Wednesday, June 6, 2012

HDIL Interview after Q4 Results.

Q: What is looking like a doable sales target for FY13?
A: We have given guidance to rating agencies of approximately the same that we did last year. We did approximately Rs 2000 odd crore revenues. I think we maintain the target that we will be achieving anywhere between Rs 2000-2500 crore of revenues.
Our profit will remain in the same area, approximately Rs 900 crore. Given the market conditions today, I think that is a great achievement and even last year was a great achievement by a company like HDIL.
Q: What is your sense of how the Mumbai market is doing right now, both commercial and residential?
A: We did an offhand calculation and we figured out that with the new concept of fungible FSI and the increase in property taxes, the end consumer is going to end up paying approximately a Rs 1000 per sq ft more and that is in any given location. Now that is the base price.
You are going to see a minimum of 10-15% increase because of the fungible FSI concept that is going to go on the consumer's head. The entire concept of developers getting areas free of FSI has gone now. Margins are going to be contracted a little bit. I am sure they are going to start increasing prices to make sure that they achieve that margin.
Q: Any significant lumpsum payments or inflows that you are expecting from any land parcel sales. There has been talk about you selling a large parcel in Andheri to Adani Group etc; do you expect any of those to go towards repayment of that debt that you are speaking about?
A: Most of our internal accruals today are earmarked towards debt repayment. We are focused towards deleveraging the balance sheet through these FSI transactions. We are still negotiating with few buyers for the Andheri project. We are negotiating with Adani for the same project as such.
But, we do have other major land parcels like the Virar project, which is now coming up. It is approximately 40 million sq ft. It will probably be the largest township outside of Mumbai city. With prices in the range of anywhere between Rs 4000 and 4500 per sq ft, that is a huge project. I am sure that the internal accruals from there will help us deleverage the balance sheet over the next two years.

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