Sunteck Realty aims Rs 300cr net profit for FY14: CMD

Sunteck Realty aims to post a profit after tax of Rs 300 crore for FY14. With its current expansion and new launches, the company will see growth of atleast 20-25 percent in the profit that it shows this year.
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Jun 11, 2013, 07.22 AM | Source: CNBC-TV18

Sunteck Realty aims Rs 300cr net profit for FY14: CMD

Sunteck Realty aims to post a profit after tax of Rs 300 crore for FY14. With its current expansion and new launches, the company will see growth of atleast 20-25 percent in the profit that it shows this year.

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Sunteck Realty aims Rs 300cr net profit for FY14: CMD

Sunteck Realty aims to post a profit after tax of Rs 300 crore for FY14. With its current expansion and new launches, the company will see growth of atleast 20-25 percent in the profit that it shows this year.

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We have done sales worth Rs 900 crore rrom the Signature Island project and so, major profit will come from that project in this financial year

- Kamal Khetan (CMD)

Mumbai-based real estate company Sunteck Realty  expects a net profit of Rs 300 crore in FY14, says CMD Kamal Khetan. Going forward, he says the company will be launching three-four projects totaling around 2.5 million square feet this year, as well as 10 ongoing projects, which will yield about 5 million square feet. Therefore, the company will see an additional growth of atleast 20-25 percent in the profits next year.

Also Read: Investigations involving many realty cos still on: CCI

Meanwhile, Khetan informs that the price for under construction projects is likely to remain stagnant. "The chances of prices coming down are bleak because already the costs for the developers in terms of fungible floor space index (FSI), the cost of constructions have gone up," he says in an interview to CNBC-TV18.

Below is the verbatim transcript of Kamal Khetan's interview on CNBC-TV18

Q: How have the cash flows been in Q1? Your Q4 showed fairly reasonable performance. Give us an idea of how Q1 and FY14 in general will pan out in terms of revenues?

A: We have a robust cash flow. We have clocked in sales Rs 2,700 crore up till now. Out of which we have received Rs 1,350 crore and are yet to receive Rs 1,350 crore. We follow a project completion method and this year we will be completing almost four to five projects, delivering about 1.5 million square feet. This year we are looking at a profit after tax (PAT) of approximately Rs 300 crore.

Q: Will you report a net profit of Rs 300 crore this year?

A: Yes.

Q: That would be a quantum leap, wasn't it Rs 4 crore last year?

A: Yes, because we follow a project completion method. So, the profit of Rs 20-25 crore that you could see, is from our rental portfolio.

Q: Could you give us some more details on your Bandra Kurla Complex (BKC) residential project because that is one of the premium projects. What is the progress? Have you sold anything there? What are the current rates there?

A: From the Signature Island itself, we have done sales worth Rs 900 crore and so major profit will come from that project in this financial year.

Q: What about FY15 in that case?

A: We are launching another three-four projects totaling around 2.5 million square feet this year, as well as ongoing projects, which are ten, about five million square feet. So next year, you will see growth of atleast 20-25 percent in the profit that we show this year.

Q: How many Signature Island projects have you sold and what is the current rate in that locality?

A: Right now we are selling at Rs 45,000 per square feet in that locality and have sold close to 50-60 percent of the units. We are quite confident that once the project is complete we will be able to sell another 40 percent of the inventory.

Q: Are you getting demand for Rs 45,000 per square feet?

A: Our sales have been reasonably good because the ready products today in Mumbai are commanding much higher premium to the projects which are under construction or on the launch.

Q: How do you see real estate prices for not ready projects, where I assume demand will be higher?

A: For the ready project demand will definitely high.

Q: What about the under construction projects?

A: Under construction projects, the prices are not going up right now and will be stagnant. The chances of prices coming down are bleak because already the cost for the developers in terms of fungible floor space index (FSI), the cost of constructions have gone up very high and some of the real estate developers or the balance sheet is highly stressed. Fortunately, we have a negligible debt, which is Rs 62 crore in March FY13. Looking at that, there will be price stagnancy. But I don’t see any big correction in the coming time.

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