Shriram Properties provides aggressive growth targets

Real estate sector in India is facing strong traction, especially the residential real estate.

Almost every company is providing aggressive growth targets.

Now Shriram Properties (SPL), while unveiling it’s new brand identity has provided ambitious growth targets.

• The Company has embarked on a mission – called, SPLNxT – towards accelerating growth, repositioning brand and enhanced focus on the mid-market segments.
  • It aims to enhance its focus on the mid-market and mid-premium segments of the residential real estate markets in Bengaluru, Chennai and Kolkata, as well as Pune that it plans to enter soon.
  • Historically, mid-segments accounted for 67% of SPL’s completed and ongoing portfolio, with the rest coming from affordable and other products segments.
• In next 3 years, i.e., by FY27 – Double sales, triple income and quadruple profits
  • Double sales in 3 years = 26% CAGR
    • In FY 24, sales value grew by 28%
  • Triple revenues in 3 yrs = 44% CAGR.
    • In last 3 yrs, Company’s revenues have grown at a CAGR of 26% and over 5 years at only 6%.
  • Quadruple profits in 3 yrs = 59% CAGR
    • In last 3 yrs, profits have grown at a CAGR of 45% and over last 5 years at 30%
  • the Company is targeting cumulative sales of over 20 msft, predominantly focused on Bengaluru, Chennai and Pune. Kolkata will remain a key contributor.
    • In last 25 years, the Company has delivered 44 Projects with 24.4 msf development.
      • Of this 15 msft were delivered in last 4 years
    • accelerate new project addition in core markets of Bangalore, Chennai and Pune and intends to more than double its new project inventory. Currently, SPL has a project pipeline of 42 projects with 42 msf development potential. Of this, 24 msf is ongoing and the remaining 18 msf of development potential vests in future projects. SPL is targeting to double this future project inventory in 18-24 months.

Prima facies the targets do look very ambitious. When seen in the context of ongoing sentiments in the sector as well as Company’s own performance, they do look achievable.

However, this is a sector where sentiments can change very quickly and hence warrants caution.