Sobha Ltd (NSE: SOBHA) Q2 2025 Earnings Call dated Nov. 15, 2024
Corporate Participants:
Adhidev Chattopadhyay — Moderator
Jagadish Nangineni — Managing Director
Yogesh Bansal — Chief Financial Officer
Analysts:
Parikshit Kandpal — Analyst
Parvez Qazi — Analyst
Biplab Debbarma — Analyst
Akshay Gupta — Analyst
Ankit Gupta — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Sobha Limited Q2 FY25 Earnings Conference Call, hosted by ICICI Securities Limited. [Operator Instructions] Please note, that this conference is being recorded. I now hand the conference over to Mr. Adhidev Chattopadhyay from ICCI Securities Limited. Thank you, and over to you sir.
Adhidev Chattopadhyay — Moderator
Yeah. Good evening, everyone. Thank you for joining us on the call today. From the management of Sobha Limited, we, as always, we have with us Mr. Jagadish Nangineni, the Managing Director and Mr. Yogesh Bansal, the Chief Financial Officer. And now I’d like to hand over the call to the management for their opening remarks. Over to you sir. Thank you.
Jagadish Nangineni — Managing Director
Thank you, Adhidev. Good evening, everyone and thank you for taking part in this Q2 FY ’25 earnings call. Our team at Sobha will interact with you today. You can access the results and the quarterly presentation on our website at sobha.com.
In today’s call we’ll briefly speak about our performance in Q2 and H1, and our perspective for the remainder of the year and beyond. Firstly, on the sales, in the first half of the year, our sales, especially real estate sales stand at about INR3,052 crores, where Bangalore has contributed to about 40% and the rest of India at about 60%. And lion’s share of that is by NCR which is about 30%. Kerala about 19% and the remaining from the rest of the locations. And in Q2 FY ’25 we achieved an overall goal of INR1,179 crores. And in this Kerala has witnessed best seller quarterly sale of 0.3 million square feet with a sale value of INR238 crores, recording their best quarterly performance and half yearly economy.
The average price realization has improved by 32% over the last year, and 40% compared to first half of the last year. Due to the contributions from projects in Gurgaon and also price increases across the projects. In Q2 FY ’25 we have launched one project, Soba Insignia in Bangalore with an area of 0.49 million square feet. This launch takes the overall H1 ’25 launched area to 3.53 million square feet over five projects.
We have a very strong pipeline of 19.29 million square feet of residential projects over 18 projects and 8 cities, and a commercial pipeline of 1.19 million square feet over four projects spread across all our cities, which can be done in the next six to eight quarters. In the second half we expect to launch an additional 5.5 million square feet, taking the yearly launches to about 9 million square feet across four projects in Bangalore.
Of the 19.29 million square feet in FY ’26 also we target to launch about 10 million square feet. We are building a strong pipeline of our future endeavors from our existing land bank and transactions in our current operating cities and high potential non-operating cities. The revenue yet to be recognized from the sales that have been done till date stands at about INR14,500 crores, and the blended margin for this — for these unrecognized revenue is over 33% and which would be recognized in the next four to five years.
In our contract and manufacturing segment, in the first half we had a revenue of about INR317 crores. Margin in the contractual projects and contract based manufacturing projects continued to be under stress with the resource mobilization issue and cost utilization issue, and hence we expect this pressure to continue to reflect in our P&L for the next couple of quarters.
With this I hand over to our CFO, Yogesh Bansal to take you through the financial numbers for this quarter, and the half. Over to you, Yogesh.
Yogesh Bansal — Chief Financial Officer
Good evening, everyone, and thank you for joining us today. I am pleased to share our financial performance for the first half and second quarter of financial year ’24, ’25 ending September 30, 2024. I will start with our right issue. During the quarter we have raised 19.99 million through right issue and it was oversupply by 1.39 times, and we have received 50% of the fund as application money and these points are earmarked for the repayment of certain borrowings, project related expenses, agreement [Indecipherable] and strategic land acquisitions. Now, thanks to all of you for participating in [Indecipherable]. So now coming to quarter performance, starting with cash flow, cash flow for H1 FY2025 we achieved both total operational cash inflow of INR29.21 billion, reflecting 4% increase from the same period last year. The real estate segment led this growth with collection increasing by 8.6% to INR26.14 billion.
Contractor and manufacturing business contributed INR3.07 billion. The consistent higher inflows quoted an increase in project related capex. During the actual 2025, we have incurred INR848 million which is 54.18% more as compared to same period last year. For the quarter, it reached INR441 million, double of Q2 FY ’24, enabling us to progress on key projects.
Additionally, we have incurred INR3.27 billion in land outflow for H1 compared to INR1.12 billion in H1 FY ’24, aligned with our growth and expansion plan. As on September 30, 2024, the projected marginal cash flow from ongoing and forthcoming residential projects stands at INR161.22 billion indicating a strong visibility of cash flow.
Unsold inventory across most ongoing project has a sale value of INR125.4 billion. Due to right issue proceed, this quarter our net debt reduced by INR9.08 billion, and as of September 30th it was down to INR2.80 billion. Our net debt equity ratio was 0.08. Average interest rate has remained steady in recent quarters holding at 9.4%. On the P&L side for H1 FY 2025, total revenue stood at between INR16.35 billion with real estate contributing INR12.56 billion and contractual and manufacturing segment generating INR3.17 billion. EBITDA for H1 was INR1.94 billion with an EBITDA margin of 11.9%. That for the half year has improved by 19% over XH1 FY 2024.
In Q2 FY ’25, our total revenue rose by 25% year-on-year to $9.65 billion. The real estate segment contributed INR7.81 billion, representing 80.9% of total revenue. But revenue yet to be recognized on sales completed as of 30th September 2024 stands at INR144.75 billion. This will be recognized over the period upon handover of the units. With this we can now open back to call for questions. Once again, thank you for all your participation.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] The first question is from the line of Parikshit Kandpal from HDFC securities Ltd. Please go ahead.
Parikshit Kandpal
Hi sir. My first question is on the pre sales for the first half. So, I just wanted to understand what went wrong? I mean we had good launches, we had launches in [Indecipherable], we had launches in Gurgaon, we had the Crystal Meadow launch, and these were like sizable launches in excess of close to, I think if I add up the total value would be close to about INR8,000 crores to INR9,000 crores. But the contribution coming in from these launches has been disappointing. So, what are you doing? So, what went wrong and how are you correcting it? And I understand these are high-value launches but in second half in order to meet your guidance of INR8,500 crores what steps have been taken and what is the launch pipeline in the second half.
Jagadish Nangineni
Good evening Parikshit. As you rightly pointed out, we have improved upon our launch timeline and we have been consistently been launching projects across locations in the last year or so. And that has created a big pipeline, I mean big inventory for us which is available for sale for all our teams. Now when we launched these projects across mainly Bangalore and Gurgaon, while inventory got created, the 67% of our inventory right now is over INR4 crores. And typically, the larger ticket size sales have we have seen is the pace of sale is over the period of the project, and hence it is an expected thing that we would be able to do the sales of these projects over the course of the project. And second is in general for Sobha being a premium player, it is unlike several of our other competitors. The pace of sale has always been during the course of the project which is essentially what people call as sustainment sales is the way we also have been doing all our things over the last more than a decade. So, that phenomena continues and hence there is nothing as such is gone wrong as what is the perception. However, there are one or two projects where we think that we could relook at the project configuration, which we are actively looking. But otherwise rest of the inventory is in place, that’s one. Second is for the remaining period of the remaining five months, six months that we have in this financial year, the project that we are launching, they have products which are across their ticket sizes, and which are typically our bread-and-butter business which is one bedroom, two-bedroom, three-bedroom, four-bedroom apartments. So those once they come in, I think the skew which currently we have towards larger ticket size would go back to the usual slick, and that should significantly improve our pace of sales. So, these two I think we should be in good stead going forward.
Parikshit Kandpal
So on the guidance part so you continue to maintain INR8,500 crores for the year?
Jagadish Nangineni
So, on the guidance which is INR8,500 crores, it entirely depends on our timing of the launches that we are expecting in the next five months. And we are really hopeful that things would gear up, and we will be able to still do it. But I mean, the clearer picture will emerge in the next few months as we launch this.
Parikshit Kandpal
So, we have been hearing off late that there has been issue in approvals in Bangalore and other peers of yours have also alluded to that, and there has been issues and delays. So, in light of that, how are we placed? So, what is the launch pipeline in this quarter for which we have already applied RERA? So, what is the visibility for November and December in terms of launches?
Jagadish Nangineni
We expect one project to be launched in November for which we have already received RERA, and another one which is about 1.1 million square feet, and the other projects that we are expecting, those also are in advanced stages. So, we are hoping that we will be able to launch them very soon. The delay or the perception that there is a delay in the approval in Bangalore or any other location, these issues keep coming up every time. There will be some issue or the other that comes up, whether it is an election, whether it is a change in regulation, whether it is a change in the government appointments. So, these are, I think, routine matters. But we are expecting that things would significantly improve over the period, but somehow that’s not the case yet. So, we are in regular business of obtaining approvals and the timelines and the risk associated with it. So, probably we’ll have to live with it. But having said that, we are trying our best to quicken the whole accrual process as much as possible by optimizing internally, externally is something that is entirely, sometimes not in our control. But those things are factored in when we are giving timelines to you in terms of launches as well.
Parikshit Kandpal
What are the launches? I mean, five and a half is the balance for the H2. So, this quarter you said 1.1 million, one launch where you have got RERA approval. So, what is the other launch in this quarter?
Jagadish Nangineni
The other, we are, what we are expecting to do is a town park, and there is one more project in Bangalore, that in South Bangalore. So, both these would also come in the next one and a half to three months.
Parikshit Kandpal
What is the [Indecipherable] million square feet of the area? So, five and a half million which you expect to launch. What is the split in Q3 and Q4?
Jagadish Nangineni
Q3 we should be anywhere between one which we already approved, that is 1.1. If Sound Pass [Phonetic], which is over 3.5 million square feet, that comes in this quarter, then that would be about over 3.5 million square feet and the project is about 0.7 million square feet.
Parikshit Kandpal
Okay, so if all these approvals come into 3 + 1.1 + 0.7, so approximately 4.8 million should be — we should be able to launch in this quarter. And in Q4?
Jagadish Nangineni
Q4 we have another one more project which is about [Indecipherable]
Parikshit Kandpal
And Pune one? Pune also will come in Q4
Jagadish Nangineni
Sorry Parikshit.
Parikshit Kandpal
Pune [Indecipherable] coming in Q4? Or the Noida, I mean any chance of these two projects coming in the fourth quarter?
Jagadish Nangineni
We are working on the approval part. We are expecting to do it by the end of the quarter of Q4 but not completely sure on it because we are yet to reach an advanced stage there.
Parikshit Kandpal
Okay, just one last question on the land banks you have not disclosed. The land banks total 48 million square feet of area, and it’s 1878 acres of land bank. So, when you say that it’s under consolidation model, so how much of this do you think can be out of 1878 brought in as an end product? And how much do you think you cannot develop and you will have to sell in the market? And what is the book value of this land?
Jagadish Nangineni
Yeah, we had put up a slide this time in the investor presentation in page 16. So wherein we have clearly marked out what subsequent plan as well, which we think that we can develop about 26 million square feet. And beyond that, the remaining land bank that we have wherever we will be able to consolidate and add to the subsequent project plan we will do over a period. And as and when we do that, we would it up and update in this bucket as well.
Parikshit Kandpal
My question is how much of this is developable? I mean do you think one the two portion to it, one is that which you cannot develop. I mean you don’t want to develop because they are very, very far away from development point of view. You will not get that 10,000 minimum realization. So how much of that you will apportion to that? And how much do you think can be brought back to that table which you have shown of 48 million square feet.
Jagadish Nangineni
In this, majority of the development that we can do from the remaining land bank would be from our Hoskote land, which we can probably add another 100 acres. And in addition to that, if any of the other lands come in for even for development that we are looking at actively because some of the locations that we have these lands earlier they were quite in outskirts of the cities but now some of the locations have improved, and hence we can look at project development as well, provided we are able to get we are able to have a contiguous land.
Second, some of the land we are actually going to use probably close to about 100 acres per our [Indecipherable] where we can set up increase our capacity of our manufacturing units as well. So that’s still in the initial stages. So hence we will as and when those events happen, we will keep updating you.
Parikshit Kandpal
That is the Hoskote, what about 500 acres or my understanding it is close to about 500 acres.
Operator
Sorry to interrupt you sir, I request to come in queue for follow up question. Thank you. [Operator Instructions] The next question is from the line of Parvez Qazi from Nuvama Group. Please go ahead.
Parvez Qazi
Hi, good afternoon and thanks for taking my question. I have two questions. First is and we keep hearing about your potential entry in Mumbai by doing the luxury project. So wanted to get your views on our diversification beyond the existing cities, especially in let’s say Mumbai and Noida. That’s the first question. Second is with regards to the future business development now after the right issue obviously we have a substantial firepower. So, while our land related capex has already increased this year, but do we have certain targets in mind as to by when we would like to utilize most of the right issue process. Thank you.
Jagadish Nangineni
Good evening, Parvez. To answer your second question first, the rights issue proceeds once we are calling for the remaining money also in December, and once we do that and we have the capital we have a good visibility in terms of deployment of the capital from the existing opportunities itself because some of the funds would be utilized for the investment in getting the subsequent projects land into a project level. And in addition to that we have, we are actively working on building up the development pipeline, and that I think in the next two years we should be able to deploy majority of the capital. And to answer your second question, which is diversification into new cities, you would have seen that greater Noida we have already won one small parcel of land and marked our entry into a new city. That once we get a good sense of the entire cycle of the project right from land acquisition to the launch of the project and initial phase of the project, then we would have a much better sense and hence actively we are pursuing opportunity. We will actually pursue opportunities there as well. When it comes to other cities like Mumbai, we like I have mentioned in my previous calls as well the Mumbai opportunity is a big one, strategic one for us. We are evaluating multiple opportunities. We have a lot of opportunities that we have been evaluating, and we will surely start doing transactions there too.
In addition to these two cities, as of now we are not looking at any other non-operating cities yet. We already are in 12 cities and these two will be some more. Third city, as such, if you have to add that will be Hosur where we already have a land bank and that we are getting. We are waiting for some conversion approvals. Once that is done that will also be added to our portfolio.
Parvez Qazi
And lastly when we look at FY ’26 launches, did I get the number correct? You are talking about 10 million square feet potential launches in FY ’24.
Jagadish Nangineni
That’s right, that’s right, Parvez. The overall like we have seen that it’s about 19 million square feet is what we have as of end of September. We should be able to do at least about another five and a half weeks remainder, and about another about 10 million square feet in the next financial year.
Parvez Qazi
Sure, thanks and all the best.
Operator
Thank you. The next question is from the line of Biplab Debbarma from Antique Stock Broking Ltd. Please go ahead.
Biplab Debbarma
Good afternoon, everyone. So, my first question is on the Gurugram project. So, we have been seeing Gurugram seen slow absorption. So, to compensate for that because you have a lot of land parcels in Gurugram, do you intend to do more launches in Gurugram in say in Q4? Because approval is also not an issue. Absorption happening quite fast. And so just wondering whether is there any possibility of new launches in Gurugram?
Jagadish Nangineni
Good evening Biplab. We have good inventory like you mentioned in Gurugram. In addition to what we have in order to increase the pace of sale and our own presence in Gurugram, we have three more projects in pipeline, and those would be done not in FY ’25 but in Q2, Q3 of FY ’26.
Biplab Debbarma
Okay, so no new launches in this financial year?
Jagadish Nangineni
No.
Biplab Debbarma
And sir, just to understand. So, in that, thanks for giving us the table on land bank, so just trying to understand the terminology of this land bank. So basically, you are saying in addition to the forthcoming projects of 19.2 million square feet you have forthcoming project land then subsequent projects length and there is 1878 acres of land bank. So, these are the additional land. So, this 228 plus 207 plus 1878, is that correct? I’m just trying to understand what does this mean? What is the meaning of forthcoming project land and subsidy plan project land, and you know 1878 acres of land under various stages of consolidation. And amongst this land parcel how much is Hoskote?
Jagadish Nangineni
Yeah, so Biplab, this is the pipeline that we typically say that we have forthcoming projects that say 19.2 million plus some commercial sales, all of that is about 228 acres. Like the slide shows and these are the ones which we are expecting to be launched, and these are the projects where we have already initiated the approval process. Design is mostly complete, and hence we have taken them as forthcoming projects where we have a clear timeline for launches. And those we believe that we should be able to do it in the next six to eight quarters. Beyond that, what we also wanted to show was that we have additional about 207 acres which is about, which can bring in about 26 million square feet. Those lands are also with us. And we have to, we have not yet started the approval process, but there are various, I mean, there are a couple of other activities that we are doing which is any conversion activity or it’s an initial design phase activity. Once those are completed and we start applying for any of these, applying for approvals, then we would move them into the bucket of forthcoming projects. So, hence what we wanted to show is not just the visibility of this about 20 million square feet, but we have clear line of sight for about another 26 million square feet. And the third one which we have is the bigger land bank of 1878 acres. Those also they are in a different stage. They probably will have to do in some places, consolidation. And those are clearly marked out saying that there’s monetization. So those are not yet — we are still making progress in terms of getting the right set of plan shape to make sure that we can move into this subsequent project plan. So, the objective of this developable land bank slide is to showcase what’s today and what’s visible today and what’s visible tomorrow. And beyond that we will continue to work.
Biplab Debbarma
Thank you, sir. This provides excellent clarity. Just you know, trying to understand this 1878 acres, this is under your control? Yes. You may monetize it, you may use it self-use for some manufacturing or you may acquire a few more land parcel to consolidate this 1878 acres. But it is under your control, right?
Jagadish Nangineni
That is right.
Biplab Debbarma
Okay. And my final question is on the contract and manufacturing. You mentioned about the poor margin. What kind of margin we have made in first half of FY ’25 and going forward, what should be the expected margin in this segment, sir.
Jagadish Nangineni
Only in the contraction manufacturing?
Biplab Debbarma
Yes, contract and manufacture, not real estate. Basically, non-real estate part. What is the margin that you have been — you have done in first half of FY ’25 and what would be the new normal in terms of EBITDA margin.
Yogesh Bansal
For the entire contracts and manufacturing, in the first half we would have done a EBITDA margin of about 6%.
Biplab Debbarma
And this would be the new normal, sir. Or do you see improvement to 10% or to 11%, 12% going forward, or there is uncertainty like kind of thing.
Jagadish Nangineni
Biplab, I will let Yogesh take this question.
Yogesh Bansal
Biplab, this year you will see similar margin. But next year you will start improving our margin [Technical Issues]
Biplab Debbarma
Okay, that’s good. So, in [Speech Overlap]
Jagadish Nangineni
There is a small color to that. The contracts and manufacturing, it comprises of various sub manufacturing activities, which is we have leasing and metalworks, interiors, concrete products in manufacturing and in contract we have civil, electrical and plumbing. The main reduction of margins has been in civil, and in which are contract based and once, but the other which are electrical, plumbing and even integration of the products, they are performing much better. And I think once the emphasis on the civil contracts and once we complete some of the older projects, engaging in metalworks, it should start seeing significant improvement in the market there. And that’s what Yogesh is also alluding to.
Biplab Debbarma
Okay, sir. Thank you, sir.
Operator
Thank you. The next question is from the line of Akshay from Investec Capital. Please go ahead. Mr. Akshay, your line has been unmuted. Please go ahead with your question.
Akshay Gupta
Am I audible?
Operator
Sir, I request you to use the handset please.
Akshay Gupta
Yeah, yeah. Hello. Okay, I have two questions. Thank you for the opportunity. First, so the first question is related to like most of our launches recently launched independent [Technical Issues], so how do you intend to sustain the sales momentum like amid the potential, like potential market fluctuation like in the Bangalore or the Gurugram market going ahead? That is my first question. And second question is like you already answered, related to the margin and all. So, what will be your overall guidance on overall EBITDA margin going ahead for like FY ’25, ’26. I know that you already are focusing on the contractual margin and manufacturing margin towards [Technical Issues]. Any guidance on the overall EBITDA margin for going at like ’25 to ’26. Yeah, that’s my second question.
Jagadish Nangineni
So, Akshay, to the first question. The demand side from import in Gurugram seems to be very steady and s such no issues till now if you consider the leading indicator. So, the only thing that we need to be more cognizant of is the product configuration that we have and the mix of the configuration that we have. So, in a kind of pyramid demand, sorry, pyramid demand structure, where there will be the size of the higher ticket, size is smaller and as we go down the size of the market increases. And I think there is a big market for residential real estate considering the economic growth and the migration that has taken place in the last few years. And even if you look at the commercial offtake in the recent in this year, apparently, it’s going to be one of the highest and that gives a lot of confidence in terms of the job creation that’s happening in the country, and which is largely in the metros. And biggest beneficiaries of this is cities like Bangalore and Gurugram. Given that macro view and from the supply side, what we are seeing from the ability to launch a project and deliver the project is also the supply is also very consistent with the kind of demand that we are seeing. And we see it can be a very stable environment in both these locations.
Coming to your second question related to the guidance on the margin, our goal for our EBITDA margin is growing in the medium to long term which is probably I cannot be able to clearly guide you for the next year or in the next half or next year. But over a period of time, our aim is to take our EBITDA margins to over 20%.
Operator
It seems like our current participant got disconnected. We’ll take our next question from the line of Ankit Gupta from Bamboo Capital. Please go ahead.
Ankit Gupta
Thanks for the opportunity. So, my question was on the overall demand on the luxury real estate side, are we seeing some slowdown there over the past few months? Hello, Am I audible?
Operator
Yes sir.
Jagadish Nangineni
Hello. Sorry, can you please repeat the question?
Ankit Gupta
Sure, I’ll do that. So, my question was on the overall market for the luxury real estate, are we seeing some signs of slowdown over the past few months in the sales for let’s say houses about INR3 crores, INR4 crores for us as well as in overall industry.
Jagadish Nangineni
Luxury housing demand is a function of again several factors which is micro market-based product type and also the overall macroeconomic environment. I think given the complex mix of it cannot be just given in the same rush for products over a certain ticket size. For example, in Gurgaon, even ticket size of INR5 crores is considered a good ticket size where the sales have a lot which can be good. And whereas in Bangalore any ticket size below INR3 crores can be a very good ticket size where sales can be good. So, considering both these I think there is a steadiness in the market and probably what we can anticipate is not that it’s going to be how we have seen the increase in the sales volumes in the last couple of years. Probably we are reaching a steady state instead of continuous increase in terms of demand.
Ankit Gupta
I was coming to this point, you know, referring to some, you know, some indications of, you know, slowdown in sales of luxury items like cars as well over the past few months. So that was the point I was making like, are we also, have we also seen some, you know, let’s say reduction in demand or the growth that which was there over the past few quarters has seen a bit of reduction.
Jagadish Nangineni
Right. So, a direct correlation from cars to houses and we are yet to establish, but we will be able to sort of get the indicators and also actual how it’s going to play out in the next few months. Once we have that clear then we would be able to respond to that same market conditions too.
Ankit Gupta
Okay, thank you, and wish you all the best. Thank you.
Operator
Thank you. The next question is from the line of Ayush Sabu [Phonetic] from Choice Equity Broking Private Limited. Please go ahead.
Unidentified Participant
Can you please guide us on the net debt figure expecting your [Technical Issues]
Jagadish Nangineni
Sorry, Ayush, you’re referring to net debt?
Unidentified Participant
Yes. Net debt.
Jagadish Nangineni
Okay, so what’s the question? Sorry?
Unidentified Participant
Could you just guide over the what range you see the net debt settling at in the next one to two years?
Jagadish Nangineni
Okay. So, from a debt perspective, Ayush, what we the way we are thinking is, I mean our gross debt is currently about INR1,600 crores, right? And largely we are comfortable having a gross debt of about this number. And going forward, our objective is to utilize the proceeds of the rights issue and cash flow that we generate from the operations, both those towards equity — sorry, used as growth capital. And given that objective there would be fluctuations in the net debt in the next few quarters because we would get receive these rights issue tranches this next chance and there would be definitely a reduction in the whole net debt. In fact, it will become negative. But post that as utilize it towards land, then again the net debt would increase. But at a gross debt level we would probably continue. In the long term we might be at ab absolute level of about INR1,500 crores.
Unidentified Participant
Pardon, INR1,600 crores, right?
Jagadish Nangineni
Yeah, INR1,500 crores.
Operator
Ayush, I hope this answer your question.
Unidentified Participant
Yes, thank you.
Operator
Thank you. [Operator Instructions] The next question is from the line of Parikshit Kandpal from HDFC Securities Ltd. Please go ahead.
Parikshit Kandpal
Yes. So, you touched upon that you’ll be calling the right second tranche in December next month, right? But if the current price is almost INR100 lower than the rights price. So, you think that last time the promoters came and filled up for the unsubscribe portion so they will continue to do the same thing, right, as per the rights of a document.
Jagadish Nangineni
Sorry Parikshit, we could not hear the question properly. Can you please repeat that?
Parikshit Kandpal
I was saying that as per the offer document, the unsubscribe portion of the rights will be taken up by the promoter. And since the current market price is lower than the rights price, do you think that we will continue with the same direction? Right. If there’s some unsubscribe portion, the promoters will fill in.
Jagadish Nangineni
[Speech Overlap] Parikshit, already promoter has subscribed to unsubscribe portion. I think now we are calling only the right money first. Okay. When we are going, we have to see what [Technical Issues]
Parikshit Kandpal
My question was that if the current price is lower the market, the other investors can buy from the market. So, if in case they don’t subscribe to the rights issue, will their portion of the rights annotation will be taken up by the promoters? That was I was asking.
Jagadish Nangineni
Rights, once you have subscribed to the right, you have the ones who have already subscribed they need to pay us. In case of any nonpayment, I mean the first tranche and if those are available, but available and we will have reached the promoter would be willing to take up.
Parikshit Kandpal
Okay, that is what I want to ask. Second question was around the land again could not get the answer last time. So out of this 1800 acres are which you have shown. So how much is the total Hoskote land and how much is the Hosur land in this.
Jagadish Nangineni
The Hoskote land will be another close to 300 acres, and the entire land, and Hosur is about 158 acres.
Parikshit Kandpal
Both of these sort of 1800 were INR450 crores. So, these are developable, right? I mean these can, finished product can be done by you on these two land parcels over the next say, seven, eight years?
Jagadish Nangineni
On the Hoskote land, yes, they can be developable over longer term. There again they are in various patches and those large patches as we consolidate, we will be able to bring it to development. In Hosur, the land, some of the lands that maybe 150 acre of the land that we are alluding to those based on, I mean again they are in multiple locations in Hosur itself. And currently given the locations, we do not think that they can be developed as plotted development. So, we will need to, if location develops, we will be able to convert it. Otherwise, we will monetize it.
Parikshit Kandpal
Okay, and this 1817 acres. So, if you guys can tell what will the book value of this land. Sir, this is 1870 acres.
Jagadish Nangineni
We do not have the number exactly, but we will circle back and provide you that number. Okay, Okay, sure. Thank you.
Operator
Thank you. The next follow up question is from the line of Biplab Debbarma from Antique Stock Broking Ltd. Please go ahead.
Biplab Debbarma
Thank you for the follow up opportunity. So sir, you are have made foray in Greater Noida and most probably in MMR, Mumbai Region too will be entering soon. So, I’m just trying to understand what would be your strategy like how do you want to play in this new market, especially MMR because MMR is a bit difficult market and just trying to understand how you want to play like which market micro market you target or what kind of redevelopment, land purchase, JDA, what kind of you are targeting, and premium luxury what segment you are targeting. So, because you have some would have something in mind you might I’m certain you have done a lot of research before making foray into MMR and Greater Noida. So just trying to understand the strategy.
Jagadish Nangineni
Yes, you are right that MMR, when we say MMR there are multiple or large markets within MMR itself, South Bombay, suburb Bombay, Thane, Navi Mumbai, and several others. So, each market has its own availability of land, its own dynamics in terms of the market itself including approvals and bylaws. So, hence we have been indeed studying the opportunities that we are looking at, and one of the things that we have seen is that the upfront investment in terms of approvals and in terms of whether it is TDR or TM or SSI charges are actually significantly higher than any of the other markets that we have been operating in. So based on that we would take a route of where the upfront capacity is not as high as in some of the other markets. So hence the current plan is to study the opportunities and spread ourselves in multiple locations so that we can have a presence over multiple geographies within MMR. So, once we have clarity on that, on specific opportunities, we will be able to disclose those to you. But it’s little preliminary for us in terms of clearly filling out the kind of strategy that we have because it is an ongoing process and it will take a little bit of time before which we can close a few opportunities, and we start working towards them. And on growth Greater Noida it is a fairly the land is largely — the supplier is the government or people who have taken it from the government allotment. So, this is very straightforward in terms of the supply. We will look for new opportunities based on how we are progressing in the first project. Once you get some comfort there, we would definitely like to expand because that’s an interesting geography, Noida and Greater Noida and we believe that there is a good opportunity there for us, considering that we have done well in Gurugram and we have good presence in Gurugram. The brand recognition and the understanding, and requirement of quality product is very high.
Biplab Debbarma
Okay, great. Sir, I have the two more clarifications I needed. You mentioned EBITDA margin, long term and medium term. Overall EBITDA margin to be 20% plus. Is it for the entire company or it is just for the real estate embedded EBITDA margin that you mentioned 20%.
Jagadish Nangineni
Biplab, this is for the entire country.
Biplab Debbarma
Okay. And real estate would be, what would be real estate segment EBITDA margin that you believe would be achievable in the medium to long term.
Jagadish Nangineni
Real estate would also be slightly higher than, I mean it would be closer to in about 22%, it might be between 22% to 25%, but even the contracts and manufacturing can be in a much better margin once we choose the right set of contractual projects or we choose to de-emphasize on some of these kind of contracts that we are currently undertaking, like civilian nature.
Biplab Debbarma
Okay. Thank you, sir. Thank you.
Operator
Thank you. Ladies and gentlemen, we’ll take this as the last question. I would now like to hand the conference over to the management for closing comments.
Jagadish Nangineni
Thank you. I express my sincere gratitude to all the participants in the call today. I hope we fielded all your questions. And if there are any further questions, please reach out to us through our Investors section. And thank you and have a wonderful evening.
Operator
Thank you. [Operator Closing Remarks]