Thank you very much. The first question is from the lin e of Puneet Gulati from HSBC. Please go ahead.

Yes. Thank you so much and c ongratulations on good numbers. Can you talk a bit about the experiences that you are having in terms of business development in cities like Bangalore, what kind of IRR are you expecting from the projects there? And how is the competitive intensity in terms of big lands?

Hi Puneet, look, frankly, in the scheme of things for Macrotech, as you know, Bangalore is something that we are more in the pilot stage at this point, not really looking for aggressively adding projects. So just from a Macrotech standpoint, perhaps it may be a bit of early to speak about. But nonetheless, whatever at least we are doing, our IRR thresholds for typical JDA that we have always mentioned would be kind of 30% plus. We haven't seen any significant challenge as of now getting there. Yes, there are a good number of branded players already existing. So, henceforth, it will be wrong to say competition won't be there. But equally, the sizability if you see alongside the competition, perhaps you would be able to appreciate that as we move on and as we now launch our first product sometime in this month, in the month of November, we'll get to hear how the people has received and thereby, what kind of potential that lies ahead of Macrotech going forward, be it in terms of the consumer sales and the by default getting our raw material land tie-up.

And within Mumbai, in terms of business development, would you focus on JDA? Are you also looking to become more aggressive in the society redevelopment projects, etcetera? Any thoughts there?

Puneet, frankly, from our standpoint, these dynamics of redevelopment, JDA, all these are, in some sense, less relevant. For us, all is in some sense, one and the same. What we really look forward is that, we should be looking for a land which we have the ability or that provides the ability to launch quicker, be it the redevelopment, be it JDA on a clean land. It doesn't matter. What matters is the size of the project, which delivers the certain return thresholds in absolute terms as well as on the margin terms and thereby the IRR. So long those are deliverable and it can be something that can be quickly b rought to the market, because that is what brings the returns, right? So those are the ingredients that we will typically look for.

Correct but society redevelopment is slower to launch to market. So will that fit into your scheme of things or would you rather avoid that and go for other projects which can be quick to launch from the time you acquire?

No, as I said, so long quick to launch ingredient is pretty much there alongside the return threshold, we don't make any distinction.

Understood. That's helpful. And lastly, on your FY '24 launches, are they looking broadly on track. There was pretty much nothing this quarter, right? I mean, second half looks to be heavily loaded in that ways. That's how one should read it?

Yes. We tend to do as much as possible in the second half because especially Q2 tends to have this monsoons unpredictability. You don't want to time a launch at a weekend when monsoons throw the city out of gear. So we typically tend to plan it in the second half of the year. Not saying that we don't do anything in the first half of the year, but it tends to be more loaded to the second half of the year. And yes, in terms of our launch pipeline for the second half, it all looks reasonably in place. Obviously, the ones which are planned for March sometimes can slip to in April, but it looks to be all in place.

Understood. That's very helpful. Thank you so much and all the best.

Thank you.

Thank you very much. The next question is from the line of Saurabh Kumar from JPMorgan. Please go ahead, sir

So I had a few questions. So first is the impact of the BMC order on pollution and all. Do yo u think this impacts your construction spend at least for this quarter?

Hi Saurabh, the BMC's guidelines have been around for some time. We're, I would say, largely compliant with them. There are going to be certain supply chain issues, which ha ve not yet cropped up, but there is a likelihood of certain supply chain issues cropping up. If they stop the transportation of heavy vehicles within the city in order to control the pollution-related issues. That is a contingent event if the air quality r eaches a certain threshold, which they classify as severe. So at this stage, I would say that there is no impact on our construction schedule or spend, but there is a downside risk in case the air quality crossed threshold that has been stated to be severe.

Okay. Understood. The second is essentially -- so you talked about this Eastern Suburbs. So we are seeing a lot of infrastructure come up like Navi-Mumbai Airport, the Trans Harbour Link, the Airoli connectivity, which you spoke about. So if you have to imagine, what happens, let's say, two years or three years out, would you expect, let's say, the differential in pricing between where Palava Airoli belt rates versus, let's say, the Andheri East , Goregaon, Kandivali belt to trade because the relative infrastructure is higher in Eastern Suburbs should that differential start to narrow down because the differential today is more like 3x to 4x?

Saurabh, so I think, we see that pricing at any location are driven by two things. One is quality of life and second is the length of commute. Palava has been very well received when it comes to the first metric, which is quality of life. Which is the reason why it enjoys a premium over other projects in the micro market. And where we expect to have substantial upside benefit coming in terms of pricing is now the length of the commute. Length of the community is in minutes, in time count, which is how a consumer thinks about it. So yes, over the next few years, and it is incremental, right, because you have the Airoli tunnel, for example, opening, then the Trans Harbour Link may happen to become really active maybe six months to 12 months down the line, then you have the metro train k icking in probably towards the '27, '28. And then you have the bullet train from BKC, which is scheduled to complete in 2029, 2030 for this leg. So every one year to two years, you are going to see that the time it takes from Palava to the main epicenters of the city is going to continue to come down. And as that happens and you combine that with quality of life, what you are saying is very, very highly likely to come through.

Okay. Understood, sir. And lastly, on your Pune strategy. So on Pune two things. Are you doing more JDA or are you doing more own? And secondly, like how would you say that, you are differentiated from competition because Pune has a pretty decent set of developers operating there for a long time. So you're doing larg e format townships, more high -end developments or just kind of more thoughts on your strategy in Pune? Thanks.

Pune, in terms of land acquisition, obviously, our strategy is JDA-led. Generally, our strategy is on joint-development-led because that's where our ROEs are higher. And that sort of as we get to this mix of about 40% of our sales coming from JDA, which should happen by the end of this fiscal or sometime next fiscal, then we will sort of start becoming more balanced as a mix of JDA and outright. So that strategy sort of keeps sort of evolving in line with market opportunities as well as how we are looking at it at a corporate level. I would beg to differ with your point of view in terms of how our brand is perceived versus what the existing competition in Pune is. I think, the Lodha brand is perceived in a much higher light by the Pune consumer as in terms of the quality of the design, the quality of the product and the service standards. And I would say this for both Pune and to an extent for Bangalore is that there are good players who do what I would say, mid-end product. But when you talk about product, which is lifestyle- oriented and value-added, I think Lodha has a big lead in the consumer's mind in terms of what it brings to the table.

Okay. Maybe I take this offline. And just one last question. Sushil, what is the total now left from UK.? Is that over now? Or is there any balance left?

As I said last September that INR1,100 crores-odd was yet to -- what to come, of which INR550 crores has already come, the rest INR550 crores, we are expecting potentially in this financial year any time. But that should come this financial year . This would once for all kind of get out of the UK thing.

Okay. Thank you, sir.

Thank you very much. The next question is from the line of Kunal from BOFA. Please go ahead.

Thank you. My first question is that during the quarter, there were media articles saying that regulations and procedures a round society redevelopment could be simplified. So Abhishek, would you view that as an expansion of opportunity for more business development? Or would you also view that as potentially a lot more supply that can come into the market?

Our view, Kunal, is that supply and regulatory changes are areas which don't really impact the business cycle in any significant manner simply because ultimately, it's about what product does one build and who is building it and whether the consumer is comfortable with both of those. The simplification of society redevelopment procedures or for that matter any other easing of business environment is very welcome because it improves productivity for whoever is involved in it. We have done some society redevelopment or tenanted property redevelopment in the past. We are open to exploring it in the future, too. So it's a source of supply. The great thing about Mumbai is that supply is always there and available in different forms. And that is what allows Mumbai to operate at a scale that it operates at much bigger than any other market in the country because the supply is available. Consumers can get what they want. And that is good for a long-term healthy market and also it reduces the incentive for excessive price growth because supply keeps coming to the market.

Yes. Got it. Okay and then just a follow -up here is that, there are a lot of divergent data points in the market right now on how fast exactly is the MMR market growing. So what would be your assessment that on your projected bookings growth of almost 20% for the year, are you gaining market share? And the spirit of the question is, do you sense that the number of market participants are increasing because the cycle is in an established strong phase right now?

Our market share growing? Yes, certainly. I think we certainly believe that our market share is growing. And that has to be seen from the context, not just from the sales growth, but also from the fact that as we increase the number of locations in line wi th our supermarket strategy, there are unaddressed markets in the past, which we are now addressing. And therefore, automatically, share growth is happening. The fact is that, the top five developers in Mumbai have less than 25% market share as of last year. And therefore, there is a lot of room to grow on consolidation. There is also space for new entrants, if they so wish to enter. Now what happens to those new entrants and how they perform, time will tell. I have no view on that. But top line as well as bottom line are areas which one has to look at closely as one enters new markets. And that's why when we enter new markets like Pune earlier, and now Bangalore, our focus is on not just top line, but also on making sure that the bottom line comes t hrough along with that and execution comes to along with that. So there is room for Mumbai to support one player or two players or three players who want to enter from outside Mumbai. But we don't see that competitive intensity is in the manner that you ar e stating it because we believe that the business has moved from being a commodity to being a branded business. So it doesn't really matter, how many people are selling cellphones. There is Apple and then there is Samsung and then there is everybody else. And that's how we believe, real estate is also moving to.

Yes. Got it. Thank you.

Thank you very much. The next question is from the line of Pritesh Sheth from Motilal Oswal. Please go ahead.

Yes. Thanks for the opportunity and congrats on a very strong performance. First is in terms of micro market performance capacity, South Central had a very good quarter. It wasn't specific to any particular project because we have been hearing certain transactions in media? O r do you see this improvement across projects because of people's preference for larger homes? And how do you see this trajectory for South Central as a market going ahead?

So you're right, that South Central Mumbai in the first half of the year and particularly in Q2, has done quite well. it's probably a story which is similar to other markets where you add locations, you have growth. Plus, we are seeing price growth in existing locations. And to an extent, we are seeing volume growth also in existing locations. So this time in South Central Mumbai, you, of course, had the World Towers and Park contributing. But you also had Lodha Malabar contributing, you had Lodha Bellevue contributing. So, we see that generally the market in South Centra l Mumbai is very deep. We are, by far, the most desired brand in this market. And as we bring in supply, we expect to continue to see the momentum grow. There are probably two new locations we'll add in the second half of the year within South Central Mumbai, land, of course, is already acquired and approvals are in place. So we expect that this momentum continues for some time. You can have quarterly ups and downs. But generally, what we see across our business is out of our 20% growth, about 6%, 7% will come from price of the balance, 5%, 6% will come from volume growth in existing locations, and then 6% to 8% will come from volume from new locations. And in different measures, that's a story, which is now playing out in South Central Mumbai too.

But any pricing strategy in South Central Mumbai would be different from the other markets because of higher propensity to pay for the customers. So would it be different?

I would say is that, again, which I answered it in a different context, but I'll say it again, pricing strategy that we have is to charge a premium to competition because we believe, we deliver the best product and the best service and there is and people get the best lifestyle and have no problem in paying a premium to the market. And that's really our pricing strategy across the board. Having said that, when it comes to price growth, we are conservative. We believe that once a project is started off and a pricing is established just because there is demand, one should not go ballistic on price increases because affordability is a key consideration. So our pricing strategy is pretty similar across markets. There is no exception to South Central Mumbai has a higher propensity to pay because c onsumers across the board want great value. Value is a combination of price combined with what product and service one is getting.

Sure. Got it. And second, on your JDA, it has been like 2.5 years now since you have been doing these transactions, preferably JDAs. Any change in terms of land owner expectations that you have seen during this period? And how are we tackling it, if at all?

We believe that the JDA pipeline and the JDA dynamics can be evidenced by the level of business development that we've done in the first half of the year. We believe that Lodha's attractiveness as a brand, what is attractive to the consumer or what is attractable to a lender is also attractive to the landowner, which is strong governance and great execution capability. And in that context, we continue to see a healthy pipeline. I would say the pipeline is lot bigger today than it was 18 months ago. And consequently, we can afford to be picky and choosy about what transactions we do and making sure that the margins that we target, which is 18% in Mumbai in terms of PBT and ROEs in excess of 30% on these JDAs can be delivered with room for error.

And just lastly, on your digital infra business, where you mentioned that pricing have increased to INR5 crores per acre now and since in last few quarters, I mean, the volumes have not been as big as what probably we have been mentioning roughly INR600 crores, INR700 crores kind of a target every year. So is pricing becoming a bit resistant now for people who are looking to buy land and probably once the infra comes up that time, we will see more volumes and transactions? Or how do you see the volume of transaction that is happening now? Is it in line with your expectation or maybe it can improve in future?

I would like to clarify a few things. Our digital infrastructure business is our warehousing and industrial parks business, where we develop warehousing and industrial parks initially in Palava, and then we are now doing across other locations. What you are referring to in terms of land value is Macrotech Developers selling land to third parties, which would include our digital infrastructure partners or platform also. So I just wanted to distinguish between those two. In terms of the land sales and land momentum, as you can imagine, it's chunky. Last year, we sold 140, 100 plus acres in a single transaction to a warehousing development entity. And obviously, that takes them three or four years before they are able to fully monetize that. That's the nature of the business. We see right now that the momentum on land sales is reasonable. You may have read about the fact that we've recently divested of a subsidiary to a company which is focused on building logistics and solutions called New Cold, whic h is a globally renowned cold chain logistics company. We've just announced the transaction for INR1.5 billion transaction will complete th en funds should come this quarter. So we're quite in a good space when it comes to the quantum of land that we want to transact. The piece which is not necessarily, I would say, predictable is the acquisition that the government does for its infrastructure. So in the last fiscal, there was more acquisition done by the government for its infrastructure this year, there has been lesser. It's dependent on what their priorities are and so on. So sometimes that number varies a lot. But what is sold to the market, I think, is moving quite well.

Sure, that’s helpful. That’s in from my side. All the best and Happy Diwali to you and your team in advance. Thank you.

Thank you.

The first question is on cash flows. So we seem to be trending well on our guidance on net debt for the full year and you already alluded to second half being much stronger on inflows. So if there is a bit of a surplus here, what are the strategies we are looking for, how to utilize that cash flow?

We do expect that the debt reduction in the second half of the year will be higher. And as Sushil also mentioned, we expect to receive about INR550 crores from the U.K. in the second half of the year. So that will also help. Having said that, I think it's a net debt number. We, of course, look at our business development opportunities on an ongoing basis. But it's possible that net debt might be slightly lower than at one point and then go up in the next quarter if it's gone below where we want to be. So that's a normal part of the business because business development opportunities or opportunities to deploy this capital don't necessarily come in the same time frame as the cash flow coming in. Obviously, while we paid ou t our first dividend last year, we expect to increase our return to shareholders also over time, either in the form of dividends or other means. So all of those things will be considered by the Board at the right time.

Sir, secondly, on the township side. So sales momentum on residential, despite the uptick you're seeing broadly and also the infra improvement, it seems to be flattish in the first half. So I mean, what will you sort of ascribe that to? And also, do you think some government in tervention is needed for this segment now?

I think the overall performance of the extended Eastern Suburbs for the full year will see meaningful growth over last year's number. Last year, we did about INR23 billion, and we expect that number to be growing meaningfully. So we have meaningful growth when it comes to the sales performance in the extended Eastern Suburb in spite of the impact of the increase in mortgage rates. In terms of the segment between INR30 lakhs and INR75 lakhs where the sensitivity to mortgage rates is the highest, clearly, there is some impact on demand there. And any intervention from the government which supports sort of these people wh o are buying their first home, starter homes, would be welcome. We of course all read some news reports in that regard. And if that were to come through, that would be, I would say, the right thing from an economic perspective because housing not only creates an immense amount of employment, but it also creates wealth for those who own homes and therefore, to get the families onto the housing ladder as early as practical, especially when we've had this increase in interest rates for reasons which are global in nature, nothing to do with things these families have made choices on. It would be, I would say, a positive intervention if it were to come. We, of course, hope it happens, but let's see.

Thanks Abhishek and all the best to the team.

Thank you.

Thank you, Malcolm. Thank you, Bipl ab. In conclusion, I would only say that I reiterate the point what Abhishek mentioned, the demand conditions on the ground remain very robust and the early read through of the festive season is quite encouraging. With this, we conclude the call. I would like to thank all of you and wish you for all the festivals coming up. Thank you.

Thank you very much. On behalf of Antique Stock Broking, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.