Shriram Properties (SPL), part of the Shriram Group, has said it remains focused on reducing debt and the cost of debt further in the future. The company’s gross debt stood 12% lower at `488 crore, while net debt stood at Rs 403 crore as at June-end. With the proposed transfer of Shriram 122 West – a residential project in Chennai by SPL to the ASK Propert Fund co-investment platform by end-Aug 2023 – the company’s gross debt would drop materially during Q2FY24. SPL expects cost of debt to drop to 11.5% levels in Q2FY24, from 11.9% in FY23 and 13.7% in FY21. SPL is on track to handover 3,000 plus units in FY24, it said.
Shriram 122 West will be the second investment by the SPL-ASK co-investment platform, set up with a capital commitment of Rs 500 crore in November 2022. For Shriram 122 West acquisition, the co-investment platform will invest Rs 205 crore, and the transaction is expected to be closed by August-end. With this, the SPL-ASK platform would have used 60% of its committed capital and is evaluating further opportunities for investment during FY24. The platform’s maiden investment was launched as premium plotted development, under the brand Shriram Pristine Estates, and is performing well exceeding expectations on volume and pricing since its launch in February 2023.
SPL registered a net profit of Rs 16.6 crore for Q1FY24, compared to Rs 10.5 crore in the corresponding quarter of last fiscal, posting a growth of 59% y-o-y. Revenue from operations grew 10% to Rs 135 crore from Rs 122.17 crore on the back of registration momentum in the recently completed projects.
M Murali, CMD, SPL, said, “These favourable results not only validate our relentless pursuit of excellence but also fortify our resolve to continuously enhance the company’s landscape. Looking ahead, with our launches we remain positive in our commitment to, delivering homes and contributing meaningfully to the growth of the company.
Supported by a strong pipeline comprising of 49 projects with an aggregate saleable area of 52 million sq-ft (msf) (including 23 msf in ongoing projects, 75% of which is sold already), SPL is well positioned to benefit from ongoing consolidation in the industry. SPL intends to complete and deliver over 10 msf over the next three years. While supporting income recognition and free cashflows, this should help sustain growth momentum and deliver significant value for its stakeholders, the company said.