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Eldeco Housing & Industries Limited Q4 and FY'24 Earnings Conference Call Summary
Key Highlights • Date of Call: May 17, 2024 • Leadership: Led by Chairman and Managing Director Pankaj Bajaj and senior management. • Sector Performance: Significant growth in residential real estate with record highs in: • Area booked: 4.6 lakh square feet • Booking value: INR 250 crores • Consolidated revenue for Q4: INR 49.2 crores • Profit after tax (PAT) for Q4: INR 11.7 crores • Total revenue for FY'24: INR 112.7 crores • PAT for FY'24: INR 33.9 crores • Dividend Announcement: Final dividend of INR 8 per share.
Land Acquisition and Market Dynamics • Land Availability: Management addressed concerns, stating successful acquisition of new land parcels. • Future Value Addition: Expected to add approximately INR 1,000 crores to gross developable value.
Demand-Supply Dynamics • Market Inquiry: Bharat Gupta raised questions about demand-supply in Lucknow. • Response: Pankaj Bajaj noted strong latent demand and quick sales due to supply constraints.
Development Projects • Vertical vs. Horizontal Development: Discussion on ongoing projects like Twin Tower and Latitude 27. • Revenue Realization: Significant increase to INR 5,500 per square foot, with optimism for future projects.
Revenue Targets and Margins • FY'25-26 Targets: Conservative outlook; performance dependent on project approvals. • Margin Sustainability: Historical margins around 40%, expected to maintain 30%-40%.
Market Outlook • Lucknow Market Potential: Compared to other growing cities, significant untapped potential due to insufficient supply.
Expansion Plans • Geographic Expansion: Clarified that Eldeco operates independently in Lucknow, with no immediate plans for expansion despite strong performance.
Public Listing Rationale • Public Listing: Explained the decision to go public in 1985 and focus on shareholder value. • Delisting Suggestions: No compelling reason to change current structure; focus on growth in Lucknow and Uttar Pradesh.
Risk Management • Growth Risks: Acknowledged risks in real estate, including legal issues and land availability. • Conservative Approach: Emphasis on compliance and project acquisition to mitigate risks.
Investor Engagement • Attracting New Investors: Discussion on improved equity and smaller ticket sizes to unlock value. • Future Communications: Commitment to update stakeholders on developments.
Conclusion • Call Closure: Moderator thanked participants, concluding the session.
Eldeco Housing and Industries Limited Q3 and 9M FY '24 Earnings Conference Call Summary
Company Performance • Date of Call: February 12, 2024 • Leadership: Led by Chairman Pankaj Bajaj • Bookings: • 2 lakh square feet valued at INR 79.14 crores for the quarter • 114% increase in bookings for the nine-month period compared to the previous year • Deliveries: 56,612 square feet during the quarter • New Projects: Launch of Eldeco Trinity and Eldeco Imperia Phase II with regulatory approvals
Financial Highlights • Consolidated Revenue: INR 21.6 crores (down from INR 30 crores YoY) • EBITDA: INR 9.3 crores with margin improvement • Profit After Tax: INR 8.1 crores (down from INR 10.5 crores YoY)
Market Insights • Demand-Supply Gap: Significant gap in Lucknow; demand for 200 bookings for every 100 available • Focus Shift: Emphasis on group housing over townships due to land assembly challenges • Future Projects: Plans to launch two more projects in Lucknow next financial year
Strategic Decisions • Office Relocation: Move to Haryana is administrative, not strategic • Monitoring Market Trends: Cautious approach to residential real estate despite interest from hotel sector due to religious tourism
Concerns and Reassurances • Land Prices: Rising prices impacting profit margins; stable margins due to strong demand for quality housing • Debt-Equity Ratio: Approximately 0.3, allowing for further land acquisitions through private equity partnerships
Future Outlook • Land Aggregation: Ongoing efforts with new project launches expected by year-end • Completion Certificates: Anticipated receipt within the next few months • Confidence in Results: Management optimistic about maintaining margins and expanding portfolio
Conclusion • Investor Engagement: Q&A session with investors addressing ongoing projects and saleable area discrepancies • Closing Remarks: Pankaj Bajaj expressed confidence in future performance and thanked participants.
Eldeco Housing and Industries Limited Q2 FY24 Earnings Conference Call Summary
Performance Overview • Steady performance despite a quiet quarter with no new project launches. • Real estate market in Lucknow is growing due to infrastructure improvements. • Sales bookings for Latitude 27 project increased by 6.5% year-on-year, totaling Rs. 28.6 crores.
Upcoming Projects • Significant launches planned: Imperia Phase-2 and Eldeco Trinity. • Expected portfolio enhancement of approximately 11 lakh square feet.
Financial Highlights • Consolidated revenue for Q2 FY24: Rs. 17.1 crores (down from Rs. 32.9 crores in Q2 FY23). • Improved EBITDA margins at 43.6%. • Optimism for H2 FY24 due to anticipated demand during the festive season.
Subsidiary Structure and Loans • Multiple subsidiaries necessary for land acquisition due to legal constraints (e.g., Land Ceiling Act). • Loan to EIPL is commercial, linked to guaranteed returns from the Bareilly project. • Recent land acquisitions through subsidiaries totaled around Rs. 80-85 crores.
Future Sales and Pricing Expectations • Optimism about doubling last year's sales bookings. • Pricing expectations: Imperia Phase-2 around Rs. 4000-4500 per square foot; Trinity between Rs. 6500-7500 per square foot.
Market Dynamics in Lucknow • Lucknow is a hub for government and private organizations, attracting both transient and permanent migration. • Strong demand for housing, particularly in established areas with limited land availability. • Eldeco's primary focus remains on Lucknow, with exploration of opportunities in nearby cities.
Land Acquisition and Strategic Partnerships • Ongoing land acquisition efforts with sufficient funds for current projects. • Open to taking on more debt for attractive opportunities. • Upcoming projects expected to improve revenue figures, including Twin Tower and Imperia Phase 1.
Conclusion • Strong performance indicators based on recent land acquisitions and project launches. • Future EBITDA margins may be lower than historical highs due to increased land costs. • Call concluded with gratitude to participants for their interest in the company.
Eldeco Housing & Industries Limited Q4 FY '23 Earnings Conference Call Summary
Market Resilience • Indian real estate market, especially in Lucknow, remains resilient despite global economic challenges. • Significant interest from real estate funds for future investments.
Sales and Operational Performance • Flat year in sales due to delays in new project launches. • Handed over 4.15 lakh square feet and registered 322 homes. • FY '23 collections totaled INR 158 crores.
Financial Highlights • Q4 revenue increased to INR 38.7 crores. • Annual revenue reached INR 129.1 crores. • Consolidated profit after tax for Q4 was INR 14.9 crores.
Future Projections • Sales guidance for FY '24: INR 300-400 crores; FY '25: INR 500 crores. • Approximately 1 million square feet available for sale, with potential sales value of INR 900-1,000 crores over 2-3 years. • Fresh bookings for FY '23 were around INR 100 crores.
Debt and Development Plans • Need for around INR 100 crores for new business development in FY '24. • Focus on residential projects in Lucknow, with potential expansion to Bareilly and Gorakhpur.
Market Trends and Shareholder Returns • Significant increase in realization rates expected. • No immediate plans for buybacks or large dividends; focus on growth and market share consolidation. • Increased dividend payout ratio, with preference for reinvestment into real estate development.
Company Positioning • Eldeco operates primarily in Lucknow, achieving the highest ROE and ROCE among listed real estate firms in India. • Focus on premium and luxury segments, avoiding affordable housing due to thin margins.
Growth Potential • Anticipated substantial growth in sales and profitability driven by infrastructure improvements in Lucknow. • Land acquisition at market prices allows for higher margins (35-40%) compared to competitors (20-25%). • Optimism about Lucknow market doubling in size within three to four years due to strong demand and government investments.
Eldeco Housing and Industries Limited Q3 FY 2023 Earnings Conference Call Summary
Key Highlights • Date of Call: February 14, 2023 • Chairman: Pankaj Bajaj • Market Demand: Robust demand in residential real estate due to low loan rates and changing consumer preferences.
Financial Performance • Homes Handed Over: 100 • Collections: INR 38 crores • Sales Bookings: INR 22.3 crores • Revenue from Operations: INR 30 crores (down from INR 42.7 crores YoY) • EBITDA: INR 12.2 crores (40.7% margin)
Future Plans • New Projects: Two residential projects planned by the end of the financial year. • Sales Pipeline: Expected to generate INR 800 crores in sales value over the next 12 months.
Market Insights • Project Size: Estimated 2.5 to 3 million square feet, including a 16-acre site. • Price Increase: Average selling prices in Lucknow-Kanpur region rose from INR 3,500 to INR 4,500 per square foot. • Sales Projections: Anticipated sales of 1.5 to 2 million square feet over the next two years, with revenues of INR 300-400 crores annually.
Challenges and Outlook • Profitability Concerns: Rising land and input costs may impact EBITDA margins. • Market Potential: Positive outlook for Lucknow market with expectations of continued price increases and strong demand. • Interest Rates: Minimal impact expected on the market, particularly in Lucknow.
Strategic Focus • Geographical Diversification: Currently focused on existing operations in Lucknow. • New Product Launches: Plans to introduce new products within the next three to six months.
Conclusion • Optimism for Future: Pankaj Bajaj expressed confidence in the company's performance and growth prospects in the upcoming year.