Anant Raj Inds to reduce debt by Rs 300cr in FY14

In an interview to CNBC-TV, Amit Sarin, CEO & Director of Anant Raj Industries he said that the company has managed to ensure that its debt reduction plan remains on track. At present Anant Raj Industries debt stands between Rs 1,150 crore and Rs 1,200 crore and they are planning to repay almost Rs 300 crore by Diwali this year.

Also read: Real estate investment - Don't ignore the data Amit Sarin also informed that, “two years back, Anant Raj spent about Rs 860 crore on land acquisition and now thereafter projects have been launched on those. The golf course project is the largest of them all.” Below is the edited transcript of his interview to CNBC-TV18 Q: What is happening with your debt repayment obligations that you have lined up for the second half of FY13? Where does the debt currently stand at and how do you plan to reduce it in the next couple of quarters? A: Debt is now totally under constrained of the company. Peak debt of the company was 750 and we have repaid some of that. Now we are between 1,150 and 1,200. By Diwali this year, 2013 we would be repaying almost Rs 300 crore out of this. The debt plan is totally on track and the net asset value of the company is about Rs 4,000 crore. So, we are very comfortable on the debt situation. There is no problem there. Q: Your earnings were very strong last quarter. What are the bookings that one can expect from the Golf Course Road project that a lot of investors believe would be a key revenue driver. What kind of revenues can we expect? A: At Anant Raj, we came back into residential in a big way about two years back. Also two years back Anant Raj spent about Rs 860 crore on land acquisition. Now those projects are launched. The golf course project is the largest one out of all the four. So far for this quarter too we have not booked any revenue from the golf course road project. Golf course project will now start contributing to the revenue from quarter three. It is a very big project. It is almost USD 1 billion project alone. The other ones put together are about Rs 1,000 crore to 1,200 crore projects. This would start contributing from this quarter and then sales will go up from there. Q: You already know how the third quarter has panned out. So what can we expect in terms of revenues in the second half? A: It is totally on track. The sales for the golf course road are pretty good at Anant Raj.  Most of the land was bought two years back when the land prices were very low. So, we are in a position to pass on the benefit of that low ground price to the customers’ also. That makes us very competitive and the sales numbers becomes very decent as well. _PAGEBREAK_ Q: Can you tell us something in terms of thousand square feet? In terms of square feet or volumes how would second half pan out not just in Golf Course, but all told? A: All the four projects put together, two of them are really contributing in a very good way to the company. The Sector 91 project Gurgaon and the Neemrana project where we are doing about 2,800 flats. In January we will start giving possession also in those flats. So, numbers will only go up from here. We saw a decent jump in profits. Profits every quarter will now keep on increasing. The revenues are now getting recognized and we are able to book sales in the quarter also. Q: What about rental income from your commercial projects? What are you seeing by way of rental income in the Kirti Nagar Mall? How much traction do you hope to see in the next couple of quarters? A: Retail now is decent. We just have one mall in Kirti Nagar which is now about 85 percent occupied.  Otherwise as a whole it is not very good as of now. We have about 5 million square feet which is now ready. Out of this 2.5 million is already leased out. The balance is being leased out and we have another 2 million in the pipeline. Till we lease out the 7 million we are not going to commercial for a while.  We will focus more on residential. We have a huge pipeline as far as residential goes. Q: What kind of volume target do you have for the end of FY13? Can you guide us on what you are looking at in the first half of FY14 as well? A: All the revenues which are being booked by the company till the second quarter are mainly from the Manesar project. It is sector M-1A, in the 91 project and Neemrana. This quarter we will have 63A. This will start contributing and the sales amount in 63A is very big. So, the quarters will only be improving from here now. Q: Would a percentage growth be Rs 130 crore that you posted in the second quarter? Should we expect Rs 200 crore as a pro rata every quarter? Something by way of a ballpark figure that you can give us? A: We saw a 30 percent growth in revenue in Quarter 2 compared to Quarter 1. I guess this growth cycle will continue. The 63A project and the other ones put together are almost a top-line of about Rs 6,000 crore. All these projects are now on the way. Their execution is going on full swing. The sell is happening. So, now the revenue figures would be much better and would be improving every quarter now. Q: Will the margins be above 50 percent? A: Hopefully yes. Not all of them, but some. Q: When is the next phase of launch of Anant Raj Estate, the next of the Gurgaon Township? A: Right now the first phase was where we launched plots. Now we are all set to do the villas in two different sizes. This should be happening sometime early March this year itself.