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Parsvnath Developers Ltd.

BSE: 532780 Sector: Infrastructure
NSE: PARSVNATH ISIN Code: INE561H01026
BSE 00:00 | 03 Aug 15.05 -0.75
(-4.75%)
OPEN

15.90

HIGH

16.10

LOW

15.05

NSE 00:00 | 03 Aug 15.10 -0.75
(-4.73%)
OPEN

15.65

HIGH

15.95

LOW

15.10

OPEN 15.90
PREVIOUS CLOSE 15.80
VOLUME 120949
52-Week high 19.56
52-Week low 2.16
P/E
Mkt Cap.(Rs cr) 655
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 15.90
CLOSE 15.80
VOLUME 120949
52-Week high 19.56
52-Week low 2.16
P/E
Mkt Cap.(Rs cr) 655
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Parsvnath Developers Ltd. (PARSVNATH) - Chairman Speech

Company chairman speech

In the reported year the Company has seen considerable uptake of its Grade 'A' officeand Retail offerings from marquee Corporate names such as CP wholesale (Thailand) Miniso(Japan) Adidas Reebok etc.

The financial year 2017-18 was an extremely challenging yet transformational year forthe country and the real estate industry. We had hoped and anticipated that the effect ofdemonetisation would be over latest by first quarter of 2017-18. However not only did theafter-effects of demonetisation linger much longer the adverse situation was compoundedwith Goods & Services Tax (GST) implementation and the delayed and differentialprogress in RERA implementation across the country meant that the buyers stayed away fromthe sector till everything settled down. Similar situation was experienced across mostsectors of the economy and this meant that the GDP growth was only 6.7% for theFY2017-18. In the real estate sector housing sales declined during this period and theabsorption in commercial office space was robust but flat.

The scenario however took a turn for better towards the end of the year with theeconomy growing at 7.7% in the last quarter of FY2017-18 and Construction sectorcontributing handsomely to this jump with an 11.5% increase over Q4 FY2016-17. Real estatesector metrics also reflected this acceleration with housing sales going up by 33% on aYOY basis. The transition phase and turmoil because of the monumental reforms inregulatory framework now seems nearly complete and the outlook for the future seemsbrighter. The picture is further enhanced because of sustained buoyancy in privateconsumption and Government's mega investment thrust in urban infrastructure andtransportation sectors.

Company's Performance

During the year under review our consolidated revenues saw a decline of 30.6% to'193.67 crores against '278.90 crores in FY2016-17. The bottom line was a net loss of'323.93 crores as against net loss of '148.87 crores in the previous year mainly onaccount of revenue decline and 38.8% jump in finance costs. The Company has establisheditself as a trusted name in developing quality commercial properties that have becomelandmarks over the years. In the reported year it has seen considerable uptake of itsGrade 'A' office and Retail offerings from marquee Corporate names such as CP wholesale(Thailand) Miniso (Japan) Adidas Reebok etc. In its nearly three decade long existencethe Company has completed 13 independent projects and 11 projects for Delhi Metro RailCorporation (DMRC) in the commercial and retail segment totaling up to 1.91 million sq.ft. It has ongoing projects in commercial space (luxury office and retail) with aSaleable/Leasable area of 2.27 million sq. ft. Some of the major ongoing Commercialprojects are The Parsvnath 27 K.G.Marg New Delhi Rohini Mall Delhi DMRC - Bhai VeerSingh Marg New Delhi. In FY2017-18 possession/fit-out for 1573 units was offered duringthe reported year across residential commercial retail and integrated township segmentswhich totaled to 3.53 million sq. ft. of space.

Way Forward

Similar to the past few years the focus of Company's efforts and investments in newprojects will be for the Commercial segment given the steadily increasing demand for GradeA office space in major markets. Propensity of investors is clearly towards investing inquality assets that generate a stable return which is true for the luxury office andretail formats. Hence it will be easier for the Company to raise capital for new launchesin this segment. Within the Residential segment the Company's energies will be directedtowards completion of under-construction projects and offer possession to successfullyfulfill all outstanding commitments. Reduction in the debt burden is another importantarea of thrust for the Company; which will be done through sale of non-core assets andhaving steady cash flows from commercial assets or fee-based projects.

Outlook

Further to the grant of infrastructure status for the Affordable Housing segment andCredit Linked Subsidy Scheme (CLSS) for interest subsidy to Low Income Group (LIG) andMiddle Income Group (MIG) in budget 2017 Indian government has announced further supportto the Affordable Housing segment through formation of Affordable Housing Fund in NationalHousing Bank for funding the Affordable Housing projects. It also extended the CLSS schemefor MIG up to March 2019 and liberalized the norms for qualification. With such consistentsupport and latent demand for low ticket housing the Affordable Housing segment isexpected to grow at a fast pace. In the Commercial segment absorption of office space islikely to remain above 30 million sq. ft. for the fourth consecutive year and 11 millionsq. ft. of retail supply is going to be released in 2018. Availability of funds forquality projects is likely to be much easier with REITs expected to make a debut in 2018and a greater number of Foreign Institutional Investors (FII) and/ or Private Equity (PE)investors are lining up to invest in the sector.

The real estate sector is expected to flourish in the coming year alongside the Indianeconomy which is expected to grow at 7.4% in 2018-19. Performance of the economy infourth quarter of 2017-18 is likely to be the harbinger of sustained good performance hereonwards for the next few years. One of the downside risks to industry growth is fromReserve Bank of India (RBI) pushing through interest rate hikes in light of sustained highinflation. This is highly probable however the overall effect is likely to be only asmall dampener on the expected breakaway performance. Parsvnath's meticulously honedcapabilities will see us through while taking advantage of this market opportunity to thefullest. We are indeed in a difficult space but there is no wavering from our commitmentto reclaim our rightful place in the industry as a leading player and again generatevalue for all stakeholders.

In conclusion

On behalf of the Board I would like to take this opportunity to express our gratitudeto all our shareholders financial institutions bankers investors esteemed customersand associates for their constant trust and continued support. I would also like to thankall our employees who have performed with great dedication and devotion for theorganization to the best of their skills and capabilities. As we embark on another fiscalit is my pleasure to communicate our results and accomplishments in this report for theyear under review.

With warm regards

Pradeep Jain

Founder Chairman

.