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Sunteck Realty Ltd
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Ladies and gentlemen, good day, and welcome to Sunteck Realty's Earnings Conference Call for Q4 and Full Year FY '23. We have with us today: Mr. Kamal Khetan, the Chairman and Managing Director of the company; Mr. Prashant Chaubey, the Chief Financial Officer; and Mr. Abhishek Shukla, the Vice President of Strategy & Investor Relations.
Please note that this call will be for 30 minutes. [Operator Instructions] This conference is being recorded and the transcript for the same may be put up on the website of the company. After the management's discussion, there will be an opportunity for you to ask questions. There is a Q&A session. [Operator Instructions]
Before I hand the conference over to the management, I would like to remind you that certain statements made during the course of this call may not be based on historical information or facts and may be forward-looking statements, including those related to business statements, plans and strategy of the company, its future financial condition and growth prospects. These forward-looking statements are based on expectations and projections and may involve a number of risks and uncertainties and other factors that could cause actual results, opportunities and growth potential to differ materially and those suggested by such statements.
I will now turn the conference over to Mr. Khetan, the Chairman and Managing Director of the company. Thank you, and over to you, sir.
Thank you for joining Sunteck Realty's Fourth Quarter and Full Year Earnings Call for the Financial Year FY '23. I hope the year gone has been prosperous for you and your family. Now in the year gone by, we have achieved a strong sustained growth in both presales and collections. In fact, on both the parameters, this is our best-ever performance indeed.
We closed FY '23 with INR 1,600 crores in presales and INR 1,250 crores in collections. The strong operational performance has enabled us to generate more than INR 425 crores of surplus operating cash flow in FY '23. Cumulatively, over the last 3 financial years, we have generated close to INR 950 crores of surplus operating cash flow. This has allowed us to not only do aggressive acquisitions but also enabled us to reduce our already negligible net debt/equity ratio in the last 3 years from 0.22 to 0.1.
During the course of FY '23, we have added two more new growth engines, namely Sunteck Beach Residences at Vasai West and Sunteck Sky Park at Mira Road. These two new big projects have received overwhelming response from the customers and the robust demand for recent launches. Soon-to-be-launched, existing and new projects will enable us to grow on a sustained basis, and we enthusiastic -- as we enthusiastically embark on FY '24.
Along with residential, we are also now focusing on building our rental portfolio from our commercial projects. And to mention, we have already pre-leased the entire project of Sunteck BKC 51 at BKC Junction for lease tenure of 29 years. Similarly, we are looking to pre-lease our second project also at BKC Junction, namely Sunteck Icon.
Over the now past several years, our team has put in tremendous effort to build the Sunteck brand. Our brand in the eye of our stakeholders is reflective of luxury living and a strong balance sheet with strong cash flows. We will continue to deliver on this promise and set new benchmarks.
I would now like to hand over the call to Mr. Prashant Chaubey, our CFO, for his comments. Thereafter, I would be happy to answer your questions, if any. Over to you, Prashant.
Thank you, sir. Good evening to one and all, and thank you once again for joining us today and taking out your valuable time for this conference call. The financial and operational numbers have already been published on the stock exchanges. I believe all of you must have gone through the same. Now I would like to highlight the key financial and business performance numbers.
Our presales stood at INR 537 crores in quarter 4 of FY '23 compared to INR 396 crores in quarter 3 of FY '23, a growth of 36% on a quarter-on-quarter basis. Our full year FY '23 presales stood at INR 1,602 crores compared to INR 1,303 crores in FY '22, a growth of 23% year-on-year.
We achieved collections of INR 330 crores quarter 4 of FY '23 compared to INR 304 crores in quarter 3 of FY '23, a growth of 8% on a quarter-on-quarter basis. Our full year FY '23 collections stood at INR 1,250 crores compared to INR 1,052 crores for FY '22, a growth of 19% year-on-year.
Additionally to this, I'm happy to share that our presales and collection CAGR for the last 2 years has increased in tandem to 25% and 27%, respectively. With respect to the financial highlights, we have reported a consolidated revenue of INR 362 crores in FY '23 and our surplus operating cash flow stands at INR 428 crores for FY '23.
We can now open the forum for questions from the participants. Thank you very much.
[Operator Instructions] The first question is from the line of Adhidev Chattopadhyay from ICICI Securities.
Am I audible?
Yes, you are.
Yes, Adhidev, you are audible.
Yes. Sir, just a question on the guidance now for FY '24, if you can just help us understand what are the planned launches for the year and the approval status of the projects which you are planning. And also, how would the collections trend in line with the presales growth which you achieved in the last year? That's it from my side.
Yes. So we are -- so guidance, I would only say that we are confident that we'll continue -- the last 2, 3 years, you have been seeing, we have been able to achieve a growth of -- sustained growth of 20% to 30%, and that we are confident we will continue to do that. And on the launch front, like last year -- in FY '23, we already launched two big projects, which is Sunteck Beach Residences. And we could launch, in fact, the second project, which was in Q4 and, in fact, in the end of March, towards the end of March 2023.
So because of that, we could not take the full advantage of obviously the new launch of Sky Park, which is Mira Road, the second project that was newly launched. We are confident this year, we will be able to at least launch this -- looking at the approval, what we have in place, Kalyan project, which we are very, very confident. And with this and new launches of the existing projects, we are confident that we will be able to achieve this growth of 20% to 30% minimum.
Okay. Sir, so sales for at least INR 2,000 crores-plus, still a very achievable target there, to understand it correctly going forward?
So I think that should be achievable.
The next question is from the line of Parvez Qazi from Nuvama Group.
Sir, my first question is the overall demand environment obviously remains good. What is the outlook on the pricing scenario? Did we take any kind of price hikes in FY '23 in our projects?
So Parvez, we're not very frankly looking at any price rise. But we are confident the demand is strong and it will continue to scale. And we have not considered that any price rise, which we will be looking at FY '24. So if it comes, it is great if the market gives us that price rise. And if we feel we should increase, we'll definitely look for it. But otherwise, we have not considered that.
Okay. And a question for Prashant. What would be our current inventory in the ODC and the Naigaon projects?
Yes, Parvez, just give me 1 second.
Yes. I mean, you can answer it maybe a minute or 2 later, you can take the next question.
So Parvez, for ODC, we have three projects which are launched, Sunteck City Avenue 1, Sunteck City Avenue 2 and Sunteck City 4th Avenue, very minimalistic inventories remaining in these three projects as of now because we have sold. Currently, we have -- the balance inventory, which is available to us in these three projects put together, is close to around INR 250 crores. That is the number.
And for Naigaon, at Naigaon, again from the launched phases, which is Sunteck WestWorld, Sunteck Maxx World and Sunteck One World. The three projects put together, we have close to around INR 400 crores of balance inventory to be sold. This -- when I say balance inventory to be sold, this does not include the balance receivables, Parvez. So these are basically the inventory levels.
And also, just to clarify, not the phases to be launched in both the locations.
Sure. And can I get a similar number for the Vasai project also?
Sure. So Vasai, only the launched portion I'm talking about, Parvez, again. In the launched portion, we have close to around INR 600 crores of future sales inventory, which is available with us.
The next question is from the line of Alpesh Thacker from Antique Stockbroking.
Sir, first question is on the commercial side. Sir, you mentioned in the BKC...
Alpesh, sorry, your voice is not coming clear.
Is it audible now?
Slightly okay.
Okay. So in the commercial part, sir, as you mentioned in your opening remarks that we were able to pre-lease the whole portion of BKC 51, sir, what rate was it done? So what was the rental for that?
So the rental was like 300 square feet-plus.
Okay. And what is the status of the other commercial projects?
So other commercial project is also very close to completion. And we are already in talks, so we are looking to pre-lease that also, which is the other -- on the BKC Junction, the second one again, same as Sunteck BKC 51, that is Sunteck Icon. The name of that project is Sunteck Icon.
Okay. And rest of the key projects that we have, what is the status on that?
Other two commercial, three commercial projects. Those, we are doing presales, strata sales. We are doing the sales, like individual offices, we are selling those three projects. It's two commercial projects.
Got it. And second one on breakup of the fourth quarter's sales numbers. So mid-income, can you give the breakup of what was between SBR and [indiscernible] sales number?
So Alpesh, Prashant, this side. I will provide this number separately to you.
Okay, no worries.
The presentation we have given, I will separately also talk to you about this.
It's already there on the presentation as I believe.
[Operator Instructions] The next question is from the line of Pritesh Sheth Seed from Motilal Oswal.
First is on how much was the size of the launch that we had in Skylark -- sorry, Sky Park this quarter? And in terms of Kalyan, which you're planning to launch this year, what should be the launch size we would be looking at?
Just 1 second, Pritesh. So Pritesh, in Sky Park in Mira Road, we had launched -- the total inventory size was close to around INR 700 crores. Hello?
Yes, all good.
Pritesh, total inventory launched in Mira Road was close to INR 700 crores. And of what we have sold, we have given the numbers in the presentation is obviously until March 31, which was sold only in the March month.
Sure. And how much was that contribution if you can just...
So that was close to approximately INR 250 crores. Exact number, I think Prashant will be able to give you after the call. If you want, you can separately get connected. And total combination numbers must be there on the presentation. It is there.
Yes. And the launch size that you are planning for Kalyan?
Something similar, INR 500 crores, INR 600 crores.
Okay. So that would be like around 0.5 million square feet, is it?
You can easily look at that size.
Okay. So just a follow-up on that, how should we look at monetization of such large projects? I think Mira Road is around 3 million to 4 million square feet, if I'm not wrong, and Kalyan would be similar, around 10 million square feet. And if we are launching it for the first phase at 0.5 million square feet, how should we think about the monetization of these two large projects?
So obviously, we are looking at all projects, these are huge projects. These are 50 acres, 40 acres. We are not -- Sunteck is now not looking at taking small projects because we feel we like set up a growth engine or a factory production house there for next 7 to 8 years, 10 years. So we are -- first launch, we are always looking at anything between 0.5 million to 1 million square feet. Maybe we launch 1 million square feet also, but I don't want to overcommit you right now anything.
That is how we want to go ahead and build locations, where we can be there for 7 to 8 years and change the -- in that location, we command a premium. And that's how we have gone and done -- now we have created almost six locations and six production house for us [indiscernible]. We are looking like a manufacturing facility for us in that particular location. And that's how we want to go about in future acquisitions as well.
Sure. Got it. So 7 to 8 years or 10 years should still be the timeline that we should look at, yes?
Yes. So because we don't want to -- and if we can buy a raw material without putting too much money on it and hold it for 10 years without affecting the IRR and balance sheet -- without putting the balance sheet money, so I think it will not be a better thing than this.
Got it. Fair enough. That's clear.
[Operator Instructions] The next question is from the line of Abhinav Sinha from Jefferies India.
Sir, just wanted to check a couple of things. So on the affordable housing side of the business, how is demand looking like as compared to the overall?
Abhinav, first thing, obviously we should understand where we are in this segment, whether we call it affordable or lower mid-income group segment. Because affordable means whatever we are talking. If we talk the lowest-selling price of all our six -- which we are calling six growth engines, what we have right now, six big, large projects, what we have, the lowest-selling price is Naigaon, which is almost like INR 11,000 per square feet, which is more than the average selling price of any Bangalore developer or a Chennai developer or a Hyderabad developer, which is not affordable at all, so which we are now -- because the price is -- price point when we launched, which was INR 6,000.
Now what we are selling at is INR 11,000 per square feet. So now it is -- I would put it in that -- even that project, which is the lowest-selling price, at a low mid-income group segment, so -- and to mention your question -- answer to your question, that even that doing well. As you see, the sales are across all the segments, whether we now call it lower mid-income segment or upper mid-income segment and the luxury, uber luxury segment. All three segments, we are doing extremely well. And the projects are selling. If you see, the sales are proportionately almost divided depending on the approval and what we have launched first or late -- before or later.
Right. Sir, secondly, on -- when we are expecting, let's say, 25-odd percent growth for FY '24 on presales, what are the new launches that we should expect to contribute to the same?
New launches, Abhinav, obviously one is Kalyan. And we'll see the new launch, which we recently did in March 31 -- during the end of March 31, our Sky Park launch, which is at Mira Road. Both these in itself should be sufficient to give us a minimum 20% to 30% growth or 25% to 30% growth. And over and above obviously all the other projects, we will continue to do some new launches or the other.
Okay. And sir, just to...
And any other acquisition, new acquisition, we'll obviously keep adding to this portfolio.
Right. Sir, where are we targeting these new acquisitions, within which geographies?
So definitely, MMR region. Nothing -- we feel there is enough screen in the Mumbai market, MMR market. And definitely, we are looking something in more towards the city side now, in the uber luxury segment and mid-income segment.
Okay. So something closer to the midtown area, is that what you're looking at?
Yes, yes, yes.
Okay. Got it. And then finally, I mean, not sort of dwelling on it, but generally wanted to check that last year, we've given a guidance of around INR 1,800 crores. But we are slightly short of it. So what are the reasons, you would say? And is it like approval delays were there? And is that a reason? Or you thought the demand was slightly lower than what we would have expected it to be?
No. You are absolutely right and bang on. So Abhinav, obviously, as I said, we were expecting this Sky Park launch to be earlier than March. We were looking at Q3. Anyhow, we managed to launch in Q4 and that, too, also towards the last month of Q4. So I think that -- because of that, I think that got -- that has got sort of our target because of that, I think. So the approval delays obviously, which we were expecting in Q3, the approvals came towards the end of Q4.
[Operator Instructions] I now hand the conference over to Mr. Chairman and Managing Director, Mr. Khetan, for closing comments.
Thank you all for taking out the time from your busy schedule today. In case if any of your queries have been left unanswered, you can get in touch with me or my team. We look forward to your continued support. Thank you once again for joining us today.
Thank you very much. On behalf of Sunteck Realty, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.