Shriram Properties Limited announced its financial results for the quarter (Q4FY23) and full year (FY23) ended March 31, 2023. The Company has reported strong operational and financial performance for the quarter and the full year.
SPL has reported sales volumes of 4.02 mn sq ft in FY23, which is a new record for the Company. Sales value reached a new high of Rs.1,846 crores, up 25% YoY, supported by higher volumes, better realisation, change in product mix and the impact of 7 successful launches, that achieved sales-at-launch2 of 44% in FY23.
The company has been able to sustain sales momentum over the quarters, despite deferment of two launches to FY24 and 2 delayed launches from Q3 to end-Q4 due to external factors.
Gross collections stood strong at ~Rs.1,200 crores, despite delayed launch impact. SPL achieved completion in 7 projects with an aggregate development area of 3.8 msf during the year. Also, the Company handed over nearly 2,000 units/plots to customers, which is again a new record for SPL. On a quarterly basis, Q4FY23 performance was impressive as well. Quarterly sales stood at 1.31 msf, up 26% QoQ and 12% YoY. Gross collections grew by 24% QoQ to Rs. 307 crores in Q4FY23.
Average realisation for mid-market units were higher by 14% YoY at ~Rs.6,000/sqft, while that of affordable housing units grew by 10% YoY to ~Rs.4,500/sqft in FY23. Average realisation for plots too were higher at Rs.2,900/sqft in FY23, compared to Rs.2,582/sqft in FY22, reflecting changed geographical mix of plots sold during the year.
The Company has reported excellent financial results for the full year FY23. The total revenues have grown 57% YoY to Rs.814 crores in FY23 with two key projects viz., Shriram Southern Crest (Bangalore) and a part of Shriram Grand-1 (Kolkata) reaching revenue recognition threshold, following receipt of completion certificate (OC). Revenue recognition with handover of units in certain other projects continued well.
Reflecting the impact of improved revenue recognition, resultant operating leverage and controlled costs, EBITDA stood at Rs.183 crores in FY23. EBITDA margins stood at 22%. Finance costs are lower by 11% YoY, while actual interest expenses are down 21% YoY in FY23. Concerted efforts towards lowering debt and successful refinancing impacted positively. Average cost of debt dropped to 11.9%3 despite RBI rate hike impact. The cost of incremental debt has come down to 9.0-10.5% range, which is encouraging.
The Company’s share of profits from JVs turned positive, reflecting revenue recognition at Shriram Park63 (Chennai), a JV with Mitsubishi Corporation. This was partly offset by SPL’s share of marketing and refinancing costs at two other JVs that have not yet reached revenue recognition thresholds. Net profit soared to Rs.68.3 crs, reflecting 3.8x growth compared to Rs.18crs in FY22.
The Company’s gross debt stood at Rs.553 crores and net debt at Rs.432 crores in Mar’23. Debt-Equity ratio at 0.36x is among the lowest in the sector. The Company remains focused on reducing debt and interest costs further in the coming quarters.
The Company has zero inventory in completed projects and over 75% of ongoing project inventory are sold already. SPL intends to complete and deliver another ~6 msf over the next 2 years (FY24-FY25), apart from 3.8 msf completed during FY23. While supporting income recognition and free cash flows, this should help sustain growth momentum and deliver significant value for stakeholders.
Commenting on the performance, M Murali, CMD, Shriram Properties said, “We are encouraged by the strong improvement in operating and financial performance, consistent with our promises. Our operating platform remains robust and resilient and is fully geared to leverage our strength in the consolidating industry environment. FY23 Earnings turnaround is encouraging and are confident of sustained improvement in earnings and profitability. SPL is emerging as one of the fastest growing and profitable residential real estate company”.
