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Letter from the Managing Director
The year gone by saw the industry grappling with challenges post demonetization and introduction of key regulatory changes i.e. RERA and GST amidst continued cyclical slow down. We remain resilient and believe that radical changes like RERA and GST will enhance transparency, level the sectoral playing field and favour the serious long term players.
The government in the past has increased focus on the Real Estate sector by introducing tax breaks, interest subventions and impetus on infrastructure including affordable housing which augurs well for the sector.
Improvement was seen in area booked on a quarter on quarter basis. The area booked was 1.05 Lakhs sq.ft in Q4 FY17 while in Q4 of FY 18 we booked 2.2 lac sq ft. The yearly area booked at 6.93 lac sq ft was in line with last year.
On the execution front, we clocked an EAC [Equivalent Area Constructed] of 8.16 Lakhs sq.ft [AHL: 6.39 Lakhs sq.ft and Partnerships: 1.77 Lakhs sq.ft]. The reduction in area constructed is in line with our commitment of on time delivery and will also help us reserve cash for new land procurement. We delivered 12.69 lakh square feet [AHL: 8.91 lakh square feet and Partnerships: 3.78 Lakhs sq.ft], 526 units resulting in a top line of Rs,334.92 Crore and a bottom line of Rs,38.23 Crore.
Cash Flow improved vis a vis last year but continued to be under pressure due to lower collections on account of lower area booked.
In term of individual markets, we saw gradual improvement. Increasing focus on Bhiwadi by launching ''Kid Centric Homes’, we saw improved traction in the market. We commenced deliveries in Ashiana Shubham, Chennai and launched Phase II also. We continue to consider Chennai as a promising market for future. Apart from Chennai, our other focus markets will be Jaipur, Pune, Bhiwadi and Gurgaon.
After a subdued year in terms of launches, we have several new project launches in the forthcoming year in Jaipur, Jamshedpur and Pune.
W I .
Our company and International Finance Corporation [IFC], a part of World Bank Group have entered into an agreement to co-invest in upcoming affordable and middle income residential projects including senior living projects. The agreement envisages a total investment of Rs,150 crores on a project to project basis by IFC, representing 40% of the capital required by a project. The remaining 60% of the capital required, i.e. Rs,225 crores, will be contributed by us. IFC will primarily invest in non-convertible debentures for identified projects with returns linked to the specific project.
We also raised Rs, 100 Crore debt from ICICI Prudential in April’18 to free up equity capital blocked in built unsold inventory.
The long term outlook of the industry remains positive. Rapid urbanization, increasing migration and improved affordability supported by government focus will drive the sector.
We care about giving back to the society, and remain committed to skill training, facilities and infrastructure up gradation of schools, computer based learning and environment sustainability as part of our CSR activities.
We continue to add value in the Senior Living space. Track 2 Realty rated us as the best brand in the Senior Living category at a national level.
I am deeply grateful to the team at Ashiana, for their tireless efforts and sharing the vision of the organization. Thanks to our customers, Business Partners and Joint Venture Partners for their support.
Along with my entire Executive Team, I would like to thank all the Board members for their valuable support, insights and guidance. And on behalf of all employees at Ashiana and our esteemed customers, I would also like to express my gratitude for your continued patronage. I look forward to meeting you at the Annual shareholders’ meeting.
With best wishes
Vishal Gupta (Managing Director]