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Puravankara Ltd
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Ladies and gentlemen, good day, and welcome to Puravankara Limited Q4 FY '24 Earnings Conference Call hosted by Axis Capital Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ashutosh Mittal from Axis Capital. Thank you, and over to you, sir.
Thank you, Neha, and good evening, everyone. Welcome again to the post result conference call of Puravankara Limited. We have with us the senior management of the company, led by Abhishek Kapoor, Executive Director, Group CEO and CFO; Mr. Vishnu Moorthi, Senior Vice President, Risk and Controls; and Neeraj Kumar Gautam, President Finance. I now hand over the call to the management for the initial comments. Thank you.
Thank you, Ashutosh. Good evening, ladies and gentlemen. Thank you for going to joining Puravankara Limited earnings call. I'm Neeraj Gautam, President of Finance at Puravankara Limited. We appreciate your time today as we present our financial results and quarter 4 ending March 31, 2024. The results and a comprehensive presentation are available on the stock exchanges for a review. In FY '24, Puravankara Limited achieved exceptional performance, recording a presales of INR 5,914 crores, marking a remarkable 90% year-on-year growth. We anticipate continued upward momentum in future, driven by our strong pipeline of launches and the unwavering trust of our customers. Our commitment to [ replenish ] the strength in all aspects of our operations beyond this financial metrics. For FY '24, Puravankara led with sales of INR 2,762 crores followed by Provident at INR 2,041 crores and Purva Land at INR 1,122 crores. In Q4 FY '24, we achieved an interested [ presales ] figure of INR 1,947 crores, reflecting a 93% year-on-year growth. Collections were robust at INR 1,094 crores for Q4 FY '24, representing a 66% year-on-year growth. For the entire FY '24, collection total increased to INR 3,609 crores, demonstrating a 60% year-on-year growth. Throughout this financial year, we launched 12 projects with a total salable area of 9.47 million square feet to meet the preferences of our diverse [ grinders ] across various categories. We have given total possession for 2,614 units in FY '24 across Puravankara Group. In line with our strategic plan and commitment to expansion, we are excited to enter the [indiscernible] market. We are selected as a preferred developer for redeveloping a residential [indiscernible] member. The project has a estimated development potential of 0.4 million square feet carpet area and our share of salable area engaged is 0.21 million square feet and the potential gross development revenue of over INR 2,100 crores. There is strong response and numerous inquiries from the societies in the [indiscernible] continuous expansion of our development portfolio. In the previous quarter, we were appointed as a developer for a redevelopment site in Lokhandwala, Mumbai. Salable area of 0.6 million square feet with a GDV over INR 1,500 crores. Our launch pipeline is robust with approximately 14 million square feet of the new projects slated for the coming period, notably non-Bangalore projects now comprise 47% of our total launch pipeline. Additionally, Provident accounts for 42% of the launch pipeline, aligning with the market trends and our group's strategic progress. Coming to our debt management. Our net debt increased from INR 1,741 crores in Q3 FY '24 to INR 2,151 crores in Q4 FY '24 and net debt-to-equity ratio from 0.85 to 1.14. I would like to update and highlight that the [indiscernible] increased debt. We have repaid IFC and ASK, 2 marque investors who were with us and invested in 2 of our projects. And both the projects we have fully repaid them and by utilizing this increased debt. Our cash and bank balance stood at INR 931 crores as on 31st March, 2024, which indicates the strong liquidity profile, ensuring stability and operational continuity. The strong collection figures highlighted our commitment to execution excellence except for our effective collection strategy is evident in our net operating circa reached to INR 513 crores for FY 2024. To underscore our strong financial position, I would like to emphasize that as of March 31, 2024, the balance receivable from sold units totaled approximately INR 4,457 crores. This amount covers approximately 50% of our remaining costs needed to complete the inventory currently available for sale, which indicates that sustainable -- substantial portion of the cost for completing the remaining inventory has already been secured for [indiscernible], giving us a solid foundation to fulfill our financial obligations. Moreover, our cash flow visibility is equally promising with the projected amount of INR 7,455 crores, expected over the next 3 to 4 years. In addition to this estimated surplus from 2 commercial projects is INR 1,356 crores, estimated surplus from launch pipeline project is INR 2,696 crores, totaling to overall surplus -- estimated surplus of INR 11,507 crores. Finally, turning to our financial performance. In Q4 FY '24, our total revenues grew by 112% year-on-year to INR 947 crores. EBITDA for Q4 FY '24 was INR 139 crores with a 15% EBITDA margin. There was a loss for the quarter of INR 7 crores for FY '24. Our total revenue increased by 60% to INR 2,260 crores. The EBITDA for FY '24 was INR 530 crores with an EBITDA margin of 24%. PAT for the year was INR 42 crores. Our presale value. I would like to highlight that our presale value for FY '24 was INR 5,914 crores. And in sales and marketing expenses related to the sales number and also the overhead income to achieve these sales numbers has been charged to the P&L for the financial year. However, the revenue in the P&L has come only for 2,614 units, which were handed over during the financial year, which has a revenue value of INR 2,460 crores. In conclusion, FY '24 has been significant and eventful period for our company characterized by the remarkable achievements across all key performance indicators. We are poised to expedite the development of new residency projects across India, delivering exceptional value to our customers and [indiscernible] long term shareholder value. Thank you for listening, and we welcome your questions you may have.
Let me -- this is Abhishek here. Hello, everybody. Let me start with an apology for the delay. And sorry for late upload of the financials. Going forward, I'm assuring everybody here on the call that we will keep this call the next day and give sufficient time for everybody to study the financials and be comfortable with asking questions. Again, apologies, and we are happy to answer any questions you may have. Thank you.
[Operator Instructions] The first question is from the line of Himanshu Jain from Tiger Assets. [Operator Instructions] As there no response for the current participant, our next question is from the line of Deepak Goswami from Swan Investments.
Congratulations for the excellent set of numbers and also for the HDFC platform deal. Sir, my first question is regarding the HDFC Capital platform deal only. We have mentioned in the PPT, there are some projects which are from the existing land bank to the extent GDV of INR 9,400 crores. And there would be some new acquisition which we are looking at INR 7,700-odd crores. So could you please share further details in terms of which are the projects which are being a part of the deal now? And also, since this deal will also incrementally monetize our cash projects at a faster pace, how should we look into that going ahead? And whether this would be predominantly for the low capital or there would be some part of the debt reduction from the incremental cash?
Thank you, Deepak, for your wishes. So Deepak, just to give you a background, as you rightly mentioned, about INR 17,000 crores of which about INR 19,400 crores from exiting. So what is happening is a part of the capital is getting deployed to unlock these lands where you have items position or some settlement or some sanctions or something, some conversion costs like that to bring these projects to the -- for the launch. Having said that, balance money that is available will get deployed in new projects, and that will create a further GDV of about INR 7,700 crores at a [indiscernible] basis. Second thing is [indiscernible]. Clearly, housing as a business is poised for growth, both in terms of bringing the existing [indiscernible] to the market. And to add more land banks, which is currently in the pipeline where we are in advanced conversations in the marketplace. So overall basis, I think this will add tremendous value to provident housing. The second part I must mention is that from within the focus of existing projects, and this is INR 9,377 crores to INR 9,400-odd crores of GDV if you tell we'll be able to repay the entire amount to HDFC so entire new investment then becomes are -- free, completely that you deploy. So in that sense, we already have a financial process to repay the entire money that is getting invested by HDFC Capital. And if you look at existing projects, we are looking at about salable area of 14 million square foot coming from the existing projects and you're looking at a surplus of about INR 1,200-plus crores -- sorry, INR 2,600-plus crores coming from the existing projects.
Okay. And sir, secondly, on the Mumbai expansion plans in the second half, we have added 2 projects one in Lokhandwala and one in Pali Hill. If you can throw some light in terms of the profitability engine of these projects, also we have also mentioned there are certain few deals, which are at the advanced stage of negotiation in the [indiscernible] region. If you can throw some light on that part as well, whether these would be continuously in the southern central market or this would be in the northern part of the market or in the western part of the Mumbai, if you can throw some light on that part that could be really helpful.
Right. So good question. One is as far as both these topics are concerned, like we have always mentioned, our target -- EBITDA target is in the range of 30%. On an average, whatever investments we are making, some may be a little lesser, some maybe a little higher. But I must tell you that both these are marquee projects and the scale and size of these projects in these locations is just not available. To have an excess of 2.5 acres in Bandra Pali Hill, I don't think that we have many plots or any plot which is of that size. So that obviously clearly commands a premium in that market. And we are already receiving calls for savings there, right? So we're very, very optimistic about what kind of realization we can make at Pali Hill, and of course, in Lokhandwala again, which is absolutely a prime Lokhandwala plot. And there is significant demand in that market. It's a very mature market, and we believe that we will be able to bring in the kind of quality that Puravankara will be able to command a premium in that market. So again, as I mentioned, we will target as per our company policy, the 30% EBITDA. As far as the planning is concerned, as a business, when we look at the various geographies, for us, what we intend to do is we intend to have presence in Western suburbs and South Mumbai and Central suburb in terms of redevelopment. So if I were to break this down, redevelopment strategy will spread right from like Dadar, Mahim going up to Western Suburb to Borivali. And on the southern side, in the Highland city, and on the central side up to Chembur. Beyond Chembur redevelopment opportunities, we may be very, very mindful and careful we may not evaluate because of the feasibility of the redevelopment opportunity. That is one. As far as development JDAs or acquisitions are concerned, we are looking at across the board, across the city. Clearly, we want to enter. We already have a project in Dombivli [indiscernible]. We are intending to add a project in Thane because Thane is a big market, and we believe that we want to be active participants in that market and bring in and get a piece of that market as well. So Mumbai as a strategy, I think we are very clear that we are looking at presenting all of these markets. Of course, we are also evaluating the new airport area and opportunities thereof because we believe that at some point in time, that market will open up.
And sir, just continuing on that part, what is the investment we have made in the Mumbai region so far in terms of the project acquisition? And what would be the investment we will be looking out to do incrementally? And when -- what would be the launch pipeline for the -- this Bandra project as well as for the other projects -- Lokhandwala project?
I frankly feel that Lokhandwala, we should definitely take it to market and -- Lokhandwala, we have said Q3, between Q3 and Q4 for sure. And Pali Hill, our target will be that we should take it to market in Q4 or Q1 of next year. And as far as investment is concerned, I think I can -- we can send that data to you separately.
The next question is from the line of Sumit Kumar from JM Financial Institutional Securities.
Congratulations on a great set of numbers as well as...
Sorry to interrupt you, sir. May I request you to use the handset, please?
Is this better now?
Yes, sir.
Yes. So congratulations on a great set of numbers and also on conclusion of 2 marquee deals in the Mumbai market. My first question is on the land bank that the company has, which is sizable close to around 28 million square feet of, I think, development potential. So in terms of BD, business development, how are you looking at it? How -- what is your target at least on an indicative basis for the next 2, 3 years? And as a follow-up to that, how much of the launches would come from the existing land bank monetization? And how much would be from the newer projects started?
So for the next year, as we have published, we are looking at launching about 15 million square foot from within the current land bank, as you know that we've sold out about 7.35 million square foot last year. So the velocity at which we are selling, we need to replace our inventories. So our target will be to maintain our 40-plus million square foot of inventory at any point in time. So therefore, there is a big gap in terms of acquisition now given that we are launching so much as well as we have sold the kind of sales that we have already done. So therefore, our goal will be to minimum maintain 40 million square foot. But at any point in time, our target is that from a date of deployment, we take the product to market within 9 to 12 months out the limit, right? So that we're not sitting on any investment. It's just a matter of plan sanction and launching the project at any point in time. So in that sense -- and that's point number one. Point number two, in terms of -- I think you asked about geographies, isn't it?
No. I mean what will be coming from the existing land bank of 28 million square foot how much do you intend to add?
So 14 million square foot will come from current land bank and whatever we add this year. So I think somewhere we have mentioned in the [ ITT ] that we have already paid INR 300 crores of land advances, and we are expecting closure of some of these projects in next, say, you can assume within next one quarter, say, 90 days time frame. And as those get closed, our endeavor will be as much as possible, we can bring some of these projects to the market within the same financial year. So we're not able to give a guidance right now on what we'll be able to bring to the market. Obviously, there is an internal target, and there is a bunch of stuff that is going on. But our goal will be to definitely bring in more inventory to the market so that we can continue to grow at a rapid pace and we are able to get the market growth rate. So to answer your question, 14 million secured, and it will be definitely about 14 million [indiscernible].
Sure. And in Mumbai, is it that you're only looking at redevelopment or in the newer markets like Thane and near the airport area -- new airport area, we'll be looking at outright land acquisitions as well?
We're looking at outright as well, JDA as well, both in Thane and the Navi Mumbai as in Panvel area because we see that also as a growth vector over time, but we are looking at good options.
The next question is from the line of Shivang Joshi from Centrum PMS.
Firstly, I want to understand, when I look at the presentation on your debt slide, so your net debt has lightly gone up, and consequently, your NCD OCD amount has gone down. Can you throw some light on this? And continuing to your borrowing costs, as highlighted in your cash flows, net interest cost has gone up on an average of INR 70 crores, INR 80 crores to INR 200 crores some you can [indiscernible] in this part?
So if you're absolutely right, few of the NCD amount which we have been reporting as in NCD issued to the IFC and NCD issued to [indiscernible] hasn't come down because we have NCD repaid to them. And in Slide #14, we have given the detail about INR 410 crores we have repaid to them, and we have repaid to them with a project which already launched, we have raised the money at a very competitive cost. And from there, the growth investment has been there. So that is the reason of these 2 NCDs going out of our best slide and now the while we pay them [indiscernible] that debt has gone up. So for the quarter, if you compare to the immediate previous quarter, it has gone up by. The NDAs also we have given about INR 410 crores going towards giving [indiscernible]. And we have also invested about more than INR 300 crores in the acquiring new win part of business [indiscernible] enhance it. So part of the money, part of this loan has gone towards funding those advances. And part of the money has been [indiscernible]. I've given the answer of all your questions. If there is anything more, I can...
So okay. So largely, you've refinanced your NPDs through your interest bearing debt.
Those entities are equity in nature and thereby, there are a certain amount of IRR could have gone from the projected cash flows. However, paying it -- paying them back then, there is [indiscernible] reducing the [indiscernible] of capital. The borrowing that has been great and thereby the overall cost, which is, otherwise, would have [indiscernible].
Added to the bottom.
Added to the bottom line.
Okay. So the increase in payout of interest of INR 200 crores is essentially of that nature and you see...
Yes. However, the return, which otherwise I would have given to IFC or ASK that will not go. That is even much more than the interest which may otherwise will compare to demand.
Got it, because for the first time, we saw your interest payout and...
Abhishek here. We have great tailwinds and create volumes and velocity that is happening right now, right? So we want to take advantage of the cash flow coming in and making sure that we are able to bring as much value to the bottom line and to the value creation for the shareholders as possible. And therefore, it makes so much sense to say that what -- why don't you reduce your cost of capital and take it to the bottom line and pay this off so that's the basic thesis. I mean, the demand has been fantastic when we started. The cash flow has been fantastic, and you're saying, why not impact the money taken for ASK, I think, should be over before December in this account because everything is sold out over there pretty much, it's selling pretty fast and the construction is happening to complete the project. Similarly, we'll have the other products which we have invested in, we are expecting the surpluses coming in there and starting to repay pretty quickly on the money that we go down and then the cost to go. So in the businesses sense, it's fantastic.
Okay. Great. Second, when -- on your launch pipeline, when you had 30 million square feet, 7 million is the phases that you would be opening and this would be from your land bank. So optically, should we expect -- I mean, last year, you closed at how much 9 million square feet of launches?
We opened 9 million square foot of inventory for sale last year out of 13-odd million that we got for sanction, [indiscernible] million square foot, we opened about 9 million square foot. You're right.
And this year, what you have mentioned just like 22, your launched pipeline, 7.28 million square feet. What is the status of approval of these projects [indiscernible] already at advanced stage of approvals? And should we see a large part of or all of them coming in this year itself? Some -- something that you can highlight there?
Absolutely. So I think a lot of momentum you will see starting from the end of second quarter and possibly make most of it -- a lot of it will come in the third and fourth quarter because they are all in approval stage. And as I mentioned earlier, our target will be to make sure that the goal will be that we make sure that we open higher than what we have opened in the last year. So while we have opened 9 million, we'd like to beat that. But this is what we have done here we give you visibility of what we already have in hand, which we have complete clarity on that this is definitely coming. Having said that, I mean, we will possibly in all likelihood add some more projects to it in next 2 quarters.
Okay. And on your cash flows when I look at the closing cash and cash balance is INR 931 crores, could you give a broad sense between how much will be in escrow, which you cannot transfer to the other -- I mean, which has to be retained at the project level and how much would be free cash flow...
About INR 500 crore money is lying into different project escrow accounts, RERA accounts, et cetera, subject to submitting our certificate withdrawal, et cetera. And about INR 400 crores are the fixed deposits, money which we have raised or taken some loans and then money yet to be deployed. There is money lying in the form of fixed deposits with the bank.
If I may continue on a follow-up question on that. On the deployment please, the Mumbai...
Sorry to interrupt you, sir. I request you to come back for a follow-up question. The next question is from the line of [ Abishek from Yes Securities ].
My only question is that I just want to understand the structure of HDFC platform. So how -- I mean, what are the responsibilities? How equity would be infused, I mean, around INR 150 crores of total platform. So what could be our our share in that? And how cash flow would be distributed?
First and foremost, I would like to update you the HDFC NCDs are 0 coupon NDCs, the 0 coupon bond. So there is no interest servicing for those NDCs. And this money, they will be investing -- the NDCs will be issued by the Provident Housing Limited, 100% owned subsidiary of Purvankara Limited or subsidiary of Provident Housing Limited. In the first tranche, Provident Housing Limited will be using NCDs of INR 550 crores. And those NCDs will be 0 coupon bond. That is the structure and the money will be out of the entire facility of INR 1,150 crores. We will be investing about INR 350-odd crores in existing projects, the remaining money will be going to acquiring new land parcels. And service will happen to this NCD by paying 7% of cash flow, cash flow surplus from the projects, and there is no fixed obligation.
Understood, sir. And sir, another part is when we are adding up to -- when we are transferring our projects, right, which already we have -- so are we going to get something out of that or that is a part of structure only?
I mean we are not transferring any of our assets. Those assets are there where they are. In the Puravankara Limited, assets are there and Provident Housing, assets are there. The money which we are utilizing towards unlocking those assets, either land parcel on existing projects and the surplus of these projects will go towards servicing the entity. Our plan is that service or repay -- fully repaid this NDCs from the existing project itself. And new projects which we're going to acquire from the investment will be a digital assets for the company.
So grossly, what kind of cash flow or the percentage of cash flow will be diverted to us in general?
This cash flow will not be -- there's no fixed capital that will be diverted to them. If these projects, which are part of the platform, there will be escrow mechanism and basis the business plan, if there is any surplus left in the month, then out of that surplus, certain percentage will go towards servicing of the NCD in a manner, that NCD will increase beside fully the return to NCD entity also NCD gets a great return.
So if you look at it, Abhishek, I'll just add to this. So total from within the existing projects where the capital is getting deployed, which Neeraj was talking about, we are looking at about INR 2,600-plus crores of surplus. Now that INR 2,600-plus crores of surplus will be more than sufficient not just to repay HDFC give their return, but leave surplus for us. Other than that, what this will do is it will add further, we are estimating about INR 1,900-plus crores of surplus for us on the new investments. So with this, our ability to scale Provident Housing and almost develop 21 million square foot, which is what we are targeting from this platform will be possible and adding significant value to the business and the organization.
The next question is from the line of [ Ramandeep Singh from MAS Capital ]
Congratulations on a great set of numbers for FY '24. My question is at a strategy level, like how we have a sub-brand provident under Puravankara? Is there a pool of thought for having another sub-brand...
Sorry to interrupt you, sir. May I request you to use the handset, please?
Am I audible now?
Yes, sir.
My question was on the strategy level, like how we have a sub-brand in the affordable housing space, which is provident, is there a school of thought of having an ultra-luxury brand, given the premiumization theme in India is picking up loud and clear, and we've seen success stories of some of the listed players? Some of the great projects that they have launched and it's sold like in record deal. So is there a thought on those lines?
See, as a strategy, I'm sure you're aware that Puravankara is clearly the luxury brand. And from the way we present or we will present the product, as far as ultra-luxury is concerned, it will be obviously a much higher -- many notches higher and, therefore, the whole approach and model that we are looking at is different. But to answer the question, will we look at a new brand? We don't need to look at a new brand because Puravankara itself is known for luxury homes, so -- and the kind of quality and the product that we bring on the table. I'll give you an example.
For example, all of these development projects that we have won, and with a bunch of them, which is currently we are closely engaging with, all of these customers are already living in these ultra-luxury homes, right? And of course, the project is being developed long back, and they may go into redevelopment. But having said that, they all come from very wealthy positions. And they have visited our projects, and they said, we think your quality and your brand is fantastic and it's brilliant. So we don't need another brand.
I think the brand over the last 50 years has gained so much respect in the marketplace. I mean, if you go out there and we see this every day, especially in the Mumbai and Pune market, which is relatively people say it's a new market, but then every time I'm out there talking to people and the team is out there, we realize that the brand has a phenomenal recognition in that market. So we don't need another brand as a strategy. What we will do, clearly, is take the product several notches up and be extremely competitive in the kind of products we bring in the market.
Sure. A connected question on similar lines. Our average realization seems to have kind of stabilized very nicely around that INR 7,900 mark. With our foray into Mumbai and with the luxury brand that you spoke about, do you see it tracking the INR 10,000 mark in the next coming year?
Look, I definitely see -- if you just look at Puravankara in isolation, without Purva Land and Provident, our average realization is already about INR 10,000 per square foot, INR 10,229. Provident Housing is at INR 7,800 and Purva Land is at INR 5,444. Now see, what's happening is now if you look at Purva Land, like last quarter, we had launched a project in Chennai, where our average realization was INR 3,000 per square foot. That dragged down the overall average realization.
But are we making money at INR 3,000? Of course, we are making money on INR 3,000, right? But your average is smaller. But if you break this down -- we've already crossed INR 10,000 in Puravankara. And I can tell you for sure that once we -- and which we are already in Mumbai, we will definitely -- average realization will go up, and Puravankara average realization will relatively go up much higher. That's clearly going to happen.
Sure. So my last question, I think great set of numbers in terms of the sales value, but not almost touching INR 6,000 crores. And I understand, as per Ind AS, the realizations will happen at the time of delivery. So tentatively, can you give me a sense when do we see the peak EPS that we've seen in 2012, 2014 levels of around INR 6, INR 6.5? When do we see that coming back?
Yes. I think the journey is between next -- I would say, between next 3 to 4 years' time frame. But you will start seeing green shoots possibly in the early third year from now. So I would say, this is '24-'25, '25-'26, so '27-'28, we will start seeing the green shoots. Because, see, the thing is that you are expanding so rapidly and your -- these sales have happened in the past, which you are delivering now, and that is called the -- as per the accounting standard, what we slightly said, the way this would be [indiscernible] would be on paper.
But as you start to deliver more and more projects and newer projects and the pace of delivery starts catching up with the pace of sales so that you're never backed up, obviously, because you will continue to grow. But it starts becoming better and better. You will see better and better gross profits, and therefore -- and some of these older investments will start making capital. Like, for example, a large amount of G&A may have been spent in the Western region. But you've added or you will continue to add significant top and bottom line for the business in the next 9 to 12 months' time frame. So I think, I would say, the answer is, I would say, third year and fourth year will be significant. We'll start seeing green shoots possibly in the 24 to 28 months.
The next question is from the line of Rishikesh from RoboCapital.
So my first question is regarding the...
Sorry to interrupt you, sir. I request you to use the handset, please.
I am audible now?
Yes, sir.
So my question is with regards to the launches for FY '25 that we have mentioned around 14, 15 [ MHS ]. could you please also mention what's the value of the launches that you are going to do?
So we are looking at a total top line -- estimated top line is about INR 7,443 crores, presales value, and you're looking at a surplus from these projects of about INR 2,696 crores.
Okay. And you have delivered around 2,600 units for FY '21 per activity. How many units could we target to deliver in FY '25 and '26?
Look, I mean, last quarter itself, we delivered about 1,188 units, and we have received OC for total of -- which is pending to be recognized, is about 1,700 units, right? Out of 3,600 units for which we have already received the OC, we have handed over 1,700. We will be handing over at least 1,700 from the OC, which is already received.
Our target for the year is about 4,000 -- approximately between 3,500 to 4,000 units because what may also happen, as it happened last year, is when you get the OC to the client here, the customer, really, to take possession sometimes there is a worry. But our target will be to deliver, like we delivered last year, about 2,200-plus units -- 2,600-plus units. In the next year, our target will be to deliver anywhere between 3,500 to 4,000 units.
Okay. And would it be fair to say that, likewise are reported, on a reported basis, our revenue growth would also be upwards of 50% for FY '25?
If you do the math, clearly, from 2,600 units, it will go up to 4,000. Obviously, you will see the international growth. As far as the revenue recognition is concerned, we'll have to just see the mix of inventory, whether it will be back into [indiscernible] with that.
Because, obviously, there will be a certain amount of land and a certain amount of plotted development is also capable to get developed and get delivered. So we have to just look at the realization and come back to you with a specific answer. But having said that, I think, yes, we can expect that revenue growth will be [ impacted ].
Okay. And lastly, on a reported basis, again, then what would be our sustainable EBITDA margins?
Look, EBITDA margin, as I mentioned earlier, is also factoring into my marketing costs and my G&A for expansion. I will leave that disclaimer on the table because a business that is growing very rapidly, we will have to make investments ahead of getting the return on the investment in terms of GDP and surpluses, where that G&A is concerned.
As far as marketing is concerned, clearly, we are extremely aggressive in the marketplace. And with the quantum of presales that we will look at, as it goes up, we'll definitely look at increasing cost, which will clearly get booked as expenses. So to that extent, leaving that disclaimer, I would think that our target is pretty much intact. In fact, if I look at the project-level EBITDA margin, they're absolutely impacted.
But the impact -- what's happening at the corporate level is that when you put back gross margin and then you put in your marketing cost of new launches that have increased sales and you look at your G&A, and that's where it starts to look different. So that is what earlier conversation was as to when do you see the books reflecting really the kind of value we are creating in the organization. And I think the brand will start seeing that reflecting on paper, I would say, the third and fourth years quite steadily, and then possibly grow pretty rapidly.
The next question is from the line of [ Sushil Jaiswal ] from BajajCapital.
Based on the existing growing sales and good collection, what is your going-forward trajectory? Do you think that it will sustain the same in the next couple of quarters, too?
If you look at -- if you're asking about the overall, we fixed some market, yet we'd read that taking in sustained. That market is good and demand is well there in -- well, and it will sustain.
See, I think what may happen is that we have pulled a lot of launches in the last quarter in the last year. We may see some of our launches to lower to the second, third and the fourth quarter. We will see a lot more details, I would think, in the second, third and fourth quarter. A lot of it will happen in the third and fourth quarter, specifically.
So in the first 2 quarters, I think we have plan sizes. We are waiting for -- they are all in advanced stages, but elections are around the corner. Elections are ongoing across the country, then there are some state elections happening. So keeping those in mind, you may see some of these launches come in the third and fourth quarter. So I mean, keeping that disclaimer in mind, I think everything else is on track. I would see a lot more presales in the third and the fourth quarter.
Okay. And my second question is, so as the real estate sector has begun to rise, so do you think this scenario is in every part of the country or just some specific parts? Also, a majority of the business comes from southern part and some from Western side also. So do you have any plans to expand your presence in Northern side like Delhi and [ Pune ] region also?
So look, we are seeing demand across the country, and we see tailwinds and consolidation across the country, across the segments, which is a great advantage for a brand like Puravankara. To answer the second question, yes, we are looking at NCR. We are evaluating opportunities. We have already started to put a team on ground. And we will definitely look at -- I mean, we -- our intent is clear that we will be a national player, and we will rapidly expand in new geographies is obviously something which is maturing as we are already seeing. And while we do the acquisitions and look at new acquisitions in [ ACR ], Gurgaon, very constructive. [indiscernible] and we need to make sure that we get our launches indirectly. So this year, I think this financial year, that even will be a big one for us.
The next question is from the line of Shivang Joshi from Centrum PMS.
I wanted to understand what is your take on the amount to be spent on BD in FY '25 and '26, considering that you have got decent free cash and good collection run rate. And on the 2 Mumbai projects, putting the capital that would be different. So if you can quantify the [indiscernible].
So as far as, look, BD is concerned, as I mentioned earlier, we're not looking at a capital target, but we're looking at [ chasing ] capital. In the sense that we have already launched -- sold last year about [ 7.5 million ] square foot, and this year, we are looking at launching another 14 million square foot. But clearly, we are looking at replacing that inventory and staying about 40 million square foot at any point in time.
And the second thing that you asked about, we had our total cost to launch for these projects is about INR 900 crores. And as I mentioned earlier, we will be looking at -- sorry, that will be about INR 650 crores cost to -- land costs plus cost to launch will be about INR [ 750 ] crores. So these 2 projects, specifically, which you asked about. And as we mentioned earlier, between these 2 projects, we will be able to generate more than INR 3,800 crores.
Okay. Any specific number you have in mind or any strategies? What amount you will be sitting as a capital or the rest into your land banking, you'll have to start afresh in the Western region. Operations uses, relatively, you have a higher land bank in the Southwest and the West.
Look, as I mentioned, so one of the things which I have mentioned in the previous call is that a market like Kochi, we are sitting with a significant surplus of about INR 1,800 crores. What we are really looking at doing and, hence, you will see some amount of capital churn and [ back ] churn and is that we see at reallocating this capital into the Western region, which is Mumbai and Pune, right? And that is significant capital.
I mean even if I discount it and say that I will take out a certain amount of capital from this region and reallocate that capital in the Western region. Clearly, the number eventually is there, right? So I think we have enough and more within our portfolio to look at in terms of equity to be able to deploy in the actual retail.
And as I mentioned, Mumbai in the past also, Mumbai is going to be a significant part of our portfolio. I mean, I've been saying this for a long time. We intend to get back to at least 40% to 50% of our value-wise square footage would be lesser. But value-wise, we'll definitely look at getting at least 40% to 50% of our presales from the Mumbai region. So it is -- we continue to deploy in that market.
The next question is from the line of Sourabh Gilda from Motilal Oswal Financial Services.
Am I audible?
Yes.
Congrats on the new set of numbers. And most of my questions are answered, I just have 1 question on your trajectory for presales, doing it. I know you don't give exact guidance, but I just wanted to understand what sort of presales do you want to achieve? What sort of growth that you intend to achieve for at least for the next 2, 3 years?
Look, I think I've mentioned this in the past. As we burn the guidance, you're already seeing what we give guidance on is the number of projects and strategies we've been able to bring to the market and have also indicated that we'll definitely try and win more than what we bought in the last year. Having said that, our goal is definitely to beat last year's number and to beat the average market growth rate. So if we are assuming that somewhere in the mid-teens will be the market, we will definitely beat that growth rate in terms of our presale number. And our plan is to ensure that we are able to achieve that number.
To answer it in another format, we are definitely part of the consolidation in the sense that we are going to make sure that we gain a lot more market share in the process of this consolidation. What will be the extent of market share? I think that is yet to be seen. It's also a factor of how much supply we are able to bring into the market, which we are to land on an ongoing basis. So we'll see where we land in the end of the year, but obviously, we're not looking at just growing at a market rate.
The next follow-up question is from the line of [ Deepak Purswani] from Swan Investments.
Sir, firstly, on the launch pipeline, on the launches front, how much was the same contribution from the new launch projects in FY '24?
In FY '24 from new launches, let me come back to you with the exact data. I can share with you. Frankly, I can give it while you ask your next question. I'm sure you'll have more. Otherwise, [indiscernible] at a later date. Yes, you can write to us, and we'll respond to it for sure.
Sure. And sir, just harping again, on the interest expenses. If I were to look on the cash flow statement point of view, our interest outflow was INR 443 crores against a net debt of INR 215 million. Just wanted to understand, when we say repayment of the NCD of ASK and other investors, was there any premium component, which was late payment was made for that during this quarter? And if yes, then what will be the sustainable kind of intersections outflow, which we will be looking over the current [ period ]?
So these NCDs, they have been paid at agreed IRR. There's no additional premium, however IRR was agreed with the investment or [indiscernible]. And the second -- answer to your second question, while repaying these NPDs of IST and ASK, we have taken the debt at competitive rates. So to that extent, interest will go up by servicing those debts.
However, that agreement with the new market conversion, so Abhishek mentioned about it, these are both hits for ASK as well as investment interest return agreement, which we have given from the existing project, which project is being very good. And we are estimating that for net cash flow itself for the entire repaying mechanism, a substantial amount of [indiscernible].
Well, there are surplus from the next phase of the project [indiscernible] -- I mean significant -- significance of this, I mean, in the project, which we will be starting now.
Okay. But from the cash flow perspective, I mean, from the next year versus what would be the interest outlook we'll be looking?
Look, it's I think IRR like -- that is about...
INR 3,000 crores.
INR 3,000 crores IRR at 11.5% is the average cost of this.
Okay. Okay. So roughly INR 350-odd crores, 350, or INR 360-odd crores? [indiscernible]
INR [ 30-odd crores ] as well as we're not adding more debt to [indiscernible]
[indiscernible]
Yes. Correct. Okay.
[indiscernible]
The retail result's about INR 900 crores is it?
[indiscernible]
Does that answer your question?
Yes.
The next follow-up question is from the line of Abhishek from YES SECURITIES.
Sir, just 1 question. We have invested roughly upwards of INR 750 crores towards land in last 2 quarters. So basically, we are taking care of BD. So how much -- I mean, how much more capital is -- are we allocating towards BD? Or how we are going to -- how much of BD we are targeting to maintain the growth, which we have seen in last 1, 2 years. So that is one. And secondly, with that growth, how we are going to maintain the balance between growth and debt?
So let me break this down for you in 2 parts. One is -- as I mentioned earlier, our growth -- we are always going to go towards outperforming the market and gain market share, right? And we are expanding in new geographies to ensure that our portfolio is diversified, wider and deeper.
Now having said that, as I mentioned earlier, we want to first get to make sure that whatever our original land bank, which is [ practically ] about [ 30 million ] square foot, is secured back in our book. We want to maintain at least that much land bank at any point in time. And the target is that we are able to move efficiently to scale launches and do their launches within 1 because we don't want to sit on any assets, you don't want to buy and wait, we will buy and deploy and launch.
So between these 2 things, the fact is that we have about INR 11,500 crores of surplus within the accruals -- within the business, internal accruals. At this point in time, from projects which are already launched and from the project which we launched in the current financial year, we would like to assume it's going to take a 4 years' time frame. Now as that capital comes in and we are reallocating that. So we can't -- we don't and we can't necessarily wait for that capital to come in. We will, say, for example, Kochi, I mentioned on earlier on the same call, we have got significant surplus.
I would estimate it would be about INR 1,800 crores is surplus sitting in cost and for not even including line end profit. So what we want to say is that and obviously, that means that to bridge that unit draw some money against that and take some cash out from there and put that money in Mumbai because we believe that you'll be able to pay a lot more value and you do not more -- do a lot more in Mumbai. So in that sense, first priority will be to create growth from rebalancing and reallocating capital within regions. That is strategy number one.
Strategy number two for us is to look at opportunities where we can raise equity. So for example, we are working towards now we are evaluating the next area. The first is almost deployed. The money is starting to enhance the next quarter, in fact to return because the project is still launched, right? So look at AIF as an opportunity.
Third, you will go and create another platform, where like in asset return platform and trade-level platform where we will look at deploying capital. Other than, for example, the first priority is we take money out of the region and put that in [indiscernible]. So this will be a constant term of capital to create a growth opportunity that ensure that your lead is robust and you are able to plan not for this year, but for the next year and the year after. Because whatever we do this year will have an impact on the next year and then the next year, right?
So that's how we're looking at the business. And look, as I mentioned earlier also, that we are very, very comfortable with debt numbers on a per square basis being under about 1,000 in square meter. So we will keep these parameters in mind. And the other factor that we must first for in our operating surplus. So last year, if you see, our operating surplus was -- net operating surplus was more than INR 500 crores, INR 513 crores. Obviously, like Neeraj mentioned earlier, we have paid out about INR 300 crores of land advance, right?
So the target will be to stay focused on cash flows within collections, continue to spend money on your operations, value operations aggressively and efficiently. And with that, you create, So for example, if you look at total operating, not net operating but operating surplus was INR 1,298 crores. So what I'm trying to say here is that between internal approvals, reallocation of capital, AIF equity platform, you will be able to manage the entire BD that you are working towards.
And to just get to it in the first question, we made you asked about the HDFC structure, there, INR 750 crores is committed for itself. [indiscernible]
Ladies and gentlemen, we'll take this as the last question. I would now like to hand the conference over to the management for closing comments.
Thank you, ladies and gentlemen, for joining our call. I hope we have been able to answer all your questions. Me and my colleagues are available if you have any further questions. You write to us, and we'll answer your questions.
Thank you. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.