A very warm welcome. I would like to thank everyone for joining this conference call.

We have with us today Mr. Amit Kumar Sinha, Managing Director and CEO; Mr.

Vimalendra Singh, CBO Residential; Mr. Vikram Goel, CBO Industrial; Mr.

Sriram Kumar, Chief Financial Officer. Today's meeting will begin with a brief presentation covering our operation and financial highlights, following which we will reply to the questions asked.

I would now like to hand over the conference to Mr. Amit Kumar Sinha, Managing Director and CEO of Mahindra Lifespace Developers Limited.

Thank you, and over to you, sir.

Is there a way we know whether they are able to hear us well?

Whether we are audible? They cannot answer.

They can't answer. Okay.

I hope you can all hear us. Otherwise, we'd go for next 20, 30 minutes without knowing.

Fine. Huh?

You're fine? Good.

Yes, sir.

Good. I'll go ahead with key highlights, I think from the presentation.

We go to next page. Now is the video, yeah.

Wake up, help each other out. Now we are together.

A perfect place where dreams come true. We'll build together out.

We'll call it home. Experience positive energy at its peak.

Mahindra Beacon Hill, home of positive energy. Wake up, help each other out.

That was Mahindra Beacon Hill. Go back a little bit.

On slide back, that we just launched that. We are in the process of marketing, and all the sales will start knitting out in the next few weeks.

We had our channel partner meeting earlier this week on Beacon Hill, quite a successful evening. This picture, I think we're showing it for the first time, yeah?

Have we shown this before? No.

This is about the Phase 1 of Mahindra Rainforest, Bhandup. We call Mahindra Rainforest, Kanjur NX.

This is Olympic size, Olympic length swimming pool, lots of amenities, lots of green. Phase 1 is part of the broader residential.

The broader residential will have a huge green cover. It'll be a forest that will have roughly 4 acres, and we'll share the details when we have the RERA approval for those phases.

Let me quickly cover some highlights for us in this quarter. I think I will not spend time, but we continue to have clarity on what strategy we are pursuing across all these themes: portfolio choices, business development engine, superior customer experience, making sure the project execution is first time right, excellent, maximizing value from IC & IC, and then across all our efforts, making sure that we have very robust financial discipline.

Key highlights, I think Resi business, Resi pre-sales ₹925 crore, successful launch of Rainforest. We got maybe two to three weeks of sale time in this quarter.

As this quarter had the impact of Iran war. Obviously, March was practically slow for many, but April was very limited footfall.

May recovery happened, our sales and marketing effort really started from May. June middle onward, we started netting, and that's what you see here reflected here.

It has done well for us. We're still in the launch phase.

I think we seeing the momentum continue with us in July. Sustenance sales contributed 42% of sales, Blossom, Vista, Marina 64, Ivy Lush, those are our sustenance sale contributors.

There are five more launches planned later this year: Mahalunge, we are in the final stages of approvals; Lakefront, same; Sai Baba, Navrath, Vastera expected in H2 of this year, second half. We have also received three OCs: Eden Phase 2, Luminare, and Palghar 2.1.8, meaning second phase, the building number 2.0 Phase 2's first part, eighth building, right?

That's the 2.1.8. Sustained BD momentum.

We had one major deal announcement in Kandivali of roughly 15-acre land parcel, ₹5,600 crore of GDV, total GDV of ₹50,000 crore, which is very healthy for us. IC & IC side, very good news yesterday or day before when we signed the partnership with Sumitomo.

As Sumitomo partnership was signed first phase in 2015-16, second one November 2024, and now Phase 2B. They continue to be an important partner with us.

We have a strong pipeline heading into Q2. Q1 was a little bit lumpy, as you know this business, Q1 was shorter in terms of conversions, but we see a significant pipeline for Q2.

We are accelerating our land aggregation in Origins Pune, and we'll make headway in the remaining part of this year. Financials, Sriram will cover them in detail, but overall, between Resi and IC, ₹966 crore, 70% year-on-year growth.

PAT 67% up, ₹86 crore. Resi collections healthy.

More work for us to do, but because the sales were a little bit back-ended in the quarter, big part of sales will come in Q2. IC collections tend to be very big contributor for us, will also should happen along the deal closure.

Prudent, robust balance sheet, net debt-to-equity of -0.2, we have more healthy cash across our subsidiary than our debt. All the debt is mostly ICD with the group.

There is some CPs that we have with the banks, right? That's the key highlights.

We'll move to the next page. Let me control.

Yeah. Roughly ₹50,000 crore GDV.

I'll point to the middle column, in blue font, K2 Kandivali has been added, ₹5,600 crore. That's a meaningful addition this year.

Many of you have asked us what is our target for GDV this year. I think we have had two successful years of ₹18,000 crore each.

We want to maintain the momentum, but we want to sign the right deals, and want to make sure the deals align with our strategic aspiration and they meet our financial guardrail. Anywhere, I expect anywhere from 10,000, 20,000 to happen in this year.

Obviously, they are lumpy. We are looking for large-sized deal, but right deals for us.

You'll keep hearing about them as we win some of these new deals. Launches, I think you see this is a nice chart, shows our trajectory for multiple years.

We are hoping to maintain the trajectory. A good set of launches planned in rest of the year, and they will contribute very well to our expectations of pre-sales on the residential side.

You've seen this slide in the past. We continue to fine-tune this, especially with the new acquisitions.

In FY '28, we expect K2, it's a greenfield project. We've started the approval process already, design discussions are underway, hopefully we'll be able to launch within the next 12 to 15 months.

Then you see the rest of the page, which covers which projects are getting added to our overall new launch pipeline as well as sustenance pipeline. IC business, I think did exceedingly well in terms of last year, huge growth, amazing profitability.

Being lumpy, I think Quarter 1 has been, I would say, a little bit low, but we have good, healthy pipeline for Q2 closures. We'll stay tuned.

Vikram and I will continue to provide update on that. You've seen this slide before.

The guidance from IC business is always ₹400 to ₹500 crore of business annually from IC business, which should give us ₹100 to ₹150 crore of PAT on an annual basis, our share. That's our IC business.

Then I'll hand over to Sriram for the financial highlights. Thanks.

Thanks, Amit. I'll take the financial highlights.

On the residential side, we did about ₹925 crore of sales, as Amit highlighted. That represents almost 106% growth over prior year.

On the IC side, it's been a little muted, but Q2 is where we are expecting some of the deals to convert. On the GDV side, the Kandivali deal had really helped us to get to about ₹5,600 crore of GDV in this quarter.

Residential collections have been at ₹527 crore. It's healthy.

Here, given that Rainforest launch, in terms of the CP event happened towards June, we had little time to collect. All the Rainforest collections is expected to come in Q2, and you will see that reflecting in the next quarter.

The net debt-to-equity continues to be healthy, negative 0.2. Our cost of debt is at 7.5% compared to 8.1% last.

Moving on to the financials, this is the segment reporting that we do on the Resi and the IC side. On the residential side, of the ₹86 crore PAT for the year, the residential side had contributed to ₹76 crore and the IC ₹10 crore.

A lot of questions last time on the margins of the completed projects. This year, on the residential side, we had OCs for Eden Phase 2 and Luminare, which contributed to the overall profitability.

Happy to report the PBT margins from these two projects are at around 26%, which is one of the questions that we had fielded in the last calls. On the IC side, it's expected to pick up as we move into Q2.

On the cash flow side, healthy cash position. There's about almost ₹1,100 crore of company-wide cash available.

The operating cash flow, we were at ₹134 crore, which is expected to pick up as we see more residential collections and action from IC happening in Q2. On the cash flow from projects, I think last time when we reported, we were at around ₹14,500 crore.

This time, we added Kandivali deal that we just announced. You have some projects that move out of the system, like with Eden and Luminare moving out of the system.

You will have the collections and construction costs move out. Effectively, we have ₹15,300 crore of cash expectations from our current project portfolio.

This does not include our Jaipur residential and Murud land available. On the financial comparison, as we reported in Q1, we had revenue from operations of ₹962 crore, basically reflecting Eden Phase 2 and Luminare.

At a PAT level, we are at ₹86 crore compared to ₹51 crore last year, roughly a 67% growth over prior year. The profitability even in Q4 was about ₹90 crore, we are maintaining that trajectory.

In FY '26, we reported ₹298 crore of overall PAT. On the balance sheet side, no significant movements.

It reflects in a very healthy position across our assets and liabilities side. On the inventories, you will notice that the inventory, sort of balance had come down a little.

That's primarily reflecting the completion of the projects where Eden and Luminare had moved out and that needs to be taken out of the inventory. Otherwise, from our balance sheet position, it remains healthy.

That's all.

Very good. That's all, right?

Yeah. Maybe we'll take questions now, and then

We'll collect

the answers.

The first question is from Mr. Jainam Shah of Equirus Securities.

The question is about the projects which are completed in Q1 and what are the margins which are booked for those projects in Q1.

Very good. Thank you.

I'll request Sriram to jump in with that.

Yeah. Two projects, as I said, we had Eden Phase 2 and Luminare completed in Q1.

Both these projects are very profitable, and the PBT margins from these projects were approximately 26%, and that is reflected in our financials currently.

To be complete, we also had one tower of Palghar also finished, OC-wise, but it was breakeven. It is affordable project.

We're

fulfilling that and moving on. That was also all completed as well.

Next question is from Mr. Lovesh of Burman Capital.

The question is, given our guidance of ₹4,500 to ₹5,000 crore of pre-sales in FY '27 and we are expecting a sustenance mix of 60%, do we have the inventory in our current projects to achieve ₹3,000 crore of pre-sales in FY '27?

I didn't understand ₹3,000 crore, what is meant by, but let me address the overall question. I think if you look at the launches that we expect this year, roughly ₹7,000 crore, somewhere 67 to ₹6,700 to ₹7,000 crore, and we didn't sell any of the Rainforest last year, the entire ₹3,000 crore is available to us.

Roughly ₹10,000 crore, maybe a little bit more, with hoping more launches, will happen. Of that, we're expecting that plus the inventory we had from prior years like Blossom, Vista, Ivy Lush, and then a few others, and Marina 64.

These are big big projects for us, and decent amount of inventory is there. Between all these sustenance projects as well as current-year project, we should have enough inventory to achieve our aspiration of 4,500 to ₹5,000 crore.

Anyway, 1,000 has already happened, now a little bit less to be achieved in the remaining nine months.

Okay.

Hopefully, we have addressed the question, right? If you have any more, you can drop a note, we'll follow.

Yeah.

Sure. The third question is from Mr.

Bhatia of SRE Fund Management. The question is, what is the progress on Origins Ahmedabad and Origins Pune?

When Mahalakshmi project is likely to be launched? These are the two questions.

Yeah. Let me take that.

I think and Vikram, you can jump in. I think Origins Pune is very simple.

We are still finishing land aggregation. We are trying to create a healthy size of industrial park.

It'll take some time for us to complete that. We'll keep you updated of the progress.

Origins Ahmedabad, there is no issue with land aggregation. It's finding the right commercial client.

I think our desire is not to have first client which is small. We want it to be decent-sized anchor client.

That's something that we are awaiting. We also feel that with the new data center policy that has been announced, the land parcel like ours will become valuable.

This land is a little bit outside Ahmedabad, we are aware of and we are patient about getting the right client, hoping that it'll happen in the next few quarters or years. We're patiently awaiting the right client now at Origins Ahmedabad, and Origins Pune I covered.

You had a sub-question on that, Mahalakshmi, right?

Mahalakshmi, launch

Mahalakshmi. Mahalakshmi project likely to be launched.

The RERA has been received. The pre-launch activities have already started, sales and marketing.

I think we had our channel partner meet just on Tuesday, right?

Right.

Just Tuesday, three days back. In a way, we are in the pre-launch effort.

I think the first sale will start to happen, I think by end of this month or early next

First week of August.

First week of August, yeah. Vimalendra is confirming.

First week of August is when we expect to start the selling part to start at Mahalakshmi. That's the question you asked, huh?

You have two questions, right? Yeah.

The next question is also from SRE Fund Management. The question is, what is the update on Lakefronts as it is completed and as it is completed 100%, and Green Estates in terms of completion?

The second question from them only: how Luminare revenue recognized in the financials and our revenue from the Alcove project, when it will get recognized? There is one more question from them: what is the total residential and commercial mix for the Thane land?

Okay.

Let me cover the first two, and Vimalendra, I'll request you for the Thane piece, right? Lakefronts has multiple phases, right?

We have delivered A, B, C, D, E. Five towers have been delivered in two phases, right?

The H and I is launched, fully sold out, is being constructed right now. F and G is something that we are likely to launch this quarter, which is waiting for final set of approvals.

Then typically you count these are not high-rises, they are mid-rise, maybe you can take two and a half to three years for it to be completed. We've seen a big swing in the fortunes of Lakefronts with last phase when both the towers were sold out in one day, right?

Right,

all the apartments with large customer. How Luminare revenue is recognized in the financials and how revenue from the Alcove project.

Sriram, you want to take that? Yeah.

As I said on Luminare, we bought out our partner in this entity, Mahindra Homes Private Limited, and we are now consolidating 100% of that entity. So, 100% of the profits for Luminare is something that we recognize right now.

In this quarter, we had roughly ₹600 crore of revenues coming in from Luminare and recognized the profitability. As I said, it's been a very profitable project.

Between Eden and Luminare, we had recognized close to 26% of PBT margins.

I think what you recognized, part of that has been recognized when you bought out. Luminare profitability is reflected in

two years.

Last year we had some gains when we bought out Actis. That also reflects the part of the profitability of Luminare.

On top of that, when the OC received, then we got 100% of that. That's what's captured here.

Alcove?

Yeah. On Alcove, we're expecting the OC to come pretty soon.

C, D, and E has already come.

C, D, and E has, yeah. Alcove had five towers in all.

C, D, and E, we received the OC last year, and it has been recognized in the profits last year. Two towers, we're expecting OC to come very soon.

Yeah.

The Alcove is a revenue share or area share agreement with the landowner, so that's how it's recognized, right? We recognize

our portion

in that project. Vimalendra, can I request you to address the total residential and commercial development potential for Thane?

Yeah.

Yeah. Hi.

Good afternoon, everyone. Thane, we are currently at the planning stages, obviously a large project for us.

In terms of the split, the way we are looking at it is because this location is very connected to the main road, main highway, the Thane highway, roughly say 20% to 25% of the FSI available we are looking for, say, commercial, given the way a lot of the business opportunities and the jobs are creating in Thane city. The balance, around 70% to 75%, we are looking at residential.

That's the broad-level mix. Of course, we have multiple options in terms of under what policy to go for the approvals, but that we will evaluate prudently, and then get back to you.

I hope this addresses your question on Thane.

Value-wise, right now we have counted ₹7,500 crore, right? Right.

Value-wise, currently the GDV is ₹7,500 crore.

Yeah. We have more FSI, right?

Depends on

More FSI. It's just that depending on what kind of product we want to do, and we want to do a great job and make it a landmark given that we have a large, contiguous land here in a way that, and the thought is that how can we make that as the most marquee location of Thane.

As you would know, there's a lot of infrastructure projects currently going on in Thane, which are also enhancing the connectivity, which are also enhancing the overall liveability and the value proposition of Thane as a city. Very specifically about our location because it's very close to where the tunnel for Thane-Borivali is being done.

That really augurs well for this particular destination in future.

Very good. Dev, back to you.

Yeah.

The next question is: inventory months has rose from 13 to 15 months. What is the current scenario?

Also, could you share the city-wise for MMR, Pune, and Bengaluru separately? Addition to this question is: given the IT sector headwinds, are you seeing any challenges in site visits, conversion ratios, or cancellations, specifically in Pune and Bengaluru over last two quarters?

This is from whom, this question?

This is from Mr. Saurabh Grover.

Saurabh. Very good.

Saurabh, great set of questions. I think let me attempt to address them.

You're right, the inventory months have gone up, and especially for last quarter. I think from the analyst reports, research report, what we found is that we saw a significant slowdown in March, but it's captured in the previous financial year.

The April month was practically washed for most of the real estate players, right? It's driven by sentiments, what is going to happen, how long the war will last.

All those things came to play. Things started to move up in May, but June was, I think, as I learned from one of the reports is, that was one of the best months in the last, I think, one to two years, right, somewhere around that.

Pent-up demand of, let's say, April, May came to conclusion in June. That's what we have seen, and that gets reflected in the overall inventory months index that you see.

While June was good, but overall, we'll see some kind of slowdown till this war situation finds a conclusion. I think every day we wake up to some new news about Israel and Iran and US and oil prices and foreign currency, and it has impact on our financial market, which has an impact on sentiment, which have an impact on real estate purchases.

I think, that's how the 13 to 15 has happened, and I think we'll take maybe another quarter, two quarters for it to stabilize, right, to the right level. As real estate is cyclical industry.

It has always has great years, and then it has some tough years. I think we've seen the best years in the last four, five.

I think next few months, maybe a few quarters, may be slower than past. The good news is that the players who are well-established, branded players, have the trust of customers, will continue to gain share from, let's say, builders, developers who are less established or who have not delivered a great products or relatively new to the market.

The branded players, listed players are likely to gain share, and we are hoping to be one of the beneficiaries. That will, even though inventory overhang might increase, but counterside is the flight to quality towards better builders will help us.

For MMR, Pune, and Bangalore, Sriram, you have the data, inventory months? Yeah.

MMR pretty much is around 16, 16.5 months of inventory. It's still healthy relative to where the past was.

On the Pune and Bangalore side, the inventory overhang is actually much better. I think Pune and Bangalore ranges at around 8 to 10 months, and it's in a very healthy position compared to the overall India market.

8 to 10 months.

8 to 10.

As you can see, these are the three cities we are participating. One is on the average higher value, the other two, which are slightly lower ticket size, are better.

Then if you go to, let's say, Delhi and Hyderabad and some of the other markets, you'll see probably lower than the average. The overall average is around 16.

Luckily, and touch wood, that we are playing in those markets that are slightly better from a portfolio perspective, and we hope to capitalize on the momentum that we still have in these markets. Your second part of the question was, given the slowdown in IT sector due to the headwinds that we see, the AI challenge that we see, I think we didn't see the IT-related slowdown as much as we saw war-related challenge, especially in Mumbai.

Yeah. Even in Pune, we didn't

see. We didn't see.

I think, and also, probably we had a blockbuster launch in last quarter in Quarter 4 in Mahindra Blossom, which was not affected by war sentiments. We had Citadel Sanctum launch currently going on in Pune, and I think we have a very good footfall so far.

Good footfall, good response.

That's been okay for us, but we're watching the market sentiments, segments which are lucrative for us to pursue very carefully, and so far it's not been major from an IT perspective, but we'll keep our eyes and ears open. Conversion ratios, no major change.

Cancellations, I think luckily we never had high level of cancellations. We are very very small, less than 1%, right?

It continues to be good over the last two quarters have been similar.

Yes, nothing out of the

Nothing out of the, right?

Next question is from Parikshit. There are three questions.

I will go one by one. The first question is, what are the plans for NCR re-entry?

Next question. Let me come back to this question.

Second is, how is the response for Rainforest?

Okay. The third one?

Third one is, can you give some more color on BD for rest of the year, at what kind of deal sizes are you seeing in MMR, Pune, and Bangalore?

Okay. Got it.

I think, Parikshit, thank you for these questions. I think the first question, I think I will wait on NCR re-entry for at least a year.

This is the first time I've given guidance for our residential pre-sales in our recent history. There may have been more in the past.

For us to achieve this target is a way to demonstrate that we can execute well and meet our commitments externally, right? Although war sentiments are not suitable, optimal, but still we know we have good set of launches planned.

We hope to achieve our aspirations and targets for this year. Once we achieve that, then we'll evaluate.

Are we meaningful enough in this market, and where the opportunities are? Is NCR the market, or should we double down another market?

That is also a consideration for us. With the new government in Kolkata, is that a market that we should consider, or should we consider Chennai because Mahindra World City has created a great name for itself, or should we focus on Jaipur, which will have the rub-off of NCR, and we have a huge piece of land under Mahindra World City Jaipur.

I think we're evaluating these three, four choices that we have. I think this year is all about execution on the sales side and making sure we continue to demonstrate profitability and execution on the ground.

NCR entry, I think we'll take this question again in a few months. That's first.

I think the second is the Rainforest. I think Rainforest was one of our biggest bets to transform Mahindra Lifespaces away from affordable mindset, central suburbs, great location, very large project, very well-located.

I think I would say that despite some of the war-related sentiments, we have done well. I think we couldn't capture all the sales that happened as of 30th June because quarter ended, but in the I would say month, maybe five weeks of sales opening, we have done close to ₹600 crore, which is, as we understand, one of the largest in that micro market.

This is only part of the year. We have still nine months, eight months to go.

This will again be a very successful project, not withstanding some of the challenges of the war which we saw in the early part of previous quarter, hoping that they don't affect the morale and sentiments for further buying, right?

Amit, just to add, we have done these numbers, Parikshit, by commanding a premium on the pricing side relative to all other players in that particular micro market. I thought that's also pertinent.

We have done good volumes at good value in terms of the pricing.

You're calling

rich pricing.

Rich pricing,

yeah. I think the people have really taken the projects well.

The number of walk-ins are very very strong. You will see the numbers growing from here on.

Great. The third question was BD, right?

Business development, right? There are certain elements within that, which cities, right?

Yeah. Mumbai, Pune.

Yeah. I think

our BD will continue to be strong. As I mentioned in my opening remarks, I finished three years, right?

We've done 18, 18, and 4, 4,000-odd, right? It's been roughly more than ₹40,000 crore that has been done, and we had some of the earlier inventory and projects that were already there with us, right?

Citadel was there, Vista was already there, right? A couple of others were already there, like Vastera was already there.

Then Jaipur and Murud is also part of our 50,000. We have made a big stride in our GDV, and good news is that we've done it in a versatile manner, right?

Some are greenfield, some are JDA, some are society redevelopment, and we are leveraging our capital strength adequately. We feel that when the market slows down, there'll be more opportunities for somebody like us who has been very focused on execution, but also managing a healthy balance sheet with practically no debt, right?

Something that we want to leverage as we enter this slightly slower phase. Since we have done last two years of 18,000, we already done 5,600 this year, we expect, I think, somewhere between 10 to 20,000.

The reason I give a broad guideline because I don't want to chase a number. My team is fully aligned in doing the right deals rather than a deal, right?

Right deal means it should give financial returns to our shareholder. The deal should have more upside than downside, especially as we enter the slowdown.

You cannot have low-cost assumption and high-price expectation. We will always, in our underwriting, underprice and overcost so that we have upsides on both sides in terms of the actual execution.

That's our plan: 10 to 20,000, but no specific number, but we'll hopefully continue to show growth. A big part of that is already happened.

In terms of portfolio, it will be 60-20-20: 60% will be Mumbai, 20% Pune, 20% would be Bangalore. I think we have a healthy pipeline for us to achieve that.

Those are the three questions from the Parikshit.

There's one more question.

One more question, yeah?

Yeah. The question is, what is the initial response for Mahalaxmi?

How is EOI stacking up versus the GDV?

How is?

EOI stacking up versus the GDV.

Oh, okay. EOI.

Vimalendra, you want to answer that?

Yeah. Hi, Parikshit.

We just did a channel partner meet this week itself, actually, and that's how we formally introduced the project to the market. The initial response has been very good, very encouraging.

As if you have seen our ad, we have said it's homecoming for Mahindra Lifespaces in South Mumbai. In the past, we had done two projects, but after a long, long time, we are doing a project in South Mumbai, and hopefully we'll do more.

All the feedback from the channel partners and the customers who have walked in has been very, very positive. I will not be able to give you a very specific number given that we are in that current book building phase, but I can tell you that it's been received very well.

The other thing is, as a very conscious strategy and conscious choice, we said that it's not that we have too many units to sell in this particular project, and hence we want to command a significant premium in that particular micro market again. From that perspective, we are very well-positioned.

Again, we have pitched the project at a higher pricing compared to the micro market, and in spite of that, given a very strong brand pull that we have, we have seen some great interest, which has got converted into EOIs as well. Hopefully, we should be able to start the netting process somewhere in the first week of August, as Amit mentioned earlier.

Watch out for more with respect to Mahalaxmi project.

The next question is on luxury segment. What would be the share of luxury projects going forward?

From whom?

It is from Anand. Okay.

Luxury. Luxury is a very tricky one.

What happens is you have a higher price and higher size. Ticket size becomes very large, and we want to be careful about participating in those segments.

We are anxiously looking at Vimalendra for Beacon Hill sellout or a good response, and that's Beacon Hill, Vastera, couple of other projects like Lokhandwala, they are in the price segment of ₹50,000 to ₹60,000 per square foot: one Mahalaxmi, one Lokhandwala, and one Santacruz, right? These are interesting locations.

These would be the highest price-point products per-square-foot-wise we would have done.

Yes.

I think the selling is different, the product design is different, the delivery is different, the timelines are very different. I think this should give us enough learning and confidence to do more.

I think, as you have seen our Mahindra cars, SUVs have really pushed the boundaries on premiumness. Many times they call it luxury cars at a bargain basement price, right?

I think that's the value creation that happens. That's the value you offer to the customers, and we hope to deliver the same thing.

You give a great product at a very good price, and that's why you'll gain share in the market. We are not chasing luxury right now, but we're chasing success of some of these projects.

Once we have the success and the learnings, we'll hopefully be able to pursue other projects where we can say that this is better than any other project that you may have seen from our peer group. No specific luxury plan, but we are making our progress towards achieving a premium positioning in the market.

The next question is, how will we control the expected significant rise in construction costs for steel, tiles, concrete, glass, and other materials given the current situation of war? Yeah.

I think I mentioned that earlier, we are conservative in our financial planning. We overcost and underprice.

I think we have taken a healthy contingency, healthy escalation, healthy DLP, healthy many of the CER and all those things, all those requirements. As you noted, the cost will go up a little bit for certain commodities, like aluminum will go up, Aluform will go up.

It's 10% of our cost structure, but what happens is we don't award all 100% in year one, especially in the year when things are tough. We award some part, let's say 25%, 30% in year one, another 20% year two, 20%, 20%, 20%.

Five years is roughly 20% each is what we award. What you see is an uptick this year may get normalized next year.

We are careful. Our calculation, Sriram and our team have done the analysis.

I think we have taken additional contingencies. I think it's on top of what we had already assumed, roughly just under 1%, because you will not give all the contracts today.

We'll do it in the next few years. That's what we have additionally created a reserve for us, which will give us the opportunity to tap into any kind of cost increases we have, and we feel that should give us enough cushion.

We will stay tuned. Also understand India is a country where the wage inflation is somewhere between 8% to 10%, right?

The pricing growth in real estate we have assumed is 4% to 6%, right? The cost increase needs to be below that, right?

In one year it might go up, but overall it'll be 4% to 6%. Think of it.

It's a natural hedge that happens. Inflation of wages, inflation of housing prices, and inflation of cost, they're kind of hedged to each other, right, naturally.

Hopefully and not 100% of cost is getting increasing, like steel prices actually came down, right? Right, Sriram?

Right? The aluminum is up, concrete is slightly up, right?

Some of the other commodities are okay. As the demand contracts a little bit, the supply also is there, we'll also see some benefits on the purchasing side.

We're carefully looking at that equation. Our goal is to deliver great quality products to our customers on time, right?

If that means a little bit of cost here and there, I think we'll be able to absorb that. Good.

We still have

one

question?

This is from Viplav.

This is from Viplav. The question is, we are targeting ₹15 billion PAT for IC &

IC

business over four, five years. How much that translate to pre-tax cash flows?

15 billion?

₹1,500 crore of cash

Correct.

₹1,500 crore of PAT which we are expecting over the next few years for IC. I'll take that.

Viplav, in the IC business, we had put out that we'll have about ₹1,500 crore of PAT coming from our IC business over the next few years. See, typically this translates to anywhere between ₹150 to ₹200 crore of PAT every year.

In terms of cash flows, since the land cost and some of the initial infrastructure cost is already incurred in our parks, especially Jaipur and Chennai, it tends to have a cash flow potential of close to ₹200 to ₹250 crore per annum.

Yeah.

That PAT is, of course Anything you want to add?

No. I was just saying that we do it on the receivables business, right?

We only account for the income when the cash flow is in place. In this case, when we talk about the revenue, it's the entire revenue which is in cash flows, and the PAT is available for us to use.

Yeah.

One last question is there. The question is, what is the look on the current residential market given the geopolitical tensions we have in the world?

Yeah. I think we have seen the best of the current cycle in the last three, four years, right?

The next at least two years will not be as high, especially on the pricing growth side, right? It'll be moderate.

I would say the investor demand will just go away, the end-user demand will continue. India is a large country with a large end-user demand.

Just to give you an example, in Mumbai, 40% of the population still rents apartment. 30% lives with family or friends or some relative.

30% are owned and lived, right? In a way, 40% for sure, but probably 70% of the current residents are prospects for us to sell our apartments.

Overall India-wise, we don't have enough volumes, right? The big question is, how do we match the needs of these customers with the right segment, right value proposition, right pricing, right?

That's where the most developers are focusing on. We feel that the volume will continue to be there, but at the right price, and that's why we have positioned our product at mid-premium, premium.

We feel that the pricing growth will be, instead of 7%, 8% or 20% that we saw in the past years, it'll be around 4% to 6%. That is just to cover, let's say, the inflation on cost side will be there.

A little bit of slowdown, I would say, but the counter to that is those developers who have great trust, great brand, they will gain share from other developers who may or may not have. Because the smaller developers can't have price premium, right?

Their cost of debt when they take is probably 50% higher or 100% higher. Like we are at 8%, they're at 10%, 12%, 15%, right, times.

Then their cost structure may be a little bit lower, but it cannot be so low that they can absorb lower price and higher cost of funds, right? They will find it difficult financially, and if they can't make 25% return on their capital, they will not participate in this market.

A lot of that capital that came in the last few years to pursue real estate may just go away or may not exist in future. There'll be a share gain, I'm hoping, for some of the well-established developer, including us.

Whatever slowdown that you might expect might get made up in the share gain for better-quality players, and we hope to be one of them. That is our view on the market.

Also, we're playing in the right set of market. Don't play in all the markets.

Some of the markets are slowing down. We are focusing on, as we discuss, inventory overhang, where that's at average or below average, which is good for us because that velocity will continue to help us in terms of achieving our targets, guidance for this year as well as for FY '30.

That's

all from the question side.

With that, thank you so much, all colleagues on the phone, on the bridge. We really appreciate your questions, thoughts.

We're all ears in case of any suggestions, anything that you have. We'll follow up.

Please let Sriram, Dev, myself, Vikram, and Vimal know if there are any other question that you have. Happy to set up a call for a follow-up discussion.

Thank you.

Thank you.

Thank you, everyone, for joining the call.

Thank you.