Ashiana Housing LtdQ1 FY23Realty

Ashiana Housing Ltd

Q1 FY23 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 1

Fundraise

N/A

Order

Yes

Capex

Yes

3 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→Targeting ₹1,500 crores value of area booked in FY '24, up from ₹1,300 crores in the previous year.
→Expect sales value realization in the range of ₹5,000 crores to ₹5,500 crores.
→Aim to increase the base scale of the company to about 14-15 lakh square feet and ₹700-750 crores sales in poor cycles, with aspirations to double this scale over 5 years.
→Projected Revenue growth rate of mid to low teens percentage annually, supported by a target Return on Equity (ROE) of 15%.
→Planning incremental addition of 20 lakh square feet in new deals across existing geographies over the next 1-2 years.
→Confidence is high in price appreciation particularly in Gurgaon, Jaipur, senior living segment, and Jamshedpur.
→Maintaining a 30% gross profit margin with improved operational efficiencies.

Margin guidance

Category 1

→Targeting a base scale increase to about 14-15 lakh sq. ft. and ₹700-750 crores sales in down cycles, aiming to double base scale in 5 years (Page 16).
→Expect pre-sales value of ₹1,500 crores for FY24 (Page 10).
→Targeting a 15% economic ROE, with double-digit ROE achieved in FY23; aiming to exceed 15% ROE from FY23-24 onwards (Pages 7, 10).
→Operating with a 30% gross profit margin, sales & marketing costs at 4%-4.5%, overheads at about 7-7.7%, aiming for 13%-15% PAT margin (Page 11).
→Future growth linked to controlled revenue share in JV transactions and managing pricing sustainably (Page 16).
→EBITDA margins historically low due to depressed volumes; improving with volume recovery and sales growth (Page 14).
→Delivery volumes expected around 26 lakh sq. ft. in FY24, supporting revenue recognition growth (Page 4).

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Fundraise plans

→There is no specific mention of any current or planned new fundraising through debt or equity in the provided transcript.
→Varun Gupta mentioned targeting a 15% ROE and managing growth with or without raising capital, implying no immediate need for capital raise.
→Discussion around buyback was mentioned, but no firm plans have been finalized.
→The company is focusing on business development within existing geographies and replacement stock rather than aggressive expansion requiring additional capital.
→No direct indications of upcoming debt or equity fundraising were provided during the call.

Order book

Yes

→The company has booked about ₹2,100 crores of stock, which is booked but not yet recognized as revenue.
→There is additional inventory amounting to ₹5,500 crores in sales value potential.
→In FY '23, around 25 lakh square feet were booked with a value of approximately ₹1,300 crores.
→For the coming financial year (FY '24), the company expects to have a sales value around ₹1,500 crores.
→Deliveries planned for FY '24 are around 26 lakh square feet.
→The company is actively engaged in land deals and has ongoing negotiations, including 2 projects with HSIIDC and 2 in Jaipur, totaling about 20 lakh square feet each, indicating a steady pipeline for replacements.
→Overall, the order book and pending orders are robust, with continuity expected in sales and deliveries.

Capex plans

Yes

- Ashiana Housing is focused on business development within existing geographies, outside senior living, where expansion is planned in a couple more cities (Page 16). - They added about 20 lakh sq. ft. of replacement stock last year through 3 deals (Jaipur, Gurgaon), with active discussions for another 20 lakh sq. ft. across 2 transactions (Page 16). - The company is waiting for market conditions to become more conducive before pursuing more aggressive stock additions (Page 16). - They aim to maintain a 15% Return on Equity (ROE) with a mid-to-low teens growth rate in capital base (Page 16). - No firm plans yet on buyback or capital return strategies; still under contemplation (Page 12). - Some non-core asset disposals are underway to optimize capital: school and certain other non-core assets are intended for transaction (Page 12). - No signs of entering new NCR centers beyond Bhiwadi for senior living; focus remains on selective geographic expansion (Page 12). Overall, the company is pursuing targeted, measured capital investments mainly via replacement stock and senior living expansions.

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