Kolte Patil Developers

Kolte has been delayed in execution of their business development plan. They are maintaining pre-sales guidance of 2200+ cr. and deliveries of 1600-1800 cr. in FY23. It seems most of the nos will come in Q4. Notes from concall below.

FY23Q2 concall

  • Out of 13 priority projects, 11 have got environmental approval and are stuck in some stage of local approvals
  • Guiding for 4000 cr. launches in H2FY23. Expect 1200 cr. of pre-sales from new projects + 300 cr. from sustenance inventory in H2FY23
  • Q4 will be higher in terms of pre-sales than Q3
  • For mid housing inventory, they sell 40-60% in 6-months after launch. For premium or luxury housing, they sell 30-40% in 6-months after launch
  • Life Republic: prices have increased by 7-10%
  • Thane project: Underwritten at 7500 and will launch at 8500, but actual cost impact is only 100-150. So margins should improve
  • The idea of selling investments and land bank through planet city is to improve project IRRs as Kolte gets cashflows earlier in the cycle
  • Guidance of deliveries of 1300-1500 cr. in H2FY23. Some deliveries will be in later part of Q3 and large part of recognition will be in Q4

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