Ashiana Housing – Banking on Tier II and III towns!

Ashiana has crossed most of their peak metrics and are now expecting further scaleup with improved profitability (plans to reach 15%+ PAT margins in 3-years). Concall notes below

FY24Q4

• FY24 launches: 10 projects (4 greenfield + 6 phase extension in existing projects) accounting for 23.19 lakh sq.ft vs 29.46 lakh sq.ft in FY23

• Targeting 2000 cr. presales in FY25 and 25-26 lakh sq.ft of constriuction. Plan to launch remaining phases of Amarah in FY25 and hopefully first phase of Sector 80 (Gurgaon) in Q4FY25.

• Current pipeline: 12.65 lakh sq.ft in ongoing projects + 80 lakh sq.ft in future projects + 21.3 lakh sq.ft in land (excluding Milakpur) ~ 114 lakh sq.ft

• Ashiana Amarah

  • March 2024: Phase 3 (224 units; 3.77 lakh sq.ft; 440 cr.; 11,671 / sq.ft) – 55% higher price

  • April 2023: Phase 2 (224 units; 3.77 lakh sq.ft; 283 cr.; 7,507 / sq.ft) – 22% higher price

  • October 2022: Phase 1 (224 units; 3.95 lakh sq.ft; 243 cr.; 6,152 / sq.ft)

• Launched Ashiana Amarah Phase 3, Nitara (Jaipur; premium housing), One44 (Jaipur; premium housing), Vatsalya (Chennai; senior living) in Q4FY24

• Delivered Ashiana Aditya in Jaipur and Amantran in Jaipur which had cost overruns and generated lower margins but good ROCEs as they in JV

• See continuous margin improvement in subsequent years and want to reach PAT margins of 17-18%. Indirect costs as % of sales should reduce significantly in FY27

• Focusing more on senior living which is higher margin and less competition. Looking to grow to 900-1000 units in 3-4 years vs 354 now. Have two term sheets for senior living in Bangalore right now (50% failure rate generally). Panvel senior living termsheet fell through

• IFC: 1st platform has Ashiana Daksh (almost complete), Amarah, Vatsalya. Money from 2nd platform is yet to deployed. IFC debenture pays IFC around 30% of net project cashflow

• Crossed economic ROEs of 15% in FY24 and will cross reported ROEs of 15% in FY26

Disclosure: Invested (position size here, no transactions in last-30 days)