Page 24 - Kolte Patil AR 2019-20

Performance analysis
The CEO’s review
Gopal Sarda, Group CEO, analyses the
Company’s FY20 performance and looks
ahead
22 | Kolte-Patil Developers Limited
Q: Was the management was reinforced through
pleased with the
sustenance sales marked
performance of the by controlled marketing
Company during the year
costs. Besides, the second
under review? successive year when Life
A: The management was Republic sales were in
pleased: the year FY20 excess of 1 msf enhanced
was the best in terms our liquidity.
of collections in three
decades. We registered It would be relevant to
sales of 2.5 million sq. ft., indicate that judicious
in line with our guidance, capital allocation for
when no launches were business development and
made. We delivered a maintaining low leverage
sizable 1.86 million sq. ft. resulted in a better P&L and
to customers. We finished ROCE performance. All
the year with C451 Crore the Company’s business
in pre-tax operating cash development transactions,
flows (excludes land-related including the ones with
payments) and 4.51 million ICICI Ventures and Planet
sq. ft. of ongoing but unsold Smart City, were uniquely
inventory. We expect to structured to maintain the
generate around C1,500 integrity of the Balance
Crore in post-tax operating Sheet while enhancing cash
cash flows across 36 months, flows and profitability.
indicating attractive profit Q: What are the various
visibility. realities that went into this
The Company’s growth development?
continued to be profitable: A: One of the things that
even as revenues from I must indicate is that our
operations increased 2.6% ZABARDUS campaign
(based on the Percentage achieved outstanding
of Completion Method), net numbers in the sustenance
profit (post minority interest) phase of a project in a single
rose 12.2% to C137.5 Crore. location. This validated our
leadership position in Pune
Q: What was the standout and our decision to buy the
feature of the Company’s private equity partner’s
performance during the share in Life Republic.
year under review?
A: The year under The Company focused
review was marked by on making quality sales,
a liquidity challenge for selling only as much as
the country’s real estate the market could bear
sector. However, during this without compromising
challenging phase, Kolte- payments (or realisations).
Patil experienced improved The Company focused on
liquidity. This translated liquidating sustenance
into a reduction of C83 Crore apartment inventory,
in net debt; net debt-to- which usually comprised
equity ratio declined from completed apartments,
0.47x in FY19 to 0.35x in generating sizable inflows.
FY20, despite investing The Company generated
resources to accelerate incremental cash flows
construction and paying from 2.5 msf of sales made
the second tranche of C70 coupled with the handover
Crore towards the buy-out of 1601 apartments in
of ICICI Venture’s 50% FY20. The Company
stake in the Life Republic aggregated Pune, Mumbai
township project in Pune. and Bengaluru collection
This enhanced liquidity teams into one unit; the