“The tough gets going”
2017-18 was a landmark year for Indian Real Estate Industry succeeding a highly reform oriented FY2016-17 where a slew of reforms such as GST and RERA impacting the industry were introduced. Government''s renewed emphasis on achieving the ambitious target of ''Housing for all by 2022'', unveiled through initiatives in the 2017 Budget, has placed Affordable Housing in the spotlight once again in FY2017-18.
ASL is in a sweet spot due to this strong focus on affordable housing both at the central and state government levels. Although reforms brought along lots of challenges, ASL has successfully risen to the occasion on back of our adherence to the best corporate practices in the industry. We are delighted by the response garnered by our projects and we envisage this to continue over the years.
Our performance for the financial year 2017-18 reflects the inherent strength as well as our commitment towards the business as our sector navigated through a challenging year with the introduction of path breaking reforms. The company reported revenues of INR1,893mn for FY18 as compared to INR1,862mn in FY17. EBITDA was reported at INR 385 mn translating into a margin of 20 percent and Net Profit stood at INR 126 mn. Higher sales of low-ticket size projects combined with increased expenditure for new projects dragged margins down. The adverse impact of demonetization on delayed bookings and sluggish cash flows in FY17 left its imprint on FY18 financials.
Our company had witnessed a slow-down in sales in FY17 which affected the revenues for FY18. This year we sold 931 units across Mumbai MMR and Jodhpur, an increase of 77 pet with an average realization of INR 4070 per sq. ft i.e. a 7 percent improvement over the previous year. 717 units were sold in MMR/Navi Mumbai and 214 units were sold in Jodhpur. ASL has been adhering to “RERA” provisions since two decades with unswerving dedication to disciplined utilization of funds for construction resulting in timely completion of projects. We are happy to share in FY18, we delivered 863 completed homes i.e. 754,029sq.ft to our customers; 698 units /511,800 sq. ft in MMR/ Navi Mumbai and 165 units / 242,529 sq.ft in Jodhpur. Occupation Certificates have been received for Phase 1 of two projects i.e. Arihant Amisha and Arihant Arshiya. Although, FY17-18 was not a very supportive year for real estate sales, we successfully organized 3 mega sales events in MMR/Navi Mumbai and Jodhpur with overwhelming response from the buyers.
We are pleased to share, while the real estate sector faced paucity of funds for a plethora of reasons, ASL managed to reduce its secured debt from INR 1.27 bn ending FY17 to INR 0.96 bn ending FY18 without raising any new facility. The average cost of borrowings was brought down by 100 bps.
In FY18, ASL launched 1293 units, 1,279,051 sq. ft across MMR/Navi Mumbai and Jodhpur as follows :
Arihant Arshiya Phase 3 - 67 units launched in April 2017
Arihant Anchal Phase 2 - 252 units launched in May 2017
Arihant Aspire - 622 units launched in November 2017
Arihant Anaika Phase 2 - 267 units launched in January 2018
Arihant Anmol Phase 3 - 85 units launched in March 2018
We have now created a strong pipeline for FY19. As mentioned earlier, the sales of 931 units we achieved in FY18, the revenues for which, would be recognized over the next few quarters. We continue to strengthen our land bank through prudent acquisition of new land parcels and projects in MMR region. We are proud to support our growth with an steadfast objective of ’Customer First’ through our policy of ’No Transfer charges’ and ’No Lock-in period’.
We believe, affordable housing sells well if Quality and Price appeals to the end-user we are confident of converting the imminent opportunities into success stories for ASL. To drive our future growth and to enable us to achieve our vision, we are expanding our talent pool, including the senior management and KMPs.
We continue to instill faith under the philosophy “EK SASTA GHAR, KHARAB GHAR NAHI HO SAKTA” and our efforts continue to be recognized through the various recognitions and awards.
The MCHI CREDAI in their prestigious GOLDEN PILLAR award 2018 has honored Arihant Superstructures Ltd (ASL) with Affordable Housing Project of the Year award.
The Economic Times (ET) Realty Convention 2018 has recognized Arihant Superstructures Ltd (ASL) for excellent quality in low cost affordable housing.
ASL was also the recipient of “Excellence in Quality Construction”, 2018 award by Dainik Bhaskar (94.3 MY FM)
ASL has Signed a MoU to facilitate Affordable Housing in partnership with private sector in “Navi Mumbai Airport Influence Notified Area”
ASL sets Quality Check lab at Jodhpur, a first of its kinds by a developer for the city of Jodhpur.
Development of Rental Housing for MMRDA Rental Housing Scheme at Arihant Clan Aalishan and at Arihant Aspire
Budget 2018 & Housing policy
India''s 2018 Budget witnessed a continual in the government''s focus and commitment towards affordable housing. 2017 Union budget granted Infrastructure status to the Affordable Housing'' Industry which is a welcome step as it will allow our industry to access capital at competitive rates in turn boosting developers'' interest. Many complementary steps such as increasing the timeline for project completion from 3 to 5 years and interest subvention for the buyers as well as GST rationalization from 12 percent to 8 percent for affordable and low-cost housing will improve consumer sentiments as well as provide added impetus to the developers. Government''s new policy on public-private partnerships in affordable housing sector introduced in November 2017, too will add renewed vigor at the supply end. These steps will strengthen and invigorate our Prime Minister''s vision of ''Housing for All by 2022''.
Although, as an industry player, we are buoyed by the government''s thrust on affordable housing, we hope to witness many industry friendly measures such as relaxation in norms for acquiring land as well as for development, ease in project approvals etc. which would only propel ''Affordable Housing1 sector to meet our Prime Minister''s vision at the earliest.ASL welcomes the government initiatives and is confident of gaining from opportunities provided through these initiatives.
Theme - Navi Mumbai: A Destination for The Future
Our planet is changing, it is becoming ''Urban''. Ever since India has been recognised globally for its economic growth, the pressure faced by Indian mega cities has only increased driven by urbanization and rising aspirations of the youth. Mega city of Mumbai is choking with limited infrastructure and a burgeoning population. Quantum of people occupying space per square km in Mumbai has only increased over the years, doubling in 38 years from 15247 to 33112 in 2018. It is expected to increase further to 45315 by 2035.
With finite space available in Mumbai due to its geography and slums, the middle-class citizens in search of affordable housing have only one choice to make i.e. satellite cities of Mumbai. As satellite towns are developed by employing superior urban planning tools, these cities offer better quality of life through self-contained townships. In 1971, Navi Mumbai (then New Bombay) was built as a planned decentralization to the Megapolis of Mumbai.
Today, Navi Mumbai is one of the fastest growing satellite cities and has become the second largest settlement city within Mumbai Metropolitan Region (MMR) in terms of population share (~10 percent of MMR''s population) yet with a population density (~6300/sq.km) much lower than other areas within MMR and the megacity of Mumbai providing better ''Quality of Life'' for its inhabitants. Well established civic services such as water, sanitation, flood management, healthcare, education along with economic opportunities and social activities provide a strong impetus for increased residential activities. Improved connectivity through well laid out road and rail network and many upcoming connectivity projects such as:
-Metro network from CBD Belapur via Kharghar to Pendhar/Taloja,
-Mumbai Trans-harbour Link (MTHL)between Sewri-Wadala in Mumbai and Ulwe in Navi Mumbai
-Seawoods-Uran Railway Line
-Navi Mumbai International Airport (NMIA) near Panvel
-Additional metro corridor between Mankhurd and Ghatkopar proposed to go up to Panvel via NMIA
-Dedicated freight corridor (DFC) between Delhi & Mumbai originating from JNPT
-Alibaug-Virar Multi Modal Corridor expected to carry all the traffic from JNPT towards Navi Mumbai and Thane outside the city will only improve connectivity going ahead.
All these factors have led to a boom in property purchases and investment in Navi Mumbai and enhanced the stature of Navi Mumbai as a City of Serenity amongst the Mad Rush consequently Navi Mumbai stands 2nd on an all India basis in the First natural survey of the most liveable cities in India. ASL being a leading player in the Navi Mumbai region is bound to gain immensely from this.
ASL has been prudent to identify opportunities and successfully wade through the waters of uncertainty currently faced by the real estate sector; propelling the organization on a path of steady and sustained success. Our dedicated and passionate workforce is pushing us further on the path of excellence despite the roadblocks.
It would be apt to say when the going gets tough, the tough gets going.
We express our gratitude to all our stakeholders'' viz. Board members, customers, employees, vendors, contractors, bankers & shareholders for their strong belief and confidence towards our organization. We look forward to their sustained support as we embark upon achieving many milestones in the future.