Shriram Properties (NSE:SHRIRAMPPS) Q2 2027 Earnings Call

0:02 Ladies and gentlemen, good day, and welcome to Shriram Properties Limited Q2 and H1 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, 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 evening, everyone, and thank you for joining us for the q two FY twenty seven earnings call.

0:48 We have built on the positive start of the year with continued operation momentum on the q two sales of 583 crores, a growth of 20% over the previous quarter. This was driven by sustained demand across our ongoing projects and the response to our recent launches in Chennai and Calcutta has continued to be encouraging. During the quarter, we also converted five of our joint ventures, along with their three key projects into wholly owned subsidiaries, an important milestone that gives us greater control over their execution. Following a relatively steady Q1, our financial performance strengthened in Q2 with a healthy growth in revenues and significant improvement in profitability for the same period last year.

1:35 We also recorded our highest ever for stock collection and maintained our execution momentum across all our projects with a strong launch pipeline and the project completion and the handover schedule for H2. We remain aligned with our FY 'twenty seven guidance and have good visibility on stronger revenue and earnings momentum through the balance of the year. Our balance sheet remains healthy when the consolidation of the newly converted subsidiary has led to a temporary increase in our debt level, but we expect it to ease over the next twelve to eighteen months. With the diversified portfolio across our key markets and the growing development pipeline, we remain confident in sustaining our growth momentum, progressing towards our FY 'twenty admission and creating long term value for our stakeholders.

2:22 With this, I now hand it over to Mr. Gopalakrishnan, CEO and Mr. Ravendra Pandey, CFO, to take you through the operation and the financial details in greater depth. Thank you. Thank you, sir. Good evening, everyone. I'm Ravindra Pandey, CFO of the company. Thank you for taking time to join us today as we present the performance highlights for Q2 FY 'twenty seven. We have uploaded the presentation on the website of the company and the stock exchanges, and we are very sorry that we have filed it very late due to outage of the outlook and we could not send the e mail on time. So it has been uploaded only a few minutes back. Hope you all have access to it.

3:07 Over the next few minutes, I will walk you through the operational financial performance of the company for FY 'twenty seven Quarter two. Following that, Mr. Gopal, our CEO, will also join me to take our questions. Any questions that you need? I'm referring to the Slide four of the presentation what we have uploaded. Our operational performance continues to remain resilient. Continued sales across existing portfolio supported by new launches in Chennai and Kolkata has contributed to the business momentum. Customer approximately 50% of recent Chennai annuity and 75% of Kolkata annuity sold. We have completed an important restructuring exercise by acquiring joint venture interest in bringing projects such as 107 Southeast, Whitefield, 122 West and the subsidiary sector.

4:02 This is strategically important for us. It gives us greater operational control, simplify decision making and improve execution efficiency. More importantly, it also changes the way the financial performance of these projects will be reflected in our consolidated accounts. Instead of recognizing only our share of gaming profits, we will recognize the full revenue and corresponding cost of the consolidated projects. We estimate that this restructuring will bring approximately 1,800 crore of additional revenue recognition potential into our consolidated financial reporting over the relevant project completion periods. We continue to maintain financial discipline with positive operating cash flows and careful deployment of capital across construction and new acquisitions.

4:48 Finally, I would like to highlight our evolving capital strategy. Following the statement settlement, we have approximately 105 beta per client. Rather than posting outright monetization, we are evaluating development led opportunities that can create significant higher long term value. Our recent partner in Villa development have received encouraging customer response with more than 75% of the inventory sold within ninety days. We intend to build on the success through two additional launches over the next twelve months. Overall, the focus is on improving execution, spending control over our projects and unlocking greater value from our existing assets. I'll refer to Slide five, which is the KPI. Our KPI for the second quarter has shown a meaningful improvement over Q1.

5:37 We achieved sales of $5.86 crore during Q2, representing approximately 20% sequential growth with sales volume of INR 910,000 is profit. For the first half, our sales value stood at INR $10.67 crore with sales volume of INR 1,760,000. Collections have been particularly encouraging. We collected INR $4.31 crore during Q2, representing 18 sequential growth, taking our hard collections to INR $7.95 crore, an increase of 10% year on year. This is important because collections are the foundation of our cash position and support both construction execution and future growth. On the delivery side, we have rendered over seven sixty units during Q2 and fourteen fifty units during H1.

6:27 While these numbers are in progress, a significant portion of our planned completion is due for the second half. Accordingly, we expect substantially higher handovers in H2, which should also support revenue recognition. The key takeaway is that sales momentum is improving, collections remains healthy and execution pipeline provides visibility for this time of second half. Next slide is the financial performance snapshot. Moving to financial performance. We have seen a significant improvement in profitability during the quarter. Total revenue for Q2 stood at INR $2.72 crore, registering 19% year on year growth. More importantly, EBITDA increased to INR 62 crore compared with approximately INR 19 crore in the corresponding quarter last year.

7:17 Our EBITDA margin improved to approximately 23%, reflecting a favorable product mix and disciplined cost management. Profit after tax is 222 compared with approximately INR 9 crore last year. For the first half, revenue reached to $5.46 crores, EBITDA INR 104 crores and INR $5.33 crores. The improvement in EBITDA is particularly encouraging as it reflects better operating performance rather than mainly growth in revenue. With additional project completions and handover expected in year two, we anticipate further improvement in financial performance. I will cover detailed profit and loss statement in the subsequent slide. Consolidated performance highlights, Slide seven.

8:06 This slide brings together the operating, financial and business development performance. On operations, despite the deferment of one planned launch in Q3, we delivered sequential growth in sales, supported primarily by customer sales. Our S2 launch pipeline is promising with nine projects aggregating approximately 5,250,000 square feet of supply potential, subject to approvals and launch readiness. On the financial side, the improvement is visible and cash flows. Kalsakar has emerged as an important contributor, accounting for approximately 50% of our first half revenues. We generated INR 101 crore of operating cash flow during H1, while investing INR 105 crore in new projects.

8:52 Our liquidity position is comfortable with cash balance of INR $3.57 crore and undrawn borrowing limit of INR $2.45 crore. On business development, we have a project with approximately 9,000,000 square feet of potential under advanced discussion, primarily across Vanguru and Chennai. Our focus is to convert these opportunities into a stronger future launch pipeline. Overall, we are seeing improvement not only in reported financial performance, but also in the underlying business fundamentals. Slide eight, the project pipeline and business development. Coming to our project pipeline, we currently have approximately 15,500,000 square feet of the ongoing projects and 17,700,000 square feet of upcoming projects. On the ongoing portfolio, approximately 13,300,000 square feet has already been sold, leaving only 2,200,000 square feet of unsold inventory.

9:45 The unsold GDV of our ongoing project is approximately INR 1,400 crores, while upcoming projects represent a further of INR 11,560 crore. Therefore, this gives an unsold GDU potential of approximately INR 13,000 crore. This provides meaningful visibility for future sales. Our new business development approximately 8,800,000 is profit with a potential of INR 7,500 crore of GDVR promising. We also have a large pipeline under evaluation. Our strategic objective is to nearly double the upcoming project pipeline over the next eighteen to twenty four months. We remain selective in our acquisitions with a preference for capital efficiency structure, including joint development and DM arrangements, wherever commercially appropriate.

10:40 The objective is not merely to increase the size of our pipeline, but to secure projects that deliver attractive returns and while preserving balance sheet flexibility. Slide 10, I'm referring to the profit and loss. Our total revenue for Q2 FY 'twenty seven stood at INR $2.72 crores compared with INR $2.29 crore in Q2 last year, representing growth of 19%, supported by handovers carried over by projects completed in FY 'twenty six and recently completed projects. Four projects, Park 63, Sankari in Chennai and Takuta projects, Ganwan and Sanshan continued the most. An important aspect of this performance is while revenues grew by 20%, our total expenses remained flat.

11:32 Consequently, EBITDA increased from INR 18.6 crores to INR 62.4 crore, representing more than threefold growth. Our EBIT increased significantly to approximately 23%. Finance costs increased to INR 31.6 crore from INR 22 crore during the quarter, reflecting the impact of consolidation of the acquired joint venture projects. Despite this profit, profit before tax improved to INR 29.6 crore compared with a loss of INR 1.1 crore in the corresponding quarter last year. Profit after tax increased to INR 21.6 crore compared with INR 8.6 crore last year, representing growth of 151. Turning to the first half, total revenues increased by 11% to INR $5.43 crore. First half revenues, employee benefit expenses and other expenses remained largely stable.

12:27 EBITDA increased by 73% to 104 crores, while PBT more than doubled to INR 44 crores. The share of JV results were negative by approximately INR 2.4 crores during H1, largely reflecting pre acquisition marketing expenses. Going forward, the relevant project income and expenses will be consolidated directly into our financial statement. PAT stood at INR 32.6 crore, representing 12% growth year on year. This reflects the benefit of product mix, revenue recognition from completed projects and cost discipline. With several projects approaching occupancy certificate and handover stages, we expect revenue recognition to be more heavily weighted towards the second half.

13:15 Overall, the first half performance provides an encouraging foundation, but execution of the SKU completions will remain itself. Slide 12, consolidated cash flows. Moving to cash flows. This is one of the more encouraging aspect of our first half performance. During H1, operating inflows is 200 crore $50.05 crore against operating outflow of INR $40.04 crore. This resulted in positive operating cash flow of INR 101 crore compared with INR 76 crore in the corresponding period last year. After completing financial cash flow, we generated free cash flow of INR $2.89 crore before new project investment.

14:02 During the first half, we invested INR 105 crore in new projects. Even after this investment, net free cash flow remained positive by INR 184 crore compared with a negative INR 34 crore in the H1 last year. This is a significant improvement in our liquidity position. Our closing cash balance increased from INR 172 crore at the beginning of the year to INR $305.57 crore at the 09/30/2026. I would also distinguish operating cash generation from the overall increase in the cash balances since financing inflows have contributed to the latter. Our priority for SHRIRAMPPS is to sustain collections, accelerate project execution and maintain discipline in new project investments.

14:53 Referring to Slide 13, debt profile. Coming to debt profile, our GAAP external debt is to INR 1,118 crore as of September 30. 51 crore at the end of June. A major part of increase reflects the consolidation of debt following the acquisition of joint venture interest and the consequent change in project ownership structures. Our cash balance simultaneously increased to INR $3.57 crores. Accordingly, net debt stood at INR $7.61 crores compared with INR $4.32 crores in June.

15:39 Net debt to equity increased from approximately INR 0.29 to INR 0.51. While this represents an increase in the reported leverage, the ratio remains within what management considers a comfortable range. Importantly, our average borrowing cost continues to remain competitive at approximately 11%. We also retained our fiscal A minus credit rating with a positive outlook. In addition to our cash balances, we have approximately INR $2.45 crores of undrawn borrowing limits. Together, this provide us with the liquidity and funding flexibility for construction and future growth. Our focus will remain on managing leverage carefully, refinancing higher cash borrowing wherever feasible and ensuring that incremental debt is supported by project level cash flows.

16:30 We will continue to monitor the consolidated debt position closely as newly acquired projects progress towards completion and new recognition. Slide 15, FY 'twenty seven guidance and outlook. Coming to our full year guidance, we remain committed to delivering meaningful growth towards FY 2026. As mentioned earlier, our business performance is expected to be significantly weighted towards the second half, both in terms of new launches and project completion. Our confidence is supported by the launch pipeline, the progress of ongoing construction and the expected completion of several projects. We recognize that achieving the guidance will depend on timely approvals, launches, occupancy certificate and customer handovers.

17:18 Our immediate focus is, therefore, on execution and conversion of available opportunities into sales, collection and recognized revenue. We are confident of achieving our full year guidance. Slide 16 provides a detailed overview of our launch pipeline. During the first half, we successfully launched Kolkata and Chennai. The Manjiri project in Pune originally planned for Q2 has been deferred to Q3. Approval are pending. Looking ahead, we have a strong line across Bangalore, Chennai and Pune. In Bangalore, planned launches include projects at Benegata Road, Yelangka, Dodhgobi, Sagapur, covering multiple product formats. In Pune, Nigeria and Hinduwari are important contribution to our upstream cost supply.

18:08 In January, the Gateway CEO project is currently targeted for Q4. The overall FY 'twenty seven calendar represents approximately 5,930,000 square feet of planned launch area. Out of this, 5,250,000 square feet will be launched during this time. I would like to emphasize that we are not relying solely on new launches for sales growth. Subsidence in inventory and new phases of existing projects will also contribute significantly. Our priority is to ensure that launches are supported by regulatory revenues, market demand and adequate execution planning. Slide 17, which is FY twenty twenty seven handovers and revenue recognition. Moving to project deliveries, it's a particularly important area of our financial performance during the second half.

18:59 We have already handed over fourteen fifty units during H1. For the remainder of the year, our project pipeline provides visibility for more than 2,200 additional handovers. The presentation indicates revenue potential exceeding 1,100 crore from the S2 handover pipeline of 2,200 units. Several projects are at advanced stage of construction, and our teams are closely monitoring our capacity certificates and completion schedules. We expect our revenue recognition to be substantially stronger during the second half, provided the plant completion materialized. The next slide, we hand over income recognition outlook, which gives the project level visibility on our expected H2 performance.

19:47 The major contributors include one hundred seven Southeast in Bangalore, Sunshine One, Sunshine Group, Grand One in South Loop in Kyrgyta and Inspire in Bangalore. Across the identified projects, we have approximately INR 3.3 nine million square feet of the sold area with INR 2,295 pending handovers and an indicated revenue potential of approximately INR $11.55 crores. 107 Southeast is particularly important with pending handovers of approximately seven ninety six units. Similarly, Sunshine 2 has approximately seven seventy six units pending handover for this plant completion in The U. S. I would like to assure you that these projects are being closely monitored because of their importance to our full year financial performance. Our objective is not mainly to complete projects, but to translate those completions into timely handover, revenue recognition and cash generation.

20:40 I would now now hand over the call back to the operator, myself, along with our CEO, with that one, sir. 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 handsets 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 Harshith Harka from Robo Capital. Please go ahead.

21:30 Thank you for the opportunity, sir. Am I audible? Yeah. Yes, sir. Yes, please. Yes. I was just checking to a target of 2,500 crores of revenue with 10% previously in FY '28. Yeah. Sorry. Can you repeat the question? I gave 2,500 crore? Of revenue with 10% PBT in FY '28. Are we still sticking to that target? Yes. Yes. May have seen in the past, there's a slide which we I think it's missing this time. We have a revenue potential of INR 4,000 INR 600 crores of ongoing projects whose revenues are not yet booked, adding up to about $8,000,000 roughly.

22:23 Plus the new launches, some of the developments like product development will be ready for income recognition in twelve to eighteen months. So we have enough firepower to reach the target number for the '28. Okay, sir. Understood. Thank you. Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and 1 on their touchtone telephone. Next question is from the line of from ICICI Securities. Please go ahead. Hello. Am I audible now?

23:10 Yes. I'm Yes. Hi. Thank you for the opportunity, and, congratulation on a decent kind of number, sir. My first question is, how is the demand that you're seeing on ground? We were supposed to launch a couple of projects in, I think, in Chennai and Pune, but I think they have been shifted to Q3. So first question is how is the demand? And second is, have you launched any of these projects in the first forty five days of Q3 so far? I'll take it. So overall market demand seems better. I'm sure you've seen the recent research from Anurag and others. They all point towards Q3 of calendar, which is quarter ending September.

23:59 That's been a smart recovery from the Q2 calendar to June quarter. I think we are seeing also on the ground continued momentum, both across Bangalore, Chennai and Pultevan, Pune as well. And so markets are doing well. In fact, Pune has been the fastest growth strongest growth than India with the 20% quarter on quarter. So markets are doing well. The concerns around interest rate, hike impact or AI impact, all that I think reminds conversation. I think we are not seeing it on the ground in terms of any softness or a deceleration in customer decision making pattern. So I think the underlying current undercurrent is strong.

24:46 With regard to projects, Q3, obviously, we had only phase launches or our tower launches, not any new projects per se. The launches will start now actually from November, December to March, which is what originally also we have planned. This is a minor delay in Chennai or Pune. Pune is, I think, we got the last but one clearances already for the... These are 2,300,000 square feet site at Manjari, which is integrated township of Kumar developers. So this Manjari project will take off somewhere around between November and December, will get launched. Some of the Bangalore projects are moving well now on the right on the planned track in terms of time line. So you would see a lot more actions between now or December to February.

25:44 So I think we have maybe the slide on the status of some of these projects. I think we are fairly confident that this 5,000,000 feet of supply, which is supposed to happen from these projects. In all, have 7,200,000 square feet of scalable area. We believe at least 5,000,000 square feet will get released during this year to the market. Okay. Okay. Fair enough, sir. My next question is about the business development. I see that in... We were having a good pipeline of around 6,000 project... Crore projects in but this we so would we see some business development in Q3?

26:34 Yes. We will have I think the Slide eight talks about it. We roughly have close to 9,000,000 square feet, 8,000 crores of GDV potential. And our last leg of our documentation and related activities. So you'll start seeing those press releases in the coming weeks on transaction closures. If you look at we'll try and share this data with you. If you remember the revenue recognition potential that we used to show earlier about 33,000,000 square feet, 16,000,000 ongoing, 17,000,000 upcoming. So the overall revenue potential, GDV potential and the revenue potentials have, in fact, moved up $8,000,000 per week of to be recognized, income recognized projects, which are on track for completion and handover.

27:28 I had a lot of time line, but it is on track with our internal target. So we should get this completed in about twenty four months from today. That would be adding up about INR 5,000 crores of revenue recognition potential for INR 8,300,000. To be launched, I think, we're getting ready to launch over the next twelve months period. They alone account for more than 7,500 crores worth of GDV revenue recognition potential. Plus, we have another 6,000,000 square feet of inventory, which is moving making progress, albeit a little slow. That's another 6,000,000 plus adding up to about INR 3,500 crores. So in all 14,015 thousand crores of revenue recognition potential is there from the projects that are signed up already in our books, just getting ready for launches. So I think we are doing reasonably okay from a pipeline buildup perspective on the launch ready... Getting ready for rolling out this for a launch.

28:31 From a new project perspective, 21 projects are under evaluation. About seven or eight of them are at the documentation stage. So it's a question of few weeks before we go public with the details of those transactions completed. They add up to about 8,800,000 or 9,000,000 square feet as highlighted in the slides eight, aggregating to a GDV of about INR 7,500 crores, which will get added during this second half. Yes. Yes. Sir, recently, there was a real deep test where you mentioned you're also looking for the business development in Mumbai region. So which specific micro market would that be, and what what is the size of the project that will...

29:19 We are looking in the MMR Basin? So as far as Mumbai is concerned, as you all know, we've been taking cautious steps. We wanted to first establish ourselves in Pune and then enter on a stronger footing into the next Western market Western Indian market. So I think we are now comfortable thinking about moving into the next large market. We are evaluating multiple micro markets in MMR as well as in other parts of around, which is the MMR, HANE and other markets. I think it is slightly premature to give more details until the stage where we have signed up with somebody or at least close with somebody.

30:10 Allow us this quarter, next time when we hear or during this quarter, if we meet, hopefully, will have more detailed insight on which micro markets and why. Okay. Okay. Fair enough. Sir, just two more questions. One is on the JV acquisition. Why would the other partner want to exit? If you could elaborate on that. So it is actually a landowner. He's been with us with this joint, which is a 50% JV owner for a long time. We had multiple transactions with the with the same landlord, multiple projects with a long term relationship. And the projects are nearing the end of the process as well as their role in this project has now become very limited.

31:01 When we started, they were not only landowners, they were also doing some part of construction contract for us. So they had some more deeper involvement. We have moved on from those relationships over the last two to three years. And we have been persisting or persuading them to move on so that we can do new developments with them. We have been a part of signing JDA for new areas as well. And so we decided to move on to the next best opportunity as a as a landowner, you know, they they... Their focus is on acquiring new parcels and creating new ventures than trying to stay with you till the execution completion. So it was an opportunity for both of us, a win win opportunity. So we paid the way the joint venture always had debt. It was there as a market exposure for us. So therefore, net debt has gone up by close to about 300 crores between all the joint ventures including landowner acquisition as well as ASK joint venture that we visited them.

32:01 ASK obviously is very commercial because we got a funding opportunity which is at least seven to 8% cheaper than effective cost of capital for these AIF money. Therefore, we moved on. And this joint venture partnership is also we've been able to secure their economic interest of 50% and adjusted for the cost of funds that we have we're going to assume, it is still value accretive for us. And therefore, overall, we are talking about JV acquisition alone should give us additional economic interest of around 70 crores to INR 80 crores for the next twelve to eighteen months in terms of our P and L impact.

32:46 More importantly, it gives us a control. It gives us the flexibility to optimize operations. And third, now it will be aligned well in consolidation. Therefore, the full effect of the completion and the recognition will show up in SHRIRAMPPS properties than recognizing as only share of JV profit or loss as a one small entry at the bottom line. Since our bottom line sharing, are now on the top line, so line balance consolidation. And the adjusted for cost of funds because they borrowed around 10%, 10.5% for this to acquire exit some of the joint venture partners. And just over cost of funds, I think we will be at least about between all the three joint ventures from the landowner and ASK will be surplus by about INR 150 crores of incremental value add that we are making in between the four three joint ventures acquired this quarter and exit to ASK done towards the end of last quarter. So between them, we are adding INR 150 crores of undiscounted net positive cash surplus to our inherent value of the company.

33:54 This is after adjusting for cost of funds. Okay. Okay. Wonderful. Wonderful. Glad to hear that. And, my last question is a book quick question. If you could provide me with the breakup of other operating income in how much is from development rights and how much is from the fair value recognition? Sure. I... Can I ask one of my colleagues to call you and give it to you? Right now, I don't have it. Okay. I'll... As we are speaking, if they have to reply the number, they'll give it. Otherwise, they'll give you a call and explain it. Yes. Yes. Okay. Thank you. Thank you so much. Thank you. Thank you. Next question is from the line of Harshith Harka from Robo Capital. Please go ahead.

34:46 Thank you for taking my question again. Sir, I wanted to ask what is the revenue and EBITDA aspiration for FY twenty seven? We haven't really gone with a specific number, but we are doing a percentage. So therefore, I'll basically give you a range of number. We are in terms of revenue recognition for the full year, think we would be somewhere between 1,300, 1,400 to 1,500, 1,500. So 1,300 to 1,500 is a number that you can safely assume. And for EBITDA, sir? For the full year, if I have to put a number to EBITDA somewhere, we should be in the 300 odd crore rate, roughly.

35:45 Okay, sir. Understood. And what is our debt outlook for FY 'twenty seven and 'twenty eight? So we are on a growth mode. Therefore, there may be some temporary increase in net debt levels as we deploy as we try to unlock cash from our existing operations. So there may be some intermittent spikes in equity, but we would not be very comfortable beyond 0.7, 0.75 as a kind of comfort zone. But desire is always stay below 0.5. So we'll come back to that number fairly quickly. You will see Okay. Thank you. Thank Okay. So can you quantify a number? Like So currently, we are at 700 crores net debt, point five is to one for us.

36:42 I see not more than 200 to 50 crores of incremental addition and net debt in the future. As we grow in the... During this year, I I I think I would be surprised if you go beyond that number before March. Okay, sir. Understood. Thank you. All the best. But more important, just as an alternative perspective, I think most of the absolute number, I think the equity is an important metric that we keep looking at, I would recommend, where the comfort zone is. We have been underly worked for a long time, point 3%, 0.3 is to one. This JV acquisition has given us 0.5, but I think our market exposure has not changed because earlier it was JV debt and it has become our debt.

37:31 But overall, we will not we don't like to see this number going beyond 0.75% in our balance sheet in a reasonable time. Even if it spikes on a temporary basis, which is a bridge financing for acquiring some land development rights and waiting for the projects to flow cash back to return, repay the loan. Even then, wouldn't really go beyond that kind of number. Understood. Thank you. Next question is from the line of Nitin Jain from Fairview Investments Limited.

38:21 Yes. Thank you for the opportunity. My question is regarding the FY twenty eight targets that we had set out for ourselves earlier. I don't seem to find that slide in this presentation this time. So should we conclude that we are not going by the target anymore? What does this indicate? If you would clarify, at least. Slide, these are some changes, and we are running late behind from the board perspective. Board itself took longer and then output issues and all that. The slide is very much intact in our mind as well as in the overall communication strategy. We still remain focused on if we ever change our mind, we'll transfer to tell you why we are changing our mind. So we'll not quietly pull up... Pull out that target from everybody.

39:09 So we are still on working towards an FY '28, our mission target of a sales value of 5,000 crores, that's the prepaid value. Revenue of INR 2,000 crores and earnings PBT level of about INR $2.50 crores plus. So we're still there. And in fact, that slide, maybe we'll try and see if we can upload it again. The slide that is the highlighted, out of the 17,000,000 pipeline, if you recall the slide, you will remember what I'm talking about. Right. Dollars 33,000,000 pipeline, 16,000,000 ongoing, out of which $2,200,000 is unsold And unsold plus sold unrecognized of $6,000,000 together is $8,300,000 reminds INR 4,600 crores of revenue recognition to be done over the next twelve to twelve to twenty four months max.

39:58 On the right hand side, you would have seen the number of 17,700,000 square feet that remains intact. So what we have done is a very deep introspection because we are now close to signing up 8,000,000 private of new capacity. We wanted to do our own planning on how much more to be added from a development pipeline. And therefore, we deep dive into how much of the 17,400,000 is moving on track, meaning progressing well. And how much of this is stuck for some long term or some last mile land connectivity or land issues, though it is that we have signed a development agreement. Some cases, we are still not able to on the develop DP submission. Right? The plan submission. So progress on about roughly 6,000,000 is what we identified as of yesterday.

40:46 So we're trying to highlight that to be more transparent. In the process, I think we we landed up with a question from you. Sorry about that. But let me give you the number. The last point 4,000,000 of pipeline is progressing on track. They have a pipe to revenue potential based on the current market estimate of the selling price. It's about 7,300 crores of revenue potential or a GDV potential of... Give me one minute, I'll give you. GDV potential of about 7,300 crores roughly out of the 11.3. And we have another 6,000,000, which we need to actually either work through very quickly to make it progressing on the approval side or we have to find an alternative for it in addition to what we are working on. That 6,000,000 will have a potential of about 3.4 where contracts are signed, but we have not made meaningful progress on the submission of development plans.

41:46 So together is about signed contracts. We have INR 10,700 crores of revenue potential, which was I think slightly lower than the previous slide. Might be able to refer it. So between both of them, 15,000 crores of signed contract with the revenue or development potential. That is intact. That gives us the confidence that we will be able to sustain the growth momentum for launches. And therefore, we will be able to deliver or reach a sales value of 5,000 crores. And as we meet in the next one or two quarters, I'll be able to refresh this number and see where do you... Where do we see ourselves for FY twenty eight on a more definitive basis. But we are on track. We believe we are on track, and we are not moving away from it and quietly removing that thought process.

42:33 Right. Thank you. Thank you for the detailed explanation. It really seems the slide is etched in the management's mind. If you could reupload it whenever you have time, that would be great. Thank you. It will be on the company's website, the presentation. So, may not allow us to re upload, but I will ensure it gets. Next question is from the line of Shriram from Shriram Properties Limited. Hi, sir. Thanks for the opportunity. So while our quarter two performance, quarter on quarter has improved, when I see the year on year performance, it shows a massive decline.

43:21 And... But you are still confident about the demand recovering in the h two. So just wanted to, you know, again ask you the same question. What gives you so much of confidence that the h two will be so good, and why has the year on year performance declined so much? Has something changed on ground? Has the demand slowed down in the second quarter and now you... Again, you expect it to pick up? So... Yeah. No. I think the things are not changed materially on the negative side in our mind or in the marketplace. Because we had last year, we had in Q2, we had significant launches, at least three of them, if I recall. And then this year, our plan itself was except for only one launch which we are originally thinking of in Q2, where there's a couple of weeks of postponement.

44:14 Otherwise, we were thinking with the... This is the... By design. The FY twenty seven plan by design was this Q second H2 focus. In fact, I was saying that if you if you go back to my earnings call last quarter also, had the same... We maintained that Q2, there may not be much launches. So that's why you see a year on year drop. As you could see from slide... I don't know, slide number. There's a slide title for effort with a new project launch calendar. You will see the aberration or a change was only in gate... If you get with C zone and Manjari. And they're also on track now because Manjari just got a normal clearance and and now on to plan approval process for, I think, about twenty days left before we get the plan sanction.

45:02 So they are on track. Market is doing well. And if you look at the original plan, like Q3 and Q4, this was all skewed towards Q3, Q4. Most of these projects are therefore, we believe taken out will be strong enough for us to cover we are at 40% of the full year target now. And I think we should be able to go closer to the full year target comfortable. Got it, sir. And for the new project investments, which we mentioned in the cash flow, that is only 17 crores this quarter. So would that also... Would that include only the existing projects, the construction cost, or, like, does that line item include that as well? No. That doesn't include line item. See, if you look at... If if I can... If I I can help you explain this more, you can go look at slide 12.

45:59 If you look at h one, the... All the new... All the existing launched ongoing project construction activity or investment into the existing project will all go in the top portion, which is a construction, marketing, or other operating outflows. So they are part of cash operating outflows. So when you say new project investment, these are exact... These are only meant for securing new mandate. Right? New new JD advances. Approval is part of this. Mean, I'll do something. So any approval related costs, if we incur on new project investment, the the demand notes paid and all that. Only those is... So it's purely BD related. Got it, sir. So all the operating operating cash flows are there in the top.

46:44 Got it, sir. That is drastically reduced in the quarter two. And the forward projects which you are so confident about, you know, and the sales which you're confident in h two, shouldn't this number reflect that somewhere is... Which is why this is misplaced the confusing. Reflect. This will not reflect, madam. I'll tell you why. The the confidence of the new launches will reflect on projects which are there in my pipeline already. If I acquire a new project to this quarter, it will take at least two to three quarters to get the plan sanction. Okay. So this is about the new pipeline. Got it. Got it, sir. And so my last question would be, how much... For the JV stake that we acquired, what was the cash outflow from our side? What is the consideration which was paid beyond assuming debt? So the debt that we have assumed for the joint venture loan is about 200 crores.

47:42 And and the... Our 37 crores is the actual consideration. So that's a $2.37 crores towards 50% of economic interest in those three joint ventures. And then comes the ASK acquisition. ASK exit It's a repayment of their investment plus 100 crores of additional money as their share of exit. So there are 300 crores. That is how you see that the total debt would have gone up by about 300 crores. 200 crores towards the JV part... JV did assume. 100 crores towards actual payout to the ASK existing asset for project for Sierra 122 West. So 300 crores is the total investment that we have made. 300 crores actual debt increase towards all the three projects with the ST, four projects acquisition.

48:30 And as I highlighted the arbitral through this investment, which is nothing but interest cost on this 3 to 300 crore is the actual outflow from us. That alone is about 152 crore is the actual value increase. Got it. Got it. Got it. Yes. Thank you so much, sir. Thank you. That's all from us. Thank you. Next question is from the line of Raj Mehta from Raj Mehta and Association. Please go ahead. Thank you, sir, for giving me the opportunity. I wanted to ask you questions. So first of all, if you have acquired this JV, so how much how much revenue will... We will recognize based on the projects which will get consolidated now.

49:22 And does that revenue is with the projection which we gave, we never included those revenue in our guidance. So in our guidance, will this revenue increase will be an additional point or it will be will be over and above the number which we have guided for? So the guy... The the overall revenue growth... Revenue potential or GDP of this fee joint ventures that we acquired is about 1,800 crores. All the little growth. We would have anyway reflected part of it in our books as as a joint venture consolidation. Only a part of the revenue would be an incremental impact on us. So I don't think we would revise our numbers to that effect as a result of that.

50:09 But the collective GDV is about. Okay. And, sir, you have mentioned that you have got a very good To be be reflected in about two years' time, max. Okay. And, sir, you mentioned that you have got a good response in the villa and the blocks which we have launched in the Kolkata, and you are expecting a good momentum to to be carried forward. So how are we planning since you you always told us in our in our previous earning call that we'll give a guidance about how we are monetizing demand. So will this help us to get a good team by build... By developing it by ourselves instead of selling it? How are we thinking about the land portion?

51:06 Very interesting question. I was just waiting for somebody to ask this. Otherwise, I would have said it on my own. So I think it's an interesting point to why and... Why is it interesting that I've been seeing this for the last two quarters that now that the government issue is settled, we will we will refine our thought process. So I think we have now refined because we tested to produce new products. Both these are not... Since Bengal, we have always sold apartments. And we always believe the apartments that micro market cannot absorb beyond 70, 75 aggregate ticket size for a three bedroom house. And that's how we have been doing the Sunshine one, sunshine two, sunshine three, Shriram Grand one was much earlier, much cheaper. All that has been good learning. So we launched Villa in late last year, and I think it took off very well.

51:55 And it was... It has... It has... It simply surprises on the micro market paying capability because the four and five bedroom villas got sold within 30. Whereas we were left with only a three bedroom villas, which we thought the reverse will happen. So there's a market is like that. So all the 1.8 ticket size got sold faster than one point four and one point five five crore ticket size. We also now increased the prices to 1.6 crore ticket size roughly for the same three bedroom and doing doing reasonably well. More important from a shareholder or a... From a management perspective is that it has demonstrated that this this this... These projects can actually you turned around in twenty four months, maximum thirty months from a completion... Launch to completion.

52:42 And they have they have demonstrated that these... Our land can earn a contribution, right, before land cost. Contribution of some that goes to 6 to 7 crores. Roughly about 7 crores for Villa. So therefore, it has it has given us a new perspective of what... How we should monetize. Therefore, we launched, which we see the way... I think we mentioned in the learning call. And and the the q one and q two because first, so far, we have sold 75% of the plot area. I think the plot project is about four lakh 80,000 square feet or something. 300 plots actually, two ninety or two ninety two plots. 75% of it is sold already. So that gives us the comfort that the market is now able to absorb plot as of and you may... Some of you may be familiar with the local market and you would have seen that.

53:35 The Calcutta's only branded land. It was a team that we tried to sell, and we've gone well with the customers. And the land plotter development also gives you somewhere between 600 to seven growths per acre contribution. That's top line, manage all our costs before land cost, which means these two products, which have a turnaround time line of eighteen months to twenty four months max, are able to deliver and have a good appetite for absorption. And therefore, we are thinking why go on large scale monetize. I think mister Ponte mentioned that during the speech that we are moving away from a large a large immediate monetization to a development led monetization. What it means is we're not talking about ten years development. In the next three to five years, can I plus acres that they have in mid area?

54:25 Totally about a 150 acres excluding some setback areas and all that. So 105 acres of monetization. My FSA available. Out of the acre, after all our settlement in green area, out of three fourteen, 60 acres we have developed already. Another 18, 19 acres of apartment, 2,300,000 square foot of apartment project. We already secured a pool sitting on it. The balance is about a 150 acres after giving the balance to Gaza, after giving 40 acres to government. So 100 and acres, I think hundred and five hundred and six acres can be a net developable. Can we convert this into... Because we already have apartments approval. Can we convert this into plot and villa? Period. It's what we're working towards. We are securing... We already applied for the next set of plots because our set is already sold.

55:17 Nearly 70% is sold. In January, we will launch one more apartment complex... One more product development. Simultaneously, we'll also try and time the villas again. Once our three bedroom villas have sold mostly, then we'll launch the next phase of villas. So what our thought process is very simple. Can I convert this hundred and five hundred and six acres of land into a $7.07 crore or 8 crore contribution product? But it has to be monetized in about three three years to maximum five years depending on whether the plot or will last. So that's the thought process now. Comes up which gives us comparable n p... NPV in terms of monetization value per acre basis.

56:03 We are open to selling it to anybody for that matter or giving it on a giant development also. But, basically, we we have a game game plan which targets unlocking this $607,100 crores or or or or If I add or project and the 2,300,000, which are excluded from this land bank, because I already secured approvals so that 18 acres should go out of the land bank. If I add for all of this, that's about thousand 200 crores or so. So in all, 2,000 crores of cash flow is sitting there undiscounted, just to clarify.

56:52 Over five or five apartments might take about five plus years. So about five to six years of monetization, 2,000 crores sitting there, which is more than my market cap, just to clarify. So we we we we believe we we should be able to accelerate this monetization. Apartment will not be... Very difficult to accelerate because we will launch one phase with 2,300,000 square feet. It it will be four years... Three to four years to sell, five to six years to complete from today. So therefore, the rest of the land, four years we should go to monitor, maximum five years. So this is the overall game plan for Calcutta. In the meantime, if this kind of monetization, if somebody comes with the bulk bulk purchase for a warehouse, data center, or any other metric, most developing a mall to township. So if somebody comes for a development of a mall, we have some space reserved for them.

57:45 We don't mind partnering with JDA JDA, not partnering, running the operation. Partnering with them to realize a three year period, or we sell the land and go on as long as we get somewhere comparable NPV terms, comparable realization from this line. Great, sir. Sir, from our perspective, overall, the Kadrata site is worth about INR 2,000 crores, INR 2 crores of cash flow over the next five to six years. Yeah. It's a great job. Even we can monetize it, it will reflect in our market class too. But it is a slow and steady process.

58:30 So I think one of one of the reason why the market is not recognizing the potential is because of the consistency of the results which we are declaring and consistency based on which we commit and we deliver. And I think that last four, five quarters, what we are able to comment and what we are able to decide is what we are able to deliver. So maybe next two, three quarters, if we are able to deliver the same consistency, market will soon reward, right? My last question is, sir, regarding the inflation, which is currently having in the market due to the cost which has gone up.

59:21 Whether that element can hamper our EBITDA margin on the ongoing projects, which are going to be get recognized since we have already sold those and the cost has been escalated. So do we have the bandwidth to maintain that margin which you have guided or we might be on a short of all and might deliver bad EBIT margin? What is your thought of that? The inflation is there. I'm not denying that. And but most of the cost inflation that we are seeing are consistent with what the long term average trends are in terms of cement price or steel price or even labor cost for that matter.

1:00:12 There are temporary spikes that happen from time to time for a variety of local reasons, right? For example, in Chennai, you must have seen this article a few days or a few weeks ago. Sand prices went up in Chennai because hand movement was restricted for whatever the reason. So this kind of thing short term happened. But when we do a project budgeting, we have always considered reasonable buffer on cost escalation, which is maybe possible because all our contracts are they do provide for whether we supply material in most cases, procure bulk and supply to each contractor, but they are fixed rate contractors. Therefore, there will be cost escalation provision as we've built in, and we have already considered some of some large part of this cost escalation or cost inflation is built into our long term models.

1:01:02 When we price the acquisition or when we price these launch price, We do have these in mind already because it's a three year construction period minimum. So that's already there. Beyond that, will that really dampen our margin in a big way? From a quarter to quarter, maybe a small fluctuation can be there depending on which project getting recognized. But on a normalized basis, if I look at, I think we still be able to be we are striving towards and we are confident of delivering stabilizing our margin at that mid-20s level at the EBITDA level. We are... I mean, excluding the. But otherwise, we should be... I'll put it this way. We are fairly confident of the around that 30, 35% line.

1:01:49 So I don't see a big big long term or sustainable risk there. Stockholm spikes, as you all know, it will be there like like any other market. And, sir, one more suggestion. We... I think we have strengthened our board also. We have brought on new independent directors. And I would suggest if we have so much potential, this is the one called with other JD... JVs which are going business development, which we have in progress, which are going to be signed in coming quarters. If... I would suggest that we can place it on the board, and if possible, can bring a big private equity fund or maybe someone out wherein we can give certain percentage of stake and bring the capital, bring the efficiency and bring that confidence with the... In the investor community too.

1:02:50 Sure. We'll take that comment. I I think you have consistently been giving us useful feedback, And I must thank you. I don't know that you are participating in meetings that Mr. Pandey, CFO, has it in Bombay from time to time. We have taken on your suggestions. We're doing road shows now. After every quarterly results, I think it goes around and some premise and meet a lot of investors. And we are also trying to meet the small cap mutual fund managers. That was the first I've been paying off, so I'm thankful to your suggestion. And we'll continue to do that, and we'll take this suggestion also on board and seriously evaluate. I'm not committing anything right now, but we'll seriously evaluate because we have we have had a very long history of private equity investors and part of that we have in the market is because of them. Right? That is one of the reason why stock always has this problem of the 70% public holding, less of institutional, bringing another PE and then after two years when they exit, again, another liquidity getting pumped into the market.

1:04:02 All that aspect is we talked through, but your comment is very fair and timely. We'll think about it and we'll surely act on it. Because I hope I'm saying this thing is because if you track the full day, develop our full day party also, they brought Blackstone and that the the significance of the management and the consistency and the expertise which comes from the PE guide helps them to gain the higher value for the land bank also and for the projects for the upcoming projects. And similarly, since we already had PE in our previous years, it would be much better for us to get that efficiency and to get back that mod... Mojo, which we have lost in last, I think, four, five years. And after an IPO, we have never been able to deliver the shareholders.

1:04:56 Well, it would be great if we start focusing more on towards this and enhance the value because now we have the... We have everything on on our plate. We have the landline. We have the monetization plan. We have the management team. It's just that we need the confidence back from the investment. Understood. Thank you. Next question is from the line of Nitin Jain from Fairview Investments Limited. Yes. Thank you for the follow-up opportunity.

1:05:42 My question is on your revenue guidance for FY 'twenty seven. So to an earlier participant, you mentioned that we can expect revenue for the full year of around INR 1,300 crores to INR 1,500 crores. So last year as well, we did around INR 1,300 crores. Seeing the growth we have seen in H1, should we see a drop in revenue in H2 going by your guidance? Give me a minute. I may have misspoken the number. Just let me you're guiding for a 20% growth, and we believe just give me one minute. Yes.

1:06:39 Just give me one minute. Yep. Roughly about $1,515,100 odd crores. 1,500 odd. Because if you look at the fundus slide, I tell you where where I'm coming from. If you look at slide number, the revenue potential... Revenue retention potential, you've done five ninety so five five forty three right now. And if you look at slide number 17, so the overseas received is about 320 crores of talent handover is possible. It's pending.

1:07:36 And that you do have 1,100 crores of OC led handover pending. So 1,400 crore is still in front of us. Right? Even if I achieve 80% of it, because all those fees may not... All registration may not be complete before the first month. So 1,500 plus is definitely doable. I I wrong... I've spoken wrongly. It's 1,500 to 1,500 crores could have been the number, not thirty minutes to 1,500. Okay. 1,500 to 1,600. And would you... And you've also mentioned that the EBITDA would be around 300 crores for the year.

1:08:22 That is still the same, right? Or would you want to revise that as well? I just saw a wrong slide and put up the number. Okay. So what would you guide towards for the EBITDA? Whatever I said earlier still holds. 300 crores EBITDA for the full year? Yes. Okay. Okay. Okay. And so if we assume 1,500 to 1,600 for this year, 2,500 for the next year is still intact, right, which will be close to 60% growth in revenue? Because we have to schedule for completion. That's the number that we always show I mean, I agree to upload that slide as well.

1:09:15 So it will tell you the total revenue recognition potential, which is pending from completed projects is about INR 4,600 crores available to be recognized within 'twenty seven, some part will get recognized, 'twenty eight, most part will get recognized. So I think we therefore have a good comfort and confidence on the FY twenty eight revenue number. Correct. No, I'm just double checking because the asking rate seems to be pretty high. But if the management is confident, that's very good. Thank you. Thank you so much. Thank you. Anyone who wishes to ask a question, may press star and one on the touch tone telephone.

1:10:13 Next question is from the line of Raj Mehta from Raj Mehta and Associates. Please go ahead. Thank you for giving me. I just wanted to ask you, sir, many of the investors are asking the FY twenty eight guidance on whether we are going to commit for the payment, or they are not confident with the management, if you are not. If possible, can you can you give us the project wise revenue recognition which are going to be happened in the coming futures and give us the confidence by by uploading that presentation and clarifying in the closing comments so that there is no miscommunication from your end to the investor end?

1:11:05 No, we'll provide you the aggregated data on the total revenue potential. We will think about project wise revenue potential or project wise and year wise revenue potential now we'll we'll think about it. We'll see if we can make those disclosures in the upcoming quarters. The other slide, you'll you'll get it today today. Okay. And sir, last question, the projects which we are already on the works on the business development side, whether the pricing is helping us to get better IRR or whether whether we are going for a average IRR since the land prices have shut down a lot. What what are what are your thoughts on the IRR of the upcoming projects?

1:12:00 Of the projects you are going to come in Mumbai also. So the IRR is going to increase and our ROE ROCE is... And higher? So we have obviously been consistent in our approach. We don't take projects which are not delivering a meaningful IRR to us, and we have always used at least 25% as our threshold for taking a new project. Whether it's combination of pricing, lower land value or cost, all that is taken into account. Would obviously, that is a dynamic market pricing you have to do because it's a combination of multiple factors. It's very easy for us to develop a strategy. But on ground, when you are sitting with the vendors of the raw materials, which is the landowners, may not be always possible to achieve any one single metric or to play with combination of metrics.

1:13:01 But we are short, we don't take projects which are below the threshold that we have in mind and better priced markets like Mumbai should give us better return provided we are able to get a decent entry point, which has a good scalability, velocity as well as pricing. Okay. And whether those will be a redevelopment projects or it will be normal construction projects? One free form of our plan, we'll let you know. Okay. And sir, last question from my end, what are the risks of all the difficulties which we are facing as of now in the in the execution side, whether we are having any difficulties or in case of approval side from the government department.

1:13:53 So what are the ongoing difficulties are we facing? Nothing unusual for us. It's whatever you would have heard from our regional players would would be applicable to everyone there. But compared to what we faced a few years ago, I think things have normalized to a greater extent. So we don't see a big challenging operating environment in our core markets at least. Thank you. Next question is from the line of from Paras Investments. Please go ahead. Yeah. Hi. Thanks for the opportunity. I'm sorry I joined a bit late and if this question were answered. So to the previous part, I think you mentioned 1,500 to 1,600 crore revenue for this year. And EBITDA, what margin you said?

1:14:47 About 20% margin, upwards of 20% margin is what you should think. Okay. So that may be around 300 to EBITDA. Okay. And what would be the right margin on this? For now, I think we are working... I mean, long run, yes, we will try to stabilize around the 1011%, but for now, it is between 810%. 8% to 10%. Okay. Okay. And on the plotted development, you also mentioned 700 crores for 110 nickel and we can generate cash flow? No. I said that the contribution potential, seven seven to eight growth of contribution per acre of land is what we are seeing right now based on products that have launched and sold successfully.

1:15:35 So this month, if you do all of them as a plots in Villa, we should be able to generate that 800 plus crores of cash flow from only this landline. Then there's a thousand 200 crores of earning potential or a contribution potential from the ongoing projects or projects that are approved yet to be launched. These are, like, the apartment develop... Those are the long term developments. So therefore, I said the cycle was 2,000 crores. Correct. Correct. That's it from me. Thank you. Thank you. That was the last question for today. I now hand the conference over to the management for closing comments. Thank you, everyone, for taking your time out to hear us on this evening.

1:16:25 And just for all of the all of you, if you are interested in meeting with us for more detailed conversation, feel free to come... Get in touch with us, and we'll try and have a call call with you. And also, I think our CFO, mister Pandey, will also be visiting you all in coming weeks weeks, and would be very happy to meet with all of you. And some of the analysts who are already there on the call, I think I hope you know some of you have been saying we want to monitor or we want to observe the company for some time. I hope we have reached a stage of meeting your confidence. Happy to we'll be very happy to work with you and see if any of you are able to discuss more in detail with us and come with the coverage.

1:17:18 And lastly, I would like to thank SGA for doing all the arrangement. And despite all this logistics nightmare that we had with the global outage of outlook, SGA has managed to get very large number of participants by sending invites in a timely manner. Thank you, SGA, and thanks, everyone, for being on the call. Thank you. On behalf of Shriram Properties Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.