Godrej Properties Ltd Q4 2023 Earnings Call Transcript

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

Question: Puneet J. Gulati - HSBC, Research Division - Analyst : Congratulations on good performance. My first question is, if you can talk a bit about the EBITDA margin on a reported basis. That seems to be

Question: Puneet J. Gulati - HSBC, Research Division - Analyst : I think the EBITDA margin on a Q-on-Q basis seems to be slightly weak despite significantly higher income. So I thought most of the fixed costs should have been absorbed. But on a reported basis, it still looks a little weaker compared to Q3, for example. Unidentified Company Representative Yes. So reported margin is because of 32% is what we reported. And because there were more launches which has happened in Q4. So there were lot of marketing expenses which get expensed out as compared to Q3. So that has little bit as compared to Q3, depressed the EBITDA a bit.

Question: Puneet J. Gulati - HSBC, Research Division - Analyst : Okay. Understood. That's helpful. Secondly, you also acquired stake in projects like Godrej Aria, 101, Eternity from 25% to 75%. These all projects were launched back in 2015-'16. So what is the thought behind acquisition at this point of time? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 03, 2023 / 10:30AM, GODR.NS - Q4 2023 Godrej Properties Ltd Earnings Call Unidentified Company Representative So these were exit, which the projects has almost got over. So obviously there was a fund, APG fund, it was from our MSE platform #1. So the project was almost over, so they need to be given. So they gave -- we gave an exit at a par value. There was nothing premium paid. In fact in this project they didn't make the expected return as desired. So it was just a routine exit on completion of the project.

Question: Puneet J. Gulati - HSBC, Research Division - Analyst : Okay. And so was this a lower-return project for you also or... Unidentified Company Representative We had some share of DM and all compared to what their internal -- what they thought they were lower. We also didn't make the expected return because the market at that time were little different. But yes, we made better returns compared to what they would have made.

Question: Puneet J. Gulati - HSBC, Research Division - Analyst : Right, right. My last question is on the breakup of your sales within the 4 geographies and fifth one others. Last 2 quarters, others have been trending up quite nicely. Is there a focused effort to move beyond the existing 4? Or is it just more a function of mix and plot sales, et cetera? Unidentified Company Representative Thanks for the question. I think our strategy is focused upon these 4 key geographies. And I believe that we are just at the tip of the iceberg from an opportunity set point of view. Like we've explained even in the previous earnings call, we are evaluating but still at a very initial level opportunities in Hyderabad and plotted opportunities in other markets. But our core growth housing markets will continue to be these 4.

Question: Puneet J. Gulati - HSBC, Research Division - Analyst : Just one clarification. Pirojsha, you mentioned that taking over increased stake in (inaudible) would likely add almost INR 4,000 crores to the business development side? Is that understanding correct? And is it included in the numbers that you disclosed?

Question: Puneet J. Gulati - HSBC, Research Division - Analyst : So anything similar number that one should add for Godrej Aria, Eternity, et cetera, or...

Question: Puneet J. Gulati - HSBC, Research Division - Analyst : So despite a reduction in salable area, you're saying you will get additional 4,000 opportunity in terms of business (inaudible).