Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ajmera Realty & Infra India Ltd (BOM:513349, Financial) reported a 36% year-on-year increase in sales value for Q1 FY25, reflecting robust demand and market confidence.
- The company successfully launched multiple projects, including Ajmera Vihara in Bhandup, which contributed significantly to sales.
- Ajmera Realty & Infra India Ltd (BOM:513349) repaid INR58 crores of debt from operating cash flows, demonstrating a commitment to reducing debt.
- The company received a credit rating upgrade to CRISIL A minus, indicating strong financial stability.
- Ajmera Realty & Infra India Ltd (BOM:513349) has a pipeline of seven projects with a gross development value (GDV) of around INR4,270 crores, indicating strong future growth potential.
Negative Points
- The company faces delays in obtaining necessary approvals for some projects, such as the Kanjurmarg launch, which may impact timelines.
- Despite strong sales, the company still has a significant amount of debt, with a debt-equity ratio of 2.8x as of June 2024.
- The commercial development in Wadala is still in the planning stage, with construction expected to start only by the end of next year, indicating a long lead time.
- The company’s reliance on the Mumbai market means it is exposed to regional economic and regulatory risks.
- Ajmera Realty & Infra India Ltd (BOM:513349) has significant ongoing and future capital expenditure requirements, which may strain financial resources.
Q & A Highlights
Q: Congratulations on the recent engagement with Rustomjee for a project in Bandra. Can you provide a timeline for securing the LOA and CC for this project?
A: The work at the site has already begun, and we have applied for the necessary permissions. We expect to secure the LOA and CC within the next three to four months, targeting a project launch between December and February. - Dhaval Ajmera, Director
Q: What is the impact of the recent demerger of a land parcel on the listed entity and overall group valuation?
A: The demerger involves shifting a 6.5-acre plot from the holding company to a 100% subsidiary, providing flexibility for future development. The valuation impact is minimal as the asset remains within the consolidated balance sheet. Shareholders benefit from an additional 2% equity due to the demerger. - Nitin Bavisi, CFO
Q: Can you provide guidance on CapEx and business development spend for FY25 and FY26, and presales targets for FY26?
A: We plan to launch seven projects with a top line of INR4,270 crores this year. Our presales target for FY25 is INR1,350 crores, and we expect significant contributions from new launches. - Dhaval Ajmera, Director
Q: Which segment is driving growth for Ajmera Realty, and where do you see maximum potential?
A: Mid-luxury to affordable segments are driving growth, with projects like Ajmera Manhattan and Ajmera Greenfinity showing strong sales. We plan to continue focusing on these segments while also considering luxury projects. - Dhaval Ajmera, Director
Q: What are the development plans for the demerged commercial land in Wadala?
A: We are currently working on the master planning and exploring potential partnerships. We aim to start construction by the end of next year, with a phased approach to match demand and supply. - Dhaval Ajmera, Director
Q: Are you on track to launch the Kanjurmarg project by September this year?
A: We are working on securing the necessary approvals and expect to launch the project by the end of this year. - Dhaval Ajmera, Director
Q: What is the total land bank Ajmera Realty currently holds?
A: We have a launch-ready project portfolio of 1.7 million square feet and a future land bank of 1.1 crore square feet, primarily in Wadala and Kanjurmarg. - Dhaval Ajmera, Director
Q: Can you provide details on the cash flow from other avenues, specifically the INR330 crores mentioned?
A: This includes ongoing UK repatriation and asset monetization in Mumbai, expected to materialize within this financial year. - Nitin Bavisi, CFO
Q: What is the plan for the new project in Bandra with Rustomjee, and how will existing tenants be accommodated?
A: The project will include both commercial and residential spaces, with commitments to existing tenants being met. Detailed plans will be revealed once finalized. - Dhaval Ajmera, Director
Q: How will Ajmera Realty fund the acquisition of INR3,500 crores worth of projects?
A: The funding will be a mix of organic and inorganic sources, including asset-light models and non-capital commitment projects. - Dhaval Ajmera, Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
