Pune mall will be fully occupied by end of FY17: Nitesh Estates

Nitesh Estates has 18 projects in its portfolio, out of which 4 are at the handover stage, 8 are in construction and six are in the approval stage, says Ashwini Kumar, ED and COO of the company.In an interview to CNBC-TV18, he spoke about the results and his outlook for the company. He expects to launch all the six projects -- that are in the approval stage -- in current year FY17."We expect that by end of this year (FY17), the Pune mall will get fully occupied," he said.Below is the verbatim transcript of Ashwini Kumar's interview to Sonia Shenoy and Anuj Singhal on CNBC-TV18.Sonia: Can you start by telling us what was the contribution from two of your luxury projects, Nitesh Park Avenue and Nitesh Napa Valley in this quarter's numbers?A: The bulk of the increase which happened in this current quarter was on account of the fact that there were three projects, which got added in terms of revenue recognition -- one of them is Park Avenue so that has started recognizing in the last quarter. Then we had yet another projects, one is Rio which is a plotted development project which has also started getting recognized. So these are the ones which have contributed significantly.To give a background to the numbers, in our portfolio we have total 18 projects and out of the 18 projects, four are in the handover stage, 8 are in construction and six are right now in the approval stage. So out of the 8 projects which are under construction, the total revenue recognition which has happened is only to the extent of Rs 320 crore. That leaves us with another Rs 1,200 crore worth of revenue, which has to be recognized.In addition to that, the six projects that I was talking about, which have been under approval for quite sometime, we expect that during the current year itself we will be able to launch all these six projects. This has a total potential in terms of revenue for us to the extent of Rs 1,300 crore. So, the first under construction bucket of Rs 1,200 crore will flow through the profit and loss (P&L) over the course of the next three years and the next Rs 1,300 crore will go through the P&L through another five years. So this is what is going to be giving us the growth in the coming quarters.Of course, in addition to that as we go ahead, there are newer projects, which will get added.Anuj: Of that Rs 1,300 crore you spoke about, how much would be in FY17 itself and also in terms of your borromline, how much of that would translate into your EPS numbers?A: In terms of the revenue recognition, on an average Q1 has been positive. It has been higher on account of the fact that three of the projects got under revenue recognition. For the balance of the quarters also, the revenue levels will be around the same kind of a number.As far as the margins are concerned, we have an EBITDA margin of 25 percent and that finally translates to 9 percent profit before tax (PBT). We do see an impact on that on account of two other projects, one is the Pune mall, which gets us an impact since it is not yet fully occupied, we expect that by end of this year, it will get fully occupied. Right now, the occupancy level is only 38 percent. As we get into the next year, we will have got to a steady state kind of a number on the Pune mall.On consolidation, hotels -- there are quite a few positives which have happened. Positives in terms of the occupancy rates have gone up to around 65 percent. We have also been able to reduce the interest burden there but still the impact of that on our P&L comes to about Rs 4.4 crore per quarter. So these are the two things, which are impacting us.Sonia: Wanted the average realisations that you have generated in this quarter and how does it compare to last quarter?A: This quarter the average realisation is a little higher. That is on account of the fact that the sales on Napa Valley had increased and also the sales of a plotted development project that was there in the previous quarter but I do not had the exact number in terms of realisation right now in my mind.