Good morning, ladies and gentlemen, and welcome to the Q2 H1 FY2023 earnings conference call of Mahindra Lifespace Developers Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then 0 on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Arvind Subramanian, Managing Director and Chief Executive Officer. Thank you, and over to you, sir. Thank you. Good morning, everyone, and welcome to our Q2 and H1 FY2023 earnings call. I'd like to thank everyone for participating in this conference call. As you're aware, many of our key operating entities from the residential business, like Mahindra Homes, Mahindra Happinest, and as well as our IC & IC business, which is Mahindra World City Developers Limited, Mahindra World City (Jaipur) Limited, and Mahindra Industrial Park Chennai Limited, are not consolidated on a line-by-line basis, and I'd request you to view our results with that in mind. My team has given me copious notes on a commentary on the global macros as well as the sector, which, with your indulgence and permission, I'm going to leave to experts on this call. Many of you know that better than I do. I'm going to dive straight into a commentary on our performance over Q2 and H1. In my opening comments, I'd like to touch upon seven aspects of our performance: the residential sales, our cash collection and collections, completions, business development progress and outlook, our IC & IC business performance. I want to specifically talk about the joint venture that we've announced with Actis and some comments on our sustainability journey. So if I look back at Q2, I think we've had a solid, if not stellar, quarter. It builds on a very strong Q1, and I had mentioned at the end of Q1 on our earnings call that I do not expect the same run rate to be maintained. Q2, as you know, is a seasonally weaker quarter for residential real estate, particularly in Mumbai and Maharashtra, because of the monsoons and the inauspicious period of Pitru Paksha. Despite that, our residential sales have been extremely strong. We've delivered close to INR 400 crores, taking H1 to just above INR 1,000 crores, which is an important psychological threshold. I did tell the sales team that the difference between ending at INR 990 crores and INR 1,000 crores is not just INR 10 crores. It's a lot more than that. I'm glad that they took up the challenge and were able to get us across the INR 1,000 crores psychological threshold. As you might recall, the entire FY2022, we did INR 1,028 crores. Seen with that perspective, doing INR 1,000 crores in the first half sets us on a very strong footing for growth this year. In this quarter, we launched one new project, Mahindra Nestalgia, in Pune. It was very well received, just under 70% of the units were sold within the quarter itself, and it's contributed roughly 35% of the pre-sales for residentials for the quarter. The rest of the 65% is a broad-based sustenance contribution across projects, across locations. This is a discipline that we have been maintaining and demonstrating for the last several quarters, that there is a very broad-based contribution to our sustenance sales. The other important aspect I'd like to draw your attention to is very meaningful price hikes that we've been able to take within quarter two, in some cases as high as 6%-8% within the quarter itself. Even in recent successful launches like Mahindra Eden and Luminare, which were launched in Q1, we've been able to take price up very quickly in the subsequent quarter itself. We're lining up for a very strong second half of the year. We will be bringing roughly INR 1,000 crore of GDV to market. This includes both new project launches as well as new phases of existing projects. To touch upon a few of them, the most important ones, we are bringing forward the second phase of Mahindra Eden. The first phase did extremely well. This has you know it was India's first net-zero energy project launched in Bangalore in the first quarter. We've sold about 90% of the inventory that was launched, and that has encouraged us to bring forward the second phase, which was originally planned for launch next year. We will be bringing that to market this quarter at this weekend itself, so it starts tomorrow. This will be followed by Mahindra Happinest Kalyan 2, which we had pre-launched in February last year. We are reactivating that and doing a full-fledged launch later this month. The third launch that is lined up, a new phase launch that is lined up this quarter, is Mahindra Happinest at MWC Chennai. Again, a very successful first phase launch where we sold out the entire inventory of 348 units within six months of its launch last year. So we are bringing the second phase, which is an equivalent equal number of units, another 348 units, to market later this quarter. Looking further into the second half of the year, we will also be bringing our Pimpri land parcel that we acquired in April to market in the second half of this year and are hoping to launch a plotted development in Mahindra World City, Chennai in the second half of this year as well. In addition to these, Mahindra Nestalgia, which, as I mentioned, was a very successful launch in Q2, we are looking at bringing the second phase to market in Q4. So all this put together gets us about INR 1,000 crores of new GDV to market in H2, and this will ride on top of the sustenance sales momentum that we have been demonstrating. Collections have been very robust, and this is, again, a good health indicator for the quality of sales that we are doing as well as the pace of construction. We've done INR 550 crores of collections in H1, which gives us a very strong operating cash surplus and sets us up very well for growth in terms of new land acquisition in the quarters to come. It's an indication that the cash cycle of the business is working very well. Residential completions in Q2 was an area which was muted, and that explains why the revenue recognition and profit in the P&L are low. However, H1 remains very strong. Overall revenue of INR 190 crores booked at roughly INR 68 crores. One of the completions we were expecting in Q2, which slipped into October, was our project the first tower of our project, the Vicino in Mumbai. But we received the OC in early October, so while it's not recognized in the Q2 financials, it will come into Q3. Let me spend a little bit of time on business development. That's a question that I know many of you all of you are keenly tracking. Let me start with an announcement or a positive news. Our Thane land parcel on Ghodbunder Road, we've been able to get the SEZ de-notification as well as other clearances towards development over the last couple of months. So we're now all clear in terms of planning, which we've already initiated. This will be a mixed-use development, and we will be looking to bring a partner in for the commercial assets within that mixed-use development. We're targeting 15-18 months to launch this project. Overall, on the residential business development in the cities of Mumbai, Pune, and Bangalore, we continue to pursue a strong pipeline. We were expecting one deal closure in Q2, but there's some final wrinkles that the landowner needs to iron out in terms of conditions preceding to the deal, and we are hoping to be able to close this within Q3. Overall, there's a pipeline of roughly INR 5,000 crore of GDV, of which roughly INR 2,000 crore are in very advanced stages of discussion, and fingers crossed should get converted in the next 2-3 quarters. The good news is none of the high-priority deals that we had kind of spoken about or indicated in the last quarter, none of them have fallen off the radar. They continue to be very much in our sights, and we are in pole position on all of those deals. Society redevelopment is an area that we had mentioned is going to be an area of focus for us, particularly in the Mumbai metropolitan region. It continues to be an exciting space. We are in the final shortlist in two situations, both of which are taking longer to close, and that is the nature of the deals, unfortunately. In a society redevelopment, there are many members who weigh in on the decision, and very often, there are more reasons not to take a decision than to take a decision. We're finding it's taking a bit of time, but we continue to be fully focused as a management team and putting our best foot forward on those, continue to be, as I said, in a strong position. We are in the final shortlist. Consequently, we had intimated to the stock exchange that the closure of the deal will get pushed out from the original and the first timeline if that gets September. We are expecting it to close in the next few weeks, and everything is on track for that. There were just, again, one or two final clearances that were required from our CP perspective before we can close the deal. In the meantime, we have progressed on the design. We expect to be able to submit our drawings for approval by the end of this quarter and should be able to launch the project within six months thereafter. I also wanted to provide an update on Dahisar, which was a joint development transaction that we had announced in October last year. We have completed our schematic designs and are ready for approvals. However, there's been a stoppage of any new CCs being issued in that immediate micromarket because of a circular from the Airports Authority of India for some radar interference that they are seeing because they have an airport radar, which is just across from the site that we are interested in. We expect we understand this conversational progress between BMC, the Maharashtra State Government, and the Airports Authority of India at the center, and we expect this will get resolved in the next six months, after which we will be able to submit our plans, which are ready for approval. And as I said, six months from there, we will be able to launch. This remains a very attractive land parcel. It's got pushed out by a few quarters from the original plan because of this aviation issue. But the silver lining is, in the meantime, the Metro Line 2, which passes in front of the site, has become operational, so that's further enhanced the value of this development. And both partners, the landowners as well as us, in the joint development, we are both committed to the deal, so working very closely with each other on this. There's no concern per se that it will delay. Turning attention to the IC & IC business, we've done INR 186 crore of leasing in the first half, INR 68 crore in the second quarter. So we're continuing to maintain a strong momentum in that business as well. Jaipur continues to be the major contributor, but we do expect Chennai to come to the party in the second half. There are some interesting deals that are built up there, and we are expecting those to close in the second half of this year. The strong lead pipeline that we have in the IC & IC business gives us confidence that we will have a good year in that business as well. We would have also had successful news of Apple starting manufacturing at Mahindra World City Chennai, again, a good testament to the quality of facilities and the operations that we've run at Mahindra World Cities, that we've been able to get such a marquee manufacturing client to start to set up operations there. Around a month back, we had announced a new joint venture with Actis to build specialized real estate for industrial and logistics clients. Let me touch upon the logic of this new joint venture and the role that we MLDL fulfills as well. So firstly, why did we do this deal? Built real estate for industrial and logistics is a growing asset for us with very strong value creation opportunities. There's been a lot of investment coming in, but we believe we're still in early days of that investment cycle. We see it as a strong adjacency to our existing IC & IC business. It, in many ways, provides an additional leg in terms of a new service offering but also an annuity business opportunity within that segment of our business. MLDL is one of the few developers, organized developers or corporate developers, who've had a successful track record in land aggregation or acquisition for industrial parks. There are very few developers in India who've been able to do that. How are we setting this up? It's going to be a separate board-managed joint venture. We've kept it separate because this is a very capital-intensive business. Actis brings strong financial capabilities and funds to the table. We've also kept it separate because we recognize that it requires very distinct operational capabilities from what we currently have in our IC & IC business, and therefore, the management team will be separate. It will be run and our involvement will be largely through the board rather than a direct management involvement. The other reason why this has been kept separate is this is a business that requires a lot of entrepreneurship and agility and an autonomous leadership team who are incentivized appropriately, operating under board supervision. We feel it's the right talent model to address this rapidly evolving market. Why Actis and how are we setting up the partnership? We ran a very rigorous process with the help of one of the banks. Actis emerged as the frontrunner for several reasons. Their intent and appetite for this business, their track record in real estate, and the trust that we've built through our partnership with them in Mahindra Homes were all major factors that spun the decision to partner with them in this joint venture. We will be a minority partner. The structure of the investment will be an OpCo and a set of PropCos. We will be a 26% partner, roughly, in that portfolio of businesses. The stakes could vary between 26%-33% in the various PropCos. We're also bringing roughly 100 acres of seed assets from our Mahindra World Cities into this joint venture and will kind of expect the first phase of investment to be in the range of about INR 2,000 crores, out of which, if you do the math, it will be about INR 700 crores of equity. 26% of that is roughly INR 180 crores. So if you look at bringing in 100 acres of seed assets and a total investment from MLDF side of about INR 180 crore, we are cash positive from that perspective. There's no incremental capital being invested in this joint venture. Finally, I wanted to share a couple of highlights and achievements on the sustainability side. As you know, this is a very important pillar of our strategy. Over the last quarter, we've been ranked a global sector leader among residential developers by the Global Real Estate Sustainability Benchmark, which is GRESB. As part of that, we've been ranked first in public disclosure. We have a five-star rating in Development Benchmark and a four-star rating in Standing Investments. We've also been recognized as a climate change leader in India by CDP and the only real estate company in the leadership band under CDP's climate change strategy from India. These are very strong endorsements of both our intent as well as actions on the sustainability side. Let me turn it over to Vimal to share the financial highlights. Hi. Good morning, everyone. Moving on to the financial highlights for the quarter end for H1 2023, the total consolidated income is still at INR 74 crores as against INR 66 crores in Q2 of 2022. The consolidated profit after non-controlling interest is still at a loss of INR 7.7 crores as against a profit of INR 6.5 crores in Q2 of 2022. Your company has debt of INR 331 crores at consolidated level as per Ind AS as well, while cash and bank balance, including short-term investment, stands at about INR 203 crores. Cost of debt is 7.2% on consolidated basis, while standalone Mahindra Lifespace's cost of debt is 6.9%. With this, I'll request if the lines can be opened up for questions, please. Thank you. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets as well when asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may press star and 1 to ask a question. The first question is from the line of Parikshit Kandpal from HDFC Securities Limited. Please go ahead. Hi, Arvind. Good morning and congratulations on a decent quarter. My first question is on business development. So the last two quarters or three quarters, our business development pipeline has been around INR 5,000 crore, and since April, we're not seeing any conversions from this pipeline. So the first question is, why is the pipeline not growing, and what is causing the delay? Because we have had one lumpy quarter, then again, it slowed down almost six, seven months. So when do we think I mean, Q3, you said that is the period where we will see some of these closings. So how confident are you that the INR 2,000-crore number can be achieved and whether you can surpass this? Because this INR 5,000 crore number is not moving. I would have believed that there could be some deals which could have got added in this quarter and taken this number higher. So if you can give more granularity on this and whether the redevelopment projects are included in this, the ones you said, at least into opportunities where you are shortlisted for kind of a final closure? So thanks, Parikshit. So the way to think about the INR 5,000 crore, while the number looks static, I would split it into two buckets. There's roughly INR 2,000 crore, as I mentioned, which is the advanced conversations or high-probability, high-priority kind of target. That has remained more or less stable for the last four or five months, and it's actually the same deals that are in that pipeline. As I mentioned, we've not lost any of them to competitors. We continue to be in a strong position, and we're progressing well on that. The back part of the INR 3,000 crore, there have been some additions and deletions on that. So we feel that, as I have mentioned in the past, we'd like to be at about INR 3,000 crore of GDV addition for this year. We've done INR 1,700 crore in April. So looking to do another roughly 1,500-2,000 for the rest of the year. To get to that INR 5,000-INR 6,000 crore pipeline is the right thing to manage. I don't want us to be scattered and spreading ourselves too thin because I do want the management attention to be on conversion as much as it is on sourcing new transactions. This does not mean we are not actively scouting new transactions, but the priority, as you rightly pointed out, in the last quarter, there's been no conversion. So the priority for me as well as our team is to ensure that we take some of these deals over the line in Q3 and Q4. I am reasonably confident we will be able to do that, so I have no cause for concern. The redevelopment opportunities are already included in the 5,000? They are over and above that? No, they are part of the 5,000. And that is not part of the INR 2,000 crore, right, which you believe is an advanced purchase? One of them is part of the 2,000. Okay. So my second question is on the land-owned business. So you said 100 acres will be the seed asset. So you'll be selling this to the joint venture and realizing the money, and then part of that goes to a small share of equity investments, right? That's right. By when do you intend to transfer this 100 acres? Potentially, because this will get classified as a leased area, so it'll happen this financial year or next year? I've sensed that it's going to take anywhere between two to six quarters. Okay. three to six quarters. Okay. My third question is on the project launch pipeline, which I believe is shifting by at least for the Kandivali project, we were looking at a Q4 launch. So now you're saying by December, we'll get the approvals, and six months from there, we'll launch it. So it goes just about the monsoon quarter. So it is, again, not a very good time to launch. So do you see any risk of this moving into second half of next financial year? And the same thing for Ghodbunder Road. We were expecting to have a first-half launch or maybe FY 2024 launch now, which looks to be moving to FY 2025. So if you can give some more color on the timelines, describe some more visibility on the timelines on these project launches. Yeah. So you're absolutely right. We've moved kindly from Q4 of the current financial to first half of next year. I do see it happening definitely in the first half because, as I said, we've advanced quite well on the design. The reason for the delay is the commitment got pushed out by a quarter, and that's why the launch is getting pushed out roughly by a quarter. What about Ghodbunder? Ghodbunder, again, as I said, it's good that we finally have all the approvals we need to move forward and the permissions to move forward. We are looking at some alternate policies under which to develop it because it's a large 68-acre land parcel. Some of those policies are in the process of being updated at the state government level, waiting for that clarity to come in the next quarter or so so that we can lock in exactly what our development plan there will be. That's the reason we are pushing it out by a little bit because the indications we have are some of the new policies will be attractive. Okay. Just lastly, I mean, the real estate market seems to be doing well, but I don't understand why you have started giving subvention schemes for the Saki Naka project. Are we running any other schemes for any other projects? Sorry, Parikshit, your question wasn't clear. It works together. The Saki Naka project, I think you started giving a subvention scheme, right, 25, 25, 15. So any particular reason why you started giving that subvention scheme? Sorry, can you hear us? Yeah, yeah. I can hear you all again. No, I got a beep, so I was wondering whether we got dropped off. So there's no specific reason. We've been experimenting with different payment plans to see what kind of resonates in the market. We've taken price up there quite significantly since the launch. So looking at different methods and seeing what resonates with different audiences. There's no kind of grand plan there of any sort. Okay. Just the last question for Vimal. So when do we expect so I understand that Pune land payment has happened. So just update us if anything's pending there. And on the Kandivali land, when do you expect to make the payment? So Pune land payment is completely separate. Kandivali and Kandivali, as we progress over the next three or four weeks or maybe this quarter, we will make the payment. Kandivali, as you know, is not a bullet payment. It's an installment payment. It's structured over 36 months. We'll follow the calendar. Okay. Sure. Thank you and all the rest. That was all my question. Thank you. Do we have the next question from the line of Adhidev Chattopadhyay from ICICI Securities Limited? Yeah. Good morning, everyone. Am I audible? Yes, Adivesh. Yeah. Thank you. The first thing is just more a question on the Thane land parcel now that you've got the de-notification done. So just could you help us understand what is the sort of FSI we could churn out of this land, a broad range? And overall, for this land, have you done any rough estimate of what is the total FSI premiums or other approval costs we will need to pay to avail the full FSI of the land? If you could just share your thoughts. I know that it's in planning stage, but just some colors you could give us, overall, how much investment it would require, and would this approval cost be upfront, or will it be split over phases? That is the first question. Yeah. So Adhidev, as I mentioned in answer to Parikshit's question, there are some policy updates that are expected that are relevant to that development. So it's hard to nail down an FSI, but we do see it being in the range of 5 million sq ft plus of development potential. And it will be a mixed-use development, as I said. It will have some commercial assets, retail, as well as residential. And we are looking at, at this stage, once the policies are factified and our mix is narrowed down, we are looking at potentially bringing in a partner on the commercial side. Okay. Fine. The second question, again, is on this business development. So the projects which we are hoping now to close out in the next two to three quarters. So what is the lead time for the launch? If you assume four to five quarters post that, and we will in FY20 25, should we see the launches coming through from these deals we are doing? Yeah. It would be in three to four quarters. But some of them, based on the confidence we have in their closure, we've already started the design on. So we will be processing in parallel. So I would say anywhere between three to four quarters to get to launch. Okay. The last question. So again, in FY 2024, of course, the two Mumbai launches, right, will happen in FY 2024, as you said. So apart from these two launches, any other large value launches we expect in FY 2024? Some of these new land parcels, certainly. Kandivali and one or two of the new land parcels that we acquired will be the large value land launches. Okay. And just again, a question. Any plans to give any interest subvention or anything for buyers considering that interest rates have gone up? And we'll see a further round of rate hikes in this quarter as well. So what is the resistance you're seeing from buyers, or is it all in so far? And what are our plans to stimulate demand in case there is a slowdown? So far, we are seeing demand being fairly strong and robust in the segments that we are operating in. We continue to see very strong walk-ins as well as conversions. So no reason for us to consider interest subvention. To me, an interest subvention is just a roundabout way of giving a price discount. So we might as well work with pricing. And we have demonstrated a fair amount of agility on pricing. We are able to take price up quickly. The converse should also then apply that when the need arises, one moderates the price to be able to drive the volume of deals. So it can't be a one-way street. So that's primarily the lever we will use rather than going down the interest subvention part. Again, as Parikshit highlighted, we are looking at different payment plans more so that we learn how the market responds to various schemes, what works for different audiences in different life stages of construction as well because it's important that what works at a prelaunch or a launch stage or early stages of construction is not necessarily what works when the project has already topped out from a civil perspective. Sure. Sure. Fine. That's very helpful. Thank you. That's it from my side. Yeah. All the best. Thanks, Adivesh. Thank you. We have the next question from the line of Pritesh Sheth from Motilal Oswal Financial Services. Please go ahead. Hi. Good morning. Thanks for taking my question. First is, again, on BD. So in terms of this INR 5,000 crore pipeline, does it also include any project that maybe we are looking in Bangalore? And just a follow-up to that, so when we had this INR 2,000 crore of GDV addition as an annual target, that time, we had only two markets in mind, which is Mumbai and Pune. Now, with Bangalore also coming in, do you expect that out of these three markets, at least there would be a deal addition in two markets that would take your targeted GDV addition to maybe INR 3,000-INR 4,000 crore on a condition basis? So just a comment on that. Yeah. Certainly, Pritesh. I think when I had indicated the 2,000, it was more than a year back. And as you rightly pointed out, it was with a 2-market focus. So this year itself, as I had mentioned earlier, we are looking at roughly INR 3,000 crore. And every year, we will look to build kind of more on that bit. So it will be in the range of INR 3,000, INR 3,500, INR 4,000 crores, steadily building year after year on year. As you know, these deals are lumpy. So it's not that you could end up being at 4,000-installed, 3,000, not 2,500-installed, 3,000 because each deal is typically between INR 500-INR 1,500 crores of GDV. Got it. That's great to hear. And secondly, now I see launches also coming fast in terms of the second phases that we are coming up with. We are expecting Eden to get launched this quarter and second phase of Nestalgia also in Q4. So for the large deals that we have signed up, be it Dahisar or Kandivali or even the larger Pune deal, I mean, obviously, right now, it's difficult to comment since we haven't seen the demand velocity. But do you think that the phase I mean, the gap in terms of launches between the two phases could be one or two quarters so that we can churn up the inventory faster than what we have done earlier? Yeah. That will always be the objective and the desire, Pritesh. We've always maintained that our strategy is to get in and get out of projects as quickly as possible. So where we see robust demand, there are two factors that play into that. One is the demand. And if a first launch does well, then you get confidence to bring the second phase forward. But it's equally about the construction phasing. In certain cases, one is able to like we are doing in Eden, we are now constructing both phases concurrently with a stagger of just two months between the two phases. But in other cases, due to site constraints, you may not be able to bring forward the second phase or third phase of a project, in which case, it makes no sense to launch something and not be able to construct it. One has to keep both balance between both these aspects. Yeah. Fair point. And just lastly, if I heard it correctly, so Pimpri second parcel, which we acquired last quarter, is also slated to launch in Q4? Yes. Yes. So that we have posted earlier, is it? I think earlier, we were planning to do it next year, but we have posted earlier. Yes. We've pulled it forward by quarter. Yeah. Yeah. Okay. Okay. Fine. That's it from my side. All the best. Thank you. Thank you. Before we take the next question, a reminder to all the participants. Anyone who wishes to ask a question may please press star and one on their touchtone phone. We have the next question from the line of Shreyans Mehta from Equirus Capital. Please go ahead. Yeah. Thanks for the opportunity. My first question pertains to our Kalyan project, where we already started on a weak note. It seems, given the quarter, we seem to have lost the momentum. Last quarter, we were talking about some change in strategy. Just wanted to hear from you, I mean, how is it working now? Yeah. So Shreyans, good morning. As I mentioned, that is one of the launches we've lined up for this quarter. Just to put things in perspective, when we say it was a weak launch, we still sold 25% of the inventory within six months. So by industry standards, that is not weak. By our own high standards, we would have expected more. And as I had mentioned in the last call, there have been some learnings about hits and misses in that. We've incorporated those learnings, and we'll be doing a full-fledged launch of that project in this quarter. Got it. Got it. Got it. Sure. So second question pertains to our Origins, Sanand. We had indicated that probably we are waiting for our anchor tenant. So is it that only when do we have any timelines in place that by this time, we are going to wait for the anchor tenant then only, or how will it work? I'd say the next 3 or 4 quarters, we need to take for finding that anchor tenant. It's really important in these kinds of paths that the initial client profile is the right client profile, and we don't sell just for the sake of selling. So we are being selective. We are being patient, and we need to just grind it out. Got it. Got it. Got it. Sure. And then lastly, my final question is pertaining to our IC & IC business. The thought process there was that intention was clear that we wanted to monetize and move out of that. All of a sudden, then probably with the deal which we've done, on a net basis, we've sold, and there will be a recycling of capital. But again, it is going towards the long gestation projects, again, moving to that long life cycle project. So I just wanted to understand, are we still following that strategy that we want to move out of that, or probably we are moving in the same direction? Yeah. Look, I don't see this, Shreyans, as an either/or. I see this as an interesting, as I said, extension or, if you would call it, an option value on that business. There are some stages we will run out of land in that business, like we run out in Mahindra World City, Chennai, the land inventory, industrial land inventory is all sold. So what is the terminal value of this business is important for us to set up right now. One part of that terminal value is the operational and maintenance activity that we do in the parks. But are there other sources of value that one can unlock over a longer period of time is what prompted the thinking to participate in this. As I said, we are participating as a minority joint venture partner and, in a sense, not putting incremental capital into this new joint venture. But I do see it as a strategically important action for us, not just as an opportunistic play. Got it. So can we expect some sort of, I mean, this thing to continue ahead as well, or probably this would be one-off deals and probably our long-term strategy still remains of monetizing in the IC & IC business? So certainly, in the industrial parks that we are already operating, we would be looking to monetize as quickly as possible. And that's a path we've been on. As the numbers also are demonstrating. Now, how this new business segment plays out, time will tell. We are fully committed to it. If it turns out to be as attractive as it promises to be in terms of the actual cash flows and return on capital, these IRR metrics that are very important to us, we will take a call at that stage about whether we want to invest incremental capital in that. At this stage, it is not, as I mentioned, incremental capital. It's the capital that is being released from the business, part of which is getting put back. Got it. Got it. Got it. Thank you so much, and all the best. Thank you. Thank you. We have a follow-up question from the line of Parikshit Kandpal from HDFC Securities. Please go ahead. Thanks for the follow-up. My question is that over the last couple of years, we have been outperforming on the business development. So this year also, we may end up somewhere close to INR 4,000 crore. Just doing the H1 pre-sales projections into at the same when we're into H2, we do exceed about INR 2,000 crore of pre-sales. If things are favorable, we may reach almost INR 2,300-INR 2,400 crore, much ahead of your timeline of INR 525 crore. Next year, we have a very strong launch pipeline almost, I think, put together, Dahisar and Kandivali, close to about INR 4,000 crore of GDV, which may get released in phases. But along with the sustaining phase can help us reach, my estimate, numbers above INR 3,000 crore. So how are we planning on the business development side from here on? Because numbers look to be growing better than expectations the next couple of years. We need to ramp up on the BD side from that INR 4,000 crore number to now, so 25 going to INR 4,000 crore to INR 8,000-10,000 crore. How do we get that internally as an organization, as a business development team, as execution engine and marketing? If you can just give your thoughts there. Yeah. So Parikshit, firstly, I trust you to always take the upper end of any range that I mentioned. So I do want to reiterate that this year, we are looking at INR 3,000 crore GDV and not INR 4,000 crore. I mentioned that because it's lumpy, one could end up in INR 2,500 crore-INR 4,000 crore, right? And on your comment on pre-sales, yes, first half of this has been INR 1,000 crore. I don't expect it to double for the second half. So don't do an arithmetic summation, please. The deeper question you've asked about how we are gearing up the business development is important. We've actually added strategically to our team certain very key capabilities, particularly one on society redevelopment. As I mentioned, it's a different type of fish, and we've brought somebody on board in the team who's done that for the last time, understands it very well. A lot of the success we are seeing with the advanced conversations we are on is credit to this new addition to the team. Similarly, on the distress asset side, we've added a person who has experience in that space. We currently still don't have any advanced conversations on that. It's a space that we are actively looking at. Those are very strategic additions to the team. Okay. But what about the guidance? I think last time also, I'd asked this question. So some point of time, we need to revise the FY 2025 guidance, which looks to be getting achieved much ahead of time. Look, honestly, I'm not being coy or deliberately roundabout on this, but we do need to see closures on the business development side for us to revise that guideline. So I'd hold until that happens. Okay. And just on the Bangalore side. Can I interrupt, Mr. Kandpal? Okay. Sure. Is the participant already connected? Yeah. Sure. Thank you. Okay. Thank you. We have the next question from the line of Amit Agarwal from Burman Capital Management. Please go ahead. Yeah. Thank you for the opportunity. This is for Vimal. So Vimal, in the last four quarters, in the residential, we have booked around INR 566 crore of revenue. And against that, cost of sale is INR 520 crore. Just wanted to understand what all costs we include in cost of sale. And implied gross margin is 7.4%, which is a bit different from the number that we typically give out. So if you can just help us reconcile those numbers. Yeah. So Amit said at a broader level, usually, gross margin will include all the direct costs, including prepaid expenses like brokerage, etc. See, it's important to, in a way, understand that last two quarters, the completions have been sort of very maybe the last phase or the last building or the last tower. And to that extent, the gross margins are lower than what we expected to be. The other thing really is that, for example, this time, in our Nagpur project, we have taken one charge which is related to royalty payout which the local authorities demanded, which we have gone ahead, paid, taken charge. But we will also bring the payment is under protest in there, so we will be making efforts to recover it. So at an aggregate level, you will see improvement in margins from here on as and when the newer projects get completed. It will be much, much larger in terms of top line estimate. Got it. And on that point, right, so on the projects that are in the pipeline and future development, the number that we gave out is around INR 10,600 is the revenue that we expect from those projects. And against that, there's a cost which you have given out expected. Can you also help out with the cost that is already incurred for the projects that are in pipeline, everything combined in the residential side? Yeah. Sure. You can refer it back to the initial presentation, actually. There's a slide which talks about three parts. One is what's happening in our already launched project, what's happening in the next phase of those launched projects, and for the projects which will come up for launch for which land acquisition has happened. It's a fairly neat and clean chart. It has got four balances, that's sort of input, output, and net cash. Amit, if you refer that, you will get about INR 3,500 crore of net cash positive. Let me know in case you need any further clarification or details around it. On that, so total revenue is around INR 10,600. Against that, costs are INR 5,700 which are expected to be incurred. I'm asking, what is the cost which is already incurred against this INR 10,600 revenue which is expected to recognize in coming years? Yeah. So look at it this way. Just projects which have got launched, usually, see, our marketing costs anywhere between, say, 2%-4%. And that's something which gets reflected in the quarter in which those launches would have happened or those sales would have got booked. What about land and the construction cost which would be part of inventory for us? Yeah. It will be part of inventory, but you would have if you refer back to the calls which have happened in the past, say, 3, 4 quarters, usually, our land payouts at times actually are very close to the launch. But whatever payouts we do, if the project is launched and conveyance has happened, that's the time a project moves into inventory. Just to give you an example, Kalyan project launch had happened in, say, March, February or March of this calendar year. Conveyance actually happened a couple of months after that. And to that extent, the inventorization will affect in quarter one of this financial year and not in the last financial year. Got it. Maybe I'll connect with you offline to better understand. Just last question on this is, from last quarter to this quarter, we saw a decline of around INR 500 crore on the future gross cash flow, right? Whereas the collection was lower than that, and also the construction payment would have happened in Q2. So just if you can help us understand why there was a decline of around INR 500 crore on the gross cash flow expectation. Yeah. So let's take this offline, Amit, and be able to help you understand that, please. Okay. Great. Just last, if I can squeeze in, our construction payout is lower than the pre-COVID, right? So it was around INR 75 crore. Previously, we used to do about INR 100 crore. Is that, in a way, a reflection of a slower construction pace? Again, how should we read out that construction outflow number? Yeah. That's right. So fundamentally, our focus really is on cash collection. And therefore, more than the work then, the money spent on work then, we focused on what action we need to take so that our collection and the demands can be sent out. And that's where you are seeing the collection numbers looking very strong. A lower work done cost may not necessarily reflect a lower work done or lower demands or lower progress in a particular project. It really depends on the later stage of the project at which we are investing the money as well. So it's a bit of. Also, Amit, I'll just add, Q2, again, because of monsoon, you will see every Q2 being slightly lower from a construction activity perspective. There is an impact of that as well. Okay. Got it. Makes sense. Thank you so much, Amit Shukla. Thank you. Thank you. We have the next question from the line of Himanshu Upadhyay from O3 Capital. Please go ahead. Hi. Congratulations and good set of numbers. I have two questions. One was on the IC business, okay? One was on the leased area, okay? We have seen the growth has slowed down from last year. What is the buildup of or inquiry levels you are seeing? And what we expected was once the economy starts opening, a lot more conversions to happen, okay? So some thoughts on that if you can give on IC and the level of inquiries and what is happening there. No, I think IC is on a very strong footing. I would encourage you, don't look at it necessarily quarter on quarter because these are long sales cycles businesses. So look at kind of trailing four quarter or moving average of four quarters or something like that. That would be more representative. Now, we are on a very solid growth trajectory there. Last year, itself, was a record growth and a record leasing in our IC business. This year, we will look to match or exceed that. Okay. One thing is, what are the corporate costs overall for the company? Just to understand, what is our recurring revenue which we need to have to break even on the residential side, please? Yeah. So it's a tough one. And frankly, again, it's a number which will really depend on the projects which are getting signed up and launched. The way we usually look at is next five years horizon and therefore allocation of a fixed cost over those five years, assuming that we will follow a certain trajectory. For example, if you look at pre-sale guidance in INR 2,500 crore-INR 700 crore where we were averaging till about FY20, the overhead cost allocation would have gone in a much more sort of higher base, and therefore, it looks much better. So that's the allocation approach that we follow. One more thing. See, when we see the gross margin, which is 7%, even if I add 2, 3, or 4%, let's say, of sales cost and some amount of other overhead, it remains very low, okay? Would you say that revenue or the realizations were low, or you think the cost increase has been pretty phenomenal and hence the gross margins are pretty low? What would be the reasons? Because 10, 11% is still, if I took whatever costs. Yeah. I'll just give you one example. So what is this combination of two or three factors? That's an important one. For example, it's the NCR project where the last phase had come up for recognition. Now, NCR is a large project spread across almost 50 acres. If I were to look at the profitability of the project across the life cycle, it will certainly be in the range of, say, 20% gross margin. But in the last phase, because of few costs, it gets lumped down into this large phase, you get to see a much lower number. But at an overall level, what I was talking about was taking the pricing up on an ongoing basis, mapping off the cost escalations which we were seeing till about a quarter back. All of this put together, all our projects which right now are at various stages are at a decent margin, which are definitely in the positions. Okay. Okay. And this leasing of outright sale of land, is it for residential in IC we have spoken, or it was for, let's say, industrial land what we are trying to sell? I just confused that. If you can help me out. Okay. No, we were referring to leasing also. Huh? We were referring to leasing in industrial. Okay. So you are saying that sales also you are thinking of from land? No, no. This is leasing in the industrial parts business. Himanshu. Okay. Okay. Yeah. Thank you so much. Thank you. We have the next question from the line of Manan Patel from Airavat Capital. Please go ahead. Thank you for the opportunity, sir, and congratulations for the good number. Sir, my first question is on Mahindra World City, Jaipur. So if I look at the numbers, we have been doing very well in the domestic segment, but SEZ is sort of being slower. So with the current phase that we are going, we might exhaust the domestic part in the next few quarters, and then SEZ might be left. So you also referred to some policy change which might happen. So what are your thoughts on this? Yeah. You're absolutely right. There has been a much stronger demand on the domestic tariff area than the SEZ. But it's not peculiar to Jaipur or Mahindra World City. This is what is happening across the country. And it's an outcome of the sunset of various incentives that had been given to SEZ 10 or 15 years back. So across the country, there's been a very muted demand for SEZ. The government has also recognized that as this proposed what is called the DESH Bill, which was expected to be tabled in the monsoon session. We are hoping it will come in either in the winter session or the budget session. What the basic premise of this bill is, is to say that rather than think about industrial parts as domestic or export, if India wants to be self-sufficient from a manufacturing perspective and be a manufacturing powerhouse, we should allow units to operate flexibly. So they will allow units in the special economic zones to also cater to the domestic market. So in that sense, specifically coming back then specifically to Jaipur, it opens up the entire SEZ area for domestic manufacturing plants as well. And that would be a very healthy upside for us. Okay. That's helpful, sir. Sir, second question is on the margin and in the IRRs and everything. So for example, in Eden, we have preponed the launch of second phase. So with that, do we take the exposure of higher exposure to the commodity fluctuations down the line because we are selling a lot more upfront rather than waiting for a part of it at the later date? So are we exposing ourselves to the commodity fluctuations, and what are the steps that we take to sort of offset? Yeah. So that's a great point, Manan. So the downside of selling a lot upfront is exactly that you're locked into fixed-price contracts with your customers, but it goes through an inflating cost base on the input side. Yeah. So therefore, in a roughly stable or a moderate inflationary cost environment, it always makes sense to sell early. If one expects a hyperinflationary cost environment, then holding back some inventory with the expectation that we'll be able to price that up would be a better strategy. We believe that we are not yet in that, the last four or five quarters, we didn't see a hyperinflationary period, but it has settled down. And we are expecting the next couple of years to be more range-bound from an input cost perspective. So we continue to pursue the strategy of selling early. It is certainly IRR-aggressive. In some cases, there is a trade-off there between getting more IRR and sacrificing a couple of 10 basis points or more of PBIT. That's the trade-off we are willing to make. Okay. And sir, the last part, you referred to value engineering that we are doing. We are on that journey. So have we implemented steps which can help our margins by a few percentage points that you have referred in the past? Yes, absolutely. Allow us, Vimal, to also add on this. But in fact, all of us in the entire leadership team are taking this call from one of our construction sites this morning. So we've been here since 10:00 A.M. exactly on this topic. So we are spending a lot of time on standardizing designs, value engineering, driving modularity, replicability, all of which is geared towards driving more cost efficiency. But Vimal, would you like to add something? Yes. The only thing is that Westfield's a highly read approach where the action on productivity or value engineering was more localized or security-specific. Right now, we have got two centers which have been formed. One which is the Costing Centre of Excellence. Scheduling i s a central planning center. Both these work hand in hand, and any best practice or leading practice which has picked up either internally from any of our projects or externally from any of the other projects. Because of interest in contractors, vendors, etc., our attempt is to do a pilot and then horizontally execute it across projects. Therefore, value engineering is going to be one of the key pillars to drive some profit or to ensure that the costs are not going out of range. That's great, sir. Thank you and wish you all the best. Thank you. Thank you. We have the next question from the line of Prem Khurana from Anand Rathi. Please go ahead. Yeah. Thank you for taking my questions, sir, and congratulations on good operations. Thank you too. My question was with respect. One more? Sorry to interrupt. Sorry. I would request you to keep your mic farther from your mouth and speak, please. Yeah. Sure. Because we're. Is it better now? Yes. Please proceed. Yeah. Sure. So my question was with respect to our IC and IC verticals. So what I see is, and we've been doing seriously good now, I mean, in terms of leasing on an incremental basis. But the thing that I observed is that, I mean, eventually, when I look at the total number of customers that you have and look at the operational customers that you have, I mean, I think initially, we used to have this condition in our contracts with the clients that you would have the commission operations in a year, a year and a half, which is where, I mean, it seemed that if these, I mean, the customers would start contributing as early as possible. But the gap between operational customer and total customer seems to be rising. I mean, for Jaipur, we have 127-odd customers, but then only 71 are operational. So there's 56-odd customers which are yet to start contributing, right? I understand, I mean, we would have realized our payments. But then the idea was to kind of make them operational and then make them contribute to the economic value that you would be able to generate from this place. So have we made any changes in the contracts that we signed? Because some of these customers have been with us for more than two, three years now and are yet to kind of come into operation. Same is the case with Chennai as well, wherein we have more than 10-odd people who are yet to kind of commission operations. That's a good observation. In Jaipur, in particular, given the growth we've seen over the last four or five quarters, there's probably 30 or so new clients that we've added. So one has to factor that in because once they lease the land, it takes them roughly 12-18 months to get operational, even if they hit the ground on demand. But that backlog is an important thing. And we are actually in the process of reaching out to many of the clients who are not yet operationalized, like you mentioned, some of the older leases that were done, and finding out what the bottlenecks are and trying to reactivate those. So those conversations are actually already underway. Sure. In fact, in Jaipur, there's something like 26 clients I'm told who have already commenced construction. Oh, okay. And that's good. Yeah. And second one was for Vimal. I think when I look at our presentation and the net debt number that you gave on a segment-wise basis, in SEZ or in IC and IC vertical, the debt has gone up not by much, but then there's a slight rise. So I was wondering, I mean, if it is because, I mean, we are aggregating more in IC and IC vertical, either in, let's say, North Chennai or in Pune, which is why the number would have gone up, or is it only a timing mismatch wherein you've sold some inventory this quarter but the payments are yet to come through? Actually, the second is certainly the key reason. And we do have a few transactions I would mention in pipelines where we will see a positive movement in these numbers by the time we reach the next one. Part of it, the first point which you said is also, right, that there's a bit of aggregation which may have been done on the South Chennai side as well apart from Pune. So both are going. But I'd say more timing, as you would see the movement in Q3 and Q4 for this. Sure. So thank you. That's it from my end. Thanks, sir, and all the very best for future. Thank you. We have the next question from the line of Jainam Shah from Equirus Securities Private Limited. Please go ahead. Hi, sir. Thanks for the opportunity. Sir, my question relates to more of a strategic purpose of Mahindra Lifespace. We have been seeing that the proportion of value homes has been consistently declining in our overall portfolio. Sir, how are we strategizing between value homes and mid-range homes? And what's the breakup of this INR 5,000 crore booking pipeline into these two parts? So, Jainam, there's no predefined kind of quota that we have between the value homes and the mid-market segment. We know what is right for a particular land parcel. In some cases, particularly in cities like Pune and Bangalore, the same location could be developed as a Happinest product or as a mid-market product because that's the nature of those markets. In a city like Mumbai, it tends to be geographically kind of aligned north to south. As you go further north, it is more Happinest. As you go further, we are not in extreme south Mumbai, but let's say the western suburbs or central suburbs just tend to be a mid-market. So there is no we don't approach this as what should the mix would be and this will be. We just look at every land opportunity that we have within the project that we are developing and what is the right product and the right audience. It's an outcome rather than an input. Okay. Okay. Sir, got it. Got it. And, sir, one question related to IC and IC segment. So we have been seeing the realization being in the similar range of INR 2.7 crore, INR 2.8 crore for the Jaipur and around INR 3 crore for Chennai. So is there any specific reason for the same, and are we expecting some kind of increase year-over-year for this realization per acre? We've actually taken the realization up in Jaipur. If you look at the last few quarters, it has gone up from what a. Yeah. Yeah. I'll just start with Jaipur. The realization has improved for the last two years. I think it's up almost by about 7%-10%. Having said that, every land parcel has got a bit of positive or negative depending on the location we are talking about. And therefore, that's where we need to see. Similarly, in Chennai, there's not much inventory left. There is some commercial largely commercial which is there. And every acre, therefore, gets negotiated depending on the location of the land. But in general, the realizations are up certainly for both parts. Okay. Okay. Sir, got it. Got it. That's it from my side. Thank you, ladies and gentlemen. As there are no further questions, I would now like to hand the session over to Mr. Arvind Subramanian for closing questions. Thank you, Michelle. Thank you for all your active participation in your questions. As we had highlighted, there are multiple actions lined up for the turning-off of this year, which includes ensuring successful new launches, new phase launches, as well as continued momentum on the IC & IC business. We are also extremely focused on driving the business development pipeline. We continue to be kind of sharpshooting on that rather than spray and pray. You will see, hopefully, some conversions in Q3 and Q4. Thank you, everyone, and appreciate your support. Thank you. On behalf of Mahindra Lifespace Developers Limited, that concludes this conference. Thank you for joining us, and you may now disconnect, sir.