Release Date: August 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The company achieved sales bookings of 304 units in Q1 FY25, equivalent to 3.29 lakh square feet, amounting to INR166 crores in value.
- Arihant Superstructures Ltd (BOM:506194, Financial) has signed a term sheet with Taj Group Hotels for a hotel management contract at their development in Chowk.
- The company has a robust collection of INR127.9 crores for the quarter.
- The net worth of the company increased to INR325.3 crores in Q1 FY25 from INR260.9 crores in Q1 FY24, registering a growth of 24.6%.
- The company is exploring more opportunities in outright JV, JDA, and redevelopment projects, indicating a bullish business development outlook.
Negative Points
- Total consolidated revenue for Q1 FY25 was INR84 crores, a decline of 30% compared to INR121 crores in Q1 FY24.
- Total EBITDA for Q1 FY25 stands at INR11.1 crores, a decline of 59.5% from INR27.4 crores in Q1 FY24.
- EBITDA margin for Q1 FY25 declined to 13.1% from 22.6% in Q1 FY24.
- Profit before tax for Q1 FY25 was INR2.6 crores, an 87% decline from INR21.1 crores in Q1 FY24.
- Profit after tax for Q1 FY25 was INR1.99 crores, an 88.4% decline from INR17.3 crores in Q1 FY24.
Q & A Highlights
Q: Out of the INR166 crores presales in Q1, which major projects contributed the most?
A: Major contributions came from Arihant Aalishan (INR19-20 crores), Arihant Aspire (INR30 crores), and Arihant Adarsh (INR38 crores). These projects collectively contributed INR88 crores, with the balance distributed among other projects. - Parth Chhajer, Whole-Time Director
Q: Despite a 32% Y-o-Y decline in presales for Q1, how is the market shaping up and what is the demand outlook?
A: The first quarter was slightly lower, but from June onwards, presales have strengthened. With new launches in Q2 and Q3, we are confident of meeting our growth estimates of 25% CAGR. - Parth Chhajer, Whole-Time Director
Q: What is the expected realization per square foot over the next two to three years?
A: We expect the average realization to be between INR6,000 to INR6,500 per square foot. This is an increase from the previous average of INR4,500 to INR5,500. - Parth Chhajer, Whole-Time Director
Q: Are there any plans for expansion in Jodhpur?
A: No current plans for expansion in Jodhpur. Our focus remains on expanding in the Mumbai Metropolitan Region (MMR), particularly Navi Mumbai, and exploring opportunities in Thane. - Parth Chhajer, Whole-Time Director
Q: What is the guidance on EBITDA margins for this financial year?
A: We expect an increase in EBITDA margins from the previous financial year, maintaining or slightly improving from the 22.5% to 23% achieved last year. - Parth Chhajer, Whole-Time Director
Q: How has the response been to the launch of Arihant World Villas?
A: The launch has been promising with good acceptance of the design and location. We are still in the launch phase and expect strong numbers by the end of the quarter. - Parth Chhajer, Whole-Time Director
Q: Are there any plans to reduce debt, and what is the target debt-to-equity ratio?
A: Debt is expected to increase to support new projects and annuity assets. We are comfortable with a debt-to-equity ratio of up to 2:1. Currently, the ratio is around 0.7:1. - Parth Chhajer, Whole-Time Director
Q: What is the completion timeline for ongoing projects?
A: We expect to complete Phase 1 of Arihant Aalishan, Arihant Aspire, Phase 2 of Arihant Aarohi, Phase 3 of Arihant Anmol, and Phase 4 of Arihant Aloki this financial year, delivering approximately 1,500 units. - Parth Chhajer, Whole-Time Director
Q: Can you provide more details on the deal with Taj Hotels and the redevelopment project in Thane?
A: The deal with Taj Hotels is a management contract model for a 221-room hotel in Chowk. The Thane redevelopment project is still in due diligence, but it is expected to be a high-value project. - Parth Chhajer, Whole-Time Director
Q: What are the presales expectations for the next two to three years?
A: We aim to continue growing at a 25% CAGR. The upcoming airport operations could further boost presales and prices. - Parth Chhajer, Whole-Time Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
