Release Date: February 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Consolidated turnover for Q3 FY24 stood at INR1,179 crores, showing strong financial performance.
- EBITDA for the quarter grew by 124% year-on-year to INR104 crores, with an EBITDA margin of 17.3%.
- Net profit grew over 10 times year-on-year to INR280 crores, driven by excellent performance in the real estate sector and cost-saving measures in the Pulp and Paper division.
- Real estate sector experienced consistent growth, with revenue growing by 139% year-on-year and 115% quarter-on-quarter to INR86 crores.
- Pulp and Paper division saw a capacity utilization of 104% in Q3 FY24, with production and sales volumes increasing by 16% and 11% respectively over the previous quarter.
Negative Points
- Textile division faced challenges with net sales at INR197 crores and an EBITDA loss of INR19 crores.
- Overall production and sales volume in the textile segment decreased by 4% and 11% respectively over the previous quarter.
- Sales turnover in the textile segment decreased by 14% over the previous quarter, indicating subdued demand.
- Imported pulp, wood, and coal prices are showing an increasing trend, which could impact future profitability in the Pulp and Paper division.
- Export demand in the Tissue segment remained subdued due to pricing pressures in the UAE, and disturbances in Europe and the USA could cause supply chain disruptions.
Q & A Highlights
Q: Earlier, you mentioned that in H2 there would be delivery of three projects, and we would be recording almost INR1,700-1,800 crore in revenue. Has this been delayed because nothing has come in Q3, and will everything come in Q4?
A: There has been a slight delay in some projects, but we have received OC for a few phases of all three projects. Most of the revenue should be recorded in Q4, with a slight possibility of a spillover into Q1 next year. (K. Jithendran, CEO - Real Estate)
Q: Regarding new launches, has Niyaara Tower 2 already been launched, or will it be launched in the next couple of months? Also, what is the status of other planned launches like RR Nagar, Bangalore, Walkeshwar, and the new phase in Gurgaon?
A: Niyaara Tower B will be launched before the end of this month. RR Nagar is awaiting RERA approval, expected this month, with a launch planned for late February or early March. Walkeshwar may launch in March, while the new phase in Gurgaon will likely be next year. (K. Jithendran, CEO - Real Estate)
Q: Could you explain the TDR sales booked this quarter and the future opportunities in this area?
A: The TDR sales were due to a market opportunity created by a deficit in the TDR market. We sold surplus TDRs generated from our textile mill policy. This is an opportunistic sale and difficult to predict for the future. (K. Jithendran, CEO - Real Estate)
Q: Can you break down the Pulp and Paper revenue into copier versus writing and printing?
A: Approximately 30% of the Pulp and Paper revenue comes from copier paper, with the balance from non-copier paper. (K. Jithendran, CEO - Real Estate)
Q: Your EBITDA margin in Pulp and Paper rose significantly despite higher BCTMP prices and declines in PP realizations. How did you achieve this?
A: The margin improvement was driven by significant cost reductions in chemicals, packing materials, and power consumption. For example, power consumption per ton of board production decreased from 525 kWh to 435 kWh. (K. Jithendran, CEO - Real Estate)
Q: What is the status of wood supply and prices for the Pulp and Paper segment?
A: The wood supply situation has been good, with adequate stock built up for the April to June period. We have also made changes in the pulping process to use different types of wood, including increasing the percentage of bamboo used. (K. Jithendran, CEO - Real Estate)
Q: What are the expected launches and their value for FY25 in the real estate division?
A: We are planning several launches, including Sarjapur in Bangalore, Wellesley Road in Pune, IHP land in Delhi, and new phases of existing projects. The total value of these launches is expected to be around INR8,000-9,000 crores, with potential additional projects adding another INR4,000-5,000 crores. (K. Jithendran, CEO - Real Estate)
Q: What is the business development target for FY24 and FY25 for real estate projects?
A: We have finalized projects worth a gross development value of INR16,000 crores in FY24 and aim to conclude deals worth around INR20,000 crores per annum going forward. (K. Jithendran, CEO - Real Estate)
Q: What are the expected pre-sales and EBITDA margins for the real estate division?
A: We aim to achieve pre-sales of over INR3,000 crores this year and around INR5,000-6,000 crores next year. The expected EBITDA margins are between 30-35%. (K. Jithendran, CEO - Real Estate)
Q: What is the outlook for the paper segment's margins for FY25?
A: This quarter's margin was around 15%. For next year, we aim to achieve an EBITDA of INR15 per kg of paper, up from the current INR11 per kg. (R. K. Dalmia, Managing Director)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
