Ashish Puravankara, managing director, Puravankara Projects, says that the company is very excited about the launch of Provident Sunworth in Bangalore. This project houses all modern amenities and is strategically located. He also says that the margins are good because of the business model adopted by the company.
Below is the edited transcript of his interview to CNBC-TV18.
Q: What important announcement has your company made today?
A: Today we have launched a project called Provident Sunworth in Bangalore which is spread over 60 acres. There will be development of around 5.88-6 million sq ft. This would be under the Provident brand. This project will have all modern amenities and is very strategically located off the NICE ring road off Mysore Road. There are also many industries around this project. The project is located at a driving distance of 20 minutes from Hosur Road which houses the entire IT sector. So we are very excited with this launch.
Q: There were some reports or concerns that because IT hiring has reduced a bit, Bangalore-based realty companies are facing some pressure. What is your view on this?
A: I don't agree with the reports, our sales in the luxury housing space has been good over last couple of months, which gave us the boost to go ahead and launch more projects. I don't think it will matter for Provident as there is huge pent up demand in this space. Provident has a ticket size of about 29 lakh sq ft for two-bedroom projects and 36-38 lakh for a three-bedroom project. No one is offering this type of premium product at this price in similar location. We are very confident it would do well.
Q: In September and current quarter, how has been sale in terms of sq ft?
A: From April till now, we have sold little over 1.3 million sq ft. We gave a guidance of 3 million sq ft. We are on our way. We will achieve that number and sales have been good.
Q: Can you give a quarterly break-up?
A: Quarterly break up would not paint the right picture because we sell around 10-15 percent on launch and the balance we like to sell during the course of construction so therefore we get good averages to mitigate any risk of increase in construction cost etc. I do not think it can be broke into quarterly basis.
Q: Resells in Q2 were up quite decently around 18-19 percent both in value and volume has that trend sustained in Q3 or is there some tempering down?
A: Resell is also happening at a good rate. I think that rate maintains.
Q: How is your debt position and do you have any plans to pare it down or increase it?
A: Debt is at 0.74. While we are comfortable with our sales and internal accruals, I believe that 0.65 would be a better number.
Q: How much sale do you expect in the coming year, you will have some visibility of FY14, are you looking at more than 3 million for FY14?
A: Considering the pipeline of launches that we have, I would say that 3.5 million an easy number to achieve.
Q: How are margins shaping up?
A: Margins have been good. Prices in the Southern markets have started increasing, there is good appreciation on the prices and especially when you factor in our business model where we like to not sell out on day one and like to sell a good 10-15 percent and then like to break the sales through the course of construction, we are able to achieve and maintain our margins.
Q: In October you launched 400,000 sq ft Purva White Hall, according to some brokerages that had met 35 percent of the inventory during the launch, how much more have you sold in that project?
A: We have crossed about 60 percent of sales and it has been very good.
Q: What is the average realization per sq ft and any estimates for the last quarter?
A: For Purvankara, we are at an average realization of a little over Rs 4,300 per sq ft. At Provident, we are over Rs 2,400 per sq ft.
Q: Is there a chance that these realizations will go up in the last quarter?
A: We will continue to see a price increase and while we maintain the sales velocity. So I believe that number will go up.