Ajmera Realty & Infra India Ltd Q3 FY2024 Concall Summary

Key Takeaways

• Record quarter, sales target in sight: Revenue hit a decade-high INR 209 crores, and with INR 730 crores in 9-month sales value, management is confident of surpassing the INR 1,000 crores full-year target.
• Project pipeline is the growth engine: Eight new projects announced, headlined by a Bandra West luxury JV with Rustomjee, with all launches confidently slated for the coming financial year.
• Realization strategy is working: Prices are being hiked as projects near completion, with ready or nearing-ready assets seeing 25–30% YoY realization jumps, protecting margins.
• Balance sheet is built for the cycle: Debt is steady at INR 785 crores with a 0.94:1 debt-equity ratio, and a structured deal on the Manhattan project has been consummated to further improve debt management.
• What to watch next quarter: The specific financial impact of the consummated Manhattan structured deal, the launch of the first Kanjurmarg phase, and the finalization of the Wadala commercial land demerger.

Sales & Project Performance

• Ajmera Eden drives the quarter: The premium Ghatkopar project became revenue-recognition eligible in Q3 and has already sold 50% of inventory despite construction being only at the second floor.
• Ajmera Manhattan benefits from infrastructure: The compact luxury project is over 60% sold and at mid-stage completion, with a fresh demand surge from the newly opened Atal Setu bridge bringing MMR buyers to Wadala.
• Bangalore projects near sell-out: Ajmera Lugaano and Ajmera Florenza, both affordable residential, are approximately 80% sold and under fast-track execution with a commitment to deliver before RERA timelines.
• Completed projects winding down: Ajmera Greenfinity in Wadala and Ajmera Sikova in Ghatkopar have very minimal inventory left, while Ajmera Prive in Juhu has reached its final RCC slab and continues to sell well as it nears completion.
• Realization rises with project maturity: The strategy of pricing higher as projects approach readiness is delivering: Manhattan saw an 8% YoY rise, while Nucleus and Sikova, which are ready or nearing ready, saw 25–30% hikes.

Dhaval Ajmera: "Wadala has been a very strategic location in terms of connectivity because probably this is the only suburb I would say of Mumbai which is connected by every infrastructure or the transport available in city of Mumbai..."

New Project Pipeline & Launches

• Bandra West JV with Rustomjee: A joint development and redevelopment partnership for a luxury residential project, marking the eighth new project announced and the company's entry into a prime western suburb.
• Kanjurmarg is the next big one: A large mixed-use project with commercial, residential and other components is under approval, with a part potentially launching this financial year and the full master plan to be unveiled once ready.
• All announced projects are locked in: Management confirmed that every announced project has a signed, registered development agreement, MoU or JDA, with planning nearly finalized and approvals underway, giving high confidence in launching all within the coming financial year.
• Redevelopment pipeline is active but unsigned: The company is pitching to 20–30 societies at a time across Juhu, Versova, Borivali and Bandra, filtering for plots above 1,000 sq meters and preferably 2–3 lakh sq ft carpet area for quick turnaround, though nothing is signed yet.
• Pune project still in the works: The company is still finalizing and closing the deal, with an announcement promised when ready.

Financial Position & Margins

• Collections keep pace with sales: INR 151 crores in collections were driven by sustained sales momentum and fast-track execution, supporting the revenue recognition cycle.
• Debt is stable and manageable: Debt levels held at INR 785 crores with a debt-equity ratio of 0.94:1, well below 1x, while the weighted average cost of debt remained stable at 12.3% due to the RBI's rate status quo.
• Structured deal consummated: The previously announced structured deal for the Manhattan project has been closed, with specifics to be shared in Q4 and an expectation of improved debt management and cost of debt going forward.
• Margin trajectory is protected: On input cost rises, management can raise prices on nearing-completion projects, while for under-construction projects it prioritizes volume and absorbs temporary hikes, raising prices only if the increase proves permanent.
• EBITDA margins can inch up: With the current project mix of society redevelopment, MHADA, SRA and own land bank, margins should maintain their trajectory, and as more own-land-bank projects come online, margins can rise further, though no specific target was confirmed.

Dhaval Ajmera: "our land banks are all already paid for and nothing is there in the debt form. So, we stand to be stronger than others number one."

Growth Strategy & Market View

• 5x growth target within reach: Management stated the company is inching very near the 5x growth mark, having already progressed from ~0.1 crore sq ft to 0.23 crore sq ft of projects, from 7 to 16 projects, and from INR 1,000 crores to INR 3,000 crores GDV, with confidence of crossing the target sooner than estimated.
• Faster project cycles: The stated goal is to finish or close every new project within a 2-to-3-year cycle, a shift enabled by the focus on redevelopment and JV projects with quicker turnaround versus large land-bank developments.
• Mumbai macro remains supportive: Management is buoyant on Mumbai region sales for the coming few years, citing the Indian economy's strength, infrastructure rollouts like the Atal Setu bridge, coastal road and metro expansions, and no expectation of a significant pricing dip.
• International projects progressing: UK repatriation has already begun in the current financial year, while the Bahrain project is in full execution with inventory entitlement expected to generate good cash flow and repatriation from the next financial year onwards.
• PE participation is possible but not formal: The company is open to project-level participation and some funds have shown interest, but no formal tie-up exists yet.

Dhaval Ajmera: "I personally see real estate being in a good growth trajectory over the next few years and definitely in that developers who have been part of this business over many years and done good deliveries definitely stand an edge towards as compared to others."

Corporate Developments

• Wadala commercial land demerger progressing: The NCLT final petition has been approved and the final order is expected at the next hearing, with regulatory formalities to be completed in approximately 45–60 days, by the March year-end.
• Manhattan Project 2 in design: A second phase of the Manhattan project is under design and development and should come up soon.
• Green homes commitment: All future projects will be certified green homes, with sustainability materials and norms being followed, supported by an internal research team that monitors construction technology and efficiency advancements.
• Professional management structure: Day-to-day operations are completely managed by a team of professionals across construction, finance, planning and HR, with family members involved but the final call resting with the professional team.

Guidance & Commitments

Key Metrics