Eye 8-10% higher realisations for this quarter: Puravankara

Puravankara Projects launched its first premium affordable housing project by Provident, one of its group companies in Coimbatore. In an interview on CNBC-TV18, Group CEO Jackbastian Nazareth said that the company has received good response for this project and has sold more than 500 apartments till now, which translates to about 5 lakh sq ft.

He further added that realisations for the company will head higher in the current quarter. "We have launched high-end projects in the two quarters, it will all get done then surely about 8-10 percent higher realizations will come in. We have given a guidance of 4.5 million sq ft for the whole group, and average pricing will be 15 percent higher," he elaborated.

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Below is the verbatim transcript of  Jackbastian Nazareth’s interview on CNBC-TV18

Q: How are the sales panning out for Provident in the last quarter?

A: Sales have been extremely good. In fact in the last quarter we have done more than about 500 apartments. The momentum will continue because for us in Provident we have reached a stage in these project cycles of individual four projects that the construction is going at full speed and I think for a first time home buyer, apart from the price, project being completed on time is an added benefit and hence we are seeing all the advantages there.

Q: You said 500 homes, can you give us the number in terms of million square feet?

A: It would be about 5 lakh sq ft.

Q: Can you tell us the kind of realizations that you are working with and the kind of margins and in turn what you are projecting for FY14?

A: We have given a guidance of 4.5 million sq ft for the whole group. More importantly, our average pricing now is going to be 15 percent higher. For Purvankara Projects last year we did Rs 4,331 on an average realisation and for Provident it was at Rs 2,981.

Q: Any plans of moving out of southern India to maybe the north part or Western India or are you happy with the southern part of India only?

A: We have an advantage of land owners and some of the developers wanting to partner with us in terms of a joint development (JD). We have got the construction part and the value engineering right.

As a company, Provident is just about four years and two months old, sold close to 7,000 apartments and we have handed over about 2,000 apartments and I think that last bit of handing over is much more important. A lot of developers and land owners are wanting to do JDs and as I see, we are at very advance stages in talking to enter into regions like Mumbai, NCR, today Coimbatore and Hyderabad in the Provident model. 

Q: Can you tell us if realizations also improved in the June quarter? And are you expecting a positive uptick in the current quarter? If I remember right, in your last quarter you reported an 8 percent jump in realizations?

A: Yes, realizations will obviously again go up primarily because we have launched high-end projects in the two quarters, it will all get done then surely about 8-10 percent higher realizations will come in.

Q: Your debt equity is slightly problematic compared to your peers in the same space in southern India, yours is 0.83 versus 0.61 for Sobha and 0.52 for Prestige. Even overall debt is quite high about Rs 1,600 crore, any plans to pare that?

A: Post the institutional placement programme (IPP) and the offer-for-sale (OFS), the total proceed both from IPP and OFS would be 107, we used this to bring down our debt and as we speak, debt equity is 0.63.