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30-35% growth, achievable with strong pipeline

Our view

Arvind Smartspaces (ARVSMART) closed the year with best ever annual presales of Rs11.07bn guided by the launch of four projects which contributed ~70% of total presales for FY24. In volume terms, ARVSMART achieved 7.4msf (118% YoY) in FY24. For FY24, the company collected Rs8.76bn (46% YoY). Company added four new projects in Ahmedabad, one in Bengaluru and Surat each, cumulative GDV exceeding Rs41.5bn for FY24. Even with substantial deployment towards the land, the company achieved operating CF of Rs4.58bn and was Rs410mn net cash positive for theFY24. Management reiterated to achieve 30-35% growth across all the matrix (presales, topline, EBITDA, business development, etc.) for FY25E. ARVSMART has projected strong capability to monetize its projects quickly in all the markets of its presence and is expected to generate strong cashflow in the next 3-4years. We have removed the 20% discount on future projects as most of them are slated to launch in next 12-15months and valued it at Rs5.2bn. For HDFC platform, we considered R6bn (earlier Rs5.5bn) yet to deploy which can generate strong cashflow of Rs11.3bn (Cos. Share) with 40% margin. We maintain our bullish stance on the company and continue to assign a higher premium of 50% to the current portfolio to arrive at a SoTP based NAV of Rs44.2bn which translates in price target of Rs974/share.

Result Highlights:

* ARVSMART achieve best ever annual presales of Rs11.07bn, up by 38% YoY guided by the launch of four projects i.e. Uplands 2.0 & 3.0, Forest Trails, Arvind Orchards and Rhythm of Life. New launches contributed ~70% of total presales for FY24. In FY24, 22% of total presales came from the referral. Company achieved presales of Rs3.23bn (15% QoQ & 32% YoY) for Q4FY24 guided by the strong launch of Arvind Orchard and Rhythm of life.

* In volumes terms, ARVSMART achieved 1.31msf (0.6% QoQ & 38.7% YoY) while for FY24 achieved 7.4msf (118% YoY)

*  For FY24, the company collected Rs8.76bn (46% YoY) while for Q4FY24 the company collected Rs2.15bn (11% QoQ & 14% YoY). Collection was lower for Q4FY24 because Rhythm of Life launched in the last two days of the quarter and collected only Rs10mn.

* For FY24, ARVSMART reported Revenue of Rs3.4bn (33.3% YoY), EBITDA of Rs1.1bn (127.8% YoY) with margin 33% (1355bps YoY), Adjusted PAT at Rs416mn (62.3% YoY) with margin 12% (218bps YoY)

* For Q4FY24, ARVSMART reported Revenue of Rs1.17bn (39.2% QoQ & 26.6% YoY), EBITDA of Rs313mn (57.2% QoQ & 54.2% YoY) with margin 27% (305bps QoQ & 477bps YoY), Adjusted PAT at Rs155mn (64.8% QoQ & 66.6% YoY) with margin 13% (205bps QoQ & 317bps YoY).

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