KOLTE-PATIL DEVELOPERS LTD (KOLTEPATIL) Q3 FY23 Earnings Concall Transcript

KOLTE-PATIL DEVELOPERS LTD (NSE:KOLTEPATIL) Q3 FY23 Earnings Concall dated Feb. 07, 2023.

Corporate Participants:

Shiv Muttoo — Investor Relations

Rahul Talele — Group Chief Executive Officer

Dipti Rajput — Vice President, Investor Relations

Analysts:

Himanshu Upadhyay — O3 Capital — Analyst

Pritesh Sheth — Motilal Oswal Financial Services — Analyst

Rohit Balakrishnan — ithought PMS — Analyst

Parikshit Kandpal — HDFC Securities — Analyst

Prithvi Raj — Unifi Capital — Analyst

Viraj Mehta — Equirus PMS — Analyst

Shreyans Mehta — Equirus Capital — Analyst

Aejas Lakhani — Unifi Capital — Analyst

Dhananjay Kumar Mishra — Sunidhi Securities — Analyst

Unidentified Participant — — Analyst

Dhwanil Desai — Turtle Capital — Analyst

Aditya Sen — RoboCapital — Analyst

Jainam Shah — Equirus Securities Private Limited — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to Kolte-Patil Limited’s Q3 FY ’23 Earnings Conference Call. [Operator Instructions]

I now hand the conference over to Mr. Shiv Muttoo from Adfactors PR. Thank you and over to you sir.

Shiv Muttoo — Investor Relations

Thank you. Good afternoon everyone, and thank you for joining us on the Q3 FY ’23 Results Conference Call of Kolte-Patil Developers Limited. We have with us today, Rahul Talele, Group CEO; Dipti Rajput, Vice President, Investor Relations; and Pawan Lohiya, Vice-President Finance.

Before we begin, I would like to state that some of the statements in today’s discussion may be forward-looking in nature and may involve certain risks and uncertainties. A detailed statement in this regard is available in the Q3 FY ’23 results presentation that has been sent to you earlier.

I would now like to invite Mr. Rahul Talele to begin the proceedings of this call. Over to you.

Rahul Talele — Group Chief Executive Officer

Good afternoon. A very warm welcome to everyone present on this call, and thank you for joining us today to discuss the operating and financial performance of Kolte-Patil Developers Limited for the third quarter of FY ’23. I would like to begin by sharing with you our views and takeaways on the real-estate environment, followed by an overview on the highlights of third quarter and nine months performance. Dipti will then take you through the key financial highlights and we then look-forward to taking your questions and suggestions during today’s call.

To begin with, Indian economy continues to perform well amid the global inflationary environment that has created unprecedented situations in many parts of the world. Significant increase in interest rates has impacted consumption spending in key markets internationally. It is quite encouraging to note that India remains fundamentally resilient in a tough global economic environment and is poised to grow at about 7% in the current financial year ’23. Further, last week’s budget announcement are reflective of the government’s confidence in the economy and the real-estate sector stands to gain from some of the announcements, focus on sustainable cities, strategic urban planners, infrastructure expansion initiatives, increasing the fund for PMAY, are all positives, especially from the perspective of long-term housing objectives. Technology and digitization initiatives will go beyond sectors, creating multiple new age job opportunities in the process in all higher capex outlay and thrust on green growth should help India build a more sustainable future.

From our perspective, while interest rates have increased in recent months, affordability still remains intact and demand robust. We believe leading real-estate players with credible market reputation and strong buyer connect are strategically at an advantageous position. During the third quarter of the financial year, the company achieved highest-ever quarterly sales value of INR716 crore, a growth of 28% on a year-on-year basis. We also reported highest-ever quarterly sales volume of 1.13 million square feet, a growth of 31% on a year-on-year basis. This performance was backed by six new project launches in Pune and Mumbai, along with continued momentum of customer traction in our existing sustenance phase projects.

During the quarter, the last one month, we have cumulatively launched 2.77 million square feet with the top-line potential of INR1,960 crores. Robust sales and good construction phase have resulted in firm growth of 22% Y-o-Y in collections for nine-month FY ’23. We have received OC to the tune of 2.7 million square feet during the nine-month FY ’23, of which 60% OCs were obtained in the month of December ’22, the revenues for which will be recorded in Q4 FY ’23. Here, I would like to share that the profitability during Q3 FY ’23 was impacted on account of two projects in Pune, which had low gross margin resulting in lower overall gross profit for the quarter of INR31 crore, which was insufficient to cover overheads. The OCs for these two projects were received towards the latter half of the quarter under review.

The revenues and costs of these low-margin projects have been fully accounted for Q3 FY ’23. In other words, there is nothing pending to be recognized in the coming quarters towards these projects. In summary, we are confident of closing the year in-line with our stated pre-sales and revenue guidance. Margin profile for FY ’23 remains intact and we hope to report better margins as compared to FY ’22. For the nine months ended 31st December, ’22, our reported sales value stood at INR1,528 crore with volumes of 2.3 million square feet compared to INR1,238 crores and 1.93 million square feet in the same-period previous year.

The strategy of business diversification remains well-established as Mumbai and Bangalore has shown contribution of 21% during the nine-month FY ’23. I’m glad to report that we have reached a significant milestone as our flagship project, Life Republic, surpass the 0.5 million volume mark by clocking 6.62 lakh square feet during the quarter. Apart from this, we have also continued to witness firm realization at Life Republic and across projects. I’m happy to share that during the quarter, we launched premium row houses for the very first time and received overwhelming response and are encouraged to rollout this format in the future too. Price bracket has widened from INR30 lakhs to INR80 lakhs to INR30 lakhs to INR2.5 crore at Life Republic township, supporting better realizations and volumes.

KPDL have the history of collaborating with several domestic and international financial institutions and corporates. This has helped us accelerate growth, innovate and diversify our project portfolio. In the recent development KPDL partnered with Marubeni Corporation, where the latter will invest INR206.5 crore in KPDL’s Pimple Nilakh residential project and will be entitled to 2.85 lakh square feet of sellable area in the project.

The Pimple Nilakh residential project, one of the priority launches in our portfolio, has a total development potential of 8 lakh square feet. With this new collaboration, we see rapid development of another high-quality residential project in the Premium Luxury segment, which is 24K, complementing our larger mass-market portfolio of offerings. We believe that this association with a leading global organization of repute once again highlights our organizational capabilities and governance standards.

Improved affordability parameters from the longer-term perspective persistence of flexible hybrid work format and sustained investments in infrastructure by the government will certainly continue to support housing demand across key markets including Tier 2 and Tier 3 cities. Based on our diversification goals, we continue to prudently evaluate business development opportunities across the three geographies of Pune, Mumbai and Bangalore. With increased consolidation and formalization of sectors, buyers and landowners are turning to quality developers and Kolte-Patil is well positioned to forge meaningful partnership with a keen focus on delivering value across the entire ecosystem of stakeholders.

With a healthy balance sheet, comfortable debt level, strong launch pipeline and brand connect, significant business development pipeline and financially prudent growth plan, we are confident of delivering profitable growth for the current year, also for the FY ’24, with pre-sales growth in the range of 25% to 30%.

I would now like to hand over to Dipti to share the financial highlights for the quarter and nine months ended 31st December ’22.

Dipti Rajput — Vice President, Investor Relations

Thank you, Rahul. Good afternoon, everybody. I will now briefly take you through our financial performance for the third quarter of FY ’23. Based on CCM-based accounting, in Q3 we clocked revenues of INR368.1 crore, up 53% Y-o-Y, whereas in the nine-month period, we reported revenues of INR691.5 crores. EBITDA for nine-month FY ’23 stood at INR15.8 crores. Here, we would like to remind you that recognition of revenue and profits are dependent on the timing of project completion, based on statutory accounting guidelines.

Our net-debt to equity stands strong at 0.21 as on December 31, 2022, and operating cash flow for the quarter stood at INR120 crores. We have reported highest-ever quarterly pre-sales numbers and look forward to maintaining the momentum going ahead as well to meet stated growth objectives. With the efforts put in by the entire team, we look to end the year on a strong note and look-forward to creating bigger milestones in the future.

On that note, I conclude my opening remarks and would like to ask the moderator to open the line for Q&A.

Questions and Answers:

Operator

Thank you very much, ma’am. We will now begin the question-and-answer session. [Operator Instructions]

We have the first question from the line of Himanshu Upadhyay from O3 Capital. Please go-ahead.

Himanshu Upadhyay — O3 Capital — Analyst

Yes, hi, good afternoon and congratulations on better set of numbers from the previous term. I hope the momentum continues, okay. I have two, three questions, one is related to Bombay, okay, we stated that land-bank in Bombay is around 60.69 million square feet, okay, how soon can you bring this inventory to commercialization and it is across how many redevelopment projects, means, what is the concentration, okay? So this is the first question.

Rahul Talele — Group Chief Executive Officer

Okay, thank you Himanshu. See, in Mumbai, currently our three projects got launched, which is in a sustenance phase and recently we have launched two more projects, again are redevelopment projects in the month of January, so that is the Sukh Niwas and Golden Pebbles projects. So we are confident of achieving a good pre-sales number in this two new projects as well, in order to continue our growth story in Mumbai, what we achieved in earlier three projects. And apart from this, there are three projects which are from a BD perspective, have already been closed, and likewise, we are working on a multiple projects in Mumbai.

So, certainly, see what differentiating things that we’re doing from a BD perspective is, we are negotiating with the land owners, we are negotiating with the societies, simultaneously we have applied to the various basic approvals for that particular land parcels so that the deal closes. So, simultaneously our legal and technical due-diligence is happening, simultaneously our approval is also getting processed. So the timeline between the BD closure and the launch will be significantly reduced in the projects which we are going to acquire in the future for Kolte-Patil.

Himanshu Upadhyay — O3 Capital — Analyst

This 0.69 million square feet of land inventory, is it done deals or this is work-in-progress we should assume, means, society — and they will be generally all society redevelopment projects only in Bombay?

Rahul Talele — Group Chief Executive Officer

Yes, that’s correct. So these are the done deals. And, so we are working in various stages of initial approvals in this project.

Himanshu Upadhyay — O3 Capital — Analyst

Okay, okay and one more thing. In the markets where we are present, okay, where you are seeing the maximum traction in terms of volume and price appreciation, okay? And how is the business development progressing, especially in Bangalore and Mumbai? In terms of Bombay, you had also stated that we might now start looking at outright sales. So is there some progress happening on that outright sales in Bombay also?

Rahul Talele — Group Chief Executive Officer

So market is at — three geographies are very good where we are currently operating, our launch performance in Pune and Mumbai is one example of that. So we are bullish on these three geographies. So as I mentioned in our earlier interactions, so there are multiple BD pipelines that we are working upon. So there is a strong BD pipeline apart from Pune, there is a strong BD pipeline in Mumbai as well and we are evaluating couple of projects in Bengaluru as well. So certainly in the coming few months, couple of months, there will be some — the closures happening for us.

Himanshu Upadhyay — O3 Capital — Analyst

Okay and one last thing. Can you give some thoughts on your experience of how are you trying to improve customer experience in CRM, okay? So that we can have more reference sales, okay. Currently what percentage of our sales would be from reference sales?

Rahul Talele — Group Chief Executive Officer

So Himanshu, thanks for asking this question. A couple of years back, we used to achieve 3% to 5% of reference sales and because of the right measures we have taken in the last two years, our referral sale was around 7% to 9% in last financial year and in this nine months, I’m happy to share our referral sales have jumped to 15%. So we are working on various initiatives, we are working on customer engagement activities. We are working on digital platforms, which will have a — the real-time connectivity with the customer, so that will — I’m confident that this will further add-up to my referral phase for the company. Okay. And one last thing. Can you give me some idea on 24K or Luxury projects and what are our plans, because what we read is, the luxury market is booming, okay, across the country, what –. So is not this product also more profitable for us and are we focusing more on 24K projects more or even the business development focus on 24K or how are your thoughts on that? Okay, Himanshu, see, our Panay [Phonetic][26:16] project is a 24K, which we are expecting to get launched in the — this ongoing quarter. Apart from that, as I mentioned in opening remarks, our Pimple Nilakh project is also under a 24K brand. Apart from this, earlier in township, we used to sell a inventory in a price bracket of INR30 lakhs to INR80 lakhs, wherein we proposed a spacious and upmarket 3BHK product around INR1 crore. So, earlier we used to sell at INR80 lakhs, INR85 lakhs and now we are selling at INR1 crore. So from a township perspective that is not exactly a 24K products, but that is the journey towards having a 24K or a premium product in the township. Apart from that, within a couple of days we could offload the 50% of the inventory in our row house sales, so that is also a positive sign for us. And certainly going-forward, in the near-future, we are evaluating a multiple 24K project closures, as well as launch of 24K project in our existing inventory.

Himanshu Upadhyay — O3 Capital — Analyst

Okay, thank you and best of luck for future. Yes, that’s all from my side.

Operator

Thank you. The next question is from the line of Pritesh Sheth from Motilal Oswal Financial Services. Please go-ahead.

Pritesh Sheth — Motilal Oswal Financial Services — Analyst

Hi, thanks for the opportunity and congrats on a great performance on the operational side. Firstly on the P&L, what all projects were recognized for revenue in this quarter? And if you can let — what were the two projects, which had a low-margin within this quarter? That’s my first question.

Rahul Talele — Group Chief Executive Officer

Okay, thanks, Pritesh. So in this quarter, our Wakad project, which is Western Avenue and Green Olive got recognized, which has the larger revenue recognition. Apart from that, sort of last quarter, so there are couple of more projects, but these are the two projects, which has the higher contribution in the revenue top-line in this concluded quarter. And in this project, there were low-margins and I mean, apart from this, there are multiple projects we have received the OC in the last couple of months, wherein the revenue recognition will happen in the month of — in the quarter of Q4, wherein we are expecting a GP in the range of 30% to 40%, EBITDA in the range of 20% to 25%, so we are in-line with our — the margin, which are a target margins for us.

Pritesh Sheth — Motilal Oswal Financial Services — Analyst

Thanks, that’s helpful. Any specific issue you wanted to highlight on Wakad and Green Olive being a low-margin? Was the sales velocity not — as per expectations or any specific thing, which led to low-margin on this project?

Rahul Talele — Group Chief Executive Officer

Not actually, but there was a — the project started — this project started almost 10 years back, the last phase got develop now and because of that there were margin pressures.

Pritesh Sheth — Motilal Oswal Financial Services — Analyst

Sure, sure, got it.

Rahul Talele — Group Chief Executive Officer

We have allotted a fully — I mean, the full recognition has already happened in Q3 for this project.

Pritesh Sheth — Motilal Oswal Financial Services — Analyst

Got it. Got it. Sure. Good to see launches also picking-up this quarter. Now we had highlighted last quarter that there are at least 6.2 millions square feet of projects which are the first phase of the total launch pipeline that we have, which is under planning stage, out of that probably we had launched 2.8 millions square feet. How close are we for rest of the launches, is it probably next two quarters is where we are looking to launch all of that 6.2 million square feet?

Rahul Talele — Group Chief Executive Officer

So out of this 6.3 million square feet, we are expecting to have the — most of the launches in next three to four months itself. And apart from this, as I mentioned earlier, so we are working on some BD opportunities wherein the projects are kind of a launch-ready or nearing launch. So that will certainly add to our volumes.

Pritesh Sheth — Motilal Oswal Financial Services — Analyst

Got it. That’s helpful. So we had done well in terms of cash flows, in terms of launches, now sales, we are also picking-up in last two years, that said, we have kicked-off the boxes. Only thing that we are looking-forward to is the business development. While you have been highlighting that we are obviously close in terms of dealing — I mean, closing the transactions. But any specific pipeline you have in mind, which are right now at the advanced-stage of discussion and probably that might get closed in next couple of quarters or one year or something?

Rahul Talele — Group Chief Executive Officer

So, Pritesh, there are multiple such opportunities which can get closed in next couple of quarters, at the right time we’ll announce that to market. But having said that, in order to — based on our prior experience, we have — we are not only negotiating with the landowners from a legal and the technical point-of-view, but also simultaneously we have applied to various stages of approval, so that on one-side we are closing the BD deals and on the other side, in couple of months, the deals can get launched to the market.

Pritesh Sheth — Motilal Oswal Financial Services — Analyst

Sure, sure, got it. So we’ll definitely see some progress over the next couple of quarters, that’s what you are doing?

Rahul Talele — Group Chief Executive Officer

In fact, in next couple of months, you’ll see some progress.

Pritesh Sheth — Motilal Oswal Financial Services — Analyst

Sure, so that’s very helpful. I mean, that’s it from my side. All the best and keep up delivering good performance. Thank you.

Rahul Talele — Group Chief Executive Officer

Thank you, Pritesh.

Operator

Thank you. The next question is from the line of Rohit from ithoughtpms. Please go-ahead.

Rohit Balakrishnan — ithought PMS — Analyst

Hello.

Operator

Please proceed, Mr Rohit.

Rohit Balakrishnan — ithought PMS — Analyst

Yes, hi, can you hear me?

Operator

Your voice is muffled, sir. I would request you to use your handset please.

Rohit Balakrishnan — ithought PMS — Analyst

Is it better now?

Operator

Yes sir, please proceed.

Rohit Balakrishnan — ithought PMS — Analyst

Yes, hi Rahul, hi team. Congrats on a good operational quarter. So this quarter, you’ve done about three — I mean, I’m just talking about P&L for a minute. I think in the previous con-call you had guided that in H2 probably you will do close to INR1,300 crores to INR1,500 crores of revenue recognition. So the balance, what will be largely done in Q4, is that correct or is there some change in that earlier guidance that you had given?

Rahul Talele — Group Chief Executive Officer

Thanks, Rohit. That’s correct. So we are going to deliver as per the guidance given to — given in our earlier discussion. We have already received multiple OCs in the last 45 days. So all of that revenue will get recognized in this ongoing quarter.

Rohit Balakrishnan — ithought PMS — Analyst

Right. And you don’t see any issues in other projects unlike the ones that you had in these two projects in Wakad and Green Olive, unlike these two projects, you don’t see any profitability issues?

Rahul Talele — Group Chief Executive Officer

No, not at all. In fact, the margin numbers are good, which are as per our targets.

Rohit Balakrishnan — ithought PMS — Analyst

Got it. And even for the projects that are getting launched now, what are the kind of gross margin that we are looking at right now? I mean the ones that are getting launched or which you were launching in the last maybe six months?

Rahul Talele — Group Chief Executive Officer

So we are envisaging a margins of 35% plus or minus in the range of 30% to 40%, depending on the deal structure and like that. And EBITDA margins in the range of 22%, 25%.

Rohit Balakrishnan — ithought PMS — Analyst

Understood, sir. And sir, on this Pimple Nilakh project, so we have a total sales potential of about 0.8 million square feet and I think you mentioned that 34% of that 6.3 million square feet of lease from Marubeni Corporation, and they have invested some money for — in exchange of that. So have you got any money from them? And like can you just explain this transaction like when will that money come in? And how will this be done?

Rahul Talele — Group Chief Executive Officer

So this is a kind of an inventory sale and this money will be received in next couple of months. And likewise, so as I mentioned earlier, we are working on a very strong BD pipeline, and these funds will be utilized for the — utilize as a growth capital for the company.

Rohit Balakrishnan — ithought PMS — Analyst

So they will get the inventory and then they will — I mean this is a purely you mentioned we have 24K products?

Rahul Talele — Group Chief Executive Officer

Yes. This is the kind of an inventory sale. So we agreed on one number, and we are getting 100% down payment.

Rohit Balakrishnan — ithought PMS — Analyst

Understood. Understood. And sir just you mentioned in terms of priority launches of 2.7 million that we have — sorry, you mentioned something that you are planning to launch all the remaining launches in the next three, four months, all the priority remaining launches that are there in the next three to four months.

Rahul Talele — Group Chief Executive Officer

That’s correct.

Rohit Balakrishnan — ithought PMS — Analyst

Okay. That’s very good to hear, sir. And last thing on this merger that is happening. So two things. So we were planning to demerge our retail arm, which we are not doing now. Can you — is there anything which has happened, which is — which is leading you to do that? Are we planning to make foray into retail or anything of that sort if you can share?

Rahul Talele — Group Chief Executive Officer

Rohit, I think this is not a significant contribution in our business.

Rohit Balakrishnan — ithought PMS — Analyst

So — yes, right now, it may be not significant, sir, but just from a future point of view, I just wanted to understand, is there any change in strategy? Or is there in addition to the strategy that we are also looking to foray into retail, and that’s why we have not demerged now, which you were earlier thinking, that was my question.

Rahul Talele — Group Chief Executive Officer

So it is not from the business perspective, it is from the — purely from the structural perspective. So we don’t have any plans to foray into retail.

Rohit Balakrishnan — ithought PMS — Analyst

Understood. Understood. Sure, sir. I’ll get back in the queue if I have more questions. Thank you very much and all the very best.

Rahul Talele — Group Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.

Parikshit Kandpal — HDFC Securities — Analyst

Hi, Rahul, congratulations on a decent quarter, sir. So my first question is on deliveries. So the first question is the 2.7 million was up about 16 billion of, I would say, roughly INR6,300 crores realization worth of sales, which are moved into revenue recognition. But for nine months, you only had INR700 crores of revenue hitting P&L. So just wanted your thoughts why there was a delay in recognition. And in the fourth quarter, what are the deliveries planned in million square feet and in value?

Rahul Talele — Group Chief Executive Officer

So, thanks Parikshit. So basically, delivery depends on the structure of the building. Delivery depends on how much time that project will take. So it is not certain that the projects will — I mean of same heights as there is no difference and like that. So it depends on the technical things. There is no delayed deliveries. So that is as per our business plan, as per our the construction schedule. So — and likewise, in Q4, we are targeting to have the revenue recognition to the tune of INR800 crores to INR900 crores. So in toto around INR1,600 crores to INR1,700 crores of revenue recognition will happen in this financial year. And as I mentioned earlier, the margins are intact for us.

Parikshit Kandpal — HDFC Securities — Analyst

So do you — I mean would you bring more to delivery which you have given in the presentation of 2.7.

Operator

I’m sorry to interrupt, sir, we are not able to hear you clearly, as your voice is a little bit muffled. Sir, can you please use your handset?

Parikshit Kandpal — HDFC Securities — Analyst

So in the presentation, sir, you have mentioned 2.7 million of delivery. So when you say delivery that means the OC would have come on these, right? And you said there’s some delay in revenue recognition against these deliveries. So I just wanted to understand why there was a difference in OC, and this should have moved into revenue recognition.

Rahul Talele — Group Chief Executive Officer

So this — the deliveries and this OC, particularly has happened in tail end of this concluded quarter, and we wait for the 30 days, 30 to 45 days, depending on the agreement with the individual customers, post that, it will go to revenue recognition for us.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. So it will largely hit in the fourth quarter.

Rahul Talele — Group Chief Executive Officer

That’s correct.

Parikshit Kandpal — HDFC Securities — Analyst

As you rightly highlighted. So second question is on business development. So I just wanted your thoughts on what has been the nine-month business development — new business development, which you’ve already agreed or summed up with your partners or landowners? And what is the pipeline for fourth quarter? And how much of that you expect to conclude in fourth quarter?

Rahul Talele — Group Chief Executive Officer

So Parikshit — so currently, we are holding a top line potential of INR22,000 crores. Out of that, as I mentioned, INR7,700 crores are the priority launches, INR2,000 crores worth inventory has already been launched. So keeping this aside, so company has a potential of around INR15,000 crores, INR22,000 crores minus INR7,000 crores is INR15,000 crores, so that is available within the — our existing land bank itself. Apart from that, as I mentioned, we are working on multiple BD opportunities. And that is the reason to go for a Marubeni transaction. And that is the reason to go for even the Planet entry at Kiwale. So we are very certain about the closure of this BD deal. But at this moment of time, since I mean, no deal has been concluded from a legal perspective. Hence, we have not announced to the market. But at the same time, the commercial discussion has been locked in multiple deals. So next few quarters, you’ll see multiple BD announcements from our side.

Parikshit Kandpal — HDFC Securities — Analyst

On the slide, you have mentioned INR7,000 crores of new business developments on Slide 21. INR7,000 crores is targeting is the advanced pipeline where we are in the final business closure or this is a prospect pipeline? And on this, how much do you expect to close in Q4? And how much in FY ’24?

Rahul Talele — Group Chief Executive Officer

So INR7,000 crores pipeline is at a very advanced stage of discussion. So out of that, we are expecting to have a closure in the ongoing quarter, maybe around — so 40% of that, and apart from that, we have already closed INR1,400 crores of Kiwale deal. So in total, around INR4,000 crores of BD closures in this quarter. And there can be a little spillover to Q1. So — but we are on track to have this BD closure.

Parikshit Kandpal — HDFC Securities — Analyst

You’re saying sir out of INR7,000 crores, 40% roughly about INR2,800 crores will happen — may happen in Q4? And this Kiwale deal is over and above this, this is INR1,400 crores or it is part of INR2,800 crores?`

Rahul Talele — Group Chief Executive Officer

Kiwale deal is a part of INR7,000 crores.

Parikshit Kandpal — HDFC Securities — Analyst

So the INR2,800 crores. So the INR2,800 crores, which is at 40%. So that includes Kiwale, or Kiwale is over and above that?

Rahul Talele — Group Chief Executive Officer

Kiwale is excluding that.

Parikshit Kandpal — HDFC Securities — Analyst

So this quarter, it will be like almost INR2,800 crores, almost INR4,200 crores you expect to close in Q4.

Rahul Talele — Group Chief Executive Officer

That’s correct.

Parikshit Kandpal — HDFC Securities — Analyst

And how much will be the cost of land cost here, approximately the capex, which you may incur on the land on this INR4,000 crores?

Rahul Talele — Group Chief Executive Officer

So land cost since the deal structuring is different, every deal has a different structure, some are outright, some are JV transaction, but whatever the top line that we are talking about around 8% to 12% is our the upfront investments.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. So on this INR4,000 crores, 8%, 12% roughly about you can say maybe INR400 crores to INR450 crores could be the investment in land.

Rahul Talele — Group Chief Executive Officer

Correct.

Parikshit Kandpal — HDFC Securities — Analyst

Okay. Great, sir. That looks you’re back in the pipeline seems to be very strong. And all the best to you for closure of this deal. Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Prithvi Raj from Unifi Capital. Please go ahead.

Prithvi Raj — Unifi Capital — Analyst

Rahul, I just have a couple of questions. See, the first one, you mentioned a land bank of INR15,000 crores in the previous question. So if I have to take out the Life Republic land bank, what will be the remaining part?

Rahul Talele — Group Chief Executive Officer

So Life Republic is around INR11,000 crores. So apart from Life Republic, the other will be around INR4,000 crore to INR5,000 crores. So at this moment of time, so out of INR22,000 crores, INR11,000 crores is from Life Republic and INR11,000 crores or INR12,000 crores is from non-Life Republic. But post this priority launches, so it’s a blend of Life Republic and non-Life Republic projects. So around INR8,000 crores out of INR15,000 crores, around INR8,000 crores will be from Life Republic.

Prithvi Raj — Unifi Capital — Analyst

Okay. That’s helpful. And coming to the priority launches, you already mentioned you launched 2.8 million square feet. Okay, out of the remaining projects or how many projects you already have approvals in place?

Rahul Talele — Group Chief Executive Officer

Sorry, can you please repeat?

Prithvi Raj — Unifi Capital — Analyst

For the remaining projects, where you didn’t launch and which you’re showing in the priority launch slide, did you get approvals for all the projects or still the approvals are pending?

Rahul Talele — Group Chief Executive Officer

So approval for the Life Republic, we have the approval for — the key approval that is environment clearance, we have the environment clearance for all Life Republic projects, which are R16, R20 and R22. Apart from that, we have already received the environment approval for Baner project as well. And Pimple-Nilakh and — Tathawade project as well. Pimple-Nilakh is in process. So likewise, we are in a very advanced stages of approval in this — the remaining priority launches. We are confident of launching in next two to four months.

Prithvi Raj — Unifi Capital — Analyst

Okay, that’s helpful. Thanks, Rahul. Thanks a lot.

Operator

Thank you. The next question is from the line of Viraj Mehta from Equirus PMS. Please go ahead.

Viraj Mehta — Equirus PMS — Analyst

Yes, sir, thank you for explaining. So sir, out of the INR30 crores loss that we have reported this quarter, what was the overrun in the two projects, which has led with lower gross margins, which was not accounted for earlier, which has led to this loss?

Rahul Talele — Group Chief Executive Officer

Hi, Viraj. So basically, GP for these two projects was INR31 crores. But as you are aware, we follow accounting — the CCN methodology. And because of that, the overhead of the last quarter, we have to account the entire overhead of the last quarter. Since there were multiple launches, since there were the good momentum happening in the internal system. So overheads were on higher side as compared to the revenue got recognized. So overall this percentage was around 9% for these two projects for all projects together.

Viraj Mehta — Equirus PMS — Analyst

Sure. And sir, in the TV interview today, you had mentioned that we will still cross INR2,200 crores, INR2,300 crores of presales this year. That is including Baner or not including Baner?

Rahul Talele — Group Chief Executive Officer

See, yes, there is a dependency, partial dependence on Baner project as well. But we are confident of launching Baner project in the month of March itself, and there is a good traction. And considering that we’ll be on track to deliver this presales number of INR2,300 crores. So just to tell you about the Baner since as I mentioned in the earlier call, so in Baner project, we have acquired a small land parcels adjoining to this project because of which there are the projects got a very good layout and we can command a good premium as compared to the earlier rate we have envisaged. So that has happened in the last quarter. So now we are planning to launch this project at INR9,000 a square feet as compared to our business plan guidance of around INR7,500 to INR7,800.

Viraj Mehta — Equirus PMS — Analyst

Sure. And sir, next year, looking at the momentum, what’s the kind of realization increase you can see in both your key markets as in Pune. Pune if you can distinguish between LR and non-LR and Bombay?

Rahul Talele — Group Chief Executive Officer

Okay. So realization per square feet, again, depends on the — where we are selling maximum inventory. Like what you have seen in the current quarter, we have sold a significant inventory at Life Republic and the realization is on a lower side because the Life Republic is the MIG product. Likewise, as there are multiple 24K and premium projects as well as the launches are lined up in Mumbai. So considering that our — the realization in the next year will be in the range of INR6,600 to INR6,800.

Viraj Mehta — Equirus PMS — Analyst

No, no, sir, that’s combined. But I’m saying like-to-like product. Any realization increase next year?

Rahul Talele — Group Chief Executive Officer

So like-to-like project, see, when we have the multiple phases. So just to tell you, we used to achieve an APR of INR5,400, INR5,200 at Life Republic, wherein we are currently achieving the APR of INR5,900, which is a blend of partial high street retail and residential. So we will — going to continue with this kind of APRs at Life Republic. Having said that, our projects in Mumbai were wherein we have taken a price rise to the tune of INR2,000 crores — sorry, INR2,000 a square feet in last one year. So certainly, wherever we will get an opportunity to increase our price, we’ll go for it without hampering the volumes.

Viraj Mehta — Equirus PMS — Analyst

Thank you. Thank you so much, Rahul and best of luck.

Rahul Talele — Group Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from the line of Shreyans Mehta from Equirus Capital. Please go ahead.

Shreyans Mehta — Equirus Capital — Analyst

Thanks for the opportunity and congratulations on a strong set of presales. Sir again dwelling more upon the EBITDA loss. So if I adjust for the note number 9, the EBITDA loss would have been much higher. So can you help me reconcile how much is on account of this to the projects which we’ve done? So adjusted for that, what would have been our EBITDA margin for the gross margins?

Rahul Talele — Group Chief Executive Officer

So Shreyans, I would love if you can take this off-line, I’ll ask my teammate to reach out to you.

Shreyans Mehta — Equirus Capital — Analyst

Sure, sure. Sure. Okay. Sure. Sir, secondly, any updates or — I mean, in terms of the Note 10, wherein we have made some investments in real estate developers. So what is that pertaining to?

Rahul Talele — Group Chief Executive Officer

So as I mentioned, we are working on multiple BD opportunity. So this is one of the BD opportunities that we are evaluating in Mumbai. So in that regard, so jointly, we are evaluating out a couple of BD opportunities with them [Indecipherable] developers. So hence, we entered into that, that field.

Shreyans Mehta — Equirus Capital — Analyst

Sir, have we committed any amount or so how will the dynamics work?

Rahul Talele — Group Chief Executive Officer

No, the commercials are not yet closed, but we are evaluating our joint BD opportunities with [Indecipherable] developers.

Shreyans Mehta — Equirus Capital — Analyst

Got it. Got it. Got it. Sure. Sir, and in terms of BD, would you like to assign any number which you are evaluating?

Rahul Talele — Group Chief Executive Officer

So Shreyans, so there are — at this moment, there are multiple thousand crores of BD that we are evaluating. But as I mentioned earlier, around INR7,000 crore to INR8,000 crores of very advanced level of BD that we are evaluating.

Shreyans Mehta — Equirus Capital — Analyst

Got it. Got it. Got it. Sure. And sir, if I compare our last quarter presentation to this quarter presentation, a few projects like Crown and Giga have now been transferred from under approval to land bank. So any particular reason for it?

Rahul Talele — Group Chief Executive Officer

So see, in Giga, we have already received the approval. So project has already been launched. But it was not a part of priority launches because it’s a commercial development. So it was not a part of priority launches. Hence, we have highlighted that separately.

Shreyans Mehta — Equirus Capital — Analyst

Okay. Okay. Sure. And sir, lastly, in terms of guidance for FY ’24 in terms of deliveries?

Rahul Talele — Group Chief Executive Officer

Deliveries in FY ’23 and ’24, we are confident of delivering our numbers of INR3,000 crores. So out of that, whatever that we are going to achieve in FY ’23 that will get deducted. So there is a certain time it takes to deliver the project.

Shreyans Mehta — Equirus Capital — Analyst

Right. So ’23, we are saying INR2,300 crores, ’24, INR3,000 crores, INR700 crores is what you’re indicating?

Rahul Talele — Group Chief Executive Officer

No, no. See, in these two financial years, in total around INR3,000 crores of revenue recognition will happen. So out of that, INR700 crores has already been taken into accounting, INR800 crores to INR900 crores will happen in this quarter. I mean, in total, INR1,600 crores in FY ’23, and the will be in FY ’24. So in next five quarters, around INR2,300 crores of revenue recognition will happen.

Shreyans Mehta — Equirus Capital — Analyst

Got it. And in terms of margins, would be in line with what you are guiding for?

Rahul Talele — Group Chief Executive Officer

That’s correct.

Shreyans Mehta — Equirus Capital — Analyst

Okay, okay. Sure. Thank you and all the best, sir. Thank you.

Operator

Thank you. The next question is from the line of Aejas Lakhani from Unifi Capital. Please go ahead.

Aejas Lakhani — Unifi Capital — Analyst

Yes, congratulations on the strong set of numbers. Actually, most of my queries are answered. Just on that, sir, this Marubeni cash flows when are you expected to receive that by? And will you be using those cash flows against the BD expenses that you called out for the land of INR400 crores to INR450 crores that broad number. So will the cash flow from Marubeni be used for that growth?

Rahul Talele — Group Chief Executive Officer

Certainly, our intent is to utilize this cash flow as a growth capital for the company. So we are in a final leg of approvals for this project. Once we receive that, so this money can be received, and it will be deployed to BD opportunity. So we are expecting a closure in the next couple of months.

Aejas Lakhani — Unifi Capital — Analyst

Got it. So we should expect the monies from Marubeni to come in, in the next quarter only or it can flow into first quarter?

Rahul Talele — Group Chief Executive Officer

So — I mean maybe in the month of March or the first month of the next quarter.

Aejas Lakhani — Unifi Capital — Analyst

Okay. Okay. And sir, the Marubeni contract that you have, it’s an outright sale against specific 2.8 lakh square feet, 2.9 lakh square feet. So there’s no recourse on that? And I mean there’s no recourse on that sale, right? And how does the — because I think you have a certain portion which is saleable as well in that project. So is it that once you’re completed with your sale proceeds, he can start? Or is there any pecking order like that?

Rahul Talele — Group Chief Executive Officer

No. It’s an earmarked inventory. We are going to offload that inventory to the market. So this is not something that Marubeni will sell the inventory in the market. So we are going to have the entire control on that project from a marketing sales and as well as from a construction perspective. And there is no recourse.

Aejas Lakhani — Unifi Capital — Analyst

Got it. Okay. So you’re only going to sell it. It is just the capital that you have paid against that earmarked. Got it. Okay, sir. Thanks.

Operator

Thank you. The next question is from the line of Dhananjay Kumar Mishra from Sunidhi Securities. Please go ahead.

Dhananjay Kumar Mishra — Sunidhi Securities — Analyst

Hello, sir. Just one clarification. In the presentation, the 2.7 million square feet delivery, it is for full year, which is we are going to deliver or already we have delivered nine months?

Rahul Talele — Group Chief Executive Officer

What we have mentioned, 0.7 million square feet of OC, we have already received. So this is the OC received in nine months. And there are some OCs, which are expected to get received in the next one month. So all of this together around INR1,600 crores of revenue will get recognized in this financial year.

Dhananjay Kumar Mishra — Sunidhi Securities — Analyst

Okay. Because you mentioned that 60% of this 2.7 million square feet where the OCs received, but we have not booked any revenue. So in that…

Rahul Talele — Group Chief Executive Officer

No, that will spillover to Q4. Apart from that, there are some OCs, which we are expecting to get received in next 15 days. So that will add.

Dhananjay Kumar Mishra — Sunidhi Securities — Analyst

So okay, in addition to 2.7 million square feet?

Rahul Talele — Group Chief Executive Officer

Yes, that’s right.

Dhananjay Kumar Mishra — Sunidhi Securities — Analyst

And what will be the average realization in this delivery?

Rahul Talele — Group Chief Executive Officer

So around INR5,000 crores to INR5,200 crores.

Dhananjay Kumar Mishra — Sunidhi Securities — Analyst

INR5,200 crores. And next year, we are seeing similar kind of delivery?

Rahul Talele — Group Chief Executive Officer

Correct. So around INR1,300 crores to INR1,400 crores.

Dhananjay Kumar Mishra — Sunidhi Securities — Analyst

Okay, okay. And margin will be about 20%, 22%. Overall margin for the full year EBITDA margin. Okay. Yes. That’s all from my side.

Operator

Thank you. The next question is from the line of [Indecipherable], an Individual Investor. Please go ahead.

Unidentified Participant — — Analyst

Can you hear me?

Operator

Yes, sir. Please proceed.

Unidentified Participant — — Analyst

Sir, congrats on a good set of booking numbers, but I mean, sorry to ask a very basic question, sir. If I understand right, we would be ending the year on a P&L top line of INR1,700 crores and the guidance for next year is INR2,200 crores. Correct me if I’m wrong, sir.

Rahul Talele — Group Chief Executive Officer

No. So we will aim from a revenue perspective, around INR1,600 crores to INR1,700 crores for next year, our numbers will be in the tune of INR1,300 crores to INR1,400 crores. This is from an accounting perspective, CCM perspective. From a presales perspective, we’ll end this year with a 30% growth as compared to last year, that is INR2,300 crores — INR2,200 crores to INR2,300 crores. And for the next year, we are envisaging a growth of 25% to 30%.

Unidentified Participant — — Analyst

No, I’m just asking you the revenue number, which will appear on the published results kind of thing.

Rahul Talele — Group Chief Executive Officer

INR1,600 crores and INR1,300 crores.

Unidentified Participant — — Analyst

Next year will be INR1,300 crores only.

Rahul Talele — Group Chief Executive Officer

INR1,300 crores.

Unidentified Participant — — Analyst

Okay. So maybe the timing between the launches and the way it is accounted for would play a big part in it, correct?

Rahul Talele — Group Chief Executive Officer

That’s correct. So whatever that the inventory that we are currently filling will get delivered in next two and a half to three years. So at that time, this presales number will get converted to revenue.

Unidentified Participant — — Analyst

I mean, if I understand correctly this year, we will see a INR1,600 crores on the P&L, and next year we’ll see around INR1,400 crore on the P&L. And maybe the delivery will come better in 2025. I mean whatever you are launching now because I think this is through the six to eight quarters for these to classify into numbers.

Rahul Talele — Group Chief Executive Officer

Yes, depending on the project configuration.

Operator

Sorry to interrupt. Mr. [Indecipherable] your voice is muffled, sir.

Unidentified Participant — — Analyst

Is it okay now?

Operator

Yes, sir, please continue.

Unidentified Participant — — Analyst

Yes. Sir, out of land bank, you mentioned that it’s around INR15,000 crores. So is this entire thing in Kolte-Patil name or it’s in a promoter group company, sir? And what — if it is, what percentage is in Kolte and what percentage is outside Kolte, sir? Thank you.

Rahul Talele — Group Chief Executive Officer

So this is our own land bank. This is a Kolte-Patil land bank.

Unidentified Participant — — Analyst

So the INR15,000 crores is entirely Kolte-Patil land bank?

Rahul Talele — Group Chief Executive Officer

That’s correct.

Unidentified Participant — — Analyst

Okay, sir. Thank you.

Operator

Thank you. The next question is from the line of Dhwanil Desai from Turtle Capital. Please go ahead.

Dhwanil Desai — Turtle Capital — Analyst

Hi, Rahul. Good afternoon. The first question is regarding the LR. So LR we used to do around 1 million square feet presales every year. And this year, we have crossed close to that in nine months. So going forward, how do you guys think about monetizing LR, is there a kind of thinking we are increasing that 1 million to a much higher number? And if so, what kind of launches that we’re looking at?

Rahul Talele — Group Chief Executive Officer

So certainly, we are confident of our capabilities at LR. So if you see in the priority launches around INR3,000 crores worth projects are from Life Republic. Out of that, we have launched a significant amount of projects already. And as we mentioned, 1.1 million square feet has already been achieved. So the base part, which has happened in the last quarter. So we have break the jinx of crossing INR85 lakhs per unit at Life Republic, and that is a very positive move for the group because my — now we call it a supermarket of products. So the new supermarket of products is right from INR30 lakhs to INR2.5 crores. So certainly, based on that, we are going to launch some multiple premium projects as well as we’ll continue to have the affordable mix segment projects can township. So we are confident of achieving a 1.5 million square feet to 1.6 million square feet year-on-year with a better price realization certainly.

Dhwanil Desai — Turtle Capital — Analyst

Got it. And Rahul, you’re saying that in next three, four months, whatever is the remaining launch pipeline will get launched, so close to 6 million per week will launch probably in this year or maybe a month here and there. But going forward FY ’24, how — what kind of launch pipeline that we are looking at in terms of million square feet or some value?

Rahul Talele — Group Chief Executive Officer

So currently, we have unsold inventory. I mean if you add my unsold inventory plus this 2.77 million square feet minus whatever that we have sold, currently, we are sitting with a 3 million square feet of unsold inventory. On top of that, we are going to launch around 4 million square feet, 4.5 million square feet from this. So 7.5 million square feet of inventory that we are going to have. So this is sufficient for next few quarters. As I mentioned in the discussion, so on one side, we have the land bank of INR15,000 crores. And on the other side, we have the potential to close the multiple BD deals, so through that, as on when required, we’ve been launching the multiple new projects as well. So it all depends on how the project is performing then only we can launch the further phases of that project. But wherein we’ll get an opportunity, BD opportunity in new micro markets of Pune and Mumbai, likewise in Bangalore, which we are going to launch that to the market.

Dhwanil Desai — Turtle Capital — Analyst

Okay. So if I understand you correctly, what you are saying is that after the launches in next three, four months, probably the pace will slow down and the focus will be on selling the unsold inventory first before launching new projects.

Rahul Talele — Group Chief Executive Officer

No. See, let me correct. So if the new BD closure is from the new micro market, certainly, we are going to launch that inventory. And our focus from BD is to enter a newer market. So most of our BD deals are from a new micro market. So that will be the added launch pipeline in order to boost our volumes and values from a pre-sales perspective.

Dhwanil Desai — Turtle Capital — Analyst

Got it. Thanks. That’s it from me.

Operator

Thank you. The next question is from the line of Aditya Sen from RoboCapital. Please go ahead.

Aditya Sen — RoboCapital — Analyst

Hi, good evening, sir. I have this question on the cash flows that we have in the page number 17 of our PPT. The collections of INR1,260 crores in the nine months FY ’23. Do they pertain to these nine months only? Or do they address the previous collections also?

Rahul Talele — Group Chief Executive Officer

So INR1,260 crores is the correction for this nine months only.

Aditya Sen — RoboCapital — Analyst

Nine months only. Okay, great. This was my only question. And also, I wanted to — just wanted to know the expected sales velocity, but you have answered this already in other terms. So that works.

Operator

Thank you. The next question is from the line of Jainam Shah from Equirus Securities Private Limited. Please go ahead.

Jainam Shah — Equirus Securities Private Limited — Analyst

Yes, thanks for the opportunity. Sir, my first question relates to the presales for the upcoming years to medium to long term. So as we have targeted for around INR8,000 cores to INR9,000 crores for the next three years, how we are thinking about FY ’24 and going forward?

Rahul Talele — Group Chief Executive Officer

So as I mentioned in the discussion earlier, so we are expecting a growth of 25% to 30% in presales for the next financial year. So that will be to the tune of INR2,700 upwards of INR2,700 crores.

Jainam Shah — Equirus Securities Private Limited — Analyst

Got it. Got it. Sir, the other question is on the other expenses. I was going through that other expenses of around INR15 crores to INR20 crores earlier and then it has jumped to INR37 crores in this quarter. So is it normal run rate that we are expecting, given the overall business pipeline that we are having? Or is it just one-off of this projects as well?

Rahul Talele — Group Chief Executive Officer

See, during the launch of the project since this quarter was a quarter for the launches. During the launches, there are significant marketing expenditures. So that has added to our overhead. And certainly, going forward, in fact, some of the margin point of view since we are shifting our base to a larger bay, there will be some kind of delta in the overhead that will add back to the our margin.

Jainam Shah — Equirus Securities Private Limited — Analyst

Okay. And sir, last question related to the debt. So if you are getting money from the Marubeni in this quarter, along with it, we are forcing some BD to convert into the land bank as well. So who you are planning as — debt number or a net debt to equity, what’s the targeted number for that?

Rahul Talele — Group Chief Executive Officer

So our current net debt to equity is around 0.2, and we have the approval from Board till 0.5. So as and when required, we are certainly going to leverage to take the advantage of good market conditions. And likewise, just to tell you, we have taken the preapprovals from the bank itself. So at the right time, we’ll take the disbursements.

Jainam Shah — Equirus Securities Private Limited — Analyst

Got it, sir. Got it. That’s it from my side. Thank you.

Operator

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Rahul Talele, Chief Executive Officer, for closing comments. Thank you, and over to you, sir.

Rahul Talele — Group Chief Executive Officer

Thank you once again for your interest and support. We will continue to stay engaged. And if you have any further questions, please feel free to reach Dipti Rajput at KPDL. Looking forward to interacting with you next quarter.

Operator

[Operator Closing Remarks]