Prestige Estates Projects Limited (PRESTIGE) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the prestigious Q1FI27 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing 100 on your touch-tone phone. Please note that this conference is being recorded. I now hand over the conference to Mr. Pratish State from Access Capital. Thank you and over to you, sir.

Yeah, thank you, Shruti. Good afternoon, everyone, and thanks for joining the call. From the management of Prestige Estates, we have Mr. Irfan Razak, Chairman and Managing Director, Mr. Zaid Noman, Executive Director, and Mr. Amit Mur, the Chief Financial Officer. I will now hand over the call to the management for their opening remarks. Thank you and over to you.

Good afternoon, everybody. I'll hand over to Zaid to give the opening remarks. We also have Mr. Nayak, our Chief Finance Controller. He's also listening on.

A very good afternoon to everybody, and thank you for joining us today. The first quarter has been a good start for the year with stable operating performance across all our businesses. We continue to execute on our development pipeline, maintain healthy collections, and solve consistent performance across our office, retail, and hospitality portfolios, while laying the groundwork for a much stronger launch calendar over the balance of the year. Our resi business recorded pre-sales of 6,579 crores during the quarter, with sales volumes of 6-odd million square feet across 337 units sold. Customer collections remain robust at 4,802 crores, reflecting healthy customer demand and continued execution across our projects. Geographically, our sales remain well diversified. Hyderabad contributed this time 49% of quarterly sales, driven by the successful launch of prestige golden growth, followed by Bangalore at 27%, Mumbai at 12%, NCR at 7%, and other markets at 5%. Average realizations for apartments stood at 11,193 rupees per square foot, primarily reflecting the geographical mix of sales, with Hyderabad accounting for nearly half of quarterly pre-sales. During the quarter, we launched four projects, spanning a combined 20.16 million square feet of developable area. These included Prestige Golden Grove in Hyderabad, Prestige Jardimia Estates Phase 2 in Bangalore, Prestige Forest Hills Phase 2 in Mumbai, and Prestige Century Landmark, a commercial development in Bangalore. Together, our REGI launches represented a GDV of approximately 12,000 crores. While Presi's Golden Grove contributed significantly to our quarterly performance, Presi's Forest Hills Phase 2 was launched toward the close of the quarter and therefore only a limited contribution to Q1 sales. We expect the momentum from this launch to be more meaningful over the coming quarters. During the quarter, we also completed three projects with a developable area of 4.37 million square feet, comprising Presi's Tech Forest, which is a commercial project, Presi's Sanctuary, a residential project in Bangalore, and Presi's Cityscape in Cochi. Our annuity portfolio also delivered another healthy quarter with our office business. We recorded a gross leasing of 1.5 million square feet during the quarter. A key highlight was a successful free leasing of the entire development at Prestige's JRC Signature Towers to one of the leading banking institutions, which shows the continued presence of marquee occupiers for well-located institutional quality office developments. The exit rental of our commercial portfolio for FY27 stands at 865 crores. Our retail portfolio continued its strong performance, with growth turnover increasing 18% year-on-year to 737 crores. Footfalls across our malls reached 5.2 million during the quarter, while the FY27 exit rental for the retail portfolio stand at 370 crores. Our hospitality portfolio also continues to perform well, supported by increased occupancies and competitive room rates, average room rates. Beyond business performance, we also remain committed to our sustainability agenda. On occasion of World Environment Day, the company participated by planting 1.25 lakh saplings as part of our commitment to plant 1 million trees in Bangalore. This initiative reflects our continued focus on integrating environmental stewardship with long-term value creation across our developments and communities we serve. As we enter the festive season, we have a strong lineup of high-value, high-velocity launches across our key markets. These include marquee developments such as Prestige Business Bay in Mumbai, Prestige Boganvilla Gardens, Prestige Meadows in NCR, Prestige Falcon City Reserve in Bangalore, Prestige Falcon City, and Prestige Cloverdale in Chennai. The prestige place in Hyderabad are a few important launches lined up for the second quarter, which will further strengthen our momentum heading into the festive period. Beyond launches, we also continue to strengthen our long-term growth pipeline during the quarter through lots of business development. We expanded our presence in three new micromastics in Mumbai, that is Thane, Borevilli, and Mersova, which marks another important step in broadening of footprint in Mumbai, MMR region. These acquisitions not only expand our footprint, but also add to our launch pipeline, with our teams already working in advance towards launching these over the coming quarters. With this, I think we're happy to take your questions and hear more feedback from you.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to receive this while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Pratikshit from HDFC Securities. Please proceed.

Thank you for my congratulations on a good quarter. So, my first question is on the Hyderabad contribution to the sales in this quarter, the Golden Grove project. So, versus the GDV, the numbers look a little muted. So, if you can give some color on how the Hyderabad demand in the current environment.

Sir, we've sold already 60% of the total project. We have a GDV of 9,500 odd crore, including the landowner share, which we're not selling. And we've, I think, sold very well over there.

And just on the business development, I think we have announced a strong business development, including Aram Nagar in the Q1. So how is the rest of the year looking in terms of business development across Mumbai, Bangalore, Hyderabad, and NCR? So if you can give some more color, what are the targets for this year? I mean, how much do you think we can do business development this year? And how quickly can we bring these launches, especially the Aram Nagar one, into the launch pipeline?

Sir, in terms of business development, it's very dynamic. It changes quarter on quarter. We are on target to, I think, achieve that spend for the year. We target about 4,500 crore of spend towards business development for the year, which will be spread over the ensuing quarters. And in terms of launches,

actually, this quarter, we plan to launch four projects in Bangalore, which is the Prestige Avon, Prestige Battersea, and the Prestige Garden Breeze. These are all under approval. We should get all the approvals in maximum eight or ten days' time after this, Vera, and then we launch that. Apart from that, we are going to launch prestige Palmcote in Chennai this quarter. So, it's quite a lot of action that we are going to see. So, Garden Breeze, Avon, Springwood and Battersea this quarter in Bangalore, Palmcote this quarter in Chennai, and Park Street in Chennai will be next quarter, and then it will follow. So, there is a big launch pipeline, which is almost 45,000 crores worth of launch pipeline that is still pending, And I think all seems to be on target. In fact, quarter three will see Prestige Meadows, Prestige Bougainville Gardens, and the Prestige, what's that called, Chambers 51 in Mumbai. Two are in Delhi, one in Chambers 51 is in Mumbai. Right.

This last question, Advan, sir. So have you seen any impact on the ground in terms of delays in de-closures by the customers, any inauguration in the sales cycle because of geopolitical tensions, because any concerns around AI, because there's been a lot of noise around AI and its impact on slowdown, especially to the traditional IT companies and the demand related to that. So, on the ground, especially in Bangalore, how things are shaping up, and even across your other sites and geographies, have you seen any impact or sentiment around geopolitics?

I think you asked me three, four questions all in one go. The first part is you asked about delays. Delays, we had a whole lot of stress in the last quarter, which, of course, will have an impact on handovers. That is, during the elections in Assam and West Bengal, a whole lot of labor had gone away, and now they've started coming back, or they've come back. But we did have huge stress of about two months. So that will impact deliveries by a month or so, but nothing really to really get concerned about. Then your next question is, how will geopolitics affect the business? Business has not got affected because of geopolitics, but what happens is our costs have gone up because of geopolitics, because of the oil prices going up, because of commodity prices going up. Obviously, our cost has gone up, but then that's only for that particular time, the three months or four months, whenever. Then we go back to the thing, but then there is going to be some impact on a bit of expense. And the third part, you're asking whether the demand is there. Demand continues to be there. We don't see anything. And AI, I think AI is more positive than negative. AI is another business model that is coming up and more job creation happens. Yes, on one side, the mundane jobs, which is a regular accounting jobs, may be at peril. While that happens, there are new type of jobs that are coming in which are more technical and everybody has to upskill themselves. However, we don't feel the pinch here. We believe that there is demand and people are positive and they have a need and they are committing themselves even at these higher prices. That's the amazing part of it. And that's not only in Bangalore, it's across all the cities we operate in.

So you remain confident of that 15-20% pre-sales growth which you have guided in the last call?

No, that is given. That is, we are very, very confident because we've got a big pipeline, and the only thing that may, which may trip is that these products don't come to market. But once we hit the market, I don't see us not selling. So the question of not being able to sell does not arise, But always you have this problem of delays in approval, delay in getting rare up. In fact, that is where our major stress is. But like you see, four projects which I told you should have come in Bangalore, now they all got delayed to this quarter. Otherwise, instead of 6,500 crores, we would have been like heroes saying we did 8,500 crores. But then it will come this quarter. There's a big pipeline, and I think it's a good pipeline that we have, Including now, we've got some three, four big projects, even in Goa, where we've invested in land. Now, it's like a moving target. Every week, we are promised next week, and the next week doesn't come. So, what happens is, we really just cannot plan it. So, that's where our problem is. In spite of all the connections, in spite of having all the relationships, sometimes targets are moving.

Awesome. Thank you, Anishina. Those are my questions.

Thank you. The next question is from the line of Kunal from CLSA. Please proceed.

Yeah, hi. Thanks for taking my question. Just on a couple of questions. Firstly, on the annuity side, in terms of the projection that we have given out for rental income, particularly for the office portfolio, there has been some revision, downward revision in 27 and 28 numbers. Is it on account of some spillover of some deliveries, completions? And if yes, then can you just highlight on that, please?

Hi, Kunal. Basically, it's two projects which we have pushed the timeline by a couple of months, maybe two, three months. So we had planned those projects to get completed in March 27. The timelines for those completions is now somewhere in June 27. These are basically your Exxon as well as JRC. These two projects is what we have pushed the time. But again, no significant delays.

Okay, and this just like a couple of quarters or like a couple of months delay. And any reason for the months? A couple of quarters, a couple of months. Okay, okay. Okay, so by 29, I think 29 onwards, our estimates are pretty much...

In fact, JRC, we have already committed to the tenant that will be handing over in June quarter.

Also, on the cash flow side, right, you know, this quarter, we saw some, you know, a little bit of surge in the expenses particularly. The connections were fine, but on the expenses side, we saw some surge. Should we expect a similar level of expenses both on the construction and the overhead, you know, for the rest of the year also, or should we, would there be any moderation there?

You can say almost similar run rate, but in Q1, the expenses were a little higher because whatever bills were submitted by the contractors in the last quarter, they were certified and they had to pay that bill. So the construction cost was a little bit higher. Moreover, we have a big launch pipeline in Q2 as well as Q3. So, some of the approval payments and all that we had to make, so because of that, the construction payments are a little higher than what we had expected.

Correct, correct. So, does that mean that, you know, because, you know, our collection rate is pretty much on track with our full-year guidance of 20,000 crores, and if we are able to achieve the same guidance, then in terms of operating cash flow, would there be some pressure there versus last year? Because if we expect the same level of expenses to continue, just trying to understand on the operating cash flow side, where would we end up?

No, even if on the cash flow, if you see, it was a little lower compared to our full year guidance, because the sales, what we are guided for the full year, it has not happened at percentage terms. So, if you see, we have guided the residential collection in the range of 21,000 plus, 21 to 22, we are expecting residential collection for the year should be. And the total gross collection, including all other verticals, will be in the range of 25,000. So, at the current run date, it will start early 2021, but then once we launch the project what we had slated in Q2, Q3, okay, those projects will add to the cash flows, and definitely it will, our free cash flows also will improve.

One question from Mr. Nazar. We've seen some, you know, NCR market really doing well. Some of the new entrants got some very good response last quarter or so. Any, you know, any plans of, like, you know, scaling up there in terms of, like, you know, project acquisitions or, like, you know, expanding into the Gurbaba market or so?

No, no. We've got three projects tied up. One is, of course, an old project, which is in sector 150, where the master plan is now finally approved at the Sports City. They're only waiting for the building plans to roll out, and then RERA, and then launch. So that is imminent. That will happen very soon. Similarly, we have tied up, that is, the Prestige Meadows in sector 92, which will again have a GDP of 4,500 crores. So even that is also the agreements are signed and the plans are drawn up and they put it for logged in for approval, which should come soon. We should have a November launch. And then there is another project, which is Sector 190 or whatever, and that is also called the Prestige Falcon City. And that also is ready for it. And that also we are just doing the final paperwork. I think that also should get done soon. Apart from this, we are also discussing a couple more. So there is a good pipeline. And I think we are very bullish on the NCR market, more so since it gave us some great numbers in the last financial year. We definitely are trying to see that we get the choices. You see, we just start getting desperate and picking up anything and everything, only if it makes business sense. And if we believe that there is a bottom line and there is a potential to get good revenue, we are locking in those. And we've locked in three, and then maybe one or two more will keep coming as we go along.

Sure. And lastly, just on the business development side, Our spend will be in line with what we had guided for at the beginning of the year, around 4,500 crores. Yes, sir. We saw some higher spend, yeah.

Yes, yes. And then, of course, you'll see there'll be churn of capital, there'll be inflows and outflows that keep happening. So, right now, see, even in Mumbai, we've tied up yesterday. We just announced that we've tied up Thane, Thane, which is a very large project in Thane, and I believe that should do extremely well. And that's going to happen pretty much fast because it's not a SRA project or a redevelopment, it's a clean land. And I believe that that should do extremely well. Thank you, sir, and all the best.

Thank you. Before we take the next question, we would like to remind participants that you may press star and want to ask a question. The next question is from the line of Rahul from Ilara Capital. Please proceed.

Hi, sir. Thanks for the opportunity. So, my main question was on the leverage front. How should we look at net debt moving from here on to FY27? You did mention that you're going to spend around 4,500 crores with BD. Your annualized finance cost is running at around 1,800-2,000 crores. And if I look at your Amity CapEx, that's around 3,500, 4,000 crores. So where should we see your peak net debt level for the next four to six quarters? That's my first question.

See, on the debt part, if you see, we have guided that gross collections for the year should be close to 25,000 crores, of which residential will contribute around 21 to 22, it will be in that range. And the free cash flows will be in the range of 8,500 to 9,000 crores. So the free cash flows, what we'll generate from the operations, will be sufficient to meet our spends on the capex spends as well as on the business development. There will be a marginal increase on debt maybe by maximum 1,000, 1,500 crores, not more than that. So, I don't think so there will be a significant drawdown this year. So, whatever launches we are planning, that will unlock capital, and maybe there will be a reduction in debt as well. Okay.

And what is your debt at the SPV level, and what is the company's share in that? Sorry?

Debt in? At the SPV. You mean joint ventures?

Yeah.

Yeah, so our net debt prestige sharing joint ventures will be in the range of 2,200 crores.

Okay, understood.

Includes the DIAL project and the Lakeshore trial and tech-specific, these are the major ones. Okay, sir. Thanks.

Thank you. The next question is on the line of Akash Gupta from Nomura. Please proceed.

Hi, am I audible? Okay, perfect. Sure, my first question is from the reported P&L. The margins were on the weaker front. EBITDA was down 4% year over year. So, just want to get a thought around the P&L and how the numbers are going to move over the next couple of quarters. That's my first question.

Again, on the margin front, if you see the distribution of residential, we have reported a residential top line of 1,600 crores. It was mainly because during the quarter, we didn't have any major completions, because of which the numbers were lower and the reported numbers were, reported residential numbers were lower. But my fixed costs remain the same. In fact, it increases because we are planning heavy launches in Q2 as well as Q3. So because of the mismatch in revenue recognition, my reported margin is a little lower. But if you see at the project level margins, it remains the same. There's no pressure on the project level margins as such.

Understood. So my second question is on our launch pipeline, I think I've heard roughly three launches in Bangalore and one in Chennai. That's still cumulative, roughly maybe 30-40 billion of launches. And then this would imply like a pre-scale rate of another 60-65 billion in the second quarter. Are we not leaving too much for an ARK perspective in the third and fourth quarter? And then if we have like 450 billion of launches pending, why are we just launching like 40-50 billion per quarter?

I'd like

to have more launches in Q2, but we are at various stages, and based on the current status, we expect some of those approvals to come in Q3.

Is there any problem in any particular city that there is a delay in LERA approval? I mean, what's holding our projects? Where is the delay?

There is no specific problem or delay. It is just the time certain things take for process. Like, each project is in a different stage of the approval process. And each, I think, department, government doesn't perform like the private sector, right? If it was, then I think we would have more predictable launch timelines and quicker timelines. Unfortunately, that's the case. So we do our best to make sure that things are expedited. But I think what we are giving you is a very conservative timeline. Hopefully, we will launch after, but one or two quarters, things may move up or down.

Some of them are recent acquisitions, which we are pushing hard for bringing it to the market. For example, the Seed Meadows in NCR. And the Chennai project.

Understood. That's a question I had. Thank you so much.

Thank you. The next question is on the line of Pritesh State from Access Captain. Please proceed.

Yeah, thanks for the opportunity. Two, three questions from my end. First, I think we had good three project additions this quarter in Mumbai and across different markets. I just wanted to know the project structure of, you know, probably each of them. You know, I know Aram Nagar is a JV. Thane, you mentioned it's a clean line, but, you know, it's the JTA. And even for Burivali, what's the structure like? And what would be the margin expectations from these projects?

Both Borivali and Thane are state joint development agreements, and I think the JDA for Thane is even registered as of yesterday, so all the terms are there very clear.

Sure, and margin expectations would be similar to what we have at the company level, or we are slightly getting better here?

We always like to get better. It all depends on the cost as well as selling price. But then selling price is going up, and it's a large development. I think Thane will get a GDV of almost 9,000 crores, which I believe we also want to really get some great volume there. And that should do well, because it's a nice piece of land, well located, and it should do well. Sure, got it, got it.

And in terms of Mumbai commercial assets, PKC and Malakshmi, we had done some pre-leasing earlier, but any progress after that in Q1, you know, have we done more? If you can just guide us on some numbers in terms of how much we have pre-leased for both the assets.

No, this is all work in progress. Only thing I can say is there's a great interest, and the numbers are very strong, and we ourselves are sort of holding back. But at the same time, we are concentrating on seeing how we can get the production in terms of completion done soon. Work is going on at a brisk pace, but we'll be most happy and most rested only once the project gets completed. And I think the teams are really working hard to see that happen. And I don't think we have any sort of doubt on the leasing part as also on the rental. The rental is also pretty quite robust.

And lastly, if you want to just provide an update on, you know, hospitality piece, You know, on the IPO or in between, we had, you know, media reports about we doing a private transaction as well. So, if you just want to clarify on that, you know, how are we approaching the monetization of the hospitality portfolio?

No, no. See, as of now, nothing new to say except that the teams are working on various options. We'll see what works out. It's all work in progress. See, we could have done the IPO, which, again, we have time until September 31st, 30th. But at the same time, today, there are interest from various PEs. Let's see what comes out.

Yeah, okay, okay. Because there also debt is, you know, kind of material enough. We know that monetization also can bring down the leverage at the company level that way. So, yeah. Okay, no problem. That's all from my side. And, and all the best. Thank you. Yeah.

Thank you. The next question is from the line of Girish from Avedis Park. Please proceed.

Yeah. Hi. Thanks for the opportunity. Firstly, just if you can give us some understanding on the Chennai launches, right? Because we see close to 12, 13,000 crores of GDP, which, which is planned in this market. So, how confident are you in terms of the sales velocity, given the depth of the market? Because in the past, what we have seen is that Chennai projects have seen a lower sales velocity at the time of launches. So, if you could give us some update on the approval stages also.

Yeah, so we are pretty confident. The approvals are in a pretty advanced stage. So, Pratish Farm course, we should launch in Q2, for sure. This has about 1,200 crores of GDV, and I think this project should do well as well in the velocity. Next would be Prestige Park Street. This either will launch in Q2 or will move into Q3. This has about 1,500 crores of GDV, and this is a luxury segment, so we're quite looking forward to it, As Chennai has not seen a good quality luxury project in the recent past, especially for Prestige, this would be a big one. Next is a large launch we should have in Q3 would be the Prestige Falcon City. And I'd like to mark that both Park Street and Falcon City are recent acquisitions. So this is quite quick to turn things around and launch in Chennai. Falcon City will be 6.84 million square feet, and it's about 5,000 crores of GDV. Q4, we should launch Prestige Cloverdale, which is also a big launch, about 4 million square feet, and another 5,000 crores. That's about 13,000 crores of GDV just the next three quarters in Chennai, which are pretty confident of launching.

Secondly, in terms of the unsold inventory, which is close to 16 to 17 million square feet, we see Hyderabad is pretty big, right? Almost 7 million square feet. So, if you could just give us some view on the sales velocity of the Hyderabad inventory, which I'm assuming is the Golden Grove and also for the rest of the inventory.

Yeah. So Golden Grove, as we said, has just launched, and we've already sold about 60% of the inventory. So I'm pretty confident of good sustained sales over the next few months. So the next one or two quarters, we should see that inventory significantly reduced. And we'll also add up some inventory in Q3, Q4 in Hyderabad with some new launches, which is Rockcliffe and Prestige Place.

Thank you.

The next question is from the line of Karan, from Ahmed Capital. Please, with me.

Yeah, hi. Just a couple of questions from my side. Firstly, you know, in terms of launches in Hyderabad, have there been any changes in plans for Prestige Imperial Park this quarter, and also a Prestige Springwood, which was scheduled for FI 27, that has now been pushed to FI 28. So, is it a conscious call to calibrate launches in Hyderabad, given the inventory levels over there?

No, not at all. In fact, Prestige Place is what was earlier called the Prestige Imperial Park. We've done a slight redesign, you know, uplifted the product, but we're pretty confident of bringing that in in Q3 or Q4.

In fact, now that Prestige Place will be a mixed-use development, it will be, again, a luxury product, Because we believe that is the future area. So we're getting a hotel, we're getting office, we're getting a luxury premium retail, as well as branded residences, which is the Marriott, as well as the Century. So the whole thing has been designed by Benoit, and the designs now finally are ready because such large developments with mixed use, with various type of components, takes time to even conceive, understand, and conceptualize and get the product right. So now we've got the product right. Now it's a question of pushing the authorities to get the approvals, which should come in the next one or two quarters. Once the approvals are there, one thing with prestige is we are never, never going to push any launch. Only thing is, our endeavor is to see how we can get the product ready to bring it to the market. And I am very confident that once we come to the market, we will be able to sell and get great revenues. In fact, on the Prestige Place, we've just started construction of the CEC, which will take us at least four or five months.

Hello.

Yes.

Yeah, sure. So as a follow-up, you know, on the balance, $450 billion of launches scheduled for later this year, and while you did briefly speak about Chennai, but if you think of the top five or six projects, which would include Chambers 51 in Mumbai, Falcon City Reserve in Bangalore,

I don't think it will slip into FI28. We are working very hard to bring it all in this financial year, and it should come and will come. Now, yes, they could be, but then I don't think they should. It should go into the next financial year, but we've got three more quarters to go. Hopefully, it should all fall in place, and we should have it quickly. Of course, we see now each region has different governments. Now, we've got a new government in Tamil Nadu. Now, it seems to be on the positive side. Now, everywhere else, it's all work in progress. I think it should come through. We don't see any problem.

Sure. And lastly on BD, I'm not sure if you've communicated what's the outlook for BD for the rest of the year. You've already closed three transactions in Mumbai, but going into the rest of FI27, how should one look at that?

Yes, we will have some balanced BD left. We'll see some BD in Bangalore, and then Burgaon as well.

Any number to quantify here, or it's still in discussions?

Okay, progress is a discussion. We'll keep you all updated.

Great. Thank you.

Thank you. The next question is from the line of Yashar from Bank of Baroda Capital Markets. Please proceed.

Good afternoon. Thank you for taking my question. I just would like to know what's caused the average realizations to go low over the quarter, and how would you expect realizations to trend, say, over FI 27 to 29?

During the quarter, a significant portion of sales came from Hyderabad region where the average realization is on the lower side. So in the Hyderabad region, the realization is in the range of 8,000 to 10,000, but whereas the other regions, it is in the range of, depends on product to product, but we can safely assume to be in the range of 14,000 to 15,000.

Not only Hyderabad region, it's all that particular micro-market, that's all the thing, and it will be a large launch. Now, we'll also do in Hyderabad, we're doing the prestige place, and we're also going to do the prestige, which will be all very high-priced. So, depends on the product, depends on the micro-market.

So, in the current quarter, because of Golden Grove, the average realization has come down.

Got it.

Thank you.

Thank you. The next question is from the line of Pariksha of HDFC security. Please proceed.

Yeah, thank you. So, my question is on the BKC X tower. So, in the last call, you had said that about 70% is leased. Just wanted to get an update on that. What's the leasing now? And also, BKC Y, you said that you'll wait for completion. So, any initial thoughts? How is the demand for the pre-leasing on that tower? And also, if you can cover Mahalakshmi pre-leasing.

Well, I think I've given instructions that we should wait and see how the construction progresses. And it's better to be a little since we've already got a big, already a big tie-up with good companies for these, both BKCX and Y. And then, of course, Y has the hot set called the hotel, which is the addition. So, we are now, focus will be on completion. Similarly, on Mahalakshmi, we have got great inquiries. In fact, we've got some very big inquiries even for buy, but we don't want to sell because finally these assets we are creating to reach out. But I think around 400,000 has already been pre-committed.

Okay. 400,000 has been reached out in Mahalakshmi, I think. And so on our first commercial launch, the business-based event is the launch, And how do you think, so what kind of response, initial response do you think you're getting? So will this be a sellout in this year? So how should one look at this big, large commercial startup?

We'll see as it comes. We are hopeful that there will be a great demand, but we never know. But I believe that the product is good, location is good, and it should meet with a very positive response. We are also trying to see and prime the market and understand what would be the right pricing. And, of course, it also has to make sense to the company in terms of bottom line. So as we get closer, right now it's all work in progress. We're getting the current occupants vacated. Almost 50%, 60% have moved. The rest have to get done. And then we need to pay a lot of fees. All that is work in progress. Hopefully in the next couple of months we should be ready.

And more than anything, seeing the progress of our commercial projects complete across BKC and Malachmi, especially the way we've completed the rehab tower, it's given a lot of confidence in the market, and a lot of people have actually approached us to acquire some spaces there, which obviously we are not selling. So this actually has given us a pulse of what's the kind of customer and what they're looking for. So this will actually help us shape our decisions for the Chamber 51 as we come here to launch.

One more question. I mean, you did touch upon hospitality and how you're thinking of monetizing it. But the broader question on the commercial portfolio, which is expected to ramp up significantly over the next two, three years, Do you think is the right time to maybe divest a minority stake and raise some capital now and wait for the assets to venture maybe and then look at Arit? So how does one look at, from that perspective, the capex on these assets, which could contribute significantly on rentals? So at what point of time do you be comfortable to bring in some external capital and deleverage that debt?

So we're waiting for the projects to actually complete because we believe, And we always believe, Mr. Radhaf, we believe that we want to build a critical mark. And I think leasing these assets out is key, which has been going pretty well. Yeah, so I think in the next year and a half, too, these projects will be complete. The leasing also should be completed by then. And actually then this would be a trigger for us to actually evaluate and then take a decision on way forward. But we're definitely considering it.

And this last question on the residential, I have seen some of the projects on your website, and they have this 25-25 scheme, so like the Forest Hill has some projects in Bangalore. So if you can help us understand what is the strategy there, and how is the scheme being rolled out in new launches? Is it more like sustainability, or is it more like luxury? So some color on that would be helpful to understand how is the demand scenario there.

This is with regards to Presti's Forest Hill site?

I think I saw on the website, the Forest Hill, there's a scheme with 25, 25, 25, 25, so four years, I think payment of 25% each, and some other projects I saw on the Bangalore on the website.

Sir, it's searching basically instead of collecting money of 5% and 3% every slab or whatever, what we felt is the flexibility of the customer to pay annually. So it's not that they are paying right at the end. They are paying once a year, 25%, and that covers over four years, and that covers that timeline of construction. So, it's 25 into 4. That's how we work this out, and it also gives a little comfort to the customer. It gives us also that the cash flows are tied up, and we will ensure that there is reconstruction progress also.

Okay. And just one last thing on the data center. I think, sir, you have signed some MOU with the Manashtra government of Manashtra. So, how are you thinking on the capital allocation towards data center? And over, I mean, near to midterm, so how much time are you away from some announcements on investments, first investments rolling out for the data center business?

Yeah, so the Maharashtra government was very keen on setting up these data centers and actually attracting and bringing in GCCs. This is where we came in, and they had some land parcels which they were going to acquire and give us. But that acquisition, we have not yet spent any money there as yet. We have not yet invested anything as yet. That's a work in progress. So I think closer to the time that that acquisition is complete, I think then we'll be able to speak a bit more on strategy. But I think overall, if you look at the data centers, what we've done in the past, we would be keen to invest in the land and also the building, And we'll tie up with data center partners or GCCs then to invest further in it. So I think it's an open canvas as of now. Closer to when we'll acquire the lands, we will form up these lands.

But any color on what kind of megawatts, I mean, what kind of scale you're looking at or the IT load on the data center side, which you think over the next three or four years should be there on the balance sheet?

About 100 megawatts for now.

100 megawatts. Sure. Thank you, sir.

Thank you. The next question is from the line of Konkaj Sibriwas from IKKI asset manager. Please proceed.

Yeah, good evening, sir. A couple of questions on the balance sheet side. Can you just help us with the debt numbers? Yes, hi.

We had a net debt of 11,900 crores, which transcends the debt equity of 0.69. The gross debt was 13,000, and we had cash and cash reculents to the extent of 3,300 crores.

From March level, the reported number on annual report was 10,900 crores on net debt. That has further gone by 1,000 crores. Is that right?

Yes, net debt has gone down, right? Which is like on two reasons. We had some borrowings as well as cash balance. We have deployed also a few land acquisitions. So there were gross borrowings to the extent of 650, 700 crores, and cash balance reduced by 400 to 500 crores.

Where do you see it settling down somewhere, and what will be the comfortable levels which you will think we are comfortable at levels?

Again, we mentioned that we have a very strong pipeline of projects which will get launched in the coming quarters, especially in Q2 and Q3, so that will unlock a lot of cash flows because some of the debt has been taken on those land parcels. Once the projects are launched, some of the debt on those land parcels will get repaid. So you will see some, especially on the residential front, some debt getting repaid in the coming quarters.

I reckon when I was looking at your annual report, which you released some time back, corporate guarantees have gone or doubled last year, and 11,000 crores of corporate guarantee apart from the betting fee. How should we read that?

Some of the corporate guarantees, it will be a double counting in the sense it has been given for debt for some of the subsidiary companies. So when we are raising capital at the SPV level, some of the banks, because it doesn't have a very long, fairly new setup, it doesn't have a credit history, to raise capital in those SPVs, the parent company needs to give those corporate guarantees. But that debt is already consolidated in the console financials. So, that doesn't get counted. But if you see, at the JV level, we mentioned that we have a prestige share of net debt close to 2,200 crores, 2,100 crores.

The corporate guarantee amount will keep on increasing? How should we look at it? Because there is a 100% increase in the country.

Again, if we are taking any debt at the SPV level, but now going forward, we don't expect it to increase significantly because now most of the projects we are trying to take in the parent entity itself instead of floating a separate SPV for each and every project. But where there's a requirement of the transaction that we have to float an SPV because of the other partner requirement or anything like that, in such cases, we'll need to exchange corporate guarantees for taking any debt in those SPVs. It will be case-specific, difficult to quantify this.

And last, but not the general, you know, just one consideration. The Secretarial Auditor has made a remark this time and flagged a non-compliance with one section, 34 Q. Oh, yeah, unable to hear you. The Secretarial Auditor has flagged a non-compliance, which was never the case with Prestige in the previous annual reports. Any thoughts on that?

Is it regarding any, I don't recollect any non-comprehensible.

Have a look at the envelope, which was regarding the not disclosing the remuneration details of the CFO, company secretary and others.

Again, that has been the case, which we have been, not the first time, you know, secretary or auditor has given that. But if you see the Related Party disclosure, we have given the KMP, whatever salaries are paid to the KMP, it is being disclosed. But not individually, but at the KMP level, it has been disclosed at the totality level.

Thank you. Thank you. All the best. Wish you all the best.

Thank you. The next question is on the line of Yash Gupta from KOTIA Asset Management. Please proceed.

Yeah, good afternoon, everyone. Sir, currently, we are commanding strong position in Mumbai and NCR, and this we have achieved within a short period of time. Are we looking to add any new cities going forward? Sir, our current unrecognized revenue is around 70,000 crores, and can we expect this 70,000 70,000 crores will get recognized in the next three years, and what will be the recognition level for FY27?

Whatever we are, 70,000 crores of revenue we have, it will get recognized in the next four years. Three years will be difficult because whatever projects we have launched, I mean, last year it will get completed in a span of 45 to 48 months. So maybe we can conservatively take four years as a This year, we should do, recognize on the residential front, close to 11,000 to 12,000 crores.

And how is the hospitality business going forward, going on, and what are the timelines for the listing now?

The listing, we have approvals till September. So, I think Mr. Razak mentioned that we are looking at alternative of this one also. So, something finalized on that front, we will definitely consider. But on the hospitality, once it is contributing meaningfully, I think we reported a top line of 350 crores on the revenue front. Yeah, 300 crores was the hospitality top line in the current quarter, and the BICTA percentage for hospitality was around 41%. And at the bottom line, it contributed close to 419 million to the bottom line.

Can we expect hospitality to finalize within the next six months, can we say that?

We wouldn't like to put a definitive timeline because the discussions can take some time, so whenever those discussions get finalized, they will definitely give those details.

Sure, thanks. There's a small request, can you please add one or two slides of hospitality business into this, so it will be great helpful for us.

Yeah, since our IPO, this one was still valid, and if the markets improved, this one, we can definitely decide on the IPO also till September, but both until September, we can disclose the hospitality details as well.

Thank you, sir.

Thank you. That was the last question for today. I would now like to hand the conference over to the management for the closing comments. Over to you, sir.

Thank you once again for a very insightful and purposeful question. We do hope you understood what the company is doing. I'm more than happy. Zayed and the rest of the team, including Amit, will be more than happy to answer any doubts that you still have and would like to know what the future is. And we believe that the business is strong and will continue to be strong as we go along. Thank you very much.

Thank you. On behalf of Access Capital Limited, that concludes this conference. Thank you for joining us and you may not disconnect your line.