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Parsvnath Developers Ltd.

BSE: 532780 Sector: Infrastructure
NSE: PARSVNATH ISIN Code: INE561H01026
BSE 00:00 | 06 Dec 7.75 0.36
(4.87%)
OPEN

7.50

HIGH

7.75

LOW

7.37

NSE 00:00 | 06 Dec 7.75 0.35
(4.73%)
OPEN

7.50

HIGH

7.75

LOW

7.35

OPEN 7.50
PREVIOUS CLOSE 7.39
VOLUME 44335
52-Week high 27.05
52-Week low 6.70
P/E
Mkt Cap.(Rs cr) 337
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 7.50
CLOSE 7.39
VOLUME 44335
52-Week high 27.05
52-Week low 6.70
P/E
Mkt Cap.(Rs cr) 337
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

We present to you the Annual Report for the financial year 2020-21 on a sombre noteunder the shadow of a never seen in a century pandemic. The world has just seen a yearthat not only changed it completely but also redefined what is normal and inflicted heavyloss of life and living. However it also saw the human spirit shine through in theuntiring and selfless efforts of the COVID warriors to do their best to save thoseinfected bytheCoronavirusthe speedy innovation and ingenuity of our scientists thatrolled out vaccines in a record short time with support from the various governments andthe support given at individual and country-level to those suffering the most. Wesincerely hope that we have already seen the worst and the time ahead is going to be aboutrebuilding our lives and reach the goals that we were meant to achieve. Your Company aswell has gone through a tough time during the year under review and yet not only managedto survive but created a platform for regaining its glory in the coming years.

Macro picture

Just when the Real Estate sector was on the verge of a sustained growth curve afteryears of turmoil the COVID-19 pandemic reset the narrative back to one of gloom and doomat the start of the financial year. The global and Indian economies went into a recessionin the first half of the financial year. India saw the most drastic shrinking of economicactivity in its history with a 24.4% degrowth due to the lockdown imposed nationally. Insuch a scenario the demand for housing and commercial space was severely hit as reflectedin the sales numbers. The developers found it difficult to continue with constructionbecause restrictions and health concerns resulted in mobility constraints supply chaindisruptions unavailability of labour and cash crunch. The new launches were muted inline with the situation during this period. But there was a turnaround from a freefallseen in Q1 FY2020-21 from the next quarter itself once the restrictions were eased andslowly the sector recorded YoY growth across segments in the second half much in linewith the broader economy. For the full year though the Residential sales figuresdeclined by 33.6% and absorption of Commercial space by 47.4%. Residential sales in termsof the number of units saw a YoY jump of 29% in the fourth quarter of the financial year.The trend forthe Commercial segment

was similarly encouraging. Hence the sector was set to regain momentum in the nextyear. Albeit the second wave of COVID-19 pandemic deferred this expectation by a quarter.With the trend of reverse migration from metros and Tier-I cities the demand for qualityhousing in Tier-ll and Tier-Ill rose. Even though a part of the workforce is likely tocontinue to 'Work From Home' or in a flexible model the demand for office space is notlikely to come down on a longer-term basis. Instead Grade-A properties that offer greaterspace for maintaining social distancing and better hygiene and sanitisation are seeinggreater demand.These developments are the proverbial silver lining in the very dark cloudthat the pandemic cast on the sector.

Company's performance

During the year under review our consolidated revenues dipped by 69.9% from Rs 1191crores in FY2019-20 to t 358 crores. This was not only on account of theimpact of the COVID-19 pandemic on sales revenue but also because of no outright sale likethe Commercial projectThe Parsvnath 27 that we accomplished in the previous year. Wewere successful in improving the operational efficiency by containing the costs whichresulted in the EBITDA margin increasing by 470 basis points to 15.2%. For the secondconsecutive year we made an operational profit even when impacted by such a massive blackswan event.The Company made a net loss of Rs 428 crores as against a net loss of Rs 363crores in the previous year mainly on account of higher finance cost and greater taxexpenses from adjustment for earlieryears and deferred tax charge. The balance sheetsuffered a strain on account of constrained collections and liquidity. The last quarter ofthe year saw two-thirds of the operating revenue for the entire year creating hope for thefortunes of the Company to shine as the market recovers. On the operational front duringthe year under review the Company booked total sales of Rs 49.89 crores for 0.50 millionsq. ft. that was spread between Residential Integrated Townships and Commercial segmentsand offered possession of 1056 number of units during the same period between the abovesegments spread over an area of 2.74 million sq. ft. Our effort during this time has beento maintain the trust that people have in Parsvnath by doing our best to remain committedto delivering on our promises.

Outlook

Among the segments of the sector Residential and Commercial - Office segments areexpected to perform the best whereas the Retail and Hospitality segments will continue tosee dampened demand even if moderately better than FY2020-21. But these estimates will berealized only from the second quarter of the financial year due to the second wave ofCOVID-19 pandemic in Q1. With the liquidity surplus maintained by the Reserve Bank andavailability of funds for quality projects and promoters from private investorsespecially foreign availability of capital shall not be a major concern subject toviability. The sector shall face some uncertainty on the cost front due to increasingcommodity prices affecting steel and cement costs and labour costs. On the demand sidedownward risks could be from any faltering of vaccine drive and COVID inappropriatebehaviour leading to third or fourth waves resulting in reimposition of lockdownrestrictions.

Way Forward

Your Company currently has 39 projects under construction / development with themajority area in 13 Townships projects at 55% of total area and 43% area under 22Residential projects. These include the projects where we have entered into Joint Ventures(JV) with other leading developers. Our primary focus will be on completing these projectsand completing deliveries as per timelines. It will be a top priority for us forincreasing liquidity and reducing the debt on books. We will consider new project launcheswherever viable to tap intoemerging opportunities inTier-ll and Tier-Ill residential andCommercial projects. If necessary we will explore tying up with potential JV partners todistribute risk. Boosting operating margins through cost rationalization will be a keyobjective but we will also be watchful of any supply shortages and plan well for any sucheventualities.

In conclusion

On behalf of the Board I would like to express our gratitude to all our stakeholdersincluding shareholders financial institutions bankers investors esteemed customers andassociates for their unbroken trust and unremitting support. The performance of ouremployees in the face of such great difficulties speaks of their loyalty and commitment tothe organization's best interests for which we doff our hats to them. We hope you andyour loved ones have a safe and successful new fiscal.

With warm regards

PradeepJain
Founder Chairman

.