Residential developer Shriram Properties Ltd announced its financial results for Q2 and H1 of FY 2023. The company saw a growth of 52% QoQ in sales volumes of 1.01 msf and 39% QoQ in aggregate sales value of Rs 435 crore during Q2 FY 2023. The aggregate collections and construction spend were at Rs 315 crore and Rs 135 crore, respectively. It registered a net profit of Rs 19.6 crore.
The developer reported its first half sales of 1.67 msf with 27% YoY growth in sales value at Rs 747 crore in H1 FY 2023. It has attained 5% higher realisation during H1, on top of about 8% growth seen in H2 FY 2022. On the execution front, the company handed over 700+ completed residential units and will hand over nearly 2,000 units in FY 2023.
The total revenues rose 90% QoQ and 193% YoY at Rs 275.8 crore. The revenue from operations nearly tripled on YoY basis and more than doubled on QoQ basis. This was backed by increased handover momentum in completed projects and receipt of OC in some key projects.
EBITDA for the quarter at Rs 51.3 crore saw a growth of 44% QoQ and 138% YoY, supported by an increase in revenue recognition on completion and handover of projects and slower growth in operating expenses.
In the first half of the current fiscal, the revenue from operations grew nearly three times and stood at Rs 380.7 crore as against Rs 118.2 crore in H1FY22. Total revenues were nearly 2.7 times higher at Rs. 420.9 crore, with increased momentum in customer handover on receipt of completion certificates in two key projects during this period. EBITDA stood at Rs 86.8 crore in H1 FY23, reflecting a growth of 162% YoY.
The overall finance costs were lower by 17% YoY, while actual interest costs were down 28% YoY in H1, reflecting the impact of lower debt and ongoing refinancing efforts to lower costs. The developer has refinanced over Rs 103 crore of debt in its balance sheet and an additional Rs 380 crore at JV level during H1FY23.
The company registered a higher share of profits from JVs on YoY basis at Rs 5.3 crore in H1FY23, reflecting the start of revenue recognition at Shriram Park63, a JV project in Chennai.
The net profit for the period was Rs 30.1 crore in H1FY23, against Rs 18 crore for the full year in FY 2022. With the company’s focus on reducing debt and interest costs further in coming quarters, the gross debt stood at Rs 478.8 crore while net debt was at Rs 374.4 crore in Sep 2022. The Debt-Equity ratio at 0.32x is among the lowest in the sector.
Recently, the company signed an MoU with ASK Property Fund to set up an investment platform for the acquisition of residential real estate projects. The company has near-zero inventory in completed projects, and around 80% of its ongoing project inventories have been sold. It will hand over nearly 2,000 units in FY 2023 and over 10 msf during FY 2023-25. About 75% of revenue recognition over the next three years would come from cumulative volumes sold till Sep 2022 and about 60% DM fee would come from projects launched already.
Murali M, chairman and managing director, said, “We are encouraged by the strong operational and financial growth as well as sustained earnings growth momentum seen since listing. We will remain focused on profitable growth by leveraging the strong project pipeline and market opportunities. Improving operating leverage and stabilised DM business model should add further strength.”