Puravankara Ltd (NSE: PURVA) Q4 2025 Earnings Call dated May. 30, 2025
Corporate Participants:
Harsh Patha
Deepak Prasad — IT head
Ashish Ravi Puravankara — Managing Director – Executive Director
Unidentified Speaker
Analysts:
Deepak Perswani — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, you have been connected for Purvankara Limited Conference Call. Please stay connected. We will begin shortly. Ladies and gentlemen, you have been connected for Purvankara Limited Conference Call. Please stay connected. We will begin shortly ladies and gentlemen, good day, and welcome to the Purvankara Limited Conference Call hosted by Emkay Global Financial Services Limited. 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 Harsh Patha from Emkay Global Financial Services. Thank you, and over to you, sir.
Harsh Patha
Yeah. Thanks, Manav. Good evening, everyone. On behalf of Emkay Global, I would like to welcome the management and thank them for this opportunity. We have with us today Mr Ashish Purwankara, Managing Director; Mr, Chief Executive Officer of West and Commercial Assets; Mr Malana Sasalu, Chief Executive Officer South; Mr Deepak, Group Chief Financial Officer; and Mr, Deputy Chief Financial Officer. I shall now hand over the call to the management for the opening remarks. Over to you, gentlemen.
Deepak Prasad — IT head
And clear? Yes, sir, we can hear you. Thank you. So I’m Deepak. Thank you all for joining our earnings call to discuss the performance for 4th-quarter and financial year ended ’25. I would like to thank our host for today’s earnings call, MKV Global Financial Services. The results and investor presentation have been uploaded to the stock exchange and I hope that you have had the chance to review them. Now let me first start with some brief highlights about the sector performance and outlook followed by our financial and operational performance for the quarter. Despite global headwinds and geopolitical uncertainty, India continues to demonstrate remarkable resilience and stands out as a compelling growth story.
The last quarter has reaffirmed India’s position as the fastest-growing major economy, supported by prudent fiscal policy and strong domestic consumption. Recent RBI repo rate cuts, liquidity measures and fiscal incentives are expected to improve credit availability and drive demand, especially in real-estate. On the real-estate front, the residential market continued its strong momentum with over 88,000 units sold during quarter-four of financial year ’25 across the top eight cities and more than 350,000 units for the full-year. Pune and Chennai led the growth for these increases, while Mumbai recorded steady demand. These trends reflect the resilience of Indian housing sectors supported by urbanization, rising expirations and favorably policy support.
On the commercial side, office space absorption crossed 70 million square feets across six major cities driven by demand from GCC, which is global capability centers and hiring momentum. This is actually — which was reported by Civils India. Bangalori continues to be one of the head-start, especially on this. Both rising residential and commercial real-estate are benefiting from favorable micro trends with steady leasing activity and upbeat buyer segment. As a company, we are aligned with India’s growth story focused on prudent expansion, operational excellence and customer sensities. Is well-positioned to capitalize on these trends with a robust launch pipeline of over 13.5 million square feets planned for financial year ’25-’26, aiming at strengthening our presence amid a consolidating market.
Now moving on to the company’s financial and operational highlight, for financial year ’24-’25, quarterly sales was INR1,282 crores and for the full-year, it was INR5,000 crores, INR5006 crores. While sales volume was 1.42 million square feets for the quarter and for the whole year, it Was 5.67 million square feets. Customer collections for Q4 stood at INR946 crores and for the financial year, it grew by 9% from 3,937 — sorry, to 3,937 from 3,609, which is the last financial year. Average realization also witnessed healthy growth for Q4. Average realization stood at INR9,031 per square feet, up 9% year-on-year. For the full-year, it improved by 10%, up from 8,035 to INR8,830 for this year versus last year. We have achieved our highest-ever system in sales during this year with a total value of INR4,223 crores, marking a 14% growth over the last year. In terms of geographical sales contribution, Bangalore led our sales with 56% followed by Chennai, Mumbai and Pune, which was closed close at around 17% to 15%. Notably, Mumbai and Pune saw a significant rise in contribution in terms of the overall sales, which grew up from 6% to 15% from versus last year. Driven by our — this is actually driven by our growing presence in the West. With recent acquisitions and redevelopment projects in Mumbai totaling over INR9,500 crores in GDV, we expect this momentum to continue. Our launch pipeline remains strong with approximately 13.5 million square feets of planned launches, it is important to highlight that projects now constitute 54% of our ongoing developments and 52% of our plann pipeline. Mumbai and Pune together account for about 21% of the planned projects, underscoring our focus on diversifying the portfolio across high opportunity markets. On the business development front, we made significant progress during this financial year with land investment of approximately INR1,284 crores, which added almost 8 million square feets of our development portfolio, representing a GDV value of INR13,000 crores. These strategic investments have further strengthened our pipeline and position as well as for sustained — as has position us for sustained growth and value-creation in the coming years. In May, we basically have announced a JV with KBM, Property Holding Limited LLP for 25 acres, approximately 25 acres land parcel located in North Mangaluru with a potential GDV of INR3,300 crores and a planned sellable area of approximately 3.5 million square feets. This development marks a key addition in our portfolio in a high-growth micro-market and is expected to launch within the next six months. We successfully launched our much-awaited Project Purva Pur Panorama in, Mumbai with a total GDV — total development potential of 3 million square feet feets with an estimated GDV of INR4,000 crores, commencing with Tower Sea, which covers 0.52 million square feets. Our commercial portfolio, currently, we have 3.2 million square feets of development underway with nearly 2 million square feets expected to receive OC during this particular year. We have two projects. One is Zentec and AeroCity and these two projects and they both are in Bangalore and these two projects are expected to generate a surplus of INR1,870 crores, making a significant value-creation opportunity for the company. Coming back to the quarter of ’24-’25 Q4 the total revenue clock was INR564 crores. EBITDA margins for the quarter was around 9%, while we had a net-net loss of INR88 crores, given that as you are aware that we had delays in terms of getting the approvals and hence the handovers were actually delayed. However, given the cost which was there already that being a period cost it got accounted for during the quarter. Similarly, for the year ended ’24-’25, our total income stood at INR2,0933 crores with a — with a total loss of INR186 crores for the quarter — sorry for the year. The pre-sales value for financial year ’25 was INR5,006 crores. The sales and marketing expenses and overheads incurred for the pre-sales have been entirely charged to P&L as per the accounting policy as per India. Operating cash flows for financial year ’24-’25 stood at INR4,342 crores, up 10% Y-o-Y. We have delivered approximately 3.09 million square feet during this year. Further, we are expecting to receive occupancy certificates during this year, which is 25 26 for key projects such as Capella, Atmosphere,, Adora for which we have already secured for a few phases in the last quarter. These projects together account for total sellable area of approximately INR3.95 million with a total GDV value of INR3,200 crores. Of this, approximately INR2,600 crores have already been sold to our customers. Coming to our debt position, as on 31st of March 2025, our net-debt stood at INR2,949 crores with a net-debt equity ratio of 1.7 times. We also had a cash balance of INR732 crores, which reflects a strong liquidity position and gives us the comfort to manage operations smoothly. We continue to stay focused on managing our finance as well. Our aim is to gradually reduce debt for square fees, especially for projects under-construction. We also are exploring funding options as we have been obviously communicating with you like QIP or platform level partnerships to keep our capital structure balanced and support our growth plans. To conclude, while financial year ’25 post challenges in the pharma deferred launches and approval delays, we made decisive investments in-land and business development that have strengthened our growth runway. Our sales performance and collection efficiency reflects operational resilience. As a marked 50 years of Purvankara, we are proud of our legacy and energized by the opportunities ahead. With a strong pipeline, key projects completion and strategic land acquisitions, we are well-positioned to deliver sustained growth and long-term value-creation for our shareholders during this year and beyond. Thank you for patiently listening. We will now open for further questions.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchtune telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. I would remind all the participants if you wish to ask any questions, you may address star and one. We have a first question from the line of Deepak Perswani from Swan Investments. Please go-ahead.
Deepak Perswani
Yeah. Hi, good evening, sir. My first question is to Mr Ashish. So just wanted to get the sense, I mean with the resignation of Mr Abhishek Kapoor in the month of May, if you can give a broader sense how we are looking into the organization structure at the first-place? Secondly, if you can touch base on the broader aspect in terms of the growth and also the aspiration, I mean where we should see this company over the longer trajectory point-of-view? And what would be your approach towards the capital allocation policy from the long-term perspective? That is my first question.
Ashish Ravi Puravankara
Sure. Can you hear me? Okay. Yeah, yeah. Okay. I think, A, just in terms of the organizational restructuring, we just believe that instead of having a very tall structure where It — we had the MD, then we had the Group CEO and then we had regions and we had different businesses in order to get more operational efficiency, cost-efficiency, process efficiency, the regional structure — the organization will benefit a lot more from efficiency and cost as well, both. So therefore, the new structure is where we have a CEO for the South region who managed the entire South business. We have a CEO for the West region who manages the entire and both then report into the MD. So a more sleeker structure. So a lot of cross learnings that were otherwise that were happening, which was not happening will start happening now. Cost efficiencies earlier, while we had duplicated a lot of departments within different verticals of brand, today those you will see some benefit coming out of that. So that was — it was a long-term discussion that we were having and eventually we put it into play. And we strongly believe that it will do great efficiencies as well as cost. In terms of growth aspirations, we continue to focus on the markets where we are present, which is Bombay, Puna, Chennai, Hyderabad and Bangalore. So these are the key markets where we will continue to expand. As a business, you’re aware, I think our focus, our strength has been also — has been residential. So that will continue to be our focus area. Surprisingly today, the brand is very, very strong. We’ve been able to secure. And I think that asset test is when you enter the new market, a, when you launch a new project and the kind of sales that you sort of receive being a new brand in that city, I think has been extremely encouraging. In addition to that, in terms of business development, we’ve been able to secure marquee locations in new markets even like Bombay. So for example, the project that we’ve secured, most of the society redevelopment that we’ve secured, which is extremely prime, one being breach candy, the second one being Pali in Bombay, if you’re aware of the Bombay market, the third being local Mala. And each one of these cases, we were competing with the number-one, number two in the city. Eventually, I think we were able to position the brand, the customer — and these customers also highly discerning, right? So they understand real-estate, they understand brand, the entire team, the SGBM team made a trip to Bangalore, saw the quality, saw the differentiation or even the vision in the product that we bring around. And therefore, we are able to secure these projects. All these projects that we speak about have been secured, DA has been signed, it has been registered. In some cases, we have submitted our plans for sanction. In some cases, they’re in the final stage of designing. So this is extremely, extremely encouraging. So going-forward, we’ll continue to focus on these markets. And as far as commercial is concerned, also, today we have a strong portfolio and these are very good locations and that’s what’s very encouraging of 3.2 million-square-foot, out of which I think about 2.2 — about 2.5 million is on the Belari Road, which is a new sunrise destination in Bangalore. If you understand the Bangalore micro-market, Ring Road is completely congested, whitefield is congested and everyone is now looking towards the new airport road, right? And so two of our largest projects are coming up on that airport road. One will be ready by December. We have applied for RFPs and we have visits already on. So even that aspect of the business is looking very positive.
Deepak Perswani
Okay. And sir, just continuing on that part, if you — I mean, previously, we were communicated that historically we had grown at a 30% CAGR in the last five years and we would continue to look into this kind of growth. How should we see this trajectory at the current juncture? And also any thoughts in terms of the debt reduction at the current juncture, if you can share your broader thought process how we are looking to reduce the debt over the next six to 12 months?
Ashish Ravi Puravankara
Sure. I think I am positive. I don’t want to give you any forward-looking statements, but I am with the kind of projects that we’ve secured. Yes, there has been some approval delays, like for example, in Bombay, there is an NGT issue if you’re aware, all builders are stuck, the case going on the Supreme Court. So we’ve really secured some marquee projects. I think this coming year in the next 12 months, you’ll see some extremely big bank launches across Bombay, across Bangalore and other cities, right? So that in itself, I think should be — we should be able to better the growth trajectory that we have. In terms of capital allocation, one important thing that we’re also doing is even in terms of land acquisition strategy, I don’t think we are in any aggregation mode.
So right now, we are looking at ready projects where we are able to give advances and take them to-market within six months. I think the minute you’re able to do that and get your land assets into production, I think that’s the key. That’s our business that we are in. As opposed to aggregating smaller pieces of land, you’re incurring holding costs, etc., etc. So that’s a clear strategy. A, B, we have also very consciously started sort of — we’ve had a land-bank for a long-time. For some reason, we were acquiring new lands. So if you see the last two, three launches, Dean Gate, for example, right, so two, three launches have been a part of our old historic, so that’s land-bank. So that’s another thing. So the minute you take these projects to launch, automatically, the cash flows from these projects, etc., you’re going to see that debt number significantly come down.
Of course, we are a business wherein real-estate, there is a requirement for capital for growth to buy land, etc. There I think we will be opportunistic to look at a combination of what do you say a joint development and outright. Bombay, there is a benefit where today society redevelopment per se, while these are large marquee high-value projects being society redevelopment, you don’t need huge upfront capital in that sense, right? So for the existing society, your investment, which is essentially a land cost to build their area, you’re spending it over four years. So even there, it’s a relatively lesser upfront requirement for capital. So I don’t see that number going up extremely significantly.
Deepak Perswani
Okay. And then moving to the operational part of the business, just wanted to check it out. I mean, in terms of the approvals, I mean, last year also we had a launch pipeline of 14 million square feet and eventually we ended-up launching only the 3 million square feet out of entire 14. I do understand, I mean, there has been some approval issue in the last year. Now this year, we are also looking into the 13.5 million square feet-in terms of the overall launches, out of this inventory would be 9.2. If you can share your thoughts in terms of the — where we are in terms of the approval side and how confident are we that these projects will be launched this year comfortably or if you can give a broader sense where we are a broader sense, I am fairly confident obviously, so it’s not been stagnant, right?
Ashish Ravi Puravankara
Obviously, there is a delay, but none of the approvals I can assure you have been stagnant, which means that from last year to this year, they have not moved, right? Now for example, and I think Thane, both are affected by NGT. Now entire Bombay and those areas, all developers are affected by it. My sense is both those and those are high-value projects. My sense, what I’m getting from as well is that there should be some sort of a resolution come around — come September, right? So in terms of planning, everything done, in terms of base approval, everything done, in terms of NOCs or airport, etc., that’s all done. But for the want of that NGT, the minute I get that NGT, then it’s a matter of two months. So I’ll just add to this one, Ashish, if with your permission.
Unidentified Speaker
So here it is, basically you asked three questions and I was just pondering on those three questions. First one is about the way that they go-forward. And we have — we have — we have positioned our company in a very unique way compared to any other organization. That is we have created the two brands that is Purua and Provident and we have created two geographic locations, South and West so that we are very focused in our approach as to what we want to do going-forward. Because as you know that real-estate development as a business is a localized business and you need to have local competencies to run the business. So as you know that the South business that what we have currently that when it comes to now the operational efficiency and other things, I’ll just reel out some of the things that what we are trying to do and where we were little bit disadvantaged by few things that happened in the South because we are predominantly currently as the West is picking-up, today we are South-based business, out of which more than 50% of our revenues have come from Bangalore alone. Then in Bangalore, the numbers that what we have reflected is — or offer two reasons.
One, about the launches. The other one is about the handover. When you look at the launches that what we are supposed to do, the launches got delayed for various reasons for various rules and regulations that are being currently altered. As we speak, there is another government order which is coming up, which is making more changes. So that we got — we got little bit delayed there. On the handing over, Karnataka went into a very new method of actually giving the Qatas, which is called the ECATA, which for millions of documents had to be redone and reconverted into an electronic format
Unidentified Speaker
Called ECATA and that was put into online. So we all were waiting in the line to get the CATA because of which we could not register. Unless we register, we cannot get the — we cannot get the revenues recognized. At the same time, today, when we are looking at the expenses has gone up, expenses means that we don’t Call-IT as an expense, we Call-IT as an investment. For example, if there are four projects which are ready to get launched and under approval, means there already that is a marketing office, sales office, marketing initiatives, the monies that have already been spent, the spend is actually not an expense, it’s an investment which is going to be coming out as a product and as an outcome over the next three, four years. So just to give you a few other things is that, so we’ve got a project in, in Bangalore, Purvankara been worked in and Grand Hill Phase-1 and Phase-2 and the Natnajar redevelopment and with, Rajat probably is going to add to that, West End, road and Kanakpura Road.
These are the projects where these are not something that we are saying that something that’s going to happen tomorrow. These lands have been acquired, fully paid-for almost 70% to 80% of the NOCs received. And only these things are because of the town planning and other things wherein they got a little bit changes that came into play, they were stuck and in fact, as a matter of fact, in the last quarter of the last year that the year went by, we were supposed to have launched three or four projects, which got either it will be in the first-quarter or the second-quarter of this year.
So looking at all these things and we have whatever the debt that we are talking about with a surplus of INR15,000 crores and which is more than five times the what we were — the debt that we have, we feel it’s very, very comfortable as a company. And with our focus, particularly Mr Rajat being there in the West, taking care of West — the Western region, very focused and who has got that much of in-depth experience in that region and his experience in commercial. We got three 4 million square of commercial, which is handling and of course, in the South that we are there. And I think the company is in a great shape. And today’s result today in my opinion, is probably at — it is at a level where it is supposed to take-off from here. And that’s what I would like to convey to the investment community.
Deepak Perswani
Okay. And finally,
Operator
Just interrupt you, Mr Deepak, can you please request you to rejoin the queue?
Deepak Perswani
Sure.
Operator
Thank you so much. A reminder to all participants, if you wish to ask any questions, you may press star and one. Anyone who wishes to ask a question, you may press star and one now. We have our next question from the line of Praem Singh from AC Brokers. Please go-ahead.
Unidentified Participant
Yes. Hello, am I audible?
Operator
Yes, sir.
Unidentified Participant
Yeah. So I would just like to ask, what has our sales growth been from the last 12 to 18 months? And could you also repeat what is your current debt profile?
Ashish Ravi Puravankara
Yeah. So I will tell you we versus last year, we were down in terms of sales around 8% versus last year. But overall from a launch perspective, we have been growing for the last five years, we have been growing at a CAGR of close to around 25%. So this year has been an anomaly. We intend to continue.
Unidentified Speaker
I think one highlight — I think one highlight there is, I think one needs to appreciate that our annual sales numbers comes from two buckets, which is your ongoing projects and your new launches. So in terms of our sustenance and online ongoing projects, I think we have done much, much better than last year. So that just shows how strong the brand is, the market sentiment and our sales efforts, right, the bone fruits from our sustainance launch projects. Any miss in sales that have happened is on account of those delayed launches, which is this from last year has now gone into the following year. And like Malama explained, we are all there almost in the final stages of getting the approvals. And, just to add to that point is that our sustainable sales has come at a price increase, so there’s been a decent price increase across all our projects. So there’s a profitability also that has been kept in mind.
Ashish Ravi Puravankara
Yes. Our sustenance has gone up from INR3,689 crores to INR4,223 crores, where there has been a struggle is a little bit of that extraneous thing that with regards to the approvals. Today, we are sitting on a pipeline of 6.53 million square feet of approvals that are in advanced-stage in various locations, in various and of various sizes and more than eight projects which are ready for the next year. So I believe that investment that what we have made so-far in bringing those projects to that level will yield good results going-forward?
Unidentified Participant
Yes. And also another question. How do you exactly propose to enter and solidify your presence in South Bombay’s market?, you may want to add it?
Unidentified Speaker
So our thought process are in Mumbai market is around group to lines. The first-line of thought process is a redevelopment where we already have secured marquee assets across multiple regions in Mumbai, be it West Mumbai or be it or in also as well in South Bombay. So that is going to be one part of our strategy. The second part of our strategy is to acquire land parcels on outside basis or on January basis, where we have done a recent acquisition in, which is around 14 acres that we took over. We have also sold one tower. We launched one tower in the month of March and we’ve got very encouraging response and we sold at a premium to the market in.
So our strategy is going to be dual strategy and we continue to focus on the strategy. Of course, every asset that we are taking and every redevelopment that we’re focusing on, we are focusing on the profitability aspect of it. So until the location is a marquee location or the project comes out to be a marquee project, we will only focus on — we will only focus on those ones. So that is what the strategy is. Yes. Okay. Thank you so much and all the best for the next quarter.
Unidentified Participant
Thank you.
Unidentified Speaker
Thank you, sir.
Operator
Thank you. Thank you. Thank you very much. Participants, you will press star and one to ask the question. Hi. Next question is from the line of Mr Shah from Shah Advisors. Please go-ahead.
Unidentified Participant
And sir, out-of-the INR12,000 crore — INR1,200 crores we spent on, if you can share what is the estimated timeline we are targeting to convert into entire of INR13,000 crores?
Unidentified Speaker
Sorry, Sir, the question.
Ashish Ravi Puravankara
The question you have is that more crores that we have invested when what is the timeline to go-to-market, right?
Unidentified Participant
Yeah, thank you.
Unidentified Speaker
That would be about six to eight months.
Unidentified Participant
So the entire what you’re asking is that you’re asking about the INR1,280 crores of investment that what we have done.
Unidentified Speaker
The resulting of that is what basically any project in our real-estate takes from anywhere between eight to 12 months-to bring to the market. Depending on the size of the market, the maturity period, sales period is around two to 2.5 years and the project completion is three to 3.5 years, four years. So the collection will be between the 3.5 years to four years. So that realization will happen over that period.
Ashish Ravi Puravankara
But to — just to reaffirm, I think in terms of the acquisition strategy, all these new investments are for our projects which are sort of ready, which can be — the minute we’ve paid this money, we’ve already started the designing. So from a timeline perspective, the plan is to take this to-market within whatever, around eight months-to whatever, 10 months-to take it to-market. So none of this is aggregation or this is not a future investment, right?
Unidentified Speaker
As Ashish was saying that previously that we do not get into the aggregation mode. These are ready to develop, which means that the land would have been converted, land would have got all the necessity land level approvals that were required would have been finished only for the development level approvals would be pending like the MOES and building plan approval and so on and so forth. And just to add for the projects, all our projects are into multiple stages of approvals. As Ashish clarified that all of these have been done. In fact, we are looking at a launch in-quarter three-for-one of our projects. So that’s — so all of the projects are in pipeline right now for launches.
Unidentified Participant
Okay. In fact, assuming all of the land cost is recognized upfront, we are accounting was same, but now you can see across the geography from last Five-Year realization are growing up and up from 4% or 8% year-on-year and — but we are still maintaining our margin guidance looking 25% to 30%. Have any changes where we want to revise it upward or something like that because we own the traditional lending bank. I mean many listed players are now rising margin for your reporting margins to that sort of 40%, 50%
Ashish Ravi Puravankara
Because not actually understand your question. What is that you want
Unidentified Speaker
I think. I think — I think — so I think we do not give guidances, but I think your sort of assumption is right and I think it will be in-line with most other real-estate developers. I think with the kind of acquisition that we’ve done, we should see those margins improve.
Unidentified Participant
Okay. And sir, one thing I want to understand that we are
Unidentified Participant
Recognizing land as a raw-material to us. Correctly?
Unidentified Speaker
Yes, yes, sir. The land in the inventory is the cost of the project.
Unidentified Participant
Okay. So just from the accounting perspective, I want to understand, from last 10 years, you recognized the revenue worth of INR18,000 crores and we are paying a taxes somewhere between INR400 crore only. So this effect is because of the land cost we are recognizing upfront and that help us to compounding the taxes.
Ashish Ravi Puravankara
I think we can answer this question offline in standard mail, we’ll respond to you all as far as accounting is concerned, though with the day we buy land, we compete it as inventory. However, it is charged to the P&L only when I recognize revenue. The day we recognize revenue, that day the cost of land, including the cost of construction put together becomes the cost of the product and that is charged against the revenue. The taxes against the monetization tax is not against holding or buying the bank.
Unidentified Speaker
So upon monetization, then that will be recognized and so.
Ashish Ravi Puravankara
If you drop us a mail, we can able to injury better because tax regulation over a period of time has changed, still tax we are paying on basis of the POC computation. However, the revenue resignation happens because of the handover. So there are little bit anomaly versus the company that the way we’re reporting profit and the way we’re computing income tax, income tax profit and then we paying tax over it.
Unidentified Participant
Okay. And sir, for the let’s say, next FY ’26 or ’27, we are looking for the similar kind of land acquisition on absolute amount.
Ashish Ravi Puravankara
Yes. So we don’t give guidance and obviously, we will be looking for growth for sure and we will want to maintain similar kind of a growth. So you can expect a obviously land acquisitions.
Unidentified Participant
Okay. Earlier we mentioned that we have some 40 million-square-foot of land every time we wanted to be in inventory, so we want to maintain that.
Unidentified Speaker
So we have close to around — so the current land-bank currently is around INR25 million at this point in time. And this is what under development is or it will get — it will be planned according over a period of time. So we will continue to work on it. That’s the way the current status is?
Unidentified Participant
Okay. Just a last question from my side or any other reason of Mr to resign or he is joining any other if you can explain?
Unidentified Speaker
No, there is no other reason for Mr to resign. Like I said, there were two things that happened almost parallelly. A, also the view of reorganizing it region-wise was one. And also I think at that point of time, when he was sort of some personal reason that he wanted to look at some opportunity, what we are told is outside the country. But yeah, there is no other reason.
Unidentified Participant
Okay. Okay. Can you just so makes sense.
Unidentified Speaker
Thank you.
Operator
Thank you. Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and 1. Anyone who wishes to ask a question, you may press star and one now. We have our next question from the line of Harsh Pathak from Emkay Global Financial Services. Please go-ahead.
Harsh Patha
Yes, sir. I have a few questions. So after the Q4, what is the sustainance inventory that we are left with in value terms? Just to confirm, is it the same INR6,500 crores as we have mentioned in the presentation? That’s correct. That is correct, yes. That is there in our portfolio. ICP, great. And if so in Q1, I guess we are having one launch. So what will be the size in value terms and at what stage are with respect to the launch? And when can we expect the launch to happen?
Unidentified Speaker
So that right now all the approvals have come and the development plan and other things have already been approved and it’s gone to the last level of the building plan approval is in-process. NOCs are all-in place and you should be looking at in the second-quarter that the launches will happen. The launch will happen.
Harsh Patha
No, no. So would be in the second-quarter or the first-quarter itself. So first-quarter in the sense that there’s only one month left, one month left.
Unidentified Speaker
So I believe that depending on its little — what can I say, it’s uncertain when you go to the government and so we may start with some kind of an expression of interest program and other things in this month that we will — we will — we will be officially launching it in the second-quarter.
Harsh Patha
Okay. And how has been the sales so-far in the quarter or just because I guess we are left with the inventory itself. So any thoughts on that? So I think we will not be able to comment on it,
Unidentified Speaker
Harsh. You know that right.
Harsh Patha
Yeah. Sure. But the velocity is going fine. I mean, I’m just trying to get the demand sentiment on-ground, that’s where I think the demand sentiment is good on the side,
Unidentified Speaker
On-the-ground, whatever the projects that we are in, there is — okay, just to — if I have to put a reverse corollary to that one that you’re asking whether we are maintain the same momentum. So I can assure you that I think the momentum is continuing and the market is still — continues to behave well and people are still wanting to look for good opportunities from listed players. And so wherever we have the stock that we continue to do at the same almost the same pace. Without putting the numbers or anything, yes, I can say that much I can say that we are — we’re continuing to do well.
Harsh Patha
Okay. And sir, with coming to the commercial side, I guess, how should we look at the Zentech asset? Are we looking to lease this asset or we would be selling it? And just in case we are looking to sell it, when can you expect the transaction to get completed? So for the Zentech asset, our strategy is dual, we are looking at both leasing and sales, primarily sales as of now. And as we speak, we are already seeing good traction in our sales volumes over there. Okay. So this has largely been focused from a sales perspective. Yeah. And what would be the total size of this asset maybe if we are selling it?
Ashish Ravi Puravankara
Our share in the total asset is close to 6.5 lakh square feet.
Harsh Patha
Okay. Great.
Ashish Ravi Puravankara
And leasing side at the asset, so AeroCity is overall at 2.3 million square feet asset. We are looking at a 1.2 million OCE by December this year. And right now, we are pulling lot of RFPs and getting very, very encouraging response from Grade A companies. So yeah, we are hoping that we should be able to announce our leasing very soon.
Harsh Patha
And are we able to commod the rentals better than the market or we are going at-the-market rates itself here?
Unidentified Speaker
Yeah, we are. We will be hitting the — at a slightly better than the market because the quality of the product that we have put in is a great A platinum-rated product and it’s much better than what the market is offering.
Harsh Patha
Sure, sure. And just maybe a couple of questions more. In Mumbai, you highlighted there is this NGT issue. I mean, we have been hearing since quite some time. So how are we placed in terms of approvals mainly at the asset? Do we expect some launches to get delayed because of this? And what stage are we with respect to the approvals at all the projects in Mumbai, if you can take-up project-to-project, please?
Ashish Ravi Puravankara
So on a Mumbai portfolio, just since you started with Andrei Local Vala, our approvals are — excluding the NGT, which is MOEF, everything is going as per the plan. We are in the final stages of securing. But however, this NGT issue is pending in Supreme Court, so it will be difficult for me to give you any timelines for that, but we are hopeful that by September this year that this problem should get resolved and then we can apply for and look at a launch. Simultaneously, our redevelopment portfolio for other projects also the plants have been submitted or in the final design stages. So we are looking at a quarter three to quarter-four launch for all our projects.
Harsh Patha
Okay. Thank you. Okay, okay, sure.
Ashish Ravi Puravankara
And in terms of just one last one, in terms of completion timeline for some of the key projects in this year,
Harsh Patha
Where are we currently with respect to these projects? And if you can highlight some key projects that are getting completed and when can we expect the revenue recognition for them?
Ashish Ravi Puravankara
Yeah,, would you like to answer that?
Deepak Prasad
Yeah, that is actually part of the ICP already. We have provided some of those details when we are going to get that. So especially like you know, there is a comment that we have already received partly some of the OCs for a project called Atmosphere, Oakshare, Kapilla and Adora. So you know, the final or the full OCs would get received during this year again and I’m sure that we will be able to at least see some of the coming through. So that we are not expecting any like the way we have expected last year, you know, we are not expecting that. Okay. So close to INR3,000 crores is what we’ll recognize in the revenue this year. Yes. But the sale has already happened, almost INR2,600 crores worth of sales have already happened in those projects actually. Sure, I was just looking from the accounting perspective.
Harsh Patha
Sure, sir, these are my questions. Thanks a lot for taking up.
Deepak Prasad
Thank you.
Operator
Thank you. Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one anyone who wishes to ask a question, you may press star and one now. We have our next question from the line of Deepak from Swan Investments. Please go-ahead.
Deepak Perswani
Yeah. Thank you for the follow-up opportunity. Sir, firstly, on the project delivery perspective, I mean this year, project delivery has again come down to 2,500 versus 2,600. So has there been any delay in terms of completion of any project, if you can give a broader sense? And second part of the question, if I’m looking into the operating profit in the P&L, I mean, since last two quarters, it has come down to the single-digits. So just wanted to check it out, any cost escalation has been booked into this particular project? And when we are looking into the huge quantum of project delivery which are coming in next year, what kind of the run-rate we should be looking at out?
Ashish Ravi Puravankara
Yes. Project delivery is a function of the burn. And I think that we have so-far in this year, we have constructed more than INR1,500 crore of money is being spent only under-construction. And also the projects which as Deepak was mentioning, are those projects which are about to get the OC that we received in some of the projects that we received OC as well, but because I was saying that because of the CAPA, CATA issue that the delivery to the customer got delayed. So the two-parts to this one, delivering to the customer after the paperwork, the other one is the construction part. I think that what — with the effort that has gone in this year and without giving too much the — value into too much into the numbers, I can say that next year looks good for good handover and revenue.
Deepak Perswani
And in terms of the upcoming projects which are coming for the delivery, how should we see the operating profile margin for these projects? Yes. And is there any cost escalation is healthy in terms of the way that whatever the currently that we are doing and are probably slightly better than what we have achieved so-far? Has there been any cost escalation booked during second-half of this year-on the construction side
Unidentified Speaker
Or there is not much of a cost escalation that has happened in our books and that we have been able to keep the cost of construction to the estimated cost of what we had. And so we — operationally, we feel that technology is in, we are in the control. And as soon as these things will resolve, the handover will start and then you will see healthy margins, I think.
Deepak Perswani
Okay. And finally, just wanted to check it out on the interest cost component. I mean, from the cash-flow perspective, this year it is at INR478 crore. And even on the P&L, it is INR50 odd crores on a date of — even if I were to consider gross debt of INR3,800 crore, right? So just wanted to get the sense, I mean, how should we see this number from the next year perspective even on the cash-flow perspective or something of that, if you can throw some?
Ashish Ravi Puravankara
Yeah, Deepak, as we have been telling you, we — we are expecting obviously the cost should come down given the handovers and everything, the cash flows, which would actually come up going-forward given the investments we have made so-far, even though we will continue to do it. So we expect those things to obviously get — you know, I’m sure that we are getting to a level wherein it has to only deliver and come down to that extent. So we will see how best we can actually handle it. But given the growth aspirations we have currently, obviously, we will continue to the old debt, but at the same time for our growth aspirations or on the land acquisitions, we would continue to do that.
If we are able to at least raise some equity from the marketplace, which you have been telling all of you and also then we would be able to at least take those steps to do it. Thus other steps which we are doing is more of an obviously equity or a platform funding, which will come as part of equity. So we have been, you know, communicating and talking to the investors and let’s see how it basically pans out. So the idea is to continue to have the debt under control, which is there already. In fact, the residential debt per square feet has actually come down. Overall, so it has come down. But because of the commercial development as well as the land acquisitions, it looks like the debt continues to go up. But from a residential perspective,, debt has come down for the year as well.
Deepak Perswani
Okay. That’s it from my end and congratulations to Mr Malana and Mr Rajatra Soki and wish you all the best. Thank you very much. Thank you so much. Thank you. Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and 1. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Shivang Joshi from Motilal Oswal Financial Services. Please go-ahead.
Unidentified Participant
Hello. Good evening, sir. I hope I’m audible. Yes. A couple of questions. First is, I’m referring to your direct cash-flow slide, just trying to say since reported numbers are not a — sorry to interrupt Mr Shivan, your voice got broken in-between. Can you please repeat your question? Hello. I hope this is better. I’m saying — I’ve been referring to your direct cash-flow slide. Now since reported numbers are not a proper way to gauge your profitability, I’m trying to gauge profitability from the cash — direct cash-flow slide only and taking operating surplus as a percentage of collection. So historically, the trend has been pretty decent, but off-late, I mean FY ’25 numbers particularly, it seems that I’m just dividing operating surplus by direct collections, it seems to be below 20%. Just trying to understand, what is your outlook for operating surplus to go up? I mean, because this should rather mimic EBITDA margins of 25%. Also, this is before the land apportion will.
Ashish Ravi Puravankara
Yeah, we will not be able to provide you the forecast. But definitely if you were to see our historical numbers, the collections have consistently gone up. And we are confident that a similar thing will continue going-forward also. In fact, this year, you know, the current year can be very, very good given the kind of launches and the handovers which we would actually — we are expecting. So now I was saying the operating surplus is a theme toward closer to the — our margin, but not necessarily year. What happens is some quarter-over year, if I’m going to spend more money on construction, doing the faster construction from projects, my operating outflow will be a little completely higher than the schedule outflow and thereby be offering will be less.
So what essentially — if you look at the RP&L also, this — this financial year, we have incurred on a direct construction INR1,500 crores compared to the previous financial year, our construction spend, which is greatly development project is more and these are part of our operating outflow. And hence, there’ll be little bit aberration in terms of operating surplus, but it’s not impacting the projected or estimated margin of a project.
Unidentified Participant
So we can expect a directional improvement, not asking for guidance, but directional improvement in operating surplus going ahead.
Ashish Ravi Puravankara
That is correct, correct.
Unidentified Participant
That is first part. Second, on the debt feature, I understand your net-debt equity seems higher because the net-worth, the denominator itself is not a proper indicator since the reported numbers are — it is impacted by the reported losses, which are not actual losses. But the overall net-debt number itself seems to be a — obviously a reasonably high number. What is your take on a comfortable absolute net-debt number going ahead, if you can speak on that?
Ashish Ravi Puravankara
And specific number or guidance towards how much will be the number. But what we — we do is that the overall debt per square feet, especially for the residential should not go up, let’s say, for INR1,000 per square feet, right? So if you are — you have an ICP, you can see our debt per square feet for residential and land has actually not gone up, right? It is within the control. And we have also repaid some of the resi debt. However, we have invested in-land and we have also invested in the commercial asset for development and hence because there is no revenue coming from that and hence it looks like that overall debt is coming up. And so that Is the anomaly. But we have provided this information in our ICP how the debt movement is. We are not definitely looking to increase the debt per square feet for the resi business. So as far as the commercial is concerned, as was mentioning earlier, once the asset comes up for either LAD or sale, obviously we will see the dramatic improvement in those set as well.
Unidentified Participant
Perfect. And lastly, a connected question to debt. You mentioned about certain fundraise options. I believe that would be for overall reducing the cost of borrowing. So directionally, again, if you can — not asking for any guidance, but how can be the — to what extent your cost of borrowing can come down in the coming year or two versus what it is today.
Unidentified Speaker
Borrowing will come down and I think I’m sure that the finance of both the Niraj and will have their views. So the cost of borrowing will come down because that doesn’t — the equity that is locked inside that company at this point of time due to — for whatever reason, the launches that have not been happening are happening so-far. And once we start to launch the projects and once we start to realize that, automatically debt will have to be coming down. Today that if we are going to be expanding and borrowing the money, then debt will always look upwards. It is just our — now the thing is to get the projects going and launching and delivering the projects and that will bring down the debt. That’s probably the right way to bring down the debt. So of course, generally, but now maybe need a general view.
Ashish Ravi Puravankara
Yeah. As far as rate is concerned, interest-rate is concerned, you have also asked question about the interest-rate which we are paying. Yes. Current our weighted-average is about 11% 285%. However, it looks a little bit higher. But if you compare for the last year, one year-ago, what are our weighted-average cost-out? It was 11.59%. During the year, we have added or we have invested about INR1,300 crores in the land and that means we have funded this land cost from the additional borrowing. Despite that, we have not let our cost of debt go up. As you know, the lend financing are not done by the bank or any even housing finance company. To finance the land, we have reached out with NBFC or the AIFs and those costs are little higher. Yet our continuous endeavor is to check the interest-rate and keep it down.
And going-forward basis also, as Malana said and Deepak said, as we are going to launch the project placement will be better and we’ll be repaying some of the debt. And also once we launch the project, we have option to convert these projects into our resident and thereby also the rate will come down.
Unidentified Participant
Okay. Thanks,. Thank you, sir. And looking-forward for your launches in the thank you.
Operator
As there are no further questions from the participants, I now hand over the conference to management for closing comments.
Ashish Ravi Puravankara
So thank you all of all of you for your time and your thoughtful questions. We appreciate your continued support and interest in Purvankara’s journey. Should you have further queries or require additional information, please feel free-to reach-out to our Investor Relations team. We look-forward to updating you on our progress in the upcoming quarters. Have a great day and nice weekend. Thank you so much.
Operator
Thank you. On behalf of Emkay Global Financial Services Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.