Signatureglobal (India) Limited November 10, 2023 So did I understand this correctly? This is... Sotry, can you repeat that number? How much did you spend? INR750 crores, you said, right? So, on this particular land parcel of 25 actes which will provide us a development potential of 5.5 million square foot, so overall, business development or the land addition is of about 6.3 million, of which INRS.5 million is from owned or yet to be owned sort of land. The balance is coming from the JDA land parcels. In this yet to be fully acquired entity, which is called GCPL, the enterprise value as far as the land is concerned is about INR500 odd crores. And once you load in all approvals, costs, et cetera, the entire capital expenditure on the particular land will go to a number of about close to INR750 odd crores. Okay, this is perfect. And of this total amount, how much have you spent so far? And of... So we've gone into definitive agreements only yesterday. So yesterday, we got the board approval and late last night, we signed the definitive documents. The GDV' of this particular project will be in excess of INR7,000 crores. Okay, understood. And the payments will be made in due course, right? In the next one or two quarters? Yes. The land payments. Six to nine months, we will be making the payments. Okay. My second question is you mentioned about the prices, the selling prices that you have mentioned in the presentation as well. We've been hearing that the prices have price increases have been healthy. So could you give a sense on these three markets, the prices that you've shared currently? How much would have been? What would have been the year back and what kind of growth have you seen in the micro markets in pricing? So Mohit, I'l give a slightly longer perspective. So in the Sohna market, we launched the first project back in January 2020. This was just before the pandemic. At that time, we launched a similar product, we've enriched the product, improved designs over the span of time. But the first product which we did on mid-income housing in the Sohna market was at about INR4,500 odd. Okay. In that same micro market, we saw very good, response from customers and we kept launching more and more, projects within that sector 36 Sohna market. We've gone anywhere between INR7,000 to INR7.500 odd in terms of per square foot during the previous financial year. And by and large run out of inventory we have just some inventory, very marginal inventory left in the Solna market. So that's the kind of price trend of last three years, if you look at Sohna from about INR4,500 to about, INR7,500 is that, pricing trend. Sector 71 is going to be a new launch. We are not taking Page 9 0f 13
Signatureglobal (India) Limited analyst Q&A
Signatureglobal (India) Limited November 10, 2023 very aggressive price points while giving this guidance, the markets, I would say quite buoyant, but we are assuming a base selling price of INR13,000 at which it will be a very profitable sort of, sale for us once we initiate it. And 37? 37D, we are launching a group housing project for the first time. Till now, we've been selling, making low rise independent floors. We started selling these floors in middle of calendar year 2021. The first project which we launched was in July 2021, wherein we price these products at about INR6,500 odd. Lately, this product has been selling at about INR9,500 odd, per square foot. But, since we'll be coming up with a group housing product, which is a much more, not much more, but a little more premium than our existing product, we are targeting a price of about INR12,000 a foot. And, assuming that Dwarka Expressway we will finally get completed this financial year, do you expect further price increases in the year immediately? So see, Mohit we are quite in the money with these sott of product pricing will. If the prices go up from here, which we do expect they will. Our still preference would be to sell bulk of the inventory at these price points. And, let our customers enjoy any further growth from these price points. But in our modeling, in our business plan, we usually don't assume escalations. And we just kind of try to achieve volumes on these particular, on any given product, which we launch, rather than trying to keep skimming the market with increase in product pricing. Okay. I just had one more question on the INR11,000 crores revenue recognition that you're expecting between 2024, 2026, what is the kind of EBITDA margins that one should expect? So on aholistic basis, we'll cross 30% EBITDA margins on this entire revenue recognition. 30% EBITDA margins. Yes. Yes. Thanks a lot. That's all from my side. And wish you all a very happy Diwali. Thank you. Happy Diwali to you as well, Mohit. Thank you. Next question is from the line of Samar Sarda from Axis Capital. Please go ahead. Yes. Good morming, everybody and congratulations once again for the IPO as well as a good HL. Thad a few questions. The first question was on the cash flows. While on slide 12, you've given a snapshot. But if you could just run through a little more detailed cash flow statement as inlike how much was the spend on construction, how much was given to the landowners, admin expenses, some of these other things. And related to that is you mentioned roughly INR3 billion Page 10 0f 13 Samar Sarda;
Signatureglobal (India) Limited November 10, 2023 or a little less than INR300 crores on land outgo for the first half. How much of that was in the second quarter? So, samar construction spend, we can provide the exact numbers, but I'm sharing approximate numbers with you. Out of INR300 odd crores which we collected, hard cost construction would be somewhere close to about INR600 odd, INR550 to INR600 odd crores out of that. Second, on the land acquisition front, we will make payments in Sector 71 during the second half. So, our land spend would be, would remain slightly higher. It would be around anywhere between on an estimated basis about INR500 to INR600 odd crores during the second half of this year. And bulk of these land payments would be happening towards our acquisitions which we are doing in Sector 71. Okay. So, the details we can probably discuss offline. The INR1,100 odd crores of gross debt, what would be the cost of debt after the IPO repaid off roughly INR30 crores of debt? So, we'll be on ballpark, you could say about 11.5% to 12% in terms of our cost of debt as of today. Would we sce gross debt going up over the next six months, 12 months? As a policy, Samar our thought is that, in any given year, the operating surplus which we are creating, our net debt should be in that similar range and should not cross that. So, for instance, once we make these land acquisitions, our net debt number, even if it was in that INRS00 to INR1000 odd crores, we are creating that similar operating surplus. And this is more of a guiding principle which we intend to follow in the years to come. And the simple reason is that in any given year, if we intend to bring down net debt level to a very low-level, we could simply not buy land in that particular year and bring down our level of debt significantly. So, that's the guiding principle. And that's why we say that we would want to keep our operating surplus for a year and net debt at similar sort of levels. Gross debt will definitely grow because as we make these acquisitions, the gross debt will grow and over a span of time, which could be, lets say, whether these six months in the balanced part of the year or the quarter thereafter, since collections and operating surplus is being created in the company, which is very good, the gross debt levels will come down. And just two more questions. Since you're launching a normal group housing or a premium group housing for the first time in Sector 37D, thereafter Sector 71, would you be using external EPC contractors this time for high rises? Yes, that's correct, Samar. That's exactly our plan as well. And thanks for asking this. We do intend to hire some good quality EPC contractors for both of these group housing projects. In Sohna, which is the third, bigger launch, which we'll do after these two launches, we'll be doing a similar product, which we've done in the past that will be done in-house. But in both of these projects, we'll be launching, using larger premium EPC contractors. Page 11 0of 13
Samar Sarda;
Signatureglobal (India) Limited November 10, 2023 Yes. And one last question is on the ticket size per unit on these forthcoming launches, especially 71 and 37D. So tentatively, what will be the apartment cost in both these projects, when you launch these projects? So see, the way the exact pricing or unit sizes are getting worked out, but on a very fundamental basis, Sohna is going to be like a INRI to INR1.2 odd crores ticket size product. 37D will be more like INR2 to INR2.25 odd crores sort of a ticket size. And Sector 71 will be around INR2.5 to INR3 odd crores. So we'll play this entire spectrum of, on an average, we hope that we'll be going closer to about INR1.5 0dd crores a unit, which currently stands at about INR9S lakhs. Perfect. Chalo. Thanks for this. Happy Diwali to everybody at Signature Group and all the best. Thank you, Samar. Thanks a lot and happy Diwali to you as well. Thank you. Next question is from the line of Adhidev Chattopadhyay from ICICI Securities. Please go abead. Yes. Thank you for the opportunity. I've got a couple of questions. The first is now that for Southern Peripheral Road, we have done most of the land acquisitions. So when can we see all the approvals coming through and how will the launches come through over here? Are we targeting something in the next few months or it could spill over to next year? That is the first question. Second question is on our sales and marketing strategy, because historically we are focused on AHP and DDJAY projects, but now a lot of our incremental projects will come under group housing. So what is going to be our sales strategy in terms of using channel partners and using our own brand equity, which we have created so far? Yes, those are the couple of questions I have. Thank you. Adbidev, thanks for the question. So as far as Sector 71 is concerned, our first project launch, we are targeting within this financial year itself. This will be a group housing project. So out of the 25.75 acres project, which we launch, on about 22.5 acres, there are quite advanced approvals, which are already in place. We do intend to take further approvals and launch this particular project within this financial year. And on a sustained basis, since this is going to be one of our core markets going forward, we intend to keep coming up with new launches as and when we are selling these projects. So we will try to maintain that level of consistency in terms of product supply. I would also like to add one of the basic reasons Adhidev, why we have been growing in terms of sales is, definitely because of good market conditions, but also because as we are growing in size, we are able to supply more products. We've always maintained that this is a hugely supply constrained market. From large branded developers, there is only so much supply being added in the Gurugram market. And hence, as we are managing to launch more projects, come up with more and more inventory, we are growing in terms of our sales value. So in Sector 71, starting with financial itself, we intend to come up with consistent launches. Page 12 0f 13
Adhidev Chattopadhyay
Signatureglobal (India) Limited November 10, 2023 As far as sales and marketing strategy is concerned, we have a very strong distribution network. So like for any B2C or a consumer company, we have a very strong brand in our local market. And also a very diversified or very wide sort of distribution network. As of today, we have almost close to 1,000 channel partners 984 to be precise who are associated with us. Even in terms of our earlier mid-income housing sales, which are these independent floors we've been this channel partner strength has been helping us a lot. And we continue to leverage on the strength going forward as we launch our group housing projects. Okay, fine. But I'm just saying, is there any different, something you want to do differently to considering the higher ticket size of these products? So, Adhidev, we don't plan to do something very different. Signature Global is a very strong brand and a very trusted brand in the local market. We've already sold products which are in these ticket size. For instance we sold mid-income floors in Sector 63A, which s on the Golf Course Ext Road the ticket size over there is about INR2.5 crores. We very successfully sold those projects. Even in Sector 37D, we are almost running out of inventory when we are selling products at these close to INR10,000 price ponts. So likewise, for group housing we don' intend to do something very different. We are very confident that with our sort of brand name and our distribution network, we'll be able to achieve good sales volumes in the group housing product as well. And we're very confident. Sure, sure. That sounds great. Yes. Thank you for all of the answers. And wish you a happy Diwali. Yes. Thank you. Happy Diwali to everyone on the call on behalf of Signature Global. Thanks a lot. Thank you. As there are no further questions, I will now hand the conference over to the ‘management, for closing comments. Well, thanks a lot to everyone for being on this call, for taking your time out and being on this call. T know this is a busy day in the result season, but we are very positive with regard to the outlook of the housing sector and also with regard to our participation in our core market. We very strongly expect sales to show an upward trend in times to come. And also, we want to ensure that we keep improving on the levels of governance relentlessly. We intend to improve the levels of governance in the company and deliver good product to our customers and deliver our promises to every stakeholder associated with us in the company. Thanks a lot. Thank you very much. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you. Page 13 0f 13