Kolte-Patil Developers Ltd Q4 FY22 Earnings Conference Call Insights

Key highlights from Kolte-Patil Developers Ltd (KOLTEPATIL) Q4 FY22 Earnings Concall

Management Update:

• KOLTEPATIL said that further from a new business development perspective, the company is focusing on newer micro markets in Pune.

• KOLTEPATIL’s objective will be to deliver 25-30% sales value growth in FY23. The company is also targeting 3 million sq. ft. plus customer handovers during FY23.

Q&A Highlights:

• Prithvi Raj with Unifi Capital asked about what kind of price hikes the company has taken across projects and geographies. Rahul Talele Group CEO said wherever the company got the opportunity of price rise, it has taken the price rise. KOLTEPATIL has improved price in the range of 5-8% in Pune, Mumbai and Bangalore areas.

• Prithvi Raj with Unifi Capital also asked if the company is looking for new launches in FY23. Rahul Talele Group CEO replied that in FY23, the company is confident of launches of more than INR4,000 crores, which was INR1,000 in FY22.

• Pritesh Sheth of Motilal Oswal enquired about the INR7,000 crore target of signing new projects and where these are located and if it will be outright or JDA purchase. Rahul Talele Group CEO said that the company has signed 7 non-binging townships, which are located in Pune and Mumbai and are in advance stage of discussion in Bangalore. Around 60-70% will come from Pune and around 30% from Mumbai and Bangalore. Of the 7 transactions, 2 are outright and 5 are JDA transactions.

• Pritesh Sheth of Motilal Oswal asked that after the rate hike, if there is any change in customer buying patterns. Rahul Talele Group CEO said there is no impact in the near future but if the rate hike is beyond 100 basis points the buying pattern can get impacted.

• Alkesh Thakkar with Antique Stock Broking asked about Bangalore portfolio as the company is not able to get deals there. Rahul Talele Group CEO said that the company is serious about Bangalore region and have moved one of its senior resource to take care of Bangalore region. So in FY23, the company expect good amount of growth in Bangalore also.

• Alkesh Thakkar with Antique Stock Broking asked about the dependency on the Life Republic in last 3-5 years and how it’s moving going forward. Rahul Talele Group CEO said the dependency was close to 40%. In FY22, it got reduced to 31% and in FY23, KOLTEPATIL is confident it will be closer to 24-25%.

• Manoj Dua of Geometric Securities asked about company’s plan in the plotting sector. Rahul Talele Group CEO clarified that the company is evaluating couple of plotting proposals in Pune and are at the advance stage of discussion. In fact KOLTEPATIL said it has executed and delivered its first plotting project in Township and has a got a good response.

• Rohit Balakrishnan of iThought PMS asked about the outlook for Mumbai in FY23. Rahul Talele Group CEO replied that in Mumbai the company has taken a target of crossing INR650 crore in FY23. In terms of margins, KOLTEPATIL envisage an IRR of more than 25% for Mumbai, particularly a redevelopment portfolio.

• Rohit Balakrishnan of iThought PMS also asked about the timelines of the Mumbai portfolio, the projects sold in FY22, when are these expected to deliver and get reflected in P&L. Rahul Talele Group CEO answered that it’s expected in the next 18-36 months.

• Himanshu Upadhyay with O3 Capital asked about the pending collection in sold inventory of launched projects and construction spend remaining. Pawan Lohiya  AVP & Head of Finance answered that total receivables from sold would be around INR1,500 crore and the balance construction spend would be about INR1,400-1,500 crore.

• Himanshu Upadhyay with O3 Capital also asked about the value of pending inventory to be sold in the launched projects and the value of it. Pawan Lohiya  AVP & Head of Finance said the pending inventory in the launched projects would be around 1.8 million sq. ft., with an [ATR] of approx. INR6,000.

• Darshan Zaveri from Crown Capital asked about the revenue expectation for FY23 and the expected EBITDA PAT margin expectation. Rahul Talele Group CEO answered that the revenue number will be close to INR1,800 crore plus. And EBITDA margin is expected close to 25%.