Kolte-Patil Developers Ltd — Call Transcript 2022

Aug 20, 2022

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To, To, The Assistant Manager, The General Manager, National Stock Exchange of India Limited BSE Limited, Listing Department, ‘Exchange Plaza’, Corporate Relationship Department, Bandra Kurla Complex, 1[st] floor, Phiroze Jeejeebhoy Towers, Bandra (East), Dalal Street, Mumbai – 400051 Mumbai – 400001

20 August 2022

Sub: Transcript of Earnings call held on 12 August 2022

Ref: NSE Symbol and Series: KOLTEPATIL and EQ BSE Code and Scrip Code: 9624 and 532924

Dear Sir/Madam,

Please find attached herewith transcript of earnings call held on 12 August 2022.

This is for your information and record.

For Kolte-Patil Developers Limited

VINOD EKNATH PATIL Digitally signed by VINOD EKNATH PATIL DN: c=IN, o=Personal, postalCode=411038, st=Maharashtra, serialNumber=031A4F8F7667DFD6F101AD302FF701154E7EC2E00D731A673EB62A5F34869955, cn=VINOD EKNATH PATIL Date: 2022.08.20 23:05:57 +05'30' Vinod Patil Company Secretary and Compliance Officer Membership No. A13258

KOLTE-PATIL DEVELOPERS LTD.

CIN : L45200PN1991PLC129428

Pune Regd. Office: 2nd Floor, City Point, Dhole Patil Road, Punc 411001. Maharashtra, India. Tel.: +91 20 6622 6500 Fax : +91 20 6622 6511 Bangalore Office: 121, The Estate Building, 10th floor, Dickenson Road, Bangalore 560042, India. Tel.: 080- 4662 4444 / 2224 3135/ 2224 2803 Web.: www.koltepatil.com

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“Kolte-PatilDevelopers Limited Q1 FY23 Earnings Conference Call”

August 12, 2022

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– MANAGEMENT: MR. RAHUL TALELE GROUP CHIEF EXECUTIVE OFFICER MR. PAWAN LOHIYA – HEAD - FINANCE

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Kolte-Patil Developers Limited August 12, 2022

Moderator:

Ladies and gentlemen, good day and welcome to Kolte-PatilDevelopers Limited Q1 FY23 Earnings Conference Call. As a reminder, all participants’ lines will be in the listen-only mode. 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 ‘*’ then ‘0’ on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Shiv Muttoo from Adfactors. Thank you and over to you, Sir.

Shiv Muttoo:

Thank you. Good afternoon everyone and thank you for joining us on the Q1 FY23 results conference call of Kolte-Patil Developers Limited. We have with us today Rahul Talele – Group CEO and Pawan Lohiya – Head Finance.

Before we begin, I would like to state that some of the statements in today’s discussion may be forward-looking in nature and may involve certain risks and uncertainties. A detailed statement in this regard is available in the Q1 FY23 Results Presentation that has been sent to you earlier. I would now like to invite Mr. Rahul Talele to begin the proceedings of the call.

Rahul Talele:

Good afternoon, everyone. A very warm welcome to everyone present on this call and thank you for joining us today to discuss the operating and financial performance of Kolte-Patil Developers Limited for the first quarter of FY23.

I would like to begin by sharing with you our views and takeaways on the prevailing macro and real estate environment, followed by a discussion on key initiatives, broad strategies, and an overview of the highlights of the first quarter's performance. Pawan will then take you through the key financial highlights. We also look forward to taking your questions and suggestions during today’s call.

To start with, some thoughts on the prevailing macroeconomic scenario that has a bearing on consumer spending behavior and therefore on our business as well. We believe that the recent news flow and data dynamics are indicating that India is once again getting to be well-positioned for expansion in domestic demand. We see government actions, the reforms agenda, and the policy framework supporting an upswing in private sector investments and productivity improvements across sectors, thereby creating a virtuous cycle in the economy. After a long period of adjustment, financial sector balance sheets are looking more robust, indicating a turnaround in the fortunes of a wide variety of borrowers. This also means that there is greater resource availability to spur the next set of economic growth drivers. The recent impact of oil and commodity price escalations had impacted sentiments. With prices cooling down, more stability is expected in the economic environment, creating confidence for improved spending and more positive consumer behavior.

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From the perspective of the Indian real estate industry, as in the case of several other sectors, recent developments have caused some escalation in raw material prices. However, the key difference here is that, unlike many other industries, real estate has the drivers to create a passon mechanism for cost escalations. This is especially true for strong brands with efficient execution capabilities and solid reputations built over many years of building customer confidence and delivering to expectations.

We believe Kolte-Patil is one such brand and our strong market position is now reflected in the positive data points that our business is generating. Our business is also displaying several other elements of strength based on three decades of focused efforts to establish a well-respected franchise within our core customer base. From the customers’ perspective, we have built longterm engagements on the foundations of trust. From the business standpoint, we have been an early adopter of the manufacturing model in the real estate sector across the 23 million square feet of area delivered till date.

We are now bringing in elements of Visibility, Predictability, and Sustainability into our operating model. We are focused on expanding Visibility within our target audiences in the focused cities of presence and deep engagements with all other key stakeholders as well. Predictability of thinking, planning, and processes that will further strengthen our corporate framework. Sustainability of practices that create a resilient structure to drive growth. We believe these attributes are essential to our ambitions of graduating from a mid-sized real estate player to creating a larger presence in the industry over the next few years.

Now, talking about operating performance, we have entered FY23 carrying the momentum of the previous year that saw Kolte-Patil deliver in line with our stated pre-sales guidance in a weak operating environment. This was largely on the back of a sustenance projects-based portfolio.

During Q1 FY23, on the operational front, the company's sales bookings stood at 0.61 million square feet with a value of Rs. 445 crore, a growth of 53% in volume and 79% in value compared to Q1 FY22. Along with sales bookings, project execution activity remained strong and collections from customers increased to Rs. 474 crore during the quarter compared to Rs. 279 crore in Q1 of the preceding year, a growth of 70%.

Price realization has seen a significant jump based on several factors – including higher realizations in ongoing sales from projects across the board, product mix contribution from our Pune-based inventory, and strong sales momentum in Mumbai. This has led to an improvement in APR from Rs. 6,418 in Q4 FY22 to Rs. 7,260 per square foot in Q1 FY23.

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We now expect to deliver 25-30% sales growth by value in FY23. We have a pipeline of projects lined up for launch in the coming months, across Pune, Mumbai, and Bengaluru with an aggregate saleable area of 8.95 million square feet and topline potential of around Rs. 6,300 crore.

We also remain focused on meeting our business development target of Rs. 7,000 crore of topline potential for the current financial year. As a part of this plan, we continue to evaluate opportunities such as the acquisition of Pune-based Sampada Realties announced yesterday. This particular transaction provides a revenue opportunity of Rs. 1,400 crore at Kiwale in Pune, with all regulatory approvals in place and we expect to start launching in phases in the current quarter itself. We will continue to add more such projects to our portfolio by leveraging our market visibility and balance sheet position for growth.

Today, with the residential real estate segment in a structural upcycle, we expect the demand momentum to continue for the next three to five years and we are positioning our organizational resources accordingly. Despite the rise in interest rates, affordability is still at its best backed by strong wage growth trends. The underlying structural drivers of demand remain strong and customers continue to favor developers and projects that provide the comfort of reliability, credibility, and a strong track record.

We see this as an opportunity to take the leap of faith into the future. We are now targeting Rs. 8,000-9,000 crore of cumulative pre-sales over FY23, FY24, and FY25. This compares with Rs. 4,300 crore of pre-sales by value over the last three years. We also look to drive forward on our business diversification objectives with about 40-45% revenues from Mumbai and Bengaluru by FY25. Underlying these transitions will remain our structure of business discipline that has remained with us through the years. We will continue to drive returns on capital, driving growth with cash-light partnerships and engagement models.

With that, I now hand over the proceedings of this call to Pawan to provide a financial overview.

Pawan Lohiya:

Thank you, Rahul. Good afternoon, everyone. I will now briefly take you through our financial performance for the first quarter FY23. Based on CCM-based accounting, in Q1 we clocked revenues of Rs. 200 crore, whereas EBITDA for Q1 stood at Rs. 46.9 crore compared to EBITDA of Rs. 40.5 crore in Q4 FY22. Our net profit after tax post minority interest came in at Rs. 21.2 crore compared to Rs. 26.8 crore in Q4 FY22.

Here, we would like to remind you that recognition of revenue and profits are dependent on the timing of project competition based on statutory accounting guidelines. We see a strong drive on the deliveries front in FY23. Linked to project completion and deliveries would be higher revenue recognition in the ensuing period.

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Our net debt to equity stands at 0.15 as on June 30, 2022. Our focus will remain on maintaining sales performance, timely execution, and cash flows, which will continue to drive P&L performance over time.

On that note, I conclude my opening remarks and would now like to ask the moderator to open the line for Q&A.

Moderator:

Thank you very much. We will now begin the question-and-answer session. The first question is from the line of Pritesh Sheth from Motilal Oswal, please go ahead.

Pritesh Sheth:

Congratulations on a great start and the deal you announced yesterday is finally good to see some progress on business development. Firstly, on business development, one specifically on the deal, prima facie it does seem very attractive. Total investment of Rs. 120 crores for that much of size and project is largely plug and play. You are hoping to launch the first phase in the next quarter. If you can just describe a bit in terms of how you managed to get this deal attractively valued and what sort of margin expectations are we targeting?

Rahul Talele:

Thank you Pritesh. Sampada Realities started this project in 2007. They acquired this property from landowners and launched this project in 2011. But in the last eight to ten years, they have just delivered 8 to 9 lakh sq. ft. There were multiple parties involved in this transaction, and the potential of this transaction is around 2.5 million sq. ft. We are expecting around a top-line potential of Rs. 1,400 crores over here and EBITDA margin of approximately 24% to 26% of EBITDA margin. In terms of the absolute number in the range of 1,300 to 1,500 per square feet EBITDA margin, we are expecting from this project. Pritesh, during our earlier calls, I used to always say that we always do very stringent due diligence and we have various sets of parameters to assess the transaction and considering the leadership position in Pune, landowners, and even the stalled project owners and the developers, their first choice of opportunities with the KoltePatilas a developer and that is how we got this deal. So there were multiple complexities involved in this deal but somehow with the help of the cohesive working internally and with the help of the strong consultant onboarding on this to provide various technical, legal as well as financial due diligence since we were entering into a live company though it is the only asset in that company. Considering the complexity, brand legacy, and brand capabilities in the Pune market, we could close this value deal for us.

Pritesh Sheth:

Okay, any kind of distress or any liability that we are carrying from the company that will be part of our books?

Rahul Talele:

No Pritesh, there are no liabilities for us. The only thing is we have to complete the ongoing phase over there which is a couple of lakhs square foot and we are confident that we are going to complete that in 8 to 9 months. It is already factored in the cost of Rs. 120 crores.

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Pritesh Sheth:

I think for the first time you have given clarity on what is the size of business development that you are targeting this year. Firstly, how much is the pipeline that you are looking at to target that Rs. 7,000 crores of GDV addition this year, and in terms of what areas you are looking at which largely again Pune or a mix of Pune, Mumbai, Bangalore across the market?

Rahul Talele:

To be very honest, to begin with, this financial year, we have set the target of Rs. 7,000 crores for business development activity with the 7 to 8 million sq. ft. of BD in Pune, around 1 million sq. ft. of business development in the city of Mumbai and around 1 to 2 million sq. ft. in Bengaluru. We are still continuing with our guidance. And there is a strong pipeline I have already mentioned in our earlier call as well. At the same time, let me accept that our due diligence and various process is very stringent. Because of that maybe it is taking a little more time but we are confident that we are going to achieve this target in this financial year itself. Considering the fact that there are multiple advanced levels of discussions going parallelly in Pune, Mumbai, and Bangalore. In Pune at this moment, around 4,000 crores of top-line worth potentials are in a very advanced age of pipeline. In terms of areas, it is close to 6-6.5 million sq. ft. In Mumbai, we are targeting a closure of 2,000 crores of top-line worth projects. These are largely due to a strong presence in western Mumbai, now we are targeting the central and Navi Mumbai suburbs. So, that we will have good visibility and that is in sync with our Mumbai BD strategy. We want to restrict our Mumbai project portfolio, project size in the range of say 300 to 700 crores of top line at one project and at the same time 1.5 to 3.5 crores for an individual unit. We are confident that we are going to achieve this. In terms of Pune, we are targeting new micro markets wherein we don't have a presence. All these deals are such like Kiwale, which is one of the examples. Other deals also we are targeting in other micro markets wherein the sales velocity is already there. There is a good amount of demand. Competition is selling good and we want to enter those sectors.

Moderator:

The next question is from the line of Shreyans Mehta from Equirus Securities. Please go ahead.

Shreyans Mehta: I just wanted to understand, this quarter we've launched only one project Giga right?

Rahul Talele:

Yes.

Shreyans Mehta: So if I exclude that, roughly the ballpark number in terms of presale is at 0.52. I understand we are actively looking at the BD pipeline aggressively but unless and until we do not see scale up in the existing, especially on the LR, how do we I mean we are talking about 8,000, 9,000 odd crores, and unless and until we see some aggressiveness as far as LR project is concerned? So just wanted to understand the thought process out there.

Rahul Talele:

Okay, thanks Shreyans. We have given details on the priority launches. That is to the tune of 6,300 crores across geographies and we have only classified all those projects wherein we are actually in a very advanced stage of approval. So, let it be Kiwale completely approved. Our

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Baner project is in a very advanced stage of approval and we have received all sets of approval for our Life Republic projects. For LR we have received the key approval of environment clearance for around 4 million sq. ft. and in fact for the Sukh Niwas project, which is again in Mumbai, we have received the CC today. So we are going to apply for RERA. In Golden Pebbles, which is again in Mumbai, we have received the IOD and the society has vacated and now the demolition work has begun. In the next 30 to 45 days, we'll be receiving a CC for that as well. Bengaluru’s Raaga we have already applied to various authorities for approval. We have classified all these priority launches where there is the possibility of a definitive launch right from the next 15 days to the next 3 to 4 months. All this potential will get a sanction and out of this, depending on the project size, we are going to launch partially. So we are targeting launches of close to 2,500 to 3,000 crores in the next 3 to 4 months.

Shreyans Mehta:

Rahul Talele:

Shreyans Mehta:

Rahul Talele:

Sure. Just to put it other way, in terms of if I look at the LR run rate we are still not even at the pre-COVID levels, the peak which we've done. So, how do you think that probably by FY 23 end we should see that scaling up?

Shreyans, I believe we have achieved the highest sales in terms of value at the Life Republic last year as compared to the pre-COVID numbers and not only in terms of value but as well as in terms of the per square foot price realization since though it was a sustenance sales, I mean the leftover inventory or the partial leftover inventory, we could improve our price realization in the range of 3% to 7%-8% in the Life Republic project. So there is a good possibility of additional value additions. Also, now since we are running a township model with a supermarket of products, there is a price range of 35 to 80 lakhs as on date and with this new launches which are mentioned in that slide, our price range is right from say 30 lakh to 1.4 crores. So that will give us an additional volume at LR. Considering the demand for the premium houses or the spacious houses, we are confident that this year itself we are going to surpass significantly as compared to the delivered number of last financial year. At the same time, since this is a big township we are parallelly looking for strategic monetization for all those potential which is going to be live after 7-8 years. Instead of that, we are trying to monetize that and if there is a possibility we want to acquire projects at other locations, we are evaluating that as well. Also, at the same time in the next 3 to 4 months, we are planning to launch a 24K vertical at the township that will again add volume and value at the township and we are also targeting a plotting segment at the township. All put together we are confident that we are going to achieve significant growth at the township level.

Got it. My second question pertains to realization, so if you could quantify how much is it because of the price and how much is it because of the product mix?

Out of this, our last quarter realization was 6,420 and this is in the range of 7,260. There is a delta of around Rs. 800. This is a 13% to 14% of improvement in price realization out of that,

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say 3% to 4% is just because of the improvement in the prices at the project level itself and the rest is a combination of contribution from a premium project and change in product mix.

Shreyans Mehta: This 3% to 4% price hike, is it that we've taken at one go or probably we might see in coming quarters as well.

Rahul Talele: There is a certainty of a price improvement in coming quarters as well. There is a price mechanism that we follow. On a quarterly basis, we try to freeze the price for the entire company level and we review that on a monthly basis. We are now targeting all those new projects that we are planning to launch mentioned in that priority list, over there as compared to our business plan assumptions we are targeting almost 5% to 7% extra at the time of launch itself.

Shreyans Mehta: Got it. Last question from my side, in this slide which is given on priority launches, can you just give some tentative numbers or in terms of when also, for example, Baner when you expect it to launch, same for Pimple Nilakh and Tathawade.

Rahul Talele: Baner will get launched in the next two months. In terms of Pimple Nilakh, it will get launched in Q3 or early Q4, and Tathawade, we have received all sets of approvals and it will get launched in another 30 to 45 days.

Shayan Mehta: 30 to 45 days and the same for the Mumbai projects?

Rahul Talele: Mumbai projects, in fact, we have received all sets of approvals, now the vacation and the demolition process is going on. Sukh Niwas will get launched in the next 20 to 30 days and Golden Pebbles in another 30 to 45 days or max 2 months and for the Life Republic, certainly, we are confident that projects can get launched in the next 60 days.

Shreyans Mehta:

Next 60 days?

Rahul Talele:

Yes.

Moderator: The next question is from the line of Shivam Prashar, an individual investor. Please go ahead.

Shivam Prashar: My question would be how much time will it take for the execution part for it to happen, for the ongoing construction that's happening, and what are the margins that you expect?

Rahul Talele: Every quarter or every year we are launching a project and there is a difference in the height of the building. Every project has a different set of RERA timelines in the range of say 2 years to 4 years from a RERA perspective, at the same time, with all this ongoing inventory we are confident that we'll be finishing the deliveries in the next 18 months to 3 years. In fact, this year again, we are confident that it will be very strong in terms of deliveries. We are targeting a delivery of close to 3.5 million sq. ft. this year itself.

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Kolte-Patil Developers Limited August 12, 2022 Shivam Prashar: Can you tell me the rupee value of the 3.5 million sq. ft. which you're targeting to deliver this year? Rahul Talele: Okay, so it will be in the range of 1,600 to 1,900 crores. Shivam Prashar: This will be executed this year only? Rahul Talele: Yes. Shivam Prashar: How much do you see in the next 24 months? Rahul Talele: Next year, since we have sold out, for next year again our deliveries will be more than 3 million sq. ft. Since the price realization, if you see the trend in the last few quarters, there is a big jump in the price realization. Considering that fact, maybe we'll be targeting more than 2,000 crores of revenue recognition in the next financial year. Shivam Prashar: Okay. This will be the execution part. Rahul Talele: In the next three years, we are going to deliver around close to say 8 to 10 million sq. ft. of deliveries. Shivam Prashar: Okay. What would be the margins for the first 3.5 million sq. ft. deliveries you will be looking for and for the next year the same? Can get the margins and any fluctuation in margins you are seeing due to this commodity price any revision in prices, revision in margins or so? Rahul Talele: Let me answer the second part. There is hardly a fluctuation in terms of the cost of construction since all these projects which are going to deliver in this year are already in the finishing stage and the commodity prices with uptick are for all those items which are required at the beginning half of the project. There is a very limited impact in terms of commodity price hikes. We are targeting EBITDA of around 24-25% with a PAT expectation of around 12 to 14%. Shivam Prashar: Okay and you won't revise these? These will be revised upwards only not downwards I guess? Rahul Talele: Yes, certainly. Shivam Prashar: General question, if you can highlight to me the market share percentage if you have gained any market share or lost any market share in certain markets? Rahul Talele: From various reports Pune market is in the range of say 40,000 odd crores to 60,000 odd crores. We are achieving around say 1,100-1,200 crores in Pune. We are consistently in the top five positions in Pune since last 20-25 years and maybe we are the only developer there since the beginning.

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Shivam Prashar: Okay other markets? Any market share percentage? You are losing market share in Pune or you are gaining market share or you're just maintaining the market share? I wanted to listen to that.

Rahul Talele:

Let me classify this. Now, Pune has grown so big. We have classified Pune into various micro markets wherein we have the projects. We are consistently achieving our market share. In fact, there is betterment in our market share even if there is competition. And hence, what I discussed earlier, we are targeting all those new micro markets wherein we don't have a presence and that will give us a very good amount of delta in terms of volume. There are multiple micro markets we are targeting to enter and with that possibility, there is a good amount of room left to double our volumes in Pune itself, maybe in the next financial year.

Moderator:

The next question is from Pritesh Sheth from Motilal Oswal. Please go ahead.

Pritesh Sheth: Thanks for the follow-up. Again, on the Life Republic good to see launches ramping up and we are now bringing a variety of products with plotting and the 24K project as well within the next 24 months. Previous participants rightly highlighted as well that we have been in the 8 lakh sq. ft. to 1 million sq. ft. range since quite some time now. With this ramp-up in launches and bringing in a variety of products, do we expect the scale to improve in the Life Republic from 1 to maybe 1.5 million sq. ft. on annual basis?

Rahul Talele: Pritesh, certainly we are confident about more volumes coming from the Life Republic. In the next 12 months from now, we are gunning for 1.5 million sq. ft. of presales number at the township.

Pritesh Sheth: This plotting is just one opportunistic thing that you're doing or do you have a larger land size that we have dedicated for this plotted development in this township?

Rahul Talele: No, since it is a township as I mentioned earlier, we want to go with the supermarket concepts. We want to give varieties to the customers. Nowadays, the plotting is in demand, and considering that we have already delivered one sector in the township, we started with a sale rate of 3,800. Last units we sold at more than Rs. 5,000 sq. ft. So, considering that positive momentum, we want to encash that opportunity at a limited level in the township.

Pritesh Sheth: Okay, got it. In terms of realization, we have already reached around Rs. 5,500 per sq. ft. on average. Considering how strong the demand is right now across cities and for our products as well, do we end it to scale up this further to around Rs. 6,000 - 6,500 where utilizing the additional township FSI that we have of 1.7, also starts to make economically viable sense for that matter. Is that the plan now?

Rahul Talele: Yes, certainly. There has to be a right balance between volume and value. Considering that, we are running for the step-by-step approach, now we are planning to launch new sectors with a

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starting rate of 5,400 to 5,500 and after the various categorization of the inventory, easy to sell, moderate to sell, and difficult to sell, our average realization will be in the range of 5,700 to 5,800. That is our projections for this set of next launches. At the same time, there is a good amount of possibility of consumption of that additional FSI as well. Considering the fact that I have mentioned during our earlier interactions that if you touch that 6,000 level, then we can certainly go beyond 70 meters of development and we are certainly planning to come up with that kind of development through 24K product.

Pritesh Sheth:

Okay, got it. Roughly how much that increases the potential of LR if we go for the higher FSI and right now we are at 11 million sq. ft. of additional development that we have, which is still not launched, what would be the additional potential that we might look at?

Rahul Talele: LR total potential I mean, we have given that note in our presentation as well. There is a potential left of more than 20 million sq. ft. at this moment at Township.

Pritesh Sheth:

At 1 FSI we are still at 11 million sq. ft. additional and it can go up to 20 million.

Rahul Talele: Yes. So, this new launch of around 3 million sq. ft. is a part of 20 million, it is a combination of residential and economic activity. It is largely residential with around 13 or 14 million sq. ft. and 5-6 million sq. ft. of economic activities, which is largely a commercial development.

Moderator: The next question is from the line of Shreyans Mehta from Equirus Securities. Please go ahead.

Shreyans Mehta: Just a follow-up in terms of cash outflow. Just wanted to understand what is the pending construction cost to be incurred for this year and next year?

Pawan Lohiya: From the ongoing project, the pending cost which is to be incurred is around Rs. 1,500 crores. Out of that, we are planning to spend around Rs.600- 650 crores this year and balance in the next 18 odd months.

Shreyans Mehta:

Rs 900 odd crores in next 18 months.

Pawan Lohiya: Yes, that's it for the existing launch project.

Shreyans Mehta: For the recently acquired project, and to be launched, what would be the rough indicative number in terms of investment?

Rahul Talele:

For Kiwale project, the investment amount is Rs. 120 crores, and all those projects that I have mentioned earlier, we have to invest obviously in tranches of around six to nine months. Our investment requirement will be in the range of Rs. 400 to Rs. 500 crores.

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Shreyans Mehta: Given that probably this year, we have an aggressive bit pipeline as well as we have a certain portion of construction also moving in, how do you see the balance sheet moving from here on, especially in terms of leverage?

Rahul Talele: At this moment, our net debt to equity is 0.15 and there is an internal approval till 0.5. There is a good amount of delta left of around Rs. 300 – Rs. 400 crores to further leverage. That is our plan B and plan A is through internal accruals and through what I mentioned earlier, through strategic monetization at the Life Republic and then backed by this leveraging, we are confident that we'll achieve our target.

Shreyans Mehta: Got it. Lastly again dwelling more on LR. Just wanted to understand, are we in talk with any players like we had earlier where we have monetized the land with the planet? Are we in talk with any other players or with the same player?

Rahul Talele: We are in discussion with a couple of players for private equity infusion like what was the structure at Planet.

Shreyans Mehta: Right, so it's still at the initial stage?

Rahul Talele: Very initial stage. As a group, if you see the history of growth we have relied on the various private equity partner. We are in discussion since we are launching multiple projects we are in discussion with private equity players.

Moderator: As there are no further questions, I would now hand the conference over to management for closing comments.

Rahul Talele: Thank you once again for your interest and support. We'll continue to stay engaged. Please be in touch with our investor relations team for any further details or discussions. Look forward to interacting with you next quarter and wish you all a happy Independence Day in advance.

Moderator: Thank you, sir. On behalf of Kolte-Patilthat concludes this conference. Thank you for joining us and you may now disconnect your lines.

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