Page 29 - Kolte Patil AR 2019-20
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Overview                     The Company arranged for a
            In the business of real estate   high proportion of apartment
            development, a critical success   purchases to be backed
            factor is the ability to keeps   by mortgage financing,
            cash flows moving. This ability   strengthening the assuredness of
            is not just derived from the   its cash flows
            ability to generate higher   The Company actively
            sales; it is complemented by   communicated the phase-wise
            the competence in collecting   construction of purchased
            receivables on schedule. The   apartments, enhancing the
            latter aspect is proving critical   customer’s clarity of the quantum   Big numbers
            at a time when the economy is   and schedule of the next payment
            sluggish, consumer sentiment                              965
            weak and there is a premium   The Company focused on making
            on collecting receivables on   quality sales, selling only as much   C Crore, Collections, FY17
            schedule. During the year under   as the market could bear without
            review, the Company reported a   compromising payments (or
            record C1368 Crore in collections,   realisations)        1368
            9.7% higher than the previous   The Company focused on
            year.                        liquidating sustenance apartment   C Crore, Collections, FY20
                                         inventory, which usually
            Drivers of success           comprised completed apartments,
            The Company reported a       generating sizable inflows     Perspective
            contrarian performance in the                               “At Kolte-Patil, we protected our
            area of collections for some good   The Company generated   competitiveness through clarity of focus: on
            reasons.                     incremental cash flows from 2.5   cash flows in hand more than cash profits
                                         msf of sales made in the previous
            The Company serviced the needs   year coupled with the handover of   on paper. The result is that we did not just
            of serious buyers as opposed   1601 apartments in FY20      focus on selling more apartments; we focused
            to investors, translating into a                            on timely construction and collections that
            greater responsibility in servicing   The Company aggregated Pune,   lubricated our cash flow and reduced working
            their instalment obligations on   Mumbai and Bengaluru collection   capital, keeping the virtuous cycle in motion.”
            schedule.                    teams into one unit; the daily   – Gopal Sarda, Group CEO
                                         monitoring enhanced collection

            How we strengthened our collections efficiency

                                This generated   The Company
               The Company      sizable inflows   worked with
               focused on       of largely     home financing
               selling existing   completed    partners,
               inventory        apartments     accelerating its

               The Company      The Company    The Company
               enhanced sales,   centralised its   segregated
               increasing       collections team   collections
               inflows          for enhanced   from the sales
                                specialisation   function,
                                               increasing focus

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