What are the key highlights of the quarter gone by? Which key projects saw revenue recognition? Also what about the debt reduction efforts that your companies are undertaking?
We have started the year with fantastic Q1 results. Our PAT for the quarter is up 1,000%, our revenue for the quarter at Rs 542 crore, is up 184%, EBITDA is at Rs 386 crore with the margin at 71%, up 476%. From a sales point of view, from the under construction and ready to move in inventory, without any new launches, we have sold Rs 314 crore plus we have done a strategic sale of commercial assets and that has enabled us to secure our cash flows and profitability and has well capitalised us.
At the same time, we have been able to reduce the debt by Rs 451 crore in this particular quarter. With an operating surplus of Rs 817 crore, we are very well capitalised to take the maximum out of the opportunity that is coming up in the market. So, I am very excited. Of course, all of this has enabled us to improve our credit rating.
has just upgraded our credit rating from BBB plus to A minus stable outlook and that is a significant improvement for us. Of course, this will further result in reducing the cost of debt. On an overall basis, we are very happy with Q1 results.
Can you talk to us about demand? Is this a demand where affordability is one of the highest considering other things have become more expensive in the last 15 years?
I think the demand in real estate is never lost and what we are seeing is pent up demand. It is pretty much back in the market because of two or three reasons. One, the environment is most conducive at this point, especially given that the interest rates currently are the lowest for a very long time.
It has been fairly high and it will continue to be low and stable for the next couple of years because even the government is going to push the economy towards the growth path.
The second is the realisation that home ownership is very important for people, especially given the pandemic and then the second wave that followed this year. It has also enabled the fence sitters to make decisions. On the affordability side, the moment the interest rates come down, the affordability goes up. And, of course, developers are doing the best to provide the best solutions in terms of funding, financing customers to purchase their homes and between all this, this is one of the best times to buy. We are seeing demand come back because of all of this.
What about your product pipeline? Also what is the total area under construction at this point in time?
Today we have about 20 million square foot under construction. The group is very well diversified and that is a big advantage. We are in uber luxury, in luxury, in affordable housing. We are also in commercial real estate. We are also in plotted developments under Purva Land which is a new brand we have launched. We are also present in nine geographies — all in the south and west. This allows us to deliver and de-risk and bring in a lot of stability and growth opportunities
We are seeing traction across residential real estate. We are looking at 14 million square feet of launch this year. Of this, about seven million is square feet in Provident which is our affordable housing plan where we continue to see huge demand. That is the biggest piece and of course Puravankara which has got about 3.5 million square feet and plotted development which is another four million square foot. So between all of this, 14 million square feet is what we intend to launch in various geographies in the west and south.
Where do you see real estate demand for the next couple of years? How do you see the supply demand situation matching in certain regions where you expect oversupply or undersupply?
Demand is only going to pick up from here on. The only challenge is going to be in terms of consolidation and that is what we are seeing. A lot of demand is getting skewed towards the listed, organised large players and that consolidation of the industry will continue. Having said that, our view is that while residential and plotted development will continue to grow at a good speed, this consolidation will bring in more business to some of the larger well organised players. Demand for commercial real estate will slowly start coming back to the market. As people start returning to office and the vaccine rollout gets completed by the end of this financial year, commercial market will come back into the folio and we will see that demand pickup.
On an overall basis, for the next two years, definitely the market is going to grow and we see all organised players getting a fairly larger share of the market.
