Mahindra Lifespace Developers profits have declined due to the changed accounting norms as it has changed the way the financial statements are reported. Sangeeta Prasad, MD and CEO, in a chat with Swati Khandelwal said the new norms mandate that revenue and profits of completed projects can only be compiled in the financial statements. 

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Profit has declined from Rs 47.7 crore to Rs 31.3 crore. What is the reason? 

Ind AS (Indian Accounting Standard) 115 has changed the accounting norms. Earlier we used percentage for completion, but now the revenue and profit can be a part of the financial statement only if a project or its phase has been completed. The results available with you are talking about the past projects that have been completed by now. Now onwards, quarter performance will be based on quarter-to-quarter mix and completed projects.  

Margins have seen a downtrend too. 

We went for a one-time land sale in the fourth quarter of the last fiscal, and therefore results of Q4FY18 are different from Q4FY19, which is based on the operations under which we make houses or leases in World City. Secondly, we have launched ‘Centralis’ in Pune in Q4. Interestingly, the launch expenses are included in the quarter, but its topline can be seen only after the project is completed. 

How do you see the sales performance? Update us on demand situation?

Last year we launched three projects, one each in Chennai, Pune and Mumbai. We will be launching three projects in Mumbai of which one will be affordable, and a small project in Chennai. Apart from this, we bought a land parcel in FY19, which will be made launch-ready at the earliest. Besides, we will aim to complete our ongoing projects so that they appear in our financial statement and expedite our lease earnings from World City. We have a commercial inventory of land in Chennai and will expedite its sale at the right value. 

Which segments would you like to expand in the next few quarters?

The middle class and affordable are the most robust segments in India, and so we are focusing on them. 

What is your inventory structure at least when your sales are performing so well?

Our inventory levels are quite comfortable at present. It is necessary that one should not have a large inventory level, but it must also not be too small. We have inventory in tune of around Rs 2,000 crore in the ongoing projects and Rs 2,600 crore in projects that will be launched. You were also talking about stressed assets, then we closely evaluate the land in the pipeline so that we can buy them and develop good projects.