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    Arihant Super.

    ARIHANTSUP
    Realty·4 Feb 2025
    Management Summary

    Arihant Superstructures delivered strong Q3 FY25 results, with significant revenue and profit growth driven by robust sales bookings and an expanded land bank. The company achieved a record EBITDA margin of 28% and successfully added 87 acres to its land portfolio. While average realization saw a temporary dip due to project mix, management remains optimistic about future pricing and growth, particularly with upcoming infrastructure developments in Navi Mumbai.

    Highlights

    5
    • Total consolidated revenue grew 26% YoY to INR151 crores in Q3 FY25.

    • Total EBITDA increased 66% YoY to INR43 crores, with EBITDA margin reaching a record 28% in Q3 FY25.

    • Profit after tax (PAT) saw a 63% YoY growth, reaching INR25.4 crores.

    • Achieved sales bookings of INR265.5 crores, representing 4.74 lakh square feet and 551 units in Q3 FY25.

    • Successfully expanded land bank from 220 acres to 307 acres by December 2024, meeting the FY25 guidance of 300+ acres.

    Concerns

    2
    • Average per square foot realization trended down to INR5,594 in Q3 FY25, attributed to the sales mix from Jodhpur projects.

    • Debt is expected to increase slightly in FY25, though repayment is largely deferred to FY27 due to moratoriums.

    What Changed2

    vs Q4 FY25

    Guidance items6 → 14 (+8)Risks discussed2 → 3 (+1)

    Key financials

    Single quarter

    06 metrics
    1. 01Total Consolidated Revenue₹151 Cr+26%YoY
    2. 02Total EBITDA₹43 Cr+66%YoY
    3. 03EBITDA Margin28%
    4. 04Profit Before Tax₹33.34 Cr+77%YoY
    5. 05Profit After Tax₹25.4 Cr+63%YoY

    Order Book

    high confidence

    Total Value

    ₹ 12,500 crores

    as of 2024-12-31

    quantified

    Inflow this qtr

    ₹ 265.5 crores

    Execution

    Entire GDV (INR12,500 crores) expected to be launched and sold in 4-6 years, and completed in 5-7 years.

    Composition

    Mix3 segments
    • Premium Housing6.0%
    • Mid-income Housing63.0%
    • Affordable Housing31.0%

    Share of order book by segment

    Pipeline

    other

    New project Town Villas with GDV potential of INR2,500 crores; 11-acre addition to World Villas land; total land bank of 307 acres.

    "The company successfully reduced ready possession inventory from INR55 crores in April 2024 to INR17 crores in December 2024."

    Source:
    Prepared remarks

    Capital allocation

    4
    high confidence
    CategoryHeadline
    Capex

    ₹25 crores

    Debt

    Debt disclosed

    Cost 10.0%

    M&A

    Land at Chowk

    acquisition · closed · Consideration ₹NaN (undisclosed)

    M&A

    World Villas Land

    acquisition · closed · Consideration ₹NaN (undisclosed)

    Guidance & targets

    14
    CategoryTargetPriority
    Other
    Overall Growth
    20-25%
    High
    Other
    GDV Launch and Sell Timeline
    4-6 years
    High
    Other
    GDV Completion Timeline
    5-7 years
    High
    Other
    Cost to Develop GDV
    ~INR6,500 crores
    High
    Other
    Free Cash Flow from GDV
    ~INR3,000 crores
    High
    Other
    Debt Repayment Start
    FY27
    High
    Other
    Navi Mumbai Airport Area Realization Jump
    INR500
    High
    Volume
    World Villas Sales
    25-35 units
    Medium
    Margin
    EBITDA Margin (Project Level)
    30-33%
    High
    Profitability
    EBITDA on GDV
    ~INR3,700 crores
    High
    Sales
    Pre-sales
    ~INR1,200 crores
    High
    Sales
    Pre-sales
    ~INR1,550-1,600 crores
    High
    Revenue
    Revenue Growth
    20%
    High
    Revenue
    Revenue CAGR
    26%
    High

    World Villas Sales Performance

    FY25 end
    Current~5 units sold in Q3 FY25
    Target25-35 units sold by FY25 end

    Why it matters

    To assess the sales momentum and performance of a key premium project.

    I think we should be able to do another, say, sales of 25 to 35 units till the year-end.

    How to verify

    order_book.inflow_this_quarter

    Risks & concerns

    3
    RiskSeverity

    Realization Volatility due to Project Mix

    Average realization per square foot trended down in Q3 FY25 due to a higher proportion of sales from Jodhpur projects, though management expects recovery in Q4.Analyst acknowledged

    medium

    Increase in Debt

    Debt is expected to increase slightly in the current financial year, although the majority is secured and repayment is deferred to FY27.Management acknowledged

    low

    Lumpy Revenue Recognition

    Revenue and expenses for projects are recognized only after reaching a 10% completion threshold, which can lead to variability in quarterly reported financials.Management acknowledged

    low

    Q&A highlights

    8

    “Yes, the World Villas launch began in August. This quarter, we have sold approximately five units, as the initial launch phase saw strong absorption in the first two months. With construction progressing, Q4 has also started well for the project. ... I think we should be able to do another, say, sales of 25 to 35 units till the year-end.”

    Clarified the sales performance of a key premium project and provided a specific sales target for the fiscal year.

    asked by Suyash Bhave

    3 min read6 chapters

    Detailed Narrative

    01

    Strong Q3 FY25 Financial Performance

    Arihant Superstructures reported robust Q3 FY25 results, with consolidated revenue growing 26% year-on-year to INR151 crores. EBITDA saw a significant 66% increase to INR43 crores, leading to a record-high EBITDA margin of 28%, up from 22% in the prior year. Profit after tax also surged by 63% to INR25.4 crores, demonstrating strong operational efficiency and profitability. This performance was driven by effective project execution and sales.

    02

    Robust Sales Bookings and Collections

    The company achieved sales bookings of INR265.5 crores in Q3 FY25, representing 4.74 lakh square feet and 551 units. The average realization for the quarter stood at INR5,594 per square foot, with an average unit price of INR48 lakh. Total collections for the quarter were INR129.1 crores. The sales mix was diversified, with 6% from premium, 63% from mid-income, and 31% from affordable housing segments, indicating broad market appeal.

    03

    Strategic Land Bank Expansion and New Project Launches

    Arihant Superstructures successfully expanded its land bank from 220 acres in April 2024 to 307 acres by December 2024, surpassing its FY25 guidance of 300+ acres. This includes the acquisition of 23 additional acres at Chowk for the new 'Town Villas' project, which has a Gross Development Value (GDV) potential of INR2,500 crores, and an 11-acre addition to the 'World Villas' land. The current overall GDV stands at INR12,500 crores, with 75% located in the Navi Mumbai area.

    04

    Navi Mumbai Infrastructure and Market Outlook

    Management highlighted the positive impact of upcoming infrastructure projects, particularly the Navi Mumbai Airport (expected in 3-4 months) and Atal Setu, on the real estate market. These developments are anticipated to drive significant job creation and population growth, leading to increased demand for both residential and commercial properties. The company expects an average minimum price rise of INR500 per square foot across its salable area, with a potential INR500 jump in realization in the airport-influenced areas within the next year, from the current INR7,000 per square foot at Arihant Aspire.

    05

    Project Development and Debt Management

    The company has commenced work on key luxury projects, including World Villas, Club 10, and a 5-star hotel, with an estimated FY25 capital expenditure of INR25-30 crores for these projects. Deliveries for World Villas are expected by December 2026, Gymkhana by calendar year 2027, and the hotel by March 2028. The cost of debt has been reduced to 10-10.5% from ~14% two years ago, with a BBB- credit rating achieved, and further 50 basis points reduction is anticipated in the coming financial year. Debt repayment for most projects is slated to begin in FY27 due to moratoriums.

    06

    Guidance for Future Growth and Profitability

    Arihant Superstructures reiterated its FY25 overall growth guidance of 20-25% and provided pre-sales targets of approximately INR1,200 crores for FY25 and INR1,550-1,600 crores for FY26. The company aims for a project-level EBITDA margin of 30-33% and expects to launch and sell its entire INR12,500 crores GDV within 4-6 years, with completion targeted in 5-7 years. Free cash flow from this GDV is projected to be around INR3,000 crores.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.