Parsvnath to launch 9 projects by mid-Sep

Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » ALSO READ See latest News about Parsvnath See previous management interviews See what other Experts & Brokerages are saying about Parsvnath Parsvnath BSE | NSE 28/05/12 Are Mutual Funds betting on Parsvnath?

Parsvnath Developers ' Q1 consolidated net profit has declined and is at Rs 73.9 crore from Rs 102.2 crore.

 

Pradeep Jain , Chairman, Parsvnath Developers said currently 114 projects are on and about 72 million square feet of area is under construction.

 

 "I don't foresee any kind of a slowdown. In the next 30-45 days, we are on the way to start about 8-9 more projects."

 

Jain does not foresee any kind of liquidity or demand issues. "The end-user demand keeps increasing on a day-to-day basis. We found strong demand by end users in this quarter as compared to the last quarter."

 

Jain said that the Nano City Project 's first phase will start soon and will be completed in the next 3-4 years. "The total project timeline is about 10-11 years and the total investment for the same is to the tune of about Rs 50,000 crore."

 

Excerpts from CNBC-TV18's exclusive interview with Pradeep Jain:

 

Q: We have seen your bottomline coming a bit lower this time. Your exposure is mainly to tier II and tier III cities up north. Have you seen any pricing pressures then and any slowdown in volume growth?

 

A: No, I don't foresee any pricing pressure on realty. The media keeps talking about the price pressure. But I have not seen any price pressure particularly in tier II and tier III cities and in selective areas of NCR as well. The reason for the decline is because of the increase in interest cost, input cost and administrative costs, because of which the bottomline declined. 

 

Q: What about the sales decline from Rs 403 crore to Rs 372 crore? What explains that performance?

 

A: If you look at the standalone, we have increased from Rs 357 crore to Rs 372 crore. In consolidated also, there is a decline. There was one subsidiary company in the Q1 of last year in which we booked revenue.

 

After that, in the SPV companies, the revenues are not coming regularly. That is why you can see a decline in the topline. But in actual sense, the topline has increased.

Q: Interest costs have been a concern. Your net debt to EBITDA ratio and your balance sheet signals a ratio of about 4:4:3. Are you looking at retiring some of this debt? Are you looking at any other further fund infusion via the PE route? 

A: We would definitely like to reduce the debt of the company if the business permits us. We are looking at some kind of an FDI tie-up. Recently, we did have a tie-up in the Kurla Project. We are in talks with two-three more Foreign Direct Investment (FDI) partners related to some other housing and commercial projects in the NCR and elsewhere. 

Q: Could you update us on the Nano City Project? What is the kind of fund infusion that you are looking at and the timeline to the project and when it starts adding to your revenues? 

A: The Nano City is a great project. It is about 11,138 acre of land near Panchkula, already notified by the State of Haryana. In this project, very recently we bought 38% equity for Rs 41.5 crore. The structure is now 38% with us, 52% with Bhatia and Associates, and 10% with the State Government.

 

The land acquisition has already started and the land is already notified by the Government of Haryana.

 

We will start the first phase very soon and the first phase will be completed in the next 3-4 years. The total project timeline is about 10-11 years. The total investment in the project is to the tune of about Rs 50,000 crore.

 

The best part about this project is that there is no liability on account of the EDC/IDC (External/Internal Development Charges) or any other infrastructure and land conversion cost to be paid to the Government of Haryana.

 

Q: What are the correct numbers of projects or the amount of area you have under development? Is there any significant slowdown you are seeing there?

 

A: At this point, about 114 projects are on. About 72 million square feet of area is under construction. I don't foresee any kind of a slowdown. In the next 30-45 days, we are on the way to start about 8-9 more projects.

 

I don't foresee any kind of liquidity issue or demand issues. The end-user demand keeps increasing on a day-to-day basis. We found strong demand by end users in this quarter as compared to the last quarter.