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Arvind Smartspaces Ltd
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Ladies and gentlemen, good day, and welcome to Arvind SmartSpaces Limited Q4 and FY '23 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Smit Shah from at AD Factors IR. Thank you, and over to you, sir.
Yes. Thank you, Vivien. Good evening, everyone, and thank you for joining us on the Q4 FY '23 results conference call of Arvind SmartSpaces Limited. We have with us today on the call Mr. Kamal Singal, Managing Director and CEO; Mr. Ankit Jain, Chief Financial Officer; Mr. Avinash Suresh, Chief Operating Officer; Mr. Prakash Makwana; Company Secretary; and Mr. Vikram Rajput, Head, Investor Relations.
Please note that a copy of disclosure is available on the Investors section of the website of Arvind SmartSpaces Limited as well as on the stock exchange. Please do note that anything said on this call, which reflects the outlook towards the future, which could be construed as a forward-looking statement must be reviewed in conjunction with the risk that the company faces.
I would now like to hand the call over to Mr. Kamal Singal for his opening remarks. Over to you, sir.
Thank you. Thank you for your introduction. A very good afternoon to everybody, and a very warm welcome to everyone present on this call. Thank you for joining us today to discuss the operating and financial performance of Arvind SmartSpaces for the fourth quarter and full year ending March 31, '23.
I would like to begin by sharing my thoughts on real estate environment and broad highlights of the quarter. We can then look forward to taking your suggestions and questions.
India, as we know, has now become the most populous country in the world. Its urban population is also -- non-urban population is also one of the largest in the world now. This population, obviously, is moving towards city in a very, very big and quick way, making India the fastest urbanizing country in the world and humankind's history. This indicates that the market for urban real estate will keep growing at a pace which possibly has never been seen.
Even as the real estate market is becoming larger and larger, we see that there is a huge scope for organized builders to contribute to this demand and supply, of course. Wherein the changed environment, [indiscernible] and GST has meant that the small and unorganized players are finding it difficult to survive in the new regime, regulations, municipal compliances, et cetera, et cetera. And there is a renewed opportunity for the organized players in that sense.
This very big change is happening in industry, and we've been talking over to the last few calls all the time, has resulted into the wider [indiscernible] between what market needs and demands and what is the kind of supply in terms of quality, in terms of quantity et cetera coming from these more qualified "competent and organized players in the industry".
And this unique situation is giving us an opportunity at Arvind SmartSpaces. We see this as a big opportunity for us and people like us, in companies like us, in businesses like us. The gap between these 2 things has been increasing at a very fast pace, and this represent a huge opportunity fulfilled for players like us.
At Arvind SmartSpaces, we are differentiated in product. We are differentiated in positioning, and we also feel that we are differentiated in perspective. We [indiscernible] different designs. We [indiscernible] design properties very differently. We also think a little differently.
The result of this holistic mindset is the ability to maximize value on every square feet of land that we consume and we use. We represent coming together of a company that is statically very conservative, but very, very audacious when it comes to creativity and the designs.
We have been talking about it in the past. We are trying to build a company, which is despite being a very, very capital intensive business that we are all engaged in. We are building a company with very, very light balance sheet comparatively, with no debt at this point in time as we speak and very clearly focused on a business which is very profitable, but at a relatively small balance sheet size.
we are operating in a very competitive margin environment. At the same time, we are optimizing and generating a very, very healthy return on equity. The way our business model is structured and the way we are trying to conduct our balance sheet business bank and the cash flows.
Coming to the operational performance, we are delighted to inform that the company has recorded the highest ever annual booking of INR 802 crores, which represents a growth of 33% over FY '22. For the first time, a number of units sold also crossed 1,000 unit milestone annually. Brand has been continuing to resonate strongly with homebuyers across Ahmedabad, Bangalore and [indiscernible] markets. This is evident from the stellar performance of the new launches, including food supply for [indiscernible] great land, et cetera, which contributed to more than 56% of our total bookings for the year.
From a quarterly perspective, we had the strongest ever quarter Q4, bookings at INR 244 crores, second consecutive quarter with a face value of over INR 200 crores that we achieved in the last 6 months. Our Bangalore presence has strengthened further, contributing 58% of the total annual booking. Both the fields of great lands have received overwhelming response from customers. Bangalore region is shaping up very well and we expect it to get stronger in the coming years with increased launches in business development activities. Both FY '23 and Q4 collections also were the highest ever in company's history. A result of efficient execution of various processes, focus on sales, registrations, construction, deliveries, et cetera, and strong perception and profitability has also resulted in [indiscernible] cash flows of more than INR 200 crores for the year.
Moving on from operational update to the financial highlights. FY '23, we reported a revenue of INR 256 crores, a similar number to the FY '22. EBITDA at INR 49 crores and PAT at INR 26 crores, a growth of just about 2%. In Q4, we reported a revenue of INR 23 crores, EBITDA at INR 20 crores and PAT at INR [20 crores].
Our balance sheet position remains very strong despite the increased investment in business relevant activities, our net debt remained negative at INR 30 crores on account of significant increased internal accruals. I just mentioned, we've had a INR 200 crore of operating cash coming from the business itself in the year as a whole.
As a company, the focus already remains on shareholders' value creation. We are happy to share that the Board Directors recommended a final dividend of INR 1.65 per share. And in addition to that, a onetime special dividend of INR 1.65 per share once again totaling to a total dividend of INR 3.3 per equity share of face value of INR 10 each. The momentum in the Indian housing market continues with the rising residential sales, declining inventory levels and appreciation in capital values across major cities.
Going forward, we have to expand our portfolio of projects with 7 launches lined up across a range of micro markets in Ahmedabad, Bangaluru et cetera. Our investments of INR 1,000 crore is very much on track, and we look forward towards its deployment in business development activities in the coming quarters. FY '24 is expected to be a year of new launches, project additions and bigger milestone for ASL. We are set to scale up faster while maintaining our financial discipline.
With this, I mean, this is about the dot and margin technique that I wanted to talk about. Maybe now is the time that we could take questions.
Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Bajrang Bafna from Sunidhi Securities.
Yes. Congratulations for a good set of numbers and achieving the guidance that the management has given for FY '23. So sir, broadly, if you could guide us what sort of launches that we are going to witness in the coming 1 or 2 quarters, the Sarjapura and all that we talked about in the last call. So what is the status? And how are we seeing the launches of those 4, 5 projects which are lined up? What is the progress on that? And what sort of demand scenario, which is existing?
And is there any change on the ground level because hopefully, the indications from the debt markets are that we have peaked out in terms of interest rates. And as we move forward, we will see the rates either to stabilize here or to come down. So what is the ground level indications on that will be really helpful. These are the questions from my side, sir.
Sure. Thanks, Bajrang. Two, three parts of your question, let me address the first one first, which is regarding the new launches. As I just mentioned in my address, the investment cycle that we overtook few months back, which constitutes a big amount of proportion coming from individual platform is truly underway as we speak. A very significant portion of other -- most of it has already been now committed in the sense of -- when I say commitment, it basically means projects are identified commercially and acquisitions are over and possibly, we would have also paid some amount of money to lock the deal. But then the last phase of actually announcing and assuming that the project is now taken in is underway, is to complete the [indiscernible] process, which is happening for various projects that we already kind of semi-finalized in that sense.
So that's fully on and we'll keep going back to all of you and tell you individual projects as and when they keep maturing to that extent and that level. Having said that, while forecasting exact launches might be a little difficult thing because timelines could always go a little here and there. But broadly speaking, we are targeting to launch projects with the top line potential of around INR 2,000 crores and a little less than that or within next 3 to 6 months' time. So that's the target we have in mind.
But that does not mean that, that is what is the total of our current investment cycle. Current investment cycle involves INR 1000-odd crore estate to be invested which would give, as we guided earlier, a top line of around INR 4,000 crores to INR 5,000 crores. Out of this project pipeline that we are doing and executing right now, we are hoping that 40% to 50% of that should be coming in to launch the next 6 months of time, so to say within this year.
So that's in the launches. Next thing that you asked was about markets and factor like interest rates, et cetera, et cetera. So as we speak, we -- I mean, we keep hearing some of the headwinds in the form of interest rates. And we know that tech company is not doing that great overseas and in India, et cetera, et cetera.
However, on ground, we have been fairly confident in the staff. We have launched some of the most successful projects in the last few months and velocity has been having way better than what we would have anticipated even in a normal situation. So while on one hand, we are all hearing news which should all be making us more cautious on the market side. But on ground, we have carried with a decent amount of balancing. Maybe it's a result of product, maybe it's a traction that the brand is getting, maybe it's to do with the market, which still is healthy. Maybe it's about the product mix that we are trying to execute in and their personal preference, et cetera.
But end of the day, it's being good at this point in time. Interest rates also, as you very rightly mentioned, is a headwind. But we don't think that it has reached a point where we should be starting to worry too much. All these factors give us enough food for thought where we have alternative strategies and we have our socks pulled up to take up higher challenges. That's how we are treating it and keeping ourselves a little more cautious as to little what we have 6-months back coming back. But let's see how it pans out from here onwards. So far, so good.
And we are hopeful that interest rate in that sense are very close to having peaked out. We don't expect interest rates to grow very dramatically up from where they are today. And hence, possibly, we are seeing the peak or very near peak when it comes to interest rates in India. Rupee has been very stable. Why we say so has two reasons. Rupee has been pretty stable especially if you were to compare with our peers across the globe, possibly India is somewhat a better performing economies in terms of monetary [indiscernible] et cetera, et cetera and hence the currency is fairly stable. That means inflation is not expected to be going out of any reasonable limits. And hence, prices to go up should not be [indiscernible].
This is also kind of alleviated by the fact that most of the commodity prices are fairly stabilized. Last 6 years have seen effective drop on a weighted average basis in terms of the broad basket of material that our industry consumes. To that extent, the cost increase, the prices in these cases are lower and inflation pressure are low. And hence, we believe that interest rates should not be very dramatically different from where they are.
But we are also not sure at the same time about interest rates going down in [indiscernible]. So either way it's pretty stable at this point. Your other part was -- I think we've covered most of the issues. Demand side, we just touched, interest side we just touched. And we have also touched about the launches that you asked.
[Operator Instructions] The next question is from the line of Dikshit from One up Financial.
And firstly, sir, congratulations on an excellent execution over the last 4 to 5 years, from INR 200 crores of presales 4, 5 years over to INR 800 crores. Congratulations on that, sir, to the entire team. Yes. Sir, I have a couple of questions mainly linked to the cash flow and the BD.
So sir, in FY '23, we have done approximately INR 200 crores of operating cash flow, as you've mentioned in one of the slides. So with FY '24 with a strong launch pipeline, you mentioned INR 2,000 crores in the next 3 to 6 months, and our existing projects are also doing reasonably well. So would it be fair to assume that this cash flow will only increase further and the money which we have to invest for this INR 2,000 crores of projects incremental that we are going to acquire, would it be more or less internally funded? Would that be a fair assumption for FY '24?
Yes. I mean, broadly, I mean, your conclusions and interpretation is correct. We did create an OCF of around INR 200 crores, [indiscernible] more than INR 200 crores in the financial year '23. And going by the fact that the recent projects that we launched have gone quite successful and they are horizontal in nature, which tend to give us quicker cash flows, at least in the context of overall cash flows to be received for the project and also in the context of the fortunate amount of expenditure that we have to increase, which means that the net cash flow after expenditures into the project for R&D. That gives us confidence that this number of INR 200 crores should only be improved in the year '24. That's one.
And obviously, this and more cash flow, which are internally generated, will go into investment cycle. But if you were to see the year as a whole, obviously, the investment plan is bigger than the internal accruals that we are talking about here. It includes the unused component of like for me, the HDFC, and it has a component of possible debt that we can think. Right now, we are negative and this negative is not a great idea in the long term. So we need to have reasonable amount of leverage in coming back into the balance sheet to create more value.
Of course, we will be -- we'll remain very, very conservative, but the idea is not to remain negative on that. So internal accruals, debt to a very limited extent and HDFC platform. These 3 things have been helping the last one year. We've done quite a bit of this -- through all these 3 -- these 2 routes. We haven't really taken debt in that sales. But going forward, we saw these 3 will be getting exhausted and hence, the investment will comprise of all these 3 components.
Right, right. Sir and so just further on this, we have spent approximately INR 300 crores, INR 310 crores in FY '23 for business development. So what kind of figure are we looking at for FY '24 if you have something in mind and what kind of GDV that we'll be getting on?
Yes. So as I said, approximately INR 1,000 crores or thereabouts we'll go further during this year on the BD activities. And that's what we have. As I said, we are nearing commitments, and that's the commitment that we are talking about.
Broadly, that is what will happen in terms of new investments. On GDVs, I said we normally are at a proportion of 4 to 5x the investments. So GDV should be more like INR 4,000 crores to INR 5,000 crores. In our case, GDVs are comparatively lower because we are doing more oriental projects. But in terms of the amount of EBITDA, amount of PAT, amount of cash flows that it generates, that is the equivalent or rather better than the normal GDVs, which should more be in the region of INR 5,000 crores to INR 6,000 crores of GDV atleast on a INR 1,000 crores investment.
So in simpler words, for everybody is easier understanding, we will definitely target to have margins, PAT, EBITDA, et cetera, equaling to or more than what we would have done from a GDV of INR 5,000 crores, INR 6,000 crores by having a GDV of maybe more like INR 4,000 crores in the same amount of investment. That's the product mix that we're talking about.
Okay. Okay. Sir just to clarify, there's INR 1,000 crores to be invested in FY '24 for acquiring new projects, and this will be from -- funded from internal accruals, HDFC platform? And if required, we will be levering up the balance sheet?
Correct. Yes.
Right, right. Okay. Okay. Okay. And sir, just one question on the bookkeeping. On the balance sheet, there is some INR 100-odd crores of debt, and we mentioned every time that interest-bearing rates. So if you can just explain what is this interest-bearing rate and the balance sheet that we have reported?
Sure. I'll ask likely to Ankit to address the question specifically.
Yes, sure. So balance sheet do not net off the debt and the investment. Investment is reported separately, and debt is reported separately. Having said that, the balance sheet debt comprises of the OCD which we are issuing to HDFC for which we have given a note in the investor presentation that approximately around INR 90 crores worth of OCD has been already issued to HDFC, which is outstanding and has not been reported by reporting the net debt because we see that HDFC that our money is more related to the risk and reward, which is being shared with the [indiscernible].
[Operator Instructions] The next question is from the line of [ Altish Thakkar ] from [indiscernible] Stock Broking.
And congratulations for a very good set of numbers. So my first question is mostly on the industry front. So is it players like [Mahindra] [indiscernible] league [indiscernible] party increasing their focus on redevelopment in Mumbai. Shouldn't a brand like Arvind also capitalize on this opportunity and it will also give us our first entry into Mumbai in an easier way? So any thoughts on that?
Yes, you are very right. We have kind of visited this in the past also. That asking Ahmedabad and Bangalore, we see Mumbai, outskirt of Mumbai rather, which is MMR and Pune is the next geography. And accordingly, we have kind of deployed resources and efforts there in BD. Some sort of activity has already taken some amount of shape there. Very hectic kind of efforts are being taken or we have put in. We are postponing that we should be doing something there in very near future.
Although in the beginning, it might not be great in the sense of proportion of overall sales coming into our groups from this market. But definitely, this is a focus area and dedicated resources are now in place from ground to see if we can make some sense out of 1 or 2 projects in these 2 markets.
So clearly a focus area. We want to do a few things, efforts are on. And we are a little conservative. But having said that, as you are aware, we've done 1 project already almost about completed in Pune. So we know the market -- micro market, we've learned our lessons. You end up little market in no detailed by going through this range. And hence, now feeling much more confident about doing it.
Now it's a question of finding the right project with the right mix of profitability, sustenance, do-ability size, et cetera, et cetera, and we're taking upsized projects. So you might end up very much so.
Okay. And just deep dive into this one. So is it fair to assume that there's INR 1,000 crores of capital deployment that we are about to do in this year? That will have the portion, a few of the deals in Pune and MMR also on...
Yes. So when it comes to BD [indiscernible] from the point of view of value it's 1 bundle. So we are not keeping separate bundles for separate markets. All in all, we are intending to spend INR 1,000-odd crores. That's for sure. And to certain extent on 1 or 2 projects and money should be diverted towards MMR and for Pune markets as well.
[Operator Instructions] The next question is from the line of Rishikesh Oza from RoboCap.
I wanted to [ reconsult ] estimated [indiscernible] in cash flow.
Sir, we are not able to hear you clearly.
Am I audible now?
Yes, this is better, sir.
Okay. So in our estimated operating cash flow table, we have said the INR 1,582 crore number of estimated cash flow. You mentioned -- like said this is at the EBITDA level, at the EBITDA for the company level. Now if you compare this with what earlier management they have indicated that they wish to maintain around 22% to 25% of EBITDA margins. But if we compare this INR 1,582 crore number with the receivables, plus the estimated value of inventory, the number is actually way above 25%. So like can you help me reconcile this? Or am I like missing out any expenses is not there in the operating cash flows?
See, I would like to clarify that the estimated operating cash flow which has been reported is based on the future cash flow, which we will be receiving from the existing bookings, which are pending to be received. Secondly, from the inventory, which will get sold. And after netting of the corporate overheads and of course, the cost of the project.
The cost of the project includes landlord share as well. So the operating cash flow, which is estimated, is not the EBITDA margin. It is at an operating level, but it is not that EBITDA is expected on a INR 6,400 crores based, the EBITDA expected at INR 1,600 crores. That is not [indiscernible].
These 2 numbers, they are disjointed. At any point in time, they might not match up to that 25%. But if you were to match up this number with whatever we've achieved in the last few quarters, and few quarters going forward and add up everything, this will all add up to 25% for sure. The business snapshot, which has 2 different numbers, which are disconnected. And this INR 1,500 crore basically is the money left over by paying up for all the lands whichever is the outstanding amount towards the land, the land of sharing joint development agreements and all the development expenditure left over now from here onward with respective to sales levels, et cetera, et cetera, and the corporate overheads. So it's a little disjointed number and hence calculating percentage based on INR 1,500 crores to any number like top line or total money to be spent et cetera will not be correct.
Okay. And also, sir, at the start, you mentioned that in 3 to 6 months, you'll be launching around [indiscernible] potentials of INR 2,000 crores. So like what will...
Sorry to interrupt, sir it's disturbing again on the line.
Is it better?
Yes, you can continue. Let's try it out, yes.
INR 2,000 crores that you [indiscernible] is strong.
I'm sorry, sir, we are not able to hear you.
Okay. So no problem.
Now it's better, sir.
Okay. Try again. So the INR 2,000 crores of top line potential project that you said you'll be launching in like 3 to 6 months, so what is our share in that?
Yes. So the project by detail has been already been mentioned in the presentation. For example Sarjapur growth project, which is a needy project, where the top line potential is close to INR 670-odd crores, where our revenue share is 65%, number one. There is a project under HDFC platform, which is [indiscernible] growth project where the top line rental is close to INR 400 crores, right?
So all the projects have been mentioned and detailed with respect to our share.
But as far as books of accounts are concerned and the gross margins are concerned, this entire INR 2,000 crores top line on a [indiscernible] basis on the margin side will come and get reflected into our books over all business. So it's not that these numbers are going to be distribute between 2 balance sheet. They are all going to be coming in, resting in -- within our P&L and balance sheet.
[Operator Instructions] The next question is from the line of Chaitanya Shah from Silverlight Capital.
My question is continuing from the previous participant's question on the cash flow. Now pardon me for my understanding. I just wanted to understand the INR 1,600 cash flow that you report. As a financial investor, how do I use the INR 1,600 crore number to arrive at a valuation of the company? Because I got a little confused between when you said -- because the presentation mentioned that this is the EBITDA level and you said that it might -- there might be a mismatch. So if you could just give a little bit more detail in terms of what this actual cash flow is and as an investor, what should I be expecting from this cash flow in terms of how you want to come? And how do I use it to value the company?
Chaitanya, I mean, as a policy, whatever the information we are giving and we talk about, et cetera, is not about valuation of the company. Of course, valuation depends upon so many other factors and [indiscernible] there and other places. So that's a very difficult question to ask and answer from our point of view.
But what we can help you with is to say that this INR 1,500 crores represent the status of current projects already launched in the pipeline already being there as of on a firm basis, there are expenditures to be incurred and there are some incomes to be dropped in, cash flows to be dropped in. Netting off of everything whatever is happening currently without considering for the investment cycle that we just talked about broadly speaking and maturity speaking. This is a snapshot of what is happening right now, excluding the projects, which are not forming part of the mix of the project beta detailed in the presentation, adding up to this INR 1,500 crores.
So it's just one number, which give you a snap of current, then I mean, there are projects we've undertaken, investment cycle we've undertaken, et cetera, et cetera. These are the rear end numbers per se. But valuation will be something which is a different issue and to interest accordingly.
Adding to as one more clarification statement. This represents a free cash flow which will accrue to us and which represents only our share of numbers. For example, if there is a HDFC share, it does not immune that any HDFC...
Any distribution outside this is not part of this. This is our share from whatever we're doing based on the projects which are already in the market, launched and acquired.
It does not represent of a investment cycle of the plan, which has not still got concluded.
All right. My next question is regarding the Bangalore and the Ahmedabad market. Could you help me with the value and volume growth that would have happened in this market because we clearly had a pretty strong growth in our presales.
You're asking what the proportion of sales that happened?
No, I'm asking about the market in general.
Market in general.
Yes.
So I think both the markets are being fairly strong despite the challenges that are better city like Bangalore is assumed to be facing. I think there is enough and more traction coming from that market. Vendor is strong an IT of course, traditionally. But it's equally strong on services with the traditional services and manufacturing and other services.
Also, Bangalore is a mix of quite a few sectors which are going strong per se. And even if sector like IT was to go a little slow, there are quite a few other triggers as well. So we are quite hopeful, and we are quite buoyant about Bangalore as a market. In fact, a very significant proportion -- Ankit can you help me with this exact number out of INR 800 crores that we did -- what is a proportion exactly?
58% is...
So almost like 60% has come from Bangaluru in the year we calculated in March. So it's fairly strong.
Ahmedabad is our home market. It is not as big as a Bangalore market. But this is not a small market, either. 40% of INR 800 crore means almost like INR 300-plus crores coming from Ahmedabad is a decent number, but we see a lot of scope still. I don't think we are deep enough in any of these 2 markets. We see a lot of scope. I mean we've got 3, 4 projects going in each of these markets in a significant way.
While Bangalore has a potential of at least having 12 to 15 projects going on at any one point in time. And quite a few developers have shown that in the past. And we clearly, in our own assessment think that this kind of depth is possible and do-able for a brand like us.
Similar is the case with Ahmedabad. We think we are still on the surface and there is enough depth to be explored further. So market sizing point of view, both the cities are fairly good. They are doing very good. Ahmedabad has quite a few triggers for example, gift is happening, outside investment is coming, urbanization in a more systematic way is coming, quality of land being made available from town planning point of view is one of the finest in the whole country.
And hence, there are quite a few kind of tailwinds. One important thing which happened in Ahmedabad market is that the circle rate or the reference circle rates for properties has been doubled in one shot across the board. Not that this has totally taken away the problem for organized players like us who don't deal in cash at all and it's all about check transactions. But this definitely has helped people like us further. There is a component of transaction in the gray market that should go down dramatically. So that is one more boost which we have come to people like us and the constraint has gone down to that extent.
Right. And generally, in these markets, do you see investor demand picking up? And I'm asking this because we've been reading a lot about rents shooting up in Bangalore, especially. So what is the status there?
See, investors and rentals actually represent 2 very different set of customers and the rentals are increasing, basically, that means that investor-held-inventory is actually going down and inconvention is increase, which is great news for us. When the rentals are increasing, this means that the consumption is high and on-ground business shortage of house. That is all important.
In fact, when it comes to investors, is the other way around. If investors are coming back and investing a lot of money resulting into stagnant rentals or rentals even going down that we've seen in the past couple of times, that is a dangerous situation of oversupply, which we should avoid at all the times.
Players like us who have a plain business model, they normally will not prefer. And actually, they can't afford to have a very large investor base. Investors in India come with a bag of money which is of multiple colors, which does not suit us. And we, broadly speaking, rely and depend upon noninvestors and consumers.
Our customer mix clearly states that our lines dependence and our relevance to investor is very low. But end consumer, we make a lot of sense and that's why we sell so much of our inventory and so much of proportion of our sales goes to a direct sales and people who are just word-of-mouth and [indiscernible] et cetera, they make some of sales to us. Most of, maybe more than 80% to 90% of sales happening to either a second homebuyer or the first homebuyer, and that is a market which is more sustainable.
I mean less close to peaks and troughs and that is where we are and that's how it is panning. Also, we don't really depend on investor. In general, also, we don't see investors coming into built-up properties in any significant way. Most of the action that we've been seeing and we are expecting to see in the coming few months and quarters is the market, which is driven primarily by [indiscernible] consumption and increase in rental basically indicate towards that healthy situation that a good developer would expect to have.
Okay. All right. And just one last question that I have is the collections this year have been almost similar to the last year collections, but the sales have gone up by 30%. So is there any particular reason for that?
So I mean, it depends upon the launch timelines and initial collection, et cetera, et cetera. Now Ankit, do you want to say something about this?
Yes. So if you were to look at the trend, we had in FY '22, one of presales of INR 400 crores. Then in FY '22 was INR 600 crores and FY '23, now by INR 800 crores. So overall collection, we do cater. Over -- collection got up with lag. It will not happen that whatever is the presale, sale will be the collection.
[indiscernible] they should possibly have increased to the greater extent. So to say, which is a valid question. But I mean, we have our targets of collection based on the actual launches, the timeline of launches and then the first milestone and the second milestone and the third milestone, et cetera.
The day we have launched and the sequence of the sale, like the 3 major launches that we had towards the second half and more like the last couple of months of the financial year, they just got sold. We get 10%, and then the collections kind of speed up. So this is a very normal trend. This is a function of when and how much was launched and sold.
Accordingly, we planned out the collections and collections have come out that way. So no big kind of impact on that. If we are [signing] at INR 600 crores and whereabouts, I think this will then mean that this year should be a better year.
All right. I have one more question, if I'm permitted to ask.
Sure.
Yes. So the 2 -- the Bangalore launch that happened this year. Both of them were sold out pretty quickly. What are you doing exactly in terms of having such a phenomenal response? And similarly, recently, there was a project by DLS at NCR, which was in news, which sold INR 8,000 crores in a day -- a couple of days. So what is generally happening and how? Like what is the consumer psyche when such phenomenal launches happen in 2 different markets? So I just want to know your understanding or response on this.
I mean it's the question which is asked multiple times. We have openly done this in Bangalore, 2 times as you very rightly said, we also did this in Ahmedabad in case of food supply. And before that, even during COVID, when we sold for [indiscernible] Phase 1, in Phase II and Phase III, exactly in the middle of COVID, it got the same or similar kind of response almost unbelievable until the circumstances. So -- but my understanding is the situation is that, of course, macros and markets play an important role, customers psyche, preferences and their kind of enthusiasm plays a very important role in all this.
But having said that, below the surface are quite a few triggers, one of them being the product itself, the brand itself and also the way you package yourself. A plotting scheme is a plotting scheme is plotting scheme where you buy a piece of land and some day you hope to build your own home and stay there. And you see that the market might become more expensive and it's better to buy your land now and build the house when you wanted to.
This is one of the examples of the launches that we are talking about. But then what all does it entail. What kind of amenities? What kind of designs? What kind of layouts, plans, specifications and what is your credential? I mean, have you really delivered the kind of things that you're talking about, making 3d is only part of it. But can you back it up with something which is delivered on ground?
So design is one. Interesting is another. But then having the track record and showing on ground is one more important aspect. Your brand is another. Your place is another. The way you source your land is another important aspect. So it's a bundle of so many things and so many boxes to be checked right. And I'm very happy that the team here has checked most of the boxes in all these 3, 4 major successes that we saw in the last few launches that Arvind did.
I think we came out with a great product. We sourced the land in. We got the timings right. We got the pricing right. We got the product right in terms of its design. We got the specific issuance right. So if I claim, for example -- I'm just reading adding a little more on this because I think it's a great question to ask, is that if I were to claim that in the entire township, if there are 10 kilometers of road to be developed in the all reinforced concrete roads or I will have a club, if you measure more than 40,000 to 50,000 square feet. Or I will have this. I will have that. I will have a golf which will be not difficult to maintain not too big to be handled by the revenues later. At the same time, give you an ambiance, it will give you fun, it will give you [indiscernible] .
Now all those packaging and positioning matter, possibly you have done few things right on those. Probably most of the things right on those, and that's what we've been doing. Plus, it has been magnified by the fact that we delivered such projects not in Bangalore, but in Ahmedabad in a very large scale, multiple times. And those actual images are shown, are experienced by the consumers. And that creates a great amount of echo and the possibility of redoing and replicating the same in a different marketing and different environment.
So brand positioning, track record, product design, I mean, all these things certainly extends to create a success like this.
The next question is from the line of[indiscernible] from JHP Securities.
So when we say that we are going to launch products that's worth INR 2,000 crores, does that mean that it's equal to the yet to be launched, the figure given in the estimated operating cash flow in the yet to be launched line. Does that add up to INR 2,000 crores. So is that what you are talking about?
Yes, we are talking about yet to be launched. And during the additional phases, which are committed, so to say, for example, if we have acquired a project with a 440 acre with a INR 400 crores topline potential. We are in the process of diligence for the balanced phase of that [indiscernible].
So overall, the number represents primarily in the yet-to-be-launched phase as well as marginally, the planned acquisition for those.
It is a some total of projects which are yet to be launched and within the market, including projects and the phases which are yet to be launched or projects which are coming up fresh.
Right. And apart from the INR 1,000 crore investment on the platform, right?
Sorry, if you could repeat the question.
This is apart from the INR 1,000 crores investment for the platform to, right?
No, that is the investment. This is the topline from the new launches. So obviously, it's a consequence of investments that we do. So INR 1,000 crores investment will give us a topline potential of around INR 4,000 crores to INR 5,000 crores. Out of this total INR 4,000, INR 5,000 crores topline, we're talking about almost like 2,000 builders in 2,000 coming at top line potential from the launches we are planning from part of the total INR 1,000 crores investment. INR 1,000, this is INR 2,000 you're talking about, obviously, it's part of that investment and it's result of that investment.
Okay. Okay. And what is the kind of collection period that we can expect from these launches?
Cash flow, I mean, we know that if we're talking about free cash flow that's one important number, and we just discussed about that. We had a little more than INR 200 crores of operating cash flow, free cash flow is that the business generated. And the idea is that with increased level of activity, increased level of launches and accordingly, collections, et cetera, et cetera.
This year should be better than the last year on free cash flow.
The next question is from the line of Rithvik sheth from One Up Financial.
Sir, In this launch projects and in this business development, what would be the split between our own projects and the projects that you would acquire in the HDFC platform? Would we have any sense on that?
We can quickly add up that number for you at least in the sense of own versus the platform. Just give us 30 seconds.
Yes. And sir, I have one final question as you pull this up. Last 5 years, we've gone from INR 200-odd crores to INR 800 crores as of FY '23. What is the vision for the next 3 to 5 years for the company? Where would we like it to take up? Because as I see FY '24 would be the highest ever in terms of business development for us and almost 2x of what inventory we have from ongoing and upcoming projects. So it looks like that we are setting up ourselves for something very big FY '24, '25 onwards. So we wanted to be convinced, where do we see ourselves in the next 3 to 5 years from a current base?
This is the operator. The management line, hello?
Sure. Sorry, it was on mute. So it's difficult to make any specific forward-looking statement. But the same time, we have been talking about our trajectory and the trajectory can be expressed the best way in the form of growth that we have achieved one in the past 4, 5 years.
Fortunately, it's a great track record, and we have been doing a CAGR of around 40% thereabouts in most of the parameters. We always have a target of growth in parameters like top line, EBITDA or PAT et cetera, growing at a rate of 25% to 30-odd percent.
So what I can again reaffirm is our commitment or our endeavor rather to continue to achieve this growth rate of around 30% going forward in the next 2 to 3 years. And obviously, once that is achieved, the numbers will fall in place in to push into that.
Got it. Okay. Okay. And if you could just give that split between own projects and HDFC platform projects?
In the INR 2,000 crores or thereabouts that we just talked about, about 60% should come from our own projects and 40%, 45% should be coming from the platform investments.
Okay. And for the BD, for the business development for FY '24?
See, INR 1,000 crores BD will mean that, I mean, INR 900 crore platform in total required INR 600 crores to come from HDFC. Part of it is already deployed. Maybe INR 400 crores, INR 450 crores is still to be kind of committed, which is still to be announced. So INR 400 crores to INR 450 crores is to be coming from HDFC share in the platform, the balance INR 500-plus crores should be coming from us, whether it is part of the platform or it is independent project taken up by us, that's immaterial. But broadly speaking, it should be coming from our share and HDFC to that extent in these 2 portions. Ankit, do you want to clarify this number?
Yes. So approximately, out of INR 1,000 crores investment, INR 800 crores platform investment will come in.
INR 800 crores mean we will invest almost 33% of that. So INR 800 crores will mean INR 250-odd crores coming from us and INR 550 crores from the platform and from a INR 1,000 crores [indiscernible] that's exactly the same number that INR 450 crores will come for us as the investment proportionate the overall balance sheet and INR 450 will come from HDFC.
So overall investment is happening in this proportion. But otherwise, INR 800 crores is happening through the platform route and INR 200 crores will happen purely from our side without any kind of partnership with the platform.
Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Kamal Singal for closing comments.
So great. Thank you very much for being part of this call. We have had an exciting last year, and looking forward to even more excitement as we move forward into the new year. There are quite a few reasons to feel satisfied. At the same time, we know that the challenges ahead are bigger and there are bigger milestones to get here. And hence, we need to put together a team and an effort which makes it all happen.
Somebody asked a very interesting question during the call about redevelopment in Mumbai and MMR. I think that's one important opportunity which exist for an organized branded player where the residents tend to, for example, trust more of those players in a situation like this, having got the experiences of various kinds in the market. So that's one opportunity, for example, which we are very excited about. And we are putting efforts to see if we could do something really exciting there in that space.
But having said that, we are aware as the company of the challenges. We know the strength. We know the kind of headwinds that we possibly could face in micro and macro environment. We know the tailwinds that we've got already in terms of our track record, in terms of great products, a great team, which is already in place. And also, the team which needs to be expanded from here onwards for an orbital change that we're on. We are all looking forward too.
And with all these awareness and the kind of support and commitment that the promoters have shown in this business in the last few years, I mean, this is the only business in the entire group in the last 10 years that promoters have put money twice, rather thrice. And key management personnel, including myself have put in significant money into the company. So I think we are all poised to take the next leap, next change orbitally in terms of size, scale and the objectives that are set for our company are -- I mean we are very well poised to strive and endeavor to achieve all those. Thank you very much for your time, and look forward to meeting you again at some time. Thank you.
On behalf of Arvind SmartSpaces Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.