Mahindra Gesco's operational approval only for IT SEZ

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Mahindra Gesco has announced its first quarter results. The company has posted standalone net profit at Rs 12.20 crore as against Rs 3.38 crore. Standalone net sales stood at Rs 34.84 crore versus Rs 34.28 crore.

Arun Nanda , Vice Chaiman, Mahindra Gesco said that they have got approvals for three new projects. Sale of Knight Frank shares got them a Rs 6 crore profit.

Q1 numbers don't include Mahindra World City revenues. The company has also received an operational approval for IT SEZ . Though, the approval for biotech SEZ is still pending.

The company's Jaipur project first phase has been totaly sold out. They have acquired 1,000 acres and will acquire 2,000 more acres this month.

Excerpts from CNBC-TV18's exclusive interview with Arun Nanda:

Q: We have your profits numbers which has come in at about 12.2 crore versus the figure of 3.5 crore. Can you tell us where this bump up has come, on a year on year basis?

A: The bump up has come from 3-4 places. One is that the interest cost is substantially down, second the income from commercial space is up and we have got some sell of shares of Knight Frank which we had sold, there is a profit coming out of that.

But by and large, I think the year looks good for us. We have got some of our approvals come through. We were stuck, there have been lot of issues on getting approvals both in Mumbai and Delhi. We have got three of our projects cleared and launched. One has been launched in the previous quarter, two will be launched in the current quarter and I think we should launch two more projects in the subsequent quarters. So I think you are seeing a little bit of affect of that.

Q: Can you tell us specifically as to how the interest cost has gone down by and how much have you registered on account of sell of commercial properties and how much the stake sell of Knight Frank hares has accounted for in the bottomline individually?

A: The interest has accounted for about - it was 143 lakh the previous year, it is down to zero, so that has come from there. There is a 6 crore profits from the sell of Knight Frank shares, rest is all operating income. 

Q: Just a quick word on World City and the SEZ plans you had, in regards to that could you tell us which phase in that project in?

A: Those numbers are not reflected here because this is MGDL standalone. The Mahindra World City, Jaipur, we have got the 1000 acres; in this month itself we should get the balance 2000 acres. The demand is looking particularly good, as you know Infosys , Wipro we had signed up at the launched, then we have got Nagarro and we have got two more clients which are now doing due diligence. There is also demand from what we called the handicraft space but it is not traditional handicraft. These are exports of Indian classical goods. Once we get this land at the end of the month, we will start marketing in that area because till now we have only got an approval for the IT SEZ. While an in principle approval is for all the SEZs, the operational approval is only for IT. Once we get the plot of land, the approval will come automatically.

I think the real story of MGDL will come out once the residential property at Chennai starts selling which should happen at the end of this year.

Q: Just one clarification, so what you are saying is you have already acquired 1000 acres of land and the remaining 2000 acres will come to you during the course of this current month, is that correct?

A: That's right.

Q: Can you give us a sense of how many phases this entire project will be developed over and the timeframe and the total investment that one project of World City will entail?

A: It will be done in three phases.

In the first phase, we have already launched 188 acres, which is totally sold out.

In the second phase, we are taking the IT from 188 acres to 600 acres and we are launching apparel and handicrafts, which will be about 200 acres each.

In the third phase, we are getting into logistics and light engineering.

The fourth phase is where the social infrastructure will come. Other than the social infrastructure, the investment is in the region of about 1000 crore.

Q: What about the biotech SEZ that you had around the Thane area, is that up and running?

A: That we have to go back to the government for approval because the land was originally in the name of Mahindra & Mahindra and the application was made by Mahindra Gesco . There were some issues in transfer of land. So we now have got a permission to do it on a joint development basis which approval came through last month. We should start marketing that from next month; the design work is going on.

Q: As things stand right now, how many SEZs is you awaiting clearance for from the centre?

A: We have in principle approval for all and we have the operational approval for the IT SEZ in Jaipur. We have an in principle approval for Pune SEZ and we have a final approval for the Thane SEZ. Chennai, we have the final approval and so we will now go into the second phase.

Q: Could you confirm or deny for us whether M&M has actually expressed interest in looking at either Jaguar or Land Rover at this point of time?

A: I think my Vice Chairman told you  - no comments, so I don't think I can make any comment on that.