Ansal Properties to attain FY12 sales of 16-18 mn sq ft

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Ansal Properties to attain FY12 sales of 16-18 mn sq ft

Dinesh Gupta, chief operating officer of Ansal Properties joins CNBC-TV18 to opine on the way ahead for his company and the sector.

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The third quarter which begins in a few days is traditionally known to be a favorable time for the realty pack. Even though concerns on land price escalation persist, the sector hopes to see some relief coming their way during the festive season. Dinesh Gupta, chief operating officer of Ansal Properties joins CNBC-TV18 to opine on the way ahead for his company and the sector.

Below is the edited transcript of the interview. Also watch the accompanying video

Q: Your target for land sales for FY12 was between 16 million sq ft and 18 million, from which, you have already achieved about 12 million sq ft. How much are you hoping to upwards wise your guidance this year, if any?

A: Last month, we had indicated that quarter three which is starting in another two days time, it's supposed to be the festive season, very auspicious for real estate and real estate sales. Looking out at the sales in that quarter, we should be able to achieve the target or be very close to the full year target in about nine months time. Our guess is that we will beat the target, but judicious call will be taken post the closure of Q3, and we should be able to give you a revised guideline. At the moment, 16-18 million sq ft is the guidance that we are maintaining, keeping in mind the sales that we have achieved till now and what we plan to do in future.

Q: Just give us a sense of where exactly have you seen the maximum traction in terms of sales with regards to the 12 million sq ft that you have already completed?

A: We have majority of the developments outside Delhi, and even in NCR, apart from tier-II towns which constitute about 57% of our land reserves, especially Lucknow, Meerut, UP and towns in Haryana.

We have seen the major spurt in these townships, primarily because of the scale of development. I think it's meeting the aspirations of the local people who are looking at options in new towns and better infrastructure. So the company providing 100s of acres of development and not just giving a residential option, but creating a life style for the entire city.

Apart from that Gurgaon has been our best selling property in the last 1-1.5 years in terms of million sq ft as well as per sq ft realization. The major upmove is in the asset class that we are operating in, the plotted development which is very scarce, and the built-up houses, which most single family units and even nuclear family unit are looking to acquire.

Q: Van you give us a sense of all the upcoming projects that you also have?

A: We have mentioned that currently we have 19 townships and within these townships, we have broader asset classes which we keep realizing and launching. So let's say in Lucknow, after doing the mid-segment sales of plots and houses and apartments, the company has gone ahead and launched golf-based villas and golf-based apartments, which are targeted towards the upper segment. Even in other townships like Meerut, we have come out with apartment complexes. Going forward, we will be releasing further inventories in these townships. So as such, we don't plan to add any new projects apart from the land reserves that we have, but within these townships, we will keep on releasing areas as per the maturity of the township, and as per the demand that has been generated in the city.

Q: We hear you are in various stages of negotiation to monetize some of your projects and utilize the same towards debt reduction. Any details that you could share with us?

A: The company is in talks for hiving off two townships in Punjab and Haryana, and we should be able to close the deal. You can understand this is not the right time because we are just approaching Navrati and most of the business deals happen during this time. So I think in the next week-ten days, we should be able to cut across those deals and share the details with you and the public.

Of course, the debt last one year, we have reduced more than Rs 300 crore and further ahead, the realizations from these asset monetization will be utilized for debt reduction which has been the endeavor and focus of our business plan for this year.

Q: So how much does the debt currently stand at and how much would you like to scale it down to?

A: We are currently at about Rs 1470 crore on the group level and the year's target that was put in place was about Rs 1300 crore. So in the next six months, we are looking to reduce another Rs 170 crore from various sources- internal accruals and asset monetization. We should close the year at about Rs 1300 crore which has been one of the prime focus for the management and the finance department for our company.

Q: And just live us with some guidance then in terms of sales what could we see you finish the year with as well as profits?

A: In terms of top line, we are targeting close to about Rs 1550-1600 crore and the internal guidance that we had given for the profit after tax for the full year was in the range of about Rs 140-160 crore. Though quarterly numbers may vary depending upon the season and the way completion of the projects happen, we should see more traction in Q3-Q4 and we should see these profitability numbers catching up in the next two quarters because of the way construction happens and the way sales also get monetized.