Isha Homes, has grown to touch revenue of Rs. 90 crore last fiscal. With a careful eye for gaps in the segment, the real estate firm has diversified into service apartments, property care and even backward integration into manufacturing bricks
S. MEERA
In 2004, Isha Homes entered the Chennai real estate market with Isha Signature Villas at Perumbakkam near the IT corridor. It was a dream come true for Suresh Krishn, Managing Director. Inspired by the houses he saw in New Jersey during one of his visits his first villa complex in the city broke away from the traditional way of building fences to demarcate each villa. But, he did face some resistance at the beginning. “In fact, many customers were willing to pay a premium to have a fence around their home and even my sales team told me it would fetch higher revenues,” recalls Suresh. But he stood by his conviction. Today, it has constructed 900 homes in one million square feet of residential space and plans to construct another one million in the next three years.
For every project, Isha tries to introduce some innovation. For instance, when IshaYara – a 450-budget apartment complex – was announced at a time when every project in the market was talking about swimming pools, Isha advertised the fact that it had ‘no swimming pool’. “It was a budget apartment and we explained to our customers that a pool would result in high maintenance costs,” he explains.
Right at the beginning, Isha took to customer delight as it mission. To ensure this, it focuses on meticulous planning right up to landscaping and uses ERP for process control. Once the planning is over, except for improvements, no other change is encouraged.
Isha Mia, an ongoing project, has received Platinum Green Certificate right from the design stage. Apart from solar power, 2500 metre tunnel for rainwater harvesting, 100 percolating wells for water conservation, solid waste management and organic kitchen garden in the premises, and each customer is also being gifted a cycle to encourage healthy living.
Urged by Passion
Suresh’s passion is evident in the meticulous detailing that goes into each project. “Our policy is to promise less, deliver more,” he explains. He completed BE from PSG Technology, Coimbatore and MS at Annamalai University, Chidambaram in structural engineering and was a lecturer at his alma mater for a short period of time. But he realised that this was not his calling. Inspired by his mason father, he quit his Rs 5,000 salaried job in the late 1980s to take up a job in Chennai for Rs. 1200 as a structural and planning engineer in an architectural firm. After working there for four to five years, he started a consultancy firm in 1994. In 1995, he along with his friends started a construction company. Finally in 2004, he branched off on his own to start Isha Homes in Chennai.
Since maintenance in the initial few years is critical, Isha started Suhana Property Management services in 2009 for maintenance services in its own properties. They typically offer maintenance services for up to five years before handing over the management to the community.
Since low cost, high quality construction was the focus of Isha, the company did a backward integration and started a brick making company, Isha Concrete Blocks in 2010. Nearly 70 per cent of the blocks made by them is sold in the market and used even for the metro project.
Isha’s Stay Easy division of service apartments came up in 2011 when they realised that several customers needed their property only for a month or so, as they were primarily based abroad. The rest of the year, Isha lets it out as service apartment. Currently it runs 40-50 rooms.
It also runs Zeal, an insurance and broking firm, for its customers. Each of these divisions is run independently, with professionals handling the operations while reporting to the common top management.
Over the Years
Right at the beginning, Isha took to customer delight as its mission. To ensure this, it focuses on meticulous planning right up to landscaping and uses ERP for process control. Once the planning is over, except for improvements, no other change is encouraged. Similarly, even if there are cost escalations during the course of the project, it is not passed on to the customers, nor is the project delayed or stopped.
Trust, transparency and responsibility are the three hallmarks of Isha, and not just with customers but also with all stakeholders, be it vendors and suppliers.
The organisation, though has hierarchies, is flat in terms of approachability. “We have an official Whatsapp group where I am also a member,” he explains to stress on the openness of the organisation.
The company was started with own financing and uses bank loans. It has already constructed 900 homes in one million square feet of residential space. It plans to construct another one million in the next three years. It has also entered Trichy and Coimbatore, and plans to enter Bengaluru in the coming year. In each city, it plans to establish its presence and have local establishments to cater to the local customer preferences.
The team has grown from six to 126 people over the years. Eighty per cent of the revenues come from the real estate business. From Rs 3.8 crore in 2004-05, it expects more than Rs 80 crore this year. Last year, it did Rs 90 crores, but given the tough market conditions, Krishn is conservative in his projections.
Challenges and Opportunities
“Giving homes at affordable prices is becoming a challenge,” explains Suresh commenting on the high cost of land acquisition. Initially, Isha had developed properties as joint ventures with land owners. Then it purchased land for its construction. But now again it does joint ventures to keeps its cost low.
Second challenge is inordinate delays in regulatory approval. Thirdly, the gap in executional capabilities is very high. “India has grown 20-30 times but manpower has not grown correspondingly,” he observes. So they have to depend on labour from other states. But since Bihar is also developing, and manpower shortage persists, Isha is experimenting with mechanised construction to bring down the manpower requirement by 20 per cent. Innovation in material used for cost and material efficiency is also part of Isha’s mandate. A dedicated quality team ensures quality right from the materials used to the final, built home.
Isha’s vision for customer delight has guided the organisation to bring in innovation in designs, materials used and quality of construction. Constant focus on improvement in processes and people has enabled it to make a name for itself in the Chennai market. Replicating it in other cities is the next stage in its growth.
WHAT NEXT?
In the next three years, construct another million homes and further penetrate outside Chennai into Trichy and Coimbatore
Introduce innovations in design, materials used and marketing to keep costs low and create affordable homes.
Touch revenues of over Rs. 80 crore by FY15
