In this interview with ET Now, Gopal Sarda, VP – Business Development of Kolte Patil Developers talks about the Q1 results and demand in the market. Edited excerpts:
It has been a strong set of results for you. Take us through the key projects that have seen traction and have led to this kind of an improvement in performance?
We have got fantastic contribution from our midsized project Corolla and the recently launched Wakad Project Western Avenue. These projects have contributed substantially to the pre-sales numbers of this quarter.
How have your Mumbai expansions plans played out because you have taken significant debt for TDR purchase etc.? Give us some details about your cash flow situation there and your expectations for this ambitious project.
We had a Rs 120 crore transaction deal with JP Morgan Chase wherein they have come in as a equity partner and we have given them an identified area of stock. We have infused around Rs 30-32 crore but there is a cash flow visibility of around Rs 100 crore which is going to come over a period of next 30 to 35 months. So in toto the ROCs for Mumbai projects are extremely well compared to the overall portfolios of other projects.
What about your average price realisation? What has it been for you this quarter and what is the key price realisation trends that you are observing?
In this particular quarter the company recorded new sales booking of 0.66 million square feet against 0.5 million square feet in Q1 financial year 2016. The value of area stood at Rs 370 crore versus Rs 300 crore in Q1 financial year 2016. So this quarter we are at an APR of around Rs 5,612 per square feet compared to last quarter when we were at Rs 6,600 APR. The reason for price realisation coming down is that the retail shop sales had happened in last quarter. Last quarter we were having around Rs 25 crore shop sales based out of Mumbai and Rs 14 crore shop sales based out of Pune which were in the range of more than Rs 30,000 per SFT. For rest of the projects, the APR are is in line with the last quarter.
What is the ground situation currently like? How are you seeing demand and prices shaping up?
Obviously the stress is there in the market, but if your execution track record is good and you are showing the progress at the site, your campaign and overall customer experience will be good. It is a stable market and we will be maintaining this kind of momentum. We are pretty much on track as far as our yearly guidance goes.
Reports and studies seem to suggest that there is a pickup in demand for real estate sector. Is that actually what you are seeing on ground because you are a key player under the one crore ticket size project?
Yes, it is absolutely correct. If you see our pre-sale numbers, they have seen uptick. So the demand has started picking up and we are seeing the traction.
You had undertaken some price cuts a few quarters back. Have you undertaken any price cuts recently and are you looking at undertaking any price cuts in the future to meet your guidance figures?
Frankly speaking, we have not done any price cut. It all depends upon your project contribution. We have four categories of product – budget home, MIG project, luxury and a 24K project as well as the township and retail shops. So the price relation completely depends on the project contribution. Sometimes if there is a substantial contribution from the retail shops, then you will see the uptick in our APR and if the contribution is from the MIG segment, then the APR comes slightly down. So overall we are maintaining stable prices across our portfolio and there are no price reduction as such.
Credits ET Realty