requires a very healthy GDV to be created over the next 5 years, 4.5 years. So anything between INR 40,000 crores to INR 50,000 crores GDV needs to be there for to supporting our [ 8K to 10K ] scale-up that we have. Now the way to pursue this is very important that we don't do, and this will be spread across, let's say, Mumbai, Pune, as well as Bengaluru.The size of the project I touched upon earlier will be different, like mega projects, Category A, Category B, Category C. But this an is important angle of the type of the deal. Is it a society redevelopment? Is it a joint development or is it an outright purchase that we have? Each of these things will have a different capital requirements because in case of, let's say, the Navy, we don't need to put capital till very late after the registration is done, you do a little bit of marketing spend, but now -- and then very quickly, you can launch. But when you're doing a outright land purchase, you have to make sure that you spend all the money upfront, and then it takes anywhere from 9 months to 12 months to bring those projects into the market. So those are the ways, we estimate the size of capital required to support our growth aspirations.But one of the fundamental principles that required for us to commit to any of these is the financial returns. So this is something that I have started to push internally that whatever you do, Himanshu, what happens is there is always a dilution of some from the cost point of view or some other reasons or IRRs get diluted because of time as well as, let's say, cost overrun. So how do we actually make sure that we factor that in our financial analysis when we do the underwriting for the field. And that's the capital allocation is based on the principle of what the theoretical IRR but also the realistic IRR when we finish the project. So we are very careful and now disciplined about keeping both these into account as we plan for the project. And that is nonnegotiable because it's critical that what we say at the time of underwriting and what we deliver at the time of possession and reflect our economics needs to be very close to each other.Now to do that, the second part of your question is KRA. In the past, we had a very functional organization. And in the last few months, we have started to change that. You'll see in our investor presentation, we have introduced the concept of Chief Business Officer for even our residential business. For IC, we had the Raj, who is our Chief Business Officer for Industrial. But now we have Vimalendra Singh, he's the Chief Business Officer for Residential, South -- West and North. And we have Ashvin as the Chief Business Officer for South, especially Bengaluru, and we have a lot of projects in Chennai in our World City as well. This is critical because then you have end-to-end accountability, what you see in underwriting and what you deliver, you have the full responsibility. And this is also required from a scale-up point of view, which is now they can have a regional structure that allows us to work towards scaling the Mumbai, Mumbai or Pune or Bangalore specifically.And beyond these changes to the organization, we are also bringing people in to make sure that they are able to support our scale-up aspiration from -- just from a [ hands and legs ] perspective and the quality of support required. So I just want to keep it short. I'm happy to discuss in more detail, but this is how we're thinking about the capital allocation and how we're thinking about the KRAs and the organizational bandwidth required to support the scale-up.
Okay. And one small thing, Origins Ahmedabad is taking a lot more time, okay, than what was envisaged, okay? Any specific thoughts you have or means what is the progress on that?
Himanshu, you said, Ahmedabad, right, Origins Ahmedabad?
Yes. Yes. Yes.
So see, our -- we talked about that we are ready to -- so [ 2 of them ]. We are either looking for a large anchor customer. We don't want to do a small 1-acre, 2-acre deal or we also shared our aspiration to even exit that if we find the right buyer. The thing that I don't want to do, Himanshu, do a fire sale. I think this land parcel is I would say, moderately attractive. It will become attractive in the next 3 years to 5 years, given how the utilization of our land parcel around that and even the competition from the government parks. But I don't want to do a fire sale because this has value. And hopefully, we'll find the right partner, right customer over the next few years. So that's the -- that we are open to get an anchor customer largest or exit completely for the right, but don't want to do a fire sale.
[Operator Instructions] The next question is from the line of Shreyans Mehta from Equirus Securities.
Yes. Sir, my first question is on Kandivali launch. So is it only the timing which we are looking or is it also dependent on some approvals, which might come in?
So I think we are waiting for the normal set of approvals. So it's not a question of if, Shreyans, if you're trying to say, yes, Kandivali will get launched, it's a question of when. And this part of routine approval that we see from all the relevant authorities. So that's going on. As soon as those are clear, including the RERA approval, then we can launch. And that seems -- we have to redesign our time lines a little bit given some of the changes that happened. But right now, we are looking good on those revised time lines.
Got it. Got it. Got it. Sure. Sir, secondly, on -- in terms of the launches, which you've lined up, say, INR 2,500 crores, INR 3,000-odd crores GDV and the way 1H has panned out, fair to assume we'll be crossing the INR 2,300 crores, INR 2,400 crores presales mark for this year?
I think, Vimal, you want to -- I think presales number, we have not given for this financial year, we have given for next financial year, INR 2,500 crores presales from resi and roughly INR 500 crores from next -- from the IC side. That's for the next F '25. And I will stay in those guardrails to talk about what we have planned for next year. I will continue to update you on a quarterly basis how our pipeline is looking forward, so you have a good comfort on how the business is scaling up.
Got it. Got it. Sure. Sure. And sir, lastly, on -- as far as our BD of INR 5,000 crores, INR 6,000-odd crores is concerned, can you break it in terms of Mumbai and specifically in terms of redevelopment?
Yes. So let me just say, so typically, the -- just the split while I'll give you overall split, my thumb rule is 60-20-20, 60% from Mumbai, 20% from Bangalore and 20% from Pune.
Okay.
That's typical. The redevelopment part is something that I'm constantly evaluating. They need to meet the guardrail that we have in terms of size, in terms of location, in terms of the number of members in the society, the kind of other commercial return that we can get from the fresh sales, all those are extremely important. But as we go forward, we also have the 60-20-20 split into vertical versus horizontal versus other models. So that we are -- but we are -- those are ways to provide returns to our shareholders. I'm always looking for is this a good project for us from a brand perspective, from a customer perspective and then does it provide commercial returns to our shareholders.
Sure. Sure. Sure. And sir, lastly, any update on Origins Pune, when can we see that coming into pipeline?
This will -- so we -- F '25, we'll be launching Pune based on the latest estimates that we have. We are -- we had 3 issues there. One issue was about access road. We have made a strong progress in the last quarter. The second issue is contiguity. It's a [ Swiss cheese ] problem. So we are working with our partners there to make sure that the Swiss cheese problem is addressed. And then there are certain approvals that we need to -- because some new rules came up with respect to a, forestation, et cetera, that we are in the process of sorting out. So those are the 3 things. All of those are exciting.What's good about -- we call it Origins Pune, OP, is that it's very close to Pune. The huge amount of interest that we are already seeing about from prospective customers, prospective investors. So hopefully, as soon as we have solved all these 3 issues, we'll be able to get the launch done in a shortest period of time.
[Operator Instructions] Next question is from the line of Ronald Siyoni from Sharekhan Limited.
Yes. I had just one question with respect to Citadel Phase 2 launch, if you can touch upon how the project's response was there? And versus the Phase 1, what kind of pricing did you see, whether have you seen any change in the footfalls or conversion ratios? So just on the whole Citadel Phase 2 launch?
So let me share a few things, Ronald, and let me just keep some more excitement for our next call. The reason is very, very, very important time for us. We launched it only like 5 days back, right, 25th, and it was a Metaverse and the drone show that we talked about. We have received a lot of EOI. The pricing is competitive. We have a very strong micro-market understanding of who the competition is, what they offer and how can our price value equation is going to be stronger than our competitors, given us an extremely nice, I would say, location.And as we had done very well in Phase 1, I think we want to take it Phase 2 to the next level. These are larger apartments, 3 BHK and 4 BHK, very well designed, I must say, and it's a premium offering that we are providing there. So the market pricing is in line with the price value equation and the competitive information, competitive set that we have. The -- roughly, I think close to 300 units have been launched as part of this, and we will have more open up as we see the response. But we are hoping for a super-duper response from this. In the last 5 days itself, we have seen very healthy EOIs already. Let me just stop at that. Hopefully, we'll have more to share in the next call.
And on the footfall front, like whether footfalls have been higher than previous launches or there has been some lower footfall? So what kind of interest in terms of footfalls have been there?
Early days, because just one weekend we've had, that too with Cricket World Cup going on. So the footfalls are healthy. They are much stronger than what we saw in the past. This was much anticipated. But I think I hear more about conversion. So I think the response from [ CP ] has been outstanding, let me tell you that. And if that is an indicator of how the presales will stack out, I think we have good news in store for all of us.
[Operator Instructions] As there are no further questions, I will now hand the conference over to Mr. Amit Sinha for closing comments.
Very good. Thank you to everybody, all the participants that I just want to thank all of your support, listening to us, but also supporting us from outside as we build our business, as we scale our business. As I touched upon the industry, this is a purple patch for the industry. We have seen strong presales momentum more on the sustainable side. Our launches are -- more of the launches that we had planned that are happening in the H2 of this financial year and some of the large size launches are planned in this second half of this financial year.Our business development effort continues to be healthy, in line with our aspirations of scale-up that we've talked in the last quarter. IC & IC business, a bit subdued in H1, but it's a lumpy business. We will see the more -- the LOI that we have, the pipeline that we have should get converted in the H2. So hoping we have more news to share on that front. And the financials, as you know, we'll continue to work on that. We will have a much better, the financial details as we finish the financial year given the lumpiness of this industry and the revenue recognition method that exists. Thanks a lot again for all your support and look forward to speaking again and best wishes to all of you for the -- for this -- Dussehra, Diwali and the festivity.
Thank you, sir. On behalf of Mahindra Lifespace Developers Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.