DSIJ Mindshare

Transparent And Timely Delivery In The Offing

Please walk us through your business in brief?

Kolte Patil Developers (BSE:532924, NSE: KOLTEPATIL) is a leading Pune-based real estate company incorporated in 1991. Kolte-Patil is a well-reputed, trusted name with a reputation for high quality standards, design uniqueness, transparency and the delivery of projects in a timely manner. The company has developed and constructed 48 projects including 35 residential complexes, nine commercial complexes, and four information technology parks covering a saleable area (KPDL share) of over 10 million square feet across Pune and Bengaluru.

The company has been accredited in the real estate and construction industry with an ISO 9001 (2008 series) certification since May 2002. The company has also fostered several long-term relationships with major financial institutions like ICICI Ventures and Yatra Capital, development and strategic partners like Portman Holdings, constructions partners like ANC Holdings (Dubai), real estate funds like ASK and individual investors as joint venture partners and co-investors in future projects. These partnerships are in-line with the core strategy of equity led expansion, improved levels of corporate governance, increased sourcing and execution capabilities helps de-risk large scale project execution and facilitates expansion in newer markets.

Kolte Patil Developers has predominant exposure in Pune with minor exposure in Mumbai and Bengaluru. What are your diversifi cation plans?

Kolte Patil has presence across growth markets and price points in Pune, and has consistently been the #1 residential real estate player in Pune with a market share between 7-10 per cent. Even though we constantly evaluate newer markets, the Company will focus on Pune, Bengaluru and Mumbai markets in the medium term. We will look to capitalize on the inherent market demand and strong brand presence in Pune and see tremendous scope to further increase our market share. In Bengaluru, we are building our brand presence and expect increased contribution through the activation of all projects in the pipeline. As far as the Mumbai market is concerned, we have judicious expansion plans. Our focus in the near term will be on unraveling the potential of society redevelopment projects and on launching the three projects won last year.

Please brief us about your current and future projects.

The company has a fully paid land bank of 53.6 million square feet spread across Pune, Bengaluru and Mumbai. This includes 35.3 million square feet of ongoing projects and projects expected to be launched over the next twelve months. The company has further development potential of 18.3 million square feet. 92 per cent of the land bank is concentrated in Pune, seven per cent in Bengaluru while one per cent in Mumbai.

The debt-equity ratio is considerably lower compared to other real estate developers. How do you manage your debt-equity in present tight liquidity scenario?

Our focus is always on staying cash flow positive at every stage of the project. We have a conservative approach to debt financing and look at fast tracking debt payments even before maturity. To support significant volume growth owing to large number of project launches planned, Board has sanctioned a net debt to equity between 0.2-0.5x. Even after incurring our highest ever land capex in FY14 and the other challenges we faced pertaining to approvals, our balance sheet continues to remain healthy with a net debt to equity ratio of 0.17 xs as on 30th June 2014. We continue to allocate capital judiciously based on future cash flow visibility across every new initiative and new project.

What is your guidance for growth in your top line and bottom line for FY15?

We believe that over the next three years, we will achieve new area sales of 12 million square feet at an average price realization of Rs 6000/sft translating into a sales value of Rs 7200 crore over FY15-17. The sales value is more than double of what we achieved between FY12-14. 

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