GANESH HOUSING LIMITED — Q3 FY25 earnings call

Call held 17 Jan 2025

Management summary

Ganesh Housing Corporation Limited reported a strong Q3 FY25, with revenue growing 44% YoY to INR264 crores and PAT increasing 60% to INR160 crores, primarily driven by high-margin land sales. The company's extensive, historically acquired land bank continues to be a key competitive advantage. Key projects like Million Minds SEZ Phase I are ahead of schedule, and the Godhavi Township project, with a potential of INR5,000 crores, is on track for monetization in Q2 FY26, positioning the company for sustained growth in Ahmedabad's robust real estate market.

Highlights

  • Q3 FY25 Revenue surged to INR264 crores, reflecting a 44% year-on-year growth.

  • Q3 FY25 EBITDA stood at INR218 crores, a 57% Y-o-Y growth with an 83% margin.

  • Q3 FY25 PAT reached INR160 crores, a 60% increase over Q3 FY24, with a 61% PAT margin.

  • 9M FY25 Revenues reached INR734 crores (19% growth), EBITDA INR589 crores (23% growth), and PAT INR433 crores (25% growth).

  • The company maintains an extensive land bank of 535 acres, fully paid for.

  • Million Minds SEZ Phase I is almost 1 year ahead of schedule, with completion by Q4 FY25 and possession for fit-out by April-May 2025.

  • Godhavi Township project is scheduled for monetization in Q2 FY26, with a sales potential of INR5,000 crores over 450 acres.

  • 90-95% of Q3 FY25 sales revenue came from high-margin land sales.

Key financials

2 periods

Q3 FY25

  • Revenue
    ₹264 Cr
    YoY +44%
  • EBITDA
    ₹218 Cr
    YoY +57%
  • EBITDA Margin
    83%
  • PAT
    ₹160 Cr
    YoY +60%
  • PAT Margin
    61%

9M FY25

  • Revenue
    ₹734 Cr
    YoY +19%
  • EBITDA
    ₹589 Cr
    YoY +23%
  • PAT
    ₹433 Cr
    YoY +25%

What they filed

Q1 FY27: revenue up 6750.0%, net profit up 560.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue242 255 39 4 104 −57%0 −100%17 −56%274 +6750%
EBITDA209 211 17 -12 79 −62%-11 −105%1 −94%112 +1033%
Net profit155 156 11 -10 57 −63%-9 −106%-1 −109%46 +560%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Project Completion

  • Million Minds SEZ Phase I Completion Project Completion · Q4 FY25 · High confidence Q4 FY25
    completion expected by end of Q4 FY '25, that is this year

    — B. Ravi

Project Possession

  • Million Minds SEZ Phase I Possession for Fit-out Project Possession · April-May 2025 · High confidence April-May 2025
    expected to give possession for fit out by April-May 2025.

    — B. Ravi

Annuity Income

  • Million Minds SEZ Phase I Lease Rentals Annuity Income · FY26 · High confidence over INR70 crores
    almost like what we had said about INR70 crores is the lease rental will be earning on that year-on-year. The way it is, it will be more than INR70 crores.

    — B. Ravi

Project Launch

  • Godhavi Township Monetization Start Project Launch · Q2 FY26 · High confidence Q2 FY26
    monetization of this in Q2 FY '26 is on schedule.

    — B. Ravi

Sales Potential

  • Godhavi Township Sales Potential Sales Potential · 7 to 10 years · High confidence INR5,000 crores
    it gives us roughly around the sales potential of INR5,000 crores.

    — Neeraj Kalawatia

Dividend

  • Dividend Payout Ratio Dividend · Annual · Medium confidence 20-30%
    Pay out being more than 20%, 30% of I think given the kind of numbers we have shown and what we like to show, that could continue

    — Management

Project Expansion

  • Million Minds Phase 2 Preponement Project Expansion · Future · Medium confidence Likely
    Bang on, Neeraj. That is almost certainly likely to happen. We -- of course, we'll have to wait for a proper announcement on that. But you are right, that looks to be on the cards for sure.

    — B. Ravi

Risks & concerns

  • Impact of Jantri or circle rate increases on project costs and new launches

    medium

    Revision of Jantri rates is impacting project costs and causing developers to wait before launching projects, creating market uncertainty.

    Analyst acknowledged

Areas of evasion (2)

  • Specific details about the 'lot happening' in Godhavi area (e.g., Olympic Village rumors)
  • Specific financial targets for the next fiscal year

Q&A highlights

2 direct, 1 evasive
High EBITDA and PAT margins and their sustainability Direct
See, these are all to historically invested land banks. And therefore, the investment costs have been quite low, and therefore, automatically, when we sell it at this juncture where the pricing is high in the market, the margins -- the cost being so low, the margins are remarkably high. So the margin is only a factor of the cost itself being lower.

This explains the company's core competitive advantage and the primary driver of its significantly higher margins compared to peers, stemming from low-cost land banks acquired years ago.

Asked by Krishna Shah

Land bank size, acquisition, and sales strategy, and revenue mix Direct
See, the total land bank we have in Ganesh Housing is subsidiary and which are fully paid around 535 acres of land and this land is fully paid for and fully account for. And in terms of the breakup of the sales, we will land and this year, around 90% to 95% of the sale is coming from the land in this quarter, and the rest is coming from the project sales. ... We actually look at saying that whether it makes better sense to develop that piece of land or it makes sense to sell it off if we are getting a good price. And sometimes, the latter wins our development.

Clarifies the current land bank size, its fully paid status, the significant contribution of land sales to current revenue, and the strategic decision-making process behind selling vs. developing land.

Asked by Ishita Lodha

Specific reasons for bullishness on the Godhavi area, including potential major developments like an Olympic village Evasive
No, no, I'll tell you. On the call, I can only say that there is a lot happening around that period. I would definitely wish that you come over here, we actually have a personal meeting, maybe all of you come over and we'll take you and give you a proper presentation on that. But on the call because it can be -- it can take a long time to really explain all what has been happening, I can tell you where somebody is very interested in what is happening around that that place.

Reveals a significant, potentially market-moving, underlying reason for the company's confidence in the Godhavi area, but management is hesitant to confirm details on the call, suggesting sensitive information or a preference for private disclosure.

Asked by Neeraj Sadani

3 min read 6 chapters

Detailed narrative

Strong Q3 FY25 Performance Driven by High-Margin Land Sales

Ganesh Housing reported robust Q3 FY25 results, with revenue surging 44% year-on-year to INR264 crores. EBITDA grew 57% to INR218 crores, achieving an impressive 83% margin, while PAT increased 60% to INR160 crores, with a 61% margin. For the nine months ended December 2024, revenues reached INR734 crores (19% growth), EBITDA INR589 crores (23% growth), and PAT INR433 crores (25% growth). This strong performance was primarily attributed to high-margin land sales, which constituted 90-95% of the quarter's revenue.

Strategic Land Bank and Monetization Strategy

The company's competitive edge stems from its extensive, historically acquired land bank of 535 acres, which is fully paid for. This low-cost land base enables significantly higher margins when sold at current market prices. Management indicated a mixed strategy of developing and selling land, opting for outright sales when good prices are available. The Godhavi Township project, spanning 450 acres, is a key asset with an estimated sales potential of INR5,000 crores over a 7-10 year plan, with monetization scheduled to begin in Q2 FY26.

Project Updates: Million Minds Ahead of Schedule, Malabar Retreat Progressing

The Million Minds SEZ Phase I commercial venture is progressing ahead of schedule, with completion expected by the end of Q4 FY25 and possession for fit-outs by April-May 2025. This project is anticipated to generate annual lease rentals of over INR70 crores starting in FY26, with significant traction already observed. The Malabar Retreat residential project, launched in Q4 FY24, has achieved presales of over INR110 crores and is 22% complete, with a sample apartment expected soon to further boost sales.

Ahmedabad Real Estate Market Dynamics

Ahmedabad's real estate market is experiencing strong growth, with residential unit sales reaching a 10-year high in 2024, growing 15% year-on-year to 18,400 units. The mid-range segment (INR50 lakhs to INR1 crore) dominated sales, but the premium segment also saw an increase. Commercial office transactions surged 64% in 2024, driven by the city's evolving economic landscape and government support. Management noted a slight slowdown in demand in the last quarter but emphasized that prices continue to increase.

Future Outlook and Expansion Plans

Ganesh Housing is actively scouting for new land acquisition opportunities in high-potential areas, particularly around Ahmedabad Ring Road corridors. While there are no immediate plans for geographic expansion outside Ahmedabad, the company remains focused on leveraging its land bank for high-value developments in residential and commercial segments. The potential to prepone Million Minds Phase 2 is 'almost certainly likely to happen' given the strong demand, indicating further expansion of its commercial portfolio.

Jantri Rate Impact and Dividend Policy

The revision of Jantri rates in Ahmedabad is impacting project costs and causing developers to delay new launches, creating uncertainty in the market. Management acknowledged this but stated it's difficult to pinpoint the exact impact currently. Regarding shareholder returns, the company aims to maintain a dividend payout of more than 20-30%, similar to its previous payout. Dividend decisions for the next year will be finalized in the upcoming board meeting in May.

This is an AI-generated summary of a publicly available earnings call transcript.
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