Expect strong growth in sales for FY16: Sunteck

Below is the transcript of Kamal Khetan’s interview with Sumaira Abidi and Nigel D’souza on CNBC-TV18.

Nigel: The numbers look very weak. On the top-line itself, there is a big contraction. Could you tell us, is there some kind of revenue recognition, is there project completion that is playing out over here that these numbers are looking so terrible particularly on the top-line itself?

A: We follow project completion method where we were supposed to recognise the revenue for Signia Isles. We missed it because there was a delay of getting some approvals.

And so, instead of booking it this year, we had to take it forward for the next year. So, because of that, there is a drop on the revenue and the profit after tax (PAT) but overall operations, have seen a growth.

The sales in Q4 2015, is Rs 164 crore in comparison with the corresponding quarter of the last fiscal which is Rs 99 crore. So, there is an increase of 66 percent in the sales.

If you see the collections, it is Rs 173 crore compared to Rs 110 crore for corresponding quarter last fiscal.

So, that is 58 percent jump. And year-on-year, the sales has been Rs 511 crore versus Rs 399 crore last fiscal. So, there is a jump of 28 percent and collections again Rs 540 crore versus Rs 418 crore compared to last fiscal. That is jump of 29 percent.

Sumaira: So this Rs 164 crore that you mentioned is the pre sales in Q4. Can you also tell us what will be the unrecognised pre sales in the first half of FY16 from these projects?

A: Because we follow project completion method, the unrecognised sale is close to Rs 2,200 crore. And the Isles number, eventually have not come in the P&L, but there is an unrecognised sales, which as a revenue, is not taking isles into consideration in P&L and there is an unrecognised profit which is lying in the balance sheet.

Nigel: Could you give us your cash flows for the last quarter or so? And also could you tell us the status of these Bandra-Kurla Complex (BKC) projects? You are mentioning about Isles, etc. So, could you tell us what is the status of these various BKC projects, what is the revenue, when exactly will it come in your P&L account?

A: There are three BKC projects. Island is fully complete and operational, in fact four to five people have already completed their interiors and at least 10-12 people will start coming and staying in this coming quarter. It will be up and running by December FY15.

And if you take Isles into consideration, it will definitely be booked in FY16, and because of that, if you see the numbers, we can expect the sales recognition to cross the revenue almost by Rs 972 crore versus Rs 317 crore this year. And by the pattern, it will grow by at least 35-40 percent.

Nigel: Could you quickly tell us what exactly are the realisations for the last quarter and also give us a quick status update on your debt equity ratio currently.

A: The realisation is Rs 24,000 / square feet. Average realisation of our sales which is highest in the industry for the last quarter and for the total financial year FY15 is the highest in the industry. And for the debt equity ratio is only like 0.41 percent of the equity which is Rs 614 crore and the cash and the bank balance is Rs 106 crore out of it. We have 24 projects, out of which 18 projects are debt free.