Puravankara Projects: 3-pronged growth strategy

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Puravankara Projects: 3-pronged growth strategy

Bangalore-based real estate firm Puravankara Projects has drawn up a 3-pronged strategy to accelerate growth in FY13. CNBC-TV18's Vineetha Athrey reports that the company is banking on entering an untapped segment.

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Excerpts from India Business Hour on CNBC-TV18 Watch the full show » Puravankara Pro BSE | NSE 30/05/12 Are Mutual Funds betting on Puravankara Pro?

Bangalore-based real estate firm Puravankara Projects has drawn up a 3-pronged strategy to accelerate growth in FY13. CNBC-TV18's Vineetha Athrey reports that the company is banking on entering an untapped segment.

For Puravankara Projects, FY13 promises to be a busy year especially as the company gets going on a slew of new launches.

Under the Purvankara brand, it plans to launch new projects spanning 6.97 million square feet. These will comprise 5 projects in the luxury residential segment.

Under its affordable housing brand, provident, properties spanning 11.97 million square feet will come under development. These include four projects in Bangalore, Coimbatore, Chennai and Mangalore, valued at between Rs 4,000 and 5,000 crore.

Puravankara says demand will not be a problem.

Jackbastian Nazareth, the CEO of Puravankara Projects said. "If you see we have 27 million square feet under construction of which we'll be moving to a phase where we will be delivering 6 million square feet Y-o-Y. That'll be one of the largest in the country. That gives us the confidence that as we start building and selling well, we'll be able to execute at the same speed."

The real estate major is also banking on entering a new segment to boost growth, the commercial segment. Three commercial projects are already underway, which the company plans to sell for Rs 200-400 crore. These funds will be used to retire a portion of its debt. Five new launches in this space over the next three years are also on the cards.

Nazareth said the company is currently doing 1 million square feet and they are definitely looking at increasing it. "In the geographies where we have land there's a need for commercial space. We are also looking at retail closely."

And of course, there is a third part to this growth strategy.

Given high raw material costs, Puravankara has already hiked prices by 15% across the board over the last one year. These costs are not coming down. So it will have to hike prices to keep margin-pressure at bay and stay on the growth path.