Twenty six years ago when we started operations real estate was an industry space thatmost shied away from. Despite this we entered the business with a vision. A vision totransform the industry in which we operate the region where we operate and the lives ofpeople around whom we operate. Driven by this we developed the five core values of ourbusiness that defines all our actions transparency in all dealings commitment todeliver on time innovation in designs and concepts focussed on customer comfort qualityof construction and care for the environment.
It was our strong belief in these values that enabled us to set new benchmarks in theindustry. Today Ganesh Housing is synonymous with trust transparency and quality. Moreimportantly these values that once defined our purpose of existence have becomeindustry norms. While most others are busy restructuring organisation and readjustingbusiness strategies to adhere to the new norms we are in a sweet spot to capitalise onthe huge opportunities that the industry would unfold in the coming years.
Another major strategy that we undertook was to restrict our presence to the Ahmedabadmarket which was still developing. Being an important part of the city's development andits meteoric rise in real estate we developed our niche in this market. Building strongties with the best in the industry suppliers and engineers working with best people andgaining customer trust we have unmatched presence knowledge and expertise in thismarket.
Performance review 2016-17
2016-17 was a difficult year for the industry. As most of the players were gearingthemselves up for the upcoming implementation of RERA in came the demonetisation shockthat impacted real estate sales as significant cash crunch in the industry. It also led tofurther delays in project delivery given that most of the industry participants. Theimpact was more severe on players who used to take the wrong route to avoid tax incidence.
At Ganesh Housing things were different. 2016-17 was a great year for us in many ways.Not only did we witness strong performance we also further strengthened our foundationthat would enable us to take the fast mover advantage of the new industry regulations.
During the year our total revenues increased 26% from Rs. 3240.86 million in 2015-16to Rs. 4087.73 million. EBITDA and PAT increased by 3% and 6% respectively to Rs. 2128million and Rs. 746 million respectively in 2016-17. The earnings per share in 2016-17increased to Rs. 15.93 as against Rs. 14.12 in the previous year.
Driven by the strong performance the Board has recommended a dividend of Rs. 2.00 pershare subject to the approval of the shareholders.
What makes me most excited about our long-term growth story are two major industrydevelopments the implementation of Real Estate (Regulation and Development) Act2016 widely known as RERA and the easing norms of Real Estate Investment Trusts (REITs).
RERA is an important development in the industry that focusses on eliminating all sortsof ambiguities in the industry to protect buyers' interest. While most other players areintimated by RERA given the amount of disclosures to be made and transparency to beadopted it is a welcome move for us. Going forward all players and parties involved inprojects needs to be registered with RERA along with sufficient disclosures relating toquality delivery schedule and plan among others. Thus as most industry players get busyrestructuring organisation and building capabilities to comply with the norms there islikely to be a significant shortfall in the supply of residential and commercialproperties. This is where our expertise shall come into play. Having followed similarnorms for over two decades we face no major hurdles. With our strong pipeline ofRERA-approved projects we shall be able to meet significant demand. Our focus for thecoming years shall be on creating robust cycle of getting more projects registereddeliver as per specification generate cash flows and fund new projects.
REITs are another major development that we are counting on. Globally REITs haveemerged as an important asset class for investors seeking investment in real estate in aliquid manner. However REITs being a completely new asset class in India and its normsbeing unfavourable earlier investors were hesitant to enter this space. Now with thegovernment modifying the rules it is likely to witness some development.
An important factor that REITs consider before investing is the developers experiencemarket reputation and income generating and capital appreciation capabilities of theirprojects. Besides with RERA implementation consideration for RERA-approved projects wouldalso form an important criterion. At Ganesh Housing having fulfilled all therequirements we are confident that our under construction as well as completed Projectshall be an attractive investment option for REITs. This shall help in funding ongoingprojects and transferring the completed ones for a consideration which shall facilitate inreducing our leverage and enhance growth momentum.
Message to the stakeholders
On behalf of the Board I would like to thank all our shareholders for their trust andsupport over the years. Our focus has always been on maximising returns to theshareholders and going forward we shall continue to do so. In addition to this RERA andREITs make our growth potential even more exciting. We shall continue to strengthencapabilities to enhance our delivery competencies.
I also take this opportunity to thank our employees for their continued efforts to takeGanesh Housing to greater heights and various builder communities for making our projectsa reality.
I would like to assure all our stakeholders that as a future-focussed organisation wehave undertaken all the necessary initiatives for creating long-term value and growthtogether.
Dipak G. Patel