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Shriram Properties Limited (SPL) reported mixed results for Q2 FY25, achieving a 47% quarter-on-quarter sales volume increase to 1.03 million square feet, valued at INR 568 crores, despite subdued year-on-year growth. Regulatory delays affected revenue recognition, leading to a net loss of INR 0.8 crores, while deferred income of INR 150 crores impacted financial metrics. SPL launched three new projects, with strong early customer interest expected to boost H2 FY25 performance. The company remains financially stable, with a net debt of INR 407 crores and positive cash flows. CMD Murali M expressed optimism about SPL's long-term growth and strategic initiatives.
Shriram Properties Limited (SPL) has released its financial results for the second quarter (Q2 FY25) and the first half of the fiscal year (H1 FY25), highlighting a mixed performance amid ongoing market challenges. The company reported sales volumes of 1.03 million square feet (msf) in Q2, a significant increase of 47% quarter-on-quarter, with sales valued at INR 568 crores. However, the overall sales growth year-on-year remains subdued, reflecting broader trends in the real estate sector as customer decision-making slows down during traditional inauspicious periods. Advertisement
Despite these challenges, SPL launched three new projects-Shriram Serenity in Bengaluru, Shriram Swargam in Chennai, and Shriram Symphony in Kolkata-toward the end of the quarter. While the impact of these launches on Q2 results was limited due to regulatory delays, early customer responses indicate strong interest. The company anticipates that these projects will contribute significantly to sales in the upcoming quarter, particularly as consumer sentiment typically improves during the festive season.
In terms of financial performance, SPL reported gross collections of INR 363 crores in Q2 and INR 683 crores for H1 FY25. The company handed over over 580 units in Q2 and more than 1,100 units in the first half of the year. However, revenue recognition was impacted by delays in receiving regulatory clearances for several projects, resulting in a net loss of INR 0.8 crores for the quarter. This deferral of income recognition, estimated at around INR 150 crores, has affected the company's financial metrics.
Looking ahead, SPL expects to see improved performance in H2 FY25, driven by the completion of several projects and a rebound in demand. The company has acquired new development rights for two projects in Bengaluru, adding a potential development area of 0.8 msf with a gross development value of approximately INR 500-600 crores. This expansion aligns with SPL's strategy to enhance its project pipeline and capitalise on market opportunities.
Financially, SPL remains stable, with a net debt of INR 407 crores and a low debt-equity ratio of 0.31:1, one of the lowest in the industry. Cash flow from operations was positive at INR 68 crores, indicating a solid operational foundation. The company reported total revenues of INR 366 crores for the first half of FY25, slightly lower than the previous year, but with a focus on maintaining healthy gross margins of around 32%.
Mr. Murali M, CMD of Shriram Properties, commented on the results, stating that the challenges faced in Q2 are temporary and that the long-term outlook for the sector remains positive. He emphasised the company's commitment to executing its strategic initiatives and maintaining growth through a robust project pipeline and a focus on cost control and quality. As the market conditions improve, particularly in the mid-market segment, SPL is well-positioned to achieve its targets and create value for its stakeholders.
As SPL prepares for upcoming project launches and aims for strong growth in FY25, the company's focus on timely project completions and effective revenue recognition will be crucial in navigating the current market landscape. With a strategic approach and a solid operational base, Shriram Properties is set to capitalise on emerging opportunities in the real estate sector.
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