Puravankara Ltd (NSE: PURVA) Q1 2026 Earnings Call dated Aug. 08, 2025
Corporate Participants:
Unidentified Speaker
Deepak Rastogi — Group Chief Financial Officer
Rajat Rastogi — Chief Executive Officer of West Region & Commercial Assets Pan India
Mallanna Sasalu — Chief Executive Officer, South
Analysts:
Unidentified Participant
Harsh Pathak — Analyst
Deepak Purswani — Analyst
Chintan Mehta — Analyst
Presentation:
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Pathak.
Harsh Pathak — Analyst
Yeah. Thanks Manav. Good evening everyone. First of all, apologies for the delay start of this con call. We shall now begin. So on the behalf of MK Global I would like to welcome the management and thank them for this opportunity we have with us today. Mr. Ashish Purvankara, Managing Director. Mr. Malana Sasalu, Chief Executive Officer, South. Mr. Rajat Rasogi, Chief Executive Officer, Western Commercial Assets. Mr. Deepak Rastogi Group Chief Financial Officer and Mr. Neeraj Gautam, Deputy Chief Financial Officer. I shall now hand over the call to the management for the opening remarks. Over to you gentlemen.
Deepak Rastogi — Group Chief Financial Officer
Good evening everyone. I’m Deepak Ristogi and I thank you for joining Purvankara’s earnings conference call to discuss the performance for the first quarter of this financial year. The result and investor presentation are available on the stock exchanges and we hope you have had a chance to review them. I would also like to thank our host for today’s earnings call MK Global Financial Services. Now let me start with some brief highlights about the sector performance followed by our financial and operational performance for the quarter. As you know, India’s economy continues to demonstrate strong resilience despite persistent global uncertainties, geopolitical contentions, supply chain disruptions and evolving tariff policies in key markets such as US Amid these external challenges, India’s macroeconomic fundamentals continue to remain robust.
The RBI has maintained its GDP growth forecast at 6.5% for this year. Financial year 26 reaffirming India’s position as the fastest growing economies in the world in the first half of 2025, India’s residential real estate sector benefited from supportive macroeconomic policies, especially from RBI, a rate cut of 100 basis points which brought down the repo rate to 5.5%. This measure was aimed at stimulating credit growth and investment at the backdrop of global uncertainty. As a result, the inflation also cooled significantly with consumer price inflation easing to obviously the lowest in the last six years. The residential market remained steady during the period under review with sales volume for the quarter stood at approximately 82,000 units across the top eight major cities.
Chennai and Hyderabad led in terms of growth recording impressive year on year increases of 16 and 6% respectively. Mumbai maintained consistent demand and remained the largest market by volumes during this quarter. India’s residential real estate market witnessed 9% quarter on quarter growth in a unit in new unit launches as sales remained largely stable during the Q2 of calendar year 2025. The mid and and high end housing segments continued capturing the attention of home buyers constituting about 58% of the total sales across the top seven cities during the quarter. The office sector continued its strong momentum during Q2 of this calendar year with steady absorption observed across key markets.
Office leasing during the quarter reached 20.3 million square feet while new office supply of approximately 17 million square feet became operational. Space was taken up by domestic corporates and GCC played a pivotal role in boosting the office absorption. Now moving on to the company’s financial and operational highlights for this quarter we achieved a pre sales value of 1124 crore reflecting a 6% year on year growth. The sales value of west region increased by 58% YoY primarily due to the launch of Purva Panoruma in Thane Mumbai. Sales volume for the quarter stood at 1.25 million square feet.
The customer collections for the quarter stood at 857 crores. The average realization also improved by 9% YoY to 8,988 per square feet underscoring sustained demand and strong pricing traction across our portfolio. In terms of geographical sales contribution, Q1 of this quarter sorry Q1 of this year financial year 50% was contributed by Bengaluru followed by Mumbai and Pune you know at 24%. Sorry were at 24%, Chennai at 15% and Kochi at 8% respectively. Increase increase of sales from Mumbai and Pune from 15% to 24% during this quarter indicating growing presence in Western region. Our launch pipeline for the year remains robust with approximately 12.32 million square feet of planned development which includes 9.22 million square feet new project launches and 3.1 million square feet of new phase launches.
Notably non Bengaluru projects now account for more than 50% of ongoing and planned projects reflecting our strategic geographic diversification. Mumbai and Pune together represents 21% of the planned pipeline, underscoring our strong focus and expanding presence in West India. On the commercial front, we are on track to complete 2 million square feet during Q1 of 26. In 26 we have signed LOI with IKEA for 80,000 square feet of carpet area at 150 rupees per square feet for Purva Zeltik. The building will be ready by January 2026 with handover expected one to two months later. Post their custom modifications with regulatory changes such as extra such as E KATA have impacted handovers and revenue recognition timelines, we remain on track for planned delivery of more than 4,500 plus units during this financial year.
Out of the planned turnovers 3,000 plus units, 3,015 units, approximately 3.65 million square feet have been completed and the OC has been received already. These are currently awaiting Ekhata issuance for handover position. During the quarter we handed over 667 units covering 0.68 million square feet generating revenue of 539. On business development front, we have been selected as the preferred developer for the de development of eight housing societies in Chembur Mumbai with an estimated GDV of 2100 crores with developer area of 1.2 million square feet. This forms part of our broader redevelopment portfolio in the city with four key redevelopment projects currently collectively with a development area of 3.63 million square feet which is expected to generate a GDV of approximately 7700 crores, further reinforcing our strategic presence and growth momentum in the Mumbai market, further strengthening our presence in key micro markets.
We have entered into a JDA for 5 and a half acres land parcel in East Bengaluru with an estimated GDV potential of over 1000 crore. Earlier this quarter Porvantara partnered with KVN Property Holding LLP for a 24.59 acres land parcel with 3.48 billions area with an estimated GDV of 3300 square feet plus the. The project is located in North Bengaluru near the airport and is expected to launch within six months. These strategic initiatives underscore our focused approach towards expanding in high opportunity locations and driving long term value creation. Coming to the financials of this quarter, our revenue was 539 crore.
EBITDA margin for the quarter was 15% while we basically reported a loss of 69 crores. The sales and marketing expenses and overheads incurred for the pre sales have been entirely charged to P and l as per NDEs standard 115. On our debt position, our net debt stand at around 2,825 crores which is at a net debt equity ratio of 1.68 with a cash balance of 718 crore indicating a strong liquidity profile ensuring stability and operational continuity. Gross debt during this quarter actually reduced by 138 crore with you know major obviously debt coming down on the resi side.
But because of the changes or the increase in the commerce commercial, the net increase sorry reduction was 138 crores. Cost of debt has reduced to 11.35% driven by continued focus on improving funding efficiencies. We remain committed to optimize financial resources by continuously working on reducing obviously the debt per square feet for under construction projects. In the next couple of quarters we will see increased velocity in acquisitions and growth trajectory, increased acquisition and new launches in the line of growth plans of the company. We want to highlight our strong growth trajectory over the last three years.
And the sales growth continues to be at CAGR of 28% while the collections have increased at a CAGR of 37% reflecting our commitment to execution excellence. To conclude, we continue to be optimistic about the sector considering the demand supply gap and rapidly growing economy. We are strategically launching the projects in our focus markets with a strong pipeline of already launched projects and further planned launches as well as ongoing business development activities. Thank you for patiently listening. We will now open the floor for questions.
Questions and Answers:
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Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. A reminder to all participants. If you wish to ask any questions, you may press star and 1. We have a first question from the line of Harsh Partak from MK Global.
Please go ahead.
Harsh Pathak
Yeah, hi sir. Thanks for the opportunity. So first of all on the upcoming launches, especially in the west region. So since the NGT order has come and I guess there has been some clearance in, you know, taking clearance from the state government. So how do we see launches in the west region? And I see in the presentation most of them are lined up in Q3 and Q4. Where are we on the approval stage and when can we expect progressively the launches to come in?
Deepak Rastogi
Do you want to take it?
Rajat Rastogi
Yes, I’ll answer it. Hi, good evening to everyone. So as you rightly said that a couple of our launches were stuck because of the NGD reason. But now with the favorable order we have started putting our applications for the MOA approval understanding. There is a long queue for all the cases that have been pending for last one year. We hope that our Anderi project and our Thane project, they both will be available for launch in quarter four or maybe end of quarter three. So from an approval perspective, I think our files are approvals. Our files are moving in the right direction, they’re moving swiftly and I think in a matter of two to three months we should start getting approvals.
But I think the launches as you said, will happen either in the end of quarter 3 or in the earlier quarter 4.
Harsh Pathak
I guess this would be phase wise launches. So you know what is the quantum will be opening maybe phase wise. If you can highlight some part of that.
Rajat Rastogi
Yeah, I think amongst the three launches that we intend to do in the west region, a total inventory that we open for sale will be in the range of around 3000 crores.
Harsh Pathak
Sure. And so any, I mean any, I mean in terms of hierarchy. So which, which projects can we see first coming? Maybe would it be Bantra, the Bridge Candy and maybe down the line we’ll go for Apnagar because we see there are a lot of launches lined up in those clusters. So how do we see the launches there in terms of, so in terms.
Rajat Rastogi
Of timeline, of course not 100% accurate, but in terms of timeline that we predict, I think it’s going to be Thane followed by Andheri and then Miami. Yeah, that is, that is how we are planning.
Harsh Pathak
Sure, sir. And the chamber projects which we, you know, banked very recently. So when do we plan to launch these projects?
Rajat Rastogi
So typically, I mean the approval process takes time. You know, we just started working on the design. So from a, from a launch perspective we are expecting it only in the next financial year. Maybe in quarter B of next financial year.
Harsh Pathak
Sure sir, I’ll come back in the queue.
Rajat Rastogi
Thank you.
Deepak Rastogi
Thank you.
operator
Thank you. A reminder to all participants, if you wish to ask any questions, you may press Star and one. Now we have a next question from the line of Deepak Parswani from Swan Investments. Please go ahead.
Deepak Purswani
Thank you for the opportunity.
operator
Sorry to interrupt you. Mr. Deepak. Your voice is quite breaking. Can you please use your hand?
Deepak Purswani
Yes, yes. Am I audible?
operator
Yes, please go with the question.
Deepak Purswani
Yeah. So firstly just wanted to get the sense in terms of the, in terms of the launch pipeline in the Bangalore. I mean if you can give the broader sense about the approval process there. I mean how should we see the approval? I do understand in the presentation there is a timeline is given for each of the projects. But in terms of the, at what stage of approval we are. If you can give the broader sense for the project like Grand Hills, Bellandur, Habergiri, Kanakpura and West End.
Mallanna Sasalu
Yeah, this is Malana here. So I think in the, in the, in the document that what we have provided, we’ve already said that you know Belland is going to come in Q3 and you know the other one in Cochin there’s a project called wing work and phase two, we said it’s going to come in for Q4. Grand Hills in Q4 and Hebagori in Q3, West End in Q3, Henur Road, probably Q4 or Q3, Mallasandra, that is one of our project in Kanakpura Road that should be coming up in Q3 and another Kanakapura Road project which is called Vajrahalli, it should be coming in Q4.
Also a small water development that’s supposed to come in Q3. The issue here has been that the Bangalore Development Authority and BBMP were revising the bylaws for the setbacks. So what it did do for us is we went on revising it and there were several couple of revisions that were brought in by the authorities themselves while we did our thing. And when we went for the approvals and the approval got delayed, further revision and further revision and I don’t see any challenges in bringing these things within this year within the timelines we have, we have said, you know, maybe one or two projects may go one or two quarter this way or that way.
But I, we are committed to probably launch all these projects within this year. Okay. So as far as there are these approvals and all NOCs received on all properties that now we’ve got the NOCC, just a matter of authority approvals is what is pending now.
Deepak Purswani
Okay. And sir, I mean in terms of the demand environment in both of the regions, I mean firstly on the Bangalore side and secondly on the western region side, I Mean, what is the kind of absorption based on the current traction in the launches we are seeing? I mean what should be the broader adsorption trend we are observing? I mean we are expecting in terms of the launch pipeline, in terms of getting the new saves from these and for the upcoming projects.
Mallanna Sasalu
Rajat, you want to talk about it from Mumbai and Pune and then I’ll talk about Bangalore and South India.
Rajat Rastogi
Sure, sure. I think I’ll just give a gist. So I think the market remains very favorable, especially on any product which is above 2 crores. And that’s the segment primary that we are catering in the west, especially in Mumbai. All the products that we have in the launch pipeline, be it Andheri, Bandra or Bridge candidate and the Thane phase two, they’re actually in phenomenal locations, the locations that customers are really, really looking for. We already have started getting a lot of inquiries. So we remain to be very positive and the market also very supportive in the segments that we are currently catering to.
Malana.
Mallanna Sasalu
Yeah, yeah. So and if you really look at what’s happening across, I think in Deepak’s, Deepak’s introduction, opening remarks, he said about how the markets are doing. Nevertheless see if you look at all over India, 66,300 units were sold in Q2 of 2025 units launched was 72,200. Which means that it’s a very balanced market at this point of time. That is the number of units that are coming in versus number of units that are getting sold are almost in tandem. So if you look at 58% of these things are coming from just Mumbai, Pune, Bangalore and South India.
So which is exactly where we are operating and particularly in Bangalore and in Chennai and in Kochi, what we are seeing is the demand is quite stable. And I would say that between stable and robust because any of the projects that have been launched, the offtake is very good. The number of players have come down and whoever is the larger players listed people, players like us, you know, we are really having, taking a premium out of that. So it’s a great market. And, and maybe my thing is that we had a good run over the last two years on the pricing side as well.
Maybe pricing might have achieved its target and maybe it’s going to be there. The prices may not go at the same rate as which went up in the last two, three years. Nevertheless it will beat the inflationary numbers is my opinion. So it’s a great market to be in.
Deepak Purswani
Okay. And Saj, I think Thane project actually we launched phase One at the fag end of the March and early April. So if you can give a broader sense, what was the total launch pipeline inventory, launch inventory during that time and how much has been sold and how has been the response for that project?
Rajat Rastogi
So for the Thane launch we launched close to around inventory, around 300 odd crores. We’ve already sold around 20, 25% of all the inventory at the launch. The launch was very, very successful. The price that we received was about 20,000 rupees as a realization at the launch which probably is one of the highest in that micro market. So most of the people who bought with us were keen on the quality that Pervankar provides. And we continue very, very hopeful that in the phase two and the new inventory that we get post these recent approvals, I think this launch can be a much, much more bigger launch.
And the numbers perspective.
Deepak Rastogi
Okay. And so if I understand correctly, earlier in the presentation we were giving that the total GDV for this project would be around 3500 crores. So eventually what would be the timeline where we would be looking out to monetize this complete project? And also is there be any, is it going to be the purely a residential development or is there going to be the mixed use development in this problem?
Rajat Rastogi
So this breaks up the question into two. So one is the overall, you’re right, it’s overall a 3700 crore GDB project. We’re looking at launching the entire project over a period of one and a half years. As I said earlier, it got a bit delayed because of the NGT issues. And now with that issue being over, we are quickly working on the approvals. So within a matter of one and a half we should be able to launch all the towers in the project, number one. Number two, yes, it’s a mixed use. We have a sizable retail because it’s right on the Gorbanda road, one of the most premium locations in Thane.
And we’re developing close to 3 lakh square feet of retail in this project.
Deepak Purswani
Okay. And I mean what would be the timeline for the next next project and what would be the GDV we would be looking at out? And in terms of, and second question to it, what would be the retail area which we would be launching and when would be the we would be looking out to launch that project?
Rajat Rastogi
So as I said, I think it is a composite project with five towers. We launched the first phase which was around half of a tower as per the current last approval. So now we’re going to be Launching another two towers and hence over a period of one and a half years, we’ll be launching all the five towers. In terms of the retail area, we are not launching, we intend to hold the retail area. We’re not looking at selling the retail area as of now. We’ll try and build a product which can lead to annuity income in future.
So right now I think we’re not opening any retail area.
Deepak Purswani
Okay. And on the commercial side of the development, I mean Zentech, where we were looking to monetize that project, I mean if you can give this broader update at what stage we are in, where has been the progress about the monetization of that deal?
Rajat Rastogi
So as Deepak mentioned in his presentation just now that we’ve been able to lease the entire retail area to Ikea. That’s one of the most significant deals that happened in the last quarter at a venture of close to 150 rupees. Apart from that, as you rightly said, we are monetizing the asset. We’ve already sold close to 15% of the assets so far. And right now as we speak, I think that there’s a business which is going on. So we hope by the end of this financial year we’ll be able to monetize substantial part of the asset.
Rajat Rastogi
Okay. Okay. And just final question from my part if I, if I were to look on the cash flow slide on the slide number 23, couple of things. One, on the collection site, I mean flattish I do understand because this time there was only the sustenance sales and there has been no launches. But if you can also get a broader perspective once the launch pipeline open, how should we see this collection number going ahead? And second part of the question, second part of the question is in, in terms of the. There is also the line item exit or investment equity in nature to the extent of 322crore.
If you can get a broader reason what this amount pertains to what.
Deepak Purswani
Yes.
Rajat Rastogi
So your question has two part A is, you know, you said that collections or operating surplus is little less compared to the previous quarter. What are the reason and how it going forward looks like so current quarter as we have mentioned that there are less launches and that impacted our collection a bit. However, the question of your the second question answer lies in slide number 24. If you look at slide number 24, we have balance collection to receive from the sold units itself 4,643 crore. So that means we have sold the inventory and collections will be commenced.
As they construct faster the collection will Come. So going forward we see there is increase in collection. As we build faster, the collection will come. In the third point which we ask about the cash flow which is 322 crore which is investment in equity in nature. So we are referring about the drawdown which we have done from SDFC Capital which is 282 crore which is payable and enable structure and zero coupon bond. And we utilize this money in acquiring one of our which we announced, the hardware park property. And another 50 crore we have drawn from the 361.
That facility is also payable and evident in nature. And that is a basis of surplus sharing and IRR based again a zero coupon bond. And that money we have utilized for our Deccan redevelopment project in Mumbai. That is why that has been classified as a separate line item.
Deepak Rastogi
Okay, One addition to the first point in terms of the cash flow reduction, obviously it is I think the contribution that would have come from new launches. Also if you notice the handover while the projects are complete, the balance 10% that we get on possession. Right. Those have gotten delayed on account of that E. Katha. So the projects are ready as and when that Ikata comes and we start doing the registration. Because most of these apartments are funded by banks. So they. They pay the balance 10% only on registration. So which have gotten delayed because of some change in government rules in this whole E Kata business.
So if we had handed over for example what we had targeted for this quarter while on the business side the project is complete. But from a handover point of view because of the Ikata that possession has gotten delayed. So that’s the second reason why you see that smaller number.
Mallanna Sasalu
Okay. And that also answers the question why comparatively the revenue is lower. And that’s one of the reason why the revenue is lower as well. Well, the expenses remaining constant on the future project. The marketing and general expenditures going up and. And the revenue not recognized despite the project is completed because of this E Katha business. And that’s the reason why you see that the revenue numbers being low.
Deepak Purswani
So would it be fair to say now this E Kata issue would be behind us and incrementally one on the sustainment part of this collection should improve. Second, from with the launch of new project there would be substantial increase in the collection going ahead. And secondly, this balance collection from sold units of 4,643 crore. What would be the time frame where we would be looking out for this collection of sold unit?
Mallanna Sasalu
So that is for. That is for coming from our current ongoing project which is two to three.
Deepak Rastogi
Years, we’ll able to achieve these collections. But you know, from a first question perspective, Deepak, you know, we are expecting next, you know, mostly from Q3, Q4, you will have very, very strong collections. Q2 also will have something more. But Q3, Q4 will be the higher collections is what, you know, we expect. Because what Malana just suggested on the E KATA thing with the glitches there, you know, if, you know, if everything goes right, obviously everything will fall in place in the current quarter. Else, you know, it will actually get into the next quarter. But let me assure the team here that we are very confident that whatever we think we should be able to do it, we will be able to achieve it during this year.
Deepak Purswani
Okay, thank you. Thank you and wish you all the best.
Deepak Rastogi
Thank you.
operator
Thank you. A reminder to all participants, if you wish to ask any questions, you may press Star and one on your Touchstone phone. Anyone willing to ask any questions, you may press Star and one. Now, anyone who wishes to ask a question, you may press Star and one. Now we have our next question from the line of Chintan Mehta from Punishka family office. Please go ahead.
Chintan Mehta
Thanks for the opportunity. I just want clarification. In press release we mentioned about the surplus cash flow. The surplus cash flow also include the redevelopment project, all of the redevelopment project.
Mallanna Sasalu
This surplus includes our. Our all our ongoing projects plus also our projects, phases of the existing project which are yet to open for sale and also the launch guidance which we are given which is there in our launch guidance in this ICP slide number 16. It does not include any business development, new business development on which we are signing. It’s precisely from our inventory open for sale plus inventory not open for sale plus the launch guidance which we have given which is on slide number 16. Nothing more than that.
Deepak Rastogi
So redevelopment is actually included in this is what I can confirm basically which is your piano Apanagar which is, you know, Rajith was mentioning we just got the NGT clearance Miami and for Deccan. So those are the 3D developments which is part of the current cash surplus which would obviously, you know, once we launch it over a period of time, you know, we would be able to at least get those surplus in place.
Mallanna Sasalu
But certain ones, like for example what we just recently announced chamber the four acres, that’s not part of this, that those cash flows have not been included. So those are all additional.
Deepak Rastogi
Correct, Chambur.
Mallanna Sasalu
And also we announced that the the one which is the KIADB land, that is 3300 GDV that is not included. We announced another one in Bangalore that was another thousand crore rupees that is not included. And they’re all there in the public domain while we are actively pursuing quite a number of opportunities which are coming to closure. But these are, these are the things which are not included.
Deepak Rastogi
Okay. There are about four or five projects where the transaction is closed but have not been included in this cash flow.
Chintan Mehta
Okay, and so what is the margin difference between these two online development projects and redevelopment project?
Deepak Rastogi
So among the 10 in the South India that we have, nine of them are owned lands and one is a joint development agreement. And I think best the three that are listed here are all redevelopment.
Chintan Mehta
I just wanted the margin differentiating between so just to.
Rajat Rastogi
Even in redevelopment projects, Chintan, the margins are different for every project. But just to give you a perspective, I think the EBT levels that we would like to operate would be between 20, 25% across our portfolio. I’m talking the retail.
Chintan Mehta
Yes. Yeah. Okay. And for one lambda, it will be higher than 35% or 30%.
Rajat Rastogi
Approximately about 30.
Deepak Rastogi
Again, depends, you know, obviously you know what kind of. But you know, we look for, you know, for our internal purposes we look for obvious a particular IRR benchmarks and we also look for, you know, gross margins. So generally, you know, we would look for more than 24%, you know, especially for the own, you know, the land acquisition and all as far as the gross margins are concerned. And I can tell you most of the projects will be in and around or even higher than what you are referring to.
Mallanna Sasalu
Also it will not be a perfect science because it depends on. Depends on.
Chintan Mehta
I’m talking about IRR only then we acquired the teacher.
Deepak Rastogi
He’s talking irr. He’s talking. So IRR purely from an IRR perspective, redevelopment would a higher IRR because there is no land cost which gets associated with it. It’s more of a construction and some kind of obviously the approval cost which comes in as far as the outright sales is concerned. From a land perspective, obviously IRR would be slightly less compared. But you know, anything which we look at it is. Should be upward of, you know, at least 18% IRR. That’s the way we look at it. And it can go up to, you know, 30, 35% and even higher than that.
So it depends upon what projects we are talking about and you know, which are the locations. And it will be very difficult for us to give you a very generic answer to that because it has to be project by project.
Chintan Mehta
Okay, sir and sir, one commercial Project which we are looking to monetize it updated there.
Rajat Rastogi
So I think on that commercial project as I said that we are already the work is already process in progress. We’ve already monetized around 15 to 20% of the asset as we speak and I we are very hopeful by the end of this financial year we’ll be able to monetize a substantial part of the asset.
Chintan Mehta
Okay, that’s the last question from my side. How we see this digital kata I kata registration because of that the price can go up or how you see that in Bangalore specific market.
Mallanna Sasalu
The questionnaire was a kata was a piece of paper. Now they made is just the same kata but it is in electronic form. And so basically what happens is that once you complete the project and the kata means the ownership comes into the developer’s name first and then it gets transferred to the ultimate customer customer again goes back and makes their own e kata the entire thing that because of the process and it’s all machine driven and the software are new and some other things cannot be uploaded and some of the options are missing and probably was kind of I would say that not well thought through and because of which what has happened is is that when you when we get the kata then only we can go and register it.
So that’s the challenge and there is no cost increase and etc because if the project is completed and maybe it’s a delay of one or two months that we need to take it in our stride and move forward.
Chintan Mehta
Okay, so just one for curiosity. This Ikata also require compulsion to register langs and all the records and are we following? We have intent to following or how you see that as a positive negative.
Deepak Rastogi
And in the long run it is. Positive in the shorts. Always. Always anything. Technology coming in and everything becoming paperless is fantastic. But thinking in the short run till it is implemented properly just exactly like the way it happened in gst. Once it is implemented, once it’s going fine, then it’s fantastic. It’s a very good thing for the industry and for the entire state state of Karnataka in terms of land records and other things.
Chintan Mehta
Sure sir. Understand. Thanks for the opportunity and best of luck.
Deepak Rastogi
Thank you.
operator
Thank you. A reminder to all participants, if you wish to ask any questions you may press Star and one on your touch tone phone. Anyone willing to ask a question, you may press Star and one now if you wish to ask any questions you may press star and 1. We have a follow up question from the lineup. Harsh Pathak from MK Global Financial Services. Please go ahead.
Harsh Pathak
Yeah Hi sir. Thanks for the follow up. So you highlighted that we have leased the space in Zentech for 150 per square foot. So. So if you can throw some light on how the micro market is and what the prevailing rates are and this rate of 150 per square foot that we have got, how is it comparable to the micro market and what is enabled to us to get this kind of a rate?
Rajat Rastogi
So harsh. I think just to give you a perspective of South Bangalore market, I think first and foremost I think this asset, what we are building is one of the best that is there in the micro market. From a perspective of IKEA coming and choosing us as a product because IKEA does a very, very long due diligence before finalizing any place especially for the retail operations. So for them to come over, that clearly says about this product which is clearly by far the best product available in the South Bangalore market, number one. Number two, the ongoing rentals for retail vary.
I think this is bank opposite for a mall in Bangalore and the rentals over here in this micro market are in the range of 120 rupees a square feet. The reason why we were able to get a higher rate is because of the quality of the asset, the way it’s come up, as I said and obviously there is a entire layout, the frontage of the asset itself in the overall sales for the. So just to give you a perspective from the rental perspective, the 120 to 100 is a range in South Bangalore and we were able to get a rate of around 150.
Harsh Pathak
And how does the pipeline look for the remaining space in Gentech?
Rajat Rastogi
It looks very healthy as I said. I was just saying in the other call. So it looks pretty healthy right now. We started sales in April this year. We’ve already done almost 15% of the area. And as we speak every month we are selling some area, monetizing some area. So we’re very hopeful by end of this year we’ll be able to substantially reduce our inventory in Gentec. Especially with ICR coming in. It really helps us to increase the price further because it becomes a landmark by itself. So that will further help us to get a higher value and further realization.
Harsh Pathak
Right. And with respect to Aero City, how are we placed there in terms of leasing activity?
Rajat Rastogi
The NSET is coming up very, very well. We are expecting OC to come by December for both the towers which is around 1.3 million square feet. There’s a lot of inquiries that is being generated on a daily basis. We hopeful that in quarter 3 and quarter 4, we’ll be able to get an anchor to start with the leasing activity in this asset.
Harsh Pathak
Sure. And I guess we are having a third asset also. So what are the timelines there? Have we finalized something? Where are we of the progress?
Rajat Rastogi
So that I said we are at the final stages of closing on the legal due diligence. I think we should be able to sign the sale deed by September end. And we are hopeful that by quarter four of this year we’ll start pouring concrete.
Harsh Pathak
Sure. And coming back to the residential space. You know, how does the BD pipeline look for the remaining of the year? I guess we have done a commendable work in the first quarter. So how are we placed for the remaining of the year and where would our focus be in terms of the region selection?
Rajat Rastogi
You mean to say for the west region or you want to get over the south region, not the overall.
Harsh Pathak
So in terms of mix of the region. So where are we focused more? Because I guess in the first quarter we have done a lot of additions in west and also in the Bangalore side also. So how do we intend to take the BDL pipeline forward for the remaining part of the year?
Mallanna Sasalu
Bangalore is our headquarters and we are quite strong in Bangalore and so we have done extremely well in closing deals in the last one year or so. So we’ll continue to do that at any given point of time. We are evaluating more than 2025 opportunities and some of the which are which are closed also not announced. And so then of course we are in Chennai and Chennai that you know, the actively we are pursuing. And now there are four projects which are going on and Cochin, we have become quite large in Cochin and one of the project is expected to launch and there are so again there also we are pursuing.
Hyderabad we are pursuing even though we have not had great luck, Hyderabad we are pursuing. We are coming to the end of the project in Goa. We are looking for some assets in Goa as well. So these are all not definitive. Things can be told. Everything has to match and our return on our investments and our ability, our matching, our company’s philosophy of the product, all those things have to match. Then we go forward in all these locations because we have put the hard work and the knowledge investment has been done in all these places.
So we will continue to be aggressive and pursuing opportunities.
Rajat Rastogi
Likewise for the west region, I think we are growing especially in Mumbai and obviously looking at opportunities in Pune. We will expand further in Pune in the near term. Also in Mumbai there is huge scope for us to further Grow and we are evaluating opportunities based on strategic goal, what we want to achieve. So I think we’re looking at opportunities more than giving a definite number.
Harsh Pathak
And in terms of overall quantum, last year we did around 11,000 crores of BDEs. So this year any number we have in mind, we look to at least cross this. Or is there some target?
Mallanna Sasalu
As I said, there is no target. We don’t go after target. We must close this much. It is about number of opportunities that come in in terms of, you know, at the end of the day it’s not about race to close the deal. It is race to be profitable on all projects the way we expect it to be. So there is, there is. I mean, I mean we can say that it will be as healthy as anything that can be without getting into the numbers. It will be healthy this year as well.
Deepak Rastogi
You know, we will continue to grow the way we are growing our business. And you know, that would continue, that drift will continue, you know, going forward. Also.
Rajat Rastogi
I think two inputs from my side there are a. On a thumb rule basis, right? It thumb rule what you sell a year. Now for example, as an organization, if you’re selling about 5 to 7 billion square foot a year, I think the thumb rule logical target would be to replenish your land bank by that much every year. So as you keep going forward, that much production and if not more, you keep increasing volumes as well. But I’m just saying as a thumb rule, that would be the number. But most importantly I think is the change in strategy in terms of business development as well.
So today we are able to replenish this in three formats. One being outright, second being joint development and now the new bucket in the western region which is the society redevelopment. So the latter two basically come at a relatively much lesser upfront capital cost because these are joint developments and society redevelopments, right? So that comes at a much lower cost. The third point being again at the strategy extremely clear that all the new bds in fact what have been done over the last two, three years, these are projects which are clean, clear, converted lands where the target to the team is that from the time you acquire, you need to turn around on an average six to eight months.
You need to get these projects to launch. So there is no sort of aggregation or aggregation risk or conversion risk or approval risk per se as a new strategy for the BD that we’ve been doing over the last two years. So you’re going to see a faster turnaround.
Harsh Pathak
Thanks for that elaborate answer. So just two final bits from my side. So are we looking at any pre sales growth target this year and second in terms of debt, I think this quarter sequentially we have seen some decline in the net debt levels in even the cost of debt has gone down. So how do we think in terms, how should we think in terms of net debt going forward? You know, just these two things.
Deepak Rastogi
So harsh. You know, we will, you know it’s difficult for us to put a number there but what I can say is that given that all the recipe you have seen that the recipe per square feet, you know, for square feet has actually come down and that will continue to obviously pair because whenever the project goes under production automatically the, you know, it start, it is a self pairing where we have continued to increase our debt level per square feet is on the commercial side because that development continues, you know, on the capital asset side until the time we either do a strata sales or you know, leasing.
That would take some more time to start. You know, obviously getting you know, pairing so recy. I think, you know, I’m not really, really concerned at all as far as commercial is concerned. There is no concern as such but obviously it will show some increase per square feet but eventually it will taper down as what Rajat was also mentioning that you know, we are looking to at least you know, do the OCS, you know, for almost 2 million square feet this year. So you know, to that extent obviously slowly we would start seeing some pairing after that.
Mallanna Sasalu
I think an easier, I think, I think an easier way to understand that is I think you classify the debt into essentially three buckets, right? The first bucket being the debt which is on under construction projects. Now these projects are selling well, collections are good, burn rates are good. So which means that there’s absolutely no concern it will be self bearing. The second bucket you look at is the debt that has come on account of business development. Like I mentioned a little earlier, extremely clear that any BD that we do have to be clean clear, which means from the day we do the transaction, the designing starts, approval starts and the target being six to eight months to launch.
So that in mind, that’s the second bucket of debt again there. If you’re able to follow even 90, 95% where we’re able to turn these projects around and get them launched in six to eight months again that goes into production. In that sense it’s a productive debt and with the sales collections it’ll get paid down. The last bucket is the debt against the commercial. Now commercial the debt is on essentially three projects. The One which you’re anyway going to be monetizing by the year end. So that debt should be paid off automatically. The other two, the other one, sorry, for now we are hoping to complete construction by December.
And as the leasing starts you convert that construction finance into LRD at a much lower cost. So again with the rentals that you collect, it will be self bearing, I think just to sort of put it into perspective.
Harsh Pathak
Yes, thanks a lot again for the detailed answer. And just on the pre sales growth, any target or.
Mallanna Sasalu
Growth you’re comparing it. To the last year.
Harsh Pathak
Yes, yes, of course. No, no, I mean any targeted number we have in mind. Just.
Mallanna Sasalu
No, we’ve never given a guidance or a number but definitely there will be a growth in that number. With the kind of launches that we have over the, you know, especially over the quarter three and four. If you look at the kind of locations and the spread that we have within Bangalore, the kind of spread that we have, even the Cochin project, the following phase, phase one of which has done extremely well. Execution is happening extremely well. So that’s a great location. Again we’ve had a great experience in that project. Again you come to Bombay.
If you look at the kind of spread that we have across the city from Thane, different price points, Thane Lokhanwala, Pali Hill, etc. Again, very unique locations. And the reason I say that in terms of while the micro markets are great again but the property itself, I think the frontage, the size and scale of these projects. For example in the Bandra most projects, I mean if you’re from Bombay, in that entire vicinity, they’re standalone towers with no amenities. We were fortunate to get the site which is 2.75 acres. So we’re able to pack in every single amenity.
And that’s the USP of that site. And that’s, you know, we’re already, I mean we’re in designing phase. The Office receives almost 10 to 15 enquiries a day. Have you opened up sale? Have you opened up sale? So within the Bandra market there’s so many people who want to move into a larger development that provide you a lifestyle and you know, a lot more than what existed India. You know, the small plot, car, single tower developments.
Harsh Pathak
Understood? Understood. Thanks Ajish for taking my questions. Thanks a lot.
Mallanna Sasalu
My, my. My pleasure.
operator
Thank you. A reminder to all participants, if you wish to ask any questions you may press star and 1. We have our next question from the line of Chintan Mehta from Puniska family office. Please go ahead.
Chintan Mehta
Just wanted to know we have any more line parcel of space at Aero City to launch something commercial or residential.
Deepak Rastogi
So we, we have a, you know, Grand Hills project which is, you know, which is there as part of our launch pipeline. Right. So you know that is there apart from commercial. There is a, that is a recipe obviously which is coming up. So if you see in slide number 16, you can see number three, Grand Hills actually, you know, pertains to that same Aero City site which you are.
Mallanna Sasalu
Referring to behind campus.
Chintan Mehta
Okay. Okay. We are looking like a big one to develop that area or any.
Mallanna Sasalu
Phase one of that Aero City project. The total commercial is about 2.2 million square foot. What we are completing by December would be 1.2. And then we hope in Jan we start the phase two of the commercial which is another million square foot that micro market is really developing. Well because of the metro connectivity, the entire micro market, you have the best of schools, you have resi, you have offices, you have hospitals. The best of schools are in that vicinity. And once the metro starts, the entire micro market like outer ring road five years ago, the entire place will get re rated in that sense.
And then at the back, currently what we have designed is so 2.2 million square foot of office space in the front and at the back rezi the whole walk to home concept.
Chintan Mehta
Okay. Okay, thanks. That’s the little I wanted. Thank you so much, sir. All the best.
Mallanna Sasalu
Thank you.
operator
Thank you. A reminder to all participants, if you wish to ask any questions you may press star and 1. As there are no further questions, I now hand the conference over to the management for closing comments. Over to you, sir.
Deepak Rastogi
Thank you all for your time and questions. We appreciate your continued support and interest in Purvankara’s journey. Should you have further queries or require additional information please feel free to reach out to our investor relations team. We look forward to updating you on our progress in the coming quarters. Have a great day and a nice weekend. Thank you so much.
operator
Thank you sir. On behalf of MKE Global Financial Services Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.