Arihant Superstructures Ltd Q4 FY2024 Concall Summary

Key Takeaways

• Record quarter, record year: Q4 revenue jumped 35% QoQ to INR 162 crores, closing a year in which PAT grew 62% YoY on 30% revenue growth.
• Pre-sales hit an all-time high: FY24 sales bookings reached INR 970 crores, and management calls its INR 1,300 crore FY25 target "conservative" with possible upside.
• Margin story is intact and improving: Blended EBITDA margin inched up YoY toward 22%, while new projects are underwritten to deliver 30%+ EBITDA, pulling the blend higher as they launch.
• The land bank is the moat: Low-cost, accurately timed land acquisitions have kept projects viable through cycles, and the company is scaling acreage from 200 toward 300 acres.
• What to watch next quarter: The pace of new launches from the INR 2,300 crore project pipeline, whether Q1 collections recover from the Q4 dip, and any update on capital-raising plans.

Sales & Launch Momentum

• Q4 bookings surge: 759 units sold across 6.49 lakh sq ft for INR 404 crores, one of the highest quarterly figures ever, driven by new phase launches at Arihant Aspire and the debut of Arihant Adarsh.
• FY24 mix balanced across price points: By value, affordable contributed 30%, mid-income 50%, and premium 20%, with an average realization of INR 6,237 per sq ft in Q4.
• Price hikes stuck: Up to 7% price increase achieved across all sites in FY24, supported by rising demand and infrastructure catalysts like the Navi Mumbai Metro and Atal Setu.
• FY25 launch pipeline is deep: Seven projects with commencement certificates received in late March and April, totaling INR 2,300 crores in new business, will launch month-on-month through the year. World Villas at Chowk is slated for mid-June, Arihant Avanti around Q2.
• World Villas scaled up: The planned unit count was raised from 75 to roughly 180 to capture demand and avoid losing buyers with specific preferences.
• Cancellations are a known friction: 10-15% cancellation rate is typical for high-volume markets, mostly from customers who fail loan eligibility checks.

Parth Chhajer: "We are confident of this guidance and our target for pre-sales is INR 1,300 crores for FY25. Obviously, this is a conservative number. There could be some surprises."

Collections & Cash Flow

• Q4 collection efficiency dipped: Two launches in February and March mean collections will follow with a 60-90 day lag, as loan sanctions and disbursements take 30-120 days depending on the customer profile, and payment schedules are tied to construction progress.
• FY25 collections target set: INR 650-700 crores expected across the full financial year, with roughly 30% growth in collections anticipated.
• Cash flow priorities: The majority of cash flows will fund self-developed projects; about 10% can be directed to land payments and acquisitions, while business development will need separate funding.
• Interest outgo mapped: FY25 cash interest outflows projected at INR 50 crores (INR 30-35 crores institutional, INR 20 crores to promoters), with total book interest around INR 70-75 crores including accrued unsecured loan interest.

Margins & Profitability Drivers

• Blended margin inching up: Current blended EBITDA of 22% is rising year-on-year, pulled by a growing share of new projects that target 30-35% EBITDA at the project level. Older projects from 2010-2012 carried only 10-12% EBITDA.
• Infrastructure as a margin catalyst: The Atal Setu and upcoming Sea Link are expected to give a spurt to margins on older projects by improving connectivity and demand in those micro-markets.
• Premium mix shift underway: The premium segment is expected to contribute more to revenue and EBITDA in FY25, which management says will lift margins further.
• Land cost is the structural advantage: Management attributes the company's ability to survive downturns and deliver high profitability to disciplined, low-cost land acquisition, calling it "the real zinc thing."

Ashok Chhajer: "Our land cost, that is where the real zinc thing is that our acquisition prices have been far, very accurate, very low cost, which has helped the company to even go through bad phases."

Land Bank & Business Development

• Acreage expanding: Land bank growing from 200 acres toward 300 acres, with a target mix of 75% owned land and 20-25% asset-light joint developments or redevelopments in mature markets.
• Business development CAGR targeted at 20-25% this year, with the company open to both outright purchases where capital outlay is lower and joint structures in developed areas.
• Capital efficiency track record: From INR 40 crores of initial capital in 2010, the company generated INR 600 crores of EBITDA over a decade while paying INR 350-375 crores in interest, building a net worth of INR 325 crores.
• Open to external capital: Management signaled willingness to invite investors at an appropriate time to fund growth and maintain a top regional position, though no timeline was given.

Ashok Chhajer: "From INR 40 crores of initial feed capital we could do up an EBITDA of INR 600 crores in the 10 years. So going forward also in the same style and where we see opportunities we see things coming up to the company."

Club 10 Gymkhana & Ancillary Business

• A company-owned asset, not a trust: The club is 100% owned by Arihant Superstructures Ltd; membership fees are income to the company, not reimbursement of costs, and there are no trust or managing committee elections.
• Investment budget clarified: Total investment budgeted at INR 150 crores, not the INR 250 crores initially floated by an analyst.
• Life membership model: The club will operate on a life membership format with a business plan for monthly inflows and outflows.

Ashok Chhajer: "There are no Trust or Managing Committee elections here. This is 100% ownership, right? This is the property of the company that owns the shell."

Guidance & Commitments

Key Metrics