Page 24 - Kolte Patil AR 2019-20
P. 24

Performance analysis                             Q: Was the management   was reinforced through
                                                              pleased with the
                                                                                      sustenance sales marked
            The CEO’s review                                  performance of the      by controlled marketing
                                                              Company during the year
                                                                                      costs. Besides, the second
                                                              under review?           successive year when Life
            Gopal Sarda, Group CEO, analyses the              A: The management was   Republic sales were in
            Company’s FY20 performance and looks              pleased: the year FY20   excess of 1 msf enhanced
            ahead                                             was the best in terms   our liquidity.
                                                              of collections in three
                                                              decades.  We registered   It would be relevant to
                                                              sales of 2.5 million sq. ft.,   indicate that judicious
                                                              in line with our guidance,   capital allocation for
                                                              when no launches were   business development and
                                                              made.  We delivered a   maintaining low leverage
                                                              sizable 1.86 million sq. ft.   resulted in a better P&L and
                                                              to customers.  We finished   ROCE performance.  All
                                                              the year with C451 Crore   the Company’s  business
                                                              in pre-tax operating cash   development transactions,
                                                              flows (excludes land-related   including the ones with
                                                              payments) and 4.51 million   ICICI Ventures and Planet
                                                              sq. ft. of ongoing but unsold   Smart City, were uniquely
                                                              inventory. We expect to   structured to maintain the
                                                              generate around C1,500   integrity of the Balance
                                                              Crore in post-tax operating   Sheet while enhancing cash
                                                              cash flows across 36 months,   flows and profitability.
                                                              indicating attractive profit   Q: What are the various
                                                              visibility.             realities that went into this
                                                              The Company’s growth    development?
                                                              continued to be profitable:   A: One of the things that
                                                              even as revenues from   I must indicate is that our
                                                              operations increased 2.6%   ZABARDUS campaign
                                                              (based on the Percentage   achieved outstanding
                                                              of Completion Method), net   numbers in the sustenance
                                                              profit (post minority interest)   phase of a project in a single
                                                              rose 12.2% to C137.5 Crore.   location. This validated our
                                                                                      leadership position in Pune
                                                              Q: What was the standout   and our decision to buy the
                                                              feature of the Company’s   private equity partner’s
                                                              performance during the   share in Life Republic.
                                                              year under review?
                                                              A: The year under       The Company focused
                                                              review was marked by    on making quality sales,
                                                              a liquidity challenge for   selling only as much as
                                                              the country’s real estate   the market could bear
                                                              sector. However, during this   without compromising
                                                              challenging phase, Kolte-  payments (or realisations).
                                                              Patil experienced improved   The Company focused on
                                                              liquidity. This translated   liquidating sustenance
                                                              into a reduction of C83 Crore   apartment inventory,
                                                              in net debt; net debt-to-  which usually comprised
                                                              equity ratio declined from   completed apartments,
                                                              0.47x in FY19 to 0.35x in   generating sizable  inflows.
                                                              FY20, despite investing   The Company generated
                                                              resources to accelerate   incremental cash flows
                                                              construction and paying   from 2.5 msf of sales made
                                                              the second tranche of C70   coupled with the handover
                                                              Crore towards the buy-out   of 1601 apartments in
                                                              of ICICI Venture’s 50%   FY20. The Company
                                                              stake in the Life Republic   aggregated Pune, Mumbai
                                                              township project in Pune.   and Bengaluru collection
                                                              This enhanced liquidity   teams into one unit; the

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