We will now begin the question-and-answer session. The first question is from the line of Kunal Lakhan from CLSA. Please go ahead.

My first question is on your Slide #6, which is the guidance for FY’25. Now, when we look at the FY’25 guidance of 0.5x debt-to-equity cap, I am just trying to understand this when we are targeting for next year considering our current liquidity of about 3,000-odd crores from the fundraise and the OCF generation expectation of about 6,500 crores for the next year. Firstly, two parts to my question. Where do we see the debt levels in absolute terms by March ‘25? And secondly, how much do we plan to spend on business development in FY’25?

Kunal, hi. The question that you’ve raised obviously as you know we have an articulated debt ceiling of 0.5 times equity and that is what we stated as our guidance that we will consistently remain below that. It doesn’t mean that we will get up to that, it’s a ceiling, it is not a target. In terms of where we expect debt to be at the end of the fiscal, obviously, it will be dependent on growth opportunities. But given the cash on hand that we have, plus the operating cash flow of the business, we suspect it will be close to 5,000 crores of net debt at the end of the fiscal, and we expect to invest in the range of about 4,000-odd crores for new business development, plus continue to support the existing projects in terms of business development spend also.

So, 4,000 crores will include both ne w as well as supporting the existing?

No, 3,500 to 4,000 crores will probably be purely new. Incrementally it will be existing, because if you look at the operating cas h flow of about 65 billion, after interest and taxes that number will be close to 50 billion. So, that 50 billion plus the increase in debt of let’s say 20 billion is 70 billion. So, we are looking at spending about half of that on new projects and the balance to be available for other uses including supporting existing projects.

So, close to 70 billion will be the total spend on new business developments?

New business development about 35 to 40 billion.

Secondly, you said in your comments that the peak mix of JDAs in the pre-sales is now there, almost one-third of our pre-sales, that’s like the peak levels. So, would it be safe to assume that going ahead the new acquisitions that you’ll be doing, would be more skewed towards owned land versus JDAs?

I think Kunal, your question probably has the answer also. As we have said, our target mix is 60% owned land and 40% from JDAs. You know that we own a very large amount of owned land. Therefore for to maintain this 60:40 mix is likely that the incremental GDP addition will be perhaps 50% from JDAs and 50% from owned land.

My last question is on our guidance for FY’25 for pre-sales of 175 billion. How much would you expect from Pune? And since we don’t have any Bangalore project, how should we look at Bangalore in FY’25?

So, between Bangalore and Pune, we would conservatively be aiming to do about 40 billion and we will see if we can further exceed that.

Next question is from the line of Praveen Choudhary from Morgan Stanley. Please go ahead.

I have one or two questions. The first one is about margin. Would you be able to share the margin in Bangalore from the pre-sales of 12 billion? And the reason I am asking this question is to understand in the early stage maybe the margin is lower than the overall Company level. So, just to understand how much business development cost went in and when would we get back to similar margin as we have like 30%, 31%? The second question I had was, you mentioned that there’s no speculative activity in most of the markets. So, Mumbai and Pune sounds about right. But some of the data that we saw suggested that Bangalore property prices have gone up by a meaningful number, that’s definitely not 5.5% again based on some data that I saw. So, would love to get your sense of 5.5% versus maybe 15% that we are seeing in Bangalore and how are you seeing that affordability in Bangalore?

Hi and thank you for those questions. In terms of the margin in Bangalore, we were at about 28% for the sales that we have done so far. So, slightly lower than our overall blend at 30%, 31%, but not significantly lower. And we do our underwriting in order to work towards that blend of margin that we target. And therefore obviously sometimes you will have gaps especially in the early stages of any project because the pricing at the early stage is lower and margin goes up as the project progresses. But generally, we try not to have too much deviation from the overall blend. Obviously, owned land and JDA projects have different margin profiles, but we try to maintain consistency across different cities, 200 basis points here or there, but broadly we try to maintain consistency. In terms of the price growth number of 5.5%, the way we measure price growth is for the project ought to have existed in the last year as well as in this year for us to be able to do a price comparison on what the price growth has been. For any project which is launched in this year, that becomes the starting point of the data from a measurement of price growth perspective. So, in terms of your point that whether price growth in Bangalore has been stronger than 5.5%, I am sure it has been. However, I do believe that Bangalore in general has good supply. Demand has been very solid. And at least in the sales that we have done in the first two projects, we have seen that most of the sales have happened to end users. People are buying for themselves. There’s nobody buying bulk units to trade later. So, that’s really our sense of what happened in the Bangalore market, but obviously we have only two projects in Bangalore. So, our understanding of the Bangalore market is definitely not as robust as some other people.

Palava land is clearly very valuable as time progresses and you have spent some time in explaining that. I understand the big picture of long-term potential, but in the near-term, if I were to think about how much land you are planning to sell every year, or even contract sales from Palava, let’s say, FY’25 or FY’26, would you have some guidance for us?

In terms of land sales, we ar e targeting about $50 million, about 400 crores to 500 crores a year of money from land sales, some years will be stronger and some years will be weaker. But that kind of is sort of the level at which we are sort of transacting land and therefore as land values go up, the quantum of land that we will transact or sell will sort of probably become lesser. In terms of our sales expectation from Palava as well as in Upper Thane, the two large land holdings that we have and we measure that data together, we did about 2,200 crores of pre-sales for Fiscal ‘24. We definitely expect that to grow much faster than the rest of the Company, because the infrastructure-related upgrades are now largely in place. So, we would be looking for at least 30% growth, if not more in this fiscal. I don’t have an outlook for Fiscal ‘26, but I would not be surprised if the growth in Fiscal ‘26 was also around that kind of a level.

Next question is from the line of Pritesh Sheth from Motilal Oswal. Please go ahead.

First question is on the capital raise that you have done and the deployment of it and that leading to additional growth to the Company. So, you guided for little over 20% kind of growth. When do you think that this capital ra ise can transpire into 20%-plus kind of growth, not marginally, but a bigger delta in terms of growth? And do you see any upside risk in this guidance that you have given because of the new project addition that you will do throughout the year and that can lead to additional kind of pre-sales?

You have been following our Company for a few years and I am sure you know that we tend to be modest or conservative in how we look at the outlook, because things can often go in various directions which are unplanned or unknown, and we must rather focus on like we said earlier predictable growth rather than lumpy or choppy growth. In terms of the deployment of the capital, ultimately, the most important thing for us is to make sure that the capital generates ROE and therefore this capital raise is not ROE-diluti ve. We expect that the capital will get fully deployed in the course of this current fiscal year and we expect the ROE levels to be back to our target levels of close to 20% by Fiscal ‘26. Th ere will be some dilution impact in Fiscal ‘25 because obviously the capital takes some time to get deployed and start contributing to earnings. I think in the early part of the capital deployment cycle which has started now, you will start seeing benefit to profitability. So, we have guided to 31% embedded EBITDA margin for Fiscal ‘25 compared to 30% for Fiscal ‘24, which itself is partly coming from the fact that we are able to use this capital to improve our profitability at the EBITDA level and then further improve our profitability by the reduction in finance costs, overall having a good impact on profitability. As the new projects get acquired, it will take about nine to 12 months after acquisition for those projects to start getting to the launch phase and therefore the impact on growth you will see more likely in Fiscal ‘26, not in Fiscal ‘25, but as I mentioned earlier, the way we think about it is to put this capital to productive use, which is making sure that our ROEs come back to where we want them to be close to 20%, and at the same time it is within our paradigm of predictable and profitable growth.

In terms of the kind of deals that we are getting to evaluate, has the characteristic changed with deals largely coming from outright land rather than in JDAs or our strategy with this kind of capital that we have, will tilt more towards outright because that obviously helps us generate better margins and eventually better ROE. So, what would be our focus that way?

So, as I mentioned in response to an earlier point, we expect going forward our new GDV additions to be about 50% from JDAs and about eq uivalent amount from outright lands so that our overall mix of 60% of sales coming from outright and 40% from JDAs can be achieved. I do want to point out that the JDAs tend to have lower absolute profitability but quite high ROE and the outright tend to have higher absolute profitability but lower ROE. So, I just wanted to sort of highlight the fact that there is that inherent trade-off in the two models.

And the kind of deals that we are getting are a mix of both JDA as well as outright?

Yes, yes, which is the reason why I am saying it’s likely to be close to that half-and-half mark, I think one has to appreciate the fact that JDAs and outright are both mode ls which exist in the marketplace and have existed for a long period of time. It’s not only a function of some particular post-COVID or post-IL&FS phenomena. JDAs co ntinue to exist, because ultimately land owners have different financial profiles and also given the fact that most developers would like to be prudent in their balance sheet and maintain moderate levels of debt, the larger land pieces often are better monetized through JDA. So, JDA opportunities will continue to remain available in our view.

And lastly on Palava, do you see FY’25 as an inflection point with the kind of growth you are expecting in the residential segment there or th ere is more growth whic h can be captured once everything in terms of infrastructure that we are talking about, let’s say developed or this 25%, 30% kind of growth is the number that we are anyways eyeing for?

So, as we mentioned, we are looking at, at least and I use the word at least 30% growth this fiscal. We hope that we can in Fiscal ‘26 also maintain that level. I think the next five years are all going to be additive in terms of the growth I would say enablers or drivers. And I think you really see Palava in full bloom, as I mentioned earlier, moving from a caterpillar to a butterfly over the next five-year period and the Airoli t unnel, the airport, the bullet train, the Metro-12 line, the V asai-Alibaug multimodal corridor, all of this over the next five years is going to be very, very real. So, I think 30% growth is probably just the start of this process, not the peak of this process.

Next question is from the line of Abhinav Sinha from Jefferies India. Please go ahead.

Just to start with Palava itself. So, you star ted your comments by hinting at some premium products or at least on the housing side. So, when can we expect this launch and what are the price points we are looking at?

We started doing premium product in Palava. It’s about 8%, 10% of the sales mix in Palava and Upper Thane currently where we are doing standalone bungalows and total value including land and construction cost between 4 to 10 crores pe r unit already and they have done exceedingly well. The first multi-storied or apartment building which is of the premium category is getting launched this quarter. The price points are likely to be close to Rs.10,000 a square feet. As you know, the average price point in Palava right now for the current product mix is more in the Rs.6,000, 6,500 handle. So, it’s almost a 50% premium to that level. It will be between Rs.9,000 to Rs.10,000 a square foot to start off and then go up. So, it will average about Rs.10,000 a square foot on saleable area and that launch we expect this quarter.

Just secondly on Slide #15, where you put out a pipeline for FY’25, just wanted to check if South-Central also has the Alibaug project this year or it’s a FY’26 project?

Yes, we expect South Central to have the Alibaug project for this fiscal.

And that will be like a weekend destination sort of a project that you’re creating?

I think it is a very, very unique parcel of land and the fact that the Alibaug is seen as the Hamptons or the new equivalent of Hamptons for the Mumbai region. It’s at a very, very high level of demand and it’s never really had the quality of development that we intend to do over there. So, yes, Alibaug connectivity is very decent right now. You can get there in about 20-30 minutes from South Mumbai from a combination of taking the speedboat and then taking 5-10 minutes to get to the site, it takes about 5-7 minutes by car from the Alibaug jetty to our site. So, it’s very, very accessible. You have a new bridge which is getting completed maybe in two or three years’ time, which will also make the road connectivity not through South Mumbai but through other parts of Mumbai, very strong. So, while it is clearly predominantly a second home or weekend destination I know a lot of Mumbaikars who are now starting to think about living in Alibaug for not just two nights a week, but more like four, five nights a week and it really is dependent on whether the rest of the infrastructure is in place, healthcare and so on. And we expect that this development of ours will fill in several of those infra gaps. So, we don’t only see it as a second home destination.

Next question is from the line of Siddharth Bhattacharya from Authum Investment & Infrastructure Limited. Please go ahead.

For the last six or seven quarters, we are seeing that the value share of ultra-luxury units and luxury units have gone up significantly in the overall mix. How do we see that as a trend and how does it affect, if you could give some perspective?

Yes, I think you’re correct in saying that luxury sales have been quite strong over the last few quarters. I would also add to that that affordable housing has been hit by the increase in interest rates and we hope that the government’s announcement in the budget to bring in a scheme to help first-time home buyers will come in after the election and will help the first-time home buyers and affordable home buyers to get on to the housing ladder. Having said that, I think luxury housing is really a reflection of India’s aspiration and India’s wealth creation. And therefore, as long as India’s job cycle and investment cycle continues to scale up, luxury housing will also do well. Luxury is something that people use very loosely, but the real luxury which is doing well is truly, truly absolute grade A+ location, grade A+ product and grade A+ developer bringing in complete grade-A lifestyle. So, I think one has to be careful while reading into what people call luxury, because everybody likes to call a lot of things luxury.

Secondly, with the new airport sort of coming up, do you think that the development in the Konkan side will be much faster compared to other areas of the suburbs?

See, the Konkan area is not a suburb of Mumbai. It’s very, very large and significant sort of part of the state of Maharashtra and has many strengths. It also needs a lot of investment and a lot of infrastructure. I don’t see the airport or for that matter, the MTHL immediately changes much, because it takes a lot to make a place attractive to live and you need connectivity, which is starting to come in, you need airports, which is again it will be operational soon, you need social infrastructure, high quality education, high quality healthcare, good retail. In a place like Palava, it’s taken a decade to put all of that together. So, we do expect that, yes, there will be development in the area, but it is not going to I would say fundamentally change the dynamics of how the Mumbai region or the larger Mumbai region is operating.

Next question is from the line of Mohit Agrawal from IIFL. Please go ahead.

First question is how are you looking at deployment of capital towards annuity assets, specifically commercial office space? And with in that, how are you seeing office demand shaping up at Palava now that you have a large residential base there?

So, we as a business are not focused on office development. Our focus is largely around housing. We do some strata office development, and our annuity strategy revolves around three pegs; one is our facilities management business along with this digital layer; second is our warehousing and industrial parks business; and the third is very selective office, specifically, we will do it in some places which have other strategic reasons like Palava and our retail portfolio which is one mall and several other high street retail locations. So, Palava, we expect office demand to pick up. We now have HDFC Bank Training Center completing. Soon, we have a pharma Company, Encube setting up its own R&D center. We have one office building which is now going to be ready this year and we are going to start leasi ng it out. We already have presence of the back offices from various banks including Axis and HDFC bank. So, yes, we have a variety of different mixes on the commercial office side and we do expect that over the next two, three years, and the bullet train connectivity to BKC becomes more real, this could become a preferred location for financial services back office in addition to any other classes which are more driven by the existing talent or the fact that this is a great location for people to live and work close to each other.

Secondly, how has been the progress on the Green Digital Infra JV? Any news in terms of acquiring land parcels there?

So, the progress on the warehousing industrial platform with Bain and Ivanhoe Cambridge, we have two assets which are under development currently. One of those assets is actually about to become operational. Cons truction is almost complete. We ar e still in the process of acquiring land. The ramp up has been slower than what we would have liked it to be. We expect some land parcels to close this quarter and then we will take it from there. But right now, we are only at two locations in that platform. We of course have a Morgan Stanley Park, which is a separate one.

Two locations. One would be Palava and the other would be?

Second is in Kurla.

Ladies and gentlemen, that was the last question of the day. I now hand the conference over to Mr. Anand Kumar, Head, Investor Relations of Macrotech Developers for closing comments. Over to you, sir.

Thank you, everyone for joining the call. Please feel free to connect in case you have any additional queries.

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