Puravankara Ltd (NSE:PURVA) Q2 FY23 Earnings Concall dated Nov. 04, 2022
Corporate Participants:
Samar Sarda — Hotels and Building Materials Senior Manager
Neeraj Gautam — Executive Vice President, Finance
Abhishek Kapoor — Executive Director and Chief Executive Officer
Analysts:
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
Kalpesh Dave — Spark Capital — Analyst
Unidentified Participant — — Analyst
Sumeet Tripathi — Emkay Global Financial Services Ltd. — Analyst
Harsh Parekh — SMC Group — Analyst
Mihir Desai — Desai Investments — Analyst
Rohit Sharma — Zen Wealth Management Services Limited — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Q2 FY ’23 Earnings Conference Call of Puravankara Limited hosted by Axis Capital Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Samar Sarda from Axis Capital Limited. Thank you and over to you.
Samar Sarda — Hotels and Building Materials Senior Manager
Thanks, Sri, and good evening, everybody. Thank you again for taking the time out. From the Company we have the Senior Management led by Abhishek Kapoor, the CEO; Vishnu Moorthi, Senior VP, Risk and Control; Neeraj Gautum, EVP, Finance; and we also Sanjay Daga, COO, West.
Mr. Kapoor, if I could request you to please start with a few comments on the results, plans, and sector outlook before we open for Q&A.
Neeraj Gautam — Executive Vice President, Finance
Thank you, Samar. Good afternoon. Thanks for — thank you all for joining us at Puravankara Limited’s second quarter and first half year of FY 2023 earning conference call. My name is Neeraj Gautam. I’m the Executive Vice President, Finance of Puravankara Limited. The presentation and financial results for the quarter that ended September 30, 2022 have been uploaded on the stock exchanges. I presume you have all had a chance to go through the results and detailed presentation disseminated by us. I would like to take you all through the key highlights for the quarter. Following that my colleagues and I will be happy to answer any questions you may have while listening to feedback and suggestions from you.
We believe real estate will continue to witness sustained growth this year and in the coming few years in India. The growing uncertainty in the global economy has had a minimal impact so far in our sector and we are hopeful that it will continue to have a very minimal impact on the economy in general, and particularly on the real estate sector.
Coming to our performance for the half year. We started the fiscal year on a good note, and we concluded H1 on even better note. We are delighted to share that the company has achieved the highest ever sales for the second quarter and for the first half year of any financial year. This is reasserting the — our strong brand zeal across the market segments in which we operate. Our sales value grew to INR1,304 crores for H1, which is 43% higher than INR910 crores sales value during a stellar period last fiscal year. In terms of volume, we stood 1,329 units and with an area of 1.75 million square feet for an half year period compared to 926 units with an area of 1.33 million square feet during H1 of the last financial year.
The sales realization improved to INR7,454 per square feet from INR6,845 per square feet last year, which is an improvement of 9% in average realization. In line with our commitment to deliver our projects within the prescribed schedules, the construction at all our sites is in full swing. This is reflected in the increasing sales and customer collection from our ongoing projects. The customer collection during H1 FY ’23 was INR925 crores, which was INR622 crore a year ago. This is implying an increase of 50% percent on year-on-year basis. We would like to highlight that composition of our collection from ongoing project has increased. If we compare collection from our under-construction projects, it has doubled for half year period compared to similar period last financial year. This is reflecting our continued focus on faster construction and efficient working capital management.
In terms of our financial performance, for the half year, our total revenue from operations stood at INR550 crores compared to INR815 crore for a similar period of previous year. Our EBITDA for the quarter — for the half year period was INR197 crores compared to INR489 crore of similar period previous financial year. Total comprehensive income for the half year period was INR14 crores compared to total comprehensive income for the similar period a year ago was INR166 crores.
And coming to our quarterly performance, we have registered the highest ever second quarter sale of INR791 crores for the quarter, which is 33% higher than INR597 crores in similar quarter a year ago. We have sold 776 units with an area of 1.07 million of square feet during the quarter, which is implying 18% growth on year-on-year basis. The last year in the similar quarter we sold 630 units with an area of 0.91 million square feet. The performance in ongoing projects continues to encourage us with around 90% of our sales bookings coming from only ongoing projects during the quarter. We collected INR518 crore from our residential scheme during the quarter, which is 52% higher than the INR341 crore collection for the similar period a year ago.
Coming to the cash flows. Our consolidated operating inflows was INR678 crore, which is compared to 77% up compared to a similar period a year ago. A year ago in the similar quarter, we collected INR383 crores. Our operating inflow also doubled — our operating outflow. Sorry, our operating outflow also doubled to INR300 crores in this quarter compared to similar quarter a year ago. This reflects our spend on ongoing projects.
Coming to our profit and loss performance for the quarter. Our consolidated revenue for the quarter was INR253 crore, EBITDA was INR58 crore, and EBITDA margin was 23%. Total comprehensive loss for the quarter was INR21 crore. Here, I would like to recreate that a full transition to Indian Accounting Standards including Ind AS115, the company had moved from erstwhile percentage of completion method to revenue recognition to a completed contract method of revenue recognition. The aforesaid change in the time of revenue recognition has brought a significant variation in the periodical financial results as the revenue is no longer recognized ratably over the project execution period but recognized upon completion of the project, and handover of flats off to the customer.
Consequently, the financial results do not depict the company’s project execution and sales efforts on a periodic basis. The above accounting impact is very evident in our period financial results. However, our four projects are scheduled for delivery during second half of this financial year and that will reflect in the revenue recognition in the third and fourth quarter of this financial year.
Coming to our debt and liquidity position of the company. The balance collection from sold units in all launched projects was INR2,640 crores as on September 30, 2022. The balance cost to complete these under-construction project was INR2,933 crore combined with unsold — value of unsold inventory INR4,684 crore from launched projects. We have estimated projected operating surplus of INR4,391 crore on the launched portfolio, which compares very favorably against the current outstanding net debt of INR2,144 crores. Besides this, we have not opened for sales inventory in existing projects with an estimated surplus of INR1,653 crore.
We would like to update you that during the quarter ICRA reaffirmed our credit rating to A- stable and this shows our resilience even in the current environment of rising interest rates. I would also like to give you update on the business development side. On the — during this quarter, we have deployed the first tranche of Purva Real Estate Fund of INR93 crores and acquired a land parcel of INR52 crores in the Chennai. This project is under planning and development and which will be launched between six to nine months period. We are also evaluating few more opportunities to deploy the funds for these by Purva Real Estate Fund. Besides this, many more opportunities are under construction has well.
Coming to the overall business outlook on the economy is — state of economy. The Indian economy is showing the stability and resilience and we are bullish on it. We are upbeat about our relaunches and we will continue to focus on the scaling in our operations while maintaining a healthy balance sheet. We are determined on two aspects, new launches in each quarter and continuous construction and delivery for ongoing projects, which we’ll keep increasing with each launch.
As an organization, we are committed to giving back to the environment we operate in and we believe that strengthening the ESG framework is essential to ensure business continuity. We will continue to focus on necessary action funds to imbibe the ESG framework for our business. Our business transparency, innovation, strong leadership, engineering equipment, and brand value will continue to create value for our stakeholders. We are confident of continued improvement in our performance over the long term and the company’s stability to deliver consistent, competitive, profitable, and responsive growth.
With this, I conclude my remarks. Thank you for joining the conference call. We are now open to questions that you may have. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] We have our first question from the line of N. Chandrabanu, an individual investor. Please go ahead.
Unidentified Participant — — Analyst
Yeah. Good evening. Thank you for the opportunity. Hello? Can you hear me?
Abhishek Kapoor — Executive Director and Chief Executive Officer
Yes. We can hear you.
Unidentified Participant — — Analyst
Great. Good evening. Sir, I could see that despite of higher sales and revenue is not comparable to the same, and that is one thing. Of course, you have explained that you can’t really show the sales until you deliver the flats to the customers, but the — still whatever we get the revenue is delivered only relative to PAT. So what is the outlook for us when we are able to deliver the flats to the customer? Can we see a positive PAT with the flats we’re going to present — deliver?
Abhishek Kapoor — Executive Director and Chief Executive Officer
Thank you for the question. Yes, so we intend to hand over additional 1,500-plus units by the end of this financial year and in the next two quarters where we have visibility already of our four large projects, and we are expecting a positive PAT at the end of the financial year.
Unidentified Participant — — Analyst
Okay. I have a follow up question.
Operator
Mr. Banu, I’m sorry. We are not able to hear you. Can you use the handset, please?
Unidentified Participant — — Analyst
Yeah. Can you hear me now?
Abhishek Kapoor — Executive Director and Chief Executive Officer
Yes. Yes.
Unidentified Participant — — Analyst
Yeah. So my question is that — my second question is see, we are constantly maintaining higher levels of debt and is there any plan of reducing debt levels going forward?
Abhishek Kapoor — Executive Director and Chief Executive Officer
Yes, very much. There is a roadmap that is there for reducing debt. Currently, the debt impact in next six months you shall see a lot of this debt is self-liquidating which will also pan out by the end of March or in the quarter of April, May, June. Also with the new launches that we are adding, there will be continuous effort towards repayment of debt. And we do have a roadmap of 24 to 36 months which clearly defines our debt reduction plan.
Neeraj Gautam — Executive Vice President, Finance
And these projects which are scheduled for delivery at this financial year, which Abhishek mentioned about 1,500 unit — plus units we’re going to deliver, and that will give our position link collection and cash flow. That will also help impair or repay that debt taken for that project, specifically for that particular project.
Unidentified Participant — — Analyst
Okay. Can you give us any kind of guidance of reducing debt levels?
Abhishek Kapoor — Executive Director and Chief Executive Officer
See, we do have a roadmap. We normally do not give guidance as you are aware of it, but yes, to answer the question in specific, we have a roadmap for next 24 to 36 months. This is actually demonstrated in last, in fact two years. We had debt of excess of INR3,000 crores and today we are down to around INR2,000 crores and this trend we intend to continue. If you see, we have been stable at a debt level of about INR1,850-odd crores from last four quarters and this current increase is also expected to self-liquidate because it is against — it was basically taken to repay IFC, which was an investment made by IFC and of course, there was one bridge capital which has taken, which is also already repaid. So the fact of the matter is that this is temporary in nature. And as we go ahead with our launches, the roadmap will look much, much more visible to all of you quarter-on-quarter basis. But the additional debt that you see between, say, last quarter and this quarter, this will liquidate in next six months.
Unidentified Participant — — Analyst
Okay. Thank you. That’s all from my side.
Operator
Thank you. [Operator Instructions] We have our next question from the line of Chintan Mehta from Prudent Broking. Please go ahead.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
Thank you for giving me opportunity. Sir, there are some slow-moving project. If you throw light on that Somerset House in Chennai, Equinox in Bengaluru, and Emerald Bay and Aspire in Pune.
Abhishek Kapoor — Executive Director and Chief Executive Officer
So as far as these projects are concerned, we have had some road access and approval pending for these projects. I’m sure you may have visited one or two of these projects and you would realize that there is a road access challenge, which is where it is slow moving but the company is working on it. And we believe that we will see better sales and in fact better realization from — in say, about two quarters from now. So there is a solution which is being worked upon currently for all three projects and we will definitely see improved sales in all of them.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
So in all three, we have pending?
Abhishek Kapoor — Executive Director and Chief Executive Officer
As far as the Equinox is concerned, that is as per the sales plan. The AOP, yeah.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
Okay, okay.
Neeraj Gautam — Executive Vice President, Finance
And Somerset is a high-end project. It’s one of a kind. It’s at a premium location and is a very high-ticket project. And that high ticket project, it will — more sale happens during the completion and you will see sales in coming quarters. Now project is at…
Abhishek Kapoor — Executive Director and Chief Executive Officer
It’s already picked up. In fact, I mean, the sales have already picked up and Chennai as a market especially in the city center, high-value projects, normally sells closer to possession. So that you will definitely see an improvement in the coming quarters itself.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
Okay, okay, got it. And sir, if you can just throw some light on the commercial front for the next two, three years, and then, for the next five, seven years in terms of development area and in terms of stagey as well that we want to be renting or selling side?
Abhishek Kapoor — Executive Director and Chief Executive Officer
So on commercial, we have one asset which we have already taken to market, which is about 800,000 square foot, which is currently gone under construction. The other asset we are taking into construction, which is about 2.1 million square foot by the end of this quarter or early next quarter. Other than this, as far as the new addition of projects is concerned, our strategy is to look at city center projects where we believe that the demand and value that that project brings to the organization and the platform is significant. And we are currently in — also as I think I’ve mentioned in the past are in the process of looking at a platform for the commercial assets, which will enable us to scale up our commercial development opportunities.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
So commercial platform means REITS? Via REITS or something?
Abhishek Kapoor — Executive Director and Chief Executive Officer
No. Commercial platform at this point in time would be with a private equity partner, and then of course, at some point in time, we will see how to look at the exit or evaluate our options.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
Okay.
Abhishek Kapoor — Executive Director and Chief Executive Officer
But currently, it is in the mode of scaling up for which we are looking at a private equity partner.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
Okay, and sir, on strategy side, we want to be sales side or we want to lease it out?
Abhishek Kapoor — Executive Director and Chief Executive Officer
So, it’s a — for the Kanakapura property, for example, will be a strata sale plan which is 800,000 square foot for the 2.1 million square foot that is the lease and hold plan at this point in time, and the new assets which we are looking at partnering on will also be on a lease and hold platform. However, we are extremely cognizant of debt and leverage. So in case if we want to look at some of the — maybe out of four towers, we want to exit one tower and make sure we’re balanced on our leverage, then we will always take those calls, strategic calls. But at this point in time, it’s mostly a leap strategy for the 2.1 million and the platform, and for the 800,000, it’s a strata sale.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
Okay, and sir on the AIF side, what do you think can go against our strategy or the risk you can see for the — that — I mean, if the project got stuck, then we still need to pay them fixed return and still need to time to buyback those?
Abhishek Kapoor — Executive Director and Chief Executive Officer
So the way we have looked at the platform, the AIF platform and the capital we are raising, it is basically going to be deployed in only two categories of projects, which is plotted development where you would have seen that our ability to turn around the cash flow and repay is very, very quick and it creates significant value. So our objective there. And second opportunity we are looking at is Provident. Again, the speed is of the essence in terms of our ability to start returning capital.
Now, from a project evaluation point of view, we are extremely careful. I mean, I’m sure you know in the history of Puravankara, there is not a single project that today you can say has been launched and is stuck or an investment which is — which cannot be unlocked. So we’ve been extremely careful in the way we are choosing these projects to make sure that we try and take these projects to launch very, very quickly from the date of deployment, and of course, the cash flow start turning around very, very quickly.
So we don’t really see, envisage any significant risk because of the choices of projects that we are making. Like for example, I think Neeraj mentioned that we have deployed our first capital for a plotted development in Chennai. And I mean in the large project that we did in Chennai, which was a plotted development, we sold out in three days, right? So we are very, very confident of the projects that we are investing in because we believe that this AIF is the long-term pool of capital for us, which will continue to scale in times to come and we want to ensure that the investors do get their capital back and in a healthy way, in a quick way.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
Okay, thank you. And sir, one more question on the Starworth Infrastructure. Currently, how much percent of our construction work is going by the precast?
Abhishek Kapoor — Executive Director and Chief Executive Officer
So currently, we have one project which is about 2.7 million square foot, which is under construction in precast. We have our own precast factory under Starworth. But basically, Starworth is doing multiple projects and all kinds of projects, special projects. It’s a full EPC company.
And as far as the business is concerned it’s a — I mean, their larger business interest is in clients like JSW Steel where we’re doing blast furnaces, we’re doing metro stations, we are doing Taj at Bangalore International Airport, and multiple such projects. So the idea is to scale up that as an independent business. And I think the business is doing pretty well in terms of its performance and billing as well as collections.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
Sure, sir. I have some more questions. I will get back in the queue, sir. Thank you.
Operator
Thank you. We have our next question from the line of Kalpesh from Spark Capital. Please go ahead.
Kalpesh Dave — Spark Capital — Analyst
Hi. First point was I just wanted to know couple of reasons for the dip in the profitability. Second was how do you see the impact of the repo rate hike on the INR200 crores of debt that we have, so about 190 bps repo rate hike has happened. What will be the impact on that? And third, I was looking at the other income. Other income is also reduced, any reason why that has happened and how do you foresee that?
Neeraj Gautam — Executive Vice President, Finance
If you look at our overall performance, sales, we are great. It’s one of the best quarters and one of the best half year. In terms of collection, if you look at its increasing trend we have collected INR519 crores for the quarter. For a total operating inflow basis we have collected INR678 crore for the half year basis, so all — and if you look at even construction outflow, that is also more than INR500 crore for the quarter. So all those parameters of sales, construction, and collection we have — the quarter has been robust and we are continuously performing quarter-on-quarter basis in an increasing trend.
However, in terms of revenue recognition, as I mentioned in my opening remarks, in this quarter we have been able to handover only very limited units and thereby earned a less GP. However, by various launch and sale of ongoing projects and new launches, the marketing expense and overheads, which is periodic expenses and it was charged against the lesser GP earned from the lesser units and thereby which resulted into a loss for the quarter. However, as we mentioned during the remaining period of six months, we are targeting to give possession of about 1,500 plus units, and thereby will going to recognize revenue from those 1,500 units plus the GP out of it, and thereby, we’ll be positive or profitable as a year as a whole basis. Hope I clarified your question.
Abhishek Kapoor — Executive Director and Chief Executive Officer
On the other income, I think the other income was largely on account of…
Neeraj Gautam — Executive Vice President, Finance
Exceptional. It was exceptional income for last quarter from a small exit from the Metro Cash & Carry project with Keppel, we received the money. That — and this, in our case, other income is normal. Regular other incomes are interest on FD plus any compensation, any interest we collect from the delayed cases that is a normal part of our other income. And it’s good that our other income is less and our operating revenues are more. I hope that clarifies your query of the reduction of other income compared to the immediate previous quarter.
Kalpesh Dave — Spark Capital — Analyst
Yeah.
Operator
Thank you. We have our next question from the line of Sumeet from Emkay. Please go ahead.
Sumeet Tripathi — Emkay Global Financial Services Ltd. — Analyst
Hello? Hello. Can you hear me?
Abhishek Kapoor — Executive Director and Chief Executive Officer
Yeah. Hi, Sumeet.
Operator
Please go ahead.
Sumeet Tripathi — Emkay Global Financial Services Ltd. — Analyst
Yeah. Thanks for the opportunity. I just have two questions. How much square feet are we planning to launch in the coming quarter? And my second question is what are the plans for allocation of INR700 crores of AIF? So how much of will you use for affordable and what is the timeline that we have in mind? And how is the revenue sharing agreement for the same?
Abhishek Kapoor — Executive Director and Chief Executive Officer
Okay, so as far as new launches are concerned in this quarter we are expecting — two, three projects are already in the launch mode. We are expecting to add two more projects in the — and add them to the launch mode. The three projects are in Bangalore, and one in Chennai, and one in Coimbatore. Between all of these projects, we will take to market approximately about 4.5 million square foot in this quarter.
Other than that, your second query on the AIF. We are looking at — we are basically looking at deploying that money in the plotted development as well as in Provident. The first one has been deployed in plotted development and we are evaluating projects, which we can take to market very, very quickly because we want these projects to be launched very, very quickly. The timeframe for this deployment will be between six and nine months. And from the revenue sharing point of view, the expected return should be met and this revenue share is being worked upon in a manner where the investors land up or the fund lands up making a return of early 20s. So that’s the target with which we are working as far as IRR and the revenue share is concerned for these projects.
Sumeet Tripathi — Emkay Global Financial Services Ltd. — Analyst
Okay. Thank you so much.
Abhishek Kapoor — Executive Director and Chief Executive Officer
Thank you.
Operator
Thank you. [Operator Instructions] We have our next question from the line of Harsh Parekh from SMC Global. Please go ahead.
Harsh Parekh — SMC Group — Analyst
Yeah. Thank you for the opportunity. Am I audible?
Abhishek Kapoor — Executive Director and Chief Executive Officer
Yes. Yes.
Harsh Parekh — SMC Group — Analyst
Yeah. So, my first question is regarding the land purchase cost which I can see on the expense side, what is this land purchase like which land has been purchased here around INR50 crore has been utilized for it?
Abhishek Kapoor — Executive Director and Chief Executive Officer
That land purchase is basically the plotted development only, which we invested in Chennai, which we mentioned. It was temporarily done from Puravankara and then it was moved to the fund.
Harsh Parekh — SMC Group — Analyst
Okay, okay, and the second question is regarding debt levels itself. So on quarter-on-quarter basis, your debt has been increased like in Q2 it’s almost INR30 crore, INR33 crore. What is the reason like and where is this debt utilized?
Abhishek Kapoor — Executive Director and Chief Executive Officer
So there are two places. You pointed out the first one. Debt was taken which is actually already repaid, which was towards buying this land and it got repaid from the fund, the moment that it got deployed, so it was a temporary debt. The other one was taken to repay IFC where we have receivables against that project. That project is almost more than 80% sold- out and we have receivables and we are targeting giving possession by — between…
Neeraj Gautam — Executive Vice President, Finance
Q1 next financial year.
Abhishek Kapoor — Executive Director and Chief Executive Officer
Yeah, between March of this year and June of the next financial year. April, May, June quarter. So that is a self liquidating. The purpose was really to repay IFC because IFC was equity investment and obviously the cost of capital was higher. This reduces the cost of capital and we are able to in fact save and add to our bottom line as we have repaid that capital with a much lower cost of debt, which has come at — with a — on a secured receivables. So that was the logic behind repayment of IFC with this capital. And obviously, as I mentioned earlier it is self-liquidating so this you will see — again, I mentioned earlier also in the call that you will pretty much see this go down very, very quicky in next six months.
Harsh Parekh — SMC Group — Analyst
What is the cost of the capital for this INR33 crores? How much shall be added to the finance cost in next quarter?
Neeraj Gautam — Executive Vice President, Finance
On overall basis if you look at our average cost of debt is 11.02% as on September 30, 2022. This incremental debt we have borrowed about 10.5% to 10.75% because part of it is also consist of our construction finance debt and part money as Abhishek mentioned. We have taken from against our self -liquidating project, a plotted development project, which is scheduled for completion in this financial year.
Harsh Parekh — SMC Group — Analyst
Okay.
Neeraj Gautam — Executive Vice President, Finance
And during some other questions of other participants, Abhishek has very clearly mentioned what is our strategy about liquidating or paring down debt over a period of time, six to seven months how our — what is our strategy and 24 to 36 month timeframe what is our strategy?
Harsh Parekh — SMC Group — Analyst
Okay. And my last question is do you foresee any change in — I mean, is there any change in the rising cost of the — because since interest rates are getting higher, are — is it impacting the — like are buyers are willing to buy the flats at these rates?
Neeraj Gautam — Executive Vice President, Finance
People are willing to….
Abhishek Kapoor — Executive Director and Chief Executive Officer
Currently, as you can see from the sales trend and what we’re seeing on the ground, we are not seeing any change in terms of the buyer’s intention to buy at the current interest rates. So we are continuing, I think Neeraj started with that commentary saying that we are quite optimistic that right now quite encouraged with the way the sales are moving. We are right now seeing at this point in time really no impact on our sales. I think the customers have become very intelligent in the way they are managing their cash flows and their planning. And I think the fact or the proof of the pudding is in the fact that you seeing quarter-on-quarter increase in sales across our business. And of course…
Neeraj Gautam — Executive Vice President, Finance
Including ours.
Abhishek Kapoor — Executive Director and Chief Executive Officer
Yeah.
Neeraj Gautam — Executive Vice President, Finance
And probably we can see that this is now related to the interest rate increase. For last two, three quarters home loan interest has increased every quarter but still home loan sales have been growing across the industry.
Harsh Parekh — SMC Group — Analyst
Okay. Thank you, sir. Thank you very much.
Operator
Thank you. We have our next question from the line of Samar Sarda from Axis Capital Limited. Please go ahead.
Samar Sarda — Hotels and Building Materials Senior Manager
Thanks, Abhishek. I thought I’ll chip in with a couple of questions. Debt is clear like we’ve used it for IFC as well as dividends. Now, I had a question on cash flows actually. Sales have been improving, construction expenditures like for the first half of this fiscal year has been pretty high, but the collections hardly kept pace which is where we see it was down. How was this changed here over the second half or next fiscal because we made roughly INR68 odd crores, INR69 crores of operating cash flow this fiscal which you’ve utilized in land, and then you had to borrow to service IFC. How was the [Technical Issues]
Operator
Use the headset, please.
Abhishek Kapoor — Executive Director and Chief Executive Officer
Right.
Samar Sarda — Hotels and Building Materials Senior Manager
So if you could just help us on the OCF trajectory and how will the collections increase?
Neeraj Gautam — Executive Vice President, Finance
If you look at our cash flow statement and traditionally also cash flow statement has three segment. One is operating segment, one is investing segment, and one is a fixed asset-related financing segment. So if you look at our operating surplus, our all ongoing projects, all our project expenses is getting met out of our operating collections and we are generating surplus there as well. However, we are — while doing the existing activity like we mentioned that if I am acquiring a land at a particular place or if I am repaying any of the costlier debt, there we are borrowing money, repaying higher cost debt, or borrowing money and investing in acquiring new debt. So that is my investing activity. And any increase in debt is coming out of our investing activity. As far as our operation is concerned, we have been able to meet all our construction at a faster pace and still generating a surplus.
Abhishek Kapoor — Executive Director and Chief Executive Officer
Samar, I’ll just add a couple of points here. And you will see as we go along with the new launches, the operating surplus only going up. You will also see the construction burn continuing to go up because that is the trajectory. The more we sell, the more we launch, the more we construct, the more the cash flow. So it’s going to be a continuous process and you will see these collections continuing to grow quarter-on-quarter as we go along. And that is the intent when you scale business to ensure that your operating cash flows continue to be positive, surplus, and it keeps increasing. And that is how over a period of time when I was earlier also talking about debt reduction is the kind of roadmap that you will see because what will happen as you do these launches is all of your equity in these projects plus the profits of these projects will start coming back to you in the surplus form and as that happens you will continue to pay down debt.
So the point I’m making is essentially the trajectory that you’re seeing which is basically last year to this year, we — our collections — operating collections have gone up by over 50%, almost 50%. You’ll continue to see that trajectory.
Samar Sarda — Hotels and Building Materials Senior Manager
All right. I agree, Abhishek. If I could just deliberate on this because our operating outflows like for the first half are like at nearly INR1,000 crores whereas the entire last year was INR1,350 crores, so collections have of course increased, but I think your expenditure has increased more than that. The other query is these are consolidated cash flows, so this would also include collections from Starworth as well right?
Abhishek Kapoor — Executive Director and Chief Executive Officer
Absolutely, you’re right. And also, you have to keep in mind that my outflows are including my investments into new projects launches. So those launches are happening right now. When I’m paying for any clearances, any approvals, design, launch, a whole lot of expenses that I am doing today is getting booked in my outflows today. That’s where I’m spending my money, which basically means that this will result into larger inflows as we go forward. So don’t look at the burn as only the operating burn as in the burn in the project in which I’m already under construction. Look at the operating outflow, which is getting invested in launching new projects, and therefore it will give you much more substantial surplus as we go forward.
Neeraj Gautam — Executive Vice President, Finance
And at the same time, more operating outflow means more faster construction activity, faster we are reaching towards delivery, and that will keep — get us closer to revenue recognition on completion of the project. So it’s good that whatever we’re collecting, we’re deploying on the ongoing projects itself.
Samar Sarda — Hotels and Building Materials Senior Manager
Sure and just one last thing. The four projects, so around about 1,500 units which you’re delivering like in the second half of this fiscal, what is the collection which is like due from the sold apartments from such a high delivery?
Abhishek Kapoor — Executive Director and Chief Executive Officer
I think we’ll have to come back, circle back. We’ll send you the details separately on this one.
Neeraj Gautam — Executive Vice President, Finance
Otherwise, you can go to our slide in our investor presentation. On an overall basis, we are giving detail about what is our balance collection from sold units and what is the balance revenue of unsold inventory.
Samar Sarda — Hotels and Building Materials Senior Manager
Yes. I thought like because you had big projects.
Neeraj Gautam — Executive Vice President, Finance
Slide number 20.
Abhishek Kapoor — Executive Director and Chief Executive Officer
He’s talking about specifically these projects. We’ll send that data out separately.
Neeraj Gautam — Executive Vice President, Finance
Separately.
Samar Sarda — Hotels and Building Materials Senior Manager
Sure. Sure. Thanks a lot.
Abhishek Kapoor — Executive Director and Chief Executive Officer
Thank you, Samar.
Operator
Thank you. [Operator Instructions] We have our next question from the line of Mihir Desai from Desai Invest. Please go ahead.
Mihir Desai — Desai Investments — Analyst
Thank you for the opportunity. Sir, one of my question was on commercial project. So can you please tell me a number of how much investments which we have done in the commercial project till date?
Abhishek Kapoor — Executive Director and Chief Executive Officer
Again, I think we will circle back on this question with exact information. Right away, we don’t have it handy, but yeah, we’ll circle back with this exact information.
Mihir Desai — Desai Investments — Analyst
Sure. No problem. Secondly on BD pipeline, sir. So currently, how does your BD pipeline looks like? And if you can throw some color in the — especially in the west as you know we have hired senior people in Mumbai, so can you throw some light on this? And any new JDs or JVs which you are doing?
Abhishek Kapoor — Executive Director and Chief Executive Officer
So we are very, very actively evaluating and working on opportunities in both Mumbai and Pune. These are the main two geographies that we are focusing on. What is very important for us to keep in mind is that we are looking at projects and business in a manner where we should be able to take it to market quickly. At the same time, there should be value and margins in the business. So basis that, we are evaluating opportunities for both Provident and Puravankara. And both between asset-light and outright purchases in both Pune and Mumbai. Mumbai, in fact, we’re also evaluating certain brownfield projects which have come to us. So it’s a mixed bag of projects because opportunities are good there. The idea of putting a leadership team there and investing in that is that while we have our ongoing projects, we need to add new pipeline of business, and we are pretty much on track with that. So we will continue to evaluate and deploy at our own — in our own — basis our own evaluation.
Mihir Desai — Desai Investments — Analyst
Sure. And sir, lastly, I just wanted to know on the land banks. So are we looking or exploring to — for any new acquisitions on the land bank front?
Abhishek Kapoor — Executive Director and Chief Executive Officer
No, it’s a continuous process. Land for us is like raw material for any other business, so it’s constantly churning for us. As we produce more, we deliver more, we keep adding more pipeline, and we’ll continue to do that.
Mihir Desai — Desai Investments — Analyst
Got it, sir. The question I asked this because, sir, recently the land prices have gone up so that’s why I just wanted to check with you like that is a — currently, it’s not hurting…
Abhishek Kapoor — Executive Director and Chief Executive Officer
Yeah, which is why I think, two things. One is you always keep in mind when you’re evaluating your margins on the replacement cost of land and therefore you factor that in when you’re pricing your projects. And therefore, you’re replacing — you know that the surplus should be able to replace the inventory that you are selling. That is one.
The second is we are very, very mindful on the value that we want to pay. If we see an opportunity which the value is not stack up for us, we have an opportunity to move to the asset-light model where we protect our margins and we shift that — the revenue share or the areas share then takes care of the land owner’s interest. And if we believe that there is sufficient margin and the project makes sense to put out our own capital and it’s coming at the right value, we will outright buy. And of course, we have multiple pools of capital as we mentioned earlier and that gives us the flexibility to deploy in all kinds of deals.
Mihir Desai — Desai Investments — Analyst
Sure. Thank you, sir. Thanks for taking my questions.
Operator
Thank you. We have our next question from the line of Chintan Mehta from Prudent Broking. Please go ahead.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
Sir, is there any plan to monetize any land bank or any entire project like Godrej Fund deal?
Neeraj Gautam — Executive Vice President, Finance
No, there is no plan to monetize any land bank per se. We are in the business of developing our projects and our focus is really to launch all our projects and impact all the land bank. We are working simultaneously to unlock value, so we are pretty much on the job as far as our business is concerned.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
And sir, if you can share the project margin of the three large Bengaluru projects, Atmosphere, Park Square, and Tivoli Hills? It is possible?
Abhishek Kapoor — Executive Director and Chief Executive Officer
We can separately share that with you. Yeah, one-on-one we’ll share that with you.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
Okay. Sure, sir. Sir, where you can see the realization going forward broadly in the Bangalore market for…
Abhishek Kapoor — Executive Director and Chief Executive Officer
So I think Bangalore market is a very, very steady market in that sense and this market produces a lot of volumes and produces a fairly balanced profitability. So we continue to see that. I think the margins will stay protected. We possibly see — there may be a little bit of a shortage of supply and maybe on opportunistic basis you will see increased prices in some of the projects. And it also depends on the ability of a brand to command a premium.
I mean, you took the example of one or two of our projects where we are commanding maximum premium and moving maximum inventory in that market, right? So it depends on the project, the brand, and its ability. But if I have to answer, generally, Bangalore as a market is a very steady market and we’ll continue to see the volume scale up.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
Okay, and sir, for the upcoming project that we have large 15 million square foot of project, how much area regulatory permission is pending?
Abhishek Kapoor — Executive Director and Chief Executive Officer
So, as I mentioned, I think this is — yeah. I mean, this is basically — all of this is under approval. Different status under sanctions. As I mentioned, of this almost five projects are in — going to be in launch mode in this quarter itself and then we will add the rest of them in the March quarter. Three of them have got RERA and are under launch mode. Two more we will add in this quarter, the rest of them are in advanced stages of approvals. And as we get RERA approvals in the next quarter, we will take them to market. But investment activity in those projects is already going on.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
Okay, okay, and how you are planning to fund this project? Any — it will be made by our operations?
Abhishek Kapoor — Executive Director and Chief Executive Officer
Yes. So all of these projects basically we have already paid for land, right? So there is no land cost per se for these projects. This is only going towards clearances and launch expenses. So that is coming from our operating income.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
Okay. And sir, just a…
Abhishek Kapoor — Executive Director and Chief Executive Officer
And I think I mentioned it earlier also, somebody asked this question as to your outflow. The outflow is going towards these projects as well, new launches.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
Okay. And sir on the revenue rate — I mean on the P&L side, this land, the cost we have passed on, it will be recognized lately or it is already passed before that?
Abhishek Kapoor — Executive Director and Chief Executive Officer
Sorry?
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
The land which the five project land cost will come to the P&L when we launch it or it is already on the when we purchased it?
Neeraj Gautam — Executive Vice President, Finance
No. What will happen here, while we recognize revenue then only cost of revenue will come to the P&L. However as as duty-free as a complete requirement, all our expenditure is done during the quarter. On a functional basis we have to report in the profit and loss account. So if you look at this quarter’s P&L there is a INR50 crores land payment being sown. However, that lend payment is not impacting this quarter profit and loss account, it is getting added to the inventory at the other IP and in the balance sheet level.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
Okay, okay. And sir just I have one request. If you can add one more thing in presentation of expected date of the new launches and possession date, if it possible then it will be a great help to us.
Neeraj Gautam — Executive Vice President, Finance
Date of launch is there. If you look at our Slide number 14. Posession date, completed.
Abhishek Kapoor — Executive Director and Chief Executive Officer
Are you asking about launch date or possession dates?
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
Both I think.
Neeraj Gautam — Executive Vice President, Finance
Okay. So launch date already on Slide number 14.
Abhishek Kapoor — Executive Director and Chief Executive Officer
Slide 14.
Neeraj Gautam — Executive Vice President, Finance
Possession date as it generally we published as a regulatorily. See possession date has a regulatorily as and when we go and formally launch the project. Before launching the project, we have to obtain the RERA registration. As you know that is law applied across the country. And while taking RERA registration, we have to mandatorily declare the date of possession, the date of completion of each project, and which we published as soon as we launch, we’ll publish on the RERA website with available access to all, including our customers as well as investors.
Chintan Mehta — Prudent Broking Services Private Limited — Analyst
Okay, okay. Thank you so much, sir. That’s all from my side.
Operator
Thank you. [Operator Instructions] We have our next question from the line of Rohit Sharma from Zen Wealth. Please go ahead.
Rohit Sharma — Zen Wealth Management Services Limited — Analyst
Hello?
Abhishek Kapoor — Executive Director and Chief Executive Officer
Yes, Rohit.
Rohit Sharma — Zen Wealth Management Services Limited — Analyst
Am I audible? Yes.
Abhishek Kapoor — Executive Director and Chief Executive Officer
Hi, Rohit. Yes.
Rohit Sharma — Zen Wealth Management Services Limited — Analyst
Thank you for the opportunity. My first question is can we see any impact of festive season in the coming quarters? Like any growth due to this festive season?
Abhishek Kapoor — Executive Director and Chief Executive Officer
Yes, definitely. I mean you can see the initial impact of the festive season in the September period, now we will — we are continuing that growth and that activity on the ground. So we expect normally as an industry and as a practice, you would normally see third and the fourth quarter are pretty big quarters of the year for everybody. So we are pretty much in track and online with that.
Rohit Sharma — Zen Wealth Management Services Limited — Analyst
Okay. Fair enough. And can you provide the revenue breakup of your other segments like Starworth and Purva streak?
Abhishek Kapoor — Executive Director and Chief Executive Officer
We can again share that separately, one-on-one.
Neeraj Gautam — Executive Vice President, Finance
We can come back on that.
Abhishek Kapoor — Executive Director and Chief Executive Officer
Yes, we can come back to you, yes.
Rohit Sharma — Zen Wealth Management Services Limited — Analyst
Okay. No problem. And my last question would be like what according to you could be the differentiating factor for Puravankara in an already competitive market of this Mumbai and so what could be that?
Abhishek Kapoor — Executive Director and Chief Executive Officer
So, I think Puravankara is brand, it carries a legacy of 47 years of strength of delivery and quality and what we bring in the way we look at customers’ needs and the way we look for solving it. I think brand is also move towards servicing the customers and it’s built of course on trust that we have always delivered our projects. So I think as a brand with the strength of quality and strength of delivery and track-record, as well as our ability to address customers’ needs and service the customer needs is a clear demarcation. When I say solved for the customer needs, we are constantly innovating, we’re constantly changing the — changing what product we are bringing to the market because we are addressing the needs of the customer. I mean this is historically visible, we were one of the first to do multi-storied buildings, one the first to bring international experience into our home projects, one of the first to bring in a manner affordable housing precast, first to bring technology in people’s homes. We have something called BluNex.
So we’ve done a lot of course and that continues to — as we carry on with that innovation and the passion of design that we bring on the table for the customer, I think that is what stands out for the consumers, and that’s a differentiating factor even for the Bombay market. It just cuts across. And the fact that we have delivered more than 45 million square foot, I think we can count on our fingers how many developers in the country have done this kind of business. So in that mix — big strength and that will continue to be our mainstay.
Rohit Sharma — Zen Wealth Management Services Limited — Analyst
Okay. Thank you.
Neeraj Gautam — Executive Vice President, Finance
Just to add. For our brand, Provident that we are now competing more for sure. For every penny which customer is paying, we are committed to deliver more for every penny customer pays for our flat. Hope you have seen our brand campaign on the LinkedIn and other social media for Provident Housing Limited.
Rohit Sharma — Zen Wealth Management Services Limited — Analyst
Yes, yes, yes. Okay. Thanks for the opportunity. Thank you.
Abhishek Kapoor — Executive Director and Chief Executive Officer
Thank you.
Operator
Thank you. As there are no further questions, I would now like to hand the conference over to management for closing comments. Sir, any closing comments?
Neeraj Gautam — Executive Vice President, Finance
Thank you once again, ladies and gentlemen, for your time and interest. I hope me and my colleagues were able to answer all your questions. However, if you require any further discussion, we are always available for the discuss during the coming weeks. Thank you once again.
Operator
[Operator Closing Remarks]