Prestige Estates Projects (NSE:PRESTIGE) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Prestige Estates q one FY twenty seven earnings conference call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand over the conference to mister from Access Capital. Thank you. Now over to you, sir. Yeah. Thank you, Shruti. Good afternoon, everyone, and thanks for joining the call. From the management of Prestige Estates, we have mister Irfan Rajaq, chairman and managing director mister Zaid Noman, executive director and mister Amit Morrish, the chief financial officer.

0:51 I'll now hand over the call to the management for their opening remarks. Thank you and over to you. Good afternoon, everybody. I'll hand over to Zai to give the opening remarks. We also have Mr. Nayak, our Chief Finance Controller. He's also listening on. A very good afternoon to everybody and thank you for joining us today. The first quarter has been a good start for the year with stable operating performance across all our businesses. We continue to execute on our development pipeline, maintain healthy collections and saw consistent performance across our office, retail and hospitality portfolios, while laying the groundwork for a much stronger launch calendar over the balance of the year. Our resi business recorded pre sales of INR6579 crores during the quarter with sales volumes of six odd million square feet across three thirty seven units sold.

1:44 Customer collections remained robust at INR4802 crores reflecting healthy customer demand and continued execution across our projects. Geographically, our sales remained well diversified. Hyderabad contributed this time 49% of quarterly sales, driven by the successful launch of Prestige Golden Grove, followed by Bangalore at 27%, Mumbai at 12%, NCR at 7% and other markets at 5%. Average realizations for apartments stood at INR 11,193 per square foot, primarily reflecting the geographical mix of sales with Hyderabad accounting for nearly half of quarterly pre sales. During the quarter, we launched four projects spanning a combined 20,160,000 square feet of developable area.

2:29 These included Prestige Golden Grove in Hyderabad, Prestige Gardenia Estates Phase II in Bangalore, Prestige Pine Forest Sorry, Prestige Forest Hills Phase II in Mumbai and Prestige Century Landmark, a commercial development in Bangalore. Together, our resi launches represented a GDV of approximately INR 12,000 crores, While Prestige Golden Grove contributed significantly to our quarterly performance, Prestige Forest Hills Phase II was launched towards the close of the quarter and therefore only limited contribution to Q1 sales. We expect the momentum from this launch to be more meaningful over the coming quarters. During the quarter, we also completed three projects with the developer area of 4,370,000 square feet comprising Prestige Tech Forest, which is a commercial project Prestige Sanctuary, a residential project in Bangalore and Prestige Cityscape in Kochi.

3:20 Our identity portfolio also delivered another healthy quarter with our office business. We recorded a gross leasing of 1,500,000 square feet during the year during the quarter. A key highlight was a successful pre leasing of the entire development at Prestige JRP Signature Towers, one of the leading banking institutions, which shows the continued presence of marquee occupiers for well located institutional quality office developments. The exit rental of our commercial portfolio for FY twenty twenty seven stands at INR865 crores. Our retail portfolio continued its strong performance with gross turnover increasing 18% year on year to INR737 crores. Food falls across our malls reached INR5.2 million during the quarter, while the FY27 exit rentals for the retail portfolio stand at INR370 crores.

4:09 Our hospitality portfolio also continued to perform well, supported by increased occupancies and competitive room rates average room rates. Beyond business performance, we also remain committed to our sustainability agenda. On occasion of World Environment Day, the company participated by planting 1.25 lakh saplings as part of our commitment to plant 1,000,000 trees in Bangalore. This initiative reflects our continued focus on integrating environmental stewardship with long term value creation across our developments and communities we serve. As we enter the festive season, we have a strong lineup of high value, high velocity launches across our key markets. These include marquee developments such as Prestige Business Bay in Mumbai, Prestige Boganwilha Gardens, Prestige Meadows in NCR, Prestige Falcon City Reserve in Bangalore, Prestige Falcon City and Prestige Cloverdale in Chennai, the Prestige Place in Hyderabad are a few important launches lined up for the second quarter, which will further strengthen our momentum heading into the festive period. Beyond launches, we also continue to strengthen our long term growth pipeline during the quarter through lots of business development. We expanded our presence in three new micro markets in Mumbai that is Thane, Borivali and Vrpova, which marks another important step in broadening our footprint in Mumbai MMR region. These acquisitions not only expand our footprint, but also add to our launch pipeline with our teams already working in advance towards launching these over the coming quarters.

5:35 With this, I think we're happy to take your questions and hear more feedback from you. Thank you very much. We will now begin the question and answer session. Participants are requested to listen only while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of from HDFC Securities. Please proceed. Sir, hi. Congratulations on a good quarter. So my first question is on the Hyderabad contribution to the sales in this quarter, the Golden Globe project.

6:25 So versus the GDV, so the numbers look little muted. So if you can give some color on how the Hyderabad demand in the current environment? So Sir, we've sold already 60% of the total project. We have a GDV of INR 9,500 odd crores, including the landowner share, And which we are not we've, I think, sold very well over there. Okay. Okay. And just on the business development, I think we have announced a strong business development including Aram Nagar in the Q1. So how is the rest of the year looking in terms of business development across Mumbai, Bangalore, Hyderabad and MCS? If you can give some more color, what are the targets for this year? I mean, how much do you think we can do business development this year?

7:11 And how quickly can we bring these launches, especially with around another one into the launch pipeline? So in terms of business development, it's a very dynamic. It changes quarter on quarter. We are on target to, I think, achieve that spend for the year. We target about INR4500 crores of spend towards business development for the year, which will be spread over the ensuing quarters. And in terms of launches, this actually this quarter, we plan to launch four projects in Bangalore, which is the Prestige Avon, Prestige Battersea and the Garden Breeze. These are all under approval. We should get all the approvals in the maximum eight or ten days time after which VERA and then we launch that.

8:05 Apart from that, we're going to launch Prestige Palm Court in Chennai this quarter. So it's quite a lot of action that we're going to see. So it's Garden Breeze, Avon, Springwood and Battersea this quarter in Bangalore, Palm Court this quarter in Chennai and Park Street in Chennai will be next quarter and then it will follow. So there is a big launch pipeline, which is almost INR45000 crores worth of launch pipeline that is still pending. And I think all seems to be on target. In fact, quarter three, we'll see Prestige Meadows, Prestige Bogen Mill Gardens and the Prestige what's that called Chambers 51 in Mumbai, two are in Delhi, two are in Chambers 51 is in Mumbai.

8:53 Okay. Just last question in advance, sir. So have you seen any impact on the ground in terms of delays in deal closures by the customers, any inauguration in the sales cycle because of geopolitical tensions because any concerns around AI because there's been a lot of noise around AI and its impact on slowdown, especially to the traditional IT companies and the demand related to that. So on the ground, especially in Bengaluru, things are shaping up and even across your other sites and geographies, Have you seen any impact on the sentiment around geopolitics? I think you asked me three, four questions all in one go. The first part is you asked about delays. Delays, we had a whole lot of stress in the last quarter, which of course will have an impact on handovers.

9:41 That is during the elections in Assam and West Bengal, whole lot of labor had gone away and now they've started coming back or they've come back. But we did have huge stress of about two months. So that it will impact deliveries by a month or so, but nothing really to really get concerned about. Then your next question is how will geopolitics affect the business? Business has not got affected because of geopolitics. But what happens is our costs have gone up because of geopolitics, because of the oil prices going up, because of commodity prices going up, obviously, cost has gone up, but then that's only for that particular time that three months or four months whenever, then we go back to the thing, but then there is going to be some impact on the bit of expense.

10:34 And the third part you're asking whether the demand is there, demand continues to be there. We don't see anything. And AI, I think AI is more positive than negative. AI is another business model that is coming up and more job creation happens. Yes, on one side, the mundane jobs, which is a regular accounting jobs may be at peril. While that happens, there are new type of jobs that are coming in, which are more technical and everybody has to upskill themselves. However, we don't feel the pinch here. We believe that there is demand and people are positive and they have a need and they are committing themselves even at these higher prices. That's the amazing part of it. And that's not only in Bangalore, it's across all the cities we operate in.

11:25 So you remain confident of that 15% to 20% pre sales growth which you have guided in the last call? No, that is given. That is we are very, very confident because we've got a big pipeline and the only thing that may which may trip is that these products don't come to market. But once we hit the market, I don't see us not selling. So the question of not being able to sell does not arise. But always you have this problem of delays in approval, delay in getting rare up. In fact, that is where our major stress is. But I'd like to see four projects, which I told you should have come in Bangalore. Now they all got delayed to this quarter. Otherwise instead of INR 6,500 crores, we would have been like hero saying we did INR 8,005 crores.

12:11 But then it will come this quarter. There is a big pipeline and I think it's a good pipeline that we have including now we've got some three, four big projects even in Goa where we've invested in land. Now it's like a moving target. Every week we are promised next week and the next week doesn't come. So what happens is we really just cannot plan it. So that's where our problem is. But in spite of all the connections, in spite of having all the relationships, sometimes targets are moving. Thank you, Anishina. Those are my questions. Thank you. The next question is from the line of from CLSA. Please proceed.

12:58 Yeah. Hi. Thanks for taking my question. Just on a couple of questions. Firstly, on the annuity side, right, in terms of the projection that we have given out for rental income, particularly for the office portfolio, there has been some revision, downward revision in '27 and '28 numbers. Is it on account of some spillover of some deliveries, completions? And if yes, then can you just highlight on that, please? Hi, Punal. Basically, it's two projects which we have pushed the time line by a couple of months, maybe two, three months. So we had planned those projects to get completed in March 27. The time lines for those completions is now somewhere in June 27. These are basically our Exo as well as GRC.

13:43 These two projects is what we have pushed the time line, but again, no significant delays as such. Okay. And this just take a couple of quarters or like couple of months delay, not not and any reason for this? The months. Couple of quarters, couple of months. Okay. Okay. Okay. So by '29, I think '29 onwards, our estimates are pretty much... In fact, JRC, we have already committed to the tenants that will be handing over in June quarter. Profit out. And then next year? Next year. It's fully reserved. Sure, sure. Also on the cash flow side, right, in this quarter, we saw some a little bit of surge in the expenses particularly. The collections are fine, but the expenses that we saw from surge. Should we expect similar level of expenses both in the construction and the overhead for the rest of the year also? Or should we or would there be any moderation there?

14:43 You can see almost similar run rate, but in Q1, the expenses were little higher because whatever bills was submitted by the contractors in the last quarter, they were certified and we had to pay that bill. So the construction cost was a little bit higher than moreover, we have a big launch pipeline in Q2 as well as Q3. So some of the accrual payments and all that we had to make. So because of that, the construction payments are a little higher than what we had expected. Correct, correct. So does that mean that because our collection already is pretty much on track with our full year guidance of INR 20,000 crores.

15:28 And if we are able to achieve the same guidance, then in terms of operating cash flow, would there be some pressure there versus last year? Because if we expect the same level of expenses to continue, just trying to understand on the operating cash flow side where we would Even be if on the cash flow, if you see it was little lower compared to our full year guidance because of the sales what we have guided for the full year, it has not happened at percentage terms. So if you see, we have guided residential collection in the range of 21,000 plus, 21,000 to 22,000, we are expecting residential collection for the year should be. And the total gross collection including all other verticals will be in the range of 25,000. So at the current run rate, it will touch only $20.21.

16:16 But then once we launch the project what we had slated in Q2, Q3, okay, those projects will add to the cash flows and definitely it will our free cash flows also will improve. Understood. Understood. And lastly, one question for Mr. Hazard. We've seen some NCR market really doing well. Some of the new entrants got some very good response last quarter or so. Any plans of like scaling up there in terms of, like, you know, project acquisitions or, like, you know, expanding in, say, Gurva market or so? No. No. We've got three projects tied up. One is, of course, an old project, which is in Sector 150, where the master plan is now finally approved at the SPORT CITY.

17:11 We are only waiting for the building plans to roll out and then rewa and then launch. So that is imminent. That will happen very soon. Similarly, we have tied up that is the Prestige Meadows in Sector 92, which will again have a GDV of INR4.5000 crores. So even that is also the agreements are signed and plans are drawn up and they put it for locked in for approval, which should come soon, though we should have a November launch. And then there is one another project, which is 190 or whatever and that is also called the Prestige Falcon City and that also is ready for it and that they also we are just doing the final paperwork. I think that also should get done soon.

18:01 Apart from this, we are also discussing couple more. So there is a good pipeline and I think we are very bullish on the NCR market, more so since it gave us some great numbers in the last financial year. We definitely are trying to see that we get the choices. You see, we just start getting desperate and picking up anything and everything. If it makes business sense and if we believe that there is a bottom line and there is a potential to get good revenue, we are locking in those. And we've locked in three, and then maybe one or two more will keep coming as we go along. Sure. And then lastly, just on the business development side, our spend will be in line with what we had guided for at the beginning of the year, around 4,500 crores?

18:48 So saw some higher spend, yes. Yes, yes. And then, of course, we'll see that there'll be churn of capital, there'll be inflows and outflows that keep happening. So right now, see, even in Mumbai, we've tied up yesterday, we just announced that we've tied up Thane, Thane, which is a very large project in Thane, and I believe that should do extremely well. And that's going to happen pretty much fast because not a SRA project or a redevelopment, it's a clean land and I believe that should do extremely well. Sure, sure. Thank you sir and all the best. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question.

19:35 The next question is from the line of Rahul from Elara Capital. Please proceed. Hi. Hi, sir. Thanks for the opportunity. So my main question was on the leverage front. How should we look at net debt moving from here on to FY twenty seven? You did mention that you're going to spend around INR 4,500 crores in BD. Your annualized finance cost is running at around INR 1,802,000 crores. And if I look at your M and A CapEx, that's around INR $30,054,000 crores. So where should we see your peak net debt level over the next four to six quarters? That's my first question. See, on the debt part, if you see, we have guided that gross collections for the year should be close to INR25000 crores, of which residential will contribute around 21,000 to 22 to be in that range.

20:32 And the free cash flows will be in the range of INR8500 crores to INR9000 crores. So the free cash flow what we'll generate from the operations will be sufficient to meet our spends on the CapEx spends as well as on the business development. There'll be a marginal increase on that maybe by maximum INR1000 crores, INR500 crores, not more than that. So I don't think so there'll be a significant drawdown on this year. So whatever launches we are planning, that will unlock capital and maybe there'll be a reduction in debt as well. Okay. And what is your debt at the SPV level? And what is the company share in that?

21:20 Sorry, debt in? The SPV, which is... You mean joint ventures? Yes. Yes. So our net debt, Prestige share in joint ventures will be in the range of INR 2,200 crores. Understood. It includes the Dial project and the Lakeshore trial and tech specific, these are the major ones. Perfect, sir. Thanks. Thank you. The next question is on the line of Akash Gupta from Nomura. Please proceed. Hi. Am I audible? Yes. Hello. Okay. Perfect. Sir, my first question is on the reported P and L.

22:08 The margins were on the weaker front. EBITDA was down 4% year over year. So just want to get a thought around the P and L and how the numbers are going to move over the next couple of quarters? That's my first question. Again, on the margin front, if you see the inclusion of residential and the we reported a residential top line of INR 1,600 crores. It was mainly because during the quarter, we didn't have any major completions because of which the indoors were lower and the reported numbers were reported residential numbers were lower. But my fixed cost remains the same. In fact, it increases because we are planning heavy launches in Q2 as well as Q3.

22:57 So because of the mismatch in revenue recognition, my reported margin is a little lower. But if you see at the project level margins, it remains the same. There's no pressure on the project level margins as such. Understood. Sir, my second question is on our launch pipeline. I think I've heard roughly three launches in Bangalore and one in Chennai. That's still cumulative roughly maybe 30,000,000,040 billion of launches. And then this would imply like a pre sales run rate of another 60,000,000,065 billion dollars in the second quarter. Wouldn't are we not leaving too much to for an ask perspective in the third and fourth quarter? And then if we have, like, $450,000,000,000 of launches pending, why are we just launching, like, $4,050,000,000,000 per quarter?

23:52 I'd like to have more launches in Q2, but tools and all that, they are at various stages. And this is our current because we expect some of those approvals to come in Q3. So that's what we are expecting Q3 to be good quarter for us. Is there any, like, problem in any particular city that there is a delay in VEDA approval? I mean, what's holding our projects? Where is the delay? There is no specific problem or delay. It is just the time certain things take process, like each project is in a different stage of the approval process. And each, I think, department, government doesn't perform like the private sector, right?

24:40 If it was, then I think we could have more predictable launch time line and quicker time line. Unfortunately, that's the case. So we do our best to make sure that things are expedited. But I think what we are giving you is a very conservative time line. Hopefully, we will launch after but one or two quarters, things may move up or down. For example, Prestige Metals and NCR and the project. Understood. That's the question I had. Thank you so much. Thank you. The next question is from the line of Prateesh Seth from Axis Capital. Please proceed.

25:31 Yeah. Thanks for the opportunity. Two, three questions from my end. First, I think we had good three project additions this quarter in Mumbai and across different markets. I just wanted to know the project structure of, you know, probably each of them. You know, I know is a JV., you mentioned it's a clean line, but, you know, it's it's it's the JTA or... And and even for, what's the structure like? And what would be the margin expectations from these projects? Both Bodhiwali and Thane have stayed joint development agreements. And I think the JDA for Thane has even registered as of yesterday. So all the terms are very clear.

26:19 Sure. And margin expectations would be similar to what we have at the company level or we are slightly getting better here or how should We always like to get better. It all depends on the cost as well as selling price. But then selling price is going up and it's a large development. I think Thane will get a GDV of almost INR 9,000 crores, which I believe we also want to really get some great volumes there. And that should do well because it's a nice piece of land, well located and it should do well. Sure. Got it. Got it. And in terms of Mumbai commercial assets, PKC and Malakshmi, we had done some preleasing earlier, but any progress after that in Q1, have we done more? If you can just guide us on some numbers in terms of how much we have pre leased for both the assets?

27:18 This is all work in progress. Only thing I can say is, it has the there's a great interest and the numbers are very strong. And we ourselves are sort of holding back. But at the same time, we are concentrating on seeing how we can get the production in terms of completion done soon. Work is going on at a best pace, but we'll be most happy and most rested only once the project gets completed. And I think the teams are really working hard to see that happens. And I don't think we have any sort of doubt on the leasing part and also on the rental. The rental is also pretty quite robust.

28:06 Sure. Sure. And lastly, if you want to just provide update on hospitality fees on the IPO or in between we had media reports about we're doing a private transaction as well. So if you just want to clarify on that, how are we approaching the monetization of the hospitality portfolio? No, no. See, as of now, nothing new to say except that the teams are working on various options. We'll see what works out. It's all work in progress. See, we could have done the IPO, which again we have time till September 30. But at the same time today, there are interest from various PEs. Let's see what comes out.

28:53 Yes. Okay. Okay. Because there also debt is kind of material enough. You know, that monetization also can bring down the leverage at the company level that way. So so... Yeah. Okay. No problem. That's all from my side, and all the best. Thank you. Yeah. Thank you. The next question is from the line of Girish from. Please proceed. Yeah. Hi. Thanks for the opportunity. Firstly, just if you can give us some understanding on the Chennai launches, right? Because we see close to INR 12 crores, INR 13,000 crores of GDV, which is planned in this market. So how confident are you in terms of the sales velocity given the depth of the market? Because in the past, what we have seen is that Chennai projects have seen a lower sales velocity at the time of launches. So if you could give us some update on the approval stages also.

29:57 Hi. Yes. So we are pretty confident. The tools are in a pretty advanced stage. So, Prestige PharmCo, we should launch in Q2 for sure. This has about INR 1,200 crores of GDV. And I think this project should do well as well in Velocity. Next would be Prestige Park Street. This either will launch in Q2 or will move into Q3. This has about INR 1,500 crores of GDV and this is a luxury segment. So we're quite looking forward to it as Chennai has not seen a good quality luxury project in the recent past, especially for Prestige, this would be a big one.

30:42 Next is a large launch we should have in Q3 would be the Prestige Falcon City. And I'd like to mark that both Park Street and Falcon City are recent acquisitions. So this is quite quick to turn things around and launch in Chennai. Falcon City will be 6,840,000 square feet, and it's about INR 5,000 crores of GDV. Q4, we should launch Prestige Cloverdale, which is also a big launch, about INR 4,000,000 square feet and another INR 5,000 crores. That's about INR 13,000 INR 14,000 crores of GDV just the next three quarters in Chennai, which we're pretty confident of launching.

31:33 Got Secondly, in terms of the unsold inventory, which is close to 16,000,000, 17,000,000 yes, 16,000,000 to 17,000,000 square feet. We see Hyderabad is pretty big, right, almost 7,000,000 square feet. So if you could just give us some view on the sales velocity of the Hyderabad inventory, which I'm assuming is the Golden Grove and also for the rest of the inventory. So Golden Grove, as we said, is just launched. And we've already sold about 60% of the inventory. So pretty confident of good sustained sales over the next few months. So the next one or two quarters, we should see that inventory significantly reduce.

32:20 And we'll also add up some inventory in Q3, Q4 in Hyderabad with some new launches, which is Rockliff and Prestige Thank you. The next question is from the line of Karan from Amit Capital. Please proceed. Yeah. Hi. Just a couple of questions from my side. Firstly, you know, in terms of launches in Hyderabad, have there been any changes and plans for Prestige Imperial Park this quarter and also Prestige Springwood, which was scheduled for FY 'twenty seven that has now been pushed to FY 'twenty eight. So is it a conscious call to calibrate launches in Hyderabad given the inventory levels over there?

33:09 No, not at all. In fact, Prestige Place is what was earlier called the Prestige Imperial Park. We've done a site redesign, uplifted the product. So but we're pretty confident of bringing that in, in Q3 or Q4. In fact, now that Prestige's Place will be a mixed use development, it will be again a luxury product because we believe that is the future area. So we're getting a hotel, we are getting office, we are getting a luxury premium retail as well as branded residences, which is the Marriott as well as the Saint Regis. So the whole thing has been designed by Benoit and the designs now finally are ready because such large developments with mixed use with various type of components takes time to even conceive, understand and conceptualize and get the product right. So now we've got the product right.

34:07 Now it's a question of pushing the authorities to get the approvals, which should come in the next one or two quarters. Once the approvals are there, we one thing with Prestige is we were never, never going to push any launch. Only thing is our endeavor is to see how we can get the product ready to bring it to the market. And I am very confident that once we come to the market, we will be able to sell and get great revenues. In fact, on the Prestige place, we've just started construction of the CEC, which will take us at least four, five months. Hello? Yes. Yes. Sure. So as a follow-up, on the balance, $450,000,000,000 of launches scheduled for later this year, and while you did briefly speak about Chennai, but if you think of the top five or six projects, which would include Chambers 51 in Mumbai, Falcon City Reserve in Bangalore, Falcon City and Cloverdale in Chennai and two other launches in NCR, that makes up about INR 30,000 crores, INR 31,000 crores.

35:15 What's the current approval status and risk of slippage in these products or in these projects into FY 'twenty eight instead of FY 'twenty seven? I don't think it will slip into FY 'twenty eight. We'll have working very hard to bring it all in this financial year. And it should come and will come. Yes, there could be, but then I don't think they should it should go into the next financial year. But we've got three more quarters to go. Hopefully, it should all fall in place and we should have it quickly. Of course, we've seen each region has different governments. Now we've got a new government in Tamil Nadu. Now it seems to be on the positive side. Now everywhere else, it's all work in progress. I think it should come through. I don't see any problem.

36:01 Sure. And lastly on BD, I'm not sure if you've communicated what's the outlook for BD for the rest of the year. You've already closed three transactions in Mumbai, but going into rest of FY 2027, how should one look at that? Yes, we will have some balance BD left. We'll see some BD in Bangalore and then Gurgaon as well. Any number to quantify here or it's still in discussions? Okay, progress in the discussion. We'll keep you all updated as things progress. Great. Thank you. Thank you. The next question is from the line of from Bank of Broda Capital Markets. Please proceed.

36:51 Good afternoon. Thank you for taking my question. I just would like to know what's caused the average realizations to go low over the quarter? And how would you expect realizations to trend, say, over FY 'twenty seven to 'twenty nine? See, during the quarter, a significant portion of sales came from Hyderabad region where the average realization is on the lower side. So in the Hyderabad region, the realization is in the range of 8,000 to 10,000. But whereas the other regions, it is in the range of depends on product to product, but we can safely assume to be in range of 14,000 to 15,000. Not only Hyderabad region, it's all that because our micro market, that's how the thing and it was a large launch. Now we'll also do in Hyderabad there will be Prestige's place and we are also going to do the Prestige, which will be all very high priced. So it depends on the product, depends on the micro market.

37:46 So in the current quarter, because of Golden Group, the average realization has average realization has come down. Got it. Thank you. Thank you. The next question is from the line of Parikshit from HDFC Securities. Please proceed. Yeah. Thank you. So my question is on the BKCS towers. On the last call, you had said that about 70% is leased. Just wanted to get an update on that, what's the leasing now. And also, on BKC, why you said that you'll wait for completions? Any initial thoughts, how is the demand for the pre leasing on that tower? And also, if you can cover Mahalakshi pre leasing? No, no, I think I've given instructions that we should wait and see how the construction progresses.

38:35 And it's better to be a little since we've already got a big already a big tie up with good companies for these both the KCX and Y. And then, of course, Y has the what's that called the hotel, which is the addition. So we are now our focus will be on completion. Similarly on Mahalakshmi, we have got great inquiries. In fact, we've got some very big inquiries even for buy, but we don't want to sell because finally these assets we are creating to reach out. But I think around 400,000 has already been pre committed. Okay. 100,000 has been leased out in March, you said? Yeah. Okay. And, sir, our first commercial launch, the business base event is the launch, and how do you think... So what kind of response, initial response do you think you're getting? So will this be a sellout in this year?

39:32 So how should one look at this big large commercial start up sale? We'll see as it comes. We are hopeful that there'll be a great demand, but we never know. But I believe that the product is good, location is good, and it should meet with a very positive response. We are also trying to see and prime the market and understand what would be the right pricing. And of course, it also has to make sense to the company in terms of bottom line. So as we get closer, right now, it's all work in progress. We're getting the current occupants vacated, almost 50%, 60% have moved. The rest have to get done and then we need to pay a lot of fees, all that is work in progress. Hopefully, in the next couple of months, we should be ready. And more than anything, seeing the progress of our commercial projects complete across BKT and Mahalashmi, especially the way we've completed the rehab cover has given a lot of confidence in the market.

40:33 And a lot of people have actually approached us to acquire some spaces there, which obviously we are not selling. So this actually has given us a pulse of what's the kind of customer and what they're looking for. So this will actually help us shape our decisions for the Chamber 51 as we come nearer to launch. And sir, one more question. Mean, you did touch upon hospitality and how you're thinking of monetizing it. But a broader question on the commercial portfolio, is expected to ramp up significantly over the next two, three years. Do you think is the right time to maybe divest the minority stake and raise some capital now and wait for that estimation maybe and then look at our REIT? So how does one look at from that perspective, the CapEx on these assets, which could contribute significantly on rentals?

41:22 So at what point of time do you be comfortable to bring in some external capital and deleverage that debt? So we're waiting for the projects to actually complete because we believe and we always believe Mr. Rajat to believe that we want to build a critical mass. And I think leasing these assets out is key, which is going which has been going pretty well. Yes. So I think in the next one years, point two years, these projects will be complete. The leasing also should be completed by then. And actually then this would be a figure for us to actually evaluate and then take a decision on way forward. But we're definitely considering it. Okay. And just last question on the residential. I have seen some of the projects on your website and they have this 20 five-twenty five scheme.

42:14 So like Forest Hill has some projects in Bengaluru. So if you can help us understand what is the strategy there and how would these schemes being rolled out in new launches? Is it more like subscale and sales? Or is it more like luxury? So some color on that will be helpful to understand how is the demand scenario there. Is this with regards to Prestige Forest Hills, right? I think it's on the website, the Forest Hills business scheme is '25, '25, '25, '25, so four years, I think payment of 25% each. And some other projects I saw on the Bengaluru in the website? Yes. It's searching basically instead of collecting money of five percent and three percent every slab or whatever, What we felt is the flexibility of the customer to pay annually.

43:04 So it's not that they are paying right at the end. They are paying once a year 25% and that covers over four years and that covers that timeline of construction. So, it's 25 into four. That's how we work this out and it also gives a little comfort to the customer. It gives us also that the cash flows are tied up and we'll ensure that there is the construction progress also. Okay. And just one last thing on the data center. I think, so you have signed some MOU with the Maharashtra government of Maharashtra. So how are you thinking on the capital allocation towards data center? And over, I mean, near to midterms, so how much time you're away from some announcements on investments, first investments rolling out for the data center business?

43:50 Yes. So the Maharashtra government was very keen on setting up these data centers and actually attracting and bringing in GCCs. This is where we came in. And they had some land parcels, which they were going to acquire and give us. But that acquisition, we have not yet spent any money there as yet. We have not yet invested anything as yet. That's a work in progress. So I think closer to the time that, that acquisition is complete, I think then we will be able to speak a bit more on strategy. But I think overall, if you look at the data centers, what we've done in the past, we would be keen to invest in the land and then and also the building and we'll tie up with data center partners or GCCs then to invest further in it.

44:42 So I think it's an open canvas as of now, closer to when we'll acquire the land, we would form up these plans. But any color on what kind of like megawatts like, I mean, what kind of scale you're looking at on the IT load on the data center side, which you think over the next three or four years should be there on the balance sheet? About a 100 megawatts for now. Okay. 100 megawatts. Sure. Thank you, sir. Thank you. The next question is from the line of Ankash Subdiwan from Iqsa Asset Manager. Please proceed. Yeah. Good evening, sir. Couple of questions on the balance sheet side.

45:29 Can you just help us with the debt numbers? Yes. Hi. We had a net debt of 11,900 crores, which canceled the debt equity of INR 0.69. The gross debt was INR 15,000 and we had cash and cash equivalents to the extent of INR 3,300 crores. From March level, reported number on annual report was INR 10,900 crores on net debt. That has further gone by INR 1,000 crores up. Is that right? Yes. Net debt has gone down, right, which is slight on two reasons. We had some borrowings as well as our cash balance we have deployed also few land acquisitions. So there was a gross borrowings to the extent of $6.50 crores, 700 crores and cash balance reduced by INR 400 crores to 500 crores.

46:27 Where do you see it settling down from there? And what will be the comfortable levels you will think we are comfortable at levels? Yes. Again, we mentioned that we have a very strong pipeline of projects which will get launched in the coming quarters, especially in Q2 and Q3. So that will unlock lot of cash flows, which because some of the debt have been taken on those land parcels. Once the projects are launched, some of the debt on those land parcels will get repaid. So you will see some, especially on the residential front, some debt getting repaid in the coming quarters. That's quite helpful. Second, when I was looking at your annual report, you released sometime back, corporate guarantees have gone or doubled last year and INR 11,000 crores of corporate guarantee apart from the rating.

47:27 How should we read that in a liability perspective? Some of the corporate guarantees, it will be a double counting in the sense it has been given for debt for some of the subsidiary companies. So when we are raising capital at the SPV level, some of the bank because it doesn't have a very long fairly new setup, it doesn't have a credit history to raise capital in those SPVs, the parent company needs to give those corporate guarantees. So but that debt is already consolidated in the CONSOL financials. So that doesn't get counted. But if you see at the JV level, we mentioned that we have a Prestige share of net debt close to INR 2,100 crores, 2,100 crores to 2,200 crores.

48:25 But this corporate guarantee amount will keep on increasing, how should we look at because there's 100% increase in the guarantee? Again, if we are taking any debt at the SPV level, but now if you see going forward, we don't expect it to increase significantly because now most of the projects we are trying to take in the parent entity itself instead of floating a separate SPV for each and every project. But where there's a requirement of the transaction that we have to float an SPV because of the other partner requirement or anything like that. In such cases, we'll need to exchange corporate guarantees for taking any debt in those SPVs. It will be case specific, difficult to quantify at this point of time.

49:12 And last, but not to be more of, just one solution. The secretarial audit has made a remark this time and flagged the noncompliance with one section 32 account number. Sorry, unable to hear you. The secretarial auditor has flagged the noncompliance, which was never the case with Prestige in the previous annual reports. Any thoughts on that? Is it regarding any I don't recollect any noncompanies... I haven't looked at the annual report, which was regarding the not disclosing the remuneration details of the CFO, company secretary and others. Again, that has been the case, which we have been not the first time, I think, a secretary and auditor has given that. But if you see the related party disclosure, we have given the KMP whatever salaries are paid to the KMP. It is being disclosed, but not individually, but at the KMP level, it has been disclosed at the totality level.

50:21 Thank you. Thank you. All the best. Wish you all the best. Yes. Thank you. Thank you. The next question is from the line of Yash Gupta from Asset Management. Please proceed. Yeah. Good afternoon, everyone. Sir, currently, we are recommending strong position in Mumbai and NCR, and this we have achieved within a short period of time. Are we looking to add any new cities going forward? See, right now, we are very focused on the four cities and growing in these markets. However, Pune has always been in the radar and very soon we should acquire launch projects over there. So Pune is a city that we are looking at very seriously.

51:09 Apart from this, we are focused on where we are operating right now. Sir, our current unrecognized revenue is around INR 70,000 crores. And can we expect this INR 70,000 crores to get recognized next three years? And what will be the recognition level for FY 'twenty seven? See, that whatever we are 70,000 crores of revenue we have, it will get recognized in next four years. Three years will be difficult because whatever projects we have launched, I mean, last year, it will get completed in a span of forty five to forty eight months. So maybe we can conservatively take four years as a time period for revenue recognition. This year, we should do recognize on the residential front close to INR 11,000 to INR 12,000 crores of sales.

52:01 Okay. And how is the hospitality business going forward going on? And what are the time lines for the listing now? The listing we have approval still September. So I think Mr. Rajat mentioned that we are looking at alternative of this one also. So if something finalizes on that front, we will definitely consider. But on the hospitality, was it contributing meaningfully? Think we reported a top line of INR350 crores on revenue front. Yes, INR300 crores was the hospitality top line in the current quarter and EBITDA percentage for hospitality was around 41%.

52:56 And at the bottom line, it contributed close to $419,000,000 to the bottom line, that. And can we expect the Prestige to like finalize within next six months, can we say that? We wouldn't like to put a definitive timeline because the discussions can take some time. So whenever those discussions get finalized, we'll definitely give those details. Sure. Thanks, sir. Just a small request. Can you please add like one or two slide of hospitality business into this, so it will be great and good for us? Yes. Since our IPO, this one was still valid and if for the markets improve, this one, we can definitely decide on the IPO also till September, September 30. But both September 30, we can disclose the hospitality details as well.

53:52 Thank you, sir. Thank you. That was the last question for today. I would now like to hand the conference over to the management for the closing comments. Over to you, sir. Thank you once again for a very insightful and purposeful question. We do hope you understood what the company is doing. I'm more than happy Zaid and the rest of the team including Amit will be more than happy to answer any doubts that you still have and would like to know what the future is. And we believe that the business is strong and will continue to be strong as we go along. Thank you very much. Thank you. On behalf of Access Capital Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.