Ladies and gentlemen, we will now begin with the question-and-answer session. The first question is from the line of Parvez Kazi from Nuvama Group. Please go ahead.

Hi, good evening and thanks for taking my question. Sir, my question is regarding business development activity. If I heard you right, you said that we are okay looking at projects outside NCR also. Did I get that right?

Yes, Parvez, that is right.

So have you found out which geography are we looking at? Is this largely going to be North India or we are okay looking at other metro cities as well?

So we are evaluating few opportunities. But let it come to the stage where we can share more. So I would prefer not to suggest the particular location. But yes, we are looking at larger format developments outside of the Delhi NCR market as well.

Sure, and ballpark and what kind of land CAPEX are we comfortable during the current period?

So see, the number could be in the range of around Rs. 1,500-Rs. 1,800 odd crores for the year.

Sure. Regarding our launches in H2, fair to suggest that one of them could be in Dwarka Expressway and the other at SPR?

It could be, it is possible that both of them could be in the SPR itself. The second one is definitely in SPR, the third one we are yet to decide, but most likely it could be SPR again.

So then a related question, I mean, first quarter we had a launch with a GDV of about Rs. 4,400 crores. So with a guidance of about Rs. 50,000 odd crores, that leaves almost about Rs. 10,000- Rs. 10,500 for the second half. So are we okay bringing that kind of inventory in a single micro market? Or can there be launches outside these micro markets?

See, there will be some launches outside. I am not saying the entire, Rs. 150 billion gets achieved out of the single market. But yes, a good portion of the launches for the current year are planned in sector 71. And we are comfortable creating that kind of supply because there is very little getting supplied in that market at this stage. Because there are very few developers locally who

own any reasonable quantum of land in that particular market, which is coming out very well in last couple of years.

And last question, in SPR, we are comfortable with the kind of ticket size and the unit size, which we have, roughly about Rs. 5-Rs. 5.5 crores. Would that be a fair assessment?

Yes.

Sure. Thanks and all the best.

Thank you.

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

Yes, thanks for the opportunity. So just on continuing on these launches, I think we had a branded residence launch this quarter. And there are a couple of more which are also planned as a branded residence in same market. So in general, how do we differentiate with these products? Considering that we launched 4.5, we would have sold maybe Rs. 1,000-Rs. 1,500 crores this quarter. We still have good enough inventory there. So bringing couple of more branded residences, how does customers differentiate in terms of which one to prefer that way. So yes, that is my first question?

Pritesh, thanks for asking this. See, there is differentiation which is getting created. So differentiation in terms of the product offering, the brand which is being offered, the size of units which is currently being offered, and the overall orientation of the project, so there are multiple ways in which differentiation will get created. The second project is very thoroughly being worked upon. So that it is clearly different from what we recently launched. We have achieved good sales. We have crossed Rs. 1,500 odd crores out of this particular launch itself. And it is not that we are putting the rest of the inventory immediately into the market. Some sales are happening even during the current quarter. But thereafter we may park some of the inventory and bring it up for sale in a subsequent manner. So there will be a clear product differentiation across the projects which are coming.

Sure. And how should we think about the monetization cycle now? Obviously earlier, I would say, maybe 2 years, 3 years back, it used to take maybe just a quarter or 2 quarters to monetize everything to offer with these branded residences. Now it should be a 1-year product or a 2-year monetization cycle. How should we think about or how would our monetization strategy be in that sense?

So Pritesh, with some of these projects, the way we plan internally is that a lot of these lands are typically already owned by us and paid for, right? So these are owned land parcels with very little level of debt in the company. So by and large these are paid for land parcels. Our

development costs and SG&A costs do not cost 30%-35% of the sale value for these projects. So anytime we are crossing, let us say, a 40% benchmark in terms of the number of units for each of these incremental launches, the financial closure for each of these projects at a project level gets achieved. So our orientation of sales for these projects is that, let us say, we sell about, give or take, 50% of the project within 3-6 months of launch. And then you launch about 10% of the inventory on an annualized basis till the time the project goes for completion. So that you balance out on both quantum of sales, price appreciation, and anyways, financial closure gets achieved right at the start. So that is the broad split in terms of sales which we plan to offer in the market because when you get into this upper mid-segment it is not a volume play anymore. You want to launch a good portion of that project at launch, but at the same time you want to show progression on the project as you achieve more sales. So we don't want to kind of achieve 100% sales like within a particular span of time.

Sure, perfect. That is helpful. And second on the collections, I think obviously it was quite weak versus our usual trend that we have been maintaining since quite a few quarters now. So specific reasons for that? And in general, see, while our sales run rate in a quarter is Rs. 2,000-Rs. 2,500 crores since, Rs. 2,000 ballpark in that range since quite some time, would we ever get to like Rs. 2,000 crores in terms of collections or anything between Rs. 1,300-Rs. 1,500 crores collections in a quarter is a good number? Is this your business plan that you have made in terms of collections?

You are right that we are averaging around Rs. 2,000 odd crores of pre-sales for a few quarters now. I think even last year, the best quarter was the first quarter where we achieved close to Rs. 2,600 odd crores. But yes, we are averaging around this Rs. 20 billion mark in terms of pre-sales for a few quarters, which we believe is kind of a fair number Rs. 2,000-Rs. 2,500 odd crores of sales coming out of a particular quarter from by and large Gurgaon which we have been achieving. And that is where we think that at these numbers, it is good kind of sales getting achieved. Collections, yes, this quarter was a bit of an aberration. We have been closing out on Rs. 1,100 odd crores of collections per quarter. I think we will soon get back to that number. Even the coming quarter, we expect it to be quite good. The reason of missing out this year was certain milestones with lumpy collections getting slipped into the coming quarter and that is why the collection number stood at a mark where it is. But eventually, yes, to your point, all this sales has to converge into collections on a quarterly basis. I can't give you a particular quarter where it is happening. Excel can speak a story which you want to narrate. But yes, all of this sales is going to definitely convert into collections because even if you look at the historical trend, so if we have launched 23 million square foot over the last 9 quarters, the GDV value is close to Rs. 334 billion. We have achieved sales of, let us say, Rs. 230-Rs. 240 billion has been achieved. So since first is supply, then is sale, and then, of course, is collection. So we don't see any doubt around it.

Yes, thank you for the opportunity. Just wanted to understand on the supply side now because of the geopolitical issues, has there been any increase in the cost of the key raw materials or our finishing things? And next, maybe on the medium term, do you see any cost escalation in the projects for that? Just wanted to understand how this is playing out?

Adhidev, even if we go almost a decade back and see the trend, usually costs tend to go up in late single digits. You do an average of material and labor both, I think you will see anywhere between 7%-8% kind of escalation on cost, which has happened over the last decade. So far, we have not seen any inordinate increase in cost over the last quarter. And so we do always take this kind of escalation into our budgets when we are planning for it. So the 7%-8% kind of cost escalation is something which one should budget over the coming years, so to say. But by and large, nothing inordinate, nothing very, no crazy spike on any particular key building product so far.

Secondly, just to allude to the comments on exploring opportunities outside NCR, we had also mentioned this, right, a few quarters back. So in terms of the margin and the projects which you want to do, would it be similar to what we are doing in Gurgaon? Or this would be, you are looking to get into maybe something ultra-luxury or mid-income, or how is the, what sort of products are you looking to get into in these markets or in terms of ticket size?

The preference is to do Low-Rise developments, more spread out developments, because any new market which you get into, the idea is not to pick up small 5-10 acre parcels and just work for that. The idea is to gain relevance in any of these markets where we enter. Low-Rise is a good model because you enter and execute and you are able to show your delivery capability sooner in a new market. So while Gurgaon, Delhi NCR, people may know Signature Global. As we get into newer markets we, for that brand recognition execution capability to be displayed, it is good to kind of do Low-Rise developments and showcase that delivery capability at a good pace. So that is why the format we are opting for is larger format, Low-Rise developments, definitely mid-income focus, neither affordable nor on the premium side, so more mid-income developments in some of these newer markets.

Sure. Yes, that is all from my side. Thank you.

Thank you, Adhidev.

Thank you. That was the last question for today. I now hand the conference over to the management for closing remarks. Over to you.

Thanks, everyone.

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