Max India Limited (MAXIND) Q4 FY23 Earnings Concall Transcript

Max India Limited (NSE : MAXIND) Q4 FY23 Earnings Concall dated May. 26, 2023

Corporate Participants:

Rajit Mehta — Managing Director

Ajay Agrawal — Chief Financial Officer

Analysts:

Chaitanya Shah — Silverlight Capital — Analyst

S Chatterjee — SL Capital — Analyst

Amit Mehendale — RoboCapital — Analyst

Anjana Shah — Shah Investments — Analyst

Rohit Mehra — SP Securities — Analyst

Rajat Jain — Private Investor — Analyst

Karan Mehra — Mehta Investments — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Max India Limited Q4 FY ’23 Earnings Conference Call.

This conference call may contain forward-looking statements about the Company, which are based on the beliefs, opinions and expectations of the Company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict.

[Operator Instructions]

I now hand the conference over to Mr. Rajit Mehta, Managing Director, Max India Limited. Thank you, and over to you, sir.

Rajit Mehta — Managing Director

Thank you. Good morning, everybody. On behalf of Max India Limited, a warm welcome to all of you for this Q4 FY ’23 earnings call. For the benefit of the audience that are joining us for the first time, I have with me my colleagues, Ajay Agrawal, who is the CFO for Antara Senior Living and also heads Investor Relations for the Company and SGA investor relations advisor; also Ishaan Khanna, who’s joined us in April as the CEO of Antara Assisted Care Services; Sandeep Pathak, who is the CFO for Max India and the Legal Head for the Group as well; and Ankit Kalra, the CFO for Antara Assisted Care; and Nishant from Investor Relations.

Yesterday, we already uploaded our investors presentation. I hope all of you have gotten opportunity to see that, but I will just take you through the highlights.

Before I delve into the business details, just an update on the unfortunate fire incident that happened in one of our care homes in South Delhi in our wholly-owned subsidiary Antara Assisted Care Services. The matter was under investigation by the police authorities and the ASCS [Phonetic] team cooperated with all the authorities during the process. The police has now filed a charge sheet in the matter against the person responsible for this unfortunate incident, who happens to be a relative of one of the residents. We have been and again express our deepest sympathies to the families and our thoughts remain with them. We assure you we’ll extend all our cooperation in the future as and when required.

Now, let me shift to some of the business highlights. As you can see from our presentation, the growth story is quite visible and we contribute to improve our financial results. Our revenues after adjusting some one-offs that we had last year like the sale of land and some COVID revenues and the revenue from a company called Max Group’s [Indecipherable] if you keep that aside, our revenues have gone up by 16% to INR213 crores in FY ’23, up by 17% to INR60 crores in Q4 FY ’23. Our consolidated EBITDA improved to INR12 crores in FY ’23 from a loss of INR1 crore in FY ’22, that is quite heartening to note. And the Q4 FY ’23 EBITA further improved to INR5 crores from a loss of INR2 crores in the corresponding previous quarter.

Treasury and other monetizable assets which are represented by Max House and the Greater Noida land parcel stood at a healthy number of INR530 crores. This includes a significant treasury of INR80 crores in Antara Purukul Senior Living. I have been stating now that project is PBT positive and cash flow presently are generated. Very strong balance sheet position, a net worth of, on a consol basis of INR542 crores as of March end.

On the residential side in Dehradun, we are only left with four units now. Four of them are inhabited by our General Manager and the doctor in the campus. We have achieved a rise of 25% in our collections from a cumulative INR510 crores in March ’22 to INR638 crores in March ’23.

On Noida Phase 1, very happy to report we have all sold out, all 340 units have been sold out. We have achieved a collection of about INR250 crores, which is a 2.1 times growth over last year. And the other good part is the collection efficiency is 97%, which also looks things that the quality of sales that we have had.

It terms of construction again, very, very happy to report we are ahead of our target, already completed 29 floors in residence one, 27 in R2 and R3 as of March ’23, which literally means we are constructing one floor every 15 days when we had start and we are in line with our aspiration of handing over possession sometime in the first quarter — last quarter of FY ’25.

On Antara Assisted Care, similarly, our overall net revenue increased by 42% to INR16.1 crores in FY ’23 from INR11.14 crores in FY ’22. In the current quarter, the net revenue increased by 54% to INR4.5 crores in Q4 from INR2.9 crores in the corresponding quarter last year. The Care Homes net revenue increased by 50% to INR6.6 crores in FY ’23 compared to INR4.4 crores in FY ’22. And net revenue, similarly, in the quarter grew by 28% to INR1.6 crores led by ramp-up in occupancy with similar contribution margin and some increase in bed capacity as well.

The Gurugram Care Home, which we have been saying that each Care Home in a steady-state basis, should become contribution positive within eight quarters. In the Gurugram Care Home, it is a proof of success. And the margins have improved from negative 25% to 13% in the last eight quarters. And hopefully, as we ramp up occupancy even more, currently it’s at 56%, this 13% number would trend towards a much higher number in the future. And that’s the validation of our model and we would acknowledge that we have put in place.

On Care at Home, the net revenue increased by 18% to INR6.1 crores in FY ’23 from INR5.1 crores, excluding, of course, the COVID revenue in FY ’22 and in the quarter, the net revenue grew by 23% to INR1.5 crores led by our focus on higher-margin service offerings with positive contribution margin of 12% in FY ’23.

On MedCare, the net revenue increased by 86% to INR3.5 crores in FY ’23 from INR1.9 crores excluding COVID revenue in FY ’22 and in the quarter we grew by about 2.3 times. We might see a slight dip in margins in MedCare, and that’s because we revalue some of the inventory and that revaluation has caused some of the deferred gain in the quarter.

Some of you may have joined the call for the first time, so I’m repeating and I’m sorry for others who already heard me say very often that we are perhaps the only organization in India, which is creating a complete integrated care ecosystem for seniors, because we have competencies of hospitality, healthcare, real estate, all available to us under one roof. This is quite appropriate that seniors have the age and their needs change, they are able to look at the same provider. To give you an example, if you look at Dehradun as a residence, move in more and more and each we are finding the needs on healthcare are going up and we are able to easily provide them to our Antara Assisted Care vertical.

In terms of overall market size, the market continues to be very large INR10 billion to INR12 billion. In fact, a very interesting study by McKinsey recently also pointed out that if you look at [Indecipherable] population in 30 cities, that’s about 1.6 crores, which is our target population. They are spending about INR48,000 to INR50,000 per annum on non-healthcare centers, which means a pool of INR40,000 crores to INR42,000 crores is available for tapping through our integrated ecosystem. This data just came out last month.

We are already present in NCR, but soon stepping out into South and West, Bangalore already didn’t get entry. However the team looked at an office space, so I’ll talk more about it as I go along.

Just to reiterate, in the integrated care ecosystem, we four verticals for seniors who are independent, but want to live with like-minded people in a safe, secure environment with primary healthcare services we have independent houses, we call it Residences for Seniors. Dehradun was the first residence that we had, and now we have Noida. And similarly, Gurugram, Bangalore, Pure and similar cases in the future and we have already signed in-principle, the key terms for Gurugram and Bangalore, which my colleague, Ajay, will talk about as we go along.

For seniors who can’t be maintained at home due to age-related issues in terms of mobility, medication, bathing, monitoring or who gone through a intense medical episode and need for recuperation for a couple of months, they can come to our Care Home facilities. Also in India, this is popularly referred to as assisted living, and for people who have cognitive neuro disorders like Alzheimer’s, dementia early stages, we also offer the Memory Care Home option.

For those who require the services at the convenience of their home, we offer Care at Home services from critical care, physiotherapy, diagnostic, nurses at home, caregiver at home, pathology, etc about 16 service lines. And for their recovery and comfort, we also offer a range of products like wheelchairs, commode chairs, walkers, etc as you can see, this is completely now capturing the synergies that we have and now imagine the eight to 10 communities that we want to build in the future, these are actually captive seniors staying with us and whatever needs they have, we’ll be able to fulfill, which means our customer acquisition costs will start coming down the way is coming down in Dehradun or in Care Homes.

We did commence our journey in 2013, have come long, long way from there. If you look Dehradun particularly in FY ’23, we sold 14 units, with an annual sales collection of INR128 crores. The project continues to be cash — debt-free and cash and PBT positive. It’s a vibrant community now with more than 150 residents staying inside enjoying our services in a very pristine environment and the resident satisfaction scores continue to be 90%. And the other important fact in Dehradun is that over 50% of our sales come through [Indecipherable], which is a great vindication of the belief that they have in the product.

We leverage the learnings from Dehradun and put that into Sector-150 Noida. So therefore, we’ve been able to see more success in Noida. Launched in 2020 as a joined development model, it’s already been sold out. And the important thing to remember is, with the last price that we realized was 50% higher from the launch price. To some extent, this helped us neutralize the impact of the rising material cost. Specifically, in FY ’23, we sold 91 units in Noida with an annual sales collection of INR170 crores. To securitize and the seamless construction activity, we have secured a INR75 crore loan term facility from Aditya Birla Finance Limited, out of which already INR40 crore was drawn and now we only have an outstanding amount of about INR22 crores as of March ’23.

We are now preparing for the launch of Noida Phase 2. The RERA application has been filed and we are with Noida and RERA for the approvals. As I said earlier, the key terms for development of residences in Gurugram and Bengaluru already have been finalized. In Bangalore, it’s a very good development, just about 10, 12 minutes from the airport, it’s in North Bangalore. Already two senior living facilities are already in that community, it’s a 200 acre development. So it’s a buzzing township already, and there we have signed the initial agreement and due diligence is now going on. Similarly, in Gurugram it’s from Sector 36A, which is Dwarka Expressway, very close to Delhi. It’s a beautiful development, part of, again, a buzzing community. And this will be our first attempt on a intergenerational community, partly will be match the stage for construction.

In Antara, so far, served about 13,000 patients since inception. We are still the largest player in assisted living of care homes in NCR. We are constantly reviewing and taking calls on what is working, what is not working. So, we are displaying the agility of a start-up and some of this will continue as we go forward. We have expanded our hospital and clinician tie-ups and we have engaged with about 1,000 people, healthcare professionals in FY ’23.

On the medical footprint side, we how have a store, virtual store in Amazon, all the building blocks both for sales and rental for equipment are in place. We have about 1,100 SKUs, will all be private-label the non-comfort Antara branded wheelchairs and this is some senior-specific features, which we refreshed for a long time. For example, the tires on — the wheels are not of rubber, but EVA for a better grip. The bedding of the chair is antifungal. And we also have safety belts for the seniors while in motion. So very thoughtfully designed products. We also working very closely with IIT Delhi on innovations on new products for seniors. We have already sold about 125-plus Antara branded wheelchairs through offline and online channels. And during the quarter, 10 new SKUs white-label products were also launched in the mobility category, walkers and commodes, etc.

We’ve also received the QI certification for our Care at Home vertical, one more vindication of our commitment to excellence in quality. We have been closely working with the NABH, which is the authority, as you know, for certifying hospitals. They have taken out draft standards now for care homes and care at home. And we are part of that committee. Our satisfaction scores in Antara Assisted Care are consistently above 93%. It was a very high conversion ratio of 50% and the news are about 70%, which is again a proof of the belief that customers have in our product and in our service capabilities.

So, to summarize, witnessing high-growth across the four verticals, entering new geographies now, as you can see from what I mentioned. Our aspiration remains consistent, eight to 10 communities, which may have about 4,000 to 5,000 units, about 8,000 to 10,000 residents in the future, about 2000 beds and care home. Of course, we did get impacted by COVID. So this is the plan for next five years. Memory Care Homes across North, West and South cluster in the next five years and we are exploring possibilities, as I too said last time also to now build some digital assets to be able to figure out some health and wellness solutions for seniors with chronic conditions and that is something I’ll talk more about in the year when we have launched those.

This is all from our side. Thank you very much for your patient listening. Happy to answer any questions.

Questions and Answers:

 

Operator

Thank you very much, sir. [Operator Instructions] We take our first question from the line of Chaitanya Shah from Silverlight Capital. Please go ahead.

Chaitanya Shah — Silverlight Capital — Analyst

Hi. Good morning.

Rajit Mehta — Managing Director

Good morning.

Chaitanya Shah — Silverlight Capital — Analyst

My question is regarding Care Homes. Could you tell me what are the total number of homes that are operational as of today and the number of beds that is on?

Rajit Mehta — Managing Director

150-plus beds. Some of that we will rejid [Phonetic] because of the incident, but about 150 beds in NCR. And we are exploring going into Noida as well. And Bangalore already entered, looking for properties there now.

Chaitanya Shah — Silverlight Capital — Analyst

Okay. And the reason for the bed days going down sequentially in the last quarter would be because of the incident, right?

Rajit Mehta — Managing Director

Correct. Correct.

Chaitanya Shah — Silverlight Capital — Analyst

So could you just give me an update on what has happened in the last three months and your standing as of today?

Rajit Mehta — Managing Director

Update in what regard?

Chaitanya Shah — Silverlight Capital — Analyst

In the sense how the — I mean, is that Care Home operational and how — I mean, in terms of reputational impact of that incident overall you are seeing in terms of the brand, in terms of the brand and how it has affected the perception in general?

Rajit Mehta — Managing Director

There’s definitely a short-term impact on contribution margin and not so much in occupancy over the Care Homes. This Care Home is not operational, because the insurance survey is going on. For that, we have to keep it the way it is. But clearly impact did come, but on other case, we continue to have very high occupancy. So no impact seen on that side. No impact seen on Care at Home, no impact seen on MedCare, no impact seen on Residences for Seniors. So did happen — financial impact definitely is there, I can’t deny it, but that’s behind us now. And therefore we’ll now be focusing on rapid growth.

Chaitanya Shah — Silverlight Capital — Analyst

Okay. So what is your target for this year in terms of the number of beds that you’re planning to open?

Rajit Mehta — Managing Director

So, again, it’s a forward-looking statement, but we’re trying to look at 300-plus beds within NCR — some in NCR and some in Bangalore and some in Chennai.

Chaitanya Shah — Silverlight Capital — Analyst

Okay. All right. The other question that I have is on the residential real estate part. Now this is just a broad question in terms of how do you think that this market is going to evolve. In US or in developed markets, if I see, there is a very clear demarcation, where there is a developer, there is an operator and there are REITs in between who own these properties. So do you think that kind of model is going to evolve in India as well or where are we in terms of that evolution in having this system set up, so that there is rapid growth and investment in this particular area of senior homes?

Rajit Mehta — Managing Director

So, if you look at the trend now, we currently have over 55 senior living communities under construction or constructed in India. These were much smaller numbers some years back, and more and more people have stepped into it. The model continues to be that there is a landowner, who does a joint development agreement with an operator like us, for example. And we help in — our core competencies are in designing, in helping sell, marketing and operating the community. So the operations remain with the operator and therefore the developer makes a profit share in the entire process, but does not run.

There’s also — we’ve seen a development in terms of the basic reason a lot was interested these days is, because the senior living facilities have a premium over normal residence. So that’s why you see there are opportunity as a separate vertical to be able to incent sales, and therefore, more and more people are coming forward also do intergenerational. So that’s the shift we have seen in the last year or so on the residential side.

Ajay Agrawal — Chief Financial Officer

But just to answer — this is Ajay. Am I audible?

Chaitanya Shah — Silverlight Capital — Analyst

Yeah, you are.

Operator

Yes, you are, sir.

Ajay Agrawal — Chief Financial Officer

Just to answer your first part, no we are not seeing the US model in India presently, because the REIT concept and the concept of owning a residences and then giving it on a rental basis or a sublease basis doesn’t work in India. We’ll have to be very conscious that in US market, all the expenses of those seniors are funded by government or by insurances, which is not there presently in India. So the return is not at all conducive to get a decision, wherein we do a asset-heavy business. And then we base our life on a annualized miniscule. So that presently is not in India. But going forward, you never know, whenever that market comes — gets improved to that level, we’ll change our products type.

Chaitanya Shah — Silverlight Capital — Analyst

Okay. All right. Thank you so much.

Operator

Thank you. We take the next question from the line of S Chatterjee from SL Capital [Phonetic]. Please go ahead.

S Chatterjee — SL Capital — Analyst

Hi, sir. Thank you for the opportunity. My question, sir, is it in the Gurugram Care Home. Hello?

Rajit Mehta — Managing Director

Yeah, go ahead please.

S Chatterjee — SL Capital — Analyst

That residence is lease property for us or do we own the property?

Rajit Mehta — Managing Director

The Gurugram Care Home, you mean?

Ajay Agrawal — Chief Financial Officer

Yes, yes.

Rajit Mehta — Managing Director

Leased. So all Care Homes will be leased properties. We don’t own any Care Homes and we will never.

S Chatterjee — SL Capital — Analyst

Okay. So the direct — so there contribution margin we are reporting, that is after the lease break or before that?

Rajit Mehta — Managing Director

After.

S Chatterjee — SL Capital — Analyst

Okay. So — and after leasing the Care Homes, I think we spent around INR1 lakh per room to develop it, right?

Rajit Mehta — Managing Director

No, no, no. So it depends on the kind of Care Home that we take on lease. For our full Care Home model, which means they we are operating all the services, it’s bought between a INR1 crores to INR1.5 crores capital cost for retrofitting for safety features. So it depends on the state of the home that we take, but that’s the capital cost. And the beds could be between 35 to 50.

S Chatterjee — SL Capital — Analyst

Okay, sir. So, in quarter four, we need approximately INR1 crore revenue and our contribution margin was 13%. So [Speech Overlap]

Rajit Mehta — Managing Director

But in steady-state, once the occupancy goes up, the 13% will get pushed up as well.

S Chatterjee — SL Capital — Analyst

Yes, sir. Sir, after this contribution margin, what are the cost there, only the administration cost, right?

Rajit Mehta — Managing Director

The actual cost allocation which might happen, otherwise all direct costs which are allocable to the care home are part of this.

S Chatterjee — SL Capital — Analyst

Okay, sir. And this year, we are going to end this with how much occupancy? Can we put it to 65%?

Rajit Mehta — Managing Director

March ’23, about 56% for also Gurugram Care Home.

S Chatterjee — SL Capital — Analyst

I think sir, by the year end what should be the occupancy approximately?

Rajit Mehta — Managing Director

No, this is not for me to comment, but our aim is to look at at least 70%, 75% occupancy, at least.

S Chatterjee — SL Capital — Analyst

70%, 75% occupancy is possible. Okay. Thank you, sir. Thank you. I will get back in the queue.

Operator

Thank you. [Operator Instructions] We take the next question from the line of Amit Mehendale from RoboCapital. Please go ahead.

Amit Mehendale — RoboCapital — Analyst

Thanks for the opportunity. Am I audible?

Rajit Mehta — Managing Director

Yes, please.

Amit Mehendale — RoboCapital — Analyst

Okay. Thanks. So, I have couple of questions. First on the Assisted Care business. Just want to understand little bit on the customer acquisition side and on the scale-up, I mean, we can scale up to like — there is scale up on the beds, that is one side of the thing and the other side is on the customer acquisition. So if you could just enlighten us on these two aspects, that will be helpful.

Rajit Mehta — Managing Director

Sure.

Amit Mehendale — RoboCapital — Analyst

I’m not looking for numbers, I’m looking more for strategy, like how are we looking to expand and what growth trajectory can we maintain.

Rajit Mehta — Managing Director

Got it. Got it. Understand. So, the biggest challenge on Care Home side is always to find compliant infrastructure. But so far, we’ve been able to do that, because the laws in each state are quite different. And we also got involved with the Haryana government about two years back to take out a specific policy, which has now been notified as well, which covers such facilities. So that’s been quite a help.

And for the landlord perspective, it’s a steady income for nine to 10 years easily, because they see the stable client and obviously we’ll take it on a long-term lease. The returns to them are in line with what they get as while on the residential side. So as we go forward, in Bangalore, for example, this category is more prevalent than in the North, so it’s well-known. And there are many, many more operators in Bangalore, so there’ll be little easier for us to scale up and so is in Chennai, because in south in general the senior care concept is little more evolved. That’s on the supply side.

We constantly look out, we have a infra team in place who does scouting of properties as we go different places. On the demand side, the customers come towards primarily through three channels, one is obviously hospital reference, so we have tie-ups with most hospitals in the NCR from Max to Apollo to Fortis to Paras to PSRI to Narayana Herbale [Phonetic] to Manipal, we tied up with everybody, or they come through doctor reference, specific doctors, who are specialists, who are working independently, but deal with such customers, they come to us from there, and we have a full-fledged team which is managing the hospital and doctor relationships, where let’s say, we have had 1,000 engagements in the last year. We also participate in healthcare conferences and put up stalls. So the healthcare fraternity knows about us. The third channel is digital. So we do lot of performance marketing and we are seeing a steady flow coming through that channel. In fact, most long stay come through digital channel to us. So it’s a combination of hospital, doctors, digital currently that is working for us in this regard in terms of customer acquisition. [Speech Overlap]

Amit Mehendale — RoboCapital — Analyst

Great. Thanks. And just, yeah, just a follow-up on the supply side. Like if I were to be a landlord and if I mean going by your comments, if I were to get similar terms as a rental yield, then am I incentivized enough? I mean, is there a challenge on that side to find enough properties to scale up little bit?

Rajit Mehta — Managing Director

The challenge is not willing landlords. There are many, because they get a site to a very stable income actually. Otherwise, the normal tenants there could be a churn every three years. The issue is compliant infrastructure, because our compliance requirements are quite stringent. So I think the landlord is not challenge at all. Our USP is very happy to get consistent annuity income, let’s say, over a long period of time.

I just forgot to add in terms of acquisition. The other channel, which we’re developing is communities. So penetrating RWAs and making them our brand ambassadors to make them aware of this facility.

Amit Mehendale — RoboCapital — Analyst

Got it. Thanks. And with regard to margins, how do you see margin shaping up? I mean, in some of the earlier presentations, we — there was discussion about 12%, 15% EBITDA margin. Do you think we are more or less as the model evolves, we are on track on that?

Rajit Mehta — Managing Director

Yeah. If you see our investor deck, the Gurugram Care Home, which is a proof of success. It’s clearly for you to see that contribution margins beginning in Q4 FY ’21 from minus 140% to minus 25% to minus 3% to 0% and now to 6%, 8% 12% and 13% positive. So every quarter, there has been an improvement, which is a proof of the pudding. And we see this 13% at 56% occupancy. The moment the occupancy is at 75%, this 13% get pushed upwards.

Amit Mehendale — RoboCapital — Analyst

Sure. Thanks. And one last question, on the Care at Homes, we have looked at some of the other players who are fairly large in this and some of the players have also raised private equity money in that phase. So the size of the opportunity seems fairly large, but how are we internally looking at that opportunity and how do we see next two, three years there? What is our strategy?

Rajit Mehta — Managing Director

Yeah. So you’re right, it’s a well-known category. All the players entered the market initially have struggled to make positive contribution. All of them are burning cash as of now. It’s a highly commoditized, very fragmented sector. So our focus has been three things. One, on high-margin services, which is diagnostics, physiotherapy and critical care. Secondly, for us, it works in conjunction with our Care Homes model, because we want to make sure that in the community where we are in we’re able to popularize this service therefore have synergies in infrastructure possible and manpower possible, therefore, customer acquisition comes down. So for us, it’s a very good completion of service. The third, as I said earlier, if you look at our communities, all the residential stay there also need at-home services or medical equipment and they have become a captive customers, so therefore in Dehradun all physiotherapy has been provided by Antara Assisted Care Services Care at Home vertical. And as the residents come in Noida, then in Gurugram, they will become our captive audiences for Care at Home. And therefore, our margins will improve, and this is one advantage we’ll have all the others.

Amit Mehendale — RoboCapital — Analyst

Right. Sir, thanks. That’s it from my side.

Operator

Thank you. [Operator Instructions] We take the next question from the line of Anjana Shah from Shah Investments. Please go ahead.

Anjana Shah — Shah Investments — Analyst

Thank you for this opportunity, sir. Couple of questions from my end. Sir, if you could just highlight some additional details on the intergenerational project at Gurugram, like how big is the project in terms of units? And out of the total units, what will be the percentage that would be dedicated exclusively for senior living? And also can we expect the launch of this in FY ’24?

Ajay Agrawal — Chief Financial Officer

So, in Gurugram, the intergenerational, key highlights are like the property is 11 acres. Approximately one-third will be allocated towards senior living, because of the SSI norms in Gurugram, the one-third area or 3.3-odd acres will give us a delible SSI of 7.5 lakh-odd. So then that means, you will have approximately 21 lakh, 22 lakh square feet of development total. We’ll be developing the project as per present planning, we’ll be developing it on one phase only, the senior living and [Technical Issues] will come in two phases.

Anjana Shah — Shah Investments — Analyst

Sure. Sure, sir. Sir, do we expect the launch by FY ’24 or no?

Ajay Agrawal — Chief Financial Officer

We have just finished the preliminary conditions. Now we are into diligence process and doing final negotiations of final documentation. There is a process of license transfer also happening at the larger contact between the landowner and the developer partner. We expect — we are targeting ourselves for a Q4 ’24 launch. But the time will only tell, it will depend on the licenses etc, which we made.

Anjana Shah — Shah Investments — Analyst

Sure. Also sir, the investor presentation indicates updates on Company entering Bangalore market. So how many projects are being planned in Bangalore and will the Company also launch projects parallely across Pune, Goa, etc?

Ajay Agrawal — Chief Financial Officer

Sure. As a strategy, we will be launching one project in each geography. So we’ll not go with multiple projects in same geography, because, as you can understand, the senior living funnel will be smaller than the normal resi. So we don’t want to take that risk and we don’t want to cannibalize our sales. While it is possible that once we’d launch one project and when we see the success of that, we’ll redo another launch in some timeframe, but not together. So presently, we are talking to — we have already closed our preliminary discussions on key terms with one land owner, as Rajit sir explained in his speech. The diligence is in process. And if that moves fast, then we are very confident that we’ll be able to launch that project within ’23-’24. And as a Plan B also, we are also in talks with other land owner. So that if anything falls in the first opportunity, we have an opportunity with us.

Rajit Mehta — Managing Director

And the Bangalore opportunity is going to be little larger in terms of number of units is going to be probably about 750, 800 units.

Ajay Agrawal — Chief Financial Officer

Correct.

Anjana Shah — Shah Investments — Analyst

Sure. Sure, sir. That was helpful. Thank you very much. That’s it from my end.

Operator

Thank you. We take our next question from the line of Rohit Mehra from SP Securities. Please go ahead.

Rohit Mehra — SP Securities — Analyst

Yeah. Thank you for the opportunity. My question is about the senior residences. What is the overall strategy in our residences for senior segment? And will be there new launches across all markets purely on for senior living or it will be integrated?

Rajit Mehta — Managing Director

So, as I said, the plan is to look at eight to 10 communities In India. Already we have Dehradun, Noida Phase 1 already sold out. Gurugram and Bangalore, the principle key terms already agreed and signed up. And the future geographies in Pune, Goa, Chandigarh under progress. So we want to launch eight to 10 communities in the future, comprising of 4,000 to 5,000 units in all, and about 8,000 to 10,000 residents who will occupy these. So that’s the plan for residences.

Rohit Mehra — SP Securities — Analyst

Okay. And do we have greater benefits if we launch intergenerational communities as compared to standalone senior living community?

Ajay Agrawal — Chief Financial Officer

Intergenerational typically will happen depending on the respective regulation. So why Gurugram was a appropriate place for intergenerational, because the minimum acre size for a group housing is 10 acre. So in a 10 acre with the SSI norm of 3.5 acre, you just can’t have 2,000 senior living space, right. So the best logical way was to have an intergeneration. But if you want to really bring the classification, it’ll always better to have a differentiator between senior and non-senior. So if the geography is like Pune or Bangalore, give me an opportunity to make a standalone senior living community, that would be our preference. But if the laws of that particular geography will not allow me to have that kind of a smaller size, then obviously we’ll go for intergenerational. What is positive is that now the developers are very interested and very open to the concept of intergenerational, which they were not earlier. So that opportunity has opened up to us in last six, seven months.

Rohit Mehra — SP Securities — Analyst

Yeah. Thank you. That’s it from my side. Thanks you.

Operator

Thank you. [Operator Instructions] We take our next question from the line of Rajat Jain, an investor. Please go ahead.

Rajat Jain — Private Investor — Analyst

Yeah. Hi. Just one question. You mentioned in case of these care homes typically properties are leased, you don’t own any of them. So what’s the tenor of the lease and do you have an option to renew? How does it work?

Rajit Mehta — Managing Director

Yeah, it’s a normally a nine-year lease with an option to renew.

Rajat Jain — Private Investor — Analyst

Okay. And that’s an option both — I mean, the person can also — the landlord can terminate the lease earlier or at the the end of nine-year? I mean, what’s the incentive for him to not renew the lease? Just curious.

Rajit Mehta — Managing Director

Yes, he can. But as I said, the advantage the landlord has today is the consistency of the annuity income for him. And once the property gets developed as a care home, to take it back into a commercial use is quite difficult, because it’s been retrofitted for seniors.

Rajat Jain — Private Investor — Analyst

Right. And then you have some sort of like annual escalation in this nine-year tenants or how does that work?

Rajit Mehta — Managing Director

Depends on lease, normally it’s after the three years.

Rajat Jain — Private Investor — Analyst

Okay. Got it. Thanks.

Operator

Thank you. We’ll take our next question from the line of Karan Mehra from Mehta Investments. Please go ahead.

Karan Mehra — Mehta Investments — Analyst

Yeah. Hello, sir. Thanks for the opportunity. Sir, two questions from my end. Firstly, it’s good to know that Noida project is fully sold out. So can you tell me what is the expected collections from Noida Phase 1 project in FY ’24?

Ajay Agrawal — Chief Financial Officer

Yeah. So Noida, we are having a total collection expectation of approximately INR550 crores. That will happen in all years to come. So that’s a cumulative end collection what I’ll get. So we are already standing at INR252 crore collection. Approximately INR80 crores, INR90-odd crores is the expectation for ’23-’24, and balance would come once we are going to give the possession in next years. But overall INR550 crores collection in Phase 1.

Karan Mehra — Mehta Investments — Analyst

Okay. Okay. And sir, my second question is, like, can you help me with the timeline for the Noida Phase 2 project launch and what is the sales realization we are expecting per square feet?

Ajay Agrawal — Chief Financial Officer

We are presently the market to the price of Noida Phase 1 is approximately INR10,500 crores to INR11,000 crores. We intend to launch our Phase 2 project somewhere in the bracket of INR12,500 crores to INR13,000 crores. The RERA application has already been filed. Now we are into discussions with the RERA councils, etc to explain them the project, etc. And then whatever the live-in time you want to take, we are absolutely prepared to launch it as soon as we get RERA, but being a government machinery, we’ll have to wait and watch.

Karan Mehra — Mehta Investments — Analyst

Okay. Sure, sir. That answers my question. Thank you and all the very best.

Operator

Thank you. [Operator Instructions] We’ll take our next question from the line of Chaitanya Shah from Silverlight Capital. Please go ahead.

Chaitanya Shah — Silverlight Capital — Analyst

Yeah. Hi. Thanks again. My question is regarding the Noida Phase 2. Now since you’re getting this price escalation, is there any impact — positive impact on the IRR that you’re expecting? That is one.

And secondly, the new projects in Bangalore and NCR that you’re going into, what is the internal ballpark IRR that you’re targeting in these projects?

Rajit Mehta — Managing Director

So, the price escalation in Noida Phase 2 also aim to mitigate the material costs that have gone up, as you can see from the market. We maintain the guidance of 15% to 17% IRR. In the other projects, it depends on project-to-project, but at least plus of 20%, at least in both the projects in Bangalore and Gurugram.

Chaitanya Shah — Silverlight Capital — Analyst

Okay. And my second question is regarding the Gurugram Care Home. The occupancy rates seem to have flattened out since the last one year near 55%, 56%. So why has that flattened out and when do you think can you reach that 70%, 75% level.

Rajit Mehta — Managing Director

See, we already have long-stay patients who are staying there, which is better for consistency of revenue. So some impact because of that in non-room availability. Some back on this quarter as well, which has come through. So that’s primarily the reason, but otherwise should go up now.

Chaitanya Shah — Silverlight Capital — Analyst

And what about the other Care Homes? When do you expect those Care Homes to reach that 60%, 65%? I mean, I just want to understand what is the lead time that it takes from the time to open a Care Home to you meet that occupancy.

Rajit Mehta — Managing Director

Yeah, it’s about six to eight quarters to hit occupancy of 55%, 60% and then in the next within 12 quarters about 75%, 80%. Normally a Care Home should breakeven in the eighth quarter, while in Gurugram we experienced that in the sixth or seventh quarter, because we optimized costs as we learned. Also the cross-sell is far better than our assumption. When I say cross-sell it means that people who stay in Care Homes, who need exclusive nursing or a diagnostic or physiotherapy, that number is more than what we expected. So realization is little more. Therefore, the lower occupancy, we’re able to breakeven the sixth or seventh quarter. And on a steady-state basis, the contribution margin should be about 20%-plus.

Chaitanya Shah — Silverlight Capital — Analyst

Okay. All right. Thank you so much.

Operator

Thank you. [Operator Instructions] As there are no further questions from the participants, I now hand the conference back over to Mr. Rajit Mehta for closing comments. Over to you, sir.

Rajit Mehta — Managing Director

Thank you very much. Thank you very much for very engaging call. Thank you for all the questions, which help us clarify our growth strategy, our profitability, our future trajectory. As I’ve said, Antara is the only brand in India, which is creating an integrated ecosystem for seniors. So whether you need independent housing or you need services at home or we need facilities for assisted living or memory care, all you need medical equipment and products in the future, if you need help in wellness solutions for chronic condition that also will be available through us. And it has been a great year, as you can see from the published numbers. And we hope to accelerate this as we go forward. So really appreciate your support and your interest and look forward to talking to you again. Thank you very much.

Operator

[Operator Closing Remarks]