Kolte Patil Developers

Kolte management is guiding for a bumper Q4 quarter, with 800-900 cr. reported revenue, 30-40% gross margin, and 20-25% EBITDA margin. Lets see what they end up delivering. Concall notes below

FY23Q3 concall

  • Out of priority launch pipeline of 7’700 cr. (13 projects), have launched 2’000 cr. Remainder landbank has development potential of 15’000 cr. (11’000 is from Life Republic)
  • Planning to launch 4000 cr. of priority launch pipeline in Q4. There maybe some spillover to Q1FY24. Require 8-12% of upfront investment in terms of sales potential. Cashflows from Marubeni will be utilized for this investment
  • Baner project: Have acquired an adjacent land parcel which has improved economic outcome. Planning to launch at 9000 realizations in March 2023 vs 7500-7800 earlier
  • Life Republic: Average realizations have increased from 5200-5400 to 5900
  • Q3 losses were because of delivery of 2 projects in Pune (which were lower gross margin and contributed 31 cr. gross profits and were insufficient to cover overheads; Western Avenue and Green Olive). All costs related to these 2 projects have been booked this quarter
  • Launched premium Row houses in Life Republic and received overwhelming response. Price bracket has widened from 30-80 lacs to 30-250 lacs
  • Q4 revenue recognition will be 800-900 cr. bringing reported revenue in FY23 to 1600-1700 cr. Gross margin: 30-40%, EBITDA margin: 20-25%
  • Deliveries in FY23 + FY24 will be 3000 cr. (so 1300-1400 cr. of revenues in FY24)
  • OCs: Have received for 2.7mn sq. ft in 9M FY23, 60% of these were received in December 2022 and will be recognized in March 2023 quarter. After OC receival, revenues are recognized in 30-45 days depending on agreement with customers
  • Expect higher EBITDA margins in FY23 vs FY22
  • Expect 25-30% pre-sales growth in FY24
  • Referral sales have improved from 3-5% earlier to 7-9% in FY22 and further to 15% in 9MFY23

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