Eldeco Housing and Industries

FY23Q4 concall notes

• Demand in Lucknow is buoyant, supply is a problem due to lack of new launches
• Due to lack of new launches, pre-sales was low at 93 cr. Launches suffered because land assembly issues took longer. Company has advanced 25 cr. in these projects
• Have witnessed interest from real estate funds who want to enter Lucknow and might use them to fund newer projects
• Positive side of this delay is that prices have increased and launches will happen at price points higher than original underwriting
• Added land bank of 20.91 acres in FY23
• Received RERA registration for Latitude 27, which will be formally launch in Q1FY24. Imperia Phase 2 will be launched during H2FY24
• Have signed two new projects where land assembly and approvals are under process, will announce them next quarter
• Plan to raise debt (upto 100 cr.) for new projects
• Total inventory: 9.22 lakh sq.ft (in on-going projects) + 10.95 lakh sq.ft (in upcoming projects) + 2 term sheets
• Current saleable volume is ~2mn sq.ft. At avg realization of 4500-5000, it will give potential revenue of 900-1000 cr.
• Realizations have increased to 4600 (20% vs last year). Expect 10% increase in FY24
• FY24 delivery: Imperia Phase I (by Q3FY24)
• Will maintain 50-50 split between horizontal plotted development and group housing
• Dividend payout has increased to 18%, aim to take it to 25%
• Don’t believe affordable housing is a sustainable business model as margins are very low
• EBITDA margin in newer projects will initially be 30% and increase to 35%

Disclosure: Not invested (no transactions in last-30 days)