Dear Shareholders,
My name is Sachin Shah and I stepped in as Executive Director of
Indiabulls Real Estate in March 2023. I would like to thank all of you for your support
and confidence in me and the new Independent Directors recently nominated to the Board:
Mr. Javed Tapia, Ms. Tarana Lalwani & Mr. Shyamm Mariwala. We join Mr. Praveen Kumar
Tripathi, Independent Director and Mr. KG Krishnamurthy, who is currently the chairman of
the Board.
Current Status and What Next?
Our FY2023 figures were ' 958 Cr in Pre-Sales and ' 1,746 Cr in
Collections, mainly through robust sales at our project Sky Forest. While this is a good
baseline, we have not been able to capitalize like some other larger developers during
what has been one of the best bull market runs in the residential sector in India. The
delay in the merger between the Company and Embassy Group has been detrimental for both
companies and their stakeholders due to its prolonged uncertainty. With one promoter
stepping off and the other not being able to take control, there has been a lag in
decision making and in taking the Company forward. Since stepping in, over the past two
quarters, we have taken some tough but needed decisions, which has led to one-time
provisions in excess ' 950 crores. There has been a clear effort in our published
financial accounts and investor decks to capture cost escalations in projects and one-time
writeoff of doubtful receivables. There has also been a management reorganization, with
the appointments of a new CFO, COO, and Company Secretary. I strongly believe that with
this new infusion of talent, the company is in capable hands with this group of
individuals and the new board. These swift and decisive actions were necessary so
management can focus on growth.
While we continue to enjoy a decent net surplus number from our ongoing
and planned projects, the next two quarters' results will be subdued due to a combination
of no new launches as well as Blu, Thane and Sky Forest depleting their inventory. But I
am cautiously optimistic. We are looking to add new Mumbai, NCR and Bengaluru development
projects. The first few launches will be future phases in our existing projects in Thane,
Worli, and Alibaug in MMR and Gurgaon in NCR. These will have a gross development value in
excess of 4,300 Cr. Our team is finalizing plans and design for approvals to take these
projects forward with launches planned between October and March 2024.
Market Conditions
The pandemic has been a stressful experience for everyone, but it has
also changed the consumer outlook toward home ownership. India's housing needs are
immense, and the demand for larger, quality homes with self-sufficient social ecosystems
has never been stronger. This trend continues to gain ground and is expected to hold for
the foreseeable future. While 2022 was full of uncertainties with geopolitical tensions
disrupting global supply chains (causing a high inflationary environment), tighter
monetary policies, and an upward bias on interest rate trajectory globally, India is in a
relatively strong position with GDP growth expected to be the fastest amongst all major
economies.
India's real estate sector has entered a cyclical upswing demonstrating
remarkable resilience despite the many disruptions during the past years. On the back of
rising incomes and improving demography, the industry has the potential to grow 3 to 4
times over the next decade. We remain optimistic about the demand for quality housing, and
we believe we are seeing a multi-year growth journey in the Indian housing market. Against
the backdrop of strong industry acceleration, larger branded developers have seen
disproportionately large growth opportunities and performed disproportionately better over
their peers. I believe we too can capitalize on this trajectory.
What next? Near term vision and Medium-term Strategy
Our debt levels are low and there is a 500+ strong team between Mumbai
and Gurugram that continue to manage the business and the projects. There is a renewed
attention to execution and delivery. Project activity has picked-up in all our sites and
there is a dedicated commitment to finishing and handing over sites at the earliest. We
are looking to reach resolution on many pending issues and are moving positively in the
right direction towards this. The message is clear - as a company, we need to improve
transparency, be more customer centric and pay attention to our quality. My key focus area
is business development and growth as we look to exit our existing near-completed projects
with a proper handover to our customers. We are also actively seeking joint venture/joint
development or development fee projects that will enable us to benefit from deploying a
capital-light model.
Finally, on behalf of the Company, I would like to thank all our
stakeholders for their continued confidence and look forward to meeting you all at the
annual shareholders' meeting.
Best wishes,
| Sachin Shah |
| Executive Director |
| Indiabulls Real Estate Limited |