An astute businessman, Dr. Lakshmi Narayana (CEO and Co-Founder of Sahiti Group) started his journey in 2000 as an individual builder. He established himself in the highly competitive construction industry over a period of 10 years. He began Sahiti Constructions as a partnership firm in the year 2010 and has so far successfully completed over 20 residential and commercial projects at various locations in Telangana and Andhra Pradesh. He established a new venture Sahiti Infratec Ventures India Pvt Ltd in the year 2015, further expanding his horizons by venturing into residential apartments, Villas, Shopping malls, Office spaces in Telangana and Andhra Pradesh.
Dr. Lakshmi Narayana is a dynamic and ambitious entrepreneur with diverse experience in real estate including infrastructure development and construction. He continues to drive the organization towards a leadership position in real estate and construction business. The group headed by him has projects in the pipeline with a total construction area of more than 54 million sft. Through his own commitment and passion, he has developed a business empire in South India. He introduced revolutionary concepts in residential and commercial infrastructure such as mixed-use development projects for highly defined living spaces (apartments & villas), shopping and entertainment, office spaces on walk-to-work concept in the same premises. He is passionate about social welfare. He is actively engaged in philanthropy focusing on child welfare and education and health for the poor.
In an exclusive interaction with Motiverge, Dr. Boodati Lakshmi Narayana, CEO and Co-Founder of Sahiti Group shares more insights about his venture, journey so far, motivation and future plans.
Below are the excerpts from the interview:
Kindly brief us about Sahiti Group and introduce us to the leadership team.
Sahiti Group is a certified construction company and is a part of the Telangana and Andhra Pradesh Developers’ Association. Since 2009, the organization has been venturing into large and complex projects, with the help of the latest technology, strong execution, and contemporary architecture, which has gained us many laurels. Our main aim is to develop residential, commercial, hospitality, and social infrastructure. Our vision and mission are to provide higher customer service and world-class products.
The core team members of the Sahiti Group include Dr. Boodati Lakshmi Narayana (myself)– Managing Director, K Srinivasa Rao – CEO & Director, Anthony Reddy – Director, Ajay Kumar Koneru – Executive Director, Naveen Mypala- COO, Prabhakar Azad- CHRO, SRP Ram- CFO, Jitender Kalluri- Head of Audit, Malikarjun- Head of Projects.
What factors influenced or motivated you to start a business in the construction industry?
From the beginning itself, I had the vision to establish something that makes my customers and workers proud to be a part of it. With years of experience and knowledge of this industry, my belief got stronger and I continued to work ahead in the same light. And finally, after a period of 10 years, I started Sahiti Constructions as a partnership firm in 2010.
With this, I and my whole team yearn to reach the heights of success in the real estate industry and to serve the highest quality of customer service and workmanship with innovative solutions that do not fail to meet the expectations.
What were the first few steps during and after the launch of Sahiti Group? How did it all begin?
My family became an inspiration for me to establish my own construction company. And, as time passed, I realized the significance of the real estate market. In the year 2000, I started as an individual builder and in 2010, I founded Sahiti Group. During my early days, I concentrated on finding and assembling a team of skilled designers, architects, and consultants. My next priority was to secure assignments and provide results that would allow me to maintain long-term relationships with my clients. And as time passed, we were able to hire 150 individuals and execute over 20 projects totaling 15 million sqft.
As an entrepreneur, how did you overcome financial obstacles, especially in the initial stages?
Sahiti Group was founded solely by myself, and it is bootstrapped but profitable. In the beginning, I spent my own resources in the firm, which was difficult because in such situations one may be constantly concerned about return on investment. However, as we started obtaining significant sales and projects, we partnered with government banks to fund our projects and to assist our customers with a simple financing process. And presently our turnover is approximating 650 crores, and so we are operating the business very well via it.
Tell us about your motivation. What is your success mantra?
If a start-up intends to address demand, then its success is sealed. This is the basic understanding anyone starting a business must have and it is what our team practices. We are clear about the fact that we aim on making an impact through our business. A retrospective approach with respect to customer feedback as well as flexibility with dynamic market trends is the core success mantra and these two factors are what I believe have brought us where we are and driven us towards a more comprehensive and adaptive company.
How has your journey been so far?
Since 2009, the organization has been venturing into large and complex projects, with the help of the latest technology, strong execution, and contemporary architecture, which has gained us many laurels. Since then we have worked on 20 + commercial and residential projects totaling over 15 million sqft in the real estate sector including the projects under construction. Furthermore, our headquarters and constructions are in Hyderabad, and we have significant projects running in Vijayawada too. Other than this we have 10 ongoing commercials and 8 ongoing residential projects.
How big is your team? How did you manage your team & business during the COVID-19 outbreak?
The core establisher of the company would be Dr. Boodati Lakshmi Narayana (myself)– Managing Director and Founder of the Sahiti Group, backed by over two decades of experience in the construction industry.
In addition to this, we have a team of 150 exceptionally sharp people who are well versed with knowledge in their respective fields. During the Covid-19 outbreak, we were strictly following the protocols and everybody was working from home. However, during the pandemic real-estate industry really utilized the technological shift, which we opted for as well. Through digital marketing and artificial intelligence, virtual tours, and chatbots, we took care of all our clients and even their feedback. And through Customer- Relationship Management teams and advanced software applications such as Salesforce, homebuyers were regularly informed about the progress of their projects as well. I think this digital shift has worked in our favor and has changed the real estate industry’s perception from one dominated by brokers, agents, and other middlemen to one that is more inclusive and accountable.
What is the biggest USP that differentiates Sahiti Group from its competitors?
Our core values differentiate us from our competitors- first comes, integrity. Sahiti Construction is built on fairness and honesty and we promise to serve the best to our customers. second, quality- we give our 100% and provide high-quality work to our clients. Third, customer focus- We work as partners and advisors before and during the projects. And lastly, personal responsibilities- we take pride in our work and provide our customers with the best results. Moreover, we also focus on points such as ticket size of apartments bracketing from 35 lakhs to 85 lakhs for 2- 3 BHK and luxury segment apartments from 1 CR. to 1.5 CR and Villas starting from 2.5 Cr to 4 CR, along with this we aspire to build projects at prime locations for our customers with all the facilities and amenities of their requirement.
What are the business opportunities in the construction industry especially in the APAC region? How do you see growth and market response in a post-pandemic world?
By 2024, the Asia Pacific building construction market is predicted to grow at a CAGR of 10.1 percent, reaching USD 3126.7 billion. Between 2015 and 2019, the residential construction business grew at a CAGR of 7.6% in value terms. In terms of value again, the commercial building construction market is predicted to grow at a CAGR of 11.9 percent over the forecast period.
In 2018 and 2019, the real estate market of India was booming with AP/Telangana leading the charts. Thanks to the SEZ push and the advent of technology companies who made AP their hub, the commercial properties saw 172% growth in the last five years and 2% year-on-year growth in Q3 2020 and directly proportional to that- residential properties.
In my opinion, people have understood that working from home is a reality and that there is a need to own a home and, in the future, a larger home, which has caused a recovery in residential demand. This has resulted in a 75% rise in residential demand in 2021 compared to the previous year. Mortgage interest rates are low, and state governments have taken initiatives to promote demand. A collaborative workspace will be in high demand in the future. Amid the epidemic, flexible workspace providers have been fairly active in providing short-term business spaces. Furthermore, many international investors have invested in this area and organized their wealth while witnessing the industry’s growth and development as well.
According to you, what are the major challenges that the Indian real estate industry is facing today?
The market’s problems (pandemic, decreased sales, costing) have prevented the industry from taking full benefit of the progress that has been occurring for years. When it comes to Indian real estate, market stagnation, decreased sales volume, delayed projects, and a shortage of cash are some of the most typical challenges. In India, construction projects have been delayed inexplicably, posing challenges for contractors as well as causing disagreements between developers and homebuyers.
Furthermore, the continual rise in land prices and building costs such as a change in steel, cement prices, building products is making the projects increasingly unviable for both developers and homebuyers. Currently, Central and State government institutions such as railways, defense, and port administrations hold significant property parcels. In order to address the scarcity and achieve housing for All by 2022, land regulations must be used to liberate unused land parcels. In the construction industry, finance is extremely important too. The ongoing liquidity crisis caused by cautious lending by Non-Banking Financial Companies (NBFCs) and dried-up investments in the sector has not only stifled new launches but has also hampered the completion of various ongoing projects across India which is due to lack of funds available for the real estate industry, and in order to solve this problem the potential solution can be project finances,
Aside from the ones listed, stringent development standards, unfavorable loan-to-value ratios, an increasing preference for renting, and competing investment possibilities are some of the other issues that have hampered the expansion of Indian real estate for a long time.
Please share your views on how the Indian Government is doing on supporting real estate companies and startups?
The government’s recent announcement in the Budget to relax the rules for debt financing of REITs and InVITs will assist the country to catch up to developed countries in terms of institutional financing of real estate assets, as well as enable investors to earn higher returns. The change will free up investment opportunities in the real estate market, particularly for income-generating commercial buildings that have previously been hidden from view.
The government’s emphasis on the importance of supporting residential real estate has bolstered the developer community’s morale and will encourage them to expand their portfolio of homes in general, and affordable dwellings in particular. The developer community now believes that the government will soon broaden the concept of affordable housing to cover residences costing up to Rs 85 lakh.
What are your future plans?
Our future plans include ongoing new commercial projects- Sadhana Arcade, Satya Tech Park, Subradha Forte, Swadha.
And 5 new residential projects- Prakhya Bliss, in Pati, Patancheru Hyderabad in 4 Acres and 1290 to 1815 S Ft. Sahitha Green Homes, kompally, Hyderabad in 8.22 Acres and 1290 to 2600 Sq Ft. Bachupally Project in Bachupally, Miyapur Hyderabad with total project area of 9.0 Acres.
Other than this, this year, we have achieved 400+ sales in the last 3 months alone and we are expecting sales of over 500 units in the next three months with two new project launches.
Awards and achievements, if any?
Sahiti Group has been awarded as The Leaders Of New India 2021, by Marksmen India in collaboration with News18. This recognition was presented to the Influential Leaders of New India who have exemplified leadership in the new world order by leading with their heads, heart, and actions. Recognizing their unique leadership capabilities in the face of crisis, we are facilitating the new age leaders who moved beyond crisis response by breaking grounds in guiding people and businesses through the uncertainty and are leading the road ahead to ‘New India’. And, recently I received a lifetime achievement award from HMTV Business Excellence Awards 2021 as well.
What are your messages or leadership lessons for budding entrepreneurs and the young generation?
Persistent efforts, hard work, committed mindset, and proper planning will get you much further than luck. When you’re a young entrepreneur, you’re likely to be doing things for the first time, and you’ll encounter critics. Never act as if it’s your first time; exude confidence to frighten the detractors away and believe that nothing is impossible.
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