Release Date: May 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nirlon Ltd (BOM:500307, Financial) reported a total income of INR154 crores for Q4 FY24, reflecting a 4% year-on-year growth.
- EBITDA for Q4 FY24 stood at INR122 crores, showing a 5% year-on-year increase.
- The company's average occupancy rate was stable at 99.8% for Q4 FY24, with Nirlon Knowledge Park being 100% occupied.
- Profit after tax for the full financial year 2024 was INR206 crores, marking a 30% year-on-year growth.
- The board proposed a final dividend of INR11.00 per share for FY24, in addition to an interim dividend of INR15 per share paid in Q4 FY24.
Negative Points
- Profit after tax for Q4 FY24 declined by 1.7% quarter-on-quarter.
- The company decided to stay with the old tax regime due to accumulated MAT credit, potentially missing out on benefits from the new tax regime.
- There are ongoing discussions about potential restructuring, but no concrete decisions have been made, causing uncertainty.
- The valuation of the company as of March 31, 2024, was INR4,500 crores, which some analysts believe is undervalued compared to market estimates.
- There is no significant growth plan or additional CapEx for the next few years, focusing mainly on maintaining current assets.
Q & A Highlights
Highlights of Nirlon Ltd (BOM:500307) Q4 FY24 Earnings Call
Q: Hi, Kunal and Rahul. My only query would be, the market understands that Kunal-ji sold-off most of his holdings, but we are happy to note that he is still on the call. Is there any particular reason for that, which we have to get worried on or something like that?
A: I've been in discussions, and looking to sell my shares for some time before the actual sale. An opportunity arose in March of 2024, which I then moved forward with. The reasons for my selling are entirely personal and not related to the company or its performance.
Q: What is the valuation as of March 31?
A: The valuation of the company as on March 31 is approximately INR4,500 crores. This is the fair value in our annual report, as we are required to present it.
Q: My question is on Nirlon House. Any plans that you can share for the visibility; it's been a while since we got any progress update on that front.
A: We are in the process of working on it and will inform as soon as there is anything significant to say. It is a strata sold property; it's a multi-owner property, which takes a little longer to resolve.
Q: What are the potential issues that management is facing in this whole restructuring of the delisting process?
A: Based on the structure and priorities of our major shareholder, we are looking at the most optimum restructuring. We are still in the process of discussing and analyzing various options.
Q: On the debt repayment, if you can just give some clarity on what we're intending to do with the debt on our books in terms of repayment?
A: We have a five-year moratorium on our debt where we pay interest only. Out of that, two years is over so far, so we have three more years of interest only. Then we pay 25% of the debt between years 6 and 10, and a bullet payment of 75% at the end of the 10th year.
Q: What is the status of Nirlon House? Are the other owners supportive of an outright sale?
A: We have not said that discussions are at an advanced stage. We are working on getting the best value for the company from Nirlon House, but due to the multi-owner nature of the building, it is complicated. We will inform once there is significant progress.
Q: What are the new terms of the renewed contract with Nirlon Management Services?
A: The new terms are very similar to the existing contract. There are no development fees as there is no significant development envisaged in NL at this point in time.
Q: What is the pending MAT credit available as of March 31, 2024?
A: It was INR30 crores on March 31, 2023, and we expect it to go down by approximately INR5 crores to about INR25 crores.
Q: Any medium-term plans for redevelopment or utilizing unutilized FAR?
A: No plans for redevelopment. The development aspect of Nirlon Knowledge Park is complete, and the park is too new to consider any kind of redevelopment.
Q: Does the new small REIT regulation open another option for Nirlon?
A: We are looking at the regulation. Prima facie, it appears to be for companies that are not listed. We are trying to understand if it will become relevant to us with further changes.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
