Shriram Properties (NSE:SHRIRAMPPS) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Q1 FY 'twenty seven Earnings Conference Call hosted by Shriram Properties Limited. 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 the conference over to Mr. Chairman and Managing Director from Shriram Properties Limited. Thank you, and over to you, sir. Good morning, everyone, and thank you for joining us for the q one of FY twenty seven earnings call. We are coming here on a positive note with a strong operational momentum and the record first quarter sales of 484 crores.

0:55 The response to our new launches in Chennai and Calcutta has been particularly encouraging. Our entry into the premium residential segment in Chennai and the successful launch of our branded product development in Calcutta are important milestones in our portfolio strategy and have further strengthened our confidence in the underlying demand. While Q1 financial performance was relatively steady, the quarter was also characterized by strong collections, continued execution momentum and a healthy level of investment towards our future growth pipeline. With a strong set of scheduled project completions and launches lined up for H2, we have good visibility on improving revenue and earnings momentum through the balance of FY 'twenty seven. Our balance sheet remains healthy, giving us the flexibility to continue investing in new opportunities while maintaining discipline in the capital allocation.

1:47 With a diversified portfolio across our key markets and the growing development pipeline, we remain confident in sustaining our growth momentum and creating long term value for our stakeholders. With that, I'll now hand it over to Mr. Gopalakrishnan, CEO and Mr. Vaveed Rukhwar Pandey, CFO, to take you through the financial and operational details in greater depth. Thank you. Thank you, sir. Good morning, everyone. My name is Ravi Lakumar Pandey, and I'm the CFO of the company. Thank you today. I will present the performance highlights for Q1 FY 'twenty seven. We have uploaded the presentation on the website and the stock exchanges, and I hope you all have access to it. Over the next few minutes, I will walk you through the operational and financial performance of the company for Q1 FY 'twenty seven.

2:38 Following that, Mr. Gopal, our CEO, will also join me to take the questions. Let me start with operational highlights referring to Slide four. Q1 has been a good operational start to FY 2027, providing a strong launch momentum and improving visibility on sales and awards and revenues for the balance of the year. Coming to the overall performance, we had a strong operational start with three launches during the quarter. Two new projects, Shriram Restiller in Chennai and Shriram South Group in Kolkata and a new phase at Green Meadows in Chennai. We achieved our highest ever Q1 sales ARPU is INR $4.84 crores with sales volume of 850,000 square feet.

3:23 Collections $3.65 crores supported by execution and handovers. The amicable resolution the Government of West Bengal achieved in FY 'twenty six is now translating into monetization opportunities and accelerated launches supporting Kolkata value unlocking. We have expanded the product portfolio from apartment to villas and now product development. The response to the product development launch has been particularly encouraging with approximately 55% of inventory sold within the first thirty days. With SHRIRAMPPSTELAR, we have entered Chennai's premium residential segment with our premium offering. Around 20% of the project was sold during the first weekend of the launch, validating the product positioning with our brand.

4:10 Overall, the strategic direction remains unchanged, deeper presence in our core markets, minimization wherever appropriate and diversification of the product portfolio. This year continues to be estimated, while Q1 performance remained modest from a revenue recognition perspective, healthy collections, sustained construction progress and scheduled completion pipeline provide a strong visibility for the balance of the year. Referring to Slide five, coming to the quarterly KPIs. Sales value was INR $4.84 crores, up 10% year on year, with sales volume of INR 0.8 five million square feet, up 4%. Collection stood at INR $3.65 crores, up 8%, and we handed over six ninety units during the quarter.

5:00 On P and L front, revenue was INR $2.71 crores, EBITDA INR 42 crores and 5 INR 11 crores. Revenue growth does not fully reflect the under primarily due to timing of handovers and project completions. With limited new projects reaching OC minus two in Q1, we expect stronger revenue recognition in Q2 and ASP. The muted margins are largely product mix driven rather than restructure with around 40% relatively lower margin legacy projects from Kartika. Margins are expected to improve in S2 and higher margin product reaches completion. From the cash flow perspective, we generated INR 135 crores of free cash flow before new project investment, invested INR 88 crores in new projects and ended the quarter with strong liquidity position.

5:54 Our business development, we added 700,000 in profit with an estimated GDV of INR $6.50 crores. Overall, Q1 was a strong operational start. Slide six summarizes what we just discussed. Referring to Slide seven. During Q1, we launched approximately 900,000 square feet at our three launches, point 3,000,000 square feet at Shriram Estella in Chennai, 400,000 square feet at SHRIRAMPPS OUT Group in Kolkata and 200,000 square feet Green Millows phase launch in Chennai. These launches demonstrate premiumization and product diversification, while also validating customer demand in our core markets.

6:40 In Chennai, Shriram Restiller is our premium residential offering. As the product was launched towards the end of June, its impact on Q1 was limited. Nevertheless, approximately 20% of the project was sold during the launch weekend. In the line concept, the response was particularly strong with approximately 55% of the inventory sold in thirty days. This provides confidence in the parts and support faster value realization and capital recycling in the Takata portfolio. Referring to Slide number eight. This slide provides a glimpse of the two key launches during the quarter. Both launches received intelligent customer response and reinforce our strategy of minimization and product diversification.

7:29 Referring to Slide nine, Project Pipeline and Business Development. Project Pipeline remains one of the strongest aspect of the business. We currently have approximately 16,000,000 square feet of ongoing projects and 17,700,000 square feet of the upcoming projects, giving us a total current pipeline of. The ongoing portfolio has 2,900,000 square feet of unsold area with unsold GDV of approximately INR $19.70 crores. The upcoming portfolio of 17% of which has a GDV potential of approximately INR 11,560 crores. Overall, the GDV potential of the current pipeline is approximately INR 13,530 crores.

8:16 In addition, over INR 7,300,000 is profit of projects with GDP potential of more than INR 6,000 crores are at advanced stage and are likely to be added over next three to six months. We continue to evaluate 20 plus million as perfect opportunity for accelerating pipeline addition. Therefore, management remains confident and committed to nearly doubling the upcoming project pipeline over next eighteen to twenty four months. Referring to Slide 11, financial highlights. Q1 revenue was INR $2.71 crore, up 4% year on year with a gross profit of INR 56 crore, EBITDA was INR 42 crore and PAT stood at INR 11 crore. The top line performance was impacted by the timing of project completions and product mix.

9:06 Revenue was primarily driven by spillover handovers from FY twenty six completions and recently completed legacy low margin projects from Calcutta, particularly Gangwal and Sunshine Mani, resulting in lower gross margin. Other operating income predominantly comprised of reversal of constructive obligations relating to Shriram Greenfield along with fair value gains on project and land advances relating to Shriram's projects 122, Sapphire and Surgam. Implied costs were marginally higher due to routine annual increments, while other expenses remains broadly stable with some increase in new project launch expenses. Finance costs were also broadly flat. The JV loss of around INR 4 crores primarily reflects higher selling expenses at INR 122 crores, partly offset by handovers from recently completed JV projects.

9:59 With scheduled project completions providing a strong visibility, revenue and earning momentum will be stronger through the balance of FY 'twenty seven. Referring to Slide 12, which summarizes our discussion. Turning to Slide 13, consolidated cash flows. Operating cash flows remained healthy, supported by healthy collections and execution at handovers. We generated free cash flows before new project investments of INR 135 crores and invested INR 8 crores in new projects, resulting in net free cash flow of INR 47 crores. The positive net free cash flows improved our closing cash balance to INR $2.19 crore.

10:47 Overall, the cash flow position remains healthy with adequate liquidity to support ongoing project execution and planning. Referring to Slide 14, debt profile. The balance sheet continues to remain comfortable. GAAP external debt at June was INR $6.51 crores against cash and cash equivalents of INR $2.19 crore. This results in net debt of INR $4.32 crore. Net debt to equity is 0.29x, which remains a very healthy level. Our cost of debt is around 11%, and we continue to benefit from the reduction in benchmark rates. The company's equity stood at INR $14.71 crores, supported by a healthy liquidity and a crystal A minus positive credit rating.

11:37 This provides ample funding capacity to support future growth. Therefore, with our strong equity base, healthy liquidity and low gearing, we have sufficient balance sheet capacity to support future growth without taking leverage to uncomfortable levels. Referring to Slide 16, FY twenty twenty seven guidance and outlook. Our guidance remains unchanged. We remain confident of achieving our full year guidance. The confidence is primarily underpinned by the strong launch lineup and the project completion visibility. Turning to Slide 17, FY twenty twenty seven plan calendar. We have 7,000,000 square feet of potential launches with approximately 6,000,000 square feet planned for FY twenty seven across the new Chennai, Pune and Kolkata.

12:31 Out of this, we have launched two projects with $700,000 in profit during Q1. With well distributed launch calendar across the year, we are well positioned to drive sales growth and maintain strong business momentum in FY 'twenty seven. Referring to Slide 18, FY 'twenty seven handovers. This is one of the most important slide from a earnings perspective as it provides strong visibility and the new recognition for the balance of the year. Recently completed projects has over four ten units and INR 400 crores of unrecognized revenue from sold units, which is expected to be recognized during upcoming quarters. In addition, two projects with over 400 plus units and INR 160 crores of revenue potential are targeted for OC in Q2, while five plus projects with over INR 2,100 units and INR 1,000 crores of revenue potential are scheduled for OC industry.

13:28 Overall, more than 2,900 units representing over INR $15.60 crores of revenue potential are scheduled for handover and revenue recognition during the balance of the year. The high confidence handover pipeline provides strong visibility for improving revenue and earning momentum through Q2 and the balance of FY 'twenty seven. Referring to Slide 19, FY 'twenty admission. We are familiar with this slide and would like to reiterate and assure to our investors that we are on track towards achieving our FY 'twenty admission. The current pipeline provides substantially substantial visibility for this objective. The 33,700,000 is target current pipeline has renewed potential of approximately INR 14,000 crores to be recognized over next five to seven years.

14:21 To summarize, Q1 FY 'twenty seven has been a strong operational start with our highest ever Q1 sales in Hindi collection. The launch response in Germany and Turkmen validates our strategy of minimization and product diversification. The project pipeline with $33,700,000 is perfect of current ongoing and upcoming projects, along with additional opportunities and the revaluation. The balance sheet remains strong with net debt to equity of only 0.29x and cash of INR $2.19 crores. And most importantly, the S2 launch and completions pipeline provide strong visibility and therefore confident of achieving FY twenty seven guidance. Overall, we are confident that the business is on a strong trajectory with the benefit of the current investments, launches and scheduled completions expected to become increasingly visible through SGFR twenty seven.

15:15 On behalf of the management team, I reaffirm our commitment to governance, customer experience and value creation. Thank you. I now hand over the call back to the operator. Myself, along with our CEO, will be glad to answer all inquiries. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of from Mount Intra Finance. Please proceed.

16:15 Hello. Hello. Good morning, sir. Yeah. Sir, can you reiterate and explain a little bit about our FY twenty eight mission target? Basically, we are still we are speaking with, like, sales value of 5,000 and then revenue of 2,500. And then PBT, we are talking about $2.50 crores, sir. So right now, our FY twenty six PBT was actually $8.80 crores, the kind of it. So is it right figure to match? Like, you are talking about from 80 crore of FY twenty six to $2.50 crore by FY twenty eight. And in that case, how much will come from our asset sale of the Calcutta land basically?

17:04 Yes. The numbers are right. And Calcutta land sale is not a significant part of it. We are developing Kolkata land from where we are today, which is about 100 to 110 acres of more is left for development beyond whatever approvals we have. Those will also be developed into a project or monetized in some way to a development through third parties. We'll have to... We're evolving the strategy there because we got the approvals. We got the litigation out of our way only last... Late last year. But this INR $2.50 crore PBT or a 2,005 crore revenue is coming from ongoing projects that are to be completed.

17:49 As you can see in slide 19, we have sold... Launched, sold, and to be recognized of about 8,000,000 square feet to be recognized over the next two years. That alone brings you to 4,800 crores of revenue recognition potential between FY '27 and '28. Therefore, you know where the confidence of 2,500 annual revenue coming in. In addition, the new launches, some part of the launches will also come for revenue recognition depending on what the product mix is and when we launch during FY twenty seven and early part of twenty eight. If it's a plot, it takes only to eighteen months to twenty four months to turn around. So some part that would also will be ready for income recognition. The combination of these two gives us a confidence that we will reach the revenue recognition of 2,500 crores.

18:40 And we are looking at PBT stabilizing in the range of what, the 10% margin. And that's fundamentally where we are coming from. It's a bottom up based on individual projects, not on land sale. So my primary concern of where I want you to highlight is, like, we are talking about PBT of 10 where we have not done even EBITDA more than seven, 8% in last four, five years basis. So, like, can you help me to understand that sales value part and revenue part I'm comfortable with? Only thing I want to understand that how we have... What is the underlying explanation and where... Can you just highlight it and explain in details that we can achieve 10% PBT, basically. So that is my more point because if if if you track the way I'm tracking your company, more or less for our last three, four years, you have always clocked the revenue you are talking about most of the cases. But media problem is arising out of the out of the margin, basically. So that that is very volatile, to be very honest. Now we are talking about... We are giving a guidance of 10% PBT margin where we have not even done seven... More than seven, 8% at EBITDA level.

19:53 So can you help me to understand that part basically? Rather than sales value and revenue, it's a PBT and maybe collection. These two figures, if you can highlight. Yes. I think we have consistently reiterated this point in the past also. There is definitely a disconnect between how you look at our our EBITDA and how the industry should look at and how we look at it at least. Our other operating revenues are integral part of our business. So when you look at our other income in the financial segment, we need to be able to divide that into two parts. One is the normal other income. Second is in other operating income. Other operating income is associated with our joint ventures, development rights, monetization, or other real real... Ordinary course of business income.

20:42 And that is why in our presentation, we consistently show other operating revenues separately. Accounting standard is accounting standard that requires all of them. Auditors will combine all of those into non income from operation. Therefore, if you add the EBITDA margins in the FY '23 was 22.5%. If you want to reconcile, I'm sure I'm ready to get one of our team members to talk to you offline. 24, 22.6%. FY 'twenty five was 18.4%. FY 'twenty six was about 13.5%. We believe with the product mix changes, '26, '27 and '28, we will see an improvement in EBITDA margins. And similarly, PBT, FY 'twenty three was 8.8, FY 'twenty four was 7.7, FY 'twenty five was nine, '26 was lower at around 5.5% of six... 5.6%.

21:35 That number we expect with the change in product mix over the next two years, we expect it to stabilize around the 10%. So this disconnect happens with most people because they're mechanically taking, like, money control or others. Mechanically removing the entire other income as as if it's a mutual fund income or treasury income. Okay. But, sir, in that case, in terms of our own estimate, like, what kind of EBITDA we can do in FY '27 and FY '28? Corresponding to 10% PBT, let's say, what should be our EBITDA in terms of our own calculation and FY '27 also, if you can give us a call for I would not likely like to put absolute numbers on in a large domain like a call like this. What I would like to say is our EBITDA margin should be in the range of about 22 to 24% by FY '28.

22:33 Okay. Got it, sir. This is Patrick. I'm not look... I was not looking for particular number. Said that range will help me. And, sir, if you... Can you give... Yeah. Sir, last point, can you give some highlight on the, like, date and interest that we will be having, sir? Sorry. What was What kind of... Date. Total total... What will be the figure? Yeah. For our estimate of the date figure and the corresponding interest rate that interest we have to pay, basically. So if I if I look at our overall gearing, it will it will go up. It will... It may... It would it would most likely go up during FY twenty seven. The gearing can rise temporarily Because as you know, as they are pursuing aggressive growth and trying to lock more project pipeline, understandably, either a equity or a debt has to come in, not only the cash from operation. If I have live within our cash from operation, the growth cannot be there. Therefore, we have... We might go up on the gearing level, but our comfort zone, even on a short term basis, it may not be very significantly higher.

23:48 So we... Our our long term comfort zone will be about point five is to one. Temporarily, it might go up. Got it. Sir, last point. Sir, in our FY twenty seven outlook, we have given us the sales value growth of almost 40% to 50% up to INR 3,300 to INR 3,500, whereas the corresponding collection figure is much muted at a 26% to 30% growth of 2,100 to 2,200. So why this disconnect? Can you help me to understand a little bit more where sales will be much higher, but collection will be slower? Yeah. So the collections tend to follow the project progress because of us to initial collection on sales will be only 10%, and then with the ATS, it goes to 20%.

24:41 After that, it will be a project progress link. And since more than... Since based on the project approval status today, as we indicated in the earlier calls, our launches are back ended, and you can also see that in the slide here in slide number 17. Since they are all q three, q four launches, they will not translate exactly to the same amount of collections. And so they... This year based software based on the progress of current ongoing project and the timing of launches of our five or six launches that we are targeting in q three and q four. We expect the collection to be in the range about 21... 2,100 to 2,200 crore. As the project progresses, the collection will ramp up in the subsequent quarters and the next financial year.

25:30 Okay, sir. Okay. Thank you, sir. Thank you. A reminder to all participants, anyone who wishes to ask a question may press star and 1 on their touch tone telephone. The next question is from the line of Ronald from ICICI Securities. Please proceed. Yeah. Thank you, sir, for the opportunity, and congratulation on good response for new project launches. Sir, my question was for the guidance for FY 'twenty seven, the pre sales number. So if we now expect about INR $3.50 crore quarterly run rate from sustainances, then we make up up to INR 1,400 crore. So the balance, what would be the launch GDV for the full year? Like I believe INR $4.50 odd crore we have launched during Q1.

26:23 And if I assume INR 2,000 crore worth of GDV projects to be launched during FY 2027 and approximately 40% to be sold from this, then also the total works to about not more than INR 2,002 crores, 2,300 crores. So if you can break up in terms of launch GDV, what is the launch GDV you guys are expecting in FY twenty twenty seven? And whether the sustain and sales number around INR1400 crores to INR1500 crores we can achieve for this year? Yeah. Let me start with your GDV. Based on the 7,230,000 supply that we are targeting to release, we will be most likely we would get about 5,000,000 square feet of launch area out of that, 5.8, 5,900,000 square feet of launch area.

27:13 The GDV of the supply that we are giving is roughly about 6,000 crores. $59.05... Somewhere around 5,950 or 5,600 crores. And because all of this will not materialize, out of this, we are looking at new sales contribution in... During the financial year of roughly about new sales. Sustainment sales are INR 1,400 crores, INR 1,500 crores seems right. The balance will come from the new launches. Great. So that explains it. Secondly, you have got a good response in Kolkata, which we are testing the waters. And you had you were looking for about two point nine two point three million square feet apartment launches, which for which there were approvals in place.

28:08 So whether this would come in FY 2028, have you planned whether there is any bifurcation in terms of how you would go for apartment or plotted sales in Kolkata, if not for this year, then next year? So as far as Kolkata is concerned, let me take a few minutes to explain. I think it's a very interesting evolution which is happening, and I think we'll land properly in this current year. Two point two million square feet approval that we already obtained, the pre elections, is unlikely to be launched fully this year. We have roughly about 700... 650,000 square feet of apartments to be sold yet from the previously launched projects, sunshine two and three.

28:57 And when we... As we reach, you know, like, half of this or more, about 200,000 square feet of unsold inventory, then it is probably worth releasing this next set of supply. Even then, 2,200,000 cannot be released in one stroke because then it'll be a excessive store supply, and customers will pick up from multiple towers of sales, and then we'll end up spending our own money to construct. So we will release in phases. Historically, we have released seven fifty eight hundred thousand square feet per lot... Per per tranche of launches, like phase one, phase two, phase three type. That is one part of it. We might launch one phase of it during this year, but nothing more than that. That is point number one from the existing approval perspective. After the approvals are done, after the handovers of land are done to the government, we have 105,150 acres roughly or slightly less than a 110 acres of land to be developed, leaving aside the common infrastructure, water bodies, and all that.

29:53 That one is the one which I said in... Mister Pandey also said, and I said earlier in the earlier answer that we are evolving that strategy. For a simple reason, we wanted to test various products before concluding on what that device development looks like. So in that context, we will launch late in q four late late last year, and plot launch this year has been very encouraging. Based on the launch price that we have achieved based on the launch price we have achieved and based on the cost of development, we believe both these products deliver between six and a half to seven and a net contribution to us per acre. If that is the case, it does not make economic sense to sell the land to warehousing or any other bulk state.

30:40 It seems to make lot for us to develop into this low gestation or a quick turnaround projects like product development which seems to have taken off very well. As mister Panti mentioned, our product development sales, we we really reached about 55% of our project was sold in in in about a month's time, which is very encouraging and the appetite of the local market is very obvious. And therefore, we will do a combination of this to release from 2,300,000 square feet of apartment, which is outside is a 104 acres. It's only considered and approved, and therefore land is utilized. The balanced plan, we will try and categorize in such a way that we optimize per acre contribution, and that's our whole intent. And more importantly, it has to be done in a faster time scale. Therefore, it will be a combination of villas, apartments, and plotter development to be developed in that site, and the intent is to complete everything in three years time and hand over the projects in five years max and get out of this site.

31:41 That's our broad strategy. How we are fine tuning each pieces is something that we we are working on internally. We hope to land it in in a quarter's time. Great, sir. Thank you for the detailed answer. And lastly, on the the DDU addition you have done. It's a supplement. I I missed one, Ronald. Sorry. Yeah. This... I I actually... I don't know whether you picked it up. Currently gave you the contribution as well. So that shows what the land can fetch us as a company. Right. Sure. Sure. Sure. Time of 104 acres, 105 acres, maximum 110 acre developable land, pitching you that kind of contribution in the inherent cash flow to be recognized over two, three years time in Shriram Properties.

32:29 Great. Great, sir. And and lastly, sir, on the project which we are added, so if you can give some details with respect to, you know, where exactly and what kind of structure it is there and how we are planning this project to come up for launch and some details on the new project you have added. So during the quarter, we added a project which is a JVA. It is in Bang... In Bangalore. It's called the micro market. It's called the and not not... Northern Side Of Bangalore. And we have already submitted the development plan and it's a joint development. So roughly about eight lakhs square feet or thereabout is the total available area.

33:18 We expect to get that on board end of Q3 or early Q4. The... I did mention in one... With some of you in a group meeting or in a previous call. We are at an advanced stage of closure. We are waiting for the plan approval with regard to the Pune project where our transaction is complete. Final documentation has been frozen, but we offer to buy this paper this FSI once the approvals come through and we're waiting for the plan approval. Once it comes within about a month's time, we should be able to launch, which is called Manjiri, the 2,300,000 square feet, which is where we are doing an FSI purchase from the existing owner of that township.

34:06 And so that project should also get taken off in Q2. We are basically waiting for Puneet, the local authority approvals. Once it comes, we'll launch. The list of launches, Mr. Pandey talked about the next list which you'll see is the Banaragatta Road, which is what we internally call it T John, which is a development project and plan approval has been submitted and we're waiting for the plant sanction. And that should also take off most likely in Q3 where we have visibility on those approvals. Beyond that, if you go down, the projects which are there in Slide number 17, transaction is closed.

34:56 Be it the Elanca, Bangalore Villa project, India Wadi apartment in Pune, Elanca apartment project of 570,000 square feet, Elanca Row House of 520,000 square feet, Dodubu, I just mentioned, Subjabra. All these transactions have been completed. There are different levels of plant submissions. In fact, I must say there are plan submission has actually commenced. The submission process is already progressed in terms of apartment in the Elanca and roads in Elanca as well. Of course, status is of June 30 and since then we have made further progress. So I think projects are progressing well. External environment where we face challenge in the past has also become a bit more controlled, bit more stable.

35:44 So I think and more importantly, as you have noticed, our launch dependency is not on one city anymore. It is across spread across multiple cities. Therefore, the risk profile of these launches is lot less compared to what we witnessed or suffered in FY 'twenty six. And therefore, have a greater confidence on FY 2027 sales value. Okay. So, some Mandiri could happen in Q2 versus the revised estimate, which is shown in Q3? Q2 is what I think the transaction will happen by the time comes in because again, we also bit of uncertainty, so we safely took it as Q3 launch. Oh. I was meaning three plus... Two to closure.

36:31 Launch can be one more couple of months here and there. Okay. Okay. So thank you very much, sir, and congratulations, and best of luck for Okay. Yeah. Thank you. A reminder to all participants, anyone who wishes to ask a question, may press star and one on the attached tone telephone. The next question is from the line of from prudent equity. Please proceed. Good morning, sir. So in the presentation, you have mentioned that you are expecting accelerated handovers and revenue recognition in s two. So can you put any number to this? I mean, what kind of acceleration are you expecting in this financial year? Yeah. It's... Sure. Sure. It is there in slide 18. We are actually... Based on the OC's receipt, we have a pent up handovers of about 410 units as of now.

37:26 And in Q2, we're expecting OCs for two projects, which will add up another 400 units, so 800 units in hand. H2, we are working towards five or more projects. These are Q3, Q4 handovers or overseas. And that should add about another 2,000 odd units. So that's how in Mr. Pandey's presentation, you've alluded to 2,900 units in hand. Our 2,900 plus units would be available for handover. And we've already done about six ninety or something in Q1. Therefore, we have a good visibility of reaching the 303,700 number. And this should be handed over in q three and q four that the new new OCs in h two will also be handed over in next year.

38:19 Okay. So around 1,500 that is mentioned, right, in the remaining of the financial year? Yeah. Okay. Okay. And on the PBT level, so your guidance is $2.80... Yes. $2.50 crores by FY 'twenty eight. So this is cumulative, right, in for FY 'twenty seven and 'twenty eight? No, no, no. This is what we want to achieve in FY 'twenty eight. Okay. And what is the guidance for this financial year, 10% PBT? So this year, we might be in the 8% to 9%. And as I said earlier in the past, our... We would we would have at least 20% growth in our revenue recognition and therefore from last year.

39:11 And actually, it could be slightly higher as well. And therefore, we believe we should be able to reach a meaningful growth in KAT during the year. Okay. And sir, this growth will come from higher margin projects because in this quarter, the margin is due to product mix, right? How the product mix is going to change in the remaining financial year? Yes. I just want to highlight, this is a really important question. Thank you for asking, Duarta. I I think I should have upfront said this earlier, but thanks for asking. So the business is actually... It cannot be a stable flat margin quarter after quarter depending on which market we pick up, which product segment we pick up from a handover perspective. So the volatility will be there on a quarter to quarter.

40:02 On an annual basis, are we improving in terms of our margin profile? I think FY twenty six was a little bit of a slowdown in margin profile. FY twenty seven will recoup some part of it. FY twenty eight will be a more stable market. Why this happens? There are three factors which is impacting us. One is the Kolkata where, if you recall, when we launched these projects, they were all... We we are penetrating the city. So these are all sold at eighteen to twenty four lakh of ticket size for a two bedroom house and three bedroom houses. Those handovers are from grand one, Shriram grand one, which was our two thousand sixteen, seventeen launch project, 2,400,000 square feet. When they get hand over, they have a very thin margin profile. Similarly, a legacy project called Shriram Shankari in Chennai, which is...

40:50 They all would be having a selling... Average selling price of about 4,500 to 5,000 rupees per square feet. Now you understand why these deliver a very low margin after four, three and a half years. So these are... I think they are almost end of that curve once we complete the Shankari in Chennai and Calcutta Grand one and Sunshine one. Sunshine two and three, which is a phase two and phase three of Grand... The the Sunshine project, which is nothing but the second part of Calcutta development, which we embarked in two thousand nineteen, twenty, and now we are handing over now. These are like in the range of 6,500 rupees per square feet and off late, we are selling at about 7,607 thousand 700 as well. So they have a high realization profile, and therefore, I will... They will have a normal margin profile.

41:40 Plus, all the projects that we launched post COVID are around the two thousand nineteen, twenty onwards. All the projects where we have consistently moved away from low ticket size or a low pricing environment to a better pricing environment where our selling prices are average. You may have seen that in the earlier slides, and maybe we'll bring back that slide in future. We used to sell pre COVID mid market selling price. Average was worth 5,000 rupees or less. Today, we are selling about 7,600, 7,700 is our average selling price for our mid market product. And therefore, that that kind of evolution of selling price curve where we are premium premiumization as mister Pandey called it, are trying to narrow the gap between us and our peer group in the mid market segments has...

42:28 Is obviously going to provide a better margin profile. And those projects will come for handover because twenty twenty, twenty twenty one launch project have to come for handover in 2625, 2627. And those are the projects should drive the margin up back towards more comfortable level of mid twenties EBITDA margin and about nine to 10% GDP margin. This is where we are working towards, and you will see them may not be immediately in the q two, but you will see them in second half of this year and then FY '28, you will see the margin pickup happening generically or organically. Okay. Thank you for the detailed answer, sir, and I wish you a very good luck to give all these numbers. Thank you.

43:15 The next question is from the line of Soumil Shah from Paras Investments. Please proceed. Hi, team. Good morning. So we are planning to launch only one project in q two. So what is the size of the project? So it's close to about a million square feet, but we will have recently launched projects also available in sale. Right? Because we launched a plotter development. We're launching a second phase of the plotter development in Kolkata. And we acquired by the project will also be available for sale. And we have sufficient $33,000,002,500,000 square feet of sustenance inventory. So there's enough momentum there in volume. But there, as you rightly pointed out, that big uptick will happen in our year on year delta will be in Q3 and Q4.

44:03 That's why we call it back end. It is always known that back end our growth for this year would be a back ended growth. Okay. My question was in terms of revenue. So point 91,000,000 square feet, what could be the revenue potential? No. That's not coming to revenue right now. No? Right? It's just a free sales you're talking about. Yeah. Yeah. So just the figure on this point 91,000,000 square feet, what is the resale number? Be about seven fifty out of crore. That's the GDV. Seven fifty of the GDV? Okay. And on the Kolkata land, you just mentioned to the previous participant that on this 105 acre land parcel, which we are planning for apartment or villas.

44:50 What could be the cash flows for this project? I think your voice was not clear. So overall, as a Calcutta, as a site as a whole, we believe the cash flow potential is somewhere around thousand 200, 2,400 crores of free cash over a five year period. Okay. Okay. And so when we are seeing our I mean, last year, there were some tax write backs during the year because this 78 crore PBT became 100 plus crores of PAT. So now when we are seeing 20% growth in FY twenty seven, where do we see our PAT numbers? So even this year, we could see some tax write back or this could be a normal year?

45:38 No. Tax write back is difficult to predict because that depends... The tax write back happen only when there is a project where you are having a loss that is being recognized as a deferred asset getting created only then the tax write back happen in the joint venture because as you know, we operate to 20 odd subsidiaries, different projects, different companies. That's why this tax rate back happen. Otherwise, there is no structured tax rate back, which is possible. We are looking at level. We should have about 8% to 9% PBT margin. And we believe at the PAT level, we are looking at our project that tax write back here. We are projecting at least about 20% between 2025% growth in PAT.

46:26 Okay. So the 20% growth, what you mentioned was for PAT? Yes, sir. Okay. Okay. And, sir, just last question. So normally, how much time it takes for the plotted development to launch and then revenue recognition? Plot launch is, of course, depends on which geographical location it is in terms of city centric and go through the normal three, four months of approval timeline like any other apartment complex. If it is outside, which is typically an outside BB and T kind of outside the metro zone. So it can be slightly faster, but still it'll take within three to four months to get the approvals to launch from the time you complete the transaction.

47:12 When... From the time you launch, typically, sales should not take more than twelve to eighteen months. Handover should not be more than eighteen months. So the turnaround time line in terms of cash inflow to cash outflow should be eighteen to twenty four months max. Okay. After turnaround can happen. Okay. Correct. Understood. That's it from my side. Thank you, and all the best. Thank you. Thank you. A reminder to all participants, anyone who wishes to ask a question, may press star and one on the attached tone telephone. The next question is from the line of from prudent equity. Please proceed. Yes. So I hope to ask one question. The market demand, how the consumer sentiment across Bangalore and other markets that you operate in?

48:04 Yep. Thank you. Thanks, Dilul, for asking again. Another good question. Give me an opportunity to share our top fund market. I think the underlying core markets that we operate are still very strong, doing well. May not be as robust as post COVID where everything was flying. To that extent, yes, there is more realistic growth happening in the mark on the ground. New launches are getting picked up well as long as it's priced well and product is of good comparable configurations and quality. And therefore, I think most large players are doing well on new launches. Bangalore launches are still slow. It is going through the same...

48:51 It takes its own time in Bangalore for whatever reason. But every large player have evolved or learned from whatever happened in calendar '25, '20... Or FY '25 and '26. So I think everybody is planning their own activities then. So suppliers are getting absorbed. Customer confidence level, we don't see... I see a lot of research. I see a lot of articles in the newspaper, business pay... Business magazines and papers about AI, customer confidence, job loss. We are not seeing on ground where customers are backtracking. We haven't seen the conversion rate going down in a material way. Therefore, we we we are of the belief and even my industry checks with the housing loan companies, they're not seeing any slowdown in application momentum.

49:42 So it's clearly tells you that the on ground momentum is there. Bit cautious. Yes. But momentum is there. And the new excitement like global... What is it called GCC, global capability centers, Other areas are... I mean, the revival of some of the export oriented sectors in our core markets like, you know, as you know, Bangalore survives on IT, pharma, startup ecosystem. Chennai survives on manufacturing automobiles to some extent IT. Pune is again IT outsourcing, GCC, automobile engineering. And Kolkata obviously is a local centric trading and some momentum manufacturing. The underlying sectors are doing well. So one sector going through a little bit of uncertainty or nervousness is not really impacting the overall momentum and wide.

50:33 This is quite a bit not just my view. If you look at the published research of industry experts or IPCs like JLL and Iraq, after a bit of a slowdown in Pan India absorption in December quarter last year, The subsequent quarterly reports seem to suggest that they're all growing between 58% and some each city have their own rate. Pan India has been growing meaningfully. So we think that residential demand will continue. Mid market self use home demand will continue longer than the normal recycle. Upper end of the market may have some slowdown because they receive their capital from this investment demand as I specifically said, induce consumption oriented segments will do well.

51:25 Investment oriented segments depend on an alternative source of capital and that source of capital like stock market gains or others have tend to remain volatile over the last couple of quarters, and therefore, that demand may slow down, taper off a little bit. But otherwise, in the normal mid market induced segment driven segments, we haven't seen a big slowdown in footfall or conversion rates. That's a good news for... And this is common trend which we have seen. Puri still remains the second largest... Fastest growing market in India. So we've we've seen this across our core market at least. Some markets like Hyderabad has seen some demand traffic tapping off according to the published research. We are not there, so I don't have an ongrown feel on it.

52:11 But Bangalore, Chennai has shown a very steady trend... Traction or very steady demand. Pune has shown reasonable growth... Reasonable momentum increase as well. So that's our feedback on some of the market. Okay. Thank you for the answers. Just just to just close the loop. Sorry, Deepak. On the pricing side, I don't see a big jump in price. I just want to clarify. So like the post COVID, we saw, like, 10%, 15% annual increase. That may not happen. On an average, we are seeing roughly about four, 5% increase in selling price and, of course, launch prices are obviously evolved based on what the competition is doing in the micro market. But sustenance sales prices are going up by 4%, 5%, not more than that, which is good enough to capture the inflationary pressure if there are any in the cost cost side.

53:07 And therefore, I think the margin contraction will not happen because of selling price or inflation or cost inflation. Therefore, the profitability enhancement will be more from scale economics, the operating leverage than price alone. Okay. Thank you. The next question is from the line of from Saphyr Capital. Please proceed. Hi, sir. Thank you for the opportunity. So just want to clarify the 20% growth that you said that's in revenue or PAT?

53:54 We expect both, ma'am. Both? And can we expect for FY '28, or should we aim for a bit higher? Sorry? Can we expect the same for FY '28? Yeah. We are fairly confident, but one step at a stage. We'll deliver our FY '27 and then... Because we had some disappointment last year, so we would like to be little cautious. Deliver FY '27 and then talk about FY '28, but we will... There will be a time during this year to discuss FY '28 how robust it can be. It'll give more confidence to you also when when I deliver halfway through the year when around q three, q four when we discuss this, it will be much more appropriate.

54:44 Okay. Okay. We are confident Thank you. Are confident that our sales value can reach that 5,000 mark approximately in FY twenty eight and revenue recognition of 2,000... Because as you know, revenue recognition is more fluid what we have done so far and what we are doing on the ground in terms of execution. That also we are currently confident of reaching the 2,500 number. Okay. Thanks, All the best. Thank you. The next question is from the line of Raj Mehta, an individual investor. Please proceed. Yeah. So thank you for this opportunity. I have been tracking the company since long. And what I feel is market doesn't like surprises from Shriram, and they don't trust the execution capabilities.

55:35 Each quarter when we give the results, market reaction to those things is because of the capabilities and the deliveries which we have not been able to do due to x y z reasons which we have faced in last couple of years. So do you think that in next couple of years this thing can be reversed and market can get surprised with the quality of earnings and the momentum which you are trying to achieve since the last IPO price, which you launched four years back. We have not even touched that thing. So is there any surprises on a positive side or on a negative side, which I think you might not be factoring in right now?

56:26 And second thing, with respect to the sales value which you have given, the guidance, in that, we have not considered any development related to. So if we are able to meet any significant development related to land sale or the product developments, whatever the product mix which you are trying to do, will that be a surprise element in your figure or it is somewhere certain amount has been included in the figure which you have given? So let me try the first one, try to answer. So yes, I think markets are more... We believe market is not giving us full credit for what we have delivered so far.

57:18 I'm not so sure whether I agree with the comment that we have not delivered on our promises completely year after year. Otherwise, we wouldn't have reached the revenue growth or the number of units handed over from FY 2021, 2022 all the way to 2024, 2025, 2026. We have moved up in our curve. We have moved up on our delivery. When we had minus INR 40 crores PAT. Last year, we delivered 100 crore PAT. And and the volatility will always be there, mister Raj, because this is the nature of business depending on when you get the completion done. And it's true for most players in the industry. If that's the case, an entire real estate industry should not get that same credit that it's getting from the market.

58:11 We are working our best to deliver the performance, and we are also trying to communicate our results to our performance and the initiatives to large institutional holders to concerted efforts. We will do our job well, be assured. And I'm sure at some stage market will take note of this and give us some credit for the delivery. Because if you look at... I'm sure you're tracking like, Shriram, you're tracking the other real estate sectors. If you look at the last couple of quarters, not all... Not many real estate companies have the same stable margins and the earnings profile. The nature of business, you should see the cash flows of the business that will show you underlying picture. Is it actually delivering cash or not? Our company has been delivering cash flow, which means that we'll under... On ground work is actually happening and is releasing cash flow from projects.

59:05 Earnings also will be following and will fall... Continue to follow. So we will try our best, but we take your feedback as a very fair comment. With regard to the surprise, I don't think any any surprises will built in in our earnings here. Some part of development of Bengal is already part of the FY twenty eight mission that we took it in terms of whether it is developing the apartments or developing the plot. If we do any bulk sale, it can be an additional kicker in terms of accelerated sales. If you do, it can be a kicker. But accelerated sales of land by just selling it to a warehousing company for $3.5.04 crore rupees per acre does not seem to make economic sense from our shareholders' perspective, especially when the plot and will last and deliver 6 crore contribution. Why should we sell 3.5 crores minus some development or filling cost and all that cost that will will associated with that?

1:00:03 Because that industry cannot pay more than that. We the data warehousing companies or we the data center companies. They cannot pay more than $3.04 crores per acre. 3.5 crore, maximum 4.5 crore. So why should the company just undersell this for accelerating cash flow? Instead, can we embark on products which are faster selling and try and accelerate the cash flow from a five year to three year or four years? That's what we're working towards. If any if any acceleration happens, these numbers can change. But FY '28, I don't think materially will get changed through this explanation. So I think we are... I don't... As of now, we don't have any surprise element in our hand up our sleeves that we will pull out later. But if there are macro related surprises there, will remain a surprise. I I also don't know that.

1:00:53 But we're working towards overcoming any macro headwinds if there are any. Sir, one more option we have, I've been saying this a lot that we... Our earnings call and the results both are on a very later stage of the once the quarter gets end. Till the time we don't get any quarterly updates to be an investor friendly company, I would request that you start giving quarterly updates. Once the quarter gets completed, many listed developers give the quarterly updates related to the collections, related to the sales value because those things are not going to change.

1:01:39 I can understand the audited numbers can change, but the quarterly numbers which we are presenting, those doesn't get changed, and it would be very investor friendly if you keep doing those things and show to the investor community that you are transparent in the way. And secondly, you... I I I advised you to do the investor con... Investor calls also related to the institutional investors. And I think now ICICI Direct and many institutions have started tracking the company and started getting... Giving you the research because it would be very much better if we can start to start to do more roadshows and enter into more conferences where there are real estate conferences to where you can present the company because the company has a huge potential, but the market is not still rewarding that potential because they have doubts in the capabilities and the execution.

1:02:40 And in real estate, everything brings down to the collection and to the execution portion. And since I think in today, Paul, once you said that you sold certain properties in the Kolkata in the year 2021, which does not have a good margin. And since right now, we are at the stage where the real estate cycle, which might be in the middle of the middle of the somewhere near to the top. So if we can plan in such a way where we can bring certain bigger developer to do a j... JV with us where we can give this land and we can build it and we can recognize the revenue on a faster pace by compromising a little bit of portion of your margin, which you think you can do by your own self. It would be great if we can recognize those and because markets will reward based on the cycles. And once the cycle gets at the end of the cycle, if you start building this thesis, we will be too late for that.

1:03:48 This is what my suggestion is for the specifically related to the Kolkata land also. Sure. We always listen to your views and suggestions with lot of interest. I just want to update you that post your earlier suggestion, our team is visiting institutional investors on a quarterly basis after the results. I think this will be the third or fourth quarterly road shows or one on one meetings they do with institutional investors through our IR partner, SGA. I'm sure the the team is continuing to do. So we have... We we do take your acquisition very seriously, and we've implemented it in the past, and we will do. On the update, yes, we will resume this. We use this for providers update earlier.

1:04:35 At some stage, we just felt market is anyway not noticing or recognizing any of this. What's the point in rushing to do that and fix up next month? But I think it's a fair comment. We will try and resume that process. As you know, we used to do that till about two thousand twenty four, twenty five. And when many of the other large players were not doing it, But we just pulled back only because markets were just not looking into it. Obviously, it was not looking into it. I'm not really listening to it. But but the fair comment, we'll do our best. We'll we'll... Irrespective of what the market thinks about us, We'll try our best to communicate the story going forward, and we'll provide the monthly quarterly updates in advance of financial results.

1:05:25 Thank you, sir. And one last question with respect with related to the industry dynamics since we are now entering into Pune markets also, and we are very much into Bengaluru. So due to AI related fear which market had that the IT might face huge job losses and which might turn bad for the real estate players who are specifically into Bangalore and Kolkata. So we have, as you said, you are not facing any headwinds on ground where the buyers are not rejecting the proposals or deferring the purchases. So are we in a state where we are confident of either increasing or maintaining the margins in which we are right now present the markets in which we are present? And can we can we increase the realization curve in such a way that even though the cycles turn in opposite way, but we can hedge those margins and hedge those realizations.

1:06:34 It was... If you see your call cutter also where where you said that our margins were less so at that age. So when whenever we launch this project and when the revenue start getting recognized after three years, four years, our margins are getting squeezed. At that particular time, you thought that this would be the best price to sell. But after three, four years when there are so many uncertainties in... Going around due to the input cost, are we plugging into certain margin protection, which can give a certainty whether this much particular margin can be easily achieved, which I think would be very much better for us to analyze that there is a margin protection even though there will be product changes, but we we may get surprises on the outside, but there should be no surprises on the downside of the margins. Thank you, sir.

1:07:31 Thank you, Raj. Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Over to you, sir. Thank you all for joining us on a busy morning, for listening to our performance outline and also sharing opportunity to share our confidence on our FY 'twenty seven outlook. We remain confident that we will deliver on our plans with the back ended growth in sales, revenue recognition. And therefore, we see much stronger quarters to come, and we are very confident that we'll deliver our clear numbers. Thank you for taking your time. And if you have any further queries, please feel free to reach us through SGA or our own team directly as you feel appropriate.

1:08:31 And we look forward to interacting with you all again in another call very soon. Thank you. Thank you. Thank you, everyone. Thank you. On behalf of Shriram Properties Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.