Kolte Patil Developers

MANU_JINDAL · July 2, 2021, 3:02am

@nikunj_patel @sangam_khandelwal @harsh.beria93 Did you guys try to get in touch with Mr Sarda. I had mailed to KPD investor relations about the explanation. As usual, it was a bland reply.

MANU_JINDAL · July 2, 2021, 3:03am

This is abstract theory but makes sense. @nikunj_patel Thanks for highlighting

kb_snn · July 19, 2021, 5:26am

Planet Smart City and Kolte Patil : 15000 houses across Pune / Mumbai and Bangalore

If one looks at design and amenities @ price they are planning to offer seems very good . Not sure of how attractive will be margins

For people who want to understand what Planet smart city does …

And Kolte has launched a project with them couple of years back - Universe at Life Republic

Any Puneites can give their feedback on this project - Is it what it promises to be … @ 35 odd lacs

This differentiation is relevant in context when DLF management said for Indian listed companies > 75 lacs is viable product and they focus more on the same …

harsh.beria93 · September 8, 2021, 9:36am

Another change in CEO, now Rahul Talele has been made group CEO and Yashvardhan Patil has been made joint MD.

harsh.beria93 · September 16, 2021, 9:53am

AR21 notes

Has ~9.13 mn sq.ft under execution (sold and unsold), 170 cr. of RTM inventory
Realizations increased by 9% to 5’785 due to increased contribution from Mumbai
Digital capabilities: 180 homes were sold during March 15 - April 30, 2020
Mumbai + Bangalore sales contribution increased to 300 cr. (~25% of FY21 sales)
Pune:
o Launched Universe at Life Republic and sold substantial volumes at a higher realization compared to the other sectors within the project
o Completed final tranche payment of 81cr. for buyout of ICICI Venture’s 50% stake in Life Republic (first tranche of 70cr. was paid in March 2019 and the second tranche of 70cr. was paid in November 2019). Company’s economic interest in its entire portfolio grew from ~60% to ~90%.
o Signed 3 projects with a combined saleable area of ~2.2 msf in Pune under capital-light models; (Projected topline of 1500 cr., projected KPDL PBT ~220cr.)
Mumbai:
o Mumbai portfolio reported sales value of 180cr. (vs 19.8cr. in FY20)
o Launched Evara at Q3 end (the first new launch in Mumbai in 4 years) and sold 54 units (75% of inventory)
o Launches of Verve (Goregaon) and Vaayu (Dahisar) in Q1FY22 should increase Mumbai sales proportion to ~25% in foreseeable future
o Redevelopment projects: Evara, Verve and Vaayu (expected topline of 1000 cr.)
o Will focus on large redevelopment properties that present possibility of generating at least 50 cr. in profit before tax.
Net debt declined by 124 cr. to 310 cr.
Availed 3-month debt repayment and interest servicing moratorium
Reduced marketing from a peak of 3.7% of sales in last few years to 2.6% in FY21
Partnerships:
o KKR committed 193cr. in R1 sector of Life Republic
o Entered into 120cr. agreement with an affiliate of J.P. Morgan Asset Management for its Mumbai redevelopment project Jay-Vijay Society in Vile Parle (E)
o Planet Smart City bought 10.4 acres of land at Sector R10 at Life Republic for 172 cr. and partnered KPDL to launch the project at Sector R10 in a profit-sharing agreement (1.42 mn sq.ft)
o The real estate investment firm ASK is a profit-sharing (70%) partner in the Three Jewels project
Brands:
o Kolte-Patil (addressing the mid-priced and affordable residential segment)
o 24K (addressing the premium luxury segment).
Planned launches: 8 in Pune, 3 in Mumbai, 1 in Bangalore. Total saleable area ~ 6.5 mn sq.ft, revenue potential: 5300 cr.
Shareholder: 37’665, Share price: low (110), high (281.95)
Number of employees: 558
Aim: To reach 5mn sq.ft annual pre-sales run-rate in 3 years
FY22: Signed 2 new projects with a combined saleable area of ~1.3 msf in Pune (Hinjewadi and Tathawade) under the DM model. Expected DM fees of ~80 cr.

Disclosure: Invested (position size here)

harsh.beria93 · November 1, 2021, 10:17pm

FY22Q2 concall notes:

Sales contribution outside Pune (Mumbai + Bangalore) ~ 35%
Have 11 priority launches (6.2 mn sq.ft saleable area, 5000 cr. potential topline, 8000-8500 / sq.ft realizations; most of these will be launched in FY22 with some spillover to Q1FY23)
Life republic portfolio realization has gone up from 4900/sq.ft to 5200/sq.ft. For premium projects in Mumbai, realizations have gone up by 2-4%
Will do >2.5mn sq.ft in FY22 and increase over that in FY23
9 mn sq.ft of current undergoing projects will get delivered in the next 3 years (expected sales ~ 5000 cr., EBITDA margins ~ 20-25% and PAT ~ 10-15%). This will be almost evenly spread over the 3-years

Disclosure: Invested (position size here)

VIMAL_AGRAWAL · November 13, 2021, 1:08pm

hello harsh , if possible pls solve my query for real estate,which company had cumilative EBITA exceeds the mkt cap, pre tax cash flow is equal to mkt cap, thanks in advance.

Sanjay_Kumar_E · November 14, 2021, 5:05pm

I think you are referring to Samit Vartak’s Bloomberg Quint interview where he says, buy a Developer when the next 5 years’ cumulative EBITDA is equal to current market cap. Kolte Patil has the ability to be one such Developer. Not 5 years but 7 years definitely.

VIMAL_AGRAWAL · November 14, 2021, 5:20pm

yes sanjay i m still confuse by data , itmay be century ? would you please clear my query in my opinion it is kolte patil, thanks in advance.

Sanjay_Kumar_E · November 14, 2021, 5:49pm

According to sources, Samit is invested in Indiabulls RE. I haven’t studied them closely to project numbers. Few other developers can do it too. The problem is the recent rally. So at current prices, next 5 years cumulative EBITDA might not be equal to current market cap but definitely possible in 7 years. 5 or 7 years doesn’t matter. Its just a thumb rule. The bigger question is, will the current demand and pre-sales sustain? While large developers will definitely gain market share due to consolidation, will the prices and pre-sales go up? Have to be dynamic and keep watching quarterly numbers.

harsh.beria93 · November 18, 2021, 2:16pm

Gopal started his own venture called “The Vibe Realty”.

Sanjay_Kumar_E · November 18, 2021, 3:32pm

Gopal was also part of the CARE Ratings’ Real Estate webinar today:

arjunbadola · January 18, 2022, 3:52pm

arjunbadola · February 4, 2022, 2:19pm

Kolte Patil received show cause notice from SEBI under rule 4(1) of SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995.

This can be due to the following reasons provided under Chapter VIA of Securities and Exchange Board of India Act, 1992:

Similar provisions in Securities Contracts (Regulation) Act, 1956 (42 of 1956) for violations.

If any member in the forum has any information on the same it would be great.

arjunbadola · February 9, 2022, 7:42am

Q3FY22 Concall Notes - Kolte Patil

Numbers

Highest quarterly sales value in last seven years in Q3 FY22
1. They expect to this year as their best ever in volume year.
2. Guidance for next FY is Rs.2000Cr+ topline (3+ million sq. ft)
  1. Will try to maintain margins around EBITDA 20-25% and PAT around 13%.
Target of 10mm sq. ft out of which 8mm will be in Pune. This leads to 6000-7000cr topline.
1. 1238cr sales currently
2. Future potential:
  1. 5.38 msf of saleable area
  2. Rs.4,600 crore of topline potential
Revenue mix: Out side Pune 31%: Mumbai 26% - 5% Bangalore
Going forward, project size will be 300-800cr with ticket size 1.5-3.5cr.
Evaluating 30 mm sq ft which is in mid-advance stage but this can’t be taken as guidance because due diligence is still going on.
1. Out of this Bangalore 2.5-3.5 mm sq ft
  1. Their plan is to cater to smaller categories to not compete with larger players.
2. Next few month there can be interesting announcement
3. Management repeatedly staying “hoping to announce something soon”
Created platform with Planet Smart City to develop 15,000 housing units (Area is 2 lakh sq ft.): There will be better realization due to partnership with Planet as they will bring in technology.
1. 80% of amount will be put in by planet
DMA deals are going to be small portion like 3-4 deals going forward.
Have strengthen JD team in Mumbai: Identified few mico-market where they have strong presence.
There are few ready to launch deals because earlier dealer could not complete.
SEBI Notice:
1. It was not mandatory but they still disclosed it.
2. A technical violation and they have appointed Khaitan & Co.
3. Nothing to do with insider trading which comes under different notice.

tusharpatil1981 · April 21, 2022, 9:44am

harsh.beria93 · April 21, 2022, 4:45pm

Latest CNBC interview (link)

Confident of growing 25-30% in FY23, don’t expect much impact of stamp duty withdrawal on volumes
Deliveries will be 3mn+ in FY23
Have taken price hikes from 2-7%
Net debt has come down to 120 cr., this should go up as this kind of debt is too low and they will deploy capital in newer opportunities

Here are their historical numbers.

	FY17	FY18	FY19	FY20	FY21	FY22
Sales volume (lakh sq.ft)	20.80	20.90	27.00	25.10	20.80	27.10
Sales value (cr.)	1’220.00	1’198.00	1’432.00	1’331.00	1’201.00	1’739.00
Collections (cr.)	965.00	1’109.00	1’247.00	1’368.00	1’128.40	1’574.00
Average realization (per sq.ft)	5’836.00	5’765.00	5’302.00	5’309.00	5’785.00	6’407.00

Disclosure: Invested (position size here, no transactions in last-30 days)

arjunbadola · May 26, 2022, 10:39am

Q4FY22 Concall Notes

Numbers:

Mumbai portfolio reported best ever performance.
1. Will continue to increase Mumbai portfolio
Collection is the highest in the 3 decades of Kolte Patil.
Guidance: “We now look forward to expand on the platform of these achievements; our objective would be to deliver 25-30% sales value growth in FY23. We have a solid balance sheet position and remain well placed to aggressively pursue business development initiatives in FY23 and expect to conclude deals with a cumulative top line of Rs.7,000. Further, in FY23 we are looking to launch projects in the pipeline that currently include saleable area of 5.4 million square feet with aggregate top line potential of Rs.4,600 crore.”
1. Confident of delivering 3 mm sq ft during FY23. Leading to Rs.1800+cr of revenue with EBITDA margins of 25%. (Today the market cap is around 1800crs)
2. Mumbai target of crossing Rs.650cr. IRR target of more than 25% of redevelopment portfolio. Margin is 22-25%
Debt to equity at 0.14 time
1. “We reduced Net Debt by Rs. 179 crore during FY22 and by Rs. 41 crore during Q4FY22. This was the third consecutive year of Net Debt reduction, with Rs. 386 crore being reduced in last three years. As on March 31, 2022 Net Debt/Equity stood at 0.14x.”
  1. Current debt level is at 20 days of collection of business.

14-15% price hike in Pune Life Republic. Further increased, 5-7% in other projects as well. (On average 5% price hike)
1. Management believes there is possibility of settling down of the cost further.
2. They were able to sell the Mumbai project within one month even after the price hike.
Confident of launching projects worth 4,000cr in FY23. This year it was 1,000cr.
1. 70% from Pune and 30% from Mumbai and Bangalore
2. 7 non-binging sheet are present where commercial discussions has been closed but not 100% guarantee that it will god through as legal problems can still come in.
Q: Any change in customer behavior due to increase in interest rate?
1. There is good growth in the industries as well where the end customer would also be receiving high increase salary but it can be impacted if it increasing by 100 basis points.
  1. They are not investors they are end users.
2. If required company is open to provide incentive to meet growth target but have not done yet rather increasing prices.
Contribution from Life republic project contributed 40% last year to now 31% next year guidance of 24-25%.
1. Reason being more projects being sold from other project and not slowing down Life Republic.
Evaluating Plotting projects of townships in Pune, already one first such project this year.
1. Less number of branded players in this segment.
Management is not seeing any slowdown in the real sector.
There has been multiple hiring in mid to high level management. New management team has joined this year like a position of COO. Plus, building a strategy team.
Booking:
1. Affordable: First 3 months and 50% is sold by that time then 100% by the time registration certificate is received
2. Premium: First 6 months 30-40%. 20% at finishing.
63% of inventory of last year has been sold.
In Mumbai customer are coming to them even at better terms for the developer showing brand recall.

P.S: Please notify if there are any errors in the notes as audio was not clear during the call.

harsh.beria93 · May 26, 2022, 11:06am

Thanks for adding your notes, its very comprehensive. I will add a few data points in terms of long term sales cyclicality and the kind of Mcap Kolte got in previous cycles.

Reported sales
2008 peak sales ~ 421 cr.
2010 low sales ~ 148 cr. (-65% from peak)
2014 peak sales ~ 764 cr. (416% from low, 81% from peak)
2015 low sales ~ 697 cr. (-9% from peak, 371% from low)
2018 peak sales ~ 1403 cr. (101% from low, 84% from peak)
2021 low sales ~ 692 cr. (-51% from peak, 0% from low)

Share prices:
2008 peak: 272
2009 low: 18.7 (-93% from peak)
2015 peak: 238.75 (1177% from low, -12% from peak), market cap: 1’812 cr.
2016 low: 78.4 (-67% from peak, 319% from low), market cap: 595 cr.
2018 peak: 404.7 (416% from low, 70% from peak) , market cap: 3’072 cr.
2020 low: 103 (-75% from peak, 31% from low) , market cap: 782 cr.

Market cap / sales
2015 peak: 2.37 (peak market cap 2015 / peak sales 2014)
2018 peak: 2.19 (peak market cap 2018 / peak sales 2018)
2016 low: 0.85 (low market cap 2016 / low sales 2015)
2020 low: 1.13 (low market cap 2020 / low sales 2021)

In terms of Mcap/sales Kolte got 2.2x in 2015 and 2018 cycles. If we just look at projected FY23 deliveries, it should be around 1800 cr. (3 mn sq.ft * 6000/sq.ft). With 25% EBITDA margins, current EV/EBITDA ~ 4.5x. On a EV/pre-sales number, Kolte is currently trading at <1x. This is in stark contrast to previous upcycles where they traded at >2x sales.

Summary: Business is in an upcycle and valuations are towards the 2016 and 2020 lows. I think its an interesting opportunity if management executes. In the past, they have overguided and underachieved.

Disclosure: Invested (position size here, bought shares in last-30 days)

hnk_so · May 26, 2022, 2:11pm

FY22 result is reflection IT boom and salary hikes. Is this going to repeat in FY23? I doubt.
Pune real-estate is driven by IT. Looking at current and near future bearish scenario in IT, layoffs fear, interest rate hike, prices hike in real-estate, etc. will definitely impact real-estate growth in city/region where IT drives growth.
Hence, management’s commentary should be taken with pinch of salt !!