Puravankara

Puravankara reported strong operational metrics for Q4 and full-year FY25. Full-year sales value reached ₹5,006 crores from 5.67 million square feet, while Q4 sales were ₹1,282 crores from 1.42 million square feet. Customer collections for FY25 grew 9% to ₹3,937 crores. Average realization saw healthy growth, up 9% YoY in Q4 to ₹9,031 per square feet and 10% YoY for FY25 to ₹8,830 per square feet. Despite these operational strengths, the company recorded a Q4 revenue of ₹564 crores with a net loss of ₹88 crores, and a full-year total income of ₹2,933 crores with a net loss of ₹186 crores, primarily due to delayed project handovers and associated period costs.

The company is well-positioned with a robust launch pipeline of 13.5 million square feet planned for FY25-26. A significant strategic shift is the diversification away from Bengaluru, with non-Bengaluru projects now accounting for 54% of ongoing developments and 52% of the planned pipeline. Mumbai and Pune's contribution to overall sales rose from 6% to 15% YoY. Puravankara made substantial land investments of ₹1,284 crores in FY25, adding 8 million square feet to its development portfolio with a potential GDV of ₹13,000 crores, including a new JV in North Bengaluru for 25 acres with a GDV of ₹3,300 crores.

Management expressed confidence in launching the 13.5 million square feet pipeline, despite acknowledging past approval delays. Specific challenges include the NGT issue affecting projects in Mumbai (Lokhandwala, Thane), with a resolution anticipated by September. In Karnataka, the e-Khata issue has delayed handovers and revenue recognition. However, projects like Mallasandra are expected to launch in Q2 FY26, and Mumbai redevelopment projects are targeted for Q3-Q4 FY26, indicating a strong pipeline ready for market.

Puravankara has 3.2 million square feet of commercial development underway, with approximately 2 million square feet expected to receive Occupancy Certificates (OCs) in FY26, specifically for Zentech and Aerocity in Bangalore. These projects are projected to generate a surplus of ₹1,870 crores. The Aerocity asset alone is expected to receive 1.2 million square feet of OC by December 2025. The strategy for commercial assets is dual, focusing on both leasing and sales, with good traction already observed in sales volumes.

As of March 31, 2025, net debt stood at ₹2,949 crores, with a net debt-to-equity ratio of 1.7x. The company aims to gradually reduce debt per square feet, particularly for projects under construction, and explicitly stated it does not intend to increase debt per square feet for the residential business. While land acquisitions and commercial development have contributed to the overall debt, management is exploring funding options like QIP or platform-level partnerships to balance the capital structure. The current weighted average cost of debt is approximately 11.85%, up slightly from 11.59% last year, despite significant additional borrowing for land.

Following the resignation of Mr. Abhishek Kapoor, Puravankara has implemented an organizational restructuring to achieve greater operational and cost efficiencies. The new, leaner structure features a CEO for the South region and a CEO for the West region, both reporting directly to the Managing Director. This regionalized approach is expected to foster cross-learning and streamline operations, moving away from a previously duplicated departmental structure across different verticals and brands.