Rustomjee to focus on Rs 1-3 crore ticket size for residential launches, says MD Boman Irani

Rustomjee has three launches planned during the ongoing quarter.

Real estate developer Rustomjee expects the majority of its launches in the residential segment for FY25 to be in the "mid-mass" segment, where homes are priced between Rs 1 crore to Rs 3 crore, its chairman and managing director Boman Irani told Moneycontrol in an interaction.

Irani was speaking after the company, which trades as Keystone Realtors Ltd, announced its Q1 FY25 financial results.

"Almost 75 percent of our supply will come from the mid-mass, and aspirational segment (Rs 3-7 crore), and all of our business development activity has also been in that area...If you look at our launches in this quarter, the Thane project falls in the mid-mass segment, and so does our plotted development (in Kasara)," Irani said.

During the ongoing quarter, the company plans to launch three projects, one more than it had guided. These include group housing projects in Thane, which can fetch revenues of around Rs 1,700 crore, as well as a plotted development in Kasara, with a revenue potential of around Rs 300 crore. The Kasara plotted development has a land parcel of around 88 acres in the first phase, with 60 more acres in later phases.

“We will definitely be continuing to take advantage of the premium segment sales, and at the same point of time, meet the needs of the Mumbai metropolitan region purchaser and give them the advantage of owning a home in the mid-mass and aspirational segments," Irani said.

Q1 results

Rustomjee reported relatively tepid results in the April-June quarter, with the consolidated net profit at Rs 25.53 crore, lower than the Rs 46.50 crore reported in the year-ago period, driven by a sharp increase in construction costs and overall expenses year-on-year. The Mumbai-based company reported collections of Rs 485 crore for the quarter, slightly lower year-on-year, and around 28 percent lower over the quarter ended March 31. Despite weakness on some counts, Irani was encouraged by the results, particularly pre-sales during the quarter.

"Our pre-sales have been Rs 611 crore, which is 22 percent higher over the same last year. We launched two projects of around Rs 2,000 crore (revenue potential) during the quarter, in Matunga and Versova...We had given a guidance of Rs 4,000 crore in business development, of which Rs 1,000 crore was already done in the first quarter, and we have zero net debt. I am pretty positive about our FY25 growth," he said.

New projects

Irani added that redevelopment projects will continue to be a major focus for the company, with both launches in Q1 being redevelopment projects. He said that the company's focus markets for redevelopment are in the western suburbs, the island city, and a project in the pipeline located in the eastern suburbs, expected to be launched later this year or early next year.

He added that the company is also looking forward to tenders by the state government for redevelopment projects, especially for layouts under the Maharashtra Housing and Area Development Authority (MHADA).

While all of Rustomjee's projects are currently in the Mumbai metropolitan region, Irani said the company is open to exploring other markets, although not in the near term.

"We want to continue being in the Mumbai metropolitan region all the time. Having said that, our eyes are always open for opportunities in other parts, and to begin with, we could look at Pune as a market, though not in the immediate future. I don't think anything in this financial year will be tied up for markets other than MMR," Irani said.