Release Date: May 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Consolidated turnover of continuing operations grew by 60% year on year to INR1,542 crores.
- EBITDA for the quarter increased by 81% YoY to INR282 crores with an EBITDA margin of 18.3%.
- Real Estate division saw substantial revenue growth to INR668 crores with an EBITDA margin of 30.5%.
- Successful launch of new phase of Birla Niyaara at Worli in Mumbai, resulting in sales worth INR2,391 crores within a month.
- Pulp and Paper segment saw a 6% year-on-year increase in production volume and a 13% increase in sales volume.
Negative Points
- Net loss for the quarter from discontinued operations amounted to INR140 crores.
- Paper, board, and tissue prices continued to decline, impacting sales turnover and EBITDA.
- Supply chain disruptions and increased prices of key raw materials affected the cost of production in the Pulp and Paper segment.
- Textile division faced continued operational losses, leading to the decision to discontinue operations at the Birla Century Bharuch plant.
- Increased competition and rising land prices are making it more challenging to secure new real estate deals.
Q & A Highlights
Q: Congratulations on a fantastic set of results again. How are land prices coming along, and what are your plans for the next leg of business in real estate?
A: (K. Jithendran, CEO, Real Estate Division) Land prices have become much firmer and more expensive, making it difficult to conclude deals. However, we are looking at several parcels in our targeted regions and are confident about securing good deals either through outright purchases or JV models.
Q: Are we still looking at outright purchases, or is it a combination?
A: (K. Jithendran, CEO, Real Estate Division) Yes, we are still considering both outright purchases and JV models. Outright purchases are considered opportunistically in targeted segments where land prices still make sense.
Q: How are we planning to expand beyond residential projects? Are we considering malls or other avenues?
A: (K. Jithendran, CEO, Real Estate Division) While we remain focused on residential projects due to their high margins and brand leverage, we are also open to commercial deals and plotted developments for quick turnarounds.
Q: How is the competitive intensity in the market now?
A: (K. Jithendran, CEO, Real Estate Division) The market has become quite competitive with many top players vying for the same land parcels. However, we are hopeful that our brand, execution capabilities, and pricing power will help us secure good deals.
Q: What are your targets for the next few years?
A: (K. Jithendran, CEO, Real Estate Division) We have targets of about INR15,000 crores to INR20,000 crores of new projects. We did about INR16,000 crores this year and hope to achieve a similar or higher number in the coming year.
Q: How do you see the demand-supply situation in the MMR region?
A: (K. Jithendran, CEO, Real Estate Division) The demand is far outstripping supply due to fewer players and high land prices. Regulatory constraints also limit supply. We expect sustained demand over the next few years due to fundamental economic factors.
Q: What is the outlook for the paper business in FY25?
A: (K. Jithendran, CEO, Real Estate Division) We had cost constraints last year, particularly in wood procurement and power costs. We have planned CapEx to address these issues and expect margins to improve to around INR12 to INR13 per kg of paper.
Q: Can you provide more details on the loss from discontinued operations?
A: (K. Jithendran, CEO, Real Estate Division) We have already taken the necessary impairments this year. We expect to achieve the realizable value of INR174 crores and do not foresee significant additional write-offs next year.
Q: What are the launch timelines for your real estate projects next year?
A: (K. Jithendran, CEO, Real Estate Division) We are planning nine launches spread across each quarter, starting from this quarter. These include projects in Walkeshwar, Bangalore, Pune, and NCR.
Q: How do you plan to manage your debt levels?
A: (Snehal Shah, CFO) Our net debt is around INR2,050 crores. We expect additional cash flow requirements of around INR300 crores to INR400 crores for ongoing and new projects. We may require additional debt for new acquisitions, partially financed by the parent company and through financing arrangements.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
