Puravankara

Puravankara reported strong operational metrics for Q2 FY25, with sales reaching INR1,331 crores and a sales volume of 1.53 million square feet. Customer collections demonstrated robust growth, increasing by 18% YoY in Q2 and 27% YoY in H1 FY25, indicating improved operating efficiencies. The average realization per square foot rose by 9% YoY to INR8,697. Financially, total revenue for Q2 FY25 grew by 36% YoY to INR520 crores, and H1 FY25 revenue increased by 67% YoY to INR1,195 crores, with EBITDA margins at 28% and 24% respectively, though the company recorded a net loss of INR19.88 crores for the quarter.

The company has a strong launch pipeline of 15.7 million square feet, including 12.27 million square feet of new planned projects and 3.44 million square feet for new trade launches. Management expects to open approximately INR8,000 crores worth of inventory for sale from this pipeline in H2 FY25. Strategic acquisitions include redevelopment rights for Miami Apartments at Breach Candy (Mumbai) with estimated rates of INR125,000-140,000 per sq ft, and an expansion in Lokhandwala (Andheri West) with a combined GDV of INR2,350 crores. A JDA for 1.95 acres in Electronic City, Bangalore, is expected to yield a potential GDV of INR250 crores.

As of September 30, 2024, Puravankara's net debt stood at INR2,430 crores, resulting in a net debt-to-equity ratio of 1.29. The company maintains a strong liquidity profile with INR939 crores in cash and cash balance. Management's long-term goal is to reduce the net debt-to-equity ratio to below one and eventually bring net debt towards zero within the next 3-4 years, driven by increasing collections and cash generation from ongoing projects. The debt per square foot of under-construction area has reduced by 26% to INR928 per square feet since March 2022.

Puravankara's strategy focuses on 5-6 key geographies: Bangalore, Hyderabad, Chennai, Mumbai, Pune, and NCR (Gurgaon/Delhi), which are expected to contribute 80-85% of the business. The company is making strategic inroads into the Western region, with 49% of planned projects in Mumbai and Pune, and aims to launch projects in Thane and Lokhandwala before March 31. While NCR is a target, the approach is cautious and asset-light, with significant contribution expected in 12-24 months. Opportunistic projects in existing markets like Kochi, Coimbatore, and Goa will continue based on established presence and relationships.

The company is actively developing its commercial portfolio, with 3 million square feet of plan-approved area. It expects to complete 2.2-2.3 million square feet in the next financial year, projecting a rental income of INR150 crores from this segment. The target is to achieve INR200 crores in rental income by October 2026 and a larger portfolio target of INR500 crores over the next five years, driven by acquisitions of city-center prime location projects.

Puravankara highlighted its strong brand traction and unique positioning in the Mumbai market, particularly in redevelopment projects. Projects in Thane are expected to yield an EBITDA margin of around 30%, while redevelopment projects in areas like Pali Hill and Lokhandwala are projected to have EBITDA margins of 23-24%. Realizations are anticipated to be INR36,500-45,000 per sq ft in Lokhandwala and INR105,000-115,000 per sq ft in Pali Hill, reflecting the premium nature of these locations and the company's ability to command a 15-20% premium in the market.