You are here » Home » Companies » Company Overview » Parsvnath Developers Ltd

Parsvnath Developers Ltd.

BSE: 532780 Sector: Infrastructure
NSE: PARSVNATH ISIN Code: INE561H01026
BSE 10:19 | 18 Jan 27.85 0.45
(1.64%)
OPEN

28.15

HIGH

28.50

LOW

27.35

NSE 10:04 | 18 Jan 27.80 0.30
(1.09%)
OPEN

27.55

HIGH

28.20

LOW

27.55

OPEN 28.15
PREVIOUS CLOSE 27.40
VOLUME 9467
52-Week high 33.90
52-Week low 12.00
P/E
Mkt Cap.(Rs cr) 1,212
Buy Price 27.55
Buy Qty 1123.00
Sell Price 27.85
Sell Qty 150.00
OPEN 28.15
CLOSE 27.40
VOLUME 9467
52-Week high 33.90
52-Week low 12.00
P/E
Mkt Cap.(Rs cr) 1,212
Buy Price 27.55
Buy Qty 1123.00
Sell Price 27.85
Sell Qty 150.00

Parsvnath Developers Ltd. (PARSVNATH) - Chairman Speech

Company chairman speech

The year gone by continued to be a transitory year for your Companyreal estate sector and the country but it also has the potential to be a point ofinflection for each one of them. The surprise announcement of demonetization in November2016 throttled the growth momentum that was gathering steam due to a normal monsoonespecially after a sluggish first half of FY 2016-17. This resulted in a tepid GDP growthof 7.1% in FY2016-17 vs. 8% in the previous year and the real estate sector was alsoimpacted due to deferment of purchase by residential buyers in anticipation of pricecorrections. However demonetization was only one of a series of steps taken by theGovernment to curb black money in the economy and usher in positive long term changetowards corporatization formalization digitization and democratization.

Implementation of RERA and similar reforms are expected to do somethingsimilar for the real estate sector. In the long term these will shore up the buyers' andinvestors' confidence in the sector and in turn improve the growth prospects. Overallthese steps will favor growth of the organized players like Parsvnath whereas theinformal sector is likely to get impacted by the same.

Company's performance

During the year under review our consolidated revenues went down by31.3% to Rs 278.90 crore against Rs 405.94 crore in the previous year. We incurred a netloss of Rs 148.87 crore as against net loss of Rs 49.36 crore in FY 2015-16. On theoperational front your Company has seen considerable demand in its luxury office andretail segment and has signed global reputed corporates like World Health Organization(WHO) and Facebook India Online Services Pvt. Ltd. in Parsvnath Capital Towers Bhai VeerSingh Marg New Delhi in addition to existing corporates viz. Aditya Birla Group ThomsonReuters Indiabulls State Bank of India ICICI Prudential Axis Bank Regus etc. YourCompany's focus on its residential segment continues to be on execution ofunder-construction projects and achieve successful project closure. We offered possessionof 493 units during the reported period across the residential commercial retail andintegrated township segments comprising of 0.85 million sq. ft. of space.

Growth strategy

In alignment with the sectoral trends our growth strategy will be inalignment with the 'smart money'. Institutional investors are currently focusing on thecommercial retail and affordable housing segments within the sector. The Company has astellar track record in delivering successful landmark commercial properties and hascompleted 13 independent projects and 11 mall projects at Delhi Metro Stations totaling upto 1.74 million sq. ft. It is currently working on another 3.51 million sq. ft. ofCommercial space (luxury office & retail) to meet the expected spurt in demand forquality and sustainable revenue projects. Our projects in the Grade A office and retailspace are much in demand from leading companies and retailers especially the notableunder-construction projects such as Parsvnath Capital Towers The Parsvnath 27 andParsvnath Mall at Rohini. Your Company's focus on residential front across Group Housingand Integrated Townships is on completion of existing projects and handing over thepossession of ready units on consistent basis.

In addition to these segments we also intend to generate diverserevenue streams from third party contracting and Government projects. In garnering theopportunities in these segments we will leverage our expertise in the sector developedover three decades. All these strategies will help us reduce debt by generating steadycash flow and also raise long term capital through new projects in segments popular withinstitutional investors.

Outlook

Major sector specific announcement such as infrastructure status forthe Affordable Housing segment along with the tax incentives already announced willfurther boost the segment through availability of long term low cost capital andfavorable economics for the developers. In addition to RERA implementation of GST willbenefit the sector through simplification of tax structure with potential benefits fromavailability of input credit. These measures in addition to liberalization of FDI normsfor completed projects and release of guidelines for REITs have already encouraged manyinstitutional investors especially large overseas players to start investing in thesector specifically in steady income formats such as Commercial and Retail. Similar to2016 there are projections of higher expected gross absorption (42.6 million sq. ft.)against supply addition (35.1 million sq. ft.) of commercial space in the major marketsduring 2017 as per a report from Colliers International. Hence the outlook for Commercialsegment will continue to be positive.

Overall the Indian economy continues to remain subdued and is yet tosee growth accelerate from the low 7% levels. While the green shoots of growth are visiblewith demonetization impact fading out by the end of Q4 FY2016-17 the excesses of pre-2008period continue to cast a shadow on the industrial growth. Similarly the real estateindustry can get into a growth overdrive only in the medium term. Overhang of accumulatedinventory past practices will need time to be cleared. However this transformation iscertain to happen and we expect this transition period to end soon. Outlook for theindustry is thus cautiously positive. Parsvnath's capabilities and nearly three decadeexperience of delivering quality real estate projects will surely help us benefit duringthis transition. We are confident of our strategic choices to focus on the segments suchas Commercial and others that are going to drive this sector and lead to value creationfor all stakeholders.

In conclusion

On behalf of the Board I would like to take this opportunity to thankall our employees whose skills and capabilities have been instrumental for our growthfor their continuous dedication and commitment. Also I would like to thank all ourshareholders financial institutions bankers investors esteemed customers andassociates for their continued trust and support. As we enter into another fiscal I lookforward to communicating our results and accomplishments as we execute our coherent andcohesive strategies towards a higher growth trajectory.

With warm regards

Pradeep Jain

Founder Chairman