Q4FY24 con call notes
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They are targeting 92k seats by march 2026
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Closed single largest Contract with Co-Forge for developing 100,000 sq. ft. of commercial space
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They are the preferred vendor for large organisations, delivering successfully on a timely basis like TCS, coforge.
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Furniture factory would be fully operational in FY 25
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They are present in 7 cities with 50 centres with about 1.9million sq area
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The Idea behind AIF/REIT is they need to go and control Real estate assets . They are operating and want to continue with asset light but when it comes to creation of assets, they want to own it through fund, they will be the sponsor. They want to acquire those asset and manage those properties in an efficient manner and offer good returns to investors. The standard yield is 7-8%, but when you convert to a managed office, you are likely to earn much better returns. They would be chagrin some fees here for the management and that would flow to bottom line directly
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This year they did 263cr form rental , 46cr from furniture and balance form D&B segment
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We are looking at SPV to partipciate in strategic investments, we see in market we get lot of opportunities development of IT parks, development of A grade properties, we want to block these properties for our management, we want to ensure we manage by the time they come up for management or fully furnishes. This would be funded from internal accruals
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Margin profile 2-3 years :
Furniture : margin will be 40% EBITDA
Rental : Margin : 30-35% EBITDA, average post occupancy
Design and build, whitewalls : EBITDA and PAT more or less same, except receivables, no investment on capex side, 16-17%
Blended level PAT for FY24 : 15% and going forward 15% to 20% because of furniture business which has higher margins
10 Furniture start in Q2. Structure is ready, machinery are ordered, will be installed in this month, we are expecting it to go live in Q2. They are expecting it to go live in Q2 and don’t need to find market for this as they are planning to add about 15k seating capacity in H1FY25 so lot of that is going to go into captive use. Planning to achieve substantial turnover this year itself
11 Receivable cycle for Whitehill’s and Furniture is 90-120 days, ideally they try for 60 days, but end of it, it goes to 90-120
When they work with TCS, coforge, they ask for retention money, for safety, they would like to ensure, certain amount of money, blocks working capital. With regards to Co-working there is a 30 days pay gap and it is pretty much on time and within 30 days, they receive every payments, who are under managed office space.
12 By September they would touch : 50k-55k
By march 2025 : 65k seats
13 They generally take 3months to get occupancy once the property is live and 4 to 6 months from development stage
14 Under whitehills, apart from commercial spaces they develop RD center, Research labs, healthcare centers etc
15 They want to establish as integrated player, RAAS, they don’t want to be known as managed office player only
16 Top clients Contribute 80% of their total revenue with contract duration of 3yrs locking and 5 yrs contract and balance 20% comes from 12 to 24 months kind of clients
17 For Special clients the contract is for 6-8 years, they are in industry for more than 10 years, there are clients who are with them for such long periods, they have so much confidence in them
17 Their major clients in Managed office are Bajaj finance, eureka, tech Mahindra
18 Q4 occupancy was more than 90% and for FY24 88-90%. generally on an average they are more than 90%
19 Their capex cost is less than peers because oof the huge purchasing capacity and sourcing is one of the key factors maintaining cost
Over 10 years, they have been doing this, developing their own center without using 3rd party contractors, in this process they have developed efficiency levels, whether it is creating internet connectivity, we have efficiency across
20 Weighted average duration with landlords : state of Maharashtra if more than 5 years, it gets converted into Lease and they have to pay large Stamp duty. So in Maharashtra it is 5 years and it gest renewed every 5yrs. Other than MH it is 7-9 yrs
21 Capacity operational : ready and given for working
Billed seats : billing to customers and getting revenue
Capacity development – Capacity operational : seats under development
23 Revenue from managed office space will reduce as % of sales. In managed office space, incremental revenue is matter of adding more and more seats. Ideally they would like to achieve good mix.
24 Whitehills infinite growth possible, can do big contracts as long as the market grows. In
Whitehills they signed contracts worth 132 crores includes co-forge, TCS, yes works and 60cr of contract is under negation so 200 crores business fy25. Out of which 132 crores in Q1. Q2
25 Capacity of 300-400 crores for new furniture factory. Will achieve 50% utilization is FY25
26 Last year they did testing of their products like buying from direct manufacturers and trading they did to understand furniture market and create a network of potential buyers, potential raw material, 46 crores trading revenue in FY24 to establish ourselves
27 They are looking at B2B and B2C, primary in B2B market
28 They spend 50k per seat on capex with 60% of it being furniture cost
29 In AIF they are the sponsor and 2% is commitment which is required for sponsor.
30 Listing on nse in this FY
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