Mahindra Lifespace Developers Limited (MAHLIFE) Q4 FY23 Earnings Concall Transcript

Mahindra Lifespace Developers Limited (NSE:MAHLIFE) Q4 FY23 Earnings Concall dated Apr. 26, 2023.

Corporate Participants:

Arvind Subramanian — Managing Director and Chief Executive Officer

Vimal Agarwal — Chief Financial Officer

Amit Sinha — Managing Director

Analysts:

Parikshit Kandpal — HDFC Securities — Analyst

Himanshu Upadhyay — o3 Wealth & Asset Management — Analyst

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Amit Dalal — Tata Investment Corporation — Analyst

Prolin Nandu — Goldfish Capital — Analyst

Unidentified Participant — — Analyst

Adhidev Chattopadhyay — ICICI Securities — Analyst

Rajesh — SBI Mutual Fund — Analyst

Shreyans Mehta — Equirus Securities Private Limited — Analyst

V.P. Rajesh — Banyan Capital Advisors LLP — Analyst

Rohith Potti — Marshmallow Capital — Analyst

Manan Patel — Airawath Capital — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to Mahindra Lifespace Developers Limited Q4 and Full Year FY23 Earnings Conference Call.

On the call today we have from the management, Mr. Arvind Subramanian, Managing Director and CEO; Mr Amit Kumar Sinha, Non-Executive Director and Board Member Mahindra Lifespace; Mr. Arvind [Phonetic] Agarwal, Chief Financial Officer, and Mr. Rabindra Basu, Head of Investor Relations.

As a reminder, all participants’ lines will be in a listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note this conference is being recorded.

I now hand the conference over to Mr. Arvind Subramanian. Thank you and over to you, sir.

Arvind Subramanian — Managing Director and Chief Executive Officer

Thank you. Good morning. Greetings, and welcome all to our Q4 and FY23 earnings call.

Before I get into my rapturous rambles, I must offer the perfunctory preamble. Do bear in mind, our business resides in many parts, consolidating them financially will call upon all your smarts. So adding individual lines, you must resist and extrapolating recent past to distant future certainly resist. This is my 12th and concluding opportunity to your notice to bring highlights of the business and our teams [Indecipherable]. Indulge me a few moments. I promise to make good time. With the business on song, as you can see it emboldens me to rhyme. Many of you have been with us long steadfast and true. Others have reposed faith in us more recently, some even re-committing anew. You have all been demanding yet fair always willing us on, routing us to draw on all three faculties, heart, brain and brawn.

I would like to tee off the highlights with our IC & IC business this time, whose voice has risen to a crescendo from a chime. Jaipur led the way, Origins Chennai has come to the party too, winning coveted clients of every industry, country and [Indecipherable]. Awaken the sleeping giant was both your and my ask. In response, the team clocked INR156 crores leasing, no mean task. Bringing our 2025 target forward by two full years, bringing in valuable cash, deserving applauds and cheers. Residential presales continues to motor along, customers new launches expectedly strong. Nestalgia, Eden and Citadel, new flags on our map. Sustenance sales, advanced unabated as if on tap. INR1,812 crores pre-sales, healthy price increases and added boon demonstrates our acuity, our business’ economic engine to tune. With marketing design and sales all kicking into new gear, INR2,500 crores well in sight, INR10,000 should evoke no fear. INR650 crores of operating cash is where the rubber hits the road. Ownership and tenacity, our construction teams showed. Accelerating project schedules, enabling brisk billing, INR1,165 crores collection followed customers were more than willing. Strong internal accruals provided fuel land acquisitions to pursue by INR3,200 crore and another INR850 this week, our GDV accretion grew. Society redevelopment and plotted new forays we pursued, our BV and legal teams INR5,500 crore deal pipelines have brewed.

The year gone by has been defining one as we journey to find our rightful place in the Sun. I now pass the baton to a new leader in-line under whom I expect the business will further shine. I cherish with immense pride our teams all-around. Indomitable self-belief and spirit of adventure bound, you make me proud, make me look good, putting shoulder to wheel. It’s been an exceptional privilege, a fantasy lead.

Let me now hand over to Vimal for the financial summary.

Vimal Agarwal — Chief Financial Officer

Thank you Arvind for such a wonderful start for the day and for the call. Good morning, everyone.

Moving on to the key financial numbers for the quarter. The consolidated total income stood at INR270.3 crores as against INR155 crores in Q4 F22. The consolidated EBITDA including other income, and share of profit from JVs stood at a profit of INR10.4 crores as against a loss of INR15.1 crores in Q4 F22. The consolidated PAT after non-controlling interest stood at INR0.5 crore as against a profit of INR136.8 crores in Q4 F22. Company has debt of INR265 crores at consolidated level as per Ind AS, like cash-in hand and bank including surplus investment stands at INR273.6 crores. Cost of debt was 8.2% and our consolidated free-cash flow after land-related payouts for Q4 F23 stood at INR142 crores as against INR79 crores in Q4 F22.

I now request if you can open the floor for questions please. Thank you.

Questions and Answers:

Operator

Thank you very much, sir. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] We’ll take our first question from the line of Parikshit Kandpal from HDFC Securities, please go ahead.

Parikshit Kandpal — HDFC Securities — Analyst

Hi team, congratulations on a great year. Quite start to the call. So Arvind, I don’t have any questions today. I just want to thank you for all you have done in this company in the last three years, taking it to the new height and outperformance almost 2x in all the accounts. So I will individually catch-up with Arvind later on strategy for the next phase of growth, but wish you all the best. I think possibly we will miss you. But I wish you all the luck. That’s all I wanted to say. Thank you.

Arvind Subramanian — Managing Director and Chief Executive Officer

Thank you, Parikshit.

Operator

Thank you. We will take the next question from the line of Himanshu Upadhyay from o3 Capital, please go-ahead.

Himanshu Upadhyay — o3 Wealth & Asset Management — Analyst

Yeah. Hi Arvind, agree with what Parikshit said, that company hedged pretty well over a period of time. And you have given a new ambition to the company. I hope the company delivers on that, but I will have queries because that is my job. This is —

Arvind Subramanian — Managing Director and Chief Executive Officer

Please go ahead.

Himanshu Upadhyay — o3 Wealth & Asset Management — Analyst

Yeah. So this is on slide 11, okay. We did consolidated PAT of INR101 crore, but the net worth has grown only INR17 crores. Both are after non-controlling interest. Has there been any adjustments made in the net worth of the company on the consol level and what was that for.

Arvind Subramanian — Managing Director and Chief Executive Officer

So fundamentally the key event, which had happened in quarter three was merger of entities in the South [Indecipherable] MWCDL as well as ensure seamless upstreaming of cash and that’s one accounting we changed. Earlier we used to show I think about INR37 crores or something as a interest in one of that entity and there was a goodwill, which was there. So it’s largely the changes that you’re seeing is largely coming off of the accounting, which we did in the quarter three.

Himanshu Upadhyay — o3 Wealth & Asset Management — Analyst

Okay. And next question also on this IC business. We had a pretty strong Q4 FY23, but the gross margin seems to have dipped quite materially. Any specific reason for that that these gross margins have come-off in the IC business because it’s more volume going up, our expectations, margins would have been higher or better Q4.

Vimal Agarwal — Chief Financial Officer

Absolutely valid observation. Just to give some sort of color to the overall numbers here. See, we have got three or four key assets. For example, Jaipur World City and Chennai World City, apart from Chennai Origins and others. If you look at the total inventory which we are right now holding, that will be I think not of 1,200 acres or so. The paths are sort of distributed across India and so is the gross margin. For example, Jaipur operates usually upwards of 65%, 70% whilst others which may be little different. On a weighted-average basis, if you look at four-quarter performance or maybe say eight-quarter performance, gross margins will be upwards of 55%, 60%. Within that you will always have instances and say Origins Chennai which has got a lower margin, which in quarter four adds up to most of the inventory. At an overall basis, I’ll request, and I’ll ask you to actually go back and look at what we said seven, eight quarters back. One of the key objective was to monetize IC & IC, generate cash use that cash to fuel residential business. And the key point is — Arvind talked about the cash there and that’s where we are. Cash is getting generated, we are using it to reduce our borrowings in the IT business. We are putting that money to generate residential business, land acquisition etc. On a weighted average basis, our gross margins in IC business are extremely strong.

Himanshu Upadhyay — o3 Wealth & Asset Management — Analyst

One question I have on this MWC Chennai. So we are trying to buy more land outside the Mahindra World City Chennai. So the new land outside MWC Chennai are in MWC Chennai or they’re in Mahindra Lifespace Developer Limited.

Vimal Agarwal — Chief Financial Officer

I think the comment is more to do with — again, I’ll go back to the Origins. Had two phase. Origins Phase 1 is a collaboration with Sumitomo Corporation and outside of deadline, we have got about 250 acres of plant, which we are calling it out as Phase 2 is still in the development and sort of strategy phase, we’re thinking through as to what is to be done and that’s the land which is adjoining the Origins Chennai.

Arvind Subramanian — Managing Director and Chief Executive Officer

Himanshu, you are asking about Origins or you’re asking about World City.

Himanshu Upadhyay — o3 Wealth & Asset Management — Analyst

I was asking about World City.

Arvind Subramanian — Managing Director and Chief Executive Officer

Yeah. So Himanshu, the Phase 2 land for Origins Chennai is in the books of World City.

Himanshu Upadhyay — o3 Wealth & Asset Management — Analyst

Okay. And one last thing. Arvind, in terms of — how do you look at the costs in the business, okay. And is there, means how focused are we on doing this, reducing the cost or managing the cost in the business because we have seen significant growth, but margins are still work-in progress and are we really running an efficient ship or you think there is something some more work on the cost side can be done, can be at the project level also and it can be at the corporate level also. Can you give some idea on that.

Arvind Subramanian — Managing Director and Chief Executive Officer

So I think couple of points to and the important one, which is again go back to say one or two years where we always talked about our focus on growing residential business. Six years back, we talked about this INR2,500 crores when we were averaging it at about INR680 crores, INR690 crores and the whole objective there was to get the right people at the right place, so that we can really build this organization for many, many years to come and therefore investment on the people side is being done, layer one and layer two put together. Similarly, there are two more key heads; one is the marketing head. If you look at our historic two or three years, our marketing costs usually have been lower than industry sort of benchmark. One reason is that, because our launches etc really are very robust, and therefore, we tend to invest less. However at the same time, our desire to build a strong brand, which Mahindra is today, we want to continue to invest and therefore do not intend to hold back so far marketing related expense are concerned, at least over the next one or two years. The third cause really is the overheads cost which are usual ones. We again look at it as percentage, not as percentage of revenue, but as a percentage of pre-sales. So if you were to look at F23 numbers, our percentage to pre-sales, LC plus IC put together will be best-in class across all four cost lines which is employee cost, admin cost, marketing cost and depreciation plus interest. So that’s the sort of long and short of it. We will continue to invest, you will see some costs, fixed cost going up, but in terms of percentage, we will continue to see decline.

Himanshu Upadhyay — o3 Wealth & Asset Management — Analyst

Okay, thanks. I will join back for further queries.

Operator

Thank you. We’ll take our next question from the line of Rohith Potti from Marshmallow Capital, please go-ahead. Mr. Rohith Potti, your line has been unmuted. Please go ahead and ask your question. If you have muted yourself on your device, please unmute yourself and ask your question. As we are not getting any response from Mr. Rohith’s line, we move to the next question. Next question is from the line of Pritesh Sheth from Motilal Oswal. Please go ahead.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Hi, good morning. Congrats on great performance in FY23 and all the best Arvind for your future endeavors. You have had a very successful tenure with Mahindra Lifespace and thanks for the progress that we see right now in the company. My first question is, again, continuing on the margin which previous participants asked. I think right now a few of the legacy projects that getting completed amid probably we didn’t had better margins. When should we expect that these margin should improve on the P&L front. I mean, last couple of years, we have had I think good launches with focus on profitability. So by when should we start seeing them in P&L.

Amit Sinha — Managing Director

So let me take this question. This is Amit Sinha. As I’ve been looking at the margin profile of the past projects, I would like to highlight three points. One is, as you’ve seen, we have had a huge successful set of launches in the last four quarters for sure, as well as the year before and those projects have been launched with, I would say right pricing, right mark-to-market, right set of value proposition for customers and most of the impact will start to happen in the next four to eight quarters as most of these projects start to complete, and that’s where we will start to see that our margin profile will start to improve, especially on the residential side. The second [Technical Issues] the current launches that we are thinking in terms of delivering a product which is outstanding which meet the customer expectations, in-line with our brand, in-line with the unique propositions we have on the sustainability, on the efficiency of design, in terms of technology and we feel that all those things that we are able to bring to customers will have a improvement of the pricing aspect, which is extremely valuable when you are sourcing land from the market, when you are doing the cost of construction in the current environment.

So we need to make sure we get the value reflected in the price, brand, the design, the sustainability, the technology, all the unique value proposition. So that’s the second piece obviously. The impact will start to come over the next eight quarters because those projects have just been launched or being launched. So you will see the effect of those in the subsequent quarters. And the third part is how do we manage the velocity of sales versus the revenue recognition. I think as we have seen the market is quite buoyant, we are able to see in certain projects should we hold back for slightly better pricing or should we release that inventory, that’s a very disciplined exercise that we have carried and started to do it really well in the last few months, but that is going to give us a slightly better improvement on pricing. Again, the way we manage our mix of sales forces, inventory will again reflecting in our margins. But to answer your question in a very sharp manner, the impact you’ll see in the next eight quarters because that’s where the revenue condition will start to happen.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

So probably FY24 should still be like subdued in terms of profit margin recognition, but from 2025 onwards, we can see that improvement. Is it fair to assume.

Amit Sinha — Managing Director

Yeah, that’s what our current belief is.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Sure. And what are the broad gross margins that you’re seeing for this year that you’re doing right now, because that would ideally drive the profit improvement in P&L as well.

Vimal Agarwal — Chief Financial Officer

Yeah. So two points to this. One is the definition of gross margin itself but frankly when we talk about gross margin, it is an all-in cost with an extent to we do not sort of keep the definition where the gross margin looks high. Usually you can expect gross margins for us and when I say gross margin I am including interest cost and overhead cost as well into the number, it should be closer to 18% to 20%.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

18% to 20%? Hello.

Vimal Agarwal — Chief Financial Officer

Yeah, that is right.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Okay. And since you are now mentioning into redevelopment as well, would the margin profile be similar or since those are projects, which are largely in Mumbai, that margin profile should be bit higher.

Arvind Subramanian — Managing Director and Chief Executive Officer

My sense is that new acquisitions, which we are doing, including redevelopment, we should certainly see a favorable or operating [Phonetic] gross margin.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Got it, fair enough. And lastly on FY24 in terms of how we look forward to, just if you can broadly guide us through the launches that you expect this year, probably Kandivali we have already started seeing some bit of marketing activities from maybe from the channel partner broker side, but what are the launch is expected in this year and what should be size.

Amit Sinha — Managing Director

So let me give — so we have a bunch of launches planned in this year. I’ll give you broad given we are waiting RERA, we are waiting all the clearances. So I don’t want to go into full details, but there are nine launches that we have planned for this year going from Q1, Q2, Q3, Q4. And Kandivali, which is a key part of that launch, Citadel Phase-II is the key part of that launch and then there are other seven launches that we have. I must tell you that we are being thoughtful about bringing these launches to the market given each of them are in different micro-market different cities, so we are not only aligned with the approval process, but also how the market sentiments are likely to be at the time of the launch. Two of these nine launches are from the recent acquisition, you heard about the [Indecipherable] secondary development that we have won. That is also included. Our sense is we will be able to push it by Q4, but it’s an early-stage. We’ll have to work really hard to do the approvals and all the design completed by then. c, some regions by. So total nine launch upfront for the year. A couple of them are for the tight deadlines which we are working currently on.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Sure, so it includes both the redevelopment, but at least you expect any one to happen this year and probably second to spillover to next year.

Amit Sinha — Managing Director

Absolutely, yeah.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Okay. Does it include Dahisar as well?

Amit Sinha — Managing Director

Dahisar, we are watching — Dahisar is not included right now, because there are certain approvals that are awaited. We want to launch when all the approvals are in place.

Pritesh Sheth — Motilal Oswal Financial Services Ltd — Analyst

Sure, sure. Perfect. That’s it from my side. All the best.

Operator

Thank you. We’ll take our next question from the line of Amit Dalal from Tata Investment Corporation. Please go ahead.

Amit Dalal — Tata Investment Corporation — Analyst

Good afternoon, Arvind or good morning yet. Sorry. Congratulations on having achieved what you started out as your target over the last three years or 2.5 years that you’ve been with us and good luck in whatever endeavor you have planned ahead. I have only one question. And this is for all real estate firms. All real estate firms are always in an investment phase. And now with this Ind AS accounting, it has made it very difficult for real estate firms to distribute to the shareholders. As much as the cash flow from past projects is what the shareholders should finally get a distribution of some income, the future project investments are capital, both equity and debt depending on what allocations are made by the company. So would you all consider small buyback.

Amit Sinha — Managing Director

So let me put my views right now from M&M as well as the MLDL. I think the buyback, we are not contemplating at this time. Because we already have — MNM has 51% plus stake into the MLDL.

Amit Dalal — Tata Investment Corporation — Analyst

Do you have increase in stake because of the buyback. It is a participatory buyback or promoter and non-promoter, it’s a tender buyback.

Amit Sinha — Managing Director

Yeah. So no plans as of now, but if our scale-up plan needs any kind of support we will consider that, but as of now, no plans.

Amit Dalal — Tata Investment Corporation — Analyst

Please take it to the Board to consider 1% or 2% of the issued capital so that we get some dividend yield at least.

Amit Sinha — Managing Director

Yeah, absolutely. We’ll take it up.

Amit Dalal — Tata Investment Corporation — Analyst

Thank you.

Operator

Thank you. We’ll take our next question from the line of Prolin Nandu from Goldfish Capital, please go ahead.

Prolin Nandu — Goldfish Capital — Analyst

Yeah. Hi, thanks a lot Arvind, an amazing stint at Mahindra Lifespace. So couple of questions for you. You know, I mean in 2.5 years, you have been able to achieve a lot and still, but there was in overall scheme of, there is still a very long way to go for the company and it had all the right ingredients to become one of the largest real estate companies in India. So what was it that and we have seen this group M&M group doing lots of things differently than what they were done in the past in terms of getting into EV, right. So what was it that within the Group, they were not able to meet your aspirations And you have to look outside, because I’m sure that journey from, we know over the last 2.5 years has been very rewarding, but it would have been equally rewarding to probably take this company to INR10,000 crores kind of a residential sales. So what was it that was missing. I mean, what was the difference of opinion that you had with the management or could you give some color for your exit. The reason for you exit.

Arvind Subramanian — Managing Director and Chief Executive Officer

Since I started with apology, let me stay with the theme. Lewis Carroll’s famous poem, Walrus in the Carpenter. Time has come, the Walrus said, to talk of many things, Of shoes and ships and sealing-wax, cabbages and kings. It’s not the time to talk about my departure or reason for departure. I think we should look forward see kind of where we are. I believe the best days of the company are still ahead of us. I’ve always said, consistently maintained that our aspiration is much larger, even the goal that we articulated of INR2,500 crores etc, INR500 crores on industrial, we’re always intended to be just the first step in a journey. And I feel confident we are on that journey. There’s a lot that this company can achieve, the potential is enormous.

Amit Sinha — Managing Director

And if I can add probably — Amit here. I think while Arvind might be leaving the organization, he is leaving a part of his legacy with us, he has done a lot and it’s our duty and responsibility to build on the work, build-on the platform he has created. And most critically, what I feel very proud is that the team at MLDL has huge amount of confidence that they can take on 5-K or 10-K as you eloquently put in your poem Arvind, that confidence is extremely valuable in any organization. I think targets become less important if the team has confidence and we’ll continue to have those three things that I mentioned in our — all when we had last call. One is scale-up built on the confidence that we have got in under Arvind’s leadership, not only in the first level of leadership, but across the organization. The second is customer-centricity. I think this is a market, our brand, our differentiation will give us much, much, much better financial outcome and third is always focus on the financial prudence. What are the right things from financial point of view, don’t just scale for the sake of scale, think about the financial outcomes for our investors or anybody in our organization. So all that is built on what Arvind you have set in motion and hopefully we’ll share periodic news about our progress along that path.

Arvind Subramanian — Managing Director and Chief Executive Officer

Thank you, Amit. Very kind of you.

Prolin Nandu — Goldfish Capital — Analyst

Yeah, thanks a lot Arvind and Amit for this answer. I have one more question for Arvind before I have a question for Amit. So Arvind, we all can see the scale and what all things that you have done, no doubt. And then as an organization, where we have reached, but if you were to probably point out two, three misses in your tenure, what would that be.

Arvind Subramanian — Managing Director and Chief Executive Officer

Look, I think on every dimension, while we’ve grown the business significantly, I would say there is still more that could have been done. Land acquisition has been a good story, but there is still that desire or that little bit further, similarly with sales. I think it’s a journey and you never get all of it right. Overall, I’m extremely satisfied, extremely proud. I look back with immense amount of satisfaction at what the team has achieved and it’s been like Amit pointed out, the standout for me has just been the self belief and kind of conviction that the team has that there can be a much different future than the past.

Prolin Nandu — Goldfish Capital — Analyst

Sure Arvind. So now I have couple of questions for Amit. Amit, the first question would be that, I mean you have experience of working with this group, right since 2020, if I’m not wrong. I mean, to have that relevant experience of real estate, how do you bridge that gap, right, I mean what are the two-three things that you would like to keep in mind for the next couple of years to bridge that domain expert things, right.

And in the same breath, let me ask the second question as well, like if you look at the very long history of this group, right, I mean, that has always been this transition of management, right in terms of new CEO and finally, we have found a stable leadership, right, sometimes so how do you realize those fears as well that we are not getting back to the same track of what we were before Arvind.

Amit Sinha — Managing Director

Fair question. Well I think I’m glad you raised it. I think. This came up in the first call I had my personal experience, but I’ll keep it short at this time. I think at the end it’s a team sport, this business, it’s not about any one individual. And if you look at the leadership team that we have at Mahindra MLDL and the leadership team that supports them is outstanding and I think that mix the if there are gap that I mean to personally fill is made-up by the team that is already there in existence with their supporting team, sub team. So that’s the first part. Personally. I think are two areas which are very useful to append to the skills that are needed to be successful. One is the group understanding of how the group work, how the capital allocation works, how synergies can be fully extract, how do you balance the sales momentum versus profitability. Many of these things are something that I’ve learned over the last few years back I used to run the strategy and capital allocation. So good understanding of how to work very closely and leverage the brand strength across multiple area. And part two be is about my personal experience prior to Mahindra as I was in consulting, similar to Arvind and I had the pleasure working with many industrial companies I will put them into real estate developer, EPC companies, the largest construction companies out of top 10, I worked with top-five. So the construction part is very well understood, especially the contracting part is very well understood to be and then many infrastructure companies in the space. So all those learnings are going to be very useful as we look at the next phase of Mahindra Lifespace.

And your second part of the transition, very well understood and. I think this is a long range industry, a product take five years to come out, you need to make sure that the continuity and every effort will be made is being made to make sure the continuity at the leadership level at the senior most as well as the next level direct reports to two MD and CEO. So all those transitions are going to be if at all they happen, they’re going to be well supported by other leaders. And more importantly, over the last three years under Arvind’s leadership, a lot of processes and systems that have been put in place. So that allowed us to make sure that the capabilities differentiation is all institutional, it is not individual-centric. So if one person has to move on for personal or professional reason, the others are able to build-up based on their expertise, but also the institutional capability that exist. So those are the two quick answers for your two questions. Let me know if you need any double-click on any one of them.

Prolin Nandu — Goldfish Capital — Analyst

No, that’s great Amit, good to know and we will probably interact ain the future call, but thanks a lot for this and all the best Arvind for your future endeavors.

Arvind Subramanian — Managing Director and Chief Executive Officer

Thank you very much.

Amit Sinha — Managing Director

Thank you, Prolin.

Operator

Thank you. We take next question from the line of [Indecipherable]. Please go ahead.

Unidentified Participant — — Analyst

Hello. Sir, am I audible?

Operator

Yeah. Please go ahead.

Unidentified Participant — — Analyst

Yeah. So you said you have inventory of around 1200 acres, right. So how much would be the sale value of it.

Vimal Agarwal — Chief Financial Officer

Sale value of that will be about INR5,000 crores.

Unidentified Participant — — Analyst

INR5,000 crores, can we expect. All right. And then how much time can we expect this to come into the books.

Vimal Agarwal — Chief Financial Officer

The inventory is actually puts about 1,400 acres and therefore I said about INR5,000 crores can be expected value. Settlement I would say is a good question. We’ll come back to you.

Unidentified Participant — — Analyst

Sorry.

Vimal Agarwal — Chief Financial Officer

Second one, I’d say the good question. I don’t have a ready answer to that. I’ll probably stay with the guidance which we have given.

Unidentified Participant — — Analyst

All right. And looking at the margin improvement, which you have said, so we expect the improvement will be from FY25, right?

Vimal Agarwal — Chief Financial Officer

Yeah. Just to add to that, see what’s happening is and all of have fairly seen the journey on that front is the whole commodity price challenges which lot of industry saw about a year or two years back. That part is behind us and as per our current projects are running including the recently launched ones are doing well. Having said that, there are projects which were launched in 2016, 2017, etc which are coming to closure as we speak and there we will see some challenges, but from a trajectory point of view, year-on-year you will continue to see improvement in margins for sure, F25, certainly yes.

Unidentified Participant — — Analyst

All right. And looking at properties which you have launched, right, so how much is the value of those things in FY24. I think have launched around nine properties, right.

Vimal Agarwal — Chief Financial Officer

Yeah, FY23 we launched nine new projects or new phases of the existing project, launched inventory was 3.3 million square feet, but our sales was about 2.3 million square feet including some [Indecipherable] area.

Unidentified Participant — — Analyst

All right, understood. And sir, you have given estimates for FY25, but how can we look at FY24, just a rough outlook on the operation side.

Vimal Agarwal — Chief Financial Officer

From the team itself, you can make out the trajectory is looking very strong and good. Amit talked about new launches which are coming up, including our foray into redevelopment market. We continue to be extremely confident so far as the overall residential prospects are concerned, including F24 and beyond.

Unidentified Participant — — Analyst

All right. So at operating level, can we expect some bit of profit in FY24.

Vimal Agarwal — Chief Financial Officer

For F24, I’ll not be able to give you a guidance. One key indicators I want to call-out is the whole cash flow. It has really come out very well in the last two years and I’ll request that’s one lead indicator. This means the things the way it’s developing and panning out is very positive over the medium-term, but no reaction to FY24 specifically.

Unidentified Participant — — Analyst

All right. Thanks. All the best. Bye.

Operator

Thank you. We take the next question from the line of Adhidev Chattopadhyay from ICICI Securities. Please go ahead.

Adhidev Chattopadhyay — ICICI Securities — Analyst

Good morning, everyone. Am I audible?

Operator

You are, sir. Please go ahead.

Adhidev Chattopadhyay — ICICI Securities — Analyst

Firstly, congratulations Arvind on whatever you have achieved. It has been very gratifying to see the company grow leaps and bounds during your tenure and I wish you all the best in whatever on your personal and professional front in the future. One, my question is mainly on the business development pipeline. Obviously as we — as you are just going out, but what is the overall pipeline looking like for the year? And in the — and just another follow-up question on the nine launches, any indicative sale value or GDV of how much these nine launches would carry? These are my two questions. Thank you.

Amit Sinha — Managing Director

Adhidev, this is Amit. Let me let me try to answer that if it’s okay and Arvind can jump in if needed. I think we had a pipeline of around INR5,500 crores GDV. We have converted almost — in the last month you’ve seen the Navy Malad announcement so that’s INR850 crore. But in the meanwhile we have replenished the pipeline so we still have INR5,500 crores plus-minus little bit of the pipeline on the BD side, business development side. And our effort is to continue to convert the right size and right kind of projects, but also continue to have a stage gate process to bring more relevant projects in our pipeline. So the short answer is INR5,500 crores, which was there, continues to be healthy. Some — one major has converted, but we have replenished the pipeline once again with similar size projects.

Adhidev Chattopadhyay — ICICI Securities — Analyst

Okay. That’s helpful. And just on the — any indicative GDV value on the launch pipeline for this year overall, the nine launches?

Arvind Subramanian — Managing Director and Chief Executive Officer

Let me, INR2,250 crores right is the [Speech Overlap]

Vimal Agarwal — Chief Financial Officer

Rough number we should be closer to INR3,500 crores to INR4,500 crores. Rough numbers, Adhidev.

Adhidev Chattopadhyay — ICICI Securities — Analyst

Yeah. I’ll just add that asking sales guidance`, just overall what is the total so around INR3,500 crores to INR4,500 crores is the correct number, right, indicative. Okay. That’s it from my side, sir. Thank you. And again, Arvind, wish you all the best and also the team for the future. Thank you.

Arvind Subramanian — Managing Director and Chief Executive Officer

Thank you, Adhidev. Appreciate your support.

Operator

Thank you, sir. We take next question from the line of Rajesh from SBI Mutual Fund. Please go ahead.

Rajesh — SBI Mutual Fund — Analyst

Hi, can you hear me?

Operator

Yes, please go ahead.

Rajesh — SBI Mutual Fund — Analyst

So, I have two questions. First is on profit margins. Earlier you responded to a question saying that the gross margins that are reported, it actually includes overheads. So could you elaborate more on what those overheads are and what would be the gross margin excluding those overheads?

Vimal Agarwal — Chief Financial Officer

Yeah. So, I’ll give you the overall response here. For example any new business case which we evaluate, there’s a particular amount or say a rupees per square feet number which we assume. The idea there is to ensure that once we reach a decent size and scale, we’re able to absorb all our overheads into that. When I say overhead, I’m largely referring to the corporate costs. And within that, my sense is that the corporate overheads at an overall level will be closer to 60% or so, the number which I mentioned. This is high level response. If you need any details, let me know.

Rajesh — SBI Mutual Fund — Analyst

Okay. But can you tell us at least at the project level, what your gross margins are for the existing project? Is it possible to give us some detail?

Vimal Agarwal — Chief Financial Officer

At project level in terms of overall if you look at our second slide, quarter four the gross margin which we reported was about 13% and that certainly in the lower end of our trajectory. You can expect that to improve as we progress over F ’24 and F ’25.

Rajesh — SBI Mutual Fund — Analyst

Okay. Thanks. The second question is on debt, it’s actually in two parts. So first question is on the IC&IC business despite good numbers in terms of collections and leasing, why do you think debt has increased despite these numbers?

Vimal Agarwal — Chief Financial Officer

Debt has increased so couple of points here. Idea of debt increase is to leverage the internal accruals towards land acquisition because that helps us optimize the cost of borrowing. And if you look at the Ind AS reported numbers while our debt is about INR240 crores, our cash is about INR273 crores roughly and hopefully that is a good indication of the things to come. At an overall level, our debt continues around INR800 crores including IC. It has improved a little because it has gone down because of certain large transactions which has happened. Having said that, our balance sheet is allowing us to take significant amount of debt without sort of stretching the balance sheet. And to that extent, we are right now net debt positive from Ind AS point of view. So huge headroom we have available to borrow money. Debt quality, sorry.

Rajesh — SBI Mutual Fund — Analyst

So one clarification, the land acquisitions for the IC business or the residential business? What are you…?

Vimal Agarwal — Chief Financial Officer

Residential business.

Rajesh — SBI Mutual Fund — Analyst

Okay. And the second part to that question is that since many of our SPVs don’t get consolidated, what’s the third-party external debt outstanding in all the SPVs?

Vimal Agarwal — Chief Financial Officer

Yes. So see third-party, we don’t have debt as in a firm commitment. Whatever platforms we have signed up for and investment we have got and I’m saying from any of our partner including IFC World Bank Sumitomo Corporation, HDFC, or Axis. All of these investments are sort of risk-resolved basis and there is no firm debt commitment, which we have on any of these.

Rajesh — SBI Mutual Fund — Analyst

But there would at least be a principal amount outstanding, right?

Vimal Agarwal — Chief Financial Officer

It will be difficult to give you a number because it’s an accounting thing, The numbers are very varied. For example Axis Mahindra Homes if you were to look at the balance sheet, there is actually zero debt because it’s all equal.

Rajesh — SBI Mutual Fund — Analyst

Okay. I’m not sure if I got my answer. But it’s okay I’ll reach out to you separate. Thank you and all the best to the entire team.

Operator

Thank you. We’ll take our next question from the line of Shreyans Mehta from Equirus Securities. Please go ahead.

Shreyans Mehta — Equirus Securities Private Limited — Analyst

Thanks for the opportunity. Sir, just one clarification. When you talk about nine launches, that does not include Thane, right?

Amit Sinha — Managing Director

No, not as of now.

Shreyans Mehta — Equirus Securities Private Limited — Analyst

Got it. So can you just highlight where — at which stage are we in Thane and probably when can we see that coming into the picture?

Amit Sinha — Managing Director

So, I’ll give a quick answer and my colleague can jump in. We are waiting on some policies that will help improve the value of the asset that we have and it’s prudent for us to wait and ensure that those policies are communicated so that we can plan our launch, which will help us maximize the value of the asset. So we’re waiting for that policy to come through. It’s been told to us it will come any anytime now, but being thoughtful about not jumping the gun. My sense is that this will go into the next financial year. But if there are any positive development, we’ll keep you updated.

Shreyans Mehta — Equirus Securities Private Limited — Analyst

Sure. Secondly, in terms of our key launches like Kandivali and Citadel. Can we expect them to be launched by first half of this year?

Amit Sinha — Managing Director

Yeah, absolutely. So, short answer is yes.

Shreyans Mehta — Equirus Securities Private Limited — Analyst

Got it. Sure. Sir, and a couple of more questions. One in terms of BD pipeline, it continues to be sticky at INR5,500 odd crores. So when do you foresee this scaling up to say around INR7,000 crores, INR8,000 odd crores because the conversions are not happening as fast as possible. So in terms of that scaling up, is there a possibility?

Amit Sinha — Managing Director

No. I think it was — my answer is that it’s very easy for us to increase our BD pipeline, very easy. But I think we are very prudent about what qualifies for the right project for us in the focus market, micro market, focus cities that we have. So it’s not a question of bulking up the number, it’s a question of having the right number for us to work on. We have limited bandwidth to focus on and we really want to do a good job of converting those. So as a result, we focus on the right projects that will come in the right locations and then we start to we like to convert them. So, that’s the strategy we have followed and it has given us good results. Our teams are very focused on converting them, our teams are very focused on getting the approvals, our teams are very focused on launching the right project in the right timeframe. And I think that’s a repeatable formula we want to have as the right BD pipeline and convert them as soon as we can rather than chase a large number.

Shreyans Mehta — Equirus Securities Private Limited — Analyst

Sure. And in terms of completion, what ideally will be our target for F ’24?

Amit Sinha — Managing Director

Completions, Vimal?

Vimal Agarwal — Chief Financial Officer

So there are few projects, which are in sort of advanced stages. You will have for example Happinest-Kalyan, two stages will come up. Similarly Nagpur-Bloomdale project will be exited. And apart from it, couple of other projects which are coming up. But not a significant amount or the quantum we are expecting for competition, which will come up in F ’24 at least in H1.

Shreyans Mehta — Equirus Securities Private Limited — Analyst

Sure. So in terms of numbers?

Vimal Agarwal — Chief Financial Officer

I’ll share that with you offline. It’s there in the presentation. Wherever the percentage completions are 90% or 80%, that’s what will come up for completion.

Shreyans Mehta — Equirus Securities Private Limited — Analyst

Got it, sure. And my last question is to Mr. Sinha. What comfort can you give to the Street that the current management will continue for at least two years? Because this has been a problem since last I would say two to three years that every two years the management changes. So, what comfort can you give to the Street that this won’t continue or this is not going to be the case going forward?

Amit Sinha — Managing Director

So. I can only say that I’ll really work hard and make sure that you guys are happy and the team is happy and the customers are happy so that a happy ecosystem allows us to create value for all the stakeholders involved. So I have no — I just joined Mahindra two years back. I have no desire to shift right now at this point of time and my current appointment is for five years. So I hope to continue to do good work following Arvind’s footsteps and make sure that for this kind of a business, which is long lead time business, we continue to provide transition and continuity. But I also mention that you can’t control all the variables. There will be some departures, which are personal, professional’ but the institutional capability, institutional support, M&M brand, M&M Group support should ensure that there is no loss in transition. So, I will say that to simply answer your question.

Shreyans Mehta — Equirus Securities Private Limited — Analyst

Got it. Thank you and all the best, sir.

Operator

Thank you. We take the next question from the line of VP Rajesh from Banyan Capital. Please go ahead.

V.P. Rajesh — Banyan Capital Advisors LLP — Analyst

Yeah, hi. Thanks for the opportunity. And Arvind, first of all let me throw in my congratulations on the value that you have created for shareholders over the last three years. And I think as Mr. Sinha said, more importantly the team you have put together does inspire confidence that this business can go up to INR5,000 crores and maybe INR10,000 crores of revenues in coming years. So, my first question was regarding the GDV of the nine launches that you are doing this year. I wasn’t sure if I got the number correctly. Is it INR3,500 crores or INR4,000 crores? If you can just clarify that.

Amit Sinha — Managing Director

Yeah, it will be closer to INR4,000 crores.

V.P. Rajesh — Banyan Capital Advisors LLP — Analyst

And typically we are selling 30% to 40% at the launch, right? So is that the right assumption to make or else should we refine that further?

Amit Sinha — Managing Director

Yeah. We have assumed around 35% for seven launches and 30% for two launches because some of the launches are in the quarter four. And as I said because we are working on very tight deadlines so there might be little bit of slippage. But we are trying to risk manage that. But 35% is for seven launches, 30% for two launches.

V.P. Rajesh — Banyan Capital Advisors LLP — Analyst

Understood. And my other question is regarding the long-term projection that we had discussed on the previous call. Dr. Shah and you had mentioned now that you guys will come back on that to the investors. So, any timeline on that?

Amit Sinha — Managing Director

Yeah. So my sense is I’m in the process of absorbing and getting up to speed in all the business. It has been quite deep engagement so far where we met almost 100% of employees at all the sites except one. My sense is in the next three months or so, I’ll highlight you on how we think about any change in direction if we need to, any change in strategy that we need to. But currently our strategy is very clear, our focus is very clear. We’ll continue to progress along those dimensions.

V.P. Rajesh — Banyan Capital Advisors LLP — Analyst

Got it. And lastly, as you have looked at the business more in detail, any gaps in the management roles that you would like to fill or augment?

Amit Sinha — Managing Director

Nothing as of now. I think we have a pretty solid team here. I think they are coming along well. It’s not the intellectual capacity, but also the emotional connect that the team has is very strong. They work really well together and I’m pretty excited to be working with them. No change anticipated of any kind in the short term.

V.P. Rajesh — Banyan Capital Advisors LLP — Analyst

Got it. Okay. Thank you so much and I look forward to interacting with you more in the coming calls.

Amit Sinha — Managing Director

Yeah, absolutely. Thank you. Look forward to it.

Operator

Thank you. We take the next question from the line of Rohith Potti from Marshmallow Capital. Please go ahead.

Rohith Potti — Marshmallow Capital — Analyst

Thank you for the opportunity. First, thank you, Arvind, for doing such a wonderful job. I’ve been an investor for three years and your appointment was the primary reason I got interest in the company and I look forward to continue being a shareholder for the longer term. Mr. Sinha, it’s very reassuring to see your position in the Mahindra Group and to see you take over Mahindra Lifespace. But just one question because I mean it can be seen from the resume that you are currently on the Group Executive Board and you drive the strategy role at the broader Mahindra Group. In that context, Mahindra Lifespace is a very small entity in the broader Group context. So, I was just curious to know how do you divide bandwidth when you become the MD and CEO here? As discussed in the call before, it is reasonably each project is four, five years it takes to compete, etc. So, how do you divide bandwidth to this entity and how do you ensure that the entity gets the time and direction to take — for the longer term? So, it’s just a concern or question I had.

Amit Sinha — Managing Director

So thank you, Rohith. I think let me just answer in two parts. Part one is how important MLDL is for Mahindra as a group and then I’ll answer the personal bandwidth question that you posed, right. And I think you may have seen Anish’s some of the analyst calls or some of the announcements about how we have four core businesses and seven to nine growth gems. And the growth gems, MLDL is one of the key growth gems. And the mandate for me as my current or previous role as Head of Strategy, Capital Allocation was or continues to be is how do you scale this asset faster than what we have done in the past? But do it in the right way, don’t lose sight of customer centricity, don’t lose sight of financial prudence. I think that’s been and they’ve been — Arvind has been working closely on multiple areas, but from a corporate point of view.

So just want to — first part of the answer is for Mahindra Group, this is a growth gem and we will do anything and everything to scale this business in the right way. So, that’s the first part of the answer. Second part is my bandwidth; I’m in the process of transition, but fortunately I’ve been able to do away most of my responsibilities as I was on seven Boards. I have gotten out of most of the Boards as a corporate nominee. In fact I’m going to spend 90% of my time on Mahindra Lifespace and after May 23, it will be 100% of my time. Whatever 10% of my time goes into my current role of strategy will be backfilled by another individual who will be joining. So, I will not be doing — I will not be double hatting after a few weeks. I’ll be 100% focused on MLDL.

Rohith Potti — Marshmallow Capital — Analyst

Okay. So, this is very helpful. Thank you. So just a follow-up here, Mr. Sinha, is that I mean at least two — from my vantage point, it seems like being on the Group Executive Board with Group Strategy role or heading the strategy role for the Mahindra Group is a much larger role than the CEO of Mahindra Lifespace given I mean it’s very heartening to hear the focus on growth in Mahindra Lifespace and scale in Mahindra Lifespace. But it does bring in the thought at least — so I’m a long-term shareholder and it just brings in the thought in our minds that that is a role you might go back to let’s say two, three years down the line and again we have this change in the top in an industry which requires relatively long-term leadership. I mean all the competition are run by the founder promoters or the family themselves and hence there’s a lot of continuity in those competition at least. So is this something — is this the right way to think at all?

Amit Sinha — Managing Director

So, it’s it’s a good thought. But let me say that right now that’s not the state of mind I am in. Right now the mandate is very clear, the focus is clear that let’s create more value built on what we have accomplished in the last few years. So next three years, five years, my current appointment is for five years and I think my focus will be how do you — how can I live up to Arvind’s legacy and scale this to a different level altogether built on what we have accomplished. Going back to another business etc. is not part of my thinking right now. And as you said the previous role was very broad. This role is very deep. It’s what I was consulting for 18 years and then strategy so I’ve done enough of strategy work. The idea was how do I contribute to value creation for one of the growth gems in the Mahindra portfolio and this is something I’m really excited about.

Rohith Potti — Marshmallow Capital — Analyst

Yeah. That is reassuring to hear, Mr. Sinha. I remember one interview in which Mr. Anand Mahindra himself said that the three businesses he’s excited about for the next 10 years for Mahindra Group was Logistics, Real Estate, and the Holiday business. So, really look forward to your journey with this company and I mean you have my vote of confidence at least and we’ll be looking forward to the journey for the next three to five years. Thank you so much.

Amit Sinha — Managing Director

Absolutely. Look forward to interacting more. Thank you.

Operator

Thank you. We take the next question from the line of Manan Patel from Airawath Capital. Please go ahead.

Manan Patel — Airawath Capital — Analyst

Thank you for the opportunity. Am I audible?

Operator

Yes, you are.

Manan Patel — Airawath Capital — Analyst

So, thank you. And first of all, thanks Mr. Arvind for bringing much needed energy to the organization and I have been part of the journey as long as you have been so it has been very rewarding. So, thanks for that and hope Mr. Sinha will also continue that energy for the company. So first question is regarding the IC business. So you mentioned in your Q1 that Jaipur has been doing well, but if I look at the quarterly numbers, Q1 started very well and then it has been downhill. So how do we look at Jaipur? And in that context, I was under the impression that Actis deal will also have like part of Jaipur land will be carved out for Actis as well. So you have not mentioned Actis at all in this call. So, is that deal on back burner and your comments on the Jaipur part of it?

Amit Sinha — Managing Director

It is a very good question I think, Manan. I’ll just take the liberty of answering this. I think it’s — I’ll answer it in two parts. Part one is we see significant momentum in inbound businesses given China Plus One, the overall buoyancy in the industrial sector. So we see a lot of activity not only in Jaipur, but all the other world cities and industrial clusters that we have. But it’s a lumpy business, Manan, as you know. We started off, Q1 was pretty good, but the conversions do take time and that’s where I think you’re seeing little bit of Q4 which doesn’t have a lumpy closure as of now. But many discussions are underway and we hope that next financial year F ’24, you will see some more action on overall World City but also on the Jaipur front.

Manan Patel — Airawath Capital — Analyst

Okay. And any comments on the Actis deal?

Amit Sinha — Managing Director

Actis, yeah. So go ahead on the Actis deal, any actions taken.

Vimal Agarwal — Chief Financial Officer

Yeah. So, that’s in progress and it will have maybe next two quarters or H2 we will have some more progress on that front and keep everyone updated.

Amit Sinha — Managing Director

But it’s not Jaipur specific, I think it’s broader. Actis, we have partnered with them. We are looking for the right land parcel that could be part of BTS as our contribution. The discussions and negotiations are underway. There are certain prerequirements and approvals that we need that will allow us to make this platform our contribution from World City point of view successful. So, the work is underway.

Arvind Subramanian — Managing Director and Chief Executive Officer

And just to add to that. First half there was to set up the team so the leadership team that is now largely in place. All the key positions have been filled; the CEO, the Head of Acquisitions, the CFO, etc; and that team has now fully kind of got their hands into the business. And as Vimal and Amit pointed out, over the next two quarters you’ll start seeing operational announcements as well.

Manan Patel — Airawath Capital — Analyst

That’s very helpful. Just again one more question on the IC business. So is that understanding right that Mitsubishi Electric deal is part — is recognized in Q4?

Arvind Subramanian — Managing Director and Chief Executive Officer

Yes.

Manan Patel — Airawath Capital — Analyst

So sir. I just wanted to understand because if it was recognized in Q4, it would have been closed completely before 31st March. But the announcement was there to the exchanges on April 17. So, why was there a big delay in that?

Vimal Agarwal — Chief Financial Officer

Look, so the announcement was actually done on 5th of April, post-registration formality which were to be completed in this particular transition.

Manan Patel — Airawath Capital — Analyst

Okay. But is part of their recognized revenue?

Vimal Agarwal — Chief Financial Officer

That’s right. Absolutely right. It’s part of the revenue recognition in quarter four. The money was received, documents were signed, it was only the registration and few more formalities which were left. And therefore being a conservative in terms of all these things, we thought it [Indecipherable] to do the announcement once all those activities get complete.

Manan Patel — Airawath Capital — Analyst

That’s very helpful. The second question on the residential side. So as we have noticed over a period of time, our contribution or pipeline value is coming down and affordable housing going up and I’m assuming that society redevelopment projects are also under affordable housing. So is that a conscious strategy of bringing down value and focusing on premium?

Amit Sinha — Managing Director

So, we are constantly evaluating this. The focus is on scale, the focused markets, and what customers would welcome. And so we will come back with more details of which whether we’re going to double down or not on affordable housing, but it depends on location of land, the customer, the catchment area, multiple things. So, we are constantly evaluating those.

Manan Patel — Airawath Capital — Analyst

Understood. And the last question if I can. So just wanted to understand when you say society redevelopment projects worth of [Technical Issues]. So is that the entire revenue that we can recognize and if you could help me understand the revenue recognition and the cost in that business? That will be helpful.

Vimal Agarwal — Chief Financial Officer

We expect it to be largely within the same range as any other residential business right from the topline to the accounting to the bottom line.

Manan Patel — Airawath Capital — Analyst

Sir, how — the land cost I understand will be linked. Is that factored in the rate?

Vimal Agarwal — Chief Financial Officer

Yeah. So, look at it like typical joint development agreement and in which case say the land comes more as a equity or a contribution from the other party. You can then probably look at all other aspects with a similar lens.

Manan Patel — Airawath Capital — Analyst

That’s very helpful. And thank you for all the answers and wish you all the best. Hope the energy of the organization continues. Thank you.

Operator

Thank you. Ladies and gentlemen, we have reached the end of the question-and-answer session and now I’d like to turn the call over to Mr. Amit Kumar Sinha for closing comments. Over to you, sir.

Amit Sinha — Managing Director

Great. I’ll keep it short, we are over little bit time. So, we thank you for all your questions and comments. I think it’s very helpful for me personally to understand your views, your vantage point, your priorities; and we at MLDL will continue to address them in our business, but also keep the channel of communication open to make sure that we are able to course correct and refine our strategies and priorities continuously. So first of all, thank you to all of you. Second is thank you to Arvind for, as I mentioned earlier, he’s leaving MLDL, but he is leaving a part of him behind and we’ll build on what he has set up in motion and we’ll continue to address them. So, that’s my second quick comment. And third, I just want to summarize the three points that I have in mind as I think about our business.

The first is about scale up is a big priority for all of us. As you’ve heard a lot from me as well as the colleagues here; the launches, the BD, the process that we have put in place, the discipline, the pricing, the inventory. All those things are part of our scale-up strategy and we’ll continue to put all our muscle and hustle behind that. The second is the customer centricity. This is a market where we feel that our brand can give us lot more than what we have — what we may have seen already. So how do we think about bringing the right product, leveraging our brand, leveraging our growth trend, addressing sustainability and technology, a parameter that create a wow we have seen with some of our products already. So how do we double down, triple down on customer-centricity?

And the third one is on the financial prudence. I think we are in the business for creating value for our shareholders and I think all our efforts should culminate into the financial outcome that we get from these efforts. So, those are the three on the residential side. Some of them apply to industrial side also. But given the buoyancy that we see on the MNC’s interest in industrial cluster, we feel that there’ll be lot of action we’ll see on the industrial side as well. And the team is geared up to convert that and I’ve seen that firsthand with some of the closures we saw in March firsthand. I’m quite impressed with the funnel that we have as well as the effort that we have put in place. So, those are the few messages from my side. Thanks to all of you for your feedback. Thanks to Arvind for setting things in motion. Three priorities first on the residential side and one clear priority on the industrial side. And I’ll continue to open the dialog with you and look forward to your support and feedback.

Operator

[Operator Closing Remarks]