Puravankara — Q3 FY25 earnings call

Call held 14 Feb 2025

Management summary

Puravankara reported robust operational performance in Q3 FY25 with sales of INR 1,265 crores and collections of INR 993 crores, driven by strong growth in Provident Housing and increased realizations. The company's launch pipeline remains strong at 12.63 million square feet, with a strategic focus on non-Bengaluru markets. Despite reporting a net loss under Ind AS, management highlighted strong cash flows and a healthy debt position, with plans for further acquisitions and growth.

Highlights

  • Q3 FY25 Sales: INR 1,265 crores.

  • Q3 FY25 Sales Volume: 1.43 million square feet.

  • Q3 FY25 Customer Collections: INR 993 crores, up 6% YoY.

  • 9 Months FY25 Presales Value: INR 3,724 crores.

  • 9 Months FY25 Operating Cash Flows: INR 3,209 crores, up 14% YoY.

  • Net Debt as of Dec 31, 2024: INR 2,824 crores.

  • Launch Pipeline: 12.63 million square feet of new planned projects.

  • Provident sales grew 76% YoY to INR 737 crores in Q3 FY25.

  • Q3 FY25 Total Revenue: INR 334 crores, with a net loss of INR 94 crores.

Key financials

  1. Presales Value ₹3,724 Cr
  2. Customer Collections ₹993 Cr +6%YoY
  3. Total Revenue ₹334 Cr
  4. EBITDA Margin 10%
  5. Net Loss ₹94 Cr
  6. Net Debt ₹2,824 Cr

What they filed

Q1 FY27: revenue up 306.3%, net profit up 126.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue275 189 155 126 334 +21%723 +283%1,119 +622%512 +306%
EBITDA10 -9 -46 -31 13 +30%124 +1478%195 +524%82 +365%
Net profit-25 -82 -76 -68 -36 −44%64 +178%111 +246%18 +126%
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.

Segment breakdown

  • Provident Housing
    ₹737 Cr Sales
  • Purva
    — Realization

Guidance & targets

Debt

  • Debt per square foot on residential and land Debt · Ongoing · High confidence INR 1,000 per square foot and under
    From the residential debt perspective, our target is always to maintain at INR1,000 a square foot and under of area under development.

    — Abhishek Kapoor

Volume

  • Commercial project completion area Volume · Current calendar year (June-September) · High confidence 2.2 million square feet
    So we're expecting to complete a total of about 2.2 million square foot in this coming calendar year, which is expected between June and September.

    — Abhishek Kapoor

  • Commercial project leasing Volume · by December (current calendar year) · Medium confidence Large amount of leasing
    As we complete these projects, we expect that a large amount of leasing should get completed by December.

    — Abhishek Kapoor

  • Land bank size Volume · Over next 2-3 years · High confidence 45 million square feet
    So one is we are targeting to take the land bank to 45 million square feet over the next 2 to 3 years.

    — Harsh Pathak (analyst, confirmed by management)

  • All Mumbai projects to market Volume · On or before December (current calendar year) · High confidence All projects
    But our target is that within this calendar year, on or before December, we should take all the projects which we have taken in Mumbai to the market.

    — Abhishek Kapoor

Other

  • Fully occupied stabilized income from commercial projects Other · After completion (3-6 months after rentals start) · Medium confidence 6-12 months from completion
    But any commercial asset to get fully occupied and have fully stabilized income takes anywhere between 6 to 12 months from date of completion.

    — Abhishek Kapoor

  • Commercial project rentals Other · Between December (current calendar year) and March (next financial year) · Medium confidence Coming in
    So we would expect to see rentals obviously coming in between December and March of the next financial year.

    — Abhishek Kapoor

  • Average incremental price appreciation Other · Future · Medium confidence Inflation plus 2-3%
    But across the country, we are still currently looking at less than 12 months supply in general on an average. And what we are expecting is with the new supply coming into the market, we would expect an inflation plus 2%, 3% kind of average incremental price appreciation...

    — Abhishek Kapoor

Margin

  • Embedded EBITDA margin Margin · Ongoing · High confidence 27-30%
    So EBITDA margin, I think we have mentioned in the past will be somewhere between 27% and 30%, of course, barring what we do in a redevelopment project and in a JV.

    — Abhishek Kapoor

Capex

  • Balance capital from HDFC fund deployment Capex · Before June this year · High confidence Over INR 700 crores
    The balance capital, which is a little over INR700 crores is expected to be deployed before June of this year.

    — Abhishek Kapoor

Risks & concerns

  • Project Approval Delays

    medium

    Past delays in planned sanctions and government approvals impacted the launch pipeline and presales. While the situation has improved, individual delays can still occur due to authorities.

    Management acknowledged

  • Debt per Square Foot Increase

    low

    Debt per square foot increased due to capex for commercial development, land acquisition for future growth, and deferment of project launches. Management is committed to optimizing financial resources and reducing it.

    Management acknowledged

Q&A highlights

2 direct
Debt Repayment and Cash Flow Management Direct
So currently, if you look at our quarterly collections is about INR1,000 crores a quarter. And with the launches which we are expecting, there are about 8 launches which are lined up in next -- between this quarter and next 2 quarters. Between these launches, we are expecting that the cash surplus will increase significantly and the cash collection will increase significantly.

Addresses a key investor concern about managing a significant debt repayment schedule (INR 1,071 crores in next year) against current cash flows, providing a clear strategy involving increased collections from upcoming launches and capital raising.

Asked by Deepak Purswani

Launch Pipeline and RERA Readiness Direct
As I said, currently, you have another 50 days to go in the year. Currently, Mundhwa, Grand Hills, Thane and Bellandur have visibility. Hebbagodi may come in this quarter, we'll have to see.

Provides specific project names and timelines for upcoming launches, which are crucial for future pre-sales and revenue generation, especially given past delays due to approvals.

Asked by Deepak Purswani

Commercial Projects Holding Strategy and Capital Value Partial
So the two I'll just ask if I got the question now right. You said will we hold the asset. So there are two assets which we are talking about currently, which are under production. One is Aerocity and the other is Zentech. As far as Aerocity is concerned, we intend to hold that asset and build the platform... On the other one, which is Zentech, which is a JDA, we are evaluating an exit there.

Clarifies the company's strategic intent for its commercial assets, distinguishing between holding for annuity income (Aerocity) and potential exit (Zentech), which impacts long-term cash flow and capital allocation.

Asked by Chintan Mehta

3 min read 7 chapters

Detailed narrative

Strong Operational Performance and Collections Growth

Puravankara reported Q3 FY25 sales of INR 1,265 crores, with sales volumes reaching 1.43 million square feet. Customer collections for the quarter increased by 6% year-on-year to INR 993 crores, contributing to a 19% year-on-year growth for the nine months ended December 31, 2024. The average realization for Q3 FY25 also saw a significant jump of almost 16% year-on-year to INR 8,847 per square feet, reflecting a positive pricing trend.

Robust Launch Pipeline and Strategic Geographic Expansion

The company maintains a robust launch pipeline of approximately 12.63 million square feet of new planned projects. Notably, non-Bengaluru projects now account for 47% of ongoing and 73% of planned projects, with Mumbai and Pune together constituting 50% of the planned projects. Management expects to launch key projects like Bellandur, Grand Hills, Mundhwa, and Thane in the current or next quarter, with all Mumbai projects targeted for launch by December this calendar year.

Healthy Debt Management and Liquidity Profile

As of December 31, 2024, Puravankara's net debt stood at INR 2,824 crores, with a net debt-to-equity ratio of 1.58. The company reported a strong cash and bank balance of INR 736 crores. Management emphasized a target of maintaining debt per square foot at or under INR 1,000 for area under development, currently at INR 910. They highlighted substantial cash surpluses from ongoing and new projects (INR 6,600 crores) to cover debt obligations.

Commercial Portfolio Development and Monetization Strategy

Puravankara is on track to complete approximately 2.2 million square feet of commercial projects by June-September of the current calendar year. A large portion of leasing for these assets is expected by December, with fully occupied stabilized income anticipated within 6-12 months from completion. The company intends to hold assets like Aerocity for long-term annuity income while evaluating an exit for projects like Zentech, a JDA.

Strong Market Demand and Price Appreciation Outlook

The residential real estate market continues to show strong demand, with India achieving a 12-year high in annual sales in 2024, surpassing 300,000 housing units. Management noted a clear shift towards premiumization and robust absorption, particularly in Bangalore, where supply is tight (7-9 months). Across the country, supply is generally less than 12 months. The company anticipates average incremental price appreciation of inflation plus 2-3%.

Capital Deployment and Business Development Initiatives

Out of the HDFC fund, INR 417 crores has already been deployed, with the remaining balance of over INR 700 crores expected to be deployed before June this year. For the nine months of FY25, Puravankara made land investments of approximately INR 1,236 crores and undertook business development for close to 7 million square feet with a Gross Development Value (GDV) exceeding INR 12,000 crores. The company aims to expand its land bank to 45 million square feet over the next 2-3 years, with significant acquisitions planned in the Southern markets.

Profitability Metrics and Accounting Perspective

For Q3 FY25, the company reported a total revenue of INR 334 crores and a net loss of INR 94 crores, with EBITDA margins around 10%. For the nine months, total comprehensive loss was approximately INR 99 crores on a total income increase of 16% year-on-year. Management clarified that under the percentage of completion method (not used for Ind AS reporting), the company would have reported profits for the nine-month period, similar to how a PBT of INR 160 crores would have been reported in FY23-24 compared to the Ind AS reported INR 68 crores.

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