Release Date: February 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Arihant Superstructures Ltd (BOM:506194, Financial) reported a 9.6% growth in consolidated revenue for Q3 FY24, reaching INR119.5 crores compared to INR109 crores in Q3 FY23.
- The company's net worth increased to INR301.8 crores in Q3 FY24 from INR276.8 crores in Q2 FY24, marking a 9% growth.
- Arihant Superstructures Ltd achieved sales booking of 483 units in Q3 FY24, equivalent to 4.1 lakh square feet, amounting to INR251 crores in sales value.
- The company acquired a new project, Arihant Anaika 7, and signed a term sheet for 118 acres of land at Chowk, indicating strong business development activities.
- The Navi Mumbai Metro inauguration and the upcoming Navi Mumbai International Airport are expected to boost demand for homes, especially in areas where Arihant has a strong presence.
Negative Points
- The EBITDA margin for Q3 FY24 decreased to 22.01% from 23.39% in Q2 FY24, showing a decline of 1.38%.
- Profit after tax for Q3 FY24 decreased by 3.1% to INR15.6 crores from INR16.1 crores in Q2 FY24.
- The average price per unit sold decreased to INR52 lakhs in Q3 FY24 from INR60 lakhs in Q2 FY24, indicating a shift towards more affordable segments.
- The company expects to increase its debt in the next few months to fund new acquisitions, which could impact its financial stability.
- Arihant Superstructures Ltd faces increasing competition from major developers like Godrej and Hiranandani in the Navi Mumbai and Panvel areas.
Q & A Highlights
Highlights of Arihant Superstructures Ltd (BOM:506194) Q3 FY24 Earnings Call
Q: Can you provide a breakup of the presales numbers for Q3 FY24?
A: Aspire contributed around INR90 crores, Aalishan around INR43 crores, and Advika around INR9 crores. Detailed figures will be shared separately. - Parth Chhajer, Whole-time Director
Q: What is the sales momentum and future plans for the Aspire project?
A: Aspire has seen strong demand due to its proximity to the upcoming international airport and the Atal Setu bridge. We plan to add another 5 lakh square feet, potentially launching two more towers in FY25. - Parth Chhajer, Whole-time Director
Q: What are the presales targets for FY25 and FY27?
A: We aim to achieve INR1,000 crores in presales for FY24, INR1,300 crores for FY25, and INR1,800 crores by FY27, supported by market conditions and infrastructure developments. - Parth Chhajer, Whole-time Director
Q: When can we expect the commencement certificate for the World Villas project, and what is the expected IRR for the resort and Gymkhana in Panvel?
A: The commencement certificate is expected by Q4 FY24, with the launch in April. The IRR for the Gymkhana and hotel properties is expected to be around 15%. - Parth Chhajer, Whole-time Director
Q: What are the plans for debt reduction and maintaining EBITDA margins?
A: We expect EBITDA margins to increase to 25%-30% in the coming years. Debt will increase in the short term to fund expansions but will be repaid through project cash flows over the next three to four years. - Dhiraj Jopat, Chief Financial Officer
Q: What is the competitive landscape in the Panvel and Navi Mumbai areas?
A: We have a competitive advantage in these areas, often selling at better prices than larger developers like Godrej and Hiranandani. The region is expected to see significant growth due to infrastructure projects, creating a strong demand for housing. - Parth Chhajer, Whole-time Director
Q: What is the expected revenue recognition for FY24 and FY25?
A: We plan to grow at a 25% CAGR from FY23 numbers. Key projects expected to receive OC in FY25 include Arihant Aalishan, Arihant Aspire, and Arihant Anaika 5. - Parth Chhajer, Whole-time Director
Q: What is the strategy for land acquisition and project development in the future?
A: We focus on acquiring land directly from sellers at competitive prices and developing new micro markets. For high-value projects, we prefer JV or JDA models. Our business development team is actively seeking viable opportunities. - Parth Chhajer, Whole-time Director
Q: What are the expected presales contributions from key projects in FY25 and FY26?
A: Major contributions will come from Arihant Advika, Arihant Aspire, World Villas, Arihant Avanti, and projects in Taloja. Advika is expected to contribute around INR200 crores in FY25. - Parth Chhajer, Whole-time Director
Q: What is the expected timeline for obtaining OCs for key projects?
A: OCs for Arihant Aalishan are expected in H1 FY25, while Aspire and Anaika 5 are expected in H2 FY25. - Parth Chhajer, Whole-time Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
