Ashiana Housing - Banking on Tier II and III towns!

I was able to only attend part of the conference call, here are my notes. I will update it once the conference call transcript is available

  • Ashiana Amantran cancellation of 41 flats which are still in the system will be recorded in Q2FY21; July and August good months for booking
  • July has been a good month across all properties; see good overall traction in bookings; Needs to be seen if the booking are because of pent-up demand? Management sense: Compression in interest rates favors consumers; 3% rental yield (± 50 bps) in most of the projects
  • Q2 booking will be better than Q1; Ramp up of construction in months to come, delivery might be a little delayed
  • Receivables not alarming according to management
    o Maintenance segment: particularly for people who do not stay at the property, so receivables can be a little stretched because of that and they pay when they visit
    o When delivery letter is issued and last 4-5% of payments is pending, sometimes that gets delayed
  • Ashiana town: July and August continue to be good. This year will be better than last year
  • Cash situation will improve in Q3 (maybe suboptimal in Q2), optimistic on the cashflow front
  • New launches: Vrinda graden phase 5 in process, Nirmay: second block will be launched this quarter, more launches in different phases of different projects later this year; New lauches for FY21: ~1mn sq.ft
  • Bhiwadi & Jaipur area: Economic activities are coming back to normal, in Jaipur where tourism and jewelry parts a large part of the economy are constrained. In Bhiwadi, auto manufacturing activities started coming back in July
  • EMI scheme: no 10:90 scheme for Ashiana; Focus on schemes which give upfront cash
  • Direct sales: Got into it more because of compulsion
  • Still looking for senior citizen project for Chennai

Disclosure: Invested (position size here)

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