Suraj Estate Developers Limited Reports Strong Financial Growth in Q1FY25
Total income surged by 30.9% YoY and 30.7% QoQ:
Suraj Estate Developers Limited, a prominent real estate company, has announced impressive financial results for the first quarter of the fiscal year 2025. The company’s total income grew by a substantial 30.9% year-on-year (YoY) and 30.7% quarter-on-quarter (QoQ). Jumping from Rs 102.8 Crores in Q1FY24 and Rs 103 Crores in Q4FY24, Suraj Estate Developers reported a total income of Rs 134.6 Crores in Q1FY25.
EBITDA increased significantly:
The company’s earnings before interest, tax, depreciation, and amortization (EBITDA) witnessed a remarkable growth of 36.3% YoY and 14.4% QoQ. Suraj Estate Developers reported an EBITDA of Rs 64.2 Crores in Q1FY25, compared to Rs 47.1 Crores in Q1FY24 and Rs 56.2 Crores in Q4FY24.
Sustained growth in PAT:
The profit after tax (PAT) for Suraj Estate Developers displayed exceptional growth, increasing by 107% YoY and 54.8% QoQ. The company reported a PAT of Rs 30.1 Crores in Q1FY25, marking an increase from Rs 15 Crores in Q1FY24 and Rs 19.5 Crores in Q4FY24.
Debt reduction and financial position:
Notably, Suraj Estate Developers successfully reduced its net debt during the mentioned period. As of June 2024, the company’s net debt stood at Rs 352 Crores, compared to Rs 572 Crores in June 2023 and Rs 315 Crores in March 2024. This debt reduction indicates the company’s strong financial management and improved liquidity position.
July 2024 Insight: Increased pre-sales, sales mix, and luxury projects driving revenue growth
In July 2024, Suraj Estate Developers experienced a growth of 5.2% YoY in pre-sales, totaling Rs 140 Crores for Q1FY25. The increase in pre-sales can be attributed to a rise in realizations by 13% YoY, primarily driven by the sales of luxury projects. However, the sales volume witnessed a slight dip of 7% YoY.
During Q1FY25, 63.6% of the company’s revenue came from the sales of luxury units, with the remaining 36.4% coming from the sales of value-luxury units. This sales mix helped in expanding the EBITDA margin on the back of operating leverage benefits.
Noteworthy developments:
Suraj Estate Developers achieved several significant milestones during the mentioned quarter:
1. Building plan approval and commencement certificate received for a proposed commercial project with an estimated GDV of ~Rs 475 Crores at Mahim West.
2. Settled litigation with Dadar Sai Kirti CHS Limited, leading to the construction of two proposed buildings with an estimated GDV of Rs 350 Crores.
3. Finalized a definitive agreement for the sale of additional areas in CCIL Bhavan building. The sale covers about 22,410 square feet of carpet area with an estimated GDV of ~Rs. 90 Crores.
Promising outlook:
Looking ahead, Suraj Estate Developers is well-positioned to achieve its pre-sales target of Rs 850 Crores in FY25. Out of this target, Rs 650 Crores are expected to come from ongoing and upcoming residential projects, while the remaining balance of Rs 200 Crores is anticipated from the launch of the proposed commercial project at Mahim West.
Strong liquidity position and debt management:
Moreover, Suraj Estate Developers reported successful debt management and refinancing efforts. Its wholly-owned subsidiary, Iconic Property Developers Private Limited, has redeemed high-cost Non-Convertible Debentures (NCDs), reducing the average cost of debt to around 13%-13.5%. The repayment of these NCDs, along with the refinancing of high-cost debt, has decreased the company’s annual interest cost to an estimated Rs 65-70 Crores, including one-time redemption premiums.
In conclusion, Suraj Estate Developers Limited’s robust financial performance in Q1FY25, substantial debt reduction, and strategic milestones achieved during the quarter highlight the company’s resilience and positive trajectory in the real estate sector. With promising pre-sales and ongoing projects, the company seems well-positioned for continued growth and sustainable profit margins in the future.
