Release Date: October 21, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ganesh Housing Corp Ltd (BOM:526367, Financial) reported a significant 52% year-on-year increase in revenue for Q2 FY25, reaching INR250 crores.
- The company's EBITDA grew by 76% year-on-year to INR215 crores, with an impressive margin of 86%, highlighting strong cost optimization and profitability.
- Profit after tax rose by 84% year-on-year to INR259 crores, resulting in a healthy PAT margin of 63.5%.
- The company maintains a strong financial position with zero debt and cash balances of INR250 crores as of September 30, 2024.
- Ganesh Housing Corp Ltd (BOM:526367) has a robust land bank and is strategically positioned to capitalize on growth opportunities in Ahmedabad's real estate market.
Negative Points
- There is a potential risk of increased competition and rising land prices in Ahmedabad, which could impact future project costs.
- The company faces challenges related to labor costs and construction activity, which could affect project timelines and profitability.
- The Malabar Retreat project experienced a slower construction progress due to the rainy season, impacting the timeline.
- Ganesh Housing Corp Ltd (BOM:526367) relies heavily on land sales, which accounted for 90% of sales in the reported quarter, potentially affecting revenue stability.
- The company operates primarily in Ahmedabad, which may limit its growth opportunities compared to expanding into other cities.
Q & A Highlights
Q: How will the increase in land prices and new entrants affect Ganesh Housing's competitive landscape?
A: B Ravi, Corporate and Financial Advisor, explained that rising land prices benefit Ganesh Housing due to their existing land bank acquired at historical low costs. This allows them to maintain competitive pricing or achieve higher margins compared to new entrants who face higher land acquisition costs.
Q: What is the expected impact of increased construction activity on labor costs?
A: B Ravi noted that while input costs have risen, they do not foresee significant upheavals in labor costs. Rajendra Shah, CFO, added that the company is using precast technology to reduce labor dependency.
Q: Can you provide details on the Million Mines IT project and its marketing efforts?
A: B Ravi stated that the project is progressing well, with strong interest from potential tenants. The company is considering both leasing and outright sale options, with significant developments expected in the next few months.
Q: What is the status of the Malabar Retreat project, and why is construction progress slower this quarter?
A: Rajendra Shah explained that the rainy season impacted construction, particularly in the basement phase. However, the project is on schedule for completion by March 2027, with significant progress expected in the coming months.
Q: How does Ganesh Housing plan to manage its land bank and future acquisitions?
A: B Ravi emphasized the importance of land as a raw material for future projects. The company continuously evaluates land acquisition opportunities in strategic areas to support long-term growth, focusing on regions with high development potential.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
