Prajay Engineers sees net at Rs 145 cr next yr

Excerpts from Closing Bell on CNBC-TV18 Watch the full show » RELATED NEWS Current land bank at about 650acres: Prajay Engineers Prajay Engineers H1FY07 PAT beats full year FY06 PAT Prajay Engineers in negotiation with Sunway City ALSO READ See latest News about Prajay Engineer See previous management interviews See what other Experts & Brokerages are saying about Prajay Engineer Prajay Engineer BSE | NSE 29/05/12 Are Mutual Funds betting on Prajay Engineer?

Director of Prajay Engineers Syndicate , Ravinder Reddy, comments on the company and its future prospects.

Reddy says that they are about to add another 200 acres to their existing land bank of 650 acres. They are about to launch Prajay Waterfront City by the end of February or the first week of March and it is expected to fetch a topline of about Rs 375-400 Crore.

Other ongoing projects are Prajay Enclave, Prajay Harbour City as well as two retail malls in Hyderabad.

Their guideline for next year is about Rs 550 crore, which could see an upside.

Excerpts from CNBC-TV18's exclusive interview with Ravinder Reddy:

Q: Could you start by outlining the land bank that you have currently, in which locations and the kind of roadmap or calendar of construction that you can share with us?

A: We are in the process of adding about another 200 acres to the existing land bank what we have as of March 2006, 650 acres. So we are in the process of adding another 200 acres in the current year, which will translate into about an additional 12 million sq.ft. of developable area.

If you look at projects in the current quarter, we will be launching Prajay Waterfront City, which will be launched sometime end of February or first week of March. This will be one of the largest gated communities in Hyderabad housing about 800 plus independent villas.

This would cover an area of about 1.5 million sq.ft. of built up area and would get an approximate topline of about Rs 375-400 crore in the next 18-24 months. This would be one of the major development which we will be announcing in the current quarter in addition to the ongoing projects of Prajay Enclave, Prajay Harbour City in Visakhapatnam and two retail malls in Hyderabad. 

Q: Break up your land bank in terms of residential, retail and official and the key projects that you might undergo in the next two quarters, your office space rather?

A: Office space would not come into operation in the next two quarters. Office space or retail space would come into operations only by the end of next financial year. But in terms of residential, we would be predominantly a residential player. Out of the new land bank acquisitions also, 85% of the land bank acquired is on the residential front. But with a varied mix of about 65-70% coming in form high-end and luxury housing.

Q: This report that we are referring to goes on to say that you will probably top Rs 500 crore in sales next year, in FY08 - do you expect that cash flows as strong as that?

A: I would not like to comment on those numbers because that is not the guideline issue forecast for the next year.

Q: What is it then, the guideline?

A: The guideline for next year is about Rs 550 crore, which could see an upside like the numbers you are referring to are about Rs 500 crore.

Q: How does that translate into what you might deliver in profits or what your own estimate is?

A: In terms of profit it would be about Rs 145 crore plus of net profits.

Q: Are you adequately funded at this point for all the projects that you are undertaking?

A: We are sufficiently funded. We had concluded around of FCCBs, about USD 60 million we had raised. The current debt on the books is only about Rs 65 crore odd, we are in the process of tying up an additional debt of about Rs 125 crore, which will be used in a phased manner to complete all these projects in the next three-four years.

Q: What is your average cost of acquisition of this 850 acres of land bank?

A: It would be tough to ascertain an average price because in lot of places the land is bought in acres and in some places in the heart of the city land is bought per square yard. So the average cost would be little too ascertain but the acquisition cost of all this 850 acres would be in the region of Rs 450-500 crore.