Full Year 2024 Macrotech Developers Ltd Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kunal Lakhan - CLSA - Analyst : Yeah, hi, good afternoon. My first question is on your slide 6, which is the guidance for FY25. Now when we look at the FY25 guidance of 0.5 times debt to equity cap, I'm just trying to understand the spend that we're targeting for next year, considering our current liquidity of about INR3,000 crore-odd from the fundraise and OCF generation expectation of about INR6,500 crore for next year. So where do we see 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 FY25?

Question: Kunal Lakhan - CLSA - Analyst : Okay. So INR4,000 crore will include both new as well as supporting the existing?

Question: Kunal Lakhan - CLSA - Analyst : So close to INR70 billion will be the total spend on new business development?

Question: Kunal Lakhan - CLSA - Analyst : Okay, understood. And secondly, on you said in your comments that the peak mix of JDAs in the pre-sales is now there and almost one-third of pre-sales that's like the peak level. So would it be safe to assume that going ahead, the business acquisition, the new acquisitions that we'll be doing, it would be more skewed towards owned land versus JDAs. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 25, 2024 / NTS, MACE.NS - Full Year 2024 Macrotech Developers Ltd Earnings Call

Question: Kunal Lakhan - CLSA - Analyst : Understood. And my last question is on the guidance for FY25 for pre-sales of INR175 billion, how much would you expect from Pune and since we don't have any Bangalore projects, how should we look at Bangalore in FY25?

Question: Kunal Lakhan - CLSA - Analyst : Understood. Thank you. And all the best.

Question: Praveen Choudhary - Morgan Stanley - Analyst : Thank you. Thank you very much for the presentation, Abhishek. 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 INR12 billion? And the reason I'm 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 is 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 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 have seen in Bangalore and how are you seeing that affordability in Bangalore? And then I have one last question. Thank you so much.

Question: Praveen Choudhary - Morgan Stanley - Analyst : Yeah, very clear. Thank you, Abhishek. So one last question I had, if I may. Look Palava land is clearly very valuable as time progresses and you have spent some time in explaining that. I just wanted to ask (inaudible) I understand the big picture long-term potential, but in the near term, if I were to think about how much land you're planning to sell every year or even contract sales from Palava, let's say, FY25, FY26, would you have some guidance for us?

Question: Praveen Choudhary - Morgan Stanley - Analyst : Okay, that's all I had. I just must congratulate you for a very good result. And most importantly, I find that your presentation in terms of growth, which is stable and sustainable rather than very high and then coming down along with the ROE target is very interesting and sounds very good to compounding companies, so to say. So thank you very much.

Question: Pritesh Sheth - Motilal Oswal Securities Ltd. - Analyst : Yeah, thanks for the opportunity. 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've guided for 20% a little over 20% kind of growth. When do you think that this capital raise can transpire into a 20%-plus kind of growth I mean not marginally, but a bigger delta in terms of growth? And do you see any upside risk in this guidance that you've given because of the new project additions that you will do throughout the year and that can lead to additional kind of pre-sales?

Question: Pritesh Sheth - Motilal Oswal Securities Ltd. - Analyst : Sure. That's really helpful. And in terms of the kind of deals that we are getting to evaluate has the characteristics change 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?

Question: Pritesh Sheth - Motilal Oswal Securities Ltd. - Analyst : Sure. And the kind of deals that we're getting mix of both JDAs as well as outright?

Question: Pritesh Sheth - Motilal Oswal Securities Ltd. - Analyst : And lastly, on Palava, do you see FY25 as an inflection point with the kind of growth you are expecting in the residential point or residential segment there or there is more growth which can be captured once everything in terms of infrastructure that you're talking about, let's say, developed or this 25%, 30% kind of growth is the number that we are anyways eyeing for?

Question: Pritesh Sheth - Motilal Oswal Securities Ltd. - Analyst : Sure. That's very helpful. Thank you for the opportunity and all the best.

Question: Abhinav Sinha - Jefferies - Analyst : Hi, Abhishek. Thanks for the question. To start with Palava itself so you started 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're looking at?

Question: Abhinav Sinha - Jefferies - Analyst : Okay. Just secondly, on slide 15, where you put out a pipeline for FY25. Just wanted to check if South Central also has the Alibaug project this year or it's a FY26 projects?

Question: Abhinav Sinha - Jefferies - Analyst : Okay. And that will be like a weekend destination sort of a project that you're creating?

Question: Abhinav Sinha - Jefferies - Analyst : Great. Thanks and all the best.

Question: Siddharth Bhattacharya - Authum Investment & Infrastructure Limited - Analyst : Hello, I'm audible?

Question: Siddharth Bhattacharya - Authum Investment & Infrastructure Limited - Analyst : Yeah, fine. So this one question from my end. So the last few quarters, six or seven quarters, we have seen that the value share of ultra luxury units and luxury units have gone up significantly in the overall mix so, let's say, the top seven cities. How do we see that as a trend and how does it affect, if you could give some perspective?

Question: Siddharth Bhattacharya - Authum Investment & Infrastructure Limited - Analyst : Got that. 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?

Question: Siddharth Bhattacharya - Authum Investment & Infrastructure Limited - Analyst : Okay, got that. Thank you. Thank you so much.

Question: Mohit Agrawal - IIFL - Analyst : Yeah, thanks. So my first question is how are you looking at deployment of capital towards annuity assets, specifically commercial office space? And within that, how are you seeing office demand shaping up at Palava now that you have a large residential base there?

Question: Mohit Agrawal - IIFL - Analyst : Okay, understood. And then secondly, how has been the progress on the Green Digital Infra JV with Ivanhoe and Bain. Any news in terms of acquiring land parcels there?

Question: Mohit Agrawal - IIFL - Analyst : Two locations would be -- one would be Palava and other would be?

Question: Mohit Agrawal - IIFL - Analyst : Okay, yeah. Perfect. Thanks. Those are my questions. All the best.