Shriram Properties Limited — Investor Meet, 20-11-2024: Analysts/Institutional Investor Meet/Con. Call Updates

Financial Performance: Shriram Properties reported revenues of INR 366 crores for H1 FY25, marking a 10% year-over-year decline, while Q2 saw revenues at INR 155 crores. The gross margin remained robust at 30%, but EBITDA was significantly impacted by deferred revenue recognition due to regulatory holdups, resulting in an EBITDA of merely INR 13 crores for Q2 and a PAT of INR 17 crores for H1. Year-on-year, collections dropped 11%, but sequentially, sales volume surged 47% to 1.03 million square feet, showcasing recovery.

Future Outlook and Growth Drivers: Management remains optimistic, emphasizing that the festive season will stimulate demand. With strong launches planned, especially in Pune and Bangalore, the company aims to recover deferred sales in H2 FY25. The strategic focus is on market expansion and enhanced brand positioning, with a target of doubling sales over the next three years.

Order Book and Operational Updates: As of Q2, Shriram Properties has a gross development value (GDV) of INR 9,800 crores across ongoing projects, with a significant portion already sold. Upcoming projects are expected to generate an additional GDV of INR 10,000-12,000 crores.

Analyst Q&A Insights: Analysts questioned revenue and profitability projections; management reiterated confidence in achieving FY25 targets based on strong sales conversion in Q3, despite the Q2 decline. Regulatory challenges are expected to ease, allowing for better operational clarity and efficiency.

Strategic Focus Areas: The company is focused on brand building, operational scalability, and securing new projects to increase market share amid a competitive landscape. Strong construction momentum, coupled with upcoming launches, is expected to enhance profitability.

Investor Insight: Given the recovery trajectory, operational improvements, and strategic initiatives, Shriram Properties appears positioned for a rebound in financial performance, suggesting a favorable outlook for investors.