The Indian real estate business is expected to surpass $1 trillion in market size by 2030, as reported by Financial Express. The first half of 2023 saw $3.9 billion in investments and a 68% year-on-year increase in home sales. By 2025, it is projected to contribute 15% of India’s GDP, demonstrating its economic importance.
With a market capitalization of Rs 29,644.03 crore, the shares of Aditya Birla Real Estate Ltd were trading at Rs 2,654.00 per share, increasing around 0.51 percent as compared to the previous closing price of Rs 2,640.55 apiece.
Matter explanation:-
As of September 2024, Goldman Sachs Group, a Foreign institution investor bought 1,301,292 fresh equity shares which is equivalent to 1.2 percent of the company.
Financial performance:-
The company’s revenue saw a 28% rise, growing from ₹894 crore in Q1 FY24 to ₹1,149 crore in Q1 FY25. Net profit surged by 342%, shifting from a ₹7 crore loss to a ₹17 crore profit, reflecting strong revenue and profitability growth.
Revenue Split:-
In FY23-24, Century Textiles and Industries’s total segment revenue reached ₹4,276.70 crore in FY23-24, a 19% increase from ₹3,593.84 crore in FY22-23. The majority of revenue, 78%, came from the Paper and Pulp products segment, followed by the real estate business at 20% and with other sources contributing the remaining 1%.
Segment Highlights:-
Birla Estate’s revenue grew over 800% year-on-year to ₹338 crores in Q1 FY’25, with bookings of ₹262 crores. The company maintained strong collections of ₹488 crores and acquired major land parcels in Gurugram and Pune. Projects worth ₹12,000 crores are planned for FY’25.
In the pulp and paper segment, Q1 FY’25 saw a 6% drop in turnover to ₹786 crores. EBITDA stood at ₹65 crores with an 8.3% margin. Cost reduction initiatives were implemented, and a moderate pricing revival is expected by Q2 FY’25, alongside seasonal impacts on tissue demand.
Market outlook:-
The residential real estate market is expected to experience significant growth in the coming quarters, fueled by infrastructure development and smart city expansion. Investors continue to see the Indian real estate sector as a secure and profitable long-term investment, enhancing market confidence.
Management guidance:-
The company is confident in meeting its sales targets for the year and anticipates significant growth in presales over the next 3-5 years. Investments are being made to acquire new projects and expand capabilities, despite facing land scarcity in certain markets.
Moreover, a strong focus remains on delivering quality, enhancing customer experience, and fostering community development. Future projects, such as Century Bhavan, are under evaluation for potential development, reflecting the company’s ongoing commitment to strategic growth and long-term success in the real estate sector.
Challenges:-
The company faces challenges in the paper segment due to rising input costs and global supply chain disruptions. However, management remains optimistic about sustained demand and strong public investment. They are confident in real estate sector growth, driven by favorable market conditions and stable economic factors.
Company snapshot:-
Aditya Birla Real Estate Ltd (formerly Century Textiles and Industries Limited) is an India-based firm that manufactures textiles, cement, pulp and paper, and real estate. Textiles, Pulp and Paper, Real Estate, and Others are the company’s business segments.
Written by:- Abhishek Singh
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