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Godrej Properties Ltd
Earnings Call Analysis
Q2-2024 Analysis
Godrej Properties Ltd
The company has transitioned its #1 priority from aggressive business development to nurturing projects already in its possession, delivering growth through internal channels over the next 2-3 years. The emphasis will be on efficient project introductions and gaining a robust foothold in high-potential regions such as Bangalore and Noida, consolidating its portfolio in well-established markets where they already have a strong presence instead of disproportionate expansion.
Management expressed confidence in meeting financial estimates amidst ongoing resolution of customer issues, while noting between 100 to 200 possible buybacks from a total of 1,100 apartments based on progress with customers and operational sides.
A spending of INR 10 to 15 crores has been disclosed, aimed at roughly 60 apartment buybacks totaling around INR 50 crores. A significant portion of the company's INR 2,000 to INR 2,500 crores cash on hand is allocated under the RERA act for future development needs and strategic business moves.
The company is witnessing record sales, spurred by market conditions favorable for some price expansion, albeit on a quarter-to-quarter assessment basis due to unpredictable long-term market trends. Discussions are ongoing for potential transactions to further strengthen business development.
A healthy profit margin profile ranging from 30% to 50% across various projects was suggested, depending on specific city entry and pricing strategies during launches. The company is aligning multiple project launches within Q3 or early Q4 and is recovering from a slower start to the year.
Considerable focus has been placed on enhancing project quality and customer service, aiming for world-class design and execution standards. Management sees this as a pivotal aspect in guiding the company's overarching goals and differentiating itself in the competitive market.
Despite a slower start in Q1, the company targets a revenue growth of 20% to 25% for the financial year. Over a longer horizon, they anticipate sustaining a 20% growth rate yearly, pointing towards considerable opportunities for sector growth and market share gains.
The management assures stakeholders of sound financial planning, indicating a track for a 4Q launch with favorable tax positioning. Additionally, they expect operational cash flow in the current and next financial year to surpass business development expenses, signaling careful stewardship of the company's business development initiatives.
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Ladies and gentlemen, good day, and welcome to the earnings conference call of Godrej Properties Limited. And there will be an opportunity for you to ask questions. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Kshitij Jain of Godrej Properties. Thank you, and over to you, Mr. Jain.
Thank you. Good afternoon, everyone, and thank you for joining us on Godrej Properties Q2 FY '24 Results Conference Call. We have with us Mr. Pirojsha Godrej, Executive Chairperson; Mr. Gaurav Pandey, Managing Director and CEO; and Mr. Rajendra Khetawat, CFO of the company.
Before we begin this call, I would like to point out that some statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the results presentation.
I would now like to invite Mr. Godrej to make his opening remarks. Over to you, sir.
Good afternoon, everyone. Thank you for joining us for the Godrej Properties Second Quarter Financial Year '24 Conference Call. I'll begin by discussing the highlights of the quarter, and then we look forward to taking your questions and suggestions.
Our reported earnings for the second quarter showed healthy growth with total income increasing by 75% to INR 571 crores, EBITDA increasing by 76% to INR 167 crores and net profit increasing by 22% to INR 67 crores.
For the first half, total income increased by 169% to INR 1,886 crores. EBITDA increased by 88% to INR 396 crore, and net profit increased by 91% to INR 192 crores. The demand for homes in India has continued to gain momentum during the quarter. Favorable macroeconomic indicators, including India's GDP growth being the highest in the world and the likelihood that interest rates are at or near their peak are expected to continue to drive positive momentum over the next few quarters.
The positive consumer sentiment driven by need for modern homes with better amenities, as well as consumer preference towards one developers, also provided strong opportunity. The second quarter was GPL's most successful quarter in terms of new bookings with year-on-year growth of 109% to INR 5,034 crores achieved during the quarter, which was 24% higher than our previous best ever quarter.
And interestingly, this quarter [indiscernible] figure is also nearly equal to our annual booking level 3 or 4 years ago. This strong growth was due in extremely strong response to some of our new launched during the quarter.
Godrej Tropical Isle in Noida was GPL's most successful ever launch, achieving a booking value of over INR 2,000 crores from 1.5 million square feet of area sold. Godrej Parklard Estate in Kurukshetra was GPL's most successful parkland launch, achieving a booking value of INR 628 crores from 1.39 million square feet of area sold. As a result, we have achieved 52% of our booking value guidance. With a robust launch pipeline for the second half of the financial year and resilient demand, we are confident of exceeding our annual booking guidance of INR 14,000 crores.
Cash collections have also grown by 23% year-on-year to INR 2,378 crores for the quarter due to net operating cash flow of INR 811 crores. For the first half financial year, we recorded cash collection of INR 1,332 crores and net operating cash flow of INR 929 crores, representing a growth of 24% and 25%, respectively. We remain on track to achieve our guidance of INR 10,000 crores of cash collections during the financial year.
From a business development perspective, it's a relatively muted quarter. We added 1 new development project in Nagpur with an estimated booking value of between INR 725 crores, taking our year-to-date total to 5 projects with an estimated booking value of INR 7,175 crores, which is broadly in line with our full year guidance of INR 15,000 crores of estimated booking value addition.
As highlighted in our call last quarter, with the business development we have already done over the past few years, we now have our strongest ever project pipeline that can deliver our growth aspirations for the next few years. The most important active going forward will be to get all of our recently added projects launched in the upcoming quarter. We believe this will dramatically accelerate our bookings and earnings trajectory in the years ahead. We will, of course, continue to do target business development to plug holes in our current portfolio and ensure continued growth beyond the next 3 years.
While DPL's primary focus will be to continue strengthening our market share and margins in the residential business, we have also made good progress in strengthening the nonrevenue component of our business.
Our first hospitality development, Taj The Trees and Vikhroli with 151 keys opened in October. Our commercial project in partnership with Godrej Fund Management as an advanced stage of development, and we expect all of these projects across Bangalore, NCR and Pune with a total area of 4.3 million square feet and a total steady-state annual real estate income potential of INR 740 crores to receive that occupation certificate and start generating rental income in the upper end financial year.
On that note, I conclude my remarks. Thank you all for joining us on the call. We'd now be happy to discuss any questions, comments or suggestions you may have.
We will now begin the question-and-answer session. [Operator Instructions] We'll take the first question from the line of Puneet from HSBC.
Congratulations on great things. My first is, you also talked about ownership of projects like Taj and you still have the Godrej Two on your books. Is there a change in strategy how you want to think about asset ownership? Or is there a plan to ultimately sell these off?
Puneet, [indiscernible] there's not a 100% decision in either direction. I think we are interested in building up an income -- steady income portfolio. But I think at the same time, if the right opportunities are available and our floor talks to the idea of monetizing them and kind of redeploying for more rapid growth on the residential side. So there's final decision here. I think we're increasingly leaning towards retaining these assets because we think both the hotel and the office assets are under development. We think our Grade A project will continue to appreciate. So I think the likelihood is going to be retain them, but that's not a certainty.
And should one think that you will do more of the FX as well to build a portfolio around it?
Yes. I think we -- on the commercial side, we've already got about 5, 6 projects under construction. And the funds, Godrej Fund Management, [indiscernible] are fully deployed. We do expect there will be additional fund. But first, the strategy on the commercial side is a little bit different for us than on residential.
I think on the residential side, we will focus both on very rapidly gain market share, on focusing across various price points in the market and on outright ownership for high economic interest in projects.
On the commercial, we have a more boutique strategy. I think we'd like to do only very high-end office developments who were not focused IT part type of development. We're doing some of the headquarter type of positioning for these developments. We're happy to do them in a more moderate scale, so do 1 or 2 in a city at a time, get to lease and then start the next one.
And we're quite clear that we would like to do those in partnership with other equity partners. Godrej Fund Management had partnered with a couple of the largest commercial asset owners in the world because we do think we take up a lot of capital if done entirely from our own balance sheet, and we wouldn't like to do that.
So I think the strategy of focusing on very high-quality assets where our all these properties taken in this range of of 20% and growing the portfolio in that manner is something that we see that would make sense.
Understood. That's very clear. Secondly, on your business development plan. Is there a deliberate move, slow down business development given that you have a huge pipeline already and focus more on project delivery? Or is it just waiting for the right opportunity?
I think a little of both, I would say. There's no question that if you have, say, the relative priority for us between business development and execution as [indiscernible] shifted over the last 2 years. I think 2 years ago, it was to say our #1 privacy was business development because we didn't think the kind of growth that we wanted to deliver, we have the portfolio at the plan to do.
We now feel clearly for the next 2, 3 years the kind of growth we want to can happen internally from projects already in our portfolio. Therefore, the most important objective and priority is counting those projects and introducing them efficiently. That said, that's not to say that we don't want to do business development. Clearly, we see a visible gap in the portfolio that needs strengthening, such as the number of projects in Bangalore or Noida, as a couple of examples.
So those are areas that we will be continuing to target the development perspective. We'd also like to answer the [indiscernible] at some stage. But most -- in many markets, we do have a strong portfolio, and it will be a little bit more about consoling replacement level kind of business development rather than the very disproportionate business development we did where, for example, last year, our business development, future sales of it was about 3x of our sales. We think this year, we'd be comfortable with it being closer to 1.
Understood. And will it be right to assume that your focus is now on expanding the market? You talked about Hyderabad. We've also seen you enter Nagpur and [indiscernible] and Kurukshetra rather than -- and you talked about replacing the existing projects. So should one think about expanding the market rather than gaining more share in the city?
No, not really. We are leasing these things to activate for group housing and for project development. I think for group housing, we entirely want to focus on the top 5 big markets, which are Mumbai, NCR, Bangalore, Pune, which we're already in, and the [indiscernible] Capita, where we end in smaller scale and possibly add Hyderabad to that. I don't think we are thinking of coming beyond there for the moment.
Whereas the profit development, I think given the greater challenge in funding required by demand and [indiscernible] bit of turnaround major development, where we're open to a global set of markets.
Understood. That's very helpful. And lastly, if you can provide an update on the [indiscernible], which you highlighted last time. Any progress there?
Yes, [indiscernible] has been in it. There's been good there. We have been watching with IP and some expert consultants on identifying the solutions. That is ongoing there. We think we established a good rapport with the customers, better now understand the situation. Or any customers who wanted to be, we've provided buybacks to them. That number is about 60 total apartments out of 1,100 or so apartments at the end of last quarter.
We think that number may end up by the end of the financial year being somewhere between 100 and 200 will be our best estimate. Of course, we'll open again to everyone. But I think good progress there, both on the operational side as well as on the customer management. We feel reasonably confident that the estimates we provided from a financial perspective will be actually, we hope to get some of that back to contractors on it. But I think overall, we're satisfied with the progress on that matter in the quarter.
And out of the INR 155 crores which you provided, how much have you spent so far?
So we have spent around INR 10 crores to INR 15 crores as of yet.
Sir, including case of 60 apartments?
No, no, this is on account of -- you ask me out of whatever we have provided. So we have 150. Of that, we have spent around INR 10 crores to INR 15 crores.
And to purchase 60 apartments?
So to purchase 60 apartments, we have spent around INR 50-odd crores. It's more of a cash outflow. It is not an expense. So it will be a value chain.
We take the next question from the line of Soo Kilda from Motilal Oswal.
Again, congrats on the very good quarter. I just have 1 clarification on the cash flows mission, INR 40 million of cash on the balance sheet. So I just wanted to ask how much of this is tied up in [indiscernible] on the projects?
So under RERA, it is around INR 1,200 to INR 1,400 crores is under RERA. The rest, either we have certain NPDs, nonbankable entities for our future development. So the cash is on account of that.
Okay. Excellent. And one more thing, I call the [indiscernible] that we have achieved so far. How much is yet to be paid?
So around INR 2,000 crores to INR 2,500 crores.
We'll take the next question from the line of Abhinav Sinha from Jefferies India.
Congratulations on the strong sales this quarter. I wanted to check on the launch pipeline that we have for the subsequent months and which are the large projects that we should be watching out for in the second half of the year?
We have very robust pipeline emanating from the business development till now. Some of the big ones that we are looking forward to our first one is 49 Gurugram. This is in the process of advanced stage of approval. And idea internally is to try and do a sort of a Q3 launch. Then we have [indiscernible] we had done in Cabo. That would be another upcoming launch. Then Mannie have the last cluster left, which is sort of a premium partner within the entire downside. That is also under planning for launch.
Then we have 1 phase of Ananda in Bangalore in the Baru location. That's part of the pipeline. Then we have another flat development in Mumbai. These are like, I would say, some of the launches that are moved front. And of course, in our investor presentation, we mentioned at last of launches that are in the underproduce. But these are ones that I would say looks to be more contended within that.
Right. gaurav, also on pricing. So we have seen good progress clearly on NCR and -- but what are your thought process here? Do you sort of [indiscernible] should take the pricing much higher from the current levels? Or do you see this impacting demand at some point in time, so you will lose right now?
Largely, what we're seeing currently in intermarket, what the price uptick we have taken and what our peers have been doing, the market is not only absorbing kind of delivering all-time best ever sales for us. And at least for the near term, it seems that there is some opportunity to continue with some mode of price expansion. But I think we'll have to take it more like a quarter-on-quarter kind of a view because it seems much possible that we will do a continued high, but difficult to predict what will be the long-term direction right now.
Right. And sir, one last question on the business development side. So I think last time we were hopeful of concluding a couple of platform deals and shifting more to the JV side. So is that still there? Or do you think, I mean, the target is unlikely to be met for those platform deals this year?
So we are in discussions with some of those transactions. And you would appreciate any point of time what we are doing right now. We have a sort of a defined set of markets we want to invest. So we run transactions do term sheet closures. And finally, which even happens to get concluded first basis the [indiscernible] the overall revenues and the valuations being intact is the one that gets concluded.
So fair to say that we do have a series of opportunity. But if you all play out basis, the diligence that's going on right now are the ability to conclude whichever transaction happens first in that particular geography.
Just add to that abating to you're referring to that we were at an advanced stage of last financial year, that did not see [indiscernible] dividend standard. So we will profitably out of [indiscernible] those 2. But there of course, the larger of the that bears an opportunity since then.
We'll take the next question from the line of Neel Mehta from Investec Capital.
Congrats on a great set of bookings this quarter. My first question was on plotted development. So I just wanted to understand what is the margin profile typically like for these projects?
Margin profile, depending on project to project, location to location, your margins can be between 30% to even 50%. But it totally depends upon which city you enter and how much pricing you're able to command during the launch. But yes, 30% to 50% is your margin, typically.
Got it. So this, the Godrej Parkland Estate project that we had in Kurukshetra, what would the margin be like for that growth?
Something similar. I don't have a number offline, but it will be within the range.
Got it. Right. And sir, my second question was on increasing our economic interest in [indiscernible] projects. So every quarter, we sort of indicate in which projects we have increased our profit share or taken our economic interest up. I just wanted to understand what exactly are the considerations that we have, when we sort of take these decisions what competitors to increase our profit share and take up more share from our JV and JV partners in these projects?
Frankly, it depends upon what is the current valuation to buy out PSC as an our increase price, which seems very attractive. There is seems relatively lower than what you would see in a greenfield project, then the opportunity becomes very exciting. Because in a way, you have a more certain margin profile from a project. You're essentially increasing the economic interest in the project to secure more predictable profit margins going ahead.
So that's the concept that which we approach. And it is very opportunistic. It's not really frankly affecting [indiscernible] as well when we see these opportunities, we tend to take a bit.
And sometimes these projects have reached a target or the fund life or the project life has come to an end. So obviously, there is a natural process to give an exit and close the JV or a SPV. So that effect also happened during that period. But as part of that, there are more opportunities. The value is good. And if you are able to give an exit and make a better value for Godrej property, those exits are evaluated at regular [indiscernible].
We take the next question from the line of Ankush Mahajan from Axis Securities.
My question is last year, we have a business development of INR 32,000 crores. In the first half, it's already INR 7,000 crores to INR 8,000 crores. So I just try to understand. For this year, what kind of land repayment that outflow is here for the [indiscernible]? And what kind of land repayment we can expect in next 2, 3 years? Basically, I want to try to understand that cash flow will become positive.
From these set of projects, we look at the ones that we acquired now?
Yes, overall [indiscernible].
I answered what is the client payment for the building, which we have already done. Now to your second part, obviously, would be the balance payment, we said any we have always given a guiding range. Actually, we would want to be in 0.5:1 to 1:1 equity. And obviously, as we do, as we launch and our operating cash flow also will keep improving. But it's very difficult to predict what would be my future very outflow on the new business development opportunity.
Sir, considering this quarter's presales, are we increasing our guidance for the full year for presales?
Not really capital intact. We had a relatively slower start in Q1. And now we are very confident on delivering on the guidance that we've given.
We'll take the next question from the line of Parvez Qazi from Nuvama Group.
Congrats for great set of numbers. So 2 questions from my side. First on Gaurav. You mentioned a couple of projects in which you said were front ended. By being front ended, you mean you are reasonably confident they will get launched in Q3, whereas other projects might get shifted to Q4? And the second is one related to if you could update about the status of some of our major projects like Ashok Vihar, Carmichael and Roambi, et cetera? And early also, when do we -- I mean there are things with regards to their launch currently?
Thanks for the question. So the launches that I talked about are some of the ones that we're targeting within Q3 or early 4. At any point of time, some of these are dependent upon last stage of approvals. And we tend to keep [indiscernible] backup so that in case one approval falls of at least have something. Sometimes you get unlucky like in Q1, where some of our approvals didn't come.
But since we run many approvals on time. So most of them should happen in Q3 and some others are also being tracked for Q3 or Q4. Coming to your second part of the question. Within the year last, it seems we will be very confident on the Carmichael because we have been very fast track on that. We are moderately confident on the issue here is seeing some good progress on some of the crucial approvals.
On the body, I think it is a key measure for me to really comment. What I would say is that between the last 6 to 9 months, we've been able to see a very steady and robust progress in terms of the internal threshold timelines that we had targeted for ourselves.
I would like to put a timeline when a Q4 also not under mix. But fair to say that it's progressing very consistently towards the direction that we had estimated earlier.
We'll take the next question from the line of Mohit Agrawal from IIFL Securities.
My first question is just connected to the last question on Ashok Vihar. Could you elaborate a bit as to what is the key issue because of which things are getting slightly delayed. Is it the approval issue or anything else you could enlighten us on that?
It's basically coal issues only. And to just summarize in the article where I'll say that in daily and like any other state, you have overlapping jurisdiction between the [indiscernible] center. And there are a series of approvals that you take from 1 sort of body, which becomes part of a condition senor the other departing to consider at wholesale.
And sometimes when you get -- but for efficient runoff cover, you run all approval family, say, MPC approval on a [indiscernible] approval, AEI approval and [indiscernible]. So sometimes, if you get stuck up in 1 approval even if your other approval is more or less seem on track. It's like circular reference you go back to those first stage, unfortunately, further the system currently works.
But the encouraging things I would like to point out is that there was -- there are 3 or 4 critical path activity approvals that you need to make the launch ready, 1 of which was very kind of consistently started from 1 of the departments. That approval is fortunately secured. But again, there are other sector approvals that we have to achieve to make the project realization. It's going in the right [indiscernible]. Sometimes it's very fine because you do every part of the work in certainly the stuck up in 1 approval. We start the same process. But I think that's the nature of the approval process that we currently see.
Yes, I understand that. So fair to say it is still on track for 4Q launch?
Yes, it seems there is a reasonable short tactic. That's why I said I'm moderately confident. The only thing is we said to me one thing like is to not get overly aggressive and optimistic. So when you're running approvals as a sort of part of a critical path activities. But yes, I'm easily confident that if we continue on what we set for ourselves, we have a shot at it.
Okay. My next question is for Prucha. There were some news reports in the early October saying that the promoter family is heading for a settlement. Is it possible to share some light on what kind of impact it can have on the existing DM arrangement in Ducroli? And how do we see the launches in decor going forward? Anything that you can share on that?
No, I think there's nothing to be shared. I think we have said many quarters ago that there are discussions with the promoter level about the structuring of the group. Certainly, I think all I can say is please be assured that in no way would any of this, if anything happens effect the right of GPLs through the development management agreement for the development that we continue to look forward to that development.
In fact, we're quite optimistic that in Q3 or Q4, we will have after some time, a new launch under the structure. So we're looking forward to that. But especially, no anticipated changes.
[Operator Instructions] We will take the next question from the line of Manish Kandi from KPMG Investments.
Coagulations to you and the whole team from almost INR 1,000 crores a year, 10 years back to now INR 5,000 crores in this quarter. So my question is the last 10 years, not taking away the great achievement, GPL. But last 10 years, we wrote the right mostly because of delayed projects. But we got help from that delayed projects and many defaults. What do you see, what 2 things we are doing differently to stay at the top and delight our customer for the next 10 years?
I think it's a great question because we're very clear. And thank you for the kind words about the last decade. But we're very clear that what got us here over the last second isn't going to get us where want to and need to go over this next decade.
So a lot of the focus has been around really looking very deeply at the kind of quality of projects. And I think it's fair to say that we feel in some areas, the reason where we want it to be. I think we've been focusing for a long time on the customer service aspects of project delivery. And again, when I say isn't where we want it to be, I'm not using it as our competition is by fast. In any case, we fel our quality in all of this is already above much of the competition.
But I think the goal is to really become a world-class company from a quality of product perspective, both design and actual execution. And I think that will be the biggest differentiator for us to ensure that we're actually able to take the company where we want to go. And I think Laura and his team has been doing some tacit work on ensuring improvements and deeper thinking around how we can design the company and its processes and operating structure to be at scale able to deliver this consistently as that's the #1 focus.
From a financial service perspective, I think commenting back to, as you know, are ensured that the projects we're developing as a group are in better locations, offering an ability to have a little bit more pricing power. We've taken up our economic interest in products some of the other focus areas that will also help us deliver on the superior quality products as we air. I think that will be the key area that we need to be able to add scale deliver consistently to kind of where we want to over this next decade.
Yes. It's wonderful to hear. And of course, the second question is I just want to know how the Godrej Living is shaping up? And I think like last 2 years, we might have hand over the project to Godrej Living and might be maintaining a few of the projects. So what customer data you have they are liking is better than the outer agencies or how your internal metrics are working in that?
Yes, I think the initial signs are paid for them. Only initial signs for now, but already encouraging. We've been very positive impact from our customer and go in living is taken over prior even had in relatively challenging conditions but for this summit, where some of these issues would it cover boiling has been taken over the facility management there, and I think has played a critical part in helping ensure our customers are comfortable and confident.
So we certainly feel that strategically do the right to ensure. And the whole reason to have is in to hold once we create as an interesting commercial opportunity in its own. But clearly, I think a bigger area of traction to was that to do what we just spoke about in terms of delivering a superior quality products and a superior service experience to our customers. We think this is a very critical part of the value chain, obviously, that we can impact the actual use of the product for delivery.
So I think Godrej Living is incenting to ensure a we're not familiar with it, it's our new facility management 100% subsidiary, which we formed to ensure high-quality living in to all our residents. And I think many early times are very encouraging, but earnings going, of course.
The next question is from the line of Kunal Lakhan from CLSA.
I think just going back to the question on Godrej. So just wanted to understand what are the -- the nature of construction amendment that we have undertaken. I mean we had highlighted that there was a corrosion of issue over there. And I mean this seems like a structural issue in RCC itself. So just I wonder what kind of amendments can we possibly make to resolve this issue?
And a related question is like we did spend about INR 50 crores on for those 50 units. Do you see a situation where we may have to return some to all revenue in apartment?
So I think the technical subject of how the repair will be done in [indiscernible] have the onto this call, we'd be happy to take you through it. But essentially, there are ways to start materials into the instrument culture that prevented the steel from the derating and allow building home active expected demand like. This is not the first project. It's certainly not globally all in India has basis.
There have been other projects by major developers in India, where this issue has been faced and actually successfully brought under control. So the technical experts who are advising us are very confident that, that can be done, and we're in the following their advice on this. We don't anticipate now that all customers will ask for this buyback is I should clarify again open to all of, them. So we are first open to that possibility. But the likely a has not been very high at the moment.
Currently, we stand at about 60 actual buyback done. As I mentioned earlier, at [indiscernible] end number, we expect as the best guess estimate would be between 100 to 200. This is also not going to be totally open-ended question. I think we're still finalizing the exact methodology, exact timeline for completion of the repair or exact details that the customers would like to have before taking a final decision in some cases.
But our sense is that within about 6 to 9 months, we should be at a few can start saying that day we want the buyback, if we take it now others that offer is closed. And ourselves or backcast we would end up with between 100 to 200 buybacks. It is, of course, possible that it is more than that. It would be less than that. But what we anticipate right now. As a mentioned earlier, so we feel that we made for the repair work and for giving everyone confidence the structure is fully saved, and we will perform to its intent to design a -- we anticipate being able to recover the full expenditure of these buybacks.
Sure, sure. Fair enough. My second question is on the Mamurdi project. We increased uptake to 92%. I just want to understand how much computation was paid for this?
[indiscernible] is a book value whatever due to that because it was a JV, profit sharing JV. So it was -- they have invested in the form of equity. So equity and the venture events was repaid. Equity was at a book value at nominal amount, not a very great amount.
And then why not [indiscernible]?
Because that there is some bit of a tax planning, which we have done and technically, it is 100%, but there is a bit of tax adding because of which we have to keep back 7%.
[Operator Instructions] We'll take the next question from the line of Harsh Pathak from B&K Securities.
Congratulations on the strong bookings for the quarter. Sir, my question is on this buyback of the apartments that you are doing. So are we doing at the same rate with the apartment are sold? Or are there the prevailing rates?
We have been also basis at the time of announcement, the last average price for apartment sold and couldn't commit, or the purchase primate for the owners, which are the [indiscernible] go to. The average price was up from about INR 6,000 [indiscernible] buyback overall.
Sure, sure. That is clear. And regarding this launch, Ashok. We had like a few questions, like it was highlighted that there might be some slip or some year ended. Sales if it lifts beyond FY '24, are we still confident of achieving our INR 14,000 crores of bookings guidance?
Yes. I think we sort mentioned I think our typical experience not this year, but any actual you look at initial start of your guidance for launches you will typically have some new projects being added that was anticipated at the start of the year, we certainly have some [indiscernible] with our regulatory approvals not coming.
So I think that's been a consistent trend. I think the guidance is obviously made keeping that in mind and withstanding that we have to have backups in place, and this guidance is a form of commitment to the market and something that we [indiscernible] as we see it.
So we are confident on delivering the INR 14,000 number irrespective of what happens with any individual project. But certainly, I think we're all -- please be assured we are extremely focused on [indiscernible] we continue looking forward to getting to market. I think the delay so far is very frustrating. But actually, we will launch the project might hindsight given how much the market has strengthened over the last couple of years. But we are fully cognizant that now is the right time to hit the market with a project and we do anything and everything we can to make sure it happens in here.
Right. That is encouraging. And regarding your opening comments, like you just mentioned that the demand remains very strong. We have a very strong launch pipeline as well. So how do we see the next 2, 3 years of growth? Can we maintain the same rate of growth -- same growth rate or maybe this can get enhanced further? How should we look at it?
Well, no, I don't [indiscernible] get 50%. So I think if we have a very good year this year, we got can go very fast. But obviously, I don't think we can sustain those kind of growth rate. I think long term, what we think is achievable is the 20% growth might more than last things possible that we can give other than that is.
But I think it's 20% is the kind of growth rate is we'd like to deliver over the long term so maybe a decade or more because I think there are big opportunities in the sector, both from the sector itself continuing to grow as a incredibly strong market share gain opportunities or the larger players who have significant advantages within the sector, but have typically single-digit kind of market share.
So there's big opportunities for continued growth. But I think the kind of exposure we saw last year and hopefully, continue to come may not have we sustained at the same rate.
We'll take the next question from the line of Abhinav Sinha from Jefferies India.
On the cash flows and balance sheet side. So a couple of things. A, OpCFs improved this quarter, but do you see this sustaining or maybe pick up from here?
I think it will pick up from your [indiscernible] as you look at something like this. I think we've demonstrated our we able to construct improve housing projects 2 to 3 years consistently. A project like this will be quite high margin if you look at our land costs to selling price, I think it's all quite attractive.
Certainly, if you look at the launch guidance, we have projects at [indiscernible] several more projects in Gurgaon. We have some large projects to launch in Mumbai, several projects in Bangalore, Pune. So there's no question that in for a much from the operating cash flow generation performance next year and looking forward to making a reality.
And In that context, I mean, where do you see the gearing level settling. So we are at -- I think your broader guidance is 0.5:1. But I mean, next 6 months, where are we headed as such?
I would broadly expect to give entire coupled out of land outflow. We think it will continue to incur probably for the rest of this financial year. And the next financial year, I think operating cash flow should be higher than business development and has been again [indiscernible] business development very sharply.
The next question is from the line of Manoj from Geometric.
And congratulations for doing the coming in last 3 years and seeing the pending prices in land, it seems like god exceptional billion growth, and I think this will lead to great presales and desired ROI. And I visited the Summit site. And even though people are facing the [indiscernible] because of the issue, but they are very appreciative as a fact that the builder has come forward to solve the problem. My question is like you've anticipated around 100 to 200 buybacks in this project. Have you understand how much money you will have to spend to correct this correction of the problem? Like you said INR 10 crores, INR 15 crores have been spent. How much do you think it will turn up to be?
Ladies and gentlemen, the line for the management basically has been disconnected. Kindly stay connected while we try to reconnect. Ladies and gentlemen, thank you for patiently holding. The line for the management has been connected. Mr. Manoj, may we request you to kindly repeat the question, please.
Okay. So I said congratulate the Russia for the last year BDA. I think that has been done with the great pricing and great volume. I think it would help it presales achieving our desired ROE because of buying at the very great prices.
And when I visited the summit side, the investors and the people who are living there were very appreciative of the fact that the developer has come forward to correct the problem. My question is that the like you are anticipating, 100 to 200 buybacks. Can you anticipate how much money we would be spending to correct the problems which are in the projects? Maybe INR 10 crores, INR 15 crores has been spent already. How much will we end up in those?
I did last quarter for INR 155 crores for this expenditure, of which about INR 10 crores, INR 15 crores have already been incurred. Separately from that, we anticipate INR 100 crores to INR 200 crores will be required for the buyback. But we think we will be able to fully recover the money spent on because we think we can sell the apartment once the repairs are complete at the same price.
Okay. You have provided INR 150 crores. Do you have any idea how much we will actually now seeing the situation, how much work has been done on INR 10 crores, INR 5 crores, how much money it would be actually to spend any [indiscernible]?
Expenses to INR 155 crores, which is what we provide. So no change in estimates over there.
Okay. My second question is if you see a con call, last 5, 7 years, we have given passing reference to China real estate and how we are trying to emulate the success, the way the number of volumes have been done in the developers by China real estate player. So where we are in that journey as an Indian real estate also as well as Godrej Property, and what can help and affect this journey? That's my last question.
Thank you. [indiscernible] should certainly clarify that there are both positive and negative lessons to take away from the China real estate story. So I think, hopefully, we can take away the positive ones without learning any of the excess date and the overbuilding issue.
But I think our whole idea of kind of stating the China market was saying that, okay, we look to take the company the next 10x from its current scale. That hasn't been done probably by a real estate developer anywhere in the world other than in China. And the big developers there [indiscernible] a 500 million square feet a year and being able to deliver consistently those projects within a couple of years at scale.
So I think the lessons were more around that. I think a lot of the focus, a lot of the time as the management goes in ensuring again what we were talking about earlier question around this journey of scale-up we want to do. How do we first make sure that we have the quality expectations that we have from the Godrej brand that customers have from the Godrej brand, the kind of design and execution that we want to do, how do we make sure we do it on a consistent basis as we look here. I think a lot of energy in going into that.
There's that we've taken some of the outcome of lessons we've learned from starting the China companies, including how we trust the organization we are fairly independently managed team in each of the geographies we operate in, even our project level have some answers for all over in the projects.
So I think it's the structure that we've used to set up the organization, we think, is built for scale. And we obviously have to keep running and keep tweaking it. But we do think fundamentally, this is the best structure to facilitate large-scale growth that we anticipate. We're also putting in efforts to make sure we have the right processes in place, the right capabilities in key areas to ensure that delivery again at the level of quality we want and on a significantly higher scale.
The next question is from the line of Himanshu Jhaveri from Roshan.
I just wanted to know the status of Revera Kalia. From what I see, the sales have been quite slow. Generally, all the other projects are doing exceptionally well. So just update on that one.
Thanks [indiscernible] subsea project. We are looking forward to doing the systems activation quite soon. And once the activation kicks in, when you will see the booking value growth. A good problem for us catering [indiscernible] is in that we've seen a series of approvals coming some of our projects on the South of the site. We just happen to be in the launch calendar at front ended. But once we do a sort of an activation in Kalyan, we see these numbers also changing.
Okay. And the second question is on the Kandivali launch. So I just want to know what is our planning for that project, which that is also quite a large project. And if you must be knowing, the [indiscernible] guys which rule Goregaon the Kandivali area, they are made exceptionally good quality projects and they are selling at premium prices. So are we on the same lines? Or what is the planning for that Kandivali project?
Yes. I mean we have a very interesting design that we've won out and very, very confident that projects will be strengthen the nimble portfolio for us in terms of point of inflection. Our product strategy is quite unique. We have a very fantastic USP. Now we're working on the approval and fair to say when this will come into the market, will be one of the most prominent and [indiscernible] also from our side.
So that is in Q4? Or should go into the next year?
It's a Q4 launch.
Okay. And my last question is that after adding so many projects, where do we see the company in 4 to 5 years down the road? Can we expect around INR 30,000 crores of top line in this kind of ROE, ROC in the next 4 to 5 years?
Yes, fair to say the market is presenting us the opportunity. And if you see the way we've been growing the last couple of quarters, fair to say till the direction we should hopefully reach. And the good thing is that entire portfolio that we had especially acquired the last 18-odd months thereabout, is all hitting launches and with a very good profit expansion. So our entire focus towards profit expansion and long-term return equity is getting strengthened by the execution that we are able to deliver in all these launches.
And my last question is that if I wanted to ask you, in the last real estate cycle, the developers, there's a lot of prices and when it's affecting the sales eventually. So this time, I think we would have to balance it out both so that we don't raise the price a lot and it doesn't affect our sales and it continues the growth of our company.
Yes. I mean you're right that it has to be sort of an adequate and logical prime. And if most markets in India are not in the kind of very, very massive price growth like we've seen in NCR. But the interesting thing is unlike the previous cycle, all of this demand, especially in our projects we are seeing from end users. We're not seeing speculative demand ball.
We don't, in fact, hardly do any marginal INR 20 crores, INR 30-odd crores we might have done as sort of a payment plan lease flexibility. But everything is very, very tightly controlled construction-linked payment plan. It only attracts end users. Our talents or construction has reduced significantly from the earlier days. So the product proposition and the price that we are seeing with the kind of payment plan is make the nonspecial the kind of [indiscernible] we built in our BPS, it becomes a nonstarter for an investor to participate.
So anything we have end user and you are calibrating your price and you're testing the market very regularly, you will see continued demand. But yes, anything is done at [indiscernible] and assuming -- and we'll assume that it continued for perpetuity and eternity, that doesn't hold. So yes, we will, of course, take [indiscernible] market realities and calibers before every launch. But currently, if you ask me opportunistically, what good ways to increase both price and volume growth, which we are trying to focus upon and even deliver upon.
Okay. Any update on Bandra and the Panvel project? If I see now it's a huge project, around 8 million square feet, I think. So are we delaying it purposely for maybe the airport opening all that so that we have more traction? Or what is the idea behind that one?
Not really airport per se. But as you would know that the new trial carbon link is about to get opened, and we believe it will create a very good upside from a pricing point of view. And Panvel will always get repositioned because the travel time that you take from Panvel to any BDC location drastically reduced. So we want enjoy the upside, and our launch plans are getting ready on track for that.
On Bandra, I think it's still work in progress. We've not put up in an aggressive launch calendar year. So I won't say that it is anything from a launch point of view within the year. But yes, there is a continuous focus to take that project also to its logical statutory.
Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for closing comments. Over to you, sir.
I hope we've been able to answer all your questions. Do you have any other questions, please let us know [indiscernible] in our system. On behalf of the management, thanks again, and happy Diwali to all of you. And so [indiscernible]. Thank you for taking time to join us despite [indiscernible]. All the best.
Thank you very much, sir. Thank you, members of the management. Ladies and gentlemen, that concludes this conference. We thank you for joining us, and you may now disconnect your lines.