Another very good set of nos from Ashiana, on reported P&L they should have 850-900 cr. sales in FY24 and they are targeting 1500 cr. of pre-sales. Concall notes below.
FY23Q4
- FY23 launches: 13 projects (5 greenfield + 8 phase extension in existing projects) accounting for 29.46 lakh sq.ft
- Guidance: 1500 cr. presales in FY24, ~26 lakh sq.ft deliveries (850-900 cr. reported sales)
- Land acquisition: 2 in Jaipur (Ashiana Nitara in Bhankrota with saleable area of 6.5 lakhs sq ft + ‘The Amaltas by Ashiana’ in Jagatpura with saleable area of 4.00 lakh sq. ft) + 1 in Manesar (Gurgaon) with saleable area of 10.30 lakh sq. ft.
- GIDC Manesar land: Have paid 25%, waiting for formal agreement to sell after which they have 12 months to make remaining payment and can then go for planned approval. Ashiana takes a lot of time in designing the project and will apply for environmental approval simultaneously. Expect launch in FY25
- Ashiana Amarah: Phase 2 sold out at launch (224 units; 3.77 lakh sq.ft; 283 cr.) and booked in April 2023. Phase 1 (224 units; 3.95 lakh sq.ft; 243 cr.) was sold just 6 months back in Q3FY23. So there has been pricing increase of close to 22% in less than 6 months
- NCR and Jaipur land prices have doubled since FY20 whereas sales prices have increased by 20-50%
- Ashiana Prakriti (Jamshedpur): Sold at launch (162 units; 2.57 lakh sq.ft)
- Current pipeline: 15 lakh sq.ft in ongoing projects + 94 lakh sq.ft in future projects + 10 lakh sq.ft in land (excluding Milakpur and Kolkata) ~ 119 lakh sq.ft
- Thumb rule: Reach 15% ROE on a corporate level with 30% gross margin
- Economic ROE: Have reached double digit in FY23 and will cross 15% in FY24
- Land deals: Negotiating 2 land deals (Jaipur + another market) that will hopefully add 20 lakh sq.ft to saleable area
- Pricing trends: Higher confidence in pricing in Gurgaon, Jaipur, Jamshedpur and senior living
- P&L structure: 30% gross margins + 4-4.5% selling costs + 7% corporate costs + tax. PAT margin of 13-15%
- Non-core assets: Slowly disposing them, looking to dispose school in Bhiwadi (wont dispose hotel in Bhiwadi; generates 15% on capital invested)
Red flags to watch when things are going south:
- In JV transactions, increasing revenue share tells that builder is becoming more aggressive
- If flat sizes go down, that means affordability is a problem
Disclosure: Invested (position size here, no transactions in last-30 days)