Bengaluru-based listed real estate player Shriram Properties plans to clock Rs 250 crore profit by FY27, up from Rs 75 crore in FY24, the company said on August 21.
"By FY27, the company plans to deliver over 15-16 million sq ft of residential development with an annual sales of Rs 5000 crore," Murali Malayappan, Chairman & Managing Director of Shriram Properties Limited told Moneycontrol.
This will require an investment of about Rs 400-500 crore, sources in the company added. The company is also planning to triple its income to Rs 3000 crore by FY27.
In FY25, the company plans to deliver over 3,500 homes totaling about 3.5 million sq ft, Malayappan added.
Over the next three fiscals, the company is targeting cumulative sales of over 20 million sq ft, predominantly focused on Bengaluru, Chennai and Pune. Kolkata will remain a key contributor.
Currently, SPL has a project pipeline of 42 projects with 42 msf development potential. Of this, 24 msf is ongoing and the remaining 18 msf of development potential vests in future projects. SPL is targeting to double this future project inventory in 18-24 months.
Shifts focus from affordable housing
In a simultaneous move, SPL announced its new target called SPLNxT --- towards accelerating growth, repositioning the brand and enhancing focus on the mid-market segments.
In November 2023, Moneycontrol reported that for all the deliveries in H2FY24, the company is looking at 40 percent to be in the affordable segment (of less than Rs 50 lakh ticket size). However, out of 3.5 million sq ft to be delivered in FY25, about 1 million sq ft will be in the affordable segment. "Though there is booming demand for affordable houses in India, a lack of policies and government incentives continue to be a challenge for the developers," Malayappan said.
This hints at a changing focus of the company's affordable housing segment with a renewed approach to mid-segment housing. SPL said it aims to achieve leadership in this segment over the next decade.
According to a recent report by ANAROCK, the share of sales in affordable housing decreased from 37 percent five years ago to 20 percent in 2023. Several metro cities faced its brunt — with Bengaluru housing sales dipping by 2 percent from the year-ago period following a sharp drop in the affordable housing segment, Moneycontrol reported in April.
The mid-segment housing in cities like Bengaluru and Chennai includes homes with ticket sizes of Rs 50 lakh - 1.1 crore and mid-premium segment housing has a ticket size of 1.5-2.5 crore, SPL pointed out.
Currently, affordable housing in India is defined as a house or flat with a carpet area up to 90 sq m in non-metropolitan cities, and 60 sq m in major cities, valued up to Rs 45 lakh for both.
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