Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nirlon Ltd (BOM:500307, Financial) reported a total income of INR163 crores for the quarter, marking an 8% year-on-year growth.
- The company's EBITDA for the quarter was INR131 crores, also reflecting an 8% year-on-year increase, with strong EBITDA margins of 80.55%.
- Profit after tax for the quarter stood at INR57 crores, showing an 8% year-on-year growth, with a PAT margin of 34.77%.
- The average occupancy rate for Nirlon Ltd (BOM:500307) was stable at 99.8% for the second quarter, indicating strong demand for its properties.
- Nirlon Ltd (BOM:500307) received recognition by being ranked second in the GRI India Awards 2024 in the Sustainable Project of the Year category.
Negative Points
- Morgan Stanley has given notices to vacate approximately 195,000 square feet, which could impact future occupancy rates.
- The company has only agreed on terms for relicensing 139,000 square feet of the vacated space, with no final agreements signed yet.
- There is a three to four-month license-free period for new agreements, which may delay revenue realization.
- The company faces uncertainty regarding the Supreme Court ruling on GST input credit, which could affect financial outcomes.
- Nirlon Ltd (BOM:500307) has limited options for increasing its area, which could constrain future growth opportunities.
Q & A Highlights
Q: Can you provide details on the relicensing of the 139,000 square feet and the rental rates?
A: We have agreed on terms for the 139,000 square feet, but the final legal agreements are not yet signed. The average rental rate is between INR165 to INR175 per square foot per month at 80% efficiency, with a three to four-month license-free period. The standard terms include a three-year, 15% escalation clause. β Kunal Sagar, Executive Vice Chairman
Q: How does the Safari retreat ruling on GST input credit affect Nirlon Ltd?
A: We are aware of the Supreme Court ruling on GST input credit and have taken steps to position ourselves to benefit if eligible. However, the issue is still playing out in court, and we will wait for the final ruling to determine if we can avail of the credit. β Rahul Sagar, CEO and Executive Director
Q: What is the year-on-year appreciation in rental rates?
A: The appreciation varies depending on the base rate and specific circumstances. It can range from 5% to 20%. Overall, the trend has been positive, with strong demand continuing. β Kunal Sagar, Executive Vice Chairman
Q: Is there any update on the space vacated by Morgan Stanley?
A: Morgan Stanley has given notices to vacate approximately 195,000 square feet. We have agreed on terms for relicensing 139,000 square feet, and there is consistent interest in the remaining space. The notice period is still ongoing for most of these spaces. β Kunal Sagar, Executive Vice Chairman
Q: Are there any plans for increasing the area or restructuring the company?
A: While there is limited scope for increasing the area, we focus on restructuring to create a win-win situation for all stakeholders. We appreciate the support and positive feedback from our investors. β Rahul Sagar, CEO and Executive Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
