Kolte Patil Developers

Growth in presales is coming back after a gap of few quarters, they reduced FY25 launch guidance to 7000 cr. (vs 8000 cr. earlier). Management is expecting 1800 cr. sales recognition with 11-12% EBITDA margins in FY25. Concall notes below

FY25Q2

• Reduced FY25 launch guidance to 7000 cr. (vs 8000 cr. earlier), only launched 1800 cr. inventory in H1FY25, expect H2FY25 to be heavy on launches. Maintain presales guidance of 3500 cr. in FY25 with 30% contribution from MMR and Bangalore

• Highest ever quarterly presales of 770 cr., growing by 22% over Q2FY24

• Expect mid-teen margins in H2FY25; Reported revenues of 1800 cr. in FY25 with 11-12% EBITDA margins (recognized 650 cr. in H1 implying 1150 cr. in H2)

• Life Republic contributed ~50% of Q2FY25 sales (385 cr., seems now Q1 sales of 300 cr. was an aberration)

• 24K segment is doing very well, 24K contributed 28% to Q2 presales and 30% to H1FY25 presales (vs 12% in FY22)

• Launched a project in Sector 2 in Vashi marking entry in Navi Mumbai market

• Interest costs will be 70-75 cr. in FY25, they recognize interest costs on delivery of projects (with rest remaining in WIP)

• Seeing tremendous demand in Hinjewadi and western Pune markets which have contributed to better realizations in Life Republic

Their last few quarters have been very disappointing. However, Kolte should be reporting very good nos because their flagship project Life Republic is witnessing amazing traction, this land bank is very old implying that the good gross margins should be very high. Their premium projects (24K) now account for one-third of their presales (again higher margin), and the Mumbai redevelopment (lower margin) is very asset light as they dont have to buy land. Logically, once these new projects start getting delivered, they should report better margins and ROCEs. However, their reported nos portray a completely different story which maybe because they are recognizing lower margin projects, which should END NOW and next 2-3 year numbers should improve. Lets see if my judgement is correct or not.

Disclosure: Invested (no transactions in last-30 days)