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Arvind Smartspaces Ltd
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Ladies and gentlemen, good day, and welcome to Arvind SmartSpaces Limited Q4 FY '22 Earnings Conference Call. On the call, we have with us Mr. Kamal Singal, Managing Director and CEO; Mr. Avinash Suresh, Chief Operating Officer; Mr. Ankit Jain, Chief Financial Officer; Mr. Prakash Makwana, Company Secretary.
Please note that a copy of disclosures is available on the Investors section of the website of Arvind SmartSpaces Limited as well as on the stock exchanges. Please do note that anything said on this call, which reflects the outlook towards the future or which could be construed as a forward-looking statement, must be reviewed in conjunction with the risks that the company faces. [Operator Instructions] Please note that this conference is being recorded.
With that, I would like to hand over the floor to Mr. Kamal Singal for his opening remarks. Thank you, and over to you, sir.
Thank you. Thanks a lot for starting this conference, and I welcome all the participants for spending time to attend this call. Thank
you very much again. Coming to the results that we just announced for the financial year ending '22 March, and also the quarter the last quarter, Q4 of '22. It has been 2 consecutive years of very significant and healthy growth and momentum for us. Last year, ending March '21, saw one of our best years in terms of fresh sales at INR 500 crores plus for the first time. And obviously, we knew that to be able to achieve this momentum, we need to invest in the pipeline. Of course due to COVID and the ambiguity thereon, we were not -- we obviously had a kind of a pause in our investment cycle, because we wanted to certainly to kind of see before we again start our investment cycle in a big way. And that happened, of course, last year when we achieved a very, very healthy sales, fresh sales sort of sale.
The great news is that the momentum has continued through this year, and from INR 500 crores plus, we've clocked a number of INR 600 crore plus this time. And of course, with the revival of investment cycle, we are now looking at significant inventory getting added in near future so that we have more avenues to sell, more products to sell, more geographies to sell, more micro markets to sell. And all those blocks, when it comes to creating the pipeline are in place, and we are hopeful that we will do all that.
But just for a moment, coming back to the macro side and economy in general, I think we've seen some tremendous turnaround in various parameters, macro and micro, that were possibly a little farfetched, they were sounding a little farfetched during the crisis, during the pandemic crisis, so to say. But of course, most of the things have moved on. We've seen a very stable regime in terms of interest rates, in terms of cost, et cetera, last call it, 24 months. And of course, affordability has been at its highest with the lowest kind of interest, the lowest kind of stable and lowest kind of raw material prices and demand getting accumulating due to pandemic pause we saw.
And then also a basic change in the mindset of people, it all added up to an environment, which kind of delivered the kind of growth we saw. And we sincerely believe that even if there are some small structural changes happening here and there, the momentum will continue. You've seen that in the last first quarter, and we are very hopeful that this will remain so in the near future.
The key word here -- that there is a decent amount of consolidation happening in favor of trusted corporate players, residential focus has really paid out for the players who are focused, mid-price housing is doing great and it is supposed to be the main drivers, it is something that we all like, and we want to clearly have a focus on those, and we are doing that. B towns like Bangalore, Pune, Ahmedabad, et cetera are doing great and they are very, very consumption-oriented markets, less dependent on investors, and hence, more sustainable. But these markets are more sustainable during growth and expected to do great [indiscernible], et cetera. I think that's something which is playing out in the market, playing at a much better and at a significant pace.
And anything which has a track record, people who have delivered in the past, people who have stronger balance sheet, people who are not burdened with that kind of reasonably manageable leveraging levels, et cetera, et cetera. Those are guys who possibly become stronger and stronger. So we have an environment where strong players are expected to become stronger. And the B category developers possibly will be getting marginalized, so to say, if that's the right word to use. So all in all, a great business environment, and great opportunity for all of us and people like us to grow and consolidate.
Coming to this year's numbers, we have witnessed a growth of 14% in fresh sales to INR 601 crores from INR 529 crores. Revenue grew by 72% to INR 257 crores, EBITDA by [21%] to INR 49 crores from INR 40 crores last year, PAT by [96%] on a small base of INR 25 crores against INR 8.7 crores last year. Our collections were very healthy and that is a great [indiscernible]. In fact this is possibly one of the reasons that we have wiped out our entire debt, and we are sitting on a surplus as we speak, which is waiting to be invested in newer projects. So collection grew by 83% to INR 595 crores against INR 326 crores last year.
We launched 2 projects, rather 2 phases of the existing projects. One is called Chirping Woods and Foreste phase IV in Ahmedabad during this year, which meant our inventory [indiscernible] square feet.
For the quarter similarly fresh sales actually shows a decline of 27% to INR 150 crores, but this is against the quarter last year which saw 2 significant launches, and that's how this decline is visible. But what basically we say is that the momentum of INR 50 crores run rate on a monthly basis is continuing [indiscernible] for the year and INR 150 crores for the quarter, so that is [indiscernible]. Operating revenue grew to INR 161 crores because we just recently received a couple of building permissions, which obviously then augment the revenue in the books of accounts, and that's the reason that we show very hefty growth here to INR 161 crores vis-a-vis INR 64 crores last year. EBITDA at INR 22 crores against INR 14.9 crores last year. PAT at INR 14 crore against INR 6.6 crores. Collections are also fairly healthy at INR 160 crores vis-a-vis INR 133 crores last year. And of course, I already said interest -- we have a negative kind of interest-bearing funds now at INR 107 crores, and that's mainly a result of very healthy cash flow that we have had.
So this is all in all the summary of numbers and the kind of micro, macro environment that we are witnessing. There are, of course, a lot of tailwinds that we just discussed in terms of consolidation, in terms of viability, in terms of opportunity, in terms of consumer orientations to buy bigger and larger and better houses, in terms of government policies to push affordable and even a bit kind of houses. So in the marketplace, a lot of spending and augmenting the spending, infrastructure from the government side, et cetera, et cetera. These are obviously great news for all of us.
And at the same time, of late post the quarter, we've also seen some of the headwinds of significance, I would call them right away maybe a little premature, but interest rates after almost, I mean, I think, more than 6 or 8 consecutive quarters we have seen [indiscernible] increased so to say. We'll see how it plays out in the market place. But there definitely is a trend that is showing signs that interest rate might get start becoming -- might get consolidated to a certain extent.
The other aspect to watch out for is the input cost, which obviously has gone up dramatically in the last 3, 4 quarters. Last year, the increase has been significant in any case. So that is another thing to watch out for. We are doing appropriate and more steps to see how we get impacted to the least possible extent, and to whatever extent such increase in costs will be passed on to the market, without really affecting the demand in any significant way. But having said that, these are 2 things to be watched out in the times to come.
So that's pretty much from my side. Maybe we can now have questions and answers. You may raise questions if you have any.
[Operator Instructions] The first question is from the line of Kirti Jain from Canara Robeco [indiscernible] please go ahead.
Congratulations for excellent year-end, I would say.
Sir, my first question is with regard to the progress on the launch of the Sarjapur project and Devanhalli project. Where are we? And any contiguous business development we have been able to do with regard to either of the projects which we can highlight? That would be great.
Yes. So we have been progressing fairly decently on both these launches, and as we speak, we are coming closer and closer to launch these 2 projects in sequence. We hope that at least one of them will be launched in H1, and in fact, even the other one might be launched within H1 itself, if not 1 month here and there. So we are progressing well.
Devanhalli Phase 1, which is around 27 acres, the land use definitely is in our hands. The final leg of approval in terms of getting the plans approved is happening as we speak, so it's all in place.
For further aggregation, Devanhalli is a project where we could add more land. And as we speak, we have crossed 60 odd acres of total land acquisition there. I guess, Sarjapur, it was more like 35, 40 acres. Now, we cross more than 60. Of course, this project has increased recently in terms of size and scale. And we are not stopping still, and we want to invest more and make it to the extent of anything between 80 to 100, that's the target. As of now, it's 60 plus, the basis quote to take it up further, and we are happy with the size that we've achieved in a short span of time. And aggregation is one of the key kind of trigger in the interest of plotting et cetera and horizontal development, and we are happy to inform that it's on track and we have achieved what we want to achieve.
On the Sarjapur project, that's also coming closer and closer to the launch and Devanhalli is to launch half then itself. Most of the things are progressing very fine on this note and hopefully, that will be just launched simultaneously.
In this project, we have JV projects, so further acquisition is not something that we are directly trying ourselves. We are open to the idea of standing it, but through the JV partners. We are not investing anything beyond the landowners. But having said that, this is not a plotting project in Sarjapur Road, it is a villa project. For villa project to be spanning 16-plus acres is fairly deep in size and gives you something like INR 62-odd crores of top line, and we believe that is very decent of size for a villa kind of development. So there are no definitive plans of expanding the size further beyond this at this point in time.
But first Devanhalli will be there, right, next Sarjapur will come right, sir?
First Devanhalli should be launched.
Sir, you had highlighted in the last quarter that cash is not the best position to be in, you want to go up to 1:1 leverage and increase the BD activity. Any progress you would like to highlight, sir? Because in our presentation, we couldn't see anything.
So I mean -- of course, we have to leverage, that's what I said in the initial comments also. That right now, we are taking it as a negative system and we have to quickly deploy and raise reasonable amount of debt out there. Now, that obviously -- raising that is -- with this kind of headroom obviously is not a big challenge. But the challenge will be to have these projects and taking these projects up to a stage where we had to pay.
Now, we as a company would be a little more conservative in terms of parting our money even if we had definitive or preliminary term sheet signed for individual projects. So we would like to be very sure before we really raise even a single penny to a third party, and that's what has been happening. As we speak, a lot of efforts are going into the marketplace and there are things which are happening. But of course, they are not mature enough for us to release any significant money onto those projects.
But having said that, minus investments like expansion of Devanhalli, et cetera, et cetera, and the money to be paid to Sarjapur landowners, which are happening in any case. But then we are also generating cash on onlay basis. So until the time we pay one large amount to one land parcel, so it was one land part, so we could be investing in the region of INR 150 crores, INR 200-odd crores or thereabouts, we really don't need to take leverage. But the idea is to exhaust this limit of any kind of debt that we need to erase very, very quickly. And this will happen as we start closing and paying to the lines which are under negotiation and discussions right now.
But there is a healthy pipeline of -- advanced stages of discussions on many of these land parcels. And hopefully, we should be able to share some details in a very short amount of time from now.
Sir, just one last question from my side. Sir, given the certainty of the launches in H1 of both the projects, can we assume that INR 1,000 crores booking for FY '23, sir? Or will it be some challenges to meet that INR 1,000 crores, is it not?
Normally, at least, we would continue to avoid giving any definitive numbers and predictions thereabout. All we normally would tend to say is that there is a great, healthy pattern of growth that we have been able to achieve through the critical parameters and even growing in between 20%, 30% on the critical kind of variables there. So our endeavor is to continue that momentum, and with the launchings being planned and maybe a few more coming in, we should be able to maintain this kind of a growth rate over what we achieved last year.
[Operator Instructions] The next question is from the line of [Bhagat Singh from Rana Financial Consultants].
Good evening sir and congratulations.....
Sorry to stop you. May I request you to speak a little louder, please?
Yes. Is it better now?
Yes, go ahead.
Congratulations on a great 2022.
Sir, I have a few questions. Firstly, you mentioned that we have increased prices to mitigate the rising cost. So would it be possible to share a ballpark figure on the blended portfolio?
And what -- sorry, on what?
On the blended portfolio, across all the projects?
So you know price increase, the first question first. Of course, we have passed on a certain amount of increases in the marketplace. Fortunately, for us, the way our construction stages are or were when prices started going up in a very steep way, we're at a very advanced stage. And hence, a lot of steel and cement kind of material consumption oriented projects were at a fairly advanced. So to that extent, the impact has been limited.
But of course, this is holding through further projects which are already under construction. It doesn't mean anything when it comes to new launches. So if you have to restrict ourselves to the impact on the company on a current ongoing basis, there's not a significant impact there too directly. It's not commensurate to what kind of price you're seeing. That's because of the stage we are in. So that's one saving grace.
But irrespective of that, because the increase has been so much and the leftover construction, it's not -- is not to be ignored, and it's a fairly decent or level of construction that we need to still do. We have taken a couple of price increases already in most of our projects in the last 2 to 3 months. They are broadly -- in a very broad sense able to mitigate the partial impact that we are feeling on these projects because of percent of completion, et cetera, et cetera, and percent of whatever is leftover to complete.
But having said that, a couple of rounds of increases have been able to, at least significantly, partially mitigate this price increase. But then price increase is a function of, one, how much it has happened already? Two, for how long this increased level of prices will sustain? And three, how it will take -- whether it will take upward or downward trajectory going forward, maybe after 3 months, 2 months or 4 months' time onwards?
So we're just keeping an eye on this. We don't want to be increasing prices in a very indiscriminate rate and find ourselves outpriced. At the same time, a very cautious and calculated kind of call is being taken on each of the projects, individually assessing market conditions, competition and, of course, costs, et cetera, et cetera, to make sure that whatever increase we pass on is not only fair, it is sustainable, and it also is in line with the kind of quotas that we have in our mind in terms of cost cutting potential will be there.
Sure, sir.
Sir, my next question is on the launch pipeline for FY '23. If I see the presentation, we have mentioned that the -- yet to be launched projects are approximately INR 2,400 crores to INR 2,500 crores across Ahmedabad, Bangalore and Pune. So what would be our target for FY '23? Will we be looking to launch at least these projects, which are already there in the pipeline?
And a follow-up to this question is that, are all these yet-to-be launched projects already signed for us and are awaiting approvals?
So I'll just leave it to our CFO, Mr. Ankit Jain, who is sitting with me right now besides Avinash who's the COO of the company.
Ankit, if you could take this question, please.
Yes, sir.
So with respect to your question on the yet to be launched projects. So partly, it has been answered in the previous question, where we have mentioned that Devanhalli and Sarjapur are the projects, which we plan to launch during H1 of FY '23. So partially, that is answered.
Besides that, there is a --
Bangalore both the projects are -- the INR 1,000 crores total sales value potential is these 2 projects?
Yes. Whey we are not giving individual project-wise, but we had given an earlier estimate when we have done the acquisition of the project. So Devanhalli is approximately INR 400-odd crores, and Sarjapur is approximately INR 600-odd crores. So this is INR 1,000 crores potential, which is ready for launch during H1 FY '23.
Besides that, we will -- we are exploring of opening of Foreste Phase V as we speak. So this might also get launched during H1. There is a project --
For Foreste project?
Yes, Foreste project.
Yes. For Foreste project, if you're asking about the status, this is the next phase, which is already under approvals. We are hopeful that in next couple of months, approval should be in place, and the endeavor is to launch even that, Phase 4 of Foreste in Half 1 or very, very early Half 2. So that's the idea there as well.
Bhukum is at a little early stage. We are doing a diligence still. There are things that we are kind of working on from regulatory point of view, from title point of view, fairly at an advanced stage. Once that is done, obviously, when we get down to the actual planning, and -- so it's a little longish cycle for Bhukum. If at all the best case scenario could be that we launch it in the last -- quarter 4 of this year or maybe then that doesn't happen early next year. But that's how it is from project to project. This covers pretty much everything right?
And -- Sorry, sir, last project which you mentioned, I missed the name?
This is a project or the land, which -- where we have signed an agreement in Pune. It's a location called Bhugaon.
Right, right. Last quarter, which we had mentioned.
Correct. So as of now, these are binding agreement that under certain conditions ...
Which are -- under kind of achievement in execution, that's what's happening.
So best case, you will be launching all these projects in FY '23?
So I mean, we definitely are targeting to launch 3 projects this year. [indiscernible] to put together, and that's how the sheet is being shown here, and that's the target, yes.
Sure. Okay.
And sir, my last question is on the business development pipeline. We've had an excellent year, and even when we didn't have any new sales, new launches in Q4 FY '22, we did INR 150 crores of sales value, which is very healthy. So with collections going strong and with the new launches planned for FY '23, sir, what is the kind of business development that you think that we can look to acquire in FY '23 for future launches? I just wanted to get your thoughts on that.
So I think this got answered in the previous question where we said we got a very significant headroom when it comes to investing further, its a zero debt situation, you got a INR 120 crores of surplus lines into books of account, plus even if it was to be 0.7, 0.8 debt equity then INR 300 crore to INR 400 crores, this can be raised. Plus, we are working on some other capital structure as well.
So all we can, at this point, tell is that there's a very significant room, and building blocks when it comes to mobilizing more investments is all in place. And we should be rolling out all these plans in acquiring newer projects in the coming months. And specifics possibly could be shared at the moment individual deals are done, et cetera, et cetera. But there is a very healthy pipeline. The team is busy, and we're aggressively sourcing. Of course, we are conservative when it comes to evaluating risk mitigation, et cetera, et cetera. But having said that, at this point, we are all guns blazing in the market to make sure that we deploy the headroom at the earliest possible time.
Sure, sir. This is very encouraging. All the best.
[Operator Instructions] The next question is from the line of Chaitanya Shah from Silver Line Capital.
Sir, my --
Yes, go ahead, please.
Yes. Am I audible?
Yes, go ahead, please.
Yes. So sir, my question is regarding 2 projects, Aavishkar and Oasis. I think they got moved into the completed post in this quarter, right? I think we started recognizing revenue for both of them.
Yes.
So I just wanted to understand now, the booking value and the recognized revenue, there is a significant difference for Aavishkar. You booked INR 92 crores, and the recognized is INR 28 crore, and for Oasis I can see only half of the booking value is recognized. So I just wanted to understand how the accounting over here works? And continuing with that, the unrecognized portion of the revenue is given as INR 1,005 crores, if you can just give the basis of calculation for that?
Sure.
See, the revenue recognition criteria is based on performance obligation, which is dependent on two conditions. One is the completion of the project or receipt of the [indiscernible] OC, what we call. The second criteria is receipt of the money with respect to the booking value, right? So this is the satisfaction of the criteria. The revenue has been recognized, the balance revenues will get recognized as and when we collect the balance amount from the customers.
So even in the collections, the collections of INR 57 crores for Aavishkar and Oasis is INR 164 crores, so the numbers are even lesser than that?
Look at the unit level, we cannot look at the overall aggregate level while a certain portion -- while, for example, maybe upfront, 10%. Someone would have given 50%. So those units do not satisfy the criteria for revenue recognition. Beyond a certain threshold only, the revenue recognition criteria is met, and hence, we recognized this as a unique business, not at an overall process.
So there will always be a gap between when we receive money in absolute sense, and when such a value is recognized in the books of account. Because each individual sales in terms of 1 unit is either qualifying or not qualifying for recognition at a point in time. And hence, you could pick up only those specific units to recognize sales in where the threshold of receipts have been crossed.
So there might be a situation in a project where INR 100 crores have come, but no unit qualifies to be recognized in the books account. So this is a very typical and very established way of determining what can be recognized and what cannot be recognized. The only takeaway that we could be having here is that the difference between what we sold and what we recognized is a great thing to have. And the bigger that amount means we have a lot of sales, which has actually been affected in the marketplace.
Pending these thresholds to be met, they are now bound to come indicatively in the books of account. And that number, as we speak, for the company as a whole, stands at around INR 1,000 crores. That means INR 1,000 crores sales is such where some money has come, but we have not recognized such sales into the books of account due to these thresholds not being met. So this is a situation happening in these 2 projects as well, and any difference thereof between the sales value and the recognized value or even the collection value and the recognized value only represents the difference of threshold being achieved [indiscernible] basis for the unit specifics.
Right. Okay. Understood.
And sir, my second question is regarding the 2 projects in Bangalore and project in Pune. How much capital are we estimating will -- we have to put in these projects? And are you going to raise -- will it require you raising debt? Even just -- if you could give me some clarity on that.
So I mean -- I mean, a broad ballpark Bhukum if you are talking about Pune is around INR 100 crores of planned investment, right? And when we talk about Bangalore, Sarjapur is a JD project. So the total outflow is not going to be more than INR 15 crores because it's a JD project. We only have to pay the deposit part of it, which is in the whereabouts of around INR 15 crores. So these are the predictions, yes.
Okay. So when you give the INR 1,500 crores number in the estimated operating cash flow, a majority of the cash flows are being -- I mean, you're assuming the majority of the cash flows will be financed by the sales, right?
By -- sorry?
By the customer sales.
So with respect to a project which is under JD, it is linked with the collection and the ability to sales only. So hence, naturally, that will be paid from the sale.
With respect to Bhukum it is an outright purchase, which will come out from our surplus or from the debt which we raised.
[Operator Instructions] The next question is from the line of Aditya Sen from RoboCapital.in.
Sir, as per accounting, any broad guidance that we can have on the revenue and PAT of FY '23 and FY '24?
As a practice, we don't give guidance. But investor presentation per se is quite exhaustive. It's a format which we started using for the last couple of quarters. And I think there will be a fair amount of data points there to kind of understand the company in a more holistic and better ways. We'll encourage you to go through the presentation. And if you have any specific questions to ask from the presentation to the extent of publicly disclosed information that you have done otherwise, we would be very happy to share and discuss with you.
[Operator Instructions] The next question is from the line of [Chaitanya Shah from Silver Line Capital].
My second question is on the commercial project in Bangalore. Could you just give me an overview of what this project is? And are we looking at strata sales, or are we going to lease the space out?
Your last sentence was not too clear, if you can repeat that please?
The commercial project in Bangalore, can you give me an overview of the project? And are we looking to sell the project, or are we going to lease it out? What is the plan there?
So yes, I mean, we are not kind of developing this for a yield income. Everything has to be sold. We are constructing to sell, and the same is happening right now. And project is under execution at a fairly fast pace at this point. So idea is to sell, yes, everything.
[Operator Instructions] The next question is from the line of [Anvesh Parikh from Native Capital].
My question is on margins. So when you show -- when you're talking about the INR 1,500 crore operating cash flow, given the kind of raw material price increases we're seeing, what is the sense of margins with these kind of future cash flows? And to maintain margins at current levels, what kind of price increases do you think you need to take in some of your planned projects to kind of justify maintaining the current level of margins?
It's a good question. And I think this is one of those questions which must be getting asked in every real estate forum and every call that the analysts would have. Because, obviously, the cost increase has been steep, and no denying about that. Until these are passed on, they can be pressure on the margins.
But fortunately, here for us on the current portfolio, we see on the execution most of the things are either already completed and we are selling the inventory or the construction is at a fairly advanced stage and hence, the impact overall on the project costs, et cetera, is not too significant. And significant portion of such impact, the leftover impact, possibly can be passed on and we've already started doing it. So we don't see any major problem on the current portfolio.
But what is important for all of us is to look beyond what we are doing right now. Obviously there, given the cost scenario, the cost of productions are not stabilized yet. I think one thing we could possibly say with the reasonable amount of confidence is that possibly we will see in the peak already, and the cost has seen the highest that it has to see. And from here onwards, at least on aggregated level, we should start seeing improvements in terms of some of the basic materials coming back to some sort of levels which are more sustainable.
But of course, it has to play out. As we said, affordability in the marketplace is, I think, at its finest. The income levels have increased, and the salary increases and macro earning reports have been encouraging and hence consumers are still in a position to buy, so to say. We don't see any significant [indiscernible] or depreciation happening when it comes to overall viability and affordability of housing per se.
So medium term, we don't see any major impact coming unless we haven't seen enough of the cost increase that happened in the last 3 to 6 months' time, and we definitely see a significant potential to increase prices within a band. And that band should be decent enough to broadly kind of cover up. So all in all it's a situation which is unfolding. But at the same time, we see scope of improving and increasing pricing in bands that are acceptable and affordable in the marketplace. And that should be broadly okay in terms of [indiscernible] the extra cost. But having said that, some minor impact possibly could come, and new launches will need to be calibrated in terms of pricing, et cetera, keeping the more sustained level of cost increase, which we will realize in the next maybe couple of months, 4 months' time from now.
Got it.
And my second question is just in terms of duration or the time line, especially for the ongoing projects which we're launching. What is the time line that we should assume for this INR 1,500 crore cash flow that you have? And on any of the projects that are ongoing, is there any delay that -- is there any significant delay that you would like to highlight?
We have already given our estimated completion time line for each of the projects, if you could refer to investor presentation.
And with respect to this INR 1,500 operating cash flow, this is operating cash flow, which is -- which is yet to come or unfold over the next 3 to 4 years as and when by the time we complete these projects, and we realize the entire cash.
The next question is from the line of Prem Khurana from Anand Rathi Financial Service.
Most of my questions have already been answered, so just a couple of clarifications.
So basically, first, is to continue with the question asked on the previous participant in terms of inflationary pressures that you've seen. So how will this make us change our sales strategy? And what I want to understand, what this make it go a little slow, try and phase out your sales a little more so that you are able to kind of take price hikes and cover for the inflationary pressure? Or you would want to sell them when you are able to sell and you're not bothered about the -- the inflationary pressure would stay there? So if you could -- if you could share your thoughts on this please. And then I'll take up the second question later.
So there's no question of having any sort of deceleration of sales as an effort. So we will sell what we sell, and we'll put all our efforts in the direction that we see at any given point in time. And cost pressure is right, everything is fine. But when it comes to sales, we are all there and we are putting all efforts to do all the time. So that's not a problem.
All we need to do is that we need to be careful by launching new projects because they will have maximum impact of any sustainable cost increase that we'll see as it unfolds. And we need to calibrate our pricing vis-a-vis such cost increases, and at the same time, sustainable in the marketplace in terms of saleability, et cetera. At the end of the day, consumer is important and their affordability is more important than what the margins are.
But having said that, we think that there are reasonable reasons to believe that there is a reasonable amount of headroom to increase the cost or increase the prices to start with. And there is also a possibility of costs getting stabilized in the next couple of months or 3 months' time from now onwards. A lot of macros should be falling in place. A lot of uncertainties should go away, a lot of turbulences which we see across the globe. I mean, a lot of it is related to what is happening outside our country. I mean, those things should also settle a little better.
So when there's no -- I mean, they are not linking our sales efforts to the inflation and these temporary things happening. Either way it goes, I think the sales engine has to perform and continue to perform with full rigor and vigor at all times, and that's what we are doing and focusing on.
And sir, just to understand, I mean, your price hike strategy a little better. So let's say, if you have 2 projects, one which is already launched and you've been selling it for a while now and you already have some lead pipeline in place where people have visited the site, they have negotiated to a certain extent, and there is a new launch. And if you want to take a price, I mean, is it easier to take a price hike if it is a new launch because there is no benchmark in place, and you're starting off fresh so you could sell it -- I mean there is a different amenity, the configuration is different, and you can set a price, which is kind of -- is able to justify the kind of efforts that you put in and you are able to have margins? Versus something which has already launched and you've been selling it for a while now, and there -- you're taking a price hike where there's a benchmark number is already in the market, and the people know you were selling at this price some time back.
So how easy or difficult is it to be able to price it with older projects versus a new launch?
This is very, very specific. I mean, each project will behave very differently, and it's a summing of many, many, many factors. In fact, to the contrary, there are situations where, as the project progresses, the scope of increasing prices actually are significantly higher, and we got several examples out there. Three of our largest projects, the Highgrove, the Foreste and Uplands. They've all shown that when we show projects in a more mature and advanced way and stage, the increase in prices is disproportionate. And hence, in the context of such projects where customers could come, feel and see the quality, quantity, et cetera, et cetera, you could actually -- it is easier to take price increases, that's what our experience has been.
In fact, even prior to the cost increases, we could take very significant increases just because the projects look very different. So I think it evens out, and potential to raise prices in an existing project is as great, if not more, as compared to a new newly-launched project so to say. We rather believe in the other thing that you do, job in a way that customers are excited when they see stuff, and they should be willing more to pay more when they see what is happening in the project.
And that's what -- it's our [indiscernible], and we've been doing this day and day out. We will rather have a progressive pricing [indiscernible] at each stage, we can command better price, and that's how everybody feels happy and feels more satisfied. And that you listed, you can see the brand and the brand performed and it delivered, and it showed very, very brisk and great progress, and that's why more people want to buy. And you kind of create that FOMO kind of environment that look this guy has missed it and I also should be missing because you see the kind of progress and the project today is becoming.
So we believe that it's actually the way around, and newer projects have more potential to increase prices.
Sure. And just one last, if I may.
Can you help us with the launch pipeline for FY '23? Because if I heard you correctly, in your opening remarks, you said, I mean, Q4 is somewhat lower in your Q4 FY '21 in terms of bookings because you couldn't -- or rather, I mean, last year, you had a couple of launches wherein you saw seriously good demand, which is why you could have larger number last year. Versus this year, Q4 FY -- Q4 wherein the sales was slightly slow because you did not have launches. So if you could help us with the launch pipeline for FY '23?
And how do we ensure that revenue don't get to have these kind of situation, where if you don't have a new project in any single quarter? So I mean, the -- so are planning to launch any project during the quarter and we couldn't have approvals in place in time, which is why you missed the launch? Or we did not have any launches planned for Q4 because we had some inventory availability or liquidate the inventory? That will be it from my side.
So I mean, I think the same pattern always needs a little bit of a dissection into what is a steady state and what is the new project launch stage. It's like in retail, you ask the question, what is the growth of sales in same store on the same-store basis? And how many stores you open and that contributing to what extent of additional sales? If we merge these 2, this will be a little bit of a blinding so to say in terms of really understanding the data.
So when it comes to steady-state sales or the sustained sales, as we call it, in real estate, that has been pretty healthy, and we've grown significantly. So INR 150 crore is pretty much the sale of the projects, which were already launched. And of course, the launch time lines being anything between 6 months to 12 months for new projects to be launched and the kind of products that we are doing large one, original projects, et cetera. The time line to launch from acquisition is anything between 6 to 12 months. So it will normally not be possible to launch very consistently every quarter in quarter out, and hence, there will be orientation in the numbers that you show.
These are just about explorations to why a decline is visible and what are the easiest explanations to those. But having said that, these fluctuations obviously will come down as the base size of the company kind of increases. So a company which has 10 projects in total and adding 2 or 3 or 4 every year will have more of these peaks and troughs as compared to a company which has 50 projects, and they add 15 every year. So to that extent, depending upon the life cycle of the company, this will vary.
But in the context of understanding of the trajectory of the company, whether or not and to what extent is sales engine is working, et cetera, et cetera, I think having dissected this kind of a bifurcation will give us more tools and wisdom to the leader of the data to decipher what's happening in the company.
As there are no further questions, I now hand the conference over to Mr. Kamal Singal, MD and CEO, for closing comments.
Great. Thanks a lot, and I once again thank everybody who participated in this call. Thanks again for sparing time. It's been a great run for all of us in the last more than 8 quarters. We've shown that the economy has bounced back and the company is prepared and equipped to not only exploit the depreciation, which you seen in the last few quarters, but also take advantage of the sustained environment that we see, which is all positive.
We need to be mindful of a couple of variables which are there, commodity pricing to start with, interest rates to again be kept in mind, et cetera. But I think there is enough momentum, there's enough reasons to believe that this momentum is going to be continuing. And we are pretty much equipped to handle it. We have a very, very strong and robust investment cycle in place, initiative in place. And hopefully, we should be able to add to our existing pipeline of inventory in a very, very significantly, and in a very short amount of time and that has been our endeavor.
Thank you very much once again for participating in this call. And I wish you all the best for your endeavors. Thank you.
Thank you very much. On behalf of Arvind SmartSpaces Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.