See increase in revenues from B,C cities: Omaxe

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Omaxe , real estate development and construction company with operations in 30 cities and 9 states in India, has listed with 29% premium at Rs 400 on NSE as against its issue price of Rs 310 per share.

Rohtas Goel , CMD, Omaxe  said that he sees FY08 revenues at Rs 3,000 crore and PAT at Rs 600 crore. He sees FY08 EPS at Rs 37-38.

FY08 might see a slight improvement in contribution of B and C cities, said the CMD. He also expects an improvement in the rates in B and C cities. He doesn't expect much change in prices of real estate .

Excerpts from CNBC-TV18's exclusive interview with Rohtas Goel:

Q: What will you do at the end of this year? Our expectations are that you will do about Rs 2,500 crore in sales and maybe more than Rs 600 crore in profits. Do you think you will be able to achieve that?

A: Topline will be around Rs 3,000 crore and will be more than what you are expecting, while bottomline will be around Rs 600 crore.

Q: What about next year, given the kind of plans and the new projects that are coming to market in FY09? What kind of sales and profits can one look forward to?

A: I will not be able to tell you about FY09, because it is too far from now. I can give you the number of FY08.

Q: Even if you do not give us estimate in terms of FY09, can you give us a sense of what percentage you hope to grow at and how much of your projects will get booked in FY08 and FY09?

A: I have already told you about FY08; I haven't calculated the numbers for FY09, but our EPS for FY08 will be around Rs 37-38.

Q: What percentage of your revenues over the next two years will come from B & C cities - the non-NCR region essentially?

A: The revenues from NCR region for FY07 was 75% and from non-NCR it was 25%. The ratio will decrease in time to come, because we are spreading out of NCR. We may spread in south India; so the revenues from B & C cities will increase.

Q: What is your expectation of real estate prices in B & C cities? Do you expect them to be soft in the future because prices have corrected a bit outside the NCR region?

A: I do not see any correction in B & C cities, because many B & C cities in India have not been explored by many builders. There are lots of potentials in B & C cities. There are many cities with a population of more than 10 lakh and in such cities the rate will not go down; rather, I see little upside in B & C cities.

Q: How much of an appreciation do you see in prices? How will that impact your margins?

A: I do not foresee any major price rise in real estate, neither any major dip in prices. The prices will sustain and a bit of rise will be there but not very substantial.

Q: Can you explain the tax benefit that you get, because you focus on middle-income housing?

A: The projects and the drawings, which have been sanctioned before March 2007 will get the tax benefit under 80IB, whether this can be completed in next four years time. We have many projects, which we have already sanctioned and get the drawing sanctioned. So, if we complete those projects in next four years time it will continue to take the tax benefit. After March 2007, no projects will get the benefit under 80IB.