Puravankara, a prominent real estate player headquartered in Bengaluru, is embarking on an ambitious plan to unveil 7.6 million square feet (msf) of residential development during the ongoing fiscal year, with a bold objective of achieving a robust topline of approximately INR 5,000 crore. Abhishek Kapoor, Executive Director and CEO of Puravankara, shared insights with Money Control, stating, “Last year, our company successfully generated INR 3,107 crore in business, introducing 3 msf of inventory for sale from the approved 6 msf launches. As we progress into this year, we are significantly amplifying our inventory for sale to 7.6 msf, a substantial increase from the 15 msf launches planned. Additionally, we are optimistic about achieving a surplus of INR 11,200 crore from our operations within the next 3 to 4 years.” (Source: Money Control)
The upcoming launches are poised to make a significant impact in key cities including Bengaluru, Hyderabad, Chennai, Pune, and Mumbai. Notably, the majority of these ventures will be concentrated in Bengaluru.
In terms of financial performance, Puravankara reported a loss of INR 17 crore for the quarter ending on June 30. However, this was counterbalanced by revenue of INR 323 crore, reflecting an impressive 50 percent year-on-year growth. Kapoor attributed the incurred loss to escalated costs linked to new launches and sales activities. “Expenditure on sales and marketing witnessed an increase of INR 15 crore, which unfortunately cannot be capitalized. Furthermore, augmented general and administrative expenses contributed to a decline in collections.” Kapoor expressed confidence that the forthcoming quarters are anticipated to show improved collections as their robust pipeline of projects materializes.
The pipeline boasts an allocation of approximately 3.7 msf for Provident Housing, while the remainder is attributed to Puravankara and Purva Land. Notably, the average per square foot rate for Puravankara’s launches is projected to range between INR 9,000 to 9,500, while Provident Housing projects are poised to average around INR 7,200 per sq ft.
Kapoor also highlighted the upward trajectory in average cost realization for launches, observing an overall increase of about 11 percent across various segments. In Q1 of FY24, around 37 percent of sales transpired within ticket sizes below INR 1 crore, while higher-priced inventories above INR 1 crore constituted the remaining sales in Bengaluru. Kapoor pointed out that a growing number of homebuyers are inclined towards upgrading to higher ticket sizes, substantiating a positive trend across all market segments.
Debt Stability and Strategic Investments
As of the first quarter of FY23, the net debt stood at INR 2,119 crore, marking a decline of INR 89 crore in comparison to the preceding quarter. While the debt landscape remained relatively stable in the residential sector, the capital expenditure linked to ongoing construction contributed to a minor upswing in debt valuation. Kapoor expressed confidence that forthcoming quarters will witness escalated construction costs primarily driven by commercial projects. He emphasized the company’s commitment to maintaining debt within a consistent range over the next 2 to 3 years. Kapoor further outlined the intention to recover capital expenditures for commercial ventures through residential vertical sales.
On the commercial front, Puravankara is actively engaged in the construction of 3 msf along the Kanakapura Road area in Bengaluru, and an additional 2.1 msf towards the airport road in the northern region of the city.
In a significant move, Purva Asset Management, a subsidiary of Puravankara, initiated a INR 750 crore alternative investment fund in March 2022. The fund is dedicated to investments in affordable housing projects and plotted developments across various locations, including Bengaluru, Pune, Chennai, Hyderabad, and the Mumbai Metropolitan Region. A noteworthy achievement includes the deployment of INR 93 crore in Chennai. Kapoor revealed the company’s intention to further invest an additional INR 300 crore in Bengaluru and Chennai before the conclusion of FY24, demonstrating their commitment to strategically bolstering their portfolio.
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