Man Infraconstruction Ltd (MANINFRA) Q4 FY23 Earnings Concall Transcript

Man Infraconstruction Ltd (NSE:MANINFRA) Q4 FY23 Earnings Concall dated May. 10, 2023.

Corporate Participants:

Yashesh Parekh — AGM INVESTOR RELATIONS & CORPORATE FINANCE

Manan Shah — Managing Director

Parag Shah — Chairman Emeritus

Ashok Mehta — Chief Financial Officer

Analysts:

Manish Ostwal — Nirmal Bang — Analyst

Khushbu Gandhi — Yes Securities — Analyst

Mayur Liman — Profitmark Securities — Analyst

Mitul Shah — Reliance Securities — Analyst

Abhay Shah — IIFL — Analyst

Amresh Kumar — Geosphere Capital — Analyst

Yogesh Bhatia — Sequent Investments — Analyst

Unidentified Participant — — Analyst

Lakshminarayanan — Tunga Investments — Analyst

Bhavna Jain — Avagrah Capital Advisors — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to Q4 and FY23 earnings conference call of Man Infraconstructions Limited hosted by Go India Advisors. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions]

I now hand the conference over to Yashesh Parekh, AGM, Investor Relations & Corporate Finance from Man Infraconstructions.

Thank you and over to you sir.

Yashesh Parekh — AGM INVESTOR RELATIONS & CORPORATE FINANCE

Thank you. Good afternoon everyone. A warm welcome to everyone attending the Q4 and FY23 earnings call of Man Infraconstruction Limited. We have on the call Mr. Parag Shah, the Chairman Emeritus of the company, Mr. Manan Shah, the Managing Director of the company and Mr. Ashok Mehta, the group CFO of the company. Participants, we must remind you that the discussion on today’s call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks that the company faces.

I would request to refer the Safe-Harbor statement shared in the investor presentation for the same. Now, I would request Mr. Manan Shah, the Managing Director of MICL Group to take you through the business and performance of the company.

Thank you and over to you Manan.

Manan Shah — Managing Director

Good afternoon to all our listeners, I am Manan Shan, the Managing Director of Man Infraconstruction Limited, welcome you all to this earnings call. Financial year 2023 has been one of the most eventful years in the history of MICL Group, where the company has achieved a significant number of milestone in a single year. We have recorded one of the strongest collection this year of INR1,448 crores. This year our company has set the bar higher again by delivering not only one or two projects, but five and attempt to break the records in the real-estate industry. We have delivered three residential projects and two commercial projects in the year 2022, 2023. First Aaradhya High Park, located near Dahisar Check Naka delivered on November 2022 year, we handed over four residential towers out of total six. Secondly, we delivered a commercial tower naming Aaradhya Primus at the same-location near Dahisar Check Naka.

We have also delivered another residential project Aaradhya OneEarth which is located at Ghatkopar East in January of 2023, where we completed and delivered two residential towers out of 7. We have also delivered one more commercial tower naming Aaradhya Square, which is located at Ghatkopar East. Our latest completion also included our Luxury Collection project Insignia which is located at the Vile Parle, West. As our motto says, live better, we always strive to achieve the world-class quality of construction and embed the experience of our company’s legacy into developing an uber luxury real-estate experience, making us a customer-centric company.

Believing in this philosophy, we have delivered all of these five projects. This milestone sets a record for our company, by delivering 7.1 lakh square feet of carpet area, wherein all the projects were delivered at least 12 months before the committed timeline. To highlight one of our luxury projects located in Vile Parle, West naming Insignia was delivered in fact 1.5 years ahead of the delivery schedule. This sets a record in the industry and we are confident to try to create these records for our future deliveries as well.

Our in-house construction team with over 50 years of experience helps us in shaping our ideas into reality. This business model, not just enhanced our productivity of delivering projects ahead of the time schedule, but helps us in crafting spaces with efficiency and excellent quality of construction. This, in-turn adds us in improvising our cash flows and getting robust collections. During the financial year of 2023, we have launched three new projects across different categories with a carpet area measuring 7,22,000 square feet. This has also broken our own records of launching of total 7,22,000 in a single year.

We have also launched a project called Aaradhya Parkwood measuring approximately 300,000 square feet of carpet area, which is located near the Dahisar Check Naka where we are targeting the middle-income and the upper-income segment and I’m very happy to announce that the project is already more than 50% sold-out during our launch period. MICL Group has also launched an ultra luxury project in the vicinity of Juhu called Aaradhya Evoq and in which that project is also sold more than 65% as on-date. In our other project at Mulund naming Atmosphere O2 we have recently launched a new tower and we are experiencing a flow of steady bookings for the same.

During the financial year, we sold 4,34,000 square feet of carpet area across all our ongoing projects with a sales value of INR992 crores. This approximately 60% of the sales were contributed by our new projects. Now, heading towards our most awaited project launch Aaradhya Avaan which is located in the region of South Mumbai, Tardeo. I’m happy to announce that the construction activity has begun in-full swing. We have acquired most of the approvals for the launch of this project and we shall hit the market soon.

The experience center is completed with a show flat and both of them shall be opened for viewing for our customers as we progress with the launch. Our team is prepared and we are geared up to hit the market in the near-future. The launch of Aaradhya Avaan project shall create history and we are very proud to say that this can be the tallest tower of India. We have envisioned this project as an architectural icon — on the global skyline and we are confident to achieve this vision with a record-breaking timeline as our previous projects.

We have also received a height approval for the complete tower, which is more than 300 meters. In such a short span of time, we have developed a strong goodwill amongst our customers, channel partners where more than 90% to 95% of our inventory in majority of the projects and the entire inventory in few of our projects is sold-out and not forgetting the most important factor that each project is delivered before time. Currently, we are having. 2.9 million square feet of portfolio in ongoing and upcoming projects catering to diversified customer groups, location and categories ranging from the middle-income segment to the uber-luxury.

Our presence in real-estate portfolio ranges from Tardeo at South Mumbai to Mira Bhayandar. The others above include Mulund, Ghatkopa, Juhu and Vile Parle. This displays our diversity of catering to varying income groups. We also have another 1.7 million square feet of projects in the pipeline. Moving on to the EPC division, we delivered Phase-II of the IPRCL project measuring 10 hectares. During the year we also delivered 1.2 million square feet of construction area in Aaradhya Highpark by completing four out of six residential towers and one commercial tower Aaradhya Primus. We also recently completed and delivered the project Insignia in Vile Parle West on May 2023 which was 19 months before the time.

The execution of the BMCT Phase 2 project at JNPT, Nhava Sheva, Navi Mumbai is on-track and ongoing as per the schedule. Currently, the order book of the EPC project stands at INR980 crores plus as on March 2023. Now sharing some light about our international portfolio. In the last fiscal year, our subsidy company MICL Global in a joint-venture Edition Residences the first branded project by Marriott International at the location of Fort Lauderdale. The project measures 1,75,000 square feet of saleable area and is seeing excellent response from customers and seeing a very good footfall at our sales office. Our other projects such as Urbin at Miami Beach and Ponce at Coral Gables are in the initial stages of approval.

The company has invested around $25 million in the US portfolio as on March 2023 and we see excellent potential and expect good margins coming out of these projects. The expected project timeline should vary between three to five years from today. Let’s run through the highlights of the consolidated financials of the company, post which we can do a question-and-answer round. In the last five years the consolidated revenue from operations has grown more than 5 times. Both the divisions, our EPC and Real Estate division has grown by 50% plus CAGR between financial year 2019 to financial year 2023.

Financial year 2023 records 97% growth year-on year in revenue from operations to INR1,890 crores. Both divisions contributed nearly 50% to the topline. Real-estate revenue from operations grew by 52% year-on year to INR972 crores. EPC revenue from operations or the contract revenue grew by 186% year-on-year to INR918 crores mainly driven by the fast execution of the BMCT project of course followed by the residential projects of Dahisar and Mulund. Consolidated EBITDA also witnessed a strong growth of 67% year-on-year to INR413 crores. Like-to-like consolidated net profit has registered a robust growth of 137% year-on-year to INR259 crores for financial year 2023.

Even after removing the positive impact of the BOT claim which we received in the fiscal year of financial year 2022. The strong profitability of the company and record collections resulted in strong cash-flow from operations of INR448 crores as of March 2023. The company also consistently focuses to reduce debt and improve liquidity, which has helped in maintaining balance sheet strength. In the year FY 2023, there has been consistent debt reduction in each of the last four quarters, mainly through internal accruals with good profitability and strong collections, which have resulted in a significant secured debt reduction of roughly INR313 crores in financial year 2023. The company to be net cash positive and has liquidity of INR300 plus crores as on March 2023.

Overall, we will continue to undertake projects that add to the topline and strive to improve profitability and maintain balance sheet strength going-forward. Thank you. And now we are open for the question-and-answers.

Questions and Answers:

Operator

Thank you very much. [Operator Instructions] We have our first question from the line of Manish Ostwal from Nirmal Bang Securities. Please go ahead.

Manish Ostwal — Nirmal Bang — Analyst

Yes sir, thank you for the opportunity and very strong set of numbers for the financial 2023, many congratulations to Manan and your team to deliver strong core operating performance. My first question on the EPC order book side so the order book has declined from December 2022 to 80 — from INR1325 crores to INR980 crores in March 2023. So how one should think about the order book growth in the EPC revenue growth in FY 2024, 2025 over the medium-term?

Because we are continuously increasing our real-estate portfolio. So how should we look at this line of the business in terms of growth for the next couple of years?

Parag Shah — Chairman Emeritus

Good afternoon, this Parag Shah. As far as EPC order, we are in the pipeline of few orders on the infrastructure side. We are expecting that few orders get confirmed by this month-end and the tender process is already over. So let’s wait for that as far as infrastructure side is there plus our own EPC contracts from our own real-estate division which we are expecting to start two to three new projects in coming six months time. So that order book will also continue.

I am not worrying on that the order book will reduce, in fact this year, we believed that the order book on the EPC side will also further increase. Thank you.

Manish Ostwal — Nirmal Bang — Analyst

Sure, second sir, on your upcoming projects pipeline so can you specify the carpet area of two project luxury project in Vile Parle and luxury project in Ghatkopar? You mentioned the other two but these two, it is not mentioned in the presentation.

Parag Shah — Chairman Emeritus

Vile Parle, we have more [Indecipherable] the total construction area is approximate 15 lakh square feet plus and the total carpet area for sale is around 4 lakh square feet which we are expecting that project should start by September. Sorry, what about the second project you mentioned?

Manish Ostwal — Nirmal Bang — Analyst

The Ghatkopar luxury project?

Parag Shah — Chairman Emeritus

The Ghatkopar luxury project is under the signing it’s yet not signed, but any moment we are paying the stamp duty and the document will get registered and then we’ll declare.

Manish Ostwal — Nirmal Bang — Analyst

Sure, and project launch in the Edition Residences in quarter two FY 23 in Florida so how much I mean, how do you see the sales potential from this project at a consolidated level for the company?

Parag Shah — Chairman Emeritus

Project is not yet not launched for sale. Some of the primary sale has been done over there but approximate between the two large projects, one at Coral Gables and one at Fort Lauderdale the topline of the company where we are a partner into it should be somewhere around $700 million.

Manish Ostwal — Nirmal Bang — Analyst

Okay and sir any update on the timing of equity raise of INR500 crores?

Parag Shah — Chairman Emeritus

No, we are not raising any equity, we are not intending to raise any equity immediately.

Manish Ostwal — Nirmal Bang — Analyst

Yeah, good to see the presentation piece on the Aaradhya Avaan and all the best to team Man Infra for such a iconic project. Thank you.

Parag Shah — Chairman Emeritus

Thank you very much.

Operator

Thank you. [Operator Instructions] We have our next question from the line of Khushbu Gandhi from Yes Securities. Please go ahead.

Khushbu Gandhi — Yes Securities — Analyst

Sir, thank you for giving me the opportunity. So my first question is like, it’s surprising to know that there is no debt in your books. So just wanted to understand that how sustainable it is going-forward, because we have Tardeo project being kicking in and also the EPC order book. There also we may be having some working capital requirement. So, do we expect that going-forward our debt would be increasing and when we receive this projects or will we be having more debt going-forward also?

Parag Shah — Chairman Emeritus

Many people are surprised many times that how this company is performing without the loan. But mainly like as far as what we had asked the question on Aaradhya Avaan there also we are on DM model. The equity participation from our side is completed. If further equity will be required there is a bank loan provision but that loan will not come on the balance sheet of Man because the loan will be taken by the landlord, on his company the loan will be there. So we do not have any burden of loan.

As far as last 30 years track record yes, we have been able to perform without debt, at present, with the current today’s position I think INR140 crore is loan in different subsidy companies but we have that much liquidity also with us. Some of the loan has been taken as an only facility just to maintain the banking relationship or for a future opportunity. So, that’s the business model over here like we do our own EPC projects. We do that much projects only what we have a capacity to invest and we choose partner if required, we always take partners in our various projects and we don’t go for the loan. Thank you.

Khushbu Gandhi — Yes Securities — Analyst

And sir, one more question. So now when we say that interest rates have been panning at good speed and now affordability of the consumer are also taking a high side — like the expense side. So how do we foresee demand going forward in FY 24? Is it going to little bit settle down or be good in FY24 and FY25?

Parag Shah — Chairman Emeritus

See, it is case-to-case as far as Mumbai is concerned. I know many developers that do not ever sell, I know many developers, they have a steady sale and I know many developers like Man Infra when we launched the project, we have been able to sell more than 50% of the product in the pre-booking only. So it cannot be a generous statement but the real-estate market is doing good since last two years and I personally believe that it will continue for next two to three years. If a good product is there, the product celebrity is there, it all depend on your design, it all depends on your location, it all depends on your track record and the quality of work.

And we have been able to succeed, since so many years and we would like to maintain that. Thank you.

Khushbu Gandhi — Yes Securities — Analyst

Thank you sir.

Operator

Thank you. [Operator Instructions] We have our next question from the line of Mayur Liman from Profitmark Securities, please go ahead.

Mayur Liman — Profitmark Securities — Analyst

Thank you for the opportunity. My question is on the expenses side. Margin was disturbed due to the increase in the expenses, the cost of material and the other expenses increases during the quarter and the year. Is there any reason for that sir?

Ashok Mehta — Chief Financial Officer

See. For EPC and real-estate what we have to see is on the annual basis what we always say, because on quarterly basis from project-to-project basis when it is a combination of all the projects, so some projects maybe we are at initial stage some maybe at the advanced-stage, some maybe at the closing stage. So if you look at historically on annual basis, the margin for EPC as well as real estate, they both are maintained. So we always try to make sure that those numbers are achieved.

Parag Shah — Chairman Emeritus

And we always advise everyone — in my any previous con-calls also, personalized meetings also that the EPC contracting company or a real-estate development company, you as an analyst, you should not see only quarter-on-quarter results because as Ashok bhai just mentioned, the project can be at a different phase. So every quarter there can be a plus-minus, profitability, but we work under the AS7 so overall, the margins will definitely maintain the same, what we are projecting.

But my guidance to all investors will be, you should not see only quarter-on-quarter results. You should see the quarter-on-quarter result, along with yearly results.

Mayur Liman — Profitmark Securities — Analyst

Yes sir, sure sir. My follow-up question, can we see the same raw material price for the ongoing quarter or it will be changed?

Parag Shah — Chairman Emeritus

Again, my answer will be the same, because the last quarter, I may have done some project where a situation was going on, in this quarter there can be — a foundation work can be going on so it cannot be a standard answer.

Mayur Liman — Profitmark Securities — Analyst

Okay, no problem sir. And my second question is could you please provide guidance on the FY24 outlook. What kind of plan for the FY24?

Parag Shah — Chairman Emeritus

For FY24 yes, we are focusing on EPC contracts but we are more focused on the EPC contract on the infrastructure side, mainly focused on the port sector, which is our niche area where we are having a specialized reputation is also there. So where we are more focused and far as the building line construction is where, we are doing now our in-house only, we have stopped contracts from outside developers since last three years and this year also we are not looking, because we have our in-house projects also in our pipeline, a very heavy pipeline will come for next three years. So we do not expect to take the work from outside developers in current financial year.

Mayur Liman — Profitmark Securities — Analyst

Okay, thank you so much sir.

Operator

Thank you. We have our next question from the line of Mitul Shah from Reliance Securities. Please go ahead.

Mitul Shah — Reliance Securities — Analyst

Sir, thank you for the opportunity. Sir, first question is on two-three years down the line, how we should look at in terms of revenue contribution from different verticals like EPC versus non-EPC and how are these order book as well as your outlook — not from next one year point-of-view but to the three, four years kind of horizon point of view?

Parag Shah — Chairman Emeritus

The projects which we are under execution, the projects which we are under negotiation and the projects which are about to get started because of — it’s not yet started because of some of the government approval. If we look into that we have a pipeline of more than 1 crore square feet in-house jobs, as far as the EPC contract works are there. But wherever we are a developer and where it is our 100% subsidy company we know everything under one umberella. So you will not see the EPC side different and the real-estate side different because we are a real estate developer also, and we are doing our in-house EPC also.

But yes, wherever we are partners with some of the other developer or we are taking a projects under DM model where the EPC orders will also come. But even in the DM model where the developer with whom we had signed, all the materials will be purchased by the developer, the margins on the material will be payable to us, so where our PMC professional fees will be there. So suppose, I’m doing INR1,000 crore work, but my balance sheet you will recognize, maybe INR200 crore only and out of INR200 crore my margins could be INR100 crore also. So we are more focused on in-house work and on a DM model where we are a partner.

And as I mentioned and the infrastructure is also there. But yes, we have more than 1 crore square feet jobs in pipeline. So for next five to six years we have jobs in-hand.

Mitul Shah — Reliance Securities — Analyst

So this ratio — revenue breakup will not change much?

Parag Shah — Chairman Emeritus

No, the issue will more or less remain same.

Mitul Shah — Reliance Securities — Analyst

And second question on this 1.7 million square-foot pipeline project, if you can give more details in terms of how are this project and would be the delivery timing etc. What is the pipeline details exactly for next?

Parag Shah — Chairman Emeritus

See, as I mentioned that we are starting one project, luxury project at Parle which is 15 lakh square feet plus construction area is there which we are estimating to start the job by September. We just started the Aaradhya Avaan which is Tardeo which is also approximate 15 lakh square feet. The project which is under signing and we expect to get it signed believe in next few days time at Ghatkopar, which is also at approximate 17 lakh square feet. So these are the three jobs, immediately starting. And there is jobs are under pipeline, which will take six to eight months to start the work.

Mitul Shah — Reliance Securities — Analyst

Lastly, on the per square-foot realization trend compared to last quarter that is in March quarter versus how is the trend in April and May. Any moderation or any [Indecipherable].

Parag Shah — Chairman Emeritus

Price per square feet more or less is same. See, if you see the Mumbai market, everywhere the celebrity is good. If your product is good, immediately the product can be a sellable product. But the price, since last two years more or less all over Mumbai movement is in a stagnant phase except some specialized projects. So I do not expect that the market is going to improve in terms of rates, but there will be a delivery, there will be more square feet area coverage would be there. But to expect that more or less the price will remain the same.

Mitul Shah — Reliance Securities — Analyst

Especially for luxury segment, wherein last quarter was a higher demand because of this budget announcement of INR10 crore, so luxury segment reported record-high bookings that may not come in next few months. So there, do you see any moderation in luxury side?

Parag Shah — Chairman Emeritus

That is actually a misguiding figure because we all know that there was high-net worth purchase were there and there were a few flats in Mumbai which has been sold at INR250 crore a single flat or INR350 crore, a single flat or someone has bought a house last year of INR1,000 crore. That figures will go up, if you will take the figures from a stamp duty collection point of view, government point of view, yes you will see there is a high-demand, but it’s a case-to-case — a specialized case. It’s not everywhere.

Mitul Shah — Reliance Securities — Analyst

Right, understood sir. Thanks a lot and all the best.

Parag Shah — Chairman Emeritus

Thank you.

Operator

Thank you. [Operator Instructions] We have our next question from the line of Abhay Shah from IIFL. Please go ahead.

Abhay Shah — IIFL — Analyst

Good evening sir. First of all, congratulations for the fantastic set of numbers. Most of the questions have been covered, just a view on one thing, Mumbai is going through major redevelopment. Am I audible?

Parag Shah — Chairman Emeritus

Yes.

Abhay Shah — IIFL — Analyst

Mumbai is going through major redevelopment drive, your view on that inventory do you see inventory will start piling up and which, ticket size? The second question is which ticket size are we targeting on the real-estate side?

Parag Shah — Chairman Emeritus

See, we are focused on at this moment, Dahisar also, Mulund also, Parle, Ghatkopar South Mumbai. Everywhere the product sizes are different, like if you talk about the Dahisar — Mira Road side, where the price is ranging between INR19 lakhs to INR2 crore. As far as the Mulund is concerned, the price is ranging between INR1.5 crore and INR4.5 crore. The Ghatkopar luxury project, which we are going to launch where the price will be ranging between INR5 crore to INR20 crore. The South Mumbai market is a different market altogether but yes, there also we are coming up with almost 7 lakh square feet — 6,50,000 square feet for this Aaradhya Avaan where also the flat size is varying between INR4 crore to INR25 crore.

Abhay Shah — IIFL — Analyst

Okay. And overall inventory view that everybody is going for the — so just to understand, since you have been doing on a large-scale, so your view is in overall Mumbai we’ll get a lot of inventory, what’s your view?

Parag Shah — Chairman Emeritus

It’s already. Mumbai is already having a very-high inventory, but the product is not saleable. Let’s say, like we are more focused on that Ghatkopar I do not have a two-bedroom, single flat in any of the projects everything has been sold. I do not have a single flat of 3BHK like we were doing one Ghatkopar avenue project which is approximate — carpet area is approximate 5 lakh square feet.

I have inventory balance hardly maybe 25,000, 30,000 square feet that is everything has been sold. But adjoining my plot there are other developers also and I do not want to quote the name, but the very large developer, the very big name, they are very nearby us, they are not successful in their project because of the design.

Abhay Shah — IIFL — Analyst

Okay, that’s good sir.

Parag Shah — Chairman Emeritus

Mumbai is having very high FSI potential, developers will have to understand they are not going to be able to consume full FSI. Because FSI — tremendous FSI has been floated. Now, if you try to fit all the FSI, your planning will get bad. Builders are ready to lose some of the FSI and do a better planning they will be more successful that’s what I believe and that model we have been following.

Abhay Shah — IIFL — Analyst

Thank you sir for answering that. Sir, are we — just your view, one more last question, your view on are we open for the redevelopment projects?

Parag Shah — Chairman Emeritus

We are doing already, we have most of the projects which are redevelopment. Like our focus is new project, which is coming up, that’s a redevelopment, it’s a cluster development of 10 societies. The Tardeo project, which is a redevelopment project, the Parle project is a redevelopment project, the Mulund and the ancillary is virgin land was there, but the Parle which we completed also — that was also redevelopment project.

Juhu which we are doing R&GI [Phonetic] work, that is a redevelopment project. So, today in Mumbai market the redevelopment is going to sustain. How much open lands are balance. That’s the point, Mumbai will change with the redevelopment only because we can create the new land.

Abhay Shah — IIFL — Analyst

Yes, sir. Sir, what’s your view on the commercial side in the Mumbai? Are we looking at it or it’s only the residential sets, sir?

Parag Shah — Chairman Emeritus

We are doing projects in Ghatkopar also, we have two buildings commercial which out of that one building is fully sold. The second building, we have yet not opened, RCC is over, but we have not yet sold anything over there. We may not sell and we may think of keeping it for a rental premises also like, we might leave it on a rent. We are doing a building just to Mulund which is a commercial tower where also. I think 70% 75% we have sold already and which we’re expecting to complete by this September, I think we are expecting.

So commercial market is good right now. Not a very big ticket size the big-ticket size are available on a rental model is more — only one is there. But approximately 300 square feet to 1800, 1900 square feet offices are in much demand.

Abhay Shah — IIFL — Analyst

Okay sir. Thank you. That’s it from my side sir.

Parag Shah — Chairman Emeritus

Thank you.

Operator

Thank you. [Operator Instructions] We have our next question from the line of Amresh Kumar from Geosphere Capital, please go ahead.

Amresh Kumar — Geosphere Capital — Analyst

Thank you for the opportunity.

Operator

Sir, we cannot hear you clearly. Please use your handset.

Amresh Kumar — Geosphere Capital — Analyst

Hello. Thank you for the opportunity sir. So, congratulations on a great set of numbers.

Parag Shah — Chairman Emeritus

Thank you.

Amresh Kumar — Geosphere Capital — Analyst

I just wanted to understand one thing, so almost two-thirds of your ongoing projects is already sold-out. So not much inventory left for you, on those ongoing projects and now that you have sold all those projects, you must be having some idea of the cash flows as to how much you’re going to accrue in terms of cash flows. How much you are going to — incurring costs and etc, so if you can give some idea of how much cash-flow will come to the balance sheet and how are you going to spend it, either in the new projects, or the land or maybe to the shareholders, any idea on that?

Parag Shah — Chairman Emeritus

See, it’s a dividend-paying company, every year we pay dividend and in fact we declared interim dividend yesterday only when we had the Board meeting, we had already given 18% first interim dividend for current year. We have liquidity, we are looking for new projects also and there are so many projects are there, which are under pipeline so which may start in two to three months’ time.

So we have enough cash-flow. Till now whatever the projects we have in hand we have a financial closure for that. So I think we are sitting on cash liquidity of INR300 crore plus, so we have still much — pockets are still balanced to fill, so we can definitely take up a new project.

Amresh Kumar — Geosphere Capital — Analyst

Okay. Got it sir. Maybe I can get more clarity on this later on, sir, one more thing, since there is so much of infrastructure projects going on in Mumbai how do you think that will change the landscape as far as real-estate industry in Mumbai is concerned? We keep on hearing thoughts from other people also, but your own thoughts would be very helpful in that regard.

Parag Shah — Chairman Emeritus

See, the real-estate and infra, both the sectors has to go parallelly. If the infrastructures will not be there then the real-estate can also not go ahead. So at present in Mumbai so many works are under development under MMRDA and all with new connectivity, new bridges are coming up. So that is must and I believe that this government is doing good on this part. So, next three years I have been seeing that once the Metro — all the lines will start I think the Metro, all the line — I’m into politics also, so I’m aware about that, so all the metro line will start by 2025-2026 then the connectivity will be much higher.

And without the infrastructure, how the people will stay in Mumbai? So that is the core planning of the government also and we will focus on that also and we will support also.

Amresh Kumar — Geosphere Capital — Analyst

Okay. And sir, just going back to one question asked by the other participant, have you increased the prices on the remaining unsold part of your inventory or is it the same price as the case earlier?

Parag Shah — Chairman Emeritus

When we launch a project before two years and today, yes, there is 15% 20% price hike is there but that’s normal, 8% to 10% price hike yearly is taking care of inflation also.

Amresh Kumar — Geosphere Capital — Analyst

Okay, so 8% to 10% price hike has happened in line with inflation, is what you’re saying?

Parag Shah — Chairman Emeritus

Yes. In every project, there is a 5% 10% but — the developers are habituated to price hike of 30% and 40% which is not happening. But yes 8% to 10% price hike is everywhere. Unless your product is weak, unless you equitation is bad, that is a different story, but the good product and the good reputation we have been able to sell it to the right price.

Amresh Kumar — Geosphere Capital — Analyst

And sir, how about, since you’re a major player in redevelopment projects, has the velocity in getting those redevelopment projects, has it become more difficult off late and if that is the case, is it leading to rethinking your own strategy?

Parag Shah — Chairman Emeritus

See, redevelopment with societies or with tenants is always a patience game. It doesn’t happen overnight. If you are talking about any large re-development it’s a span of, two years whatever speed you may be doing it becomes two years. But still there is a viability because you are not investing the money in your land, we are not blocking your fund, so there is a, in my company, we have a team like they are negotiating for a re-development with various societies.

Considering today we will start talking and the work will start after 1.5, two years, we will get the order. So that’s a separate division that division is only working on the redevelopment future projects only and the execution team is completing the project.

Amresh Kumar — Geosphere Capital — Analyst

Sir, my last question is one your Mulund projects. One particular project in that, there only about one-fourth of the units have been sold off, abut one-forth, is it because the selling part is being done by your partner rather than you or is there any particular case there?

Parag Shah — Chairman Emeritus

It’s a slightly tricky question but that you are talking about the G Tower. The G Tower has been just launched in last four months’ time. So it is still under the plinth it’s a 48 storey building and we are still in the plinth. So you can compare that — you need other buildings also. But yes, we are — there three partners are there and the responsibility has been distributed, but it is like that one partner is managing one show, so on a day-to day business he is managing the sale. But if anything starts, we are already there with them and I’m managing the finance, I’m managing the execution of the product, which is my day to day responsibility. If I start, then even they are helping me. But, what your question is that only 25% sold, is that we believe that there is a good sell, it is not a bad sell.

Amresh Kumar — Geosphere Capital — Analyst

Got it. No sir, rest of your projects sell like very fast.

Parag Shah — Chairman Emeritus

We have to understand here, there is a more than 1,000 flats are there. So percentage wise, if we count like if I am launching 10 flats, and I’ve been able to sell five flats, I will be able to claim those unsold 50%. But when I have 1000 flats, even though I sold 250 plus I have to claim that I have sold 25% only.

Amresh Kumar — Geosphere Capital — Analyst

Got it sir. Sir, how much money will be required to mobilize work at Tardeo project?

Parag Shah — Chairman Emeritus

I have already answered that. I am repeating the answer, the money what was required had already been inserted, not only the construction finance will be required that also has been tied-up by a developer with IndusInd Bank. The loan is already there, plus our capex is also a little and we have started booking also where cash-flow from that booking will also start coming now.

Amresh Kumar — Geosphere Capital — Analyst

Got. Thank you so much for your patient answering of my question.

Parag Shah — Chairman Emeritus

And as far as that project is concerned, our direct responsibility is a construction, marketing and sales. Finance is not actually our responsibility because we are on a DM model.

Amresh Kumar — Geosphere Capital — Analyst

Got it sir, thank you so much. Thank you.

Operator

Thank you. We have our next question from the line of Yogesh Bhatia from Sequent Investments. Please go ahead.

Yogesh Bhatia — Sequent Investments — Analyst

Congratulations on a very good set of numbers. I wanted to know what is the runrate we are seeing at for FY24 for delivering how many lakh square feet can we deliver in FY24?

Parag Shah — Chairman Emeritus

In next 5 years’ time we will be able to deliver more than 5 million square feet, we can’t commit after every six months because it’s a difficult question for me to answer on the phone, immediately.

Yogesh Bhatia — Sequent Investments — Analyst

Okay. Thank you sir.

Operator

Thank you. We have our next question from the line of Arshith Kotty, an Individual Investor.

Unidentified Participant — — Analyst

Hello?

Operator

Yes sir, we can hear you. Sir, there is background noise coming from your line.

Unidentified Participant — — Analyst

Congratulations on all the front sir.

Parag Shah — Chairman Emeritus

Thank you very much.

Unidentified Participant — — Analyst

Sir, one simple question which I want to ask you is, do we expect any major policy changes at a government level or a BMC level on a redevelopment, which would benefit the company more? And second, do we expect to have the same run-rate what we have reported in this quarter going-forward.

Parag Shah — Chairman Emeritus

First question’s answer I won’t be able to give because I am into politics also so I do not want to go into any controversial statement where my business and BMC policies are concerned.

Unidentified Participant — — Analyst

I understand sir.

Parag Shah — Chairman Emeritus

But I can only say that the current government is really doing a good job and it will be more beneficial to real-estate development overall but that time will say. The second question sorry, I forgot your second question.

Unidentified Participant — — Analyst

The second question is, can we expect the same kind of run rate going-forward, what we have reported in the current quarter or better than that?

Parag Shah — Chairman Emeritus

Yearly basis, yes. It may not be, again, I’m saying that my balance sheet you will never be able to understand if you want to understand on quarter-on-quarter. But yes, the current year, we expect as in the last year.

Unidentified Participant — — Analyst

So in that case, if you could just give us some guidance in terms of, is it always whenever we are launching new project are we majorly going-in for a booking of two-third or 50% of it in the balance after completion. What is our policy on that?

Parag Shah — Chairman Emeritus

Like in Gujarat, we still [Indecipherable] 100% product will sell, I will sell and we sold also in past, like when we had launched Mira Road project we had launched 667 flats and we sold on day one. Every flat has been sold, like Mira Road we have completed four towers, and I think I have one flat only left and too also because there was some dispute by a developer — by purchaser, he was not being able to pay and we won in RERA and that flat came back to us so that’s the only flat which is left out of some — more than 1,000 flat.

The second phase, which we are going to complete in next three to four months time with [Indecipherable] is already completed and the finishing is also nearer to completion where also hardly 12 or 13 flats are left. But we believe that we are a developer, we are not a investor. So, my job is to make the product and sell. If I will start doing the job of a investor only then I cannot run the company, so I strongly believe that my job is to. manufacture and sell.

Unidentified Participant — — Analyst

I understand. Then wouldn’t that put you at a greater with regards to the commodity price volatility?

Parag Shah — Chairman Emeritus

Generally, no, because we do first of all — because that much cost itself in the interest cost, because other projects — if other developers are there, they are borrowing the money, they are paying the interest. We are not paying the interest. We always count in our present section of so many years experience that the cost of the construction will shoot up and we should take that 1% or 2% or 5% risk is fine, because the cost of construction is what, INR4000, INR5000 a square feet, where we are considering a INR5000 a square feet cost of construction there the sale price is INR35,000 to INR40,000 a square feet. If that INR5,000 cost will shoot up to say 10% then rate will become INR5,500 so INR500 against the INR40,000 is actually nothing. So that much risk we should always take rather than paying bank interest.

Unidentified Participant — — Analyst

Okay. Thank you sir.

Parag Shah — Chairman Emeritus

Thank you.

Operator

Thank you. [Operator Instructions] We have a question from the line of Lakshminarayanan from Tunga Investments. Please go ahead.

Lakshminarayanan — Tunga Investments — Analyst

Thank you. Two questions, first is, from a capital deployment point-of-view outside India, what is the total capital you’d like to deploy, how much is deployed and how much you think will get deployed over the next three to five years that’s my first question.

Parag Shah — Chairman Emeritus

Till today we have invested somewhere around $29 million in US but we have $15 million as liquidity also there, so we have invested $14.5 million till how and $15 million we have balance over there for the future projects or the projects which we already have taken, the next capital installment when it will come that money has been transferred. So, there we are not expecting to transfer more fund now because at least for next one year we don’t need any more capital there.

Lakshminarayanan — Tunga Investments — Analyst

Got it. The next question is that you have generated good free-cash flows this year. What is an outlook of cash-flow generation for the next couple of years, whether it be in-line with this or how does one look at it, should we look at it on a — is this year an aberration or should we look at it on a block of three years, how do we look at it?

Parag Shah — Chairman Emeritus

We believe that our cash-flow will further improve because there are many projects which are nearer to completion the cost of competition is almost completed by say 95% and 5% cost is balanced, but the receivables are more than 20% of our balance, like my Ghatkopar project is there, my Parle project is there. My Atmosphere project is going to complete. So that cash flow will come. We are expecting some of the claims from government also which is also in the final stage so that will also further improve your cash flow.

And we are always very conservative on our policy. Like I like to sleep on cash, so I need always a bank balance. So that cash flow will always continue and we sit on liquidity and I strongly believe that because of liquidity, only we have been able to win in recession market also or where the market is very good also, we were not much affected, even the last so many recessions, in my career I have seen four, five recession but we always stood there because of the cash liquidity.

Lakshminarayanan — Tunga Investments — Analyst

Got it, on a slightly longer-term point-of-view maybe 5 years or even 10 years, right as we grow, we have grown very, very strong in the last couple of years. What are main risk you actually see, other than the normal risk people talk of in terms of recession etc, right and which is what you are working on. So, if you can just pencil out the top three or four risk you actually foresee in the next four, five years as you actually scale-up because you’re scaling up very fast and very prudently, but love to hear your view.

Parag Shah — Chairman Emeritus

See, in India doing a business is a risk and I am giving this statement with very sound awareness only. The business in India is a risk but how you manage your risk that is important. We have been able to successfully manage in last 30 years I started my career in 1991 with INR1 lakh paid-up capital. Investment we need first, and then after I had never invested INR1 in Man Infra. And I have been able to manage that. The risk will always be there, some government policies will change, yes we may also get affected. But how much risk you’re taking all depends on you. So I believe that God is with us, we are very successful in that managing the risk and we will be able to manage that in future also.

Lakshminarayanan — Tunga Investments — Analyst

Thank you.

Operator

Thank you. We have our next question from the line of Bhavna Jain from Avagrah Capital Advisors LLP. Please go ahead.

Bhavna Jain — Avagrah Capital Advisors — Analyst

Congratulations on the good set of numbers to the whole team first. And thank you for this opportunity. Sir, I actually had a question regarding your portfolio share, like I can see in the presentation that the mid premium segment is around 24% and the premium segment is around 71%, so how do we see this going ahead? Is this share going to differ, if you have any plans as such. The reason is I wanted to know the return on capital if there is a big difference in these two segments as such.

Parag Shah — Chairman Emeritus

Frankly speaking what we are saying the luxury product for a mid premium product is all definition of what is luxury. People like to read luxury products, so my team renamed it as luxury product. INR35,000 INR40,000 rate, INR45,000 rate in Mumbai is no more a luxury product. But yes, we have a project as I mentioned back it varies between INR17,000 and INR18,000 carpet per square feet to around INR45,000 INR50,000 per square feet. But it’s not a very high premium products, these are standard projects like INR35,000, INR45,000 rates are going on Borivali also.

With the same price you may get at Lower Parel also the same price, you may get it Mulund also, in Ghatkopar also as well as Juhu also. So this is according to me this range has become a mid section range. But we all attribute that around that INR10,000 INR15,000 rate is low-income product, INR15,000 to INR25,000 is a mid income product, INR25,000 to INR40,000 is a luxury and above INR40,000 is super luxury product, this is all set in our mind. For the same figures, we have been talking before 5 years also.

After 5 years if we put the inflation figure also, what was there in INR40,000 before 5 years today the prices are maybe INR70,000 INR80,000 but we do not have any projects which are super luxury products. Even at this Tardeo and all, there also we are estimating INR50,000 INR55,000 a square feet, we are not into the sector of INR1 lakh a square feet.

Bhavna Jain — Avagrah Capital Advisors — Analyst

So the project Aaradhya Avaan, could be, if we tag it as ultra luxury so it’s an exciting project, right, 300 meters tallest tower. So there are other risks also involved in that. So, we generally don’t differentiate between them and the mid premium segment if there is any to the Mira Road area or Ghatkopar or wherever. So the return on capital basically, when we calculate as such, we consider it’s almost at the same range that’s what I understand?

Parag Shah — Chairman Emeritus

Yeah, because there we are not only a developer there, there we are EPC contractor as well we have DM model. If the price is say INR50,000 a square feet I am getting 12.5% — square feet as my DM fees. But if the price will shoot up to INR60,000 my DM fees will remain 12.5% only, or if the price will fall down to INR40,000 then also my price is 12.5%, as far as the sale rate is concerned.

As far as the EPC contract is there yes my EPC margin is already intake whatever the money I invested, I’m getting interest for that money. So for me Aaradhya Avaan is a zero risk product. Unless the project got stalled in-between because of some government policy and all, then it’s a different story, but that we are not estimating because we have all the permissions now in hand.

Bhavna Jain — Avagrah Capital Advisors — Analyst

Okay. Got that and just one question, which is a little on the international presence, a little outlook if you can give on your international presence, because right now, we can see there are only two completed project and ongoing, do you plan to further expand that as well or that may take a little backseat ahead, just little outlook on that if possible that’s it.

Parag Shah — Chairman Emeritus

We are right now focused in Florida, USA. And international, right now we are focusing only on Florida. We completed one single project where it was a trial, it a small two bungalows were there that work is completed. We are starting another project, which we just need [Indecipherable] that is a single bungalow is there.

And there is two projects, which are in local partners over there, one is at Fort Lauderdale one is at Coral Gables which are super luxury residential projects where the prices are somewhere between $12,00 to $1,800 per square feet. So these two products are there. At this moment as I mentioned that we had already invested $29 million in USA, out of that some $14 million is already invested in $15 million is kept as liquidity. But that money we will require for these two current projects also which are large projects. My second installment, third installment payment will be there as far as once the construction will start. So at this moment, we are not estimating to expand more over there, we will take one year and then we’ll expand further.

Bhavna Jain — Avagrah Capital Advisors — Analyst

Okay. Thank you so much and best luck for the team for the future. Thank you.

Parag Shah — Chairman Emeritus

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 management for closing comments. Over to you.

Yashesh Parekh — AGM INVESTOR RELATIONS & CORPORATE FINANCE

Thank you everyone for participating in the earnings call of Man Infraconstruction Limited, we will see you next quarter.

Parag Shah — Chairman Emeritus

Thank you everyone.

Yashesh Parekh — AGM INVESTOR RELATIONS & CORPORATE FINANCE

Thank you.

Operator

[Operator Closing Remarks]