Puravankara to add 14 million sq ft of developable space in next 6-9 months, reduce debt

Real-estate major Puravankara Ltd — amongst the stocks that are a part of the NSE Realty index — plans to add a developable area of 14 million sq ft – commercial, residential, premium housing, all put together – across its three brands, with an estimated investment of ₹4,200 crore, in the next 6-9 months.

New projects are expected across brands like ‘Puravankara’ – 5.06 million sq ft; the affordable housing brand, ‘Provident’ (4.82 million sq ft), and the premium plotted housing brand, ‘Purva Land’ with a developable area of 3.77 million sq ft. Saleable area under these three brands is to the tune of 10 million sq ft.

Demand revival

These new launches will cover its home city of Bengaluru and Chennai, Kochi, Coimbatore and Mumbai.

Non-Bengaluru projects account for 49 per cent of its share of ongoing projects; and 45 per cent of its new launches.

According to Ashish Puravankara, MD, Puravankara Ltd, there is buoyancy in the market and new launches have been accelerated. Demand is reviving and price hikes to the tune of 5–12 per cent have also been initiated, in a calibrated manner, primarily because of a rise in raw material costs that include cement, steel and copper prices.

Ready to move in space is now at a 5 year low of 0.43 million sq ft, indicating revival and also acceptance of price hikes across premium and affordable offerings.

“New creations will be funded primarily through internal accruals and equity funds. In the last three to four years, in eight out of 10 of our launches, we have been able to sell almost 65 - 80 per cent within the first two-to-three quarters,” he told BusinessLine .

“We are confident if these launches come out as we planned but for a couple of months here and there. I do not think achieving a 5 million square foot will be difficult,” Ashish added.

For Q2FY22, Puravankara reported 117 per cent sequential growth. Sales stood at 0.9 million square feet compared to 0.42 million sq ft in the quarter ended June 30, 2021. The sales value stood at ₹597 crore; up 90 per cent sequentially. Consolidated revenue stood at ₹272 crore; up 24 per cent, sequentially; while EBITDA was at ₹104 croe and PAT at ₹12 crore. On a half yearly basis, the company received a booking of ₹910 crore for 1.23 million square feet of sale (up from ₹810 crore for 1.53 million sq ft of sale in the year-ago-period). Recognised revenues more than doubled Y-o-Y to ₹814 crore.

According to Ashish. as on September 30, 2021, Puravankara’s net debt stood at ₹1,860 crore - the last five years. In the December and March quarters it will repay around ₹75 crore, each quarter. “Nearly ₹900 crore of debt have been repaid between the last 12-24 months. And we are in a comfortable position now net debt being below ₹2,000 crore level. Our net debt to equity is trending down and stands at 0.90 times. Work is done 0.41 times a year ago. Our average cost of debt stands at 11.30 per cent as of September 30, 2021,” he said adding that the aim is to get the weighted average cost of debt down to 11.20 per cent.

COMMENT NOW