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Paranjape Schemes targets ₹2,000 crore revenue in FY27; plans 2.5 million sq ft launches in H2

Paranjape Schemes expects revenue of around ₹2,000 crore in the current financial year, compared with ₹1,500 crore in the previous year, while maintaining blended profit margins of 20-21%. The company plans to launch around 2.5 million sq ft in the second half and reduce gross debt from ₹1,800 crore currently to about ₹700 crore by December 2027.

The developer plans to launch around 2.5 million sq ft during the second half of the financial year, after launching approximately one million sq ft during the first six months.

The company currently has gross debt of around ₹1,800 crore and plans to bring it down to approximately ₹700 crore by December 2027 through project cash flows. It also expects to deploy around ₹300 crore towards construction during the current financial year.

Residential real estate contributes around 95% of its portfolio, with mid-income and upper mid-income housing accounting for the bulk of its revenue. The company is also expanding its senior living business through development management arrangements and currently operates 220 assisted-living beds.

In an exclusive interaction with ETRealty, Paranjape spoke about launches, margins, debt reduction, senior and assisted living, township economics and its new housing format for families with differently-abled children. Edited excerpts:

How has the company performed during the first half of the financial year?

We recorded about ₹600 crore of pre-sales across the first two quarters, including allotments. The overall business generated during the two quarters was broadly similar.

The noticeable change has been in the product mix. Luxury housing has slowed in certain micro-markets, while demand for 1-BHK and 2-BHK homes has picked up rapidly.

At Forest Trails, our township project in Bhugaon, we launched and sold around 150 units during the last quarter. We see Bhugaon as the next Bavdhan in Pune’s residential geography.

The project primarily comprised 1-BHK and 2-BHK units. A 1-BHK was priced at around ₹45 lakh, while a 2-BHK was priced at approximately ₹68-69 lakh. The ₹45 lakh agreement value also enables us to pass on the benefit of the lower applicable GST rate to buyers. Demand for 3-BHK homes continues to remain strong.

How much did the company launch and deliver during the first two quarters?

We launched an aggregate of approximately one million sq ft during Q1 and Q2. On the delivery side, we handed over around 750 units during the period.

What are your launch and delivery plans for the second half?

We plan to launch approximately 2.5 million sq ft during Q3 and Q4. On the delivery front, we expect to complete and hand over about one million sq ft.

Most of the projects we launched after the pandemic are scheduled for completion this year. Consequently, possessions will be handed over continuously through the remainder of the financial year.

Have you revised your launch plans because of changing market conditions?

We did not launch enough projects last year and launched only about one million sq ft. We are therefore accelerating the launch pipeline this year.

On the delivery side, we did not have many major completions scheduled last year because our projects were still completing their three-and-a-half to four-year development cycles. The main exception was a plotted development where we delivered about 200 plots.

What is the composition of your overall portfolio?

Residential real estate accounts for approximately 95% of our portfolio, while commercial real estate contributes about 5%.

Within residential, we operate across mid-income housing, affordable luxury, luxury housing, senior living and assisted living. Mid-income and upper-mid-income housing account for about 75% of our revenue. Senior living contributes approximately 10%, while assisted living currently contributes less than 1%.

Redevelopment accounts for around 5% of our portfolio across Pune and Mumbai.

What are your plans for the redevelopment business?

We expect to deliver approximately half a million sq ft of redevelopment projects in Mumbai during the year. We are also preparing to launch about one million sq ft of redevelopment in Thane during Q3 or Q4. Redevelopment will remain a selective but important part of our Mumbai Metropolitan Region portfolio.

Which markets are you currently present in?

We are present across nine markets spanning tier-I, tier-II and tier-III locations. Our active footprint includes Mumbai, Pune, Thane, Vadodara, Bengaluru, Nashik, Chiplun and Ratnagiri, along with locations across coastal Maharashtra such as Diveagar and Shrivardhan.

In Vadodara, we completed the second phase of our senior living project during the previous quarter and plan to launch the third phase in Q4.

We have a 50-acre layout in Nashik where we are introducing senior living. In Chiplun, we have completed three phases of a project and reserved its fourth phase for senior living.

What is your track record in senior living?

We have delivered 17 senior living communities, including 13 in Pune, two in Vadodara and one in Bengaluru. Together, these communities comprise approximately 2,500 delivered units and accommodate more than 4,000 senior residents.

What is the current scale of your assisted living business?

We currently operate 220 assisted living beds. This includes 100 beds in Pune and 120 retrofitted beds in Khopoli. We operate across owned, operator-led and long-lease models. Private suites are priced at approximately ₹60,000 per bed per month. An 84-bed facility currently generates annual revenue of about ₹2.8-3 crore.

Occupancy across the assisted living portfolio is approximately 95-98%, with EBITDA margins of around 29-33%. The business remains relatively small today, but once sufficient bed capacity is created, it could present an opportunity for a specialised REIT-type structure over the longer term.

What is the scale of your commercial real estate portfolio?

Commercial real estate accounts for approximately 5% of our overall business. We are currently developing approximately one million sq ft of Grade-A office space in Wakad.

What are your plans for plotted developments?

We are developing approximately 600-650 plots across two projects on the outskirts of Pune. One is part of a 40-acre township layout, while the other is being developed over approximately 20 acres.

How much will the company spend on construction during the year?

We expect to spend approximately ₹300 crore on construction during the financial year. The expenditure will be funded through internal project-level cash flows and available bank construction finance limits.

What is the company’s current debt and reduction target?

Our current gross debt is approximately ₹1,800 crore. During the last two years, we have retired around ₹1,000 crore of debt, even as we took new construction finance limits for projects.

We plan to reduce total debt to approximately ₹700 crore by December 2027. The reduction will be funded entirely through cash flows generated by our projects.

What revenue and margin are you expecting?

We expect to generate revenue of approximately ₹2,000 crore during the current financial year, compared with around ₹1,500 crore in the previous year. We expect to maintain blended profit margins of approximately 20-21%.