Vishal Gupta-MD, Ashiana Housing

What has been the reason behind the impressive growth in both topline and bottomline and how are you looking at this financial year?
One thing that has stood us in good stead is that we are a much focused middle-income group player. When the market was caught in a downturn during the recession, we took a loan from the market for the first time and it was done to speed up our projects. So while the other developers in the markets slowed or shut down their projects temporarily, we took the opportunity and increased the construction volume. That is what generated a tremendous amount of goodwill and confidence in our customers’ minds. Also, we sell our products directly to the customers and while we do not sell too cheap, we also make sure that the overheads on the product do not increase by appointing several agencies to sell the same product.

What is your current strategy, especially for Tier II and Tier III cities?
Necessity is the mother of invention. I am not saying that I am the only one to look into the Tier II and Tier III cities as areas of growth. What I would like to say is that we do not have access to abundant cheap capital but we have very strong execution capability and hence that is what we have leveraged. We find our own niche out of our necessity.

Any more cities you are looking forward to tapping? Which are the projects that you have in hand at present?
We are definitely exploring newer cities. At present we do not have any projects in hand but we are in active discussions on certain projects and hence it is very difficult to comment on that. One thing that I can tell is that we are really looking forward to tapping the potential in four new cities.

What is your view on the real estate sector and do you foresee any further correction in the prices?
There are only a very few markets that are over-priced such as those of South Mumbai, Gurgaon, certain prime areas of Delhi, etc. In these areas, post the correction the prices have witnessed a major improvement and have moved in such a way that the projects are no longer affordable for the common man. But I feel that these areas that have media and investor attention will have a repel effect in the short run on the other markets. There is a possibility about collateral damage that can happen in Tier II and Tier III cities. The way in which the cement and labour prices have increased gives very limited opportunity to witness correction in prices to a large extent.

Any plans to diversify in any other verticals of construction activity?
We will continue to remain focused on the middle-income group homes.

Are you facing any problems in raising funds?
We are not in great need of funds. We have syndicated whatever we need at present. Our model is not very capital-intensive and we can grow without a huge infrastructure base.

What are the current challenges?
The main challenge is the regulatory one and the delays caused because of the regulatory part are creating hindrances for the project. These are in the form of environmental reports or legal issues over the land. The solutions for fast redressal of these problems are absent and this in turn is putting a lot of pressure on the cost of land. The second challenge is that the infrastructure is not keeping pace. We are, for example, in desperate need of a good mass transport system. Also, power and water supply, rain water harvesting, sewer systems, etc need to be taken on a serious note. The challenges will diminish if these issues are addressed properly.

How are you looking at long-term and short-term growth?
We are trying to achieve 27 to 30 per cent growth on a year on year basis and would be very happy if we can do the same ten years in a row.