Sunteck Realty Limited · NSE:SUNTECK
Sunteck Realty — Q4 FY2022 Earnings Presentation
52 slides from Sunteck Realty's earnings presentation, May 30, 2022
Slide 1: Cover letter to stock exchanges
Sunteck Realty Ltd. Sunteck 1 SRL/SE/J~_/22-23 Date: 30 th May, 2022 The l\1ana~cr, Listing Dcpnrtment The Secretary, Listing Department, National Stock Exchange of India Ltd Department of Corporate Services Exchange Plaza. BSE Limited Plot no. C/1, G Block, Phiroze Jeejeebhoy Tower, Bandra-Kurla Co
Slide 2: Sunteck Realty Limited Investor Presentation Q4 & FY2022
Sunteck Realty Limited Investor Presentation Q4 & FY2022 NSE: SUNTECK | BSE: 512179 | Bloomberg: SRIN: IN | Reuters: SUNT.NS / SUNT.BO
Slide 3: Disclaimer
Disclaimer By attending the meeting where this presentation is made and any additional material is provided (“Presentation”) or by reading the Presentation, you (“Recipient”), agree to be bound by the following limitations. This Presentation has been prepared on the basis of the estimates of the man
Slide 4: Agenda
Agenda ▷ Who are we ▷ What have we achieved ▷ What we aspire for ▷ Key Numbers ▷ Risk Factors ▷ Industry Insights ▷ Awards ▷ Summary 3
Slide 5: Who are we
Who are we 4
Slide 6: Executive Summary
Executive Summary ▷ NSE and BSE listed organization with development focus in the Mumbai Metropolitan Region (MMR) market. ▷ One of the largest developer in the Western Suburbs of MMR from Bandra to Virar. ▷ Delivered projects worth > US$ 1 bn (~Rs 8,000 cr) GDV till date. ▷ Presently have ~50* mn s
Slide 7: Mumbai (MMR) presence
Mumbai (MMR) presence One of the largest developer on Western suburbs with ~18.1 mn sq ft of balance development Expanded to Eastern suburbs with ~12.1 mn sq ft of balance development By Project Brands By Location Volume ~5 msf ~12 msf Eastern Western Eastern Suburbs Suburbs Suburbs ~2.6 msf Western
Slide 8: Company Overview
Company Overview Real Estate Developer with 2 Decades of Experience MMR-focus residential play and pivot from high-end luxury segment towards mid-income & affordable segment Luxury Mid-income Affordable Across segments (Aspirational luxury) BKC, Borivali E, ODC, Borivali W, Vasai W, BKC Airoli Goreg
Slide 9: Our Brands
Our Brands Premium positioning by creating different luxury brands across all the segments Presence across the pricing spectrum from uber- luxury to affordable 8
Slide 10: Our Partnerships
Our Partnerships Partnership with Ajay Piramal Group - India REIT private equity invested at Signature Island in 2006 and exited at >20% IRRs within ~3 years - 50:50 JV - Piramal Sunteck Realty Pvt. Ltd. (PSRPL) formed in 2007 to undertaken multiple projects Partnership with Kotak Group - Kotak Real
Slide 11: Board of Directors
Board of Directors 200+ years of combined experience across real estate, banking & finance, law & compliance Kamal Khetan Atul Poopal V P Shetty Mukesh Jain Rachana Hingrajia Chaitanya Dalal Sandhya Malhotra CMD Executive Director Ind. Director Ind. Director Director Ind. Director Ind. Director - 1s
Slide 12: Shareholding Pattern
Shareholding Pattern March-22 Others, 7.5% FIIs & DIIs, 25.4% Promoters, 67.1% *Nil shares are pledged ▷ Market Cap - ~Rs. 6,328 crore / ~ US$ 843 million (27th May, 2022) US$ 1 = ~Rs 75 11
Slide 13: What have we achieved
What have we achieved 12
Slide 14: Well-timed Capital Allocation
Well-timed Capital Allocation ~36 mn sq ft of projects acquired since 2018 Of which, ~23 mn sq ft acquired since the onset of COVID-19 pandemic Net Debt/Equity @0.16x at the end of H1FY22 highlights fiscal discipline Strong land acquisition track-record, post- Lehmann crisis years (peak recession) 1
Slide 15: Net Debt/Equity discipline
Net Debt/Equity discipline ▷ Despite acquisitions of 36 mn sq ft since 2018, the leverage discipline has been maintained ▷ No compromise on financial prudence and fiscal discipline 2.00x 1.80x 1.60x 1.40x ~36 mn sq ft of projects acquired since 2018 1.20x 1.04x Of which, ~23 mn sq ft has been 1.
Slide 16: Equity fund raising done judiciously
Equity fund raising done judiciously ▷ Sunteck has raised external equity twice through QIP in 2009 (~Rs 150 cr) and 2017 (~Rs 500 cr) ▷ Since 2007, cumulative equity fund raising account for ~28% of FY22 Networth Networth break-up Equity fund raising - QIP & Others 28% Reserves & Surplus 72% 15
Slide 17: Completed Projects
Completed Projects 13 (residential+commercial) projects delivered worth over Rs 8,000 crore (>US$ 1 bn) Signature Island, BKC Signia Isles, BKC Signia Pearl, BKC Signia High, Borivali E Signia Oceans, Airoli Signia Skys, Nagpur Sig. Waterfront, Airoli Gilbird Hill, Andheri W S. City Avenue 1, ODC S.
Slide 18: Completed Commercial Projects
Completed Commercial Projects Sunteck Kanaka, Goa Sunteck Center, Vile Parle E Sunteck Grandeur, Andheri E
Slide 19: Ongoing Projects - Residential
Ongoing Projects - Residential ~6 mn sq ft of execution underway, of which, ~2 mn sq ft nearing completion
Slide 20: Ongoing Projects - Residential
Ongoing Projects - Residential ~6 mn sq ft of execution underway, of which, ~2 mn sq ft nearing completion
Slide 21: Ongoing Projects - Commercial
Ongoing Projects - Commercial ~6 mn sq ft of execution underway, of which, ~2 mn sq ft nearing completion Sunteck BKC 51, BKC Jn. Sunteck Icon, BKC Jn. Sunteck Crest, Andheri E Pinnacle, ODC
Slide 22: Key Performance Highlights (FY18 - FY22)
Key Performance Highlights (FY18 - FY22) Delivering sustainable operational growth and operating margins Average Pre-sales Collections EBITDA CAGR CAGR Margin (18-22) (18-22) (18-22) ~22.03% ~18.68% ~33.51% *Company follows project completion method of accounting Rs 1 cr = Rs 10 mn 21
Slide 23: Operational Performance Trend
Operational Performance Trend Pre-sales mix & Collections efficiency ▷ Pre-sales mix has pivoted from Luxury to Mid-Income and Affordable segment. ▷ Collections Efficiency has improved to 81% in FY22 against 76% in FY21 Healthy pre-sales mix Collections efficiency 100% (Collections/Pre-sales) 6% 8%
Slide 24: ESG Performance Highlights
ESG Performance Highlights Environmental Social Governance ‘Go Green’ CSR campaign Support for migrant labourers and Philosophy on code of governance Digital transformation to reduce frontline workers following the Policy framework consisting of resource consumption COVID-19 outbreak Code
Slide 25: What we aspire for
What we aspire for 24
Slide 26: Embarking on Sunteck 3.0
Embarking on Sunteck 3.0 ▷ Sunteck 1.0 journey was initiated as a Business Center Operator in 2000 and after 6 years with the acquisition of the Signature Island, BKC – under Sunteck 2.0 – the company grew into a pure play RE developer with projects in BKC and ODC, Goregaon W. ▷ The salient aspects
Slide 27: Existing Growth Engines of Sunteck 3.0
Existing Growth Engines of Sunteck 3.0 Sunteck’s strategy is to enter markets underpenetrated by organized players and bet big to realize attractive returns 2006 Residences tapped back in 2006-2009, when looked as CBD BKC Took huge bet and developed Uber luxury apartments via Signature Island
Slide 28: Future Growth Engines of Sunteck 3.0
Future Growth Engines of Sunteck 3.0 The launch and execution of these new growth engines will scale up the sales engine of Sunteck 2020 ~50 acres acquired with a development potential of ~5 mn sq ft Vasai W Est. GDV of ~Rs 5,000 crores in the coming 6-7 years Tap big demand potential of hithe
Slide 29: Development Potential & Launch Timelines
Development Potential & Launch Timelines ▷ Est. Gross Sales Visibility of ~Rs. 28,600 (~US$ 3.8 bn) crores from the 6 (six) growth engines Estimated Project Already Balance Beyond Projects Sales Q4 FY22 FY22-23 E FY23-24 E Size Launched Potential FY24 E Visibility (~ mn sq ft) (~ mn sq ft) (~ mn sq
Slide 30: The 'Sunteck' approach to 'Continuous Growth'
The ‘Sunteck’ approach to ‘Continuous Growth’ ~23 msf acquired since the onset of Estimated GDV of acquisitions is ~Rs. the COVID-19 pandemic. 28,600 cr (~US$ 3.8 bn). In the last 3 years, the company has The monetization of these projects acquired ~36 msf. will lead to continuous growth in
Slide 31: ~US$ 3.8 billion GDV, ~36 million sq ft, ~0.19x
~US$ 3.8 billion Est. Gross Development Value (GDV) of upcoming project pipeline ~36 million sq ft Across 6 projects at BKC, ODC, Naigaon, Vasai West, Kalyan- Vasind, and Borivali West in MMR ~0.19x One of the lowest Net Debt/Equity ratio across the sector US$ 1 = Rs 75 30
Slide 32: Pre-sales growth multiple to improve
Pre-sales growth multiple to improve On the back of new project launches ▷ The phase-wise launch of new projects at Vasai West, Kalyan-Vasind, Borivali West and new phases of existing projects such as Sunteck City ODC and Sunteck World Naigaon could be a tailwind for sales growth. 25 1,800 20 15 1,0
Slide 33: Key Numbers
Key Numbers Operational Performance and Financial Statements 32
Slide 34: Operational Snapshot
Operational Snapshot FY22 FY22 Pre-sales Collections (~Rs cr) (~Rs cr) 1,303 1,053 Q4 FY22 Q4 FY22 Pre-sales Collections (~Rs cr) (~Rs cr) 503 404 Rs 1 cr = Rs 10 mn
Slide 35: Operational Performance Trend (Quarter-wise)
Operational Performance Trend (Quarter-wise) Both pre-sales and collections are GROWING STRONGLY on a sequential (quarterly) as well as yearly basis Pre-sales (~Rs cr) Collections (~Rs cr) 600 500 503 404 500 400 371 321 400 349 352 300 253 270 300 272 207 200 200 172 176 141 200 101 65 100 100 0 0
Slide 36: Operational Performance (Pre-sales Segment-wise)
Operational Performance (Pre-sales Segment-wise) The pre-sales mix for the year is dominated by the mid-income and aspirational (affordable) segment contributing 72% of the total bookings. Luxury segment has also improved to 19%. Q4 FY22 Mix FY22 Mix Segment Brands (~Rs cr) (%) (~Rs cr) (%) Luxury S
Slide 37: Operational Performance (Collections Segment-wise)
Operational Performance (Collections Segment-wise) The collections mix for the year is broad-based with all segments performing well. Q4 FY22 Mix FY22 Mix Segment Brands (~Rs cr) (%) (~Rs cr) (%) Luxury Signature, Signia 166 41% 296 28% Mid-income Sunteck City 107 27% 391 37% Aspirational Sunteck Wo
Slide 38: Operational Cash Flow Waterfall
Operational Cash Flow Waterfall ~ Rs 171 cr operating surplus generated in FY22 – used in adv. premium payment 37 *1-time premium payment is part of Working Capital Changes Rs 1 cr = Rs 10 mn
Slide 39: Robust operational cash flows
Robust operational cash flows ~ Rs 400+ cr operating surplus generated in 2 years – used in debt reduction and adv. premium payment ~Rs 171 cr of operating cash flow surplus generated in FY2022. Utilised efficiently to save approval costs of almost ~Rs 200 cr in the ongoing projects, by availing the
Slide 40: Strong Balance Sheet
Strong Balance Sheet In FY22, the consolidated net debt to equity has been strong at 0.19x. Particulars FY 2021 FY 2022 Secured Debt 597 700 Less: Cash & Bank Balance 99 97 Less: Loans to JDA partners 34 64 Net Debt 464 539 Net Worth 2,772 2,790 Net Debt / Equity 0.17 0.19 Quasi-Equity* 91 87 Adjust
Slide 41: Key Financials
Key Financials ▷ In Q4 FY22, Revenue from operations stood at Rs 156 cr (Rs 1,559 mn) and Rs 513 cr (Rs 5,131 mn) for FY22 ▷ EBITDA for the quarter stood at Rs 3 cr (Rs 32 mn) and Rs 95 cr (Rs 953 mn) for FY22 ▷ EBITDA margin stood at 19% for FY22 BALANCE SHEET – FY22 (Consol)* PROFIT & LOSS STATEME
Slide 42: Superior Credit Rating
Superior Credit Rating ▷ Sunteck has Top Tier Credit Profile which is a Testimonial for its Strong Fundamentals. AA- / Positive AA- / Stable ▷ Key Rating drivers are – ○ Healthy track record in real estate development in MMR ○ Adequate committed cash flow visibility ○ Prudent Financial Policies; Str
Slide 43: Risk Factors
Risk Factors 42
Slide 44: Risk Factors
Risk Factors ▷ Impact of COVID-19 pandemic on overall economy and real estate sector in particular is still being quantified and uncertain. ▷ Exposure to cyclicality in real estate business – the residential real estate sector have been adversely impacted by liquidity crunch, high inventory and subd
Slide 45: Industry Insights
Industry Insights 44
Slide 46: Improved Affordability
Improved Affordability ▷ Rise in income-levels and favourable demographics (66% of Indian population is less than 35 years of age) has led to best affordability in the last 25 years. ▷ MMR affordability has improved the most in the last 10 years since 2011. (Affordability = EMI/Income) Source: HDFC
Slide 47: Rising Urbanisation
Rising Urbanisation ▷ By 2030, almost 40% of the population is expected to be living in urban centers. 35% 31% 32% 30% 28% 26% 25% 23% 20% 20% 17% 18% 15% 10% 5% 0% 1951 1961 1971 1981 1991 2001 2011 2017 Urbanisation Trend 46 Source: ADB, Census 2011, Knight Frank Research data
Slide 48: MMR Dominates the Residential Real Estate Market in India
MMR Dominates the Residential Real Estate Market in India ▷ MMR both in terms of pricing and units sold is the largest micro-market in India. The average pricing at Rs6,787 per square feet is higher than other cities ▷ Over the past 5 years, the pricing in MMR has remained stable 60,000 MMR 6,787 MM
Slide 49: Home loan rates are benign
Home loan rates are benign ▷ Housing loan rates are at decadal lows, thereby improving affordability and savings on EMI. 11.0% 10.0% 10.0% 10.1% 10.2% 9.9% 9.5% 8.9% 8.7% 8.6% 8.6% 7.0% 6.5% 9MFY22 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 48 Source: Bank data
Slide 50: Awards
Awards 49
Slide 51: Awards
tee MIXED-USE PROJECT OF THE YEAR xword VASIND, THANE DISTRICT tees INTEGRATED TOWNSHIP PROUECT OF THE YEAR SunteckWorld NAIGAON tae BEST DEVELOPER (MUMBAI) PROJECT OF THE YEAR Sunteck)) Sunteck)) seme BEST LANDSCAPE ARCHITECTURAL } DESIGN PROCTOR ME YEAR SunteckWerld NAIGAON
Slide 52: Thank You
Thank You Manoj Agarwal, Prashant Chaubey, CFO Head & SVP - Corporate Finance & IR ir@sunteckindia.com 51