Ladies and gentlemen, good day and welcome to the Oberoi Realty Q3 FY 2022 earnings conference call. We have Vikas Oberoi, the Chairman and Managing Director of the company, and Mr. Saumil Daru, Director of Finance of the company, with us for the call. Please note that this call will be for 30 minutes. For the duration of this conference call, all participant lines will be in the listen-only mode. This conference call is being recorded, and the transcript of the same may be put up on the website of the company. After the management discussion, there will be an opportunity for you to ask questions. Should anyone need assistance during the conference call, you may signal the operator by pressing star then zero on your touch-tone telephone. Before I hand the conference over to the management, I would like to remind you that certain statements made during the course of this call may not be based on historical information or facts and may be forward-looking statements, including those relating to general business statements, plans, strategy of the company, the future financial condition and growth prospect. The forward-looking statements are based on expectations and projections and may involve a number of risks and uncertainties and other factors that could cause actual results. Opportunities and growth potentials could differ materially from those suggested by such statements. I now hand the conference over to Vikas Oberoi, the Chairman and Managing Director of the company. Thank you, and over to you, sir. Thank you. Good morning, good afternoon, good evening to you all as per the time zones from which you have logged in, and welcome to the conference call of Q3 FY 2022 results and business updates. Thank you all for taking time for this call. I hope your family and you are doing well and keeping yourselves safe. Let me begin by wishing you all a very happy new year, and I hope 2022 brings in a lot of good news for all of us. Before I begin, I would like to share with you some quick business updates. I'm very happy to let you know that we have delivered the best ever gross booking value for the nine-month period of any financial year, which stood at INR 3,150 crores. As you are aware that we had launched the second tower in Elysian in October 2022. This means that this was the second tower in the same financial year, and it's heartening to see an overwhelming response. In fact, in just the quarter itself, we crossed INR 1,000 crores of sales booking, which is, you know, also a great thing. Our other projects Sky City and Maxima reported strong numbers and delivered the highest booking values in any non-launch quarter. With this, I want to open the floor for question and answers, and both Saumil and I will be happy to you know take your questions and answer. 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 telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Reminder to the participants, anyone who wishes to ask a question may press star and one. The first question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead. Hi, Saumil. Hi. Hi, Vikas Oberoi. Congratulations on a good set of numbers. My first question is on the office space and the mall space. Do you think there is a strategy when earlier we have been, like, staying away, being a little cautious. Do you think on this, you can add more properties and more assets here? That's my first question. Hi, Puneet. You know, again, we are a residential-centric developer. We do commercial, and we do shopping malls, and we do them well. So I mean, you know, that is like our extended business. We obviously are an agile company. Looking at what we see as demand, we probably will pivot towards that. Some land parcels are specific to its use. Somewhere we have already made commitments, so we obviously will continue. Like Gurugram, we continue to do that. We are building Commerz III, which is close to 2.4 million sq ft. You know, just a little less than 50% is already leased. So you know, our commitments continue with both these projects, and that's where we are. Any update on the non-MMR CO and non-MMR 4A? Also if you can touch upon the redevelopment opportunity which you had highlighted couple of quarters back with us. You know, again, at both ends, we have a strong focus. We are awaiting certain things to happen so that we can, you know, share that good news with the market. Right now it's all, you know, under development. We are at, you know, final stages at some places. We are probably a few months away in closing transactions. It's work in progress. That's what I would like to say. Very strong focus and an absolute clear drive and desire to do this. Okay. Just last question on the CapEx. Saumil, if you can just touch upon what is the total pending CapEx and what timeframe you are looking to deploy it? CapEx on what really? CapEx in commercial assets and mall. Any pending, what's the total amount yet to be invested in the mall and the office? Can you take that offline? I mean, I can just- Sure, sir. I tell you that our mall will be ready. I mean, at least the structure part of the mall will be ready by April this year, and then we get down to doing our finishing. Our office building, the Commerz III building, we are, I think, on the seventeenth level. More than 70% of the 2.4 million sq ft is constructed. Rest, we are again, I mean, you know, we are running on schedule as far as you know, that building also goes. Detailed numbers, I'm sure you guys can discuss offline with our finance team. Perfect. Thanks. Those are my questions. Thank you, Vikas. Thank you. The next question is from the line of Sameer Baisiwala from Morgan Stanley. Please go ahead. Hi, Sameer. Hi, hi. Hi, Vikas. How are you? I'm good. How are you doing? Excellent. Thank you. First question is regarding the rentals at Commerz II. It's been, I think, 12 quarters or a bit more since we've been stable at INR 140, so is the next escalation on the corner? Sameer, you know, I feel, you know, whenever I peek out of my window, I see the metro trials going on. We're bang on the station. We're literally like. In fact, we are building a private connection from the metro into, I wouldn't say only our development, it's for the public also. You will literally be walking out of the metro and walking into your office, very much like what happens in Hong Kong. We are obviously waiting for that to happen. I surely believe that it'll completely rewrite the entire area because of simple accessibility. I mean, you know, really when you see the metro operational, you feel, you know, that exhilaration in your heart and you feel that, you know, really infrastructure is getting built around your, you know, in the city and around your development. I feel that that probably should help, you know, increase both, I mean, you know, focus and rentals. I mean, at least one can hope. Yeah. Great. Thanks, Vikas. I was referring to the contractual escalation that should be happening every three years, 15% or so. Yeah. That you know, obviously, like, you know, we were just coming out of COVID. A lot of people have reneged and, you know, increased their tenure. We've you know, at some point, either you know, averaged our rates out or come in only for a marginal increase or probably let that go also. We've been very you know, practical, accommodating and that's about it. You know, it's not like this was the time where one could push. You know, wherever, whatever deals happened during the COVID time, that obviously one couldn't you know, trigger the 15% escalation. Anything now will all start because, you know, people are back, offices are back. Everyone's realized that work from home is not that great an idea, you know. I guess now again, you know, with not much supply in office, I actually see demand picking up also. In fact, you know, as we speak, we are talking to so many people for new office space. I think that probably will give us the confidence to go up there and then hold our prices or hold our terms. Okay, great. The second question is on Three Sixty West. Very good news to see it getting recognized. The profit that you recognized, INR 235 crore, share of associate, what does it correspond to in terms of the overall sales done and cash collected, roughly INR 2,500 crore, in that project? You know, this is firstly only our share. I mean, we have done historic sales. There are some sales that were transferred from our [Inaudible] into this, so they were really low. I would say close to 28 odd% of the sales are done, and the rest have to be done. Like I said, that this is just our share of profit. Yeah, it corresponds to all the sales cumulatively done so far and cash collected? Saumil, would you answer that, please? Yes, sir. Now it follows the typical, what we can say, the POCM method, Sameer, that we use in every single one of our projects. It'll always be related to the percentage of work done. Then as Vikas Oberoi pointed out, corresponding to that, in line with the JV agreement, the share of profit that belongs to Oberoi, that is what gets consolidated. Okay, great. Very clear. Thanks. I've got few more. I'll get back in the queue. Thank you. Thank you. Thank you. The next question is from the line of Puneet from HSBC. Please go ahead. Yeah. Hi. Good, and thanks for the opportunity. Great set of numbers. My question is on your future portfolio strategy. As you guys have been very cautious in buying land, do you see prices of land going up now, or do you still see enough opportunities to expand your portfolio for future? You know, I think everyone should be prudent in buying land. It's like buying raw materials, and that forms the basis of our, you know, profit that one makes. Obviously we will continue to be prudent, but we are very open in buying large land parcel and, you know, create value right from the beginning. As in like we will first establish the location then, you know, like, make sure that prices go up and then we profit out of the rest of the development, which is what our strategy has been. If you see how we played Goregaon or Borivali or any other project. Now Thane. Very similar strategy. Do you see pockets of these similar opportunities still available in the market? Yeah, yeah. I mean, there are plenty, in fact. In fact, I wanna tell you all that today, you know, you can count the number of developers who can write a big check on your fingertips, you know. You know, the market is big, and it's just for all of us to clean that out. Each one needs to understand that buying land is not the only thing. We'll have to build it, deliver it to the quality that we all, you know, are known for and all that. Execution also is an equal challenge. Just buying land is not the only thing. You're right. I mean, you know, we are continuing to focus on new lands. If you will see our company and the cash flows that we generate, look at the stock we will have in Mulund and Borivali and Worli, just the cash flows out of all these three projects need to be deployed. You know, and they're large in number. I mean, if you just do a back of the envelope, you'll realize that this money needs to go in buying land, which we will of course do. You know, and we've always done that. Right. Yeah. Okay. That's great. A technical question for Saumil. The Maxima saleable area seems to have gone down. Is there a revision in the plan or did something get excluded? Hi, Puneet. Yes. What has happened is, as far as Maxima is concerned, the original plans were moving on the basis of a slightly higher number of floors. We have now decided to cap off the building at about 29 floors. Whatever correction came in on account of that, just as much. That's it. Okay. This is the final number now? That is the final number now. Great. That's confirmed. Thank you so much. Thank you. Thank you. The next question is from the line of Pritesh Sheth from Motilal Oswal. Please go ahead. Hi. Thanks for the opportunity and congrats on the great quarter. With this Three Sixty West getting recognized, firstly, should we assume that OC is received? Secondly, would we now see restart in terms of sales in Three Sixty West? Thanks for the question. In fact, very eager to answer that one first. We have got our entire project approved under 2034 DCR. That means that, you know, we have all our decks, everything that was originally taken free of FSI, which was available in 1991 DCR, we paid premiums, we paid that cost and got that approved. We got that approved on 31st of December. We have now applied for OC and probably in the next, you know, if everything goes well, next 2-3 weeks we'll have our occupation. You're absolutely right, we will, you know, press the accelerator on sales and get going. The building is complete. It's come out really well. We have, you know, like a pipeline of people waiting to buy. That this is for Three Sixty West. Maybe another question you might be eager to answer is Thane launch. When are we expecting that? Even Thane, you know, we've just paid, we were all lucky, you know, how government extended the payment to 31st January. We made all the premium payments and now getting our plans revised, we'll then get started. We were, you know, we were waiting for a few things. Now most of them have fallen in place. Hoping to do it in this quarter, I mean, and really hoping. You know, I always, you know, give you current information. Our strategy is to continue to hope that we launch within this quarter. Failing which, worst-case scenario, it'll be first quarter next year. But our attempt is to do it this quarter. Thanks. Great. All the best. Thank you. That's it from my side. Thank you. The next question is from the line of Kunal Lakhan from CLSA. Please go ahead. Hi, Kunal. Hi, Vikas. How's it going? On Three Sixty West, right, what is the take rate on the basis of which you have recognized the profits? I remember the take rate was in the range of 25%-40%. This 235% is equivalent to what take? Hi Kunal, Saumil here. It's close to about 32%. Sorry. Come again. It's 32%. 32%. Okay. Yeah. 32%. Okay. You know, our agreement is a variable on price. Now, as the price, you know, goes up, one can even hope for a better realization. Correct. Got that. Got it. In terms of, again, just a related question, what is the margin, EBITDA margin that we are getting on the current realization? Kunal, as Vikas Oberoi pointed out, you know, in one of the earlier answers, the current top line is a mix of many things, you know, especially for sales where you know, we have transferred people from one of our earlier projects over here, and also the sales which have happened over the years. In all fairness, you know, this EBITDA margin number is not necessarily indicative of what it will be once we start doing fresher sales and you know, recognize on that basis. It would be more relevant to look at that number rather than the historical number, because a lot of these sales, as I mentioned earlier, are done at different numbers. Maybe, you know, once we get into a more regular basis of recognitions and the newer sales start contributing a lot more to the EBITDA, it would be more relevant to look at it at that point of time. Sure, sure. Okay. My second question was on the premiums that you have paid. How much premium have you paid in December quarter and also in Jan, as you have indicated so far? One second. Can we do a math and come back to you? Actually, that was one thing I told our people to, you know, collate and come back. We will come back to you on that. Sure. No worries. If I may squeeze one last one. On Thane launch, right, what is the holdback there like? It's been, you're planning to launch it since a while now. No, no holdback at all. We have tweaked our plan. We are so active on it. I mean, you know, we like added Zoom meeting rooms. We added balconies. We added those large decks in front of it because the way people live is changing, so we want to include certain lifestyle elements in the project which we had to amend. These days you have to get all approvals before you get your RERA permission and all that. We wanna make sure that everything is in place, and only then we do that. Otherwise, like, I mean, you know, you show a particular layout and then you want to amend, it's not possible. We have to be very, very sure of what we are doing in terms of, you know, everything around it, which is what we have, you know, now frozen and we will get to starting it. You've submitted the revised plans? No, we've completed. In fact, because you're asking, I can tell you, we have paid a premium of close to INR 200 odd crores in Thane itself. Yeah, so that's where we are. We paid premium for the 0.5 FSI. We paid premium for the ancillary FSI. You know, and we have close to 6 million sq ft of FSI readily available today for us to use without going and doing any TDR or anything of that sort. Okay, sir. Thank you. Thank you so much. All the best. Thanks. Thank you so much. Thank you. The next question is from the line of Abhinav Sinha from Jefferies. Please go ahead. Hi, you know, congratulations on a great quarter. Just couple of things. One, have you seen any impact of the third wave on sales and is there any change in momentum? That's one. Secondly, if you can also answer, your outlook on pricing now. Well, you know, I feel every buyer is currently enjoying the pricing without the developer having factored in all the increase in input cost. You know, so it's great. Everyone wants to sell and, you know, I feel once the existing stock starts expiring and people realize that, you know, the input cost has gone up, of course they do, which they will feel when they start buying. I see a decent correction, you know, happening then. So I feel that's one part. Two, I also see that we are forgetting that we virtually had almost 1.5-2 years of almost no construction happening, you know. So there will be a huge supply constraint that will hit the market between 2024-2025. You know, we're lucky we have Borivali getting completed, Mulund getting completed. Worli's, of course, complete, so we've stopped there. We'll have a lot of material to sell. By and large, if you see many developers, they don't have enough inventory that is coming in 2022, 2023, 2024, you know. These two things are gonna play out parallelly, and I really see there will be an increase in price. And- 20 to 25 houses down. Sorry. Second question was on the third wave impact. You know, again, I feel, you know, I don't wanna say it too soon, but okay, if I have to just tell you my opinion, COVID is a passé. It is, you know, most countries have recognized it as, you know, like a little more than a common cold. Of course, you know, if you have comorbidity and all that, there is an issue, and this takes you probably five days to recover. It's gonna be business as usual. Most of Europe is saying no mask. India's also getting there. You know, so I feel there is not gonna be anything like third wave. I hope that I'm right, but I don't see that. You know, just how quickly, look, I mean, you know, we all bounced back with the second wave. I mean, I was tracking other countries in Europe. Also cases are coming down big time. They're 40% down from what they were last month. I would say that, A, either people have started to live with it. They realize that it's not like, you know, as threatening as one thought 1.5 years ago for sure. We live around it, you know. If you see, it's not impacted anybody. People have learned to live around it and that's about it. Sir, if I may just ask one more. What are the expected delivery timelines for Sky City A to D and Eternia Enigma now? Thank you. You know, we obviously have enough time as far as our commitment to people through RERA is concerned. We are putting all efforts to ensure that we complete these projects much before or at least, you know, in time for whatever commitment we've given in RERA. We'll not delay that. I don't want to, you know, make a statement here and get, like, I mean, you know, misguide anybody. My timeline is RERA. I will do it either then or before that, for sure. You know, do it then for sure, and before that is also a very big possibility. I don't want to kind of say and then, you know, get stuck there. Oh, I committed there, I'll give it. That's how it is. Sure. Thanks. Thank you. The next question is from the line of Rakesh Vyas from HDFC Mutual Fund. Please go ahead. Hi, Rakesh. Hi, Vikas. First of all, happy New Year to you and your team. Two quick questions, Vikas. First one is on the launch pipeline on the residential space for us in next twelve months. If you can highlight, apart from Thane launch, what other projects you are planning to launch? We have Borivali, our last phase, Goregaon, last phase. We have, you know, these are projects then of course, I mean, you know, we're on it quietly, we'll obviously be acquiring new land, and we'll continue with that. Just for clarity, Vikas, acquisition of land and launch will get pushed out more than 12-18 months, right? Basically, next 12 months is new towers in Borivali, which is the last phase you indicated, and maybe Goregaon, another tower is it, apart from Thane? I have three more towers in Goregaon. I have two more towers in Borivali. I have a lot of inventory in Mulund. I have again, like I said, in Thane that will get launched, and we have you know, our entire Worli to sell. A lot of activity, you know. Like you just saw that one does not need a launch to have a very good you know, quarter. Both Enigma and Sky City did a fantastic job. It sold a lot, and we'll continue to do that. Yeah. No, I agree. We have very strong inventory to sell and maybe a strong pipeline in launch as well. That clarifies. Vikas, second question and just out of curiosity, as I was looking at the residential operating margin, this seems to have come down materially in this particular quarter compared to what our historical numbers suggest. Any comments around that as to why that should be the case? Secondly, in Exquisite, the inventory that we sold is at a significant discount to the earlier prices as well as it is at comparable or discount to the new Elysian. Just out of curiosity, why prices should be lower? Uh, so- Go ahead. Yeah. On the margin bit, firstly, you know, Rakesh- Sure. There are two things. If you look at it, the overall margin contribution is, there is two parts. It also depends on the number of projects, I mean, the top line coming from each of the projects. If you were to look at the earlier period, when you know, Exquisite and Esquire were a substantial part of those revenues at that time in the earlier quarters, Exquisite and Esquire both came in with, you know, they have been the highest margin, what you can say, projects for us. When that component is higher, you see a higher margin. If you look at the current quarter, in addition to Exquisite and Esquire, you are seeing, you know, Eternia, Enigma, all of these are contributing to the top line. In fact, the proportionate share of Exquisite and Esquire within the top line this quarter is, you know, far, far lower than you know is virtually half of what it used to be in other quarters. That's where you are seeing some of those numbers go up. The other thing is also that, you know, under our revenue recognition method till we commence, you know, profit recognition, some of the projects, you know, our top line, we recognize on the basis of just cost incurred. You will see the top line coming in, but you are not seeing the margin coming in over there. That is the reason again, you know, that number gets a little depressed. In all fairness, you know, once again, the moment you will see the revenue recognition coming in from every single project, you will see that margin stabilize, I mean, going back to a normal number. Got it. Any comment on Exquisite realization this particular quarter? Really, in all fairness, these are just the last two apartments left. I think after that there is just one more apartment left. I genuinely wouldn't, I mean, I would be more interested in seeing what the Esquire numbers are rather than what the Exquisite numbers are, you know? Okay. Sure, please. By floors and things like that, with this we are done with Esquire, Exquisite totally. 100% of Exquisite is sold. I mean, like Saumil said, these are last apartments. Some of them may not have the best view, some of them may have, you know, all those constraints. Yes. In all, done with that and this thing. Just on this margin, Vikas, as you indicated, the cost pressure is increasing, but industry is not able to take adequate price hikes as of yet. So is it likely to impact our margins as well? Although they remain very, very healthy, but just in case if there is any thought process around that as well. No, frankly, I wanna tell you that it won't because, you know, in the beginning somebody asked me a question that we're being very prudent in buying land. That prudence is paying us, one. Number two, you know, we don't carry debt, huge debt. We don't pay too much interest. All this kind of helps us in maintaining our margins, and we'll continue to do that. That per se looks after what we've already done. We are lucky we built a lot in that regime where the construction cost was low. You know, obviously, whatever new we buy, you know, I think everybody in the industry will be raising prices and people will have to pay. They have no alternative but to pay. Great. Thank you so much, Vikas, and congratulations on great set of numbers and that's all. Just for everybody's knowledge, you know, there was a question how much premium we have paid. I want to ask Saumil. Saumil, you know, just for everyone, we both are in different locations, and that's why I'm asking. Saumil, is the INR 1,381 crore that we paid from August till today, does this include Thane or is it excluding Thane? Excluding Thane. Excluding Thane. Okay. If you include Thane, as of today, we have paid a little over, or close to INR 1,600 crores. A little over INR 1,580-odd crores. Sir, just give us one second. I'm just accessing that file as we speak. It includes Thane, sir. It includes Thane. Okay, great. Just for everyone, we paid about INR 1,381 crores as premium. This gives us a total FSI of about 8 million sq ft. You know, and then this is all monies paid. This is the operator, Mr. Miah. Does that answer your question? Yeah, yeah. Thank you so much. Thank you. It was more for everyone else because there was a pending question, so I just thought I'd do this. Should we take the next question now? Sure. The next question is from the line of Parvez Akhtar Qazi from Edelweiss Securities. Please go ahead. Hi, Parvez. Yeah. Hi, Vikas. Good afternoon and congratulations for a great set of numbers. Just one question from my side. There was a news article regarding us buying a land parcel in, I think, LBS Road, Bhandup for about INR 150 odd. Just wanted to get your views on that. You know, frankly, I just wanna tell you, there was a DRT bid. We looked at the land. It's well located. It's not very big. We would have preferred to have a larger piece of land, but you know, this is what it was. It was at a decent price, and we bought it, and that's it. You know, really didn't think much about it. You know, this is our business. Land is our raw material. It's in a good location. It's coming at a very good price. It's clean transaction because you buy through DRT, you get it clean. That's what we did, you know. When can we expect a potential launch there? Yeah, you know, we've just got it. Maybe give us a quarter. We'll come back to you with a lot of clarity. Thanks. All the best for future. Thank you so much. Thank you. Ladies and gentlemen, we will take that as the last question. I would now like to hand the conference over to Vikas Oberoi for closing comments. Thank you all for taking time for this call. These interactions provide us with meaningful input, and we take back a lot of value and feedback from you all. Our team is always available to interact and speak with you. If you have any further questions, please feel free to, you know, connect with our IR or Mr. Saumil Daru, our CFO, and me as well. I'm very happy to answer any more questions. I think with that, we can end our call. Thank you again. Thank you, everybody. Thank you. Ladies and gentlemen, on behalf of Oberoi Realty, that concludes this conference call. Thank you for joining us. You may now disconnect your line.