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Arvind Smartspaces Ltd
Earnings Call Analysis
Summary
Q2-2024
The company anticipates a robust launch pipeline with 4 to 5 products in the financial year, potentially adding INR 1,700 to 1,800 crores to the top line. They are on track to deploy an additional INR 750 crores, part of an INR 1,000 crores investment plan, with over 30% from their own funds. Historically, the company has achieved PAT margins of 11% to 20% and EBITDA margins of 26% to 27%, and they optimistically foresee maintaining such differentials.
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Ladies and gentlemen, good day, and welcome to Q2 FY '24 Earnings Conference Call of Arvind SmartSpaces Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Amit Sharma from Adfactors PR. Thank you, and over to you.
Thank you very much. Good morning, everyone, and thank you for joining us on the Q2 and H1 FY '24 Results Conference Call of Arvind SmartSpaces Limited. We have with us here 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, Company Secretary; and Mr. Vikram Rajput, Head of Investor Relations.
Please note that a copy of the disclosure is available on the investor section of the website of Urban's past Spaces Limited as well as on the stock exchanges. Please do note that anything said on this call that reflects the outlook towards the future, which would be construed as forward-looking statements must be reviewed in conjunction with the risks that the company faces.
I would like to now hand over the call to Mr. Kamal Singal for his opening remarks. Over to you, sir. Thank you.
Thanks a lot, and a very good morning to all of you who are present on this call. Thank you for joining us today to discuss operating and financial performance of Arvind SmartSpaces for the second quarter and also for the half year ending 30th September 2023. Diwali is around the corner, and I wish you all a very, very happy Dipawli and a prosperous New Year. And my wish also are there for the Indian Cricket Team. I hope the boys the boys lift the trophy once again in the second half of this month post Dipawli.
I would like to begin by sharing my thoughts on the real estate environment and broad highlights for the quarter, and then we'll look forward to your questions a little that you wanted to ask. The Indian real estate industry part is filled with promising potential detonate let's see we touch a $1 trillion market to 2030. And this is sold as a major contributor to the relations economy. The industry is harvesting the power of technology and in sustainable practices and that into the other evolving market dynamics. The Indian real estate market has entered a circle given the factors like increase affordability raining salaries or stabilizing of moderates, et cetera, et cetera. this perspective to persist over the next few years, we expect will sustain MD-level of demand across various segments of lease industry. every medicine countries experiencing very, very obvious demand and high volume of sales are forming the industry is improving outlook in general. This is especially true for progressive and branded players in the industry. very good business practices in volume such as an list.
Both government and real estate developers are taking to 3 measures to expand availability of quality leading spaces within consumers and in general. Consolidation -- sorry, conformation scaling our et cetera, are some of the pieces of the subcycle, which is separating the meeting shaft. And leaders like gestates are driving very robust business development seeing a pickup in launches growing cash flows, diversify across products in Montreal market, our share gain, et cetera, and delivering sustainable growth in the medium and long term.
At Arvind SmartSpaces, our possibility of what goes beyond very shows it goes deeper into design aspects, specialization of changes, leading habit to create an optimal experience to our consumers. This has in turn supported our objective reach the gap between what the consumers want and what the deeper are looking to supply. As a result, our business model is in sustainable growth while using organizational resources optimally to cut here turns and cash flows. Coming to the quarter, in Q2 24, we have indeed witnessed outstanding results. Our sales has held to new hikes registering a remarkable 95% year-on-year growth for the quarter, reaching an impressive INR 69 crores for this quarter. This substantial growth can be largely attributed to successful launches during the quarter. These new launches have not any strengthened our feet have also set a new milestone for us with quarterly sales costs mark for the very first time.
One of the standout achievement of this quarter was the introduction of [indiscernible] at Village called Agoda in South Ahmedabad. There will be quite a bit of work in West and North Ahmedabad, but this is our first period in South and hence, it's all the more important. The response from our customers, there's nothing short of exception. We managed to secure a core industry selling out the entire Phase 1 of this project in 3a. This encompasses approximately more than 4 million scale feet or rate development. This is a clear indication of the trust and the compilation of the times had in our plan and the quality of our offerings. We're also happy to report that our collections during the quarter, this is a new milestone. We recorded highest ever quarterly collections with substantial 133% year-on-year growth amounting to INR 263 crores for the quarter. This is given the specially significant as it marks the highest quarterly collections for the fourth consecutive quarter. This then understood our ability to maintain a strong operating cycle, aligning our sales, construction and delivery process effectively.
Furthermore, we look -- when we look at the overall performance for the quarter or for the first half of this fiscal year, we have achieved a record rating half-yearly sales, which exceed INR 500 crores and to be precise for INR 504 crores, which represents a remarkable 64% year-on-year growth. Additional year half collections have also reached an all-time high, standing at INR 467 crores and showing a substantial year-on-year growth of 90%. We have also achieved an important milestone by successfully concluding first platform with HDFC capital advisers through [indiscernible] on delivered a strong return in 2.5 years of its operation. And we are delighted about the quality impact has had on our stakeholders.
In addition, from the -- in addition, from the operating standpoint, we've expanded our footing by acquiring a new residential high port in Bangalore. The port is located in [indiscernible] and marks our geographic expansion into the city and the key market of [indiscernible]. This growth a top line of around INR 400 crores further in machine or redevelopment potential. With this addition, our total business development potential for the financial year now stands at an impressive INR 800 crores for the year. We remain on track to meet our goal of industries within INR 1,000 crores, making this a recorder for our new project pipeline.
Now moving from operational date to the financial highlights we have reported a revenue of INR 140 crores, up 26% on a year-on-year EBITDA pre grew by 73% to INR 36 crores, PAT grew 38% to INR 17 crores. And in Q2, [indiscernible] revenue of INR 73 crores, up 34% year-on-year and EBITDA grew by 17% to INR 20 crores. That for the quarter grew 9% to INR 900 crores for the quarter. Our balance sheet position remains very strong despite expanding operations. net debt decreased to INR 141 crores means we had success of INR 141 crores in the balance sheet as on 30th September 2023, from a net debt of around INR 87 crores minus negative, which existed at on 30th June 2023. A crucial parameter industry reflecting the under-and business performance quite well with the operating cash flows. During the quarter, operating cash flows amounted to INR 60 crores. And we closed the quarter with a net cash position of INR 26 crores. Operating cash flows during the first half stood at INR 271 crores. This means [ INR 150 crores ] for this current quarter and INR 111 crores together this number stands at [ INR 217 crores of ] operating cash loss that we can redo due this year as a whole in the first 6 months. We estimate of an unrealized operating cash flow [indiscernible] INR 2,205 crores from the holding project pipeline. As you would have noticed in our presentation, we have very recently launched surprise we've been talking about in the last few calls. The quantity is named sales. This is a premium [indiscernible] project with [ 1.2 ] of for sale for bottling [indiscernible] of the fines of or formalities for the micro market and in general. We look forward to give an exceptional experience to our customers in danger. And this is our biggest while [indiscernible] in of the park.
To conclude, real estate industrial demand by dynamics remains very, very robust. The overlying trends of consolidation and corporatization is further enhancing the outlet for branded players. Our diversification efforts spanning both horizontal and vertical developments in Bangaluru and Ahmedabad are making very, very good progress. We tended to expand these our key attributes to Pune in MMR as well with a focus on growing presence in these new markets. With a strong brand expanding geographical footprint, innovative product portfolio, total capital allocation, a very strong balance sheet with a very significant headroom to advance real capital further and a commitment to operating excellence among the government structures that we have in place already. Arvind SmartSpaces is well positioned to sustain its part of profitable growth. We are progressing well to end the year on a very strong month with a few of launches in pipeline.
On that note, I'll conclude my remarks, opening remarks, and I would now like to ask the moderator to take over and open the Q&A session.
[Operator Instructions] We have a first question from the line of Biplab Debbarma from Antique Stockbroking.
[indiscernible].
Apologies. Sir, we cannot hear you clearly. Can you use your handset, please?
Am I audible?
You are a little better, but maybe could give me a little more better.
Okay, sir. My first question is on the launch pipeline and business development by [indiscernible]. Can you give us some color on where are we in terms of ancient again and business development, how much -- what is the business for us in this [indiscernible].
I'm sorry, you sounding muffled Mr. Debbarma.
But I think -- I guess I could still hear here the question and understand what exactly respective here. If I may replace the question for everybody. Biplab is basically asking for the launch plan from here onwards for the rest of the year. So Biplab, thanks for joining and very good morning. Our launch in the remaining part of the year is loans very strong. We are hoping that anything between 4 to 5 predicts will be launched during this financial year. And these 4 to 5 products should carry our top line potential of around INR 1,700 crores to INR 1,800 crores in total. So this is a launch that we are very hopeful that we should be able to bring to the market in the next 6 months' time.
Where are in terms of business development because I believe in the platform, we have point a significant like around INR 700 crores, INR 600 crores to be declined. And do you think in the second half of the financials we are going to be able to deploy that amount?
Yes. I mean the second part of the question, obviously, was related to the BD side of it. This year has been a very, very strong year in terms of BD almost [ INR 2,800 crores ] of new project pipeline already. Then many of the projects that we've taken out of the INR 800 crores of in has come to JD rooted hence, that means that we have not really consumed our surpluses and our platform money significantly. As we speak, we are yet to deploy INR 750 crores, which is available kind of on a for the rest of this year. And we are very hopeful that within the next 6 months or 5 months, which are left in this financial year, this additional INR 750-odd crores will be invested and that marks the completion of our INR 1,000 crores overall investment plan that we had in the beginning of the year. So we are very well on track, and we are very hopeful that this remaining INR 750-odd crores will be deployed in the remaining part of this year.
That's great. And my final question is on collection and strong operating cash flow. It's been the -- trend is really very strong. It is growing what kind of just trying to [indiscernible]. Is this strong cash flow and collection, definitely, you have a good sales number, but it is because also that our -- so far our projects [indiscernible] horizontal where -- and the same is project has been a all for similar sales velocity, the collection and operating cash flow, we have been a bit more moderate than what we explained. Is it -- I'm just trying to -- is it because of I know -- is it mainly because of the projects we are doing, which is a [indiscernible]?
So a very good question. I mean if I have listened the question right and your voice remains a little problematic. But the question is what is the trend going forward in terms of the strong cash flows and is these very strong cash flows also a function of product mix and his original strategy helping the cause of cash flows? So yes, I mean, the cash flows have been very, very healthy. For the first time last quarter, we had more than INR 100 crores of net cash coming from operations. And then this quarter is even better and it's INR 260-odd crores for the current quarter. So that means almost 270 crores plus have been generated from the operations. Now where this cash comes from, obviously, it is a function of how the products are launched and how when these were selling velocities. So these are obviously always the time drivers. And they have somehow tried we saw quite healthy in various product categories that we are operating. There are also healthy cash flows coming from established projects like [indiscernible], et cetera, where sales is happening or the realizations that have been happening nicely out of the sale that happened in the past. But as you also very rightly mentioned, a significant portion of cash flows and improved cash flow is also a result of our strategy of horizontal development and large 3 to 4 projects which we launched, not we did sell very well, but also because of the very nature of the project cash flows were front-loaded, and they always are front-loaded, and that has helped the cause as well. But I mean, original doesn't mean only in originally sporting origin small villas, row houses, and luxury villas and luxury row houses, et cetera, in [indiscernible] this quarter, we've just relaunched [indiscernible], a very large 1 when it comes to this kind of a project with quite dense [indiscernible] the cash flow initially and throughout the project will be very healthy. We obviously opposed to convene but we are working -- once that is then, of course, that remains the prime driver. Our cash flows are supposed to be held as well. product base and everything else has contributed. And of course construction you still have to achieve certain milestones to get this kind of cash flow that we're talking about. So I think everything is fired, product which is the right product mix as well. And these 3 factors are helping cash flow [indiscernible].
We have a next question from the line of Dhananjay Kumar Mishra from Sunidhi Securities.
And a very excellent set of numbers as well as operating performance. Sir, my question is that we have done very well in terms of launching very quickly of the current project we have acquired, and that is about [ 4 million ] we could sell immediately. So how long it will take to complete? Because at the momentum, I guess, because we are in shorter development. So is it possible the entire thing in terms of cash flow will be happening within 1 year from this project? And secondly, you also -- you indicated that Sarjapur already pre on stay. So what is the response in terms of booking and all [indiscernible]?
So I mean, normally, if it is a pure stocking project, it takes anywhere like 1.5 years and thereabout to realize the money. And that is what is expected as far as this project is concerned. Of course, this project has multiple phases. All we sold is Stage 1 of it, but there is still very significant potential less, and we are right now preparing to launch more phases and sell more out of the same project. But generally speaking, our plotting project will have a lifespan of around 15 to 18 months, maybe 20 months of time to realize the cash flows....
Project that [indiscernible].
Yes. As this is a very large project. This is -- we are talking about 200-plus [indiscernible] in and golf course and a very large resort is coming up there. So quite a bit of development work is required. These are very, very highly amenitized e-class infrastructure with resort and all, et cetera, things. So they will take to complete, it will take 2.5 to 3 years' time. But to realize whatever we are selling right now, most of it maybe 85% to 90% money almost 18-odd months time, when we sell these products at. So that's how we in shaping up. Forreste, you said -- yes, we just announced, we just relaunched after this quarter. We just have started building the market making with the channel partners, et cetera. Initial response has been absolutely great. And the early signs are quite good and very happy about with what we're seeing right now. But we come out with the numbers, and that will happen sooner than later.
Ideally, it should come in Q3. I mean, so both...
No Q3 -- I mean, yes, you will see numbers coming in Q3 for Sarjapur already kind of relaunched and market building in saliva started. Just now it's not a formal sales, but at least when I see have started already. And we speak, there's a very hectic activity and a lot of reps on the site happening. So yes, I mean, definitely, you'll see some numbers coming in Q3 for this project.
And secondly with the HDFC platform investment, as you said that INR 150 crore to be deployed. So what could be the revenue potential, I mean if you -- because you are having just 4, 5 months, so you must have identified in terms of horizontal or vertical, what kind of projects are there. What could be the revenue potential we can create from this revenue [indiscernible]?
I mean, as a rule we can talk really vary from product to quarter and category to category. Investment to top line ratios change magically between, say, a plotting project and a build up high apartment project. But nevertheless, if you would just average quite a few things out, our INR 700-odd crores should mean a INR 3,500-odd crores of top line on a very, very low average basis, taking both these products team sites together. And as you know, I mean you would know that INR 3,500 crores will be what kind of EBITDA et cetera, et cetera out there. So this is what it is from the fresh investment standpoint. But obviously, our investment or rather a pipeline, we have 2 components. One is the outlet that is projects, which is these numbers, [ INR 735 crores ] of top line. But in addition to that, we should also be adding our healthy component of JD, which requires significantly less money in proportion to the top line and the bottom line that it generates. In fact, as we just mentioned, the first INR 3,000-odd crores of that happened this year, INR 2,800 crores would be more precise, but very significant compare that has come from the JDs. And that means we still have a lot of money to invest. And that's why we are talking, still talking about despite adding INR 3,000 crores odd of BD. We're still talking about INR 750 crores being still there to invest out of INR 1,000 crores that we had. So I mean, depending on how much we do the JDs going forward and continue to do the JDs to that extent. The overall pipeline will change dramatically. But the limited answer to the question you have is INR 700 crores should be sent into a INR 3,500-odd crores of top line.
And you mentioned the 4 or 5 projects we have [indiscernible] launch. So of course, you would have [indiscernible] Sarjapur. So which other projects you are going to launch [indiscernible] any other you [indiscernible]?
So yes, I mean, there are projects which are already declared. Sarjapur the first one, then we have a project declared at [indiscernible]. And then we have the last phase of [indiscernible] selling up the soon. And Uplands Agoda we've launched already Phase 1, but then there are 2 more projects coming expansion of this peer called Uplands Phase II and Uplands 3, otherwise are that we are planning to launch.
Sir, lastly, 1 clarification.
I'm sorry, I'm sorry.
Yes. Yes,. You go ahead.
So together, we will have a ton potential of around INR 1,700 crores to INR 1,800 crores.
Yes, that I got. And lastly, just one clarification was saying that operating cash flow for the first half is INR 20 crores -- while in the result, cash flow, I'm looking at pain INR 177 crores. So [indiscernible] year-end?
I will answer the question. Accounting methodology of cash flows was in a different manner. We are not -- they are ranked on indirect net of competition of -- and even the land cost is part of the operating cash flow because finally land is not an investing activity from accounting percent more.
So if we take out the land investment, it essentially is investment in new projects, if you do not assume that as operating cash flow negative, then the business has really 271 crores. [indiscernible] gone into the land already in the new projects, not of that.
We have a next question from the line of Abhishek Lodhiya from YES Securities.
Two questions basically. First is, we have posted a robust presales of INR 390 crores roughly. Big chunk of it came from the launch side, and we still have [ INR 45-odd million ] saran from the rest of the projects, we are on only INR 90 crores. So don't you think I mean whether this number is it more towards launches, and we have maybe scored a little lesser in the ongoing projects. First thing is that Second thing is you said about deployment of INR 700 crores or INR 750-odd crores for BD. And of that, roughly INR 600-odd crores is from the HDFC platform. And additionally, you keep on saying that we would be doing most of the projects in JD models, right? Then how that economics work on the HDFC platform because then 25-odd percent or a say 75 -- 65-odd percent is HDFC. And I understand the [indiscernible] and the radio partner taking the bit of it, then what would be left for us? And how does that work out for us. Those are my 2 questions. And sorry, 1 more question. I mean, we, as a company right now having a lost pipeline of roughly 28-odd million square feet. And we are expired to exhaust that we launch pipeline in the next 1, 1.5 years. So how we should see that with the deployment of this INR 150-odd crores. One, I mean, we need to keep on doing maybe at a maybe better case or is it -- I mean, a lot more deals we need to do to keep the momentum that [indiscernible]. Those are my questions.
Sure. So on a is about INR 750-odd crores of set [indiscernible]. And a very short base, which comes to my mind about the components of the INR 750 crores is around INR 500 crores to INR 525 crores coming from HDFC platform. And our own money to the extent of INR 275-odd crores or thereabout. So that means -- around maybe INR 225-odd crores. So that means there is a very healthy mix of of our own funds coming into the play here, and they are maybe more than [ 30% ] or thereabouts of the investment that we have planned. And a lot of money has already been invested from our own internal approvals in the past few quarters. The [indiscernible] one, for example, is one such example. At least for the time being, it is all through our internal goals. Now when it comes to what is asked in the game the bottom line sharing point of view, you know that in the new platform, [ NAV ], we start with our investment to the extent of 30%. And obviously, our share in profits and cash flows in significantly more than that. And on top of that, we also won our development management fee on the platform. So all this put together, so very, very thick skin that we have in the overall business in general. But just to add a little more additional layer into the whole thing. JDs certainly are not kept under the platform. In fact, till date, not even a single JD is such where HDFC co-invest with us. JDs are all funded and invested [indiscernible] investment levels there are small comparatively. And whatever they are, we end up investing JDs or sales from our internal only. So there is to be shared as far as our JV surpluses are concerned between us and HDFC. And that's the reason by our overall margins, overall profitability and overall percentage in terms of EBITDA to sales and Shearman as a mix, pretty healthy in shape.
Sir, that means HDFC platforms will only have the [indiscernible]?
Correct, correct. That's what has been happening, and that's what the intention is. We don't want to share people in general sense. For example, in a JD, there is already a third party called the land partner. And then we are there. Obviously, land partner gets appreciation on these languages, they have to wait it out and take the risk with us. But we have one more partner to platform in a JD sector will mean a little in skin for us, and that's what we will not generally defer unless the investment in JD itself is very big because its underline project is supposed to be very big even into JD. And those assumptions are going to be rare, and they have not happened yet. So all the JD projects, the large ones, including the [indiscernible] on the Sarjapur that we are talking about right now, just got launched this month itself. They're all funded and edition by us and nothing to be shared with platform HDFC.
Mr. Lodhiya?
yes. So -- and about the mix of your sales from non-ad new launch has on the way [indiscernible]?
Yes, from quarter-to-quarter, you will see these numbers going up and down. As a company, we are still at an early stage of our growth in terms of absolute numbers. And hence, from quarter-to-quarter, you will definitely see some presenters coming into these 2 segments. Generally, the sales pretty healthy. This quarter, we have sold significantly more in the form of new launches. As for going forward, we -- because we have been selling pretty well the existing inventory value is not that high in any case. The detail more the projects are very, very manageable and sustainable sales is happening. And that is where you also want to seize them out in the leftover mix and price accordingly. So going forward, I see a trend that a significant rather majority of the sale that you will see will keep coming from new launches. And of course, it will be backed by some and strong moment domains [indiscernible] sale. I don't have a ready number in terms of what is going to be the percentage of new launch versus on a quarter-on-quarter basis. But I'm sure this will be more like a 2 coming from new launches and undercounted I mean as a thumb rule, which we expect for the year as a whole and even going forward.
[Operator Instructions] We'll take our next question from the line of Rithvik Sheth from One-Up Financial.
Yes...
Sir, can you use your handset please? You're not audible?
Yes. Is it better?
Yes. Yes.
Yes. Sir, a few questions from my end. Firstly, sir, if you can share some updates on the progress to enter MMR. And also in Pune, we have had 1 project and how do we go from here in Pune as well.
Sure. So [indiscernible] in our scheme of things, we are treating Pune and outskirts of Mumbai, which we call MMR. We keep these 2 markets as 1 market from investment priority standpoint. And hence, we are very actively looking at projects at both these places, MMR and Pune simultaneously with a lot of rigor and vigor as we speak, there's a very strong team of people out there on the ground and evaluating quite a few options. We have a little final lens as compared to the lender would be having when it comes to selection of a land parcels for many standpoints, which includes, obviously, the title risk and the regulatory risks and also the profitability the benchmark that we have for ourselves. But we are very confident that we resolve all these efforts by the end of this year, we should be having at least 1 or 2 projects in our portfolio coming from MMR and Pune.
Okay. Okay. Great. Sir, second question is on the investments of INR 750 crores, which you have mentioned to be spent over the next few quarters, will this be more or less own projects since the first INR 2,800 crores GDA. So will this be more of own projects that could give us a better balance of GDA and own projects. Is that a fair understanding?
Out of this INR 750 crores, as we mentioned earlier, around INR 500 crores to INR 550 odd crores is yet to be deployed from the platform. So all the platform money which is deployed is deployed in outright purchases only. we are less with another INR 200 crores to INR 20-odd crores, which is our investment. Our investments will definitely go more in GDA as well as we are is open for outing for our own outright purchases as well. So altogether, we have put in a target of deploying INR 1,000 crores which we have significantly deployed. And there's, again, further significant portion, which is yet to be deployed. And of course, we would like to first leverage the platform because platform exhaustion is the first thing which we are targeting. And post that also, of course, the running has to continue, the choice to continue. So we will continue to invest.
Okay. Okay. Great. Okay. And sir, just one more question. The project that we have acquired in H1 and the projects which we'll acquire in the coming quarters. Would that be a fair understanding that these projects can be launched in FY '25?
FY '25? '25 will be too far, I would say.
I mean, in 1 day, it will be faster than that. So whatever we acquire or normally a porting and organic project takes anything like 4 to 8 months, 9 months' time to launch. And hence, anything acquired this year will definitely be launched next year. But then depending on when during this year, we acquired -- something gets acquired in December, for example, should be launched by Q3 of next year itself. So mostly, we are looking at launching quite a few of these -- in fact, all of these by the end of -- before the end of next year.
Right. So basically, if you acquire a project, then we are looking at less than 1 year to launch the project.
Yes. Purely, yes. And if it is a builder project like the [indiscernible] project, [indiscernible] project, for example, there's a time line internally that we keep anything been 6 to 8 months only.
We'll take the next question from the line of Naysar Parikh from Native Capital.
Most of my questions are answered. One question I had was on the financing costs. So I think it's around INR 19 crores or something this quarter. So can you just talk on what all is part of it?
Yes, I'll take this question See, finance costs typically relates to interest. While you look at our balance sheet and that statement, our gross debt is very minimally very minimal. This significantly represents the portion which we have paid out to HDFC because the HDFC structure works on redemption premium as well as the interest component on the OCD, which we had issued as part of platform on. Further, whatever OCDs have been issued as part of platform to -- on a fair value basis, the interest cost gets accounted as a part of interest cost.
So the simple answer from the business standpoint essentially this is the platform money which is getting repaid in [indiscernible] or the other as for the waterfalls mechanism. The way get accounted is more like an interest on an instrument structure. This is definitely a long-term patient money, which needs to be paid on a payable basis. And hence, it's not a debt in that sense, and we pay we are and repay when beyond. But essentially, this outflow is getting accounted as an interest component in overall balance sheet in numbers point of view. But otherwise, bank interest or the funds that we have taken as for net debt, I mean, that number is minimum. In fact, overall, we have [indiscernible] in the books of a form to be very precise. This year, we -- this quarter, we needed a number of INR 141 crores being the surplus funds waiting to be deployed enhanced interest obviously is net negligible. And this represents outflows to the platform, which is a structured payment which happened to the platform based on the actual flows.
Understood. So is this -- there is a growth of around 20% versus last quarter. So moving forward, is this the number we should consider the INR 19 crores, INR 20 crores per quarter is the number will happen in the next few...
This was onetime again because the platform 1 was paid out completely during the quarter, and the numbers are looking at the level where they are on an ongoing basis, we need to consider business outstanding OCD. So is -- that statement is there as a part of our debt statement. The outstanding on [indiscernible]. On that, you can definitely assume. On a quarter-on-quarter basis, the numbers will keep growing as we drop on the platform.
Got it. And the second was the other expense...
Mr. Parikh, I request you to join the queue, please, as the other participants waiting. We have a next question from the line of Ashish from Infinity Alternatives.
Just speaking from the last speaker. Sir, just wanted to understand because this interest is effectively a cost of providing the end product. What is the long-term PBT margin that you think that we can target across different products, different models that we have, JDA, et cetera?
It could be in [indiscernible]. But generally, if you to predict the future and give you guidelines is a little something that we avoid. But if you look at the numbers historically, we are covering in 11% to 20% of PAT margins and 26% to 27% of EBITDA margin, PBT is a little a bit higher than the PAT and [indiscernible] lower than EBITDA. We don't have any significant component of interest coming in between. But yes, into 27% of the retain 10% order thereabouts of PAT is something that we have been achieving. And going forward, we are hoping that this is different that we should be witnessing.
The second question was that while we have seen a very significant growth in bookings, and assuming an 18 to 24 month time for completion. So if I look at FY '22, we still had INR 500-odd crores of bookings, but the revenue run rate in terms of recognition sense do you think that we should look at the T plus 2 or T plus 3 for estimating the reported revenue number from the booking tank?
So I can again give you a little more insights on how it works. Obviously, it also has got a lot to do with the product in recent quarters a year, et cetera. For example of putting scheme or our general project will recognized little earlier. Our [indiscernible] scheme, possibly after 15 months to 18 months or maybe more comically 4 months' time, you start getting into exhibition of sale leads and accordingly, portion the revenue is of account. But high-rise product, which is, say, INR 24 crores, INR 25 5 crores, et cetera, et cetera, we'll take at least 3.5 years to complete and start getting into a [indiscernible]. So depending upon which product we sell them the time very 2 years to 3.5 years before we start booking from the launch date, and that's how it pan out, and that's how it is logically supposed to be panning out. Right now, quite a bit of sales has happened from the last 2 quarters at least from original launches. And hence, the launch should start getting reflecting -- reflected in on the next 2 years' time.
So sir, if I were to look at FY '23, we had INR 800 crores of bookings and a large percentage of that was horizontal. So would it be fair to assume that in FY '26, that should be reflected in the P&L by FY '26 then? Or will it be...
I mean I don't think we are very on this. So broadly, I mean, logically, yes, broadly yes, and it should happen that way, yes. yes.
So basically, what we are booking this year probably will hit us a P&L in FY '27. So basically, that will be a 3-year average cycle is what we should assume?
Absolutely right, yes.
Right. Okay. And I have a few more questions, but I'll come back in the queue.
We have our next question from the line of Deepak Purswani from Swan Investments.
As you...
I'm sorry, you are not audible. Can you repeat your question, please?
Is it better now?
Yes.
So just wanted to check in on the strategic direction front. As you highlighted, we would be looking on to invest INR 100-odd crores over the next 6 odd months. including HDFC platform and our own money. Could you also share directionally what do [indiscernible] based on [indiscernible]? And also any broader guideline in terms of investment or broader metrics impacts on the c-level development? Maybe an now would be the amount we are looking to allocate towards the Bangalore and also Ahmedabad and Ahmedabad and Pune region as a whole?
Sure. So the first question essentially relates to the grain, for example, makes. So essentially, we want to invest 40%, 40%, 20%, 40% Bangalore, 40% Ahmedabad [indiscernible] so 40 [indiscernible] major cities will go deeper and maybe 20% going into MMR and Pune put together. So that's how -- that's how it is. between horizontal and vertical, we have invested a little more in horizontal in the past few quarters. as on date, it is significantly stood to the spend of 75%, 25%. It going forward, I think the few will change a little and it become 50-50 between horizontal and vertical in that we are putting a lot of focus back on vertical at this point in time. That's why we just closed 1 project back, which is to in Bangalore. And I think that's a INR 70 crores -- going forward, the mix should be more like a 50-50 between horizontal and vertical. At the same time, between cities, Bangalore 40 and Ahmedabad 40 and Pune MMR20 is what we are looking at.
Okay. And sir, any targeted we are looking on the investment over a period of time?
The IRR obviously, again, depends on the structure of the product, the mix, et cetera, et cetera. And there are significantly higher IRR that will be pursuing horizontal spotting and [indiscernible] compared to a high rate project. But generally, our length is in terms that we projects only when they exceed anything between 23% to 25% of when it comes to outright by demand. In JD, IRRs are much higher, obviously, because underlying investment is low. So that's not that relevant of parameter. But nevertheless, it timely higher than 25% general benchmark we have for the rest of it.
We have a next question from the line of Faisal Hawa from H.G. Hawa and Co.
Sir, what kind of digital initiatives we are taking to really have a better hang of the customers who are visiting and getting probably more footfall into the sample flat for our projects? And can you just enumerate some initiatives you have taken to speed up the construction and in the approvals part of your business? And are we finding it difficult to find more business development executives with the real estate generally booming and falling into more organized hands? That's one. Second question is, sir, that is there anything in mind of the management that how much we will do horizontal Bangalore, [indiscernible] how this kind of development? And how much will be the vertical development? Because horizontal does kind of sound to be a very big USP or a very good short cycle construction advantage for our company as opposed to other real estate majors.
Sure. So I didn't really understand the question relating to the digital piece. Are you show we are ramping up our digital interest?
What I meant is there are now several platforms which can help you in selling your inventory very fast and even understanding your customer and tell targeting. There is one part where you just build the brand. And there's another part where you have a targeted advertising.
Yes, yes, yes. So I got the question. I mean [indiscernible] something which is very close to our heart. I mean this is a company or a group which especially driven by retail, cash, et cetera, et cetera, and the sense there also has done great and in switching our DNA to has seen and mechanisms in place, both in terms of people and software, et cetera. So we have a very, very evolved [indiscernible] strategy under execution and we just tell you some of the numbers. Our digital sales possibilities one of the highest in the industry. It's more than 1/3 of our sales that we keep locking over and over again through digital mediums and [indiscernible] direct sales. In fact, our direct digital component, which is essentially driven by a technology in both these as 40% to 45% put together. And obviously, at the sale side, this actually is the highest in the industry. And these are the numbers to say that, yes, we are doing something great out there. But behind this, there's a whole piece of added software in people and professionals who are working. We got a digital persona setup of this will be here. In fact, this also helps us keep our total cost of goods sold within a very, very manageable limit. This is possibly again one of the those companies where the COGS is less than 3% persistently throughout -- even when we were INR 100 crores, this was the case. And today, we are at INR 1,000-plus crores, it is the same. And this is possibly one of the novation is we book together for the poles that we have. So we're in that with technology and how we do it. very stronger, very well organized call center with operations exist. They are integrated back in and front-end to a very significant strength. We run on [indiscernible] because on SAP, we have seamlessly integrated. So we'll know which [indiscernible] which customer falls and responded when how many patients created, what is our funnel looking like points what the total makes, what is the total walk-in ratios to the [indiscernible], et cetera, et cetera. So these are very, very closely monitored. We've hired some of the best talents in the industry, for example, at a very small scale, we were able to hire and we rather hired a person who was heading this function for an organization which is possibly 50x because and invested that kind of money very, very early, not only in people and even software is very, very heavily. And hence, this piece is kicking. This is reflecting in our numbers. Today, as we speak, I can even tell you which holding is doing what, whether this holding at [indiscernible] is making more sense or the holding at Sarjapur is making more sense and that is stored in appreciated by this system. I can also tell you that if I'm running a campaign on a Facebook or on Insta, then for a project for the same date, which creative is making more sense. So if I show you a clubhouse for Sarjapur villa project, what is the efficiency of that it is because we have villa elevation that I'm showing. So if a villa elevation [indiscernible] more places by impression that we are trying to create. And agreeing obviously cost us, then we know that it's time that we took more focused on villa created than a clubhouse created, for example. So these are in AI are initiatives, which are already up and running on ground, not now but for the last 7 quarters. And that is why almost like 1/3 of our sales is coming from digital, and this will obviously mean that there is no intermediary enhances is very, very, very manageable [indiscernible] enter normal concept that 1 does in case channel partners are to be -- sorry.
[indiscernible].
Yes. I mean there are several other pieces. This is one of those tea the funnel. But then we also have in leases now at least beat on levels implemented where you could just buy a house like you go on many without the intention at all so you could go climb up to go to the specific floor virtually and see the unit actually and see various angle look right or whatever and see how the use are in this particular -- on this floor to the whole own technology comes into these days and show you actually from your apartment or your balcony, your bedroom, et cetera. And you also runtime basis get to know what is inventory available is showing its available you could just slide INR 50,000. So we don't take a lot of money to distinct in personal sales that [indiscernible] customer can click a few buttons. I see that I have a 500 that we enter and then the physical will start in the ones where people will go to explain everything so that there is [indiscernible] and do you see your norm solution but target in the product and the offering, et cetera, et cetera, and the process moves from here and year onwards. So at least you are able to block an inventory online without infecting individuals. And the experience of buying out will actually be better than are you going firstly and not being able to find the same floor in the same flat because it's contention still, we actually get actually a little better sales. So technology is something we're investing, and this is definitely clicking for us. Your next question was related to making construction better, et cetera, et cetera, of course, this is a complicated question. I think India as a market is doing. And the entire supply chain [indiscernible] is also improving in proportion in tandem. There are some very good quality contractors who shaped up well and you'll see a lot of growth coming into the contactor balance sheet numbers as well. It's about selecting the right grades and having our own systems control, et cetera, in place. We've invested there as well in terms of various software and monitoring mechanisms that are there. The company is given by system. This company is driven by IT and we are very price about our systems and process and IT specifically person look into it and this department directly reports to me. And I will know what's happening on technology base. One more example I can talk hours and hours on this is my favorite subject. But just to tell you one more example of this is that we retain our entire records and document management in 10 years back, 100% digitalized our system of ticketing there. If our smallest level of supervisor has some hurdles in this system or release [indiscernible] piece. We can just restate again the Vice President of some other department saying that, look, your contactor is not turnout today. And hence, my work is getting hampered and I'm not able to start something that I should have started otherwise. So that ticket is visible to everybody. And we present is supposed to be force to be responding to the supervisor and make sure that the ticket specifically is not overdue, and it's kind of acted upon. And these kind of systems are very, very visible and we live every day. So yes, I mean, these kind of initiatives are helping us. We deliver both of our projects well in time. And hopefully, we'll continue to do that. Of course, challenge is growing, and that's where we are investing as a company is equal et cetera, et cetera. cost front, and we are hopeful that we'll be ready when the oil change comes select opportunity income in our operation and size and scale.
And sir, about my question about finding it difficult to find like really quality business development executives and all with the overall real estate boom and also the corporatization of the...
Mr. Hawa, I request you to join back the please...
No. This was my question I had already asked.
Sure. Sure. Let me answer this. I mean to say a question. And I mean business eventually is a business of people you got good people, you succeed if you don't have to prevent, you don't succeed. I mean it's not about changes not about bricks and it's not about [indiscernible].It's always about finding the right people. So this is one challenge, which is [indiscernible] consistent being faced by everybody, notably in this industry, in our industry, cost industry, this is the key and digital on trying and investing upfront. I mean, and the run time in a nice situation to expect that you will find it people all the time is very difficult. And of course, it's becoming more difficult economy growth, et cetera, et cetera. But it's about realizing and understanding your part and investing upfront. So what we are doing is that we are keeping margins of the work volume, et cetera, which we are anticipating for ourselves and trying to put teams ahead of requirements, at least 3 to 6 months time ahead of our volumes in orbit that we are funding to operate. So that's 1 month a year following. We have hired some very interesting talent across industries, production, et cetera. in this business upfront. And that's why we are where we are, and we'll continue to invest there. It is a challenge but obviously, there's no opportunity but to appreciate the challenge in [indiscernible] on this challenge.
We have our next question from the line of Bajrang Bafna from Sunidhi Securities.
Congratulations for good -- not good, it's a great set of numbers during the quarter. So sir, my first question seriously pertains to the trajectory that perhaps as an analyst, we were looking at seems like changing for our company and where we have created almost now physical pipeline of INR 4,000 crores to INR 5,000 crores. And this quarter number is really suit to the eyes for our company, where we are almost in the first half inching towards INR 500 crore kind of presales. And we have guided that we'll be growing 25%, 30% during the year. So it looks like the way my sense is that Sarjapur is also on the block, which is going to be launched soon. So is there any possibility of any upward revision of this thought process of, let's say, INR 1,000 crores presales in FY '24? And the kind of pipeline that we have created in the last quarter, any thoughts that by FY '25, what is the kind of growth that we are looking at? Is there any change for our community to see the company slightly superlative in terms of growth parameters, maybe not 20%, 25% could be 30%, 35%? So that matters a lot for us while analyzing or building the modules and all. So if you could guide in that sense will be really good for us. And purely from a P&L perspective, how do we see next year in terms of delivery of the projects that we have entered in last, let's say, 2 years. So how that P&L purely is going to look like for FY '25? Some sense on that will be really helpful. That's all from my side.
Sure. Very, very good questions from an analyst standpoint. I mean, we would still like to remain a little conservative when it comes to guidance for the future. But having said that, we've been on this saying that 25%, 30% growth is something which should be very much achievable. Of course, if you look at last 3 years, it is much more than 25%, 30% that we're talking about all the time. And the trajectory today, if we see, I can throw a little more light in terms of the building blocks we have and then it is [indiscernible] left the imagination and calculation, et cetera. for the analysts to do is that our blocks are very strong. The blocks are stronger than [indiscernible] expectations. Our major investment is still to hit the market, INR 750 crores would mean [ INR 210 crores ] of fresh inventory coming only from the outside projects through internal approvals in recalls. We are already at INR 5,500 crores of pipeline sitting today. And will mean INR 8,000 crores to INR 9,000 crores of total that we're looking at by the end of this year. this year will be added almost INR 3,000 crores of BD. And hence, 25%, 30% is something which is a number we have been maintaining is a good chance that we could exceed that in the coming years. And on top of that, our strategy of keeping overall mix a little lean in terms of mix between outside and JD is also taking significant. In fact, one of the major sense that I would like to talk about her is about the brand and not -- and the brand when I see it's not in the context of selling, our product in the consumer, but it's also about our brand in the eyes of land partners. I see a great traction coming to this company where a lot of great land partners are wanting to partner with us, and they are willing to take bets on us on some very, very large plan partners, taking example of the [indiscernible] project in 2, 3 and even land, means like 300, 400 acres coming to us with very, very new investments, every risk in that has been taken by the landlord, including commotion, ownership, et cetera, et cetera, and guarantee the titles for the entire life cycle of the project, et cetera. I think these kind of large deals have started flowing in and people expect and people hope that we'll do a better job than they doing it themselves or they're doing it [indiscernible] kind of competitor set. That's where the brand is seeing very significantly. And a mix of JD and this investment cycle coming back to your question, means that in all likelihood, one should hope that we should be able to exceed this 25%, 30% benchmark that we are always working. But having said, today, we always say that our target is to continue on the trajectory of 25% to 30% growth in all the major parameters that one counts.
Got it. And sir, on the P&L, CFO sir, if you can give some purposes that how we see next year in terms of delivering the projects that we have launched in last 2 years?
Project delivery is happening. I mean, and because we are little heavy today on horizon, obviously, our completion cycles are shorter on an average basis, original should be getting from a rate between 2, 2.5 years and thereabouts, and the vertical ones get continued in 3.5, 4-year cycle. To that extent, our resolution will quite a bit in the coming quarters and less for sure. In the overall context, how we pan out, I don't have the ready numbers of generally speaking, maybe I'm more focused on getting the business in the sense of creating such pipeline in fresh sales, et cetera, et cetera. Obviously, accounting standard will work its own way and numbers have to come sooner or later. But thankfully, we have a product mix that these numbers will start getting reflecting in the books of account faster than the industry average because we are more tilted when the industry average was for on this point of view. So to that extent, we can get a little more aggressive in our assumptions. But having said that, [indiscernible] the way it is supposed to be working. And we are really focused on feeding the pipeline and getting the red sales and momentum in seater, et cetera, because we know that piece is done and taken care. There is no way but sort of those numbers to enter into books of accounts sooner then later.
Yes, I totally understand, sir, Kamal sir. But the thing is that now the query was that how the pipeline is going to be created, how the pipeline will be built up. So I think we have delivered more than what we have said in the last, let's say, a year or so or maybe 2 years. Now we are building an expectation we want to see the real P&L because that is something maybe out of 1 of Enlist, only 5 or 6 will work with the maybe deals and all but 90% of your janta, which is there in the market only understands what you have shown in your P&L. Probably a couple of more, you can say, seasoned investors will be able to understand the cash flow and maybe the pipeline that we have created. But P&L is the end of the day is something which is again a suit to the eye that how much profit that Arvind has made during this year? So this is something which is also circa now we are building an expectation that we also want to see the pipeline or the sales that we have done in the last 2 years, now it should flow into the P&L. Sir, some guidance on that may end in this quarter, but some guidance purely from next year perspective, if you could guide that would be really helpful for the entire community. That was the whole purpose to just give you this kind of [indiscernible].
Bajrang, the point is very well taken, and I really appreciate what you're seeing in the makes sense. I mean fresh sales and pipeline, they're all very important parameters analyst day happen, the thing is going to be happening that's for sure. But then obviously, the actual delivery of numbers in the books of account is equally important for a lot of people as you mentioned. Fortunately, quite a few people have become aware of this nuance of when and how we reflect invest more important, et cetera, et cetera. But having said that, as you said, it's important to know the number in the trajectory. I leave this question to Ankit. Maybe we can coning whatever information we could share with you -- which is assets already available in the form of Unite's presentation at the website. But we'll see what is best analyst [indiscernible] achieved within the constraints and [indiscernible] compliance at our system. And I take this forward from their notes.
We have a next question from the line of Rishikesh Oza from RoboCapital.
Sir, I'm just touching upon what the previous participant had asked about recognition. Sir, we are currently at around INR 280 crores annual recognition run rate. And if I see for last 3 years back, we were doing around INR 600 crores of bookings. So would it be fair to say that should be starting with INR 600 crores of annual run rate, revenue run rate in that's 2 or [indiscernible] in FY '25. Would that be a fair assumption?
See, I would to be clear, I think there are multiple questions on revenue recognition. It cannot mean that generally we have sold [ 600 ] 2 years back, it will come in this year or next year exactly because the products which is equally important in the product completion, everything is equally important. So for certain projects, we have already given an indicative completion date in our project portfolio schedule based on the end those are not redefined to you. They are our internal the best estimate for project completion. Now applying the project completion method, we can -- numbers can easily achieve in terms of what numbers you can expect from each of the projects. It was the ease of the projects we have already given how much are the bookings as on date and how much revenue has been recognized as on date also for each of the projects individually. So someone probably can work it out at a project level. It cannot be generalized to overall INR 600 crores or INR 800 crore.
But yes, I mean, generally speaking, just from the information which is already made available in the investors presentation, numbers can easily derive this broad solution number. But you are right in saying that average life cycle of our project in vision is around 3 years, putting horizontal and vertical putting together and [indiscernible]. And a quarter or 2 here and there, the trajectory should be like that. I mean there is no reason to believe that we will be very different from what you're talking about here the number. I think on an average in 3 years, any specific project, we should start seeing some numbers coming into the books of account as a general principle and for the project and product mix that we are talking about here.
The next question is from the line of Akshay Kothari from Envision Capital.
Sir, just numbers question placement in the Pune market, the project [indiscernible]?
The project [indiscernible].
Yes. Has there been any replacement? Because when I look at from the last quarter, the area sold has reduced. How come that is possible? Is there any return which has happened?
In [indiscernible], they were in alone working cancellations, which was there and since the area would have got reduced.
And we have not sold anything in [indiscernible]?
What we're doing in Elan is that it's about to be completed. It's a wonderful project, which is about to be delivered and start. So -- and because this is only 1 project happened right now, obviously, the effort is to add at least 2 more projects in MMR and fine going forward. We thought slow at the sales for the time be couple of cancellations would be just any other event in the project life cycle per se. But our idea and the understanding was that we could realize significantly higher and better once the project is which is about to get ready as maybe 3 months will sign this is absolutely done a project. We're putting more than reported efforts in this way to showcase this project. And we thought that the units which are left will be gone better when we are done with it rather than burning money today to promote it at a very small scale and then sell and try to do anything which is extraordinary. So that's part of the strategy. I mean, some of [indiscernible] could be part of the life cycle of the project and can happen at any in time. The is nothing specific and more to it. But once the project is ready, we should be able to liquidate this went very far we know what product is coming out. It's just about 3 to 4 months away, and I'm very confident that once people see these for driven products will be very heavy awarded and sale should not be a problem.
Sir, second question is on South Bavlu [indiscernible] project, which we have taken. So price per square feet is around 7 currently. So if I look at the second phase, it comes to be around INR 1,125 per square feet. So is the second phase going to be much more premium than the first phase because the differential is huge as such?
So we I mean this project in terms of relation [indiscernible] vendor for us, and there are some 4 or 5 if they can reconnect in a matter of 3, 4 days is we sold this project in. Obviously, as we progress, prices will keep increasing. Even area is coming a little bit. These are large original one, and we always have a pursuit to add and subtract a few numbers. The numbers that you've seen do not include PLCs in my understanding. These are the specific location charges and they are also pretty healthy in terms of oral realizations. Once that is also added into the Phase I numbers. then obviously, the data will not be as we're looking at between the Phase II and Phase I. But yes, I mean, election has been great, and they are improving.
Because the competitors in the same area, if I look at [indiscernible] and [indiscernible] by the very group, they are priced much more higher.
So [indiscernible] is not exactly the same location. It's very different in terms of its location. [indiscernible] is more like Southwest and this is [indiscernible] talking about the road themselves are very, very different. But road is very, very different. I said on this road, if you were to pound and measure our velocity possibly is 300 to 400 times better than any other home greater. And our relation will be at least 30% to 35% higher than the next or competition, the right comparison will be numbers of the passages projects called [indiscernible] forest train. That is tally is another, but this is a villa project, but it will take as a benchmark, then that is what it is. Our VH1 is a very different location, very different roads like [indiscernible] and their bots and it's a bile project in that game central and other things. So quite different in terms of location and the basic land price be would tell you the land price difference between a rod and the glass like more like a [ INR 3 to INR 400,000 ] on a per gig basis and more like INR 2 crores in case of a [indiscernible] 6x.
And [indiscernible] is much more [indiscernible].
As I have heard of this name [indiscernible] yet, maybe something small by a small delectation...
No, no. It's by the very group [indiscernible].
[indiscernible] come about. Maybe some if not all, it's not on will go in my undertone. So I don't regulate what is -- the meeting also I'm not sure who is the [indiscernible].
Ladies and gentlemen, we'll be taking the last question. That is from the line of Harshal Kothari from RV Investments.
So my question is on the line of Ahmedabad area. So basically, we've seen that Ahmedabad is a growing major IT hub. So are we planning to take on corporate offices or data center projects is coming in the Ahmedabad area?
I mean, the answer is pretty straightforward. We remain focus on residential in all the markets we're talking about Ahmedabad, Ghandhi Nagar, Bangalore, Pune [indiscernible]. So at this point, we don't have any specific focus on commercial or ID patients, and that's something which is going to remain like this in the medium term. So as of now, no IT andesites business for that material will business for the time being except for the cases where it's a adjacency. So if you've got a 10-acre something going on, they're 1.5-inch good for commercial and hence, it was adding the supported value, yes. I mean, such things are always welcoming. We've been doing those in there and there is a few projects of our portfolio in our portfolio. But generally speaking, to do a stand-alone IT commercial data center projects, the answer is no, at least for the medium term.
And I wanted to ask you that do you have any unused land for any upcoming projects if comes at a very good [indiscernible]?
So every large project especially in the original side, we always have less in beta in terms of value, might be small tail in terms of area left but will be a very big tail possibly when it comes to valuation of the tail. And we keep doing that. We did that in our plan. We did that in beyond high growth, we did et cetera. So hopefully, [indiscernible], [indiscernible], [indiscernible], even great lines, for example, or even though low have long value sales left and we keep exporting on those things. But otherwise, with a business model, we don't do any land banking at all. [indiscernible], very quickly this possible time lines we open the market on and is invested in. And as we at the biggest possible time, in fact, in between entering exit also, we say we have a benchmark called the autopilot mode, outearn project means that we sold enough and more to ensure that the project becomes cash positive at least in terms of its expenditures, construction, overhead, selling expenses, et cetera, et cetera. And that should be more like our cost of [indiscernible], which takes care of all these things. So we've been seeing this very possible entry with the launch of a project, then the quickest possible autopilot mode. And then their to exit the project the fastest possible time. And that means that we don't have any significant inventories or unused land left, except for the LTVC project, as we call them as, the long-term value creation projects like [indiscernible] or Uplands, et cetera, there will have a longer tail with very high values.
Thank you. Ladies and gentlemen, that is the last question. I now hand the conference over to Mr. Kamal Singal, MD and CEO, for his closing comments.
On behalf of the management, thank you, everybody, for participating in the earnings calls of Arginase paces and for your continued support. I hope we have been able to address most of your prices. However, if we have leased out on any of your questions, kindly reach out to become and he'll be are able to answer that revenue is left and you can [indiscernible] offline any time. I look over to entering with you once again next quarter. And once again, I wish all of you a very, very happy Dipawli. Stay blessed, and thanks a lot for saying time for this call.
Thank you, members from the management team. Ladies and gentlemen, on behalf of Arvind SmartSpaces Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines, thank you.