Raymond Realty's 20% Profit Margin Policy

Mumbai, Jun 30 (PTI) Raymond Realty will not sign up development deals if it doesn't see profit margins of at least 20 per cent, the company's top officials said on Monday.

The entity, which is slated to debut on bourses on Tuesday, will launch projects with a gross development value of Rs 6-10,000 crore, they said.

Raymond group chairman and managing director Gautam Singhania acknowledged that recent deals have witnessed prices getting "heated up" but made it clear that financial discipline is of utmost importance for the company.

"I will do a deal only if it delivers on financial returns," Singhania told reporters on the eve of the company's listing.

He said some of the recent deals are so "heated" that even a gambler will not place any bets on them.

The company's chief executive Harmohan Sahni specified that it will not look at projects only if they deliver profit margins of over 20 per cent.

Typically, it looks at using own land bank or redevelopment or greenfield projects starting with land acquisition or joint developments to launch profits.

He said the company has looked at 1,400 projects till now, and signed on only six of them. The management also denied there being any dearth of land or projects.

Singhania said the realty arm is targeting a topline growth of 15 per cent, and an operating profit margin of 20 per cent.

Typically, the company will launch projects where units will sell between Rs 1-5 crore, though it may sell some projects with higher ticket sizes.