Any current/future new fundraising through debt or equity?

No explicit mention of new equity fundraising in the provided transcript. Management highlighted managing gross debt levels around INR 300-350 crores for FY24 and FY25, indicating controlled borrowing. Debt repayment is ongoing, including redemption of INR 100 crores debenture associated with a project acquisition. There are plans for land monetization (e.g., in Chennai and Bengal) expected to generate cash inflows in Q3, potentially reducing net debt. Current and future gross debts arise mainly from construction financing at the project level; net debt is targeted to approach zero by FY25. No

Any current/future capex/capital investment/strategic investment?

Shriram Properties has ongoing construction and project investments, including JV advances (noted INR17 crores outflow in one quarter). Focus on construction spend target of INR750 crores for FY24, fueled by two new Chennai launches: Prime Paradiso and 122 West. Completed acquisition of a 1.88 million sq. ft project (Shriram 122 West), being launched in August-September 2023; this project is part of the ASK Shriram Co-Investment Platform (80% ASK capital, 20% Shriram). Capital platform utilization at ~60% (~INR300 crores used from a INR500 crores partnership platform). Ongoing enhancement of p

Future growth expectations in sales/revenue/volumes?

Strong demand outlook for the next 3-5 years, especially in mid-market housing, supported by India story and market consolidation. Targeting at least 20% CAGR in volumes over the longer term. Full-year handover target of about 3,000 units (~3.4-3.5 million sq ft) in FY24 to boost revenue recognition (~INR 1,500-1,600 crores). Pipeline of 52 million sq ft with 23 million sq ft ongoing projects and 20 million sq ft available for launch. Expect revenue and volume growth supported by 11-12 project launches planned for the year. Realizations have grown by about 9% quarter-on-quarter, driven by pric

Future growth expectations in earnings/operating earnings/profits/EPS?

Management expects a strong earnings visibility over the next 3 years, supported by 70% of project revenues from volumes already sold till FY23 and Q1 FY24. Targeting at least 20% CAGR in volumes with sustained profitability. EBITDA margins are targeted to stabilize in the 20%-25% range during this year and going forward. EPS run rate around INR 4, with second half (Q4) expected to be stronger due to revenue recognition seasonality. Positive net earnings with improving margins and returns are key focus areas. Revenues expected to grow with 3.5 million sq.ft. of handovers and INR 1,500-1,600 cr

Current/ Expected Orderbook/ Pending Orders?

Ongoing project pipeline comprises 19 projects, all launched. Total ongoing project area: 23 million sq. ft., with Shriram Properties owning ~21 million sq. ft. Approximately 80% of the ongoing project pipeline is already sold. Sold receivables collectible amount from ongoing projects is INR 2,500 crores. Unsold value in ongoing projects is about INR 2,000 crores. Total balance collectible from ongoing projects is roughly INR 4,500 crores. For FY '24, about 5.7 million sq. ft. is expected to be launched, mostly under JDA category. Current pipeline includes 52 million sq. ft. overall, with 23 m

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Shriram Properties LtdQ2 FY23Realty

Shriram Properties Ltd Q2 FY23 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹91.6P/E: 20.2Market Cap: ₹1.4K CrSector: Realty

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→Strong demand outlook for the next 3-5 years, especially in mid-market housing, supported by India story and market consolidation.
→Targeting at least 20% CAGR in volumes over the longer term.
→Full-year handover target of about 3,000 units (~3.4-3.5 million sq ft) in FY24 to boost revenue recognition (~INR 1,500-1,600 crores).
→Pipeline of 52 million sq ft with 23 million sq ft ongoing projects and 20 million sq ft available for launch.
→Expect revenue and volume growth supported by 11-12 project launches planned for the year.
→Realizations have grown by about 9% quarter-on-quarter, driven by price hikes and product mix improvements.
→Sustainable EBITDA margins expected in the 20-25% range.
→Revenue recognition momentum to continue driven by project completions and handovers through FY23-25.
→Overall, a positive market environment with stable demand and controlled supply in key cities.

Margin guidance

Category 3

→Management expects a strong earnings visibility over the next 3 years, supported by 70% of project revenues from volumes already sold till FY23 and Q1 FY24.
→Targeting at least 20% CAGR in volumes with sustained profitability.
→EBITDA margins are targeted to stabilize in the 20%-25% range during this year and going forward.
→EPS run rate around INR 4, with second half (Q4) expected to be stronger due to revenue recognition seasonality.
→Positive net earnings with improving margins and returns are key focus areas.
→Revenues expected to grow with 3.5 million sq.ft. of handovers and INR 1,500-1,600 crores revenue recognition expected in FY24.
→Management confident that markets will take note of improved earnings and treat the stock appropriately over time.

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Fundraise plans

Yes

→No explicit mention of new equity fundraising in the provided transcript.
→Management highlighted managing gross debt levels around INR 300-350 crores for FY24 and FY25, indicating controlled borrowing.
→Debt repayment is ongoing, including redemption of INR 100 crores debenture associated with a project acquisition.
→There are plans for land monetization (e.g., in Chennai and Bengal) expected to generate cash inflows in Q3, potentially reducing net debt.
→Current and future gross debts arise mainly from construction financing at the project level; net debt is targeted to approach zero by FY25.
→No direct statements about raising new equity or debt, but some borrowing at individual project levels (INR 16 crores) occurs regularly.
→Management emphasizes improving cash flow and reducing interest costs rather than new large-scale fundraising.

Order book

Yes

→Ongoing project pipeline comprises 19 projects, all launched.
→Total ongoing project area: 23 million sq. ft., with Shriram Properties owning ~21 million sq. ft.
→Approximately 80% of the ongoing project pipeline is already sold.
→Sold receivables collectible amount from ongoing projects is INR 2,500 crores.
→Unsold value in ongoing projects is about INR 2,000 crores.
→Total balance collectible from ongoing projects is roughly INR 4,500 crores.
→For FY '24, about 5.7 million sq. ft. is expected to be launched, mostly under JDA category.
→Current pipeline includes 52 million sq. ft. overall, with 23 million sq. ft. ongoing and 20 million sq. ft. planned for launch.
→Strong demand outlook supports comfortable achievement of full-year sales targets.

Capex plans

Yes

→Shriram Properties has ongoing construction and project investments, including JV advances (noted INR17 crores outflow in one quarter).
→Focus on construction spend target of INR750 crores for FY24, fueled by two new Chennai launches: Prime Paradiso and 122 West.
→Completed acquisition of a 1.88 million sq. ft project (Shriram 122 West), being launched in August-September 2023; this project is part of the ASK Shriram Co-Investment Platform (80% ASK capital, 20% Shriram).
→Capital platform utilization at ~60% (~INR300 crores used from a INR500 crores partnership platform).
→Ongoing enhancement of project pipeline with 43 million sq. ft development potential, including 23 million ongoing and 20 million yet to be launched.
→Plans for monetization of land parcels, including one in Chennai, to reduce net debt and generate free cash flow.

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