Puravankara Limited in the second quarter (Q2FY24) ending September 30, 2023 has reported sales of INR 1,600 crore, an increase of 102% Y-o-Y. Sales volume for the quarter stood at 2.01 msft, up by 89% Y-o-Y with a strong collection of INR 879 crore (+70% Y-o-Y).
Average price realization for the Bengaluru-based developer (5th Best Brand of India as per Track2Realty BrandXReport 2022-23) increased by 7% to INR 7,947/sq ft during the quarter, up from INR 7,396/sq ft in Q2FY23.
Operating cash inflows for H1FY24 stood at INR 1,756 crore (+31% Y-o-Y), and revenue from projects stood at INR 368 crore (+54% Y-o-Y). The company launched one new project, Provident Ecopolitan (Bengaluru), and new phases for Purva Park Hill (Bengaluru) and Purva Windermere (Chennai), totaling 2.09 msft.
Commenting on the company’s performance, Ashish Puravankara, Managing Director, Puravankara Limited, said, “While the residential real estate industry grew by 6% on a Y-o-Y basis, Puravankara Group delivered a phenomenal performance in the second quarter resulting in an exponential increase of pre-sales by 102% Y-o-Y, driven by our strong brand and robust product portfolio. The collections grew by 70%, amounting to INR 879 crores on a Y-o-Y basis, a testimony to the company’s strong execution capabilities, commitment to customer satisfaction, and demand for high-quality products. We remain confident in maintaining our growth momentum in the coming quarters. With a robust pipeline of new launches, we are well-positioned to occupy a higher market share.”
The total revenue from operations recognised, including other income for the H1FY24, is INR 717 crore by handing over 927 units with an area of 1.01 msft, which resulted in INR 130 crore Gross Profit.
However, expenses related to sales and marketing costs for ongoing and new launches, along with G&A expenses of INR 168 crore incurred on account of planned growth, resulted in a net loss of INR 29 crore after tax in H1FY24.
Does this net loss indicated any downward curve for the company? “Not really,” says Abhishek Kapoor, Group CEO and Executive Director. “If you look at it in a holistic manner, these are not losses but expenses on account of growth. There are two aspects – one is delivery and on account of that our revenue has gone up; but there are expenses on account of sales & marketing because of new launches and growth plans . These are growth driven expenses. Now we have 2500 new delivery in pipeline in the second half, and hence revenue booking would look different after delivery. It is a loss to be recovered as business is profitable. We are in growth mode and we are delivering and investing for future.”
The company has a planned delivery of approximately 2,500 units (area of approx. 2.5 msft) in H2 FY24.
Operational Highlights for Q2FY24
Area sold stood at 2.01 msft (+89% Y-o-Y)
Sales value stood at INR 1,600 crore (+102% Y-o-Y)
Sales realisation stood at INR 7,947/sft (+7%Y-o-Y)
Consolidated Q2FY24 Financial Performance
Revenue from projects stood at INR 368 crore (+54% Y-o-Y)
EBITDA stood at INR 98 crore (69% Y-o-Y)
Loss stood at INR 11 crore, reduced by 45% compared to INR 21 crore for the same quarter last year on increased delivery, showing improvement in revenue booking
Projected Cash Flows as of 30th September 2023
Balance collections from sold units (completed + ongoing) in all launched projects stood at INR 3,636 crore
Total value of unsold inventory, including new launches in Q2FY24, stood at INR 5,581 crore
Total estimated surplus from all completed and ongoing projects is INR 6,455 crore
Debt
The net debt stood at INR 1,992 crores, and the net debt-to-equity ratio stood at 1.01 for Q2FY24. The weighted average cost of debt stood at 11.61% as of 30thSeptember 2023.
Outlook
The Indian realty sector is reflecting the resilience demonstrated by the broader economy in the face of significant challenges currently confronting the global economy. This is indicated by declining inventory. The absorption is expected to remain buoyant in the upcoming quarters, as this demand is predominantly influenced by end-users. With increasing economic activity and a revised growth projection of 6.3% by the IMF (up by 0.2%), Purvankara is optimistic that the company is well-positioned to capitalise and gain market share in a continuously consolidating real estate market.
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