Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Launch of Eldeco Trinity, a luxury project in Lucknow, with a total salable area of more than 5 lakh square feet.
- Significant increase in booking value, up 89% year-on-year to INR59.1 crores in Q1 FY '25.
- Strong collections, showing a 117% increase year-on-year with INR55.3 crores collected in Q1 FY '25.
- Handed over 114 homes to allottees before the contractual due date or within RERA timelines.
- Consolidated revenue from operations grew by 17.5% year-on-year to INR29.2 crores in Q1 FY '25.
Negative Points
- Bookings for Eldeco Trinity started off lukewarm, although they picked up subsequently.
- Minimal progress in land aggregation at two out of three locations in Lucknow.
- Revenue recognition is dependent on the completion and handover of units, which can be unpredictable.
- Significant portion of cash (INR60 crores) is stuck in RERA bank accounts, limiting immediate liquidity.
- Approval processes for new projects can be slow and unpredictable, impacting project timelines.
Q & A Highlights
Highlights of Eldeco Housing and Industries Ltd (BOM:523329, Financial) Q1 FY 25 Earnings Call
Q: What can we expect the top line and when can it be achieved for the Eldeco Trinity project?
A: The total GMV of the Eldeco Trinity project is expected to be around INR400 crores to INR500 crores. The project is expected to significantly contribute to the company's top line. (Pankaj Bajaj, Executive Chairman and Managing Director)
Q: Are we seeing any increase in realization in the market we are capturing right now?
A: Yes, there has been a remarkable increase in per square foot realization. Last year, it was around INR4,500 per square foot, which increased to INR5,500 per square foot last quarter, and this quarter it has peaked at INR6,350 per square foot, largely due to Eldeco Trinity. (Pankaj Bajaj, Executive Chairman and Managing Director)
Q: What is the timeline for project completion and handover for Imperia Phase 1, Twin Tower, Shaurya Arcade, and Saksham?
A: All these projects are completed, and we have applied for completion certificates. Most of these units will get handed over in Q2, if not in Q3. (Pankaj Bajaj, Executive Chairman and Managing Director)
Q: How much cash do we have currently that will help us to acquire more land parcels?
A: As of now, we have around INR140 crores in balance, out of which close to INR60 crores is stuck in RERA bank accounts for future and ongoing projects. This cash will be used for ongoing projects, future land aggregation, and other purposes like dividends and debt repayment. (Sanjay Aggarwal, Vice President, Accounts and Taxation)
Q: What are the other new projects you are planning to launch this year?
A: We are submitting at least three projects for approvals: GH-04, Hanging Garden, and a new project over 46 acres. Depending on how quickly we get the approvals, we should be able to launch them in about four to five months. (Pankaj Bajaj, Executive Chairman and Managing Director)
Q: Are we facing challenges in selling the Latitude 27 project?
A: No, we are very happy with the pace of sales. Out of the total salable area, a significant portion is allotted to our partner, and we have not yet launched one tower. We have already sold more than 60% of the available area, and the pace of sales is ahead of the pace of construction. (Pankaj Bajaj, Executive Chairman and Managing Director)
Q: How do you see the growth trajectory for the next three to four years?
A: There is no change in strategy. We will continue with our consistent approach, focusing on township formats and premium projects. We have enough inventory for the next two years, and our BD pipeline and square footage under development are strong. (Pankaj Bajaj, Executive Chairman and Managing Director)
Q: What is the competitive landscape in Lucknow, and how are you able to pitch your projects against others?
A: The real estate market is fragmented, but there has been a trend of consolidation. We are one of the leaders in the Lucknow market, benefiting from this trend. Our competitive edge lies in our track record, quality, and timely delivery. The market itself is growing, providing enough space for both large and small players. (Pankaj Bajaj, Executive Chairman and Managing Director)
Q: What is the margin profile of Imperia Phase 1 and Twin Tower projects?
A: These are premium products in the Lucknow context with good profit margins. Even though the per square foot price realization is not very high, we are efficient in land procurement, which helps maintain good profit margins. (Pankaj Bajaj, Executive Chairman and Managing Director)
Q: What is the revenue visibility for the financial year '26?
A: Real estate is a lumpy business, and we do not give specific guidance. However, we have enough inventory and ongoing projects to support our revenue in the coming years. (Pankaj Bajaj, Executive Chairman and Managing Director)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
