Arvind Smartspaces Ltd
NSE:ARVSMART
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Arvind Smartspaces Ltd
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Ladies and gentlemen, good day, and welcome to Arvind SmartSpaces Limited Q1 FY '23 Earnings Conference Call. We have with us today on the call Mr. Kamal Singal, Managing Director and CEO; Mr. Ankit Jain, Chief Financial Officer; Mr. Avinash Suresh, Chief Operating Officer; Mr. Prakash Makwana, CS; and Mr. Vikram Rajput, Head, Investor Relations. Please note that a copy of disclosure is available on the Investors section of the website of Arvind SmartSpaces Limited, as well as on stock exchanges.
Please do note that anything said on this call, which reflects the outlook towards the future, which could be construed as a forward-looking statement must be reviewed in conjunction with the risk that the company faces. [Operator Instructions] Please note that this conference is being recorded. With that, I would like to hand the floor over to Mr. Kamal Singal for his opening remarks. Thank you, and over to you, sir.
Thank you. Good evening. A very warm welcome to everyone present on this call. Thank you for joining us today to discuss the operating and financial performance of Arvind SmartSpaces Limited for the quarter ending June '22. We believe you must have got a chance to go through our revamped earnings update uploaded on our website and stock exchange.
I would like to begin by sharing my thoughts on real estate environment and broad highlights of the quarter. And then we'll have an opportunity to take questions from all of you and suggestions as well.
While we remain watchful of the global risk, including the economic slowdown, which is happening in the United States, Europe, et cetera, and also the geopolitical issues arising from the Russian and Ukrainian standoff, the impact of global economic headwinds on the Indian economy is yet to play out. Though inflationary trends have led to increased repo rate and higher prices, housing demand remains very strong across cities and product segments, which basically highlights the sustainability of the upcycle that we are seeing in the Indian housing sector to continue.
And this upcycle is here to stay, in my opinion, unlike many other western countries the demand for housing in India is strong, very genuine home buyers, and it is not speculative in nature. The demand for housing continues to be both from the first-time homebuyers, as well as from the buyers who are basically moving up the ladder and generally trying to upgrade their houses.
The tailwinds for the real estate and especially organized branded [Indiscernible] are [indiscernible] including very steady rise in income levels, wealth effect, joint family nuclearization, increasing share of household savings being directed into home purchases and the downfall of Tier 2 developers ecosystem with the GST and demonetization, et cetera because [indiscernible] economic push that government gave.
With the government's focus on reforms to tighten the monetary policy and the economy, we can look forward to an even stronger real estate sector in the future for sure. We believe that it is a great opportunity for brand like Arvind with a legacy of more than 120 years of trust, accountability and impeccable corporate governance standards. The formalization and consolidation of real estate industry, coupled with a very strong balance sheet that we have with significant headroom to raise funds, which is very important to know that we've got very, very significant headroom to raise funds and an extremely strong execution record, I mean all these efforts put together put Arvind into a unique position to deliver great value in times to come.
We continue to evolve as an exemplary customer-centric technology-driven solution provider with design and innovation at its center.
Coming to our comments for financial year '23. Coming to our performance, FY '23 has started on a very, very healthy mode for ASL which is basically continuing on the momentum achieved in the last financial year into Q1 of financial year '23. These were our best ever Q1 from booking perspective. Booking for the quarter grew 8% year-on-year to INR 118 crores and -- INR 118 crores in Q1 '23. Collection improved by 12% year-on-year at INR 133 crores, reflecting our continued focus on execution. We have taken measures like increasing price across projects, which were absorbed well by the markets. These highlights have improved salability of our projects and the rising brand equity of Arvind in the real estate space as well.
We are happy to announce that we have added a new project in our portfolio. This is our 14th project in Gujarat, a 44-acre plotting development in Bavlu Village in the outskirts of Gandhinagar with approximately 2 million square feet of salable area with a top line of INR 150 crores. This will be an outright purchase of land deal, and it should be closed somewhere by the end of next quarter.
While we are on the subject of business development, I would like to apprise everyone that we have exited the Bhugaon project in Pune due diligence process -- during the diligence process due to technical feasibility challenges. As a group and a company, we place high importance to transparency. And we had discussed this project earlier, and we have told about this project to everybody. However, due to the technical reasons and approval issues, so we have decided to exit this project.
To mitigate this, we have already taken some active steps to fulfill the project pipeline gap created by this exit. Nevertheless, our focus on Pune market as a market remains very, very strong, and we continue to evaluate more alternatives and [Indiscernible] . The company is rigorously working on extending the project pipeline across Bengaluru, Ahmedabad, and Pune of course, including MMR in the future months.
Moving from operational update to the financial highlights. In Q1, we reported revenues of INR 60 crores, up 124% on a year-on-year basis. EBITDA for the quarter grew by 31% to INR 11 crores. PAT for the quarter grew 190% to INR 7.2 crores. Our balance sheet position remains strong. As of June 30, 2022, our net debt remains negative at INR 92 crores.
I'm very excited to share a very significant development, which has taken place today. The company Board has approved a creation of INR 900 crores worth residential development platform with HDFC Capital Advisers. The proposed investment is such that ASL and HDFC comes in or invest INR 300 crores and INR 600 crores, respectively in this platform. This platform builds upon the success of the previous platform with HDFC Capital, settled in 2019 just before COVID. And these people have capital-investment abilities in short term to medium term and intend to create significant value for the shareholders.
The fund will be utilized to acquire new projects for residential development in the cities of Ahmedabad, Bangalore, Pune and MMR. ASL will set up a separate SPV to house the projects under this platform. That's the proposal.
The platform will create an overall revenue potential of anything between INR 4,000 crores to INR 5,000 crores, excluding the investment potential. We are already in advanced stages of finalization of 2 projects, which are expected to be housed using this platform. And we further expect 4 to 5 such projects under this platform over the next 12 odd months. The platform is designed to generate a significant upside to its sales linked to project performance. And while -- I mean, of course, this will add to a project pipeline in a very significant way. And at the same time, we should be able to manage the risk profile of the balance sheet in a very efficient active way.
To sum up, we have the sustained traction in volumes from a range of projects across locations in Ahmedabad, Bengaluru and Pune, we are very well [Indiscernible] towards this year. This will be supported by both the sustained sales traction in current projects, as well as new launches that are planned over the next few quarters in Ahmedabad, Gandhinagar and Bangalore. The real estate macro environment remains intact, optimistic and rather buoyant. The company is focused on capitalizing on debt opportunity and boost the growth momentum in the ongoing year on our business development launches, booking, collections, et cetera while maintaining a very, very strict financial discipline.
With a strong brand, solid balance sheet, significant headwind to raise funds and a strong execution track record, the company is well-placed to create sustained value for its stakeholders. Thank you very much. And now we can move on to question-and-answer session, and we can take questions.
[Operator Instructions] The first question is from the line of Kirti Jain from Canara HSBC.
My question is with regard to our 2 Bangalore projects, Devanhalli and Sarjapur. What is the progress? And how close are we to launch these in the current quarter?
So these 2 projects are progressing very, very fast. As you know, land acquisition has already happened. In Devanhalli, for example, is a project where land acquisition is done for Phase 1, et cetera. And it will be, of course, launched in a couple of phases as approvals come. So we're making bundles of land, getting the approvals for the minimum lot and launching it, and then subsequently, we'll keep adding more land, which is already purchased. But the approvals are happening in sequence and that's how it will be launched.
So as we speak, we are very close to launching the project in Devanhalli. Approvals are about to be completed. Maybe we've covered up 95% of the process. Land [Indiscernible] ex cetera is already done. Plan approval is almost about to be completed. And last, which is left subsequent to that is RERA approval, which normally takes a month's time or so. So we are hopeful that, that will go within this quarter or maybe very, very early next quarter, we should be able to launch Devanhalli.
And situation in Sarjapur is also similar, a little behind Devanhalli. But per se, the agreements and JVs, et cetera, et cetera, are all done. Most of the land is already converted into [Indiscernible] agreements, et cetera. So that's the major part When it comes to overall time lines of a project launch. Now the final touches are been given to the plans, the architectural aspects of it. And subsequent to that, maybe this project should be getting launched after Devanhalli, maybe 1 month, 1.5 months behind Devanhalli.
We will move on to the next question. That is from the line of Rithvik Sheth from One-Up Financial.
Sir, a few questions from my end. Firstly, on this fund with HDFC. So our economic interest will be 33%? Is that understanding right?
See, this is obviously our third engagement or partnership with HDFC Caps. The first was under the HCARE-1 fund. Through that fund, we invested in this Devanhalli project, which is essentially that platform project that we just talked about. The second engagement because by the time we could invest more, COVID struck, and the funding actually kind of took a halt, but still the fund invested at the entity level in that case. And we got INR 50-odd crores invested by the fund at the entity level itself that took back equity into the company. And this is now the third arrangement that we are talking about, which is also a very, very significant size, a larger size than the previous one. So the partnership goes from x to y, which is significantly higher.
Because the terms are yet to be signed and this should happen in next few days, we shall be in a position to share more details about that once that process is completed. Today, the Board has approved the continuity of this potential partnership, and that's what we have been excited about sharing with all of you. But we'll definitely come back to you once the process is complete, which is a few days away from now.
Sure. So the thought process is, put in equity of about INR 900 crore.
Sorry to interrupt sir. Sir, Can you speak a bit louder? We're not able to hear you.
Sure. Is it better?
Yes, better.
Yes. Okay. Sorry. Sir, the thought process would be that both entities will put in INR 900 crores and then leverage that to some extent and acquire projects which are stand-alone balance sheet on the size which we could not do. So this will help us to increase the size of the projects as well, right?
Absolutely. So as you would have read through the communication that we have made, this is going to be INR 900 crores platform. We are creating an SPV for this specific purpose. All the projects which we take where we co-invest will be housed under that new SPV. And of course, this gives us not only the dry powder required to take more projects, but as you very rightly said, this also gives us more strength to take a bigger, more value-creating projects at a location, which until today we have been restricting ourselves to a certain extent. But definitely, even that aspect gets debottlenecked, and we have more opportunities to find more valuable lands in that context.
Right. And so since Arvind SmartSpaces, would you be developing the company for that, we would be getting some kind of fees and some project management services fees as well, right? Would that be a fair...
Naturally, naturally. For a developer, there has to be more than what developer investment in any arrangement. So that asset has to have for us to be there. And that's what we look forward to when we get into such arrangement. And that obviously is going to be something which is important to us. And that's what is going to be happening eventually.
Right. And when do we expect to include this INR 300 crores from our end? Is there any time line? Or...
No, this is simultaneous. Infusions will happen simultaneously. For example, suppose we acquired a project which is worth INR 100 crores, then only 1/3 of that, INR 33 crores [Indiscernible] will come simultaneously at the time of acquiring that project. So it basically is simultaneous to when the accretion happens and both partners in their own ratio 2:1 will invest. We have, of course, some [Indiscernible] something that is already there in the sense of availability et cetera.
Right, right. This is encouraging, sir. This platform is getting leveraged after 2, 3 engagements with them, right. So my next question is on the Pune project. What was the hurdle that we could not clear or the landowners could not clear that we stepped aside? And did we lose any money on this, any deposits or any advances that...
No, no, absolutely, not. We don't get into any arrangement where we have a potential to lose money for sure. We'll do documentation, right. We did pay some little amount of maybe a couple of crores, INR 4 crore there, and we've got the money back. But the reasons were regulatory, the reasons were related to some of the approvals of height, et cetera. The whole thing was not making that sense that we assumed at the time of acquiring the project, and it came out that [Indiscernible] make the land less attractive and hence we decided to exit that project.
Sure. Okay. And sir, my next question is on our existing projects. So what is the construction cost that is yet to be spent on the existing projects?
I'll ask Ankit to share that number.
If you could refer to the Slide 19 of the information update, it has all the operating cash flows, which stops not at the project level, but at the category of the project in terms of completed, ongoing and yet to be launched. It gives the balance cost to be incurred for the company as a whole and thereby arriving at the estimated operating cash flow, which is at the EBITDA level for the company as a whole.
Okay. Sorry, which slide is it?
Slide #19, 1-9.
Okay. So yes, yes, there is a balance cost in there. Sure. Okay. And sir, my last question is, can we expect entry into MMR market in FY '23?
So MMR, which we read along with Pune, definitely, one of our new focus area. We have been doing a lot of scanning of the options available there. And that's how we came across Pune also, which is the second project. One is already underway, as you all know. But -- and the second couldn't happen because of the technical reasons, but we clearly have a focus. And our idea is to start MMR for sure with this -- under this project -- I mean, under this platform itself. So definitely, within this year we intend to have something going on either in Pune, in addition to what we're doing or in MMR which should lead together as such.
The next question is from the line of Kirti Jain from Canara HSBC.
Sir, my question was with regard to the capital allocation. So currently, we have INR 90-odd crores in our balance sheet, then we will be generating surplus as we complete our projects and recognize the profits and cash flows of that. So cash balance will further get accreted, and then we have an unlevered balance sheet. So all these 3 put together we will have INR 600 crores, INR 700 crores of resources. Then there is a HDFC platform also. So how will be the priority where the capital will be taken and how it will be put, sir?
So you read it right, including the leveraging capability and the headroom which exists, numbers are broadly what you said. And HDFC platform means that from the funds and the headroom that we have around INR 300 crores need to go on the platform itself. So maybe something like a 50%, 60% of the internal resources that we have or we could mobilize go towards the platform arrangement. So the platform becomes 900 in total. And then we still have -- obviously have some sort of another arrangement with a similar fund, all we do on our own, et cetera, et cetera. But the first priority will be to deploy these first INR 900 crores under the platform.
And the clear focus is that in the next few months, we do that efficiently. And that obviously will happen between these 3 markets that we are doing. They're not going more horizontal. We are not doing at new geographies apart from the existing Bangalore, Ahmedabad, Gandhinagar and now renewed focus on Pune and MMR market. So these 3 major geographies will remain our focus. Luxuries, of course, is broadly what we want to do. Mid-priced is something that we are very strong at. We've done quite a few projects. So that remains our priority. Of course, it will be sprinkled with opportunistic luxury ones, and that's what we continue to do. INR 900 crores first under the platform and the rest of the dry powder is still there to do a few things on our own or rather have more arrangements like HDFC 1 to multiply the investment cycle.
Sure, sir. Sir, INR 900 crore will be through outright buyouts or there will be JV, JDs also, sir?
So it's a very good question. Whatever numbers in the communication that we mentioned assumes that everything is buyout outright basis. But of course, we are free to do JDs, we are free to do JVs. In fact, we have had a strong track record of doing some very successful large JD developments and from getting those projects. This includes our largest projects like Uplands, Highgrove, Chirping Woods, Forreste V, et cetera. So we intend to definitely continue doing that. And if we do that and to the extent that we do that, the top line, et cetera, will obviously multiply, and it will also mean that return on equity, et cetera will be even higher because JDs are arrangement like that. They seem smaller. The returns, in commensurate is a little higher.
So we'll do. To be a combination, we are not trying to predict to what extent will be a mix of JDs, et cetera. But on a conservative side, if you were to just invest everything on an outright basis, this entire INR 900 crores, this gives us a potential of having a top line of around INR 4,000 crores to INR 5,000 crores. But having said, definitely this is something which is going to be coming in the form of JDs as well.
Sure, sir. Sir, then this Bavlu project is actively launched, right sir? informally launched, right sir? As of now.
Bavlu project is kind of informally pre-launch, not launched. So we have not taken formal bookings, et cetera. But we have got expression of interest from the potential customers. And we got some sort of a commitment as well from them, and it has been phenomenal. I mean, the response has been [indiscernible]. You would know that. So that's right.
Yes, it's called Arvind Fruits, right sir?
Fruits of Life.
Yes. That's what, I heard from the...Sir, just one last question sir, with permission. One thing is like, our JD addition -- there has been channels just like -- what gives you confidence that -- going forward, the BD addition can be strong sir. Like, from last October to August, there has been no BD addition, which we have been able to demonstrate in a net-net way apart from this Bavlu, which has come now. So what business -- so what gives confidence that, going ahead, BD will pick up in a very significant way, sir?
You are right. Bavlu is one project that we just added recently. And we have also extended size of some of the projects. Those details will share with you. Apart from that, there are 2 projects which should be concluded any time from now, maybe in the next 2 to 4 weeks' time, 6 weeks' time. That's the expectation.
As we speak, the entire focus of the company was BD. We just concluded this platform arrangement. And as one of the previous speakers said, it also kind of gives us an opportunity to us to look for the sizes, which are bigger than what we have been doing till date. That means that it unlocks more options for us in the marketplace. Some of the very, very successful launches that we've seen in the last 1.5 years, including Forreste, Highgrove, et cetera, et cetera. More and more landlords are showing very, very keen interest. Having said that, having fund is one thing. The other is that we need to have a very, very micro microscope, which stands to the extent we quote deals to ourselves. So we always are a little conservative. But at the same time, we are very, very aggressive in the marketplace.
The entire team is panned out in these 3 geographies. The pipeline is strong. And there are a few projects, as I said, which are coming closer and closer to the final conclusion. We'll see the results in the next couple of quarters, and idea is very, very relatively deploy this INR 900 crores. That's the key result area for the entire organization and all of us.
[Operator Instructions] The next question is from the line of Rithvik Sheth from One-Up Financial.
My question has been answered.
[Operator Instructions] The next question is from the line of Aditya Mehta from AP Advisers.
My first question is on the revenue front. On a consolidated basis, I can see the income...
Can you speak a little louder, please. Not able to hear you properly.
Sorry to interrupt, Mr. Mehta, we're not able to hear you.
Is this better?
Yes, much better.
So on the revenue front, on a consol basis, I can see the income has drastically decreased and so is the PAT. Could you please throw some light on the reasons behind the same?
Can you repeat the last bit once again, please?
Sir, on the revenue front, on consolidated statements, I can see that income has drastically decreased, and so is the PAT. Could you please throw some light on the reasons behind this a bit?
So we are recurring quarter 4 versus quarter 1 of the current year, correct?
Yes, sir.
Yes. So if you look at y-o-y, of course, [Indiscernible] has grown significantly from INR 27 crores to INR 60 crores. Now in quarter 4 of last year, which is March ending quarter, we have received the completion certificate for 2 of the projects, and hence, we see a sudden increase revenue recognition in that quarter on a stand-alone basis.
Aditya, this problem on a quarter-on-quarter basis, we generally face because of the way the accounting standard now works, a lot of revenue gets recognized when you complete a new project. SmartSpaces is a company, which is not having a very, very wide sort of set of projects at this point. And hence, there are a few peaks and troughs coming into this account. That is why we generally would focus a little more about the operation level in terms of what is the fresh booking, what are the additions to the pipeline, what are the kind of collections happening, how much is the sustainable sale, how many projects we could launch, et cetera, et cetera.
That gives a little better indication, and this peak and troughs keep coming, and that's what Ankit was explaining you that last quarter, Q4 of 2022, we suddenly had 2 projects being completed, and a lot of revenues got recognized. So apart from the peaks and troughs, broadly, the business remains robust, and we are recording very, very decent growth in all the operational parameters as we conduct our business at this point.
Okay. Okay, sir. Yes, I understand. Thank you so much for explaining it so well, sir. Sir, my next question would be on the bookings. So the bookings during the quarter remains subdued with modest 8% growth y-o-y despite Q1 FY '22 being affected by the quarter. So I would like to know the reason behind the same in parallel to that? Are there any specific reasons for the dip in the bookings of Forreste?
So basically 2 questions, one is the general booking levels. So we are into a sustaining phase in this period. So we haven't really accounted for -- we've not really launched any new projects. They are all lined up. And Q2, Q3, we hope to expect a lot of action out there. We are very hopeful that we will be able to achieve a very significant growth over the last year's numbers, which were INR 600 crores in total for the year as a whole in terms of new bookings. But of course, this quarter has been a quarter without any new launch. So this was a sustainable sale, so to say.
The second question is about Forreste. Forreste, we've launched 4 phases. And in these 4 phases, we've launched significant component already. I think more than 80%, 85% is already sold and the lesser inventory is now gradually getting liquidity. We are in the process of getting the final approvals and [Indiscernible] already approved for the Stage 5 of Forreste, which is going to be broadly the last phase of the project and a very large one. When that happens, this will mean that more inventory is made available for sale. So primary reason of it, this is not the market or not any other reason, but the inventory availability itself, we will improve dramatically once we get the last phase RERA approvals. So this should improve.
[Operator Instructions] The next question is from the line of Rishikesh Oza from RoboCapital.
Sir, my first question is when exactly are we launching Devanhalli and Sarjapur project, like by this quarter 2 end or in quarter 3? Can you please indicate?
So I think we just answered this question in the previous response. The idea is that we launch Devanhalli first, and that should happen more like end of this quarter or very, very early next quarter. And subsequent to that, Sarjapur is behind Devanhalli in terms of launch, maybe 1.5 months, maximum 2 months. So within end of this quarter, early quarter 1 project, and then by the middle of next quarter, maybe Sarjapur.
Okay. And once it is launched, would it be fair to say that we would see a very good bookings, may be above our normal run rate, which used to be INR 150 crores, INR 160 crores, maybe more than that?
Sorry, if you could repeat the question, please?
So sir, once it is launched, I'm assuming that our bookings currently -- okay, once the projects are launched, both projects, okay. Would it be fair to say that our bookings would cross INR 150 crores up?
So just 1 second. Just give me a second. So actually, when these big launches happen and the project sizes are very decent, so obviously, we expect this INR 100 crores, et cetera. That number will be exceeded a very significant margin because this will be a new launch sales. The current sale of INR 118 crores is broadly the sustainable sales. Of course, these should be over and above these kind of numbers. The new launched sales.
Okay. And sir, if you could give any broad revenue execution and EBITDA margin guidance for this year?
We don't give guidance on the margins, et cetera. But I think we have shared quite a few details in our investor presentation. There are quite a few data points out there, which should help you in understanding the overall product mix and segment mix, et cetera. If you need any more clarification specifically on any of the data points, you can always get in touch with us, and we'll try to help you to the extent possible.
The next question is from the line of Chaitanya Shah from Silver Line Capital.
My question is on Aavishkaar project. Your presentation mentioned that there's still around 2 lakhs square feet of inventory to be sold and this is a part of a completed project. So just wanted to understand why is there a significant amount of unsold inventory still left. I mean, are we facing some problems in selling this project?
Yes, Chaitanya, thanks for your question. Great question. Aavishkaar is one of our projects with that ultra-low-cost segment. The product there is priced somewhere around INR 25 lakhs to INR 30 lakhs. So the lower price [Indiscernible] anywhere in our credit portfolio till date. The project is a beautiful one, and it caters to the segment of society which possibly needs the housing the most.
While in the same velocity has not been as great as what we would have liked it to be or what we've been achieving particularly in every other project, but at the same time, despite challenges, this project was sold almost by 2/3 by the time the building came up and the project got [Indiscernible] point of view. We've just started handing over, and we are very hopeful that the velocity should improve from here onwards, [Indiscernible] something where people can start funding and then living there.
The other reason or plausible explanation to this could be that COVID affected the lower strata the most. Even the interest rates affected the lowest strata the most. And this is one of our rare projects which happen to be in that segment of ultra-low cost. The rest of our entire pipeline of whatever projects we are doing in any of our cities are either midsized or upper midsize. So they start something like of INR 50 lakh to INR 60 lakh, or INR 70 lakh onwards, 2 BHKs; and 3 BHK, which are more like INR 1 crore. And then we have a luxury portfolio, which starts from something like INR 2 crores to INR 10 crores INR 15 crores. This was the only exception.
So there have been challenges, COVID has affected this segment a little more. But fortunately for us, we've recovered mostly our costs, et cetera. We sold 2/3 of it and velocity should increase. But having said, this is not our core sector, and we are really focusing on midsize affordable housing rather than ultra-low cost affordable housing. That's where we're active.
Okay. And Also, I was expecting more of the revenues to be -- the booking value to be recognized for Oasis and Aavishkaar, but only a small portion has been recognized even this quarter. So I just want to understand why was that?
So Ankit will give you the explanation of accounting. Ankit, [Indiscernible].
Yes, sure. So both for Oasis and Aavishkaar, there are certain payment plans, which are linked to handover of the units. So we are expecting those collections as soon as we hand over these units in the coming months to come. And because the [indiscernible] received recently, the project's final commissioning stages are almost near to completion, we are starting -- we have already started the process of handover for these units. So as soon as the handover is done, then we expect these units to get clear. And secondly, from a bank's funding perspective, the bank disburses the last leg only when the final handover or the possession letter is given to the customer.
So in a nutshell, Chaitanya, if I were to rephrase or restate what Ankit said, the final recognition happens with the receipt of final 5-odd percent at the time of handover. And when the project gets ready, normally, people take a little longer to react and take possession because they have to top up 2 things. One is this 5%, the other is 6 odd percent of stamp duty, which is a little bit of a strain.
So it takes a little time before customers start taking aggressively reparations. And hence, there's always a lag that we've seen that the time when the handovers will pick up and the time that the [Indiscernible] has come, there's always a lag between the 2, and this is possibly the lag. We should plug this gap very quickly. And of course, we are putting quite a bit of effort for people to come forward, and get the sales deeds done, registrations done. The moment that happens when we receive the final payments, recognition happens. But of course, this is a little slow, basically handing over the apartments to the clients, and this should pick up.
Understood. And the latest addition, the Bavlu, Gandhinagar project that you mentioned, do you expect it to -- do you expect to launch this -- in this financial year itself or will it spillover to next financial year.
No, no, no. This financial year for sure. I mean, next quarter it should be all done.
No, I'm talking about launching the...
Yes, yes, yes, launching, of course.
Ladies and gentlemen, that is the last question. I now hand the conference over to Mr. Kamal Singal for his closing comments.
Sure. On behalf of all of us, thank you very much, everybody, for participating in this earnings call of Arvind SmartSpaces, for your continued support and attendance. I hope we have been able to address most of your queries. However, if we have missed out on any of your questions, kindly reach out to our Investor Relations team, and they will connect with you offline.
Speaking of the Investor Relations, Vikram Rajput who is there in our call at this point, has joined us as Head of Investor Relations. He brings with him extensive knowledge of public equity markets and proven experience as an Investor Relations officer in the estate industry. We look forward to working closely with him and further enhance our engagement with the investors and financial community. We wish him very best in his role. I look forward, and thank you very much once again for your participation. Thank you.
Ladies and gentlemen, on behalf of Arvind SmartSpaces Limited that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.