Puravankara Ltd (NSE: PURVA) Q3 2025 Earnings Call dated Feb. 14, 2025
Corporate Participants:
Deepak Rastogi — Group Chief Financial Officer
Ashish Puravankara — MD and Executive Director
Analysts:
Abhishek Lodha — Analyst
Deepak Purswani — Analyst
Chintan Mehta — Analyst
Harsh Pathak — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Purvankara Limited Q3 FY ’25 Post-Results Conference Call hosted by Motilal Oswal Financial Service. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Abhishek Lodia from Motilal Oswal Financial Services. Thank you, and over to you, sir.
Abhishek Lodha — Analyst
Thank you, Yusuf. Good evening, everyone. On behalf of Motilal Oswal Financial Services Limited, I would like to welcome everyone to Purvankara Limited Q3 FY ’25 results call today. As always, we have from the management Mr Ashish Purovankara, MD, Executive Director; Mr Abhishek Kapoor, our Executive Director and Group CEO; Mr Deepak, Group CFO; Mr Niraj, our Deputy CFO; Mr Vishnu Murti, Senior VP, Risk and Control; Mr Rajat, CEO, West and Commercial Assets; Mr Malana, CEO of Provident Housing Limited. I would now like to hand over the call to Mr to the management for their opening remarks, after which we will move on to the Q&A session. Thank you and over to you, sir.
Deepak Rastogi — Group Chief Financial Officer
Yeah, good evening, everybody. I’m Deepak here. I thank you for joining the company’s earnings conference call to discuss the performance of the 3rd-quarter and nine months ended financial year ’25. The results and a comprehensive presentation is available on the stock exchanges. We hope that you have a chance to review the same. Before we begin, let me thank our host for today’s earnings call, Oswal. Now moving on, let me first start by giving you some brief highlights on the sector performance and outlook followed by our financial and operational performance for the quarter. India remains the back-end of growth and opportunity with our balanced foreign policies, India is a strategic player in the global geopolitical and economic landscape. These factors have continued to the momentum of the country’s real-estate sector, reflecting the broader optimism surrounding the country’s economic future. India’s residential real-estate market new heights in 2024, achieving a 12-year high in annual sales and is recording steady growth across major cities with the final quarterly performance accelerated by the seasonal western demand. This growth proppled annual sales over 300,000 housing units for the second consecutive year, while there is a Q-on-Q growth of 7% in-housing unit sales during Q3 of financial year 2024-’25, we did witness a clear shift de-remorization towards pre-mobilization, the evolving buyer preference driven by aspiration for an enhanced lifestyle and confidence in Indian economic trajectory. The office real-estate market has sustained its record-breaking momentum with annual transaction volumes surpassing 72 million square feet, the highest on record to an all-high absorption of 79 million square feet-in 2024. There is a strong momentum in activity during October to December quarter of ’24 with the required quarterly space take-up 22.2 million square feet. This robust performance-led to a 10% Y-o-Y jump-in the office leasing during Q4 of 2024 and an 8% Q-on-Q increase in an absorption. Technology sector drove highest leasing activity, followed by flexible space operators and BFFIs BFSI. The recent changes in the Union budget and RBI reducing repo rates by 25 basis-points to 6.5%, marking the first-rate cut in the last five years will — which would actually stimulate economy growth and is expected to make loans including those for homes and vehicles more affordable, potentially boosting consumer demand in the real-estate sector and provide incentive to India — India’s real-estate industry. We expect that coming years are poised to — for robust growth driven by country’s economic performance and rising demand across residential, commercial and industrial segments, increased urbanization, infrastructure development and favorable government policies are boosting homeow competency. Now I will actually move to the company’s financial performance and operational highlights. So during Q3 of ’25, our sales were INR1265 crores, where sales volumes were 1.43 million square feet. Customer collections for Q3 increased by 6% Y-o-Y to INR993 crores. Similar numbers for nine months of financial year ’25, the customer collections improved by 19% Y-o-Y. It is important to note that collections have increased significantly, growing from around INR350 crores per quarter during 20 financial year ’22 to a current quarterly run-rate of approximately INR1,000 crores. Average realization for the quarter has also increased by almost 16% Y-o-Y to 8,847 per square feet because of the mix of inventory, while Purvankara and Provident saw 29% and 7% Y-o-Y increases respectively. Our sales for the quarter across projects were led by Provident, which saw massive growth of 76% Y-o-Y and the year and the sales was INR737 crores on account of consistent sales in ongoing projects and successful launch of Ecopolitan Phase-2, while Purva maintained its sustainable sales velocity, achieving 29% increase in realization. The geographical contribution for nine months ended nine months period for this financial year, the contribut — 60% was contributed by followed by Chennai at 16%. Mumbai and Pune were at 11% and Kochi at 9% respectively. Increase in sales from Mumbai and Pune is indicative of growing presence in Western region. New acquisitions and redevelopment projects in Mumbai with GDP of — GDV of approximately INR9,200 crores plus is expected to contribute to the market-share in the coming quarters. Our launch pipeline for the company is robust with approximately 1.63 million square feets of the new plant projects with non Bangalore projects now accounting for 47% of the share of ongoing and 73% of planned projects. Mumbai and Pune together constitutes 50% of the planned projects indicating our robust pipeline in West Asia.
On business development front, we have done land investments of approximately INR1,236 crores during this nine months of the financial year. We have done business development close to 7 million square feets, the GDV over INR12,000 crores during this time. This strategic investment strengthens our development pipeline, positioning us for sustained growth and value-creation. Our operating cash-flow for the nine months stood at INR3,209 crores, up by 14% Y-o-Y. Coming back to the Q3 performance for this quarter, our revenue — our total revenue was INR334 crores. EBITDA margins for the quarter were around 10%, while we had a net loss of INR94 crores for the nine months ended for this financial year, our total income increased by 16% Y-o-Y, while the total P&L comprehensive loss was approximately — it was approximately INR99 crores. The pre-sales revenue for nine months was INR3,724. The sales and marketing expenses and overheads incurred for the pre-sales have been entirely charged to as per IndAS standard 115. While we have reported a loss of INR99 crores for the nine months of for the financial year under IndAS, under the percentage-of-completion method, it would be rather we would have actually reported profits for this particular period. Similarly, like last year for the financial year ’23, ’24, we have reported under NBS a PBT of around INR68 crores versus under percentage-of-completion method, the profits were actually at INR160 crores for a similar period. Further, we are expecting occupancy certificates for the projects like,, Oakshire and Adora Dir Goga over in next two quarters with total sellable area of 3.95 million square feets with total GDV of 3,200 crores, out of which the sold value is INR2,550 crores. Coming to our debt management. Our debt stands at around — the gross debts — sorry, the next debt stands at around INR2,80624 crores as on 31st of December ’24 with a net debt-equity ratio at 1.58% our cash and bank balance was INR736 crores, which indicates strong liquidity profile, ensuring stability and operational continuity. The debt per square feet has increased vis-a-vis the previous quarter, primarily due to capex towards commercial development and lab acquisition for future growth and deferment of projects launched due to delayed approvals. However, we remain committed to optimizing financial resources by continuously working to reduce debt for Square food or under-construction project and we are also focused on maintaining optimal financing structure, including raising equity through QIP, AIF zero platform level, funding, etc. We are excited about next 15 months, which will see increased velocity in acquisitions and new launches in-line with the growth plans of the company and also the country. We want to highlight our strong growth trajectory over the last three years. Our sales growth has grown at CAGR of 57%, while collections have increased at a CAGR of 58%. The area delivered has expanded at a CAGR of 47%, 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 new projects in our focus markets with a strong pipeline of already launched projects and further planned launches as well as ongoing business development. Thank you for patiently listening. We can now open the floor for the question-and-answer session.
Questions and Answers:
Operator
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to withdraw yourself from the question queue you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. Participants to ask a question, you may press star and one first question is from the line of Ishita Lodha from Swan Investments. Please proceed.
Deepak Purswani
Yes, hi. Deepak
Operator
Mr Deepak, your voice is breaking
Deepak Purswani
Yeah, am I audible now?
Operator
Yes, you are audible now.
Deepak Purswani
Yeah, hi, good evening to the management and congratulations for the new
Operator
Mr Deepak, your voice is breaking again.
Deepak Purswani
Am I audible now?
Operator
No, sir it is not clearly audible. It is breaking in-between.
Deepak Purswani
I will join back-in the queue.
Operator
Sure, sir. Thank you. Before we move to the next question, a reminder to the participants to ask a question, you may press star and 1. Next question is from the line of Chintan Mehta from Family Office. Please go-ahead.
Chintan Mehta
Hi, sir, good evening. My question regard, can’t we recognize the purchase of land cost in for many years, five, 10 years down that kind of? Or we need to only recognize them upfront?
Ashish Puravankara
What do you mean by recognize it? The land purchasing cost has been go into our inventory and investment, it’s — sorry, I didn’t follow the question, please come again
Chintan Mehta
For the five, 10 years or until we exit the project?
Ashish Puravankara
No, no. So basically, this is — this is raw-material for us as a real-estate development company. And as we go along, we are not expensing it out-of-the P&L. I think when Deepak was referring to cash-flow and debt he meant was there is a substantial amount of investment that has been done from cash-flow perspective in-land. And obviously, as and when as per accounting standards, the cost is booked when we deliver the project because this is a project completion method of accounting. So that’s how it operates. I’m not sure if I’ve answered the question.
Chintan Mehta
Okay. And sir, subcontract cost, it is for the — only for the project which we delivered or it is for the entire in particular quarter time?
Ashish Puravankara
So subcontractor cost is for the projects which have been delivered. No, it includes the contractor cost and the contractor cost, which is coming on the face of financial statement is reflects the kind of construction activity we are doing and amount we have incurred on our ongoing projects that also includes the cost of the inventory, the inventory which is recognized during the period.
Chintan Mehta
Okay, understood. And sir, I have a question regarding the land asset. We mentioned we have close to around 27.23 million-square-foot. This is the total land-bank we have, not the developable area, correct?
Ashish Puravankara
Area under development currently is about 33 million-square-foot and land-bank is about 27 million-square-foot.
Chintan Mehta
Okay. So if I need to arrive at, I need to multiply with FSI correct, sir,
Ashish Puravankara
This is the sellable area. This is underlying FSI, correct.
Chintan Mehta
Okay. And just
Ashish Puravankara
In different geography, different locations and our lens are spread in different part of the country. Hence the easier understanding of the user of this statement, we have applied the applicable SSI and we’re publishing the data, which is available area
Chintan Mehta
Okay. Sir, just suggestion, I mean, any real-estate company post that or in which area or which geographical part they own the land, for example, South Bangalore, North Bangalore, how much acre they own. So if you can arrive or share that data on presentation, that could be great help to us.
Ashish Puravankara
Sure, we can do that. As of now, page 17 of the ICP consists of city-wise distribution and brand-wise distribution. If you need any further details, you can write to us separately and we can answer it.
Chintan Mehta
Okay, sure. And sir, what is the peak that we are targeting that a maximum date which we go to —
Ashish Puravankara
Sorry, what is it what we are targeting?
Chintan Mehta
A peak debt number,
Ashish Puravankara
Peak debt number. No, so as I said, and we have been maintaining that. From the residential debt perspective, our target is always to maintain at INR1,000 a square-foot and under of area under development. That’s the target with which we work. Now if you see refer to Slide 21, it shows that debt per square-foot on residential and land currently is at about INR910 per square-foot. Now eventually debt is a factor of the quantum of business that you do and how we look at it is what kind of surplus are you able to generate with the debt that you currently have. So if you look at — while our debt is at INR2,800 crores, and if you look at our slide of surplus, the surplus is of including the new launches which we have shown is of INR14,000 plus crores, which means there is more than adequate you know summer in terms of the surpluses coming in from this site.
Chintan Mehta
Okay. And sir, typically construction cost is in was say this example per square-foot construction cost in Mumbai?
Ashish Puravankara
Yeah. So construction cost differs from market-to-market and area to area. In Mumbai also, it would differ. Should it be in a market like a Khane or in-market like a or a versus what could be in South of Mumbai. So it could be anywhere between INR7,500, INR8,000 rupees a square-foot on sellable area going as low as INR3,500 rupees a square-foot area and distance about depending on the height, type of products, specifications, etc. So that’s the general range if you’re asking about the Mumbai market.
Chintan Mehta
And for the Bangalore?
Ashish Puravankara
I’m sorry
Chintan Mehta
For Bangalore
Ashish Puravankara
And for Bangalore, Bangalore would be anywhere between INR3,200 rupees a square-foot going up to INR3,800 square
Chintan Mehta
I will get back-in the queue.
Ashish Puravankara
Thank you.
Operator
Thank you participants to join the question queue, you may press star and 1. Next question is from the line of Deepak Perswani from Swan Investments. Please go-ahead.
Deepak Purswani
Hi, good evening, sir. And congratulation Mr. And sir, I just wanted to check it out couple of things. Firstly, from the debt point-of-view, if currently we have a net-debt of INR2,800 crore and it is shown that in the next one year, we have a repayment schedule of INR1,071 crores. When I’m looking at the operating cash-flow before the land investment, this nine months we had close to INR250 odd crores. So just wanted to get the sense what is our broader plans to manage or to — in terms of the debt management over the next one year, especially this debt repayment part over the next one year. How should we look from the broader point-of-view?
Ashish Puravankara
So currently, if you look at our quarterly collections is about INR1,000 crores a quarter. And with the launches which we are expecting, there are about eight launches which are lined-up in next — between this quarter and next two quarters. Between these launches, we are expecting that the cash surplus will increase significantly and the cash collection will significant — will increase significantly. And of course, I think somewhere in the presentation, we’ve also mentioned the way forward in which we are looking at different methods of capital-raising in terms of equity, which includes our UIP, platform level and project-level, this is on Slide 31 on AIS and of course, the commercial platform. So the multiple levels at which we are looking at increasing our equity. At the same time, significant increase we should see in our cash-flow collections as the launches come through with a large we’ve been delayed on account of planned sanction approvals, which has been the industry situation largely on account of elections last year. So we would expect that this should more than adequate each other. And as I mentioned earlier, if you see the surplus slide picture is given, the cash surplus out-of-the new launches and existing projects itself is about INR6,600 crores. From the commercial platform, it’s about almost INR1,940 crores. And with the new launches will be another INR5,700 crores. So that more than adequately is just a matter of time as you start seeing that the money coming in. This is surplus. So obviously the collections are high.
Deepak Purswani
And secondly, sir, if you can also throw some light on the launch pipeline, how has been our launch pipeline in last nine months and how should we look into it in the Q4 and which are the projects which are at the rare ready at the current juncture from the launch point-of-view because we do understand there was some approval related issue but where do we stand-in terms of the launch point-of-view at the current juncture, which are the key projects which would be coming up for the launch in the next six months, specifically — specifically in the Q4?
Ashish Puravankara
Right. If you see Slide 19, it mentions the launches, which is expected in this quarter and the next quarter and some of the launches which we are expecting in this quarter are brand –, Grand Hills, Mundwa, Khane, these are launches which are expected in this quarter, including Heba Guri, but these one or two of may spill-over to early to-Q1. But having said that, most of these launches you will see in next two quarters coming. And other than that, a couple of additional projects will come in. Will come in the next quarter for sure Spire will come in. So what we are expecting is and in this quarter, we are expecting to come in. So what we’re expecting is, in addition to this, there are a couple of other projects which are there in the pipeline. I think we will announce more projects by 31st of March, which will get added for the next year’s plan. So we have a very robust pipeline and an extremely robust pipeline of acquisitions, which will continue to continue to help us maintain and create the momentum for the growth, which I think we will — when we talk in April quarter, I think you will get a better sense of it in terms of what more we will add-in the next year. But currently, what visibility we have shared on Slide 19, which is about 12.63 million square feet.
Deepak Purswani
Okay. So, sir, my question was more majorly related to the — in terms of the — out of these launch pipeline, how much are currently rare ready, which are about to launch in the next 15 20 days?
Ashish Puravankara
As I said you know you are currently you have another 50 days to go in the in the year currently Mundwa Grand Hills and Belindur have visibility may come in this quarter, we’ll have to see?
Deepak Purswani
Okay. Okay. And secondly, sir, in terms of the nine months, what are the key projects which have been launched and what has been the contribution in the pre-sales from the new launches in these nine months?
Ashish Puravankara
Look, so for the last nine months, I can tell you that we have higher sales from sustainance. So out of about INR3,700 odd crores, INR3,200 crores have been from. This is the highest-ever we have done in sustenance. Last year we were at about INR2,800 crores in sustenance. The gap has largely been at about INR500 plus crores has come from new launches. The gap has really been in the new launches and we are expecting to catch-up with this gap as I mentioned earlier, largely on account of procedural delays at the government approvals, which has been the case with the industry for this financial year, there has been a supply-side constraint. I mean, if you look at the industry data also, you’ll realize that there has been more absorption than supply. And I think that trend kind of continues till we all are able to bring in more supply, which I think will normalize in next in this quarter, in the coming two quarters after?
Deepak Purswani
Okay. And finally, sir, I mean from the trajectory point-of-view, we have been highlighting that this growth trajectory will continue. But from the overall perspective, if I were to look from the Nine-Month perspective, this time we are somewhere close to INR3,800 crore and last year we did a sales of INR5,900 crore. So how should we see this trajectory now from the overall perspective of the financial year as a whole.
Ashish Puravankara
So as I said, it’s a — so INR3,800 crores, it’s in and about similar number of what we were at last year. I think we’re at INR3,900 crores. And so it’s not very far from where we were nine-month period. Obviously, the last quarter, as I mentioned, we are expecting these four launches. So that will add a value in terms of the press number. And some of this, as I said, will spill-over in the quarter — in the next quarter or the quarter after. And I — from the way we are looking at it, the growth trajectory will continue. If it was not for the delay in planned sanctions, I think we would have had a very, very robust growth in this financial year as well. Having said that, I think we will definitely beat the industry average. That’s our goal and target which we are working.
Deepak Purswani
Okay. And sir, from the investment point-of-view, we had also raised the capital from the HDFC fund as a whole. If you can please provide us an update how much capital has been deployed out of this and how should we look from the deployment point-of-view in over a period of time?
Ashish Puravankara
About INR417 crores is already deployed. The balanced capital, which is a little over INR700 crores is expected to be deployed within — before June of this year. That’s the target in which we are working. A lot of active deals are currently at finance pages. Of course, new diligence and I’m sure you will hear about it. It takes its own time. I think we are in that process. Hopefully, within next 90 days, you will start hearing more-and-more deals, but definitely the fortune is the target to deploy the entire.
Deepak Purswani
Okay. And then, sir, finally on the demand environment front, we have seen and especially in the core micro-market, which is a Bangalore, there has been a price hike in double-digit price hike over the last nine months or something of that sort. How do you see the absorption trend going ahead in that particular macro market?
Ashish Puravankara
So you’re right. I think from price appreciation point-of-view, we have reached a steady-state. Absorption has been very, very robust. As I mentioned earlier, we have seen the highest-ever sustain sales and largely the prices have also gone up because of the supply-side, right? We have not been able to bring — the industry has not been able to bring enough supply to the market. And hence the supply is literally somewhere between seven to nine months in the Bangalore market, for example. But across the country, we are still currently looking at less than 12 months supply in general on an average. And what we are expecting is with the news, with the new supply coming in into the — into the market, we would expect an inflation plus 2% to 3% kind of average incremental price appreciation, unlike in the past where it was also on account of increased cost of — input costs of construction, et-cetera. But we would expect that it will be a steady-state. From absorption point-of-view, we believe that there is no respite in terms of the demand-side. We’ve continued to see significant demand in the market and I’m sure you’ll hear about it as and when we do our launches. On-ground, we are not seeing, of course, there is a lot of anticipation and requirement and need for housing in all of these markets somewhere Deepak covered the point that about 71 million square feet of commercial offices we leased-out in the country this year. That’s a clear indication of — it will have a multiplier effect in terms of employment and the economy and we believe that this demand is going to continue. And add to that, consolidation will continue and I’m sure Purvankara is going to be in a very good position to capitalize on that consolidation. So we believe that the demand is definitely there. Price appreciation will be possibly in inflation plus 2% or 3% industry average. Of course, different micro markets may have exceptions. You may have certain markets where you will see very-high price appreciation because of lack of supply and certain markets you will see relatively low-price appreciation because there is too much supply. So those factors that could be in different projects and micro markets on an industry average, that’s position.
Deepak Purswani
And from the margin perspective on the —
Operator
Maybe please request you to rejoin the question queue for the follow-up questions.
Deepak Purswani
Sure. Sure.
Operator
Thank you so much, sir.
Deepak Purswani
Thank you.
Operator
Participants to ask a question, you may press star and one. Next question is from the line of Harsh Pathak from Emkay Global. Please go-ahead.
Harsh Pathak
Yeah. Hi, team. Thanks for this opportunity. So I have a few questions. First is, I guess in the current quarter, we have so-far launched two projects, one in Bangalore, the Ecopolitan and one in Pune, Keshav Nagar. So how has the response been on these two projects?
Ashish Puravankara
Both the project response is doing quite good. Ecopolitans sold-out in fact, and as far as a Kishal is concerned, we have had over INR100 crores of sales at launch and we are seeing very, very good and increased traction in that market.
Harsh Pathak
Great. So how big would this launch be? I mean, each of this Bangalore and Pune, right?
Ashish Puravankara
So we can share the data separately in detail. Okay, eight in a month.
Harsh Pathak
Sure, sure. That’s fine. And the second is on the approval side, I guess in the first-half we had seen approvals move very slowly. But how have things picked-up? I mean from the last two, three weeks of December, we have been starting to see some approvals come through. But how is the situation now?
Ashish Puravankara
And definitely, somebody earlier on the call asked what is the pipeline looking like and as mentioned — you mentioned Ecopolitan and Mundwa, I also mentioned and and Thane and. These are projects that we are working on, which we see visibility of and then of course, the rest of the price we are seeing possibly may stay over in the next quarter. But overall, there is a much better momentum on the approvals, but given the number of sanctions and approvals that real-estate deals with and then you do still have in certain situations where you may have certain authorities not functioning, changes in committees, et-cetera, chairman getting appointed. So those are individual certain things that happen. But overall, yes, you’re right, there has been a much better momentum on the plant actually.
Harsh Pathak
Right. And sir, coming to the West region, so I think we already have a couple of projects of and bridge candy, maybe this would be on the luxury side. So how — how is the demand shaping up and when can we see these launches coming up?
Ashish Puravankara
So from a new project perspective, we have four projects, which is,, Pali and and Beach., we are expecting to launch in this quarter. And as well as and breach candy, we are expecting between the September and December quarter to take it to the market. But our target is that within this calendar year, on or before December, we should take all the projects which we have taken in Mumbai to the market
Harsh Pathak
That’s great to hear. So I visited the project. I mean the location is superb, but are we seeing, I mean, demand traction there because we are seeing a lot of around the luxury segment. So how — what dynamics are you hearing on-the-ground for this project?
Ashish Puravankara
Look, fortunately, each of these projects and we can get into a detailed discussion. Like example, has extremely unique in itself because it’s 2.5 acres, the largest project — the largest land parcel in that market. All the projects, I’m sure you are aware, since you, you know from Mumbai is largely half an acre at best short than an acre. This is a 2.5 acre project and that gives us an opportunity to really create a large community and you know, for example doesn’t have any large communities and whenever one or two projects have come where you have created large communities, you commanded a premium of more than 40% to 50% in fact equivalent to you and higher than you. So we expect that this market — this particular project in will see significant demand given the scale and size of the project in that market is possibly the largest. That is one. Secondly, very interestingly, the residents themselves have shown keen interest in buying homes here are not only getting what they have already got, but buying. So we see that interest. There are already a lot of people who have thought of the project reaching out to let them know as and when we do the launch. So on it — and similarly at Miami, again, this is next to candy club and overlooking the sea, again something which is a very premium because every unit will have sea view and it’s a very, very prime location., again, very similar in the sense there isn’t any project of the scale and size in that market. The only other project is one project, which is SRA project. So in that sense, we believe — and the previous project that was launched there in the same-area was sold-out 100%. So we’re very confident about what we expect in the market. And of course, Hana is a brilliant location. It’s right to fast. Again, we would expect you will see that the numbers should look good in all of these studies. So from the demand perspective, the strategy of acquisition has worked very well in terms of choosing the right project and the right products. So we’re very, very confident about pushing through these expecting good robust sales from these projects.
Harsh Pathak
Oh, great. Thanks for that elaborate answer. Just last two bits from my side. So one is we are targeting to take the land-bank to 45 million square feet over the next two to three years. So how is the project visibility and especially since we are focusing more on the West region. So what kind of projects are we targeting? I mean, in terms of locality of in the Mumbai and Pune, if you can throw some light there.
Ashish Puravankara
So when we say 45 million, it’s not just the West. A substantial acquisition will also happen in the South between Purvankra, Provident and land. Of course, West will continue to remain focused. But West is not about volume of square footage, especially Bombay. Mumbai will be more about value. Of course, Puneer, we will definitely bring in more acquisitions. But much larger volume of acquisitions will happen in the other parts of the country in the southern market specifically. And in terms of square footage, the 45 million-square-foot will — majority, if you were to look at square-foot, not value will definitely happen in the Southern market and how we look at each of these markets is we provided it to the city into different submarkets where we are — we understand the supply-and-demand dynamics and those are the markets that we are going after across these cities to look at focused effort for each of these categories for Lankara, Provident and Land, which has all got differentiated product offering to ensure that we are able to create the scale of acquisitions that we are targeting.
Harsh Pathak
Sure. And one last question, what is the update on the commercial project? When can we see rentals start kicking-in? And I mean for both the assets?
Ashish Puravankara
So we’re expecting to complete a total of about 2.2 million-square-foot in this coming calendar year — in this calendar year, which is expected between June and September. As we complete these projects, we expect that a large amount of leasing should get completed by December. But any commercial assets to get fully occupied and have fully stabilized income. It takes anywhere between six to 12 months from date of completion. So we would expect to see rentals obviously coming in-between December and March of the next financial year. And thereafter, I think another three to six months, we should see completely fully occupied stabilized income in these projects.
Harsh Pathak
Okay, so great. I mean those are my questions. Thanks for answering.
Ashish Puravankara
Thank you,.
Operator
Thank you. Participants to ask a question you may press star and 1. Ladies and gentlemen, if you wish to join the question queue you may press star N1 on your touchstone telephone. The next follow-up question is from the line of Deepak Perswani from Swan Investments. Please proceed.
Deepak Purswani
Yeah. Thank you, sir. Thank you for the follow-up opportunity. Sir, firstly, wanted to check it out on the portfolio basis on the — from the embedded EBITDA margin point-of-view, how should we look into at the current juncture? What are in-built embedded EBITDA margin at the current realization on the portfolio basis?
Ashish Puravankara
So EBITDA — EBITDA margin, I think we’ve mentioned in the past will be somewhere between 27% and 30%, of course, barring what we do in a redevelopment project and in a JD way generally on an outright basis, somewhere between 27% to 32%, 35% depending on the kind of product. In fact, we will land at a much higher EBITDA margin. Of course, redevelopment will have a lower EBITDA margin. So therefore on an average, we believe we assume we should target between 27% and 30% of EBITDA margin.
Deepak Purswani
Okay. So considering that — that in mind, if you can also share your thought process, what are our internal target in terms of managing the ROE of the company, I mean, how should we look from the trajectory point-of-view, return-on-equity from the next two, three-year perspective?
Ashish Puravankara
Look, I think that’s a very, you know, different way of looking this is being real-estate and being the way the sector is and the way we operate, we don’t look at return-on-equity. We look at our margin on the top-line. And the reason I say that is, for example, if I lined-up doing a JDA and make an investment of deposits, my return is absolutely, but you can’t compare the return, right, because you put in a deposit of INR50 crores, but we may have landed up with a substantially higher-margin and therefore the equity return is very, very disproportionate. And hence, we do not calculate equity return as far as our overall business is concerned. We focus on what kind of sales you are able to do and what kind of — and your earlier question, which was a question, what kind of EBITDA margin and PBP margin you can target, which our goal is that if you were to look at an EBITDA margin, we continuously work towards 27% to 30%. And of course, the ROE will be very, very different in terms of in certain cases will be very exponential.
Deepak Purswani
So let’s put it in this way, what would be the threshold IRR or targeted IRR we are looking based on whatever investment we have made in the last 12 months? And this IRR would be based on the last one year realization and since we have seen some kind of — I mean, whatever quotate IRR we would have looked at the underwritten price in the last one year, if there is some hike in the realization, where does these IRR stand at the current juncture.
Ashish Puravankara
So to answer that question, IRR would be anywhere could — again, it is extremely exponential in JDA. So I’ll put that as a disclaimer here when I answer that question. But should it be a redevelopment project or an outright purchase, your IRR will be in high-20s and early 30s. And of course, that is a pre-cost of capital. And of course, once you the cost-of-capital, that’s when you arrive on the company’s IRR. But that’s the target at which we close.
Deepak Purswani
Okay. And sir, sorry, again, harping on this cash-flow point again. If I were to look from the debt point-of-view of repayment schedule of INR1,000 odd crore, if you can also give some sense in terms of like you mentioned about there would be improvement in the operating surplus that would be sufficient. But if you can also throw some light in terms of the collection and construction outflow and what are the land payment plans over the next 12 months, that would be really helpful.
Ashish Puravankara
Okay. Let me answer this question a little more differently. We have a debt slide, which gives you a breakup of where the debt is sitting in-land or in residential. So if you look at the debt, INR2,200 crores is in residential, right? Out-of-the INR2,800 crores, this is Slide 22. Are you me?
Deepak Purswani
Yeah.
Ashish Puravankara
Okay. If you see Slide 22, there’s INR2,192 crores of debt sitting on the residential. Now this is self-liquidating debt, pretty much money going from the project, right? Yeah. Now the land debt, which is about INR889 crores is what really is the only debt we are talking about because INR479 crores is again capex towards commercial development. And as soon as it gets completed within six months thereafter, that is pretty much sustaining coming from the lease rental. In fact, you can discounted and you can payer a lot of debt and use that excess capital. Correct? Are you with me?
Deepak Purswani
Yeah, yeah.
Ashish Puravankara
And then you have about INR736 crores of cash-and-cash equivalent against INR889 crores of land debt.
Deepak Purswani
Okay,
Ashish Puravankara
Right? Now this INR889 crores of land debt is what we are talking about moving to the residential piece. So the moment this move and in fact, what we are taking to the market, if you look at 12-plus million-square-foot is far more than adequate to cover. So from the debt perspective, as I said, INR2,200 crores per security from the ongoing project where inventory is already sold, money is coming in, is getting liquidator as we go along. INR479 crores taken care of from the commercial lease rentals, 736 of cash equivalent line against 889 of bank which is going into production. So from our perspective, the way we look at it and another way to look at it, the same thing is I think as somewhere I mentioned about the cash surplus, which is about INR6,600 crores and about INR4,851 crores from the ongoing project. That also more than adequately covers the debt scenario from your perspective.
Deepak Purswani
Okay. So would it be fair to say — I mean, probably just checking from the broader point-of-view, let’s say, even if there is we were planning to raise the fund, even if that does not get implemented over the next six to 12 months, we would be sufficiently placed to reduce the debt from the current juncture?
Ashish Puravankara
Absolutely, we’ll be very, very comfortable to reduce the debt because as I said, INR2,142 crores is going right from the — from the project which is already under-construction 2,192, correct? The second thing is with these launches, the rest of the debt not only starts getting repaid, but starts providing you further room for acquisition. So there is from the debt perspective, I mean, of course, the choice will be ask whether we want to square debt, their debt or continue to grow. And this has been a conversation we’ve had. We continue to grow the business because we believe that the brand is, you know, able to really perform well and in the consolidation phase enjoy the premium in the market where we should bring in more-and-more supply and take more-and-more market-share. So hence, from our perspective, yes, to answer that question, that can be easily shared by the ongoing and new launches. But not just that, we are confident we’ll be able to go-forward and get more liquidity in the system with the launches to be able to continue on new acquisitions.
Deepak Rastogi
It’s just one more point, the surplus which we continue to maintain is close to INR14,000 some INR500 crores, right? So — and that debt is hardly INR2,800 crores. So whichever way you look at it, the debt is far more lower than compared to the surplus which gets actually generated out-of-the ongoing selling projects. So you know, we are not really concerned from a debt perspective overall.
Deepak Purswani
Okay good thank you and wish you all the best.
Ashish Puravankara
Thank you
Operator
Thank you participants to ask a question you may press star and 1 thank you. Next follow-up question is from the line of Chintan Mehta from Puneshka Family Office. Please go-ahead.
Chintan Mehta
Sir, if you can — you have mentioned somewhere that the capital value of commercial projects is INR2,833 crore. It is excluding debt value or the total value of the commercial project?
Ashish Puravankara
No, this is the total value of the capital value of the asset.
Chintan Mehta
Okay. So you’re taking at 10% of the yield of the rental value, correct?
Ashish Puravankara
Yeah, it would be at about 8.5%. 8.5%.
Chintan Mehta
Okay. So we have done hold it for the longer time, we are expecting a more square-foot realization going-forward for the five, 10 years and the capital value will multiply fold. And I think what would our ROIC return on invested EBITDA would be close to, 20% 22%, correct, sir?
Ashish Puravankara
I generally didn’t hear a thing about what you said. Sorry, but the voice is really muffled. Can you repeat that for me, please? Pardon me?
Chintan Mehta
No. We want to hold this commercial project for many years, correct? We are expecting more price.
Ashish Puravankara
Yeah. So the two — if I’ll just ask it, I got the question now right. You said will we hold the asset. So there are two assets which we are talking about currently, which are under production. One is AeroCity and the other is Gentech. As far as AeroCity is concerned, we intend to hold that asset and build a platform. In fact, we are looking at another acquisition also in Bangalore itself. On the other one, which is the Gentech, which is JD, we are evaluating an exit there and there, of course, we will pair up the debt and move ahead. At this point in time, that’s the thought process.
Chintan Mehta
Okay. And sir, both of the combined value we are spending close to around INR1,250 crores somewhere. I it somewhere.
Ashish Puravankara
Correct?
Chintan Mehta
Yeah. Okay. Thanks so much, sir. All the best.
Ashish Puravankara
Thank you.
Operator
Thank you. Participant, if you wish to ask a question you may press star and 1. Ladies and gentlemen, to join the question queue you may press star and one person you are speaking with have put your call on-hold. As there are no further questions from the participants, I would now like to hand the conference over to the management for the closing comments.
Ashish Puravankara
Thank you. Thank you this evening for joining us for this call. And we look-forward to hearing from you if you have any more questions. Have a great weekend. Thank you.
Operator
Thank you. On behalf of Motilal Oswal Financial Services, that concludes this conference. Thank you all for joining us and you may now disconnect your lines