Slow demand in NCR; UP major contributor: Ansal Properties

Ansal Properties and Infrastructure’s consolidated revenues fell by 19 percent to Rs 226 crore this quarter. Speaking to CNBC-TV18, Sunil Gupta, CFO at Ansal Properties says the demand for infra projects is slowing in National Capital Region (NCR) which is pressurising the company’s earnings.“There are some external reasons like National Green Tribunal, there is no notification of that; flats are ready, but there is no registry and customer are not willing to take the possession,” he adds.However, majority portion of its result continues to come from Uttar Pradesh, particulary Lucknow projects, he says.Below is the transcript of Sunil Gupta’s interview with Ekta Batra and Anuj Singhal on CNBC-TV18.Ekta: It seems as though it was quite a dismal quarter. Your revenue was down 19 percent, can you just tell us what the recognition was like and what resulted in this 19 percent drop?A: As you correctly said, revenue is fall by 19 percent, but we are still able to maintain our operational margins. If you see that at container freight station (CFS) level, it increased by three percent, that is 32-35 percent. This is due to operational efficiency.Ekta: So, can you tell us what the kind of recognition was? How much did you sell? What was your recognition in terms of income which did not come through this quarter and which could possibly come through in the coming quarters?A: In this quarter, my consolidated revenue is Rs 226 crore as you said and earnings before interest, taxes, depreciation and amortization (EBITDA) is Rs 33 crore. But EBITDA margin improved from 12 percent to 15 percent. In this financial year, we also recognised income from non-core business. There is a inflow of around Rs 32 crore. Anuj: Since you are present mainly in National Capital Region (NCR), is it safe to assume that we are seeing a big crisis as far as the property sales are concerned in NCR and would that mean significant pressure on earnings going forward as well?A: There is a pressure on earnings also, as you correctly said, that is why our revenue is falling. But we thank the customer who have good faith and trust in Ansal brand. This is because there are some external reasons also like National Green Tribunal, there is no notification of that. Flats are ready, but there is no registry and customer are not willing to take the possession. But apart from this, major portion from Uttar Pradesh, particular Lucknow project also, that is a great contributor in case of our results.