India has experienced multiple structural reforms in recent years and remains one ofthe fastest growing emerging market economies. Weakness in global commodity pricescontrolled in ation and increased public spending supported economic growth. Beyond thetemporary hurdle arising out of the government's demonetization initiatives and globalevents like the US presidential elections and the UK vote in favor of Brexit; policyactions continued in the right direction.
The year gone by has been an eventful one for India's real estate sector with a lot ofpositive changes and initiatives being introduced by the government. Reform measures likeimplementation of RERA and clarity on GST are structural changes which are likely to giveincreased con dence to home buyers and provide consolidation opportunities for theorganized players. The Union
Budget 2017 came across as a very balanced and progressive budget with a record highallocation towards infrastructure and measures to encourage housing growth. The provisionsto encourage affordable housing like deduction on pro ts for developers lower interestrates for the borrower and infrastructure status from a lenders' perspective furtherunderline the government's sincerity about their housing for all scheme.
Through this dynamic business environment FY2017 has been a very strong year forSunteck both operationally and nancially. We posted revenue of ` 952cr an increase of291% y-o-y and record PAT of ` 208cr. We also made multi-fold progress on furtherstrengthening our balance sheet with reduction in average cost of debt decrease inabsolute debt levels and A+ credit rating being re-af rmed by multiple credit ratingagencies.
The main contributor to the strong P&L was recognition of our third residentialproject in Bandra-Kurla Complex (BKC) Mumbai called Signia Pearl which also obtainedOccupation Certi cate (OC) during the year.
With this all three of our residential projects in BKC are now operational withSignature Island and Signia Isles already seeing a lot of South Mumbai families shiftingtheir base to BKC. With the entire complex seeing more habitation we witnessed goodtraction in sales and also concluded multiple lease deals for our customers at amongst thehighest rentals in the country. The new upcoming yovers connecting BKC to the entire citytwo new ve-star hotels and hi-end malls coming up and a Convention Centre gettingoperational in the next 18 to 24 months augur well for the potential monetization of ourbalance inventory.
The second biggest capital allocation for Sunteck has happened towards ourSunteck City' project at Oshiwara District Centre (ODC) Goregaon West.
There have been some very signi cant developments in this location during the year.Apart from one East-west yover (which is an extension of the JVLR) another yover gotoperational during the year which connects ODC to the IT hubs of Nirlon and Nesco inGoregaon East which are the main target audience for our residential developments.
The past year also saw the Ram
Mandir station becoming operational on Mumbai's western railway line. The next twoyears will see further developments like completion of several ninety feet roads in thenoti ed zone of ODC and two or more metro stations in a radius of around three kilometers.These infrastructure developments will further enhance the value of ODC spread over 160acres and of our project Sunteck City - the largest mixed-use development in the area spread over 23 acres. The way Sunteck saw an early opportunity in the CBDs of BKCand Navi Mumbai ahead of the curve; ODC is a similar opportunity which can take yourcompany to a new level of growth. Our other Projects under the Signia brand like SigniaHigh at Borivali and Signia Waterfront at Airoli (Navi Mumbai) are also moving well.
Looking ahead interest rates are already on its descend should act as a building blockfor a recovery in the residential segment. This will be well supported by the arrival ofRERA and increasing transparency in the sector which will increase the con dence of homebuyers who had been waiting on the sidelines in recent years. The government's impetus onaffordability has the potential to drive the next leg of growth for the residentialsegment and lead to a broad-based recovery in the coming years. We at Sunteck also aspireto be present across pricing spectrums within the MMR to ensure the long - termsustainable growth of the company. Thus we are selectively evaluating opportunities in themid-income value homes segment as well under a new brand where using the bene tsavailable under the affordable housing regulations we will maintain our pro tabilitylevels. Our prudent cash ow management and balance sheet strength has facilitated us toattract strategic partners over the years. We will leverage our brand positioning andexecution strength of both Sunteck and its partners for selectively exploring newacquisitions.
The Company today has an established brand and presence across the MMR region with atrack record of quality execution and a proven ability to identify growth areas andestablish presence ahead of the curve. We have delivered several landmark projects whichhave changed the pro le of the entire locale. We enjoy a premium positioning across ourproducts and micro-markets. I truly believe that your company is on the path of creatingvalue for the society as well as its stakeholders. Our commitment towards delivering thebest possible homes for our customers remains at the core of our business philosophy andwe are con dent of achieving new heights in the coming year.
I would like to thank our Board of Directors customers partners associates andshareholders for your con dence in us which helps fuel the momentum towards a brighterfuture for Sunteck.
Chairman and Managing Director