Dhiraj Jain, Director, Mahagun Buiders and Developers, He possesses several of these keys not only due to his academic and professional qualifications from BITS (Pillani) in B-tech whereas he also holds a degree in Masters in Business administration but also due to the invaluable experience he has garnered over the years he has spent in the effervescent Real estate industry. Mr. Dhiraj Jain has set an example for everybody. He is a man brimming with confidence and has a focused vision to take the Real Estate Industry to great heights. He feels that his association with Mahagun has given him a platform to realize his dreams of taking Real Estate Industry to great heights.
Mahagun (India) Pvt. Ltd. is a committed team of highly experienced engineers with an established track record of more than 40 years. This is one of the biggest factors contributing towards the present standing of Mahagun as one of the most trusted and preferred builders and developers, those "Who Deliver What They Commit". Having a very long list of satisfied customers, Mahagun have an unblemished record of handing over all their projects before the committed dates and to the entire satisfaction of their valued customers. The company's core competency is in managing complex construction projects from concept inception to project completion. They are able to provide services that encompass all phases of construction from pre-planning, budgets, and scheduling to design and construction.
Replying to Anil Mascarenhas of IIFL, Mr. Dhiraj Jain says " With the demand for housing showing signs of revival, the outlook in the sector is positive, though denial of credit to the sector continues to be a major challenge ".
Brief overview of the industry. What are the changing trends?
The future overview in the real estate sector continues to be bright, despite some slow-down resulting from rub-off effect of global financial turmoil experienced till first half of year 2009-10. With the demand for housing showing signs of revival, the outlook in the sector is positive, though denial of credit to the sector continues to be a major challenge.The real estate market not being fully matured, some customers are reluctant to enter in the backdrop of the housing bubble experienced in US last year. India being home to 1.20 billion people, there is a huge potential for development, which can be full realised with necessary support from banks and financial institutions, coupled with transparency and timely delivery by the developers.
What are the opportunities and challenges you see?
With the Indian economy slated to grow between 8-9% per annum, there is a huge potential for development to Real Estate. The steady increase in per capita GDP has led to the emergence of huge middle class, with rising disposable income levels, which in turn offers a tremendous potential for developers. We also see a huge potential for development of dwelling units through public-private participation under the Central Government's Urban poverty alleviation programme to accomodate and rehablitate people currently living in slums. Again the change in lifestyles had led to increase in demand for houses in the luxury segment. It is heartening to note that companies like Tata have realised the potential of development in this segment. Hence there are innumerable opportunities for development of housing to cater to all market segments.
With the metropolitan cities in india gradually acquiring the status of megapolis, the necessary infrastructure to support the burgeoning population in these area is a big challenge. Again the employment opportunities being currently concentrated around big cities, the chances of real estate development percolating to smaller cities and town appear to be grim. Moreover the sector continues to be denied credit by banks and financial institutions and is subject to bureacratic red-tape due to a multitude of approvals/ licences/ clearance required for development of real estate project. These areas continue to be major challenges for the sector.Lack of transparency coupled with the inability of some developers to complete their deliveries in time is yet another major challenge to the development of sector.
Do you expect a slowdown in any of your projects?
More often than not, the slow down in any project occurs mainly due to financial constraints arising from lack of credit and/ or locking up of funds in land banks and unsold inventories. Mahagun as a group has been maintaining sufficient liquidity by ensuring that funds are not un-necessarily locked up in inventories. We carry out a thorough analysis of our financials by subjecting these to sensitivity analysis with regard to various factors and ensure that sufficient funds are always in place to ensure timely execution of projects. Hence there is no question of our projects getting delayed or subject to slow down.
Could you tell us about your order book going forward? What is the current order book and by when would it be executed?
The company's Order book as of date in excess of Rs. 600 Crores and we have been delivering our projects accordingly. Incidentally the company has already achieved a turnover of similar figure during the last three years put together. We have already carried out a business process re-engineering exercise to identify our systems weakness and taken corrective measures to enhance our productivity leves and to supplement out capacity to develop new projects. Hence the existing order book does not pose any challenges for us and we feel we can do much more.
Walk us through your financials. What are some of the highlights?
During the last few years , we have been achieve a sustained growth rate of about 15% year on year fin our turnover and we hope the trend to continue during the current year. As per our estimates the turnover for the year 09-10 (using percentage completion method as per Accounting standard AS-7), will be in the vicinity of Rs.2750 million compared to Rs. 2450 million during financial year 08-09.However, the rates of profitability are likely to be lower due to steady increase in input costs coupled with the increase in competition levels, due to which the increase cannot be passed on to customer.
Tell us about your Mall projects. Do you plan any more?
After successfully completing a number of residential projects, the Company is now in the process of completing the Mahagun Metro Mall , which is designed to show-case the company’ s capability of developing commercial real estate. The Mall when completed will offer a host of shopping pleasures along with food courts and Cineplex as well as a fully functional Service Apartment Hotel. The Mall is under finishing and is expected to be fully operational by the end of June 2010. Some shops/ show-rooms have already been leased to some recognized international brands like Bharti-walmart, McDonalds etc. We are currently in the process of finalizing the arrangements for the food court, which will offer a variety of cuisine to cater to the requirements of different segments of customers.
What is the upcoming pipeline?
Mahagun Real Estate Pvt Ltd. is a subsidiary of Mahagun India Pvt Ltd. The company is already developing a low-cost housing project under the name and style of Mahagunpuram at village Mehroli, NH-24, District Ghaziabad. The Company been allotted 25 Acres of land for developing a residential housing project in Sector 78 Noida. The project named ‘Mahagun Moderne’ has already been launched by Mahagun Real Estate Pvt Ltd and has been a run-away success with the customers.
Tell us more about "Mahagun Moderne." What are the property rates here?
. The project involves construction of about 2200 flats of different sizes , which is expected to be completed within four years. The project is being designed to offer a variety of residential flats from 2BHKplus study, to 5BHK to cater to different market segments. Mahagun has already completed and delivered three residential projects namely, Mahagun Manor, Mahagun Morpheus and Mahagun Maestro in Sector 50 Noida and another project under the name and style of Mahagun Maple is already in advanced stage of construction. Mahagun plans to leverage its experience of completion and timely delivery of its projects with the excellent customer confidence enjoyed by it to deliver the contemplated new project within the scheduled time lines.
Where would the focus be going ahead?
Mahagun group has already delivered about 2.60 million sq ft of residential/ commercial space so far and projects to the extent of another 7.00 million sq ft are currently under execution by the group. The company leverages its capability with excellent understanding of the market dynamics to ensure that the projects are conceived according to customer requirements and delivered in time. With the major part of the projects under development been already booked for sales coupled with availablity of adequate resources to deliver the projects, the outlook continues to be positive and the group is expected to achieve new heights in the years to come.
How do you see Interest costs playing up going ahead?
With the current levels of inflation touching all time high, RBI has found it incumbent to increase the CRR and Repo rates, which in turn are sure to lead to increase in interest rates by the banks. Increase in interest costs will adversely affect the industry at both ends viz, lead to increase in input costs as well as make the houses costlier for buyers. I hope and believe tha the rates will be reviewed from time to time to ensure that the hike in the interest rates does not result in a negative growth in the industry.
What is your mix between commercial and residential? How much revenues come in from malls?
Our operations are mainly concentrated in the residential segment though we have made a foray into commercial and hospitality sectors through development of a commercial Mall in Vaishali and a hotel (currently under development) in Delhi. Accordingly the residential housing segment is the major contributor to our revenues.
Comment on your margins?
During the last few years , we have been achieve a sustained growth rate of about 15% year on year fin our turnover and we hope the trend to continue during the current year. As per our estimates the turnover for the year 09-10 (using percentage completion method as per Accounting standard AS-7), will be in the vicinity of Rs.2750 million compared to Rs. 2450 million during financial year 08-09.However, the rates of profitability are likely to be lower due to steady increase in input costs coupled with the increase in competition levels, due to which the increase cannot be passed on to customer.
To add to this, the company's margins have also been under pressure due to its strategic decision to make a foray into 'affordable housing' segment, which is designed to cater to housing for low income groups.
Briefly explain to us your business model.
Mahagun has been ploughing back its profits and constantly looking inwards to reduce its costs and at the same time maintian highest standards of quality without too much dependence on borrowed funds. Availablity of sufficient amount of internal accruals has also enabled us to cut down costs and pass on the benefits on this account to our customers. We thoroughly analyse and evaluate each business opportunity by subjecting the assumptions to a lot of analysis and at the same time keep our selves abreast of happenings in the market place to constanly re-define our strategy to overcome new challenage and ensure delivery in accordance with out motto "We deliver what we commit"
What is your staff strength? How many are permanent on your rolls?
Currently we have more than 300 employees on our rolls. Since a portion of construction activity is carried out through sub-contractors, they also employ a substantial number of presons to work on our projects.
What are your capex plans? How would it be funded?
The group as got all in-house infrastructure required to carry out the development of real estate projects. All necessary equipment like Batching Plants, Transit mixers, Cranes and hoists and other equipment are already available in the company. Currently the annual capex is in the vicinity of about 5% of the total revenue.
What is the vision for your company?
To emerge as one of the leading real estate developers in india by continually re-definig our strategy in accordance with the market dynamics and leveraging our core competence with the trust and confidence of our customers
Do you plan an IPO? By when?
Yes We do plan an IPO down the line 2-3 years to enlarge our growth wings.
Anything else you would like to add about the company?
Mahagun is slowly and steadily becoming a trusted brand within the hearts of people in Delhi & NCR.
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Source:http://www.indiainfoline.com
4 comments:
Once knowing the fact of Mascot mahagun Crossing , no one will buy any flat of Mahagun
www.consumercomplaints.in/?search=mahagun
Mahagun: Big Cheaters
Builder whom we can’t trust, Mahagun India Private Limited. They cheated the customers in Crossing Republic and now they are repeating it in Mahagunpuram. They are the big time cheaters.
I have a flat in Mahagunpuram and its almost 3 yrs and I don't see any visibility over the possession. Moreover, they are not paying the penalty. They are charging interest even on a single day delay in payment. But now when it comes to penalty, they don't pick the phone. Moreover, In many cases where they provided the penalty in earlier projects, they are paying penalty on the basis of Buildup Area not on Super Area. When they are charging for Super Area why don't they pay penalty on that. Usually there 'll be a difference of around 200 Sq ft. between Buildup Area and Super Area. So, the difference comes out to be of Rs.1000 per month approx. Even the construction quality is pathetic. I would suggest go and ask any of the existing Mahagun customer before booking.
I would suggest NEVER BOOK ANY FLAT WITH MAHAGUN. The image which they developed over the last few years is vanished now and they are surviving in the market by cheating their customers. Mahagun NEVER deliver what they commit!!!!!!! Think 1000 times before book any flat.
Regards,
Mahagunpuram Resident
http://mahaguncheaters.blogspot.com/
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