Accumulate Anant Raj; target of Rs 84: Prabhudas Lilladher

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Accumulate Anant Raj; target of Rs 84: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Anant Raj Industries and has recommended accumulate rating on the stock with a target of Rs 84 in its August 12, 2011 research report.

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Prabhudas Lilladher is bullish on Anant Raj Industries and has recommended accumulate rating on the stock with a target of Rs 84 in its August 12, 2011 research report.

"Anant Raj Industries reported results ahead of estimates on account of better than expected sales progress at the Sec 91 Gurgaon project. This resulted in higher than expected revenue recognition from the project leading to revenues growing 34% QoQ to Rs 826m, although down 19% YoY. EBITDA margins were lower for Q1 FY12 at 59% compared to 71% reported in the Q4 FY11, mainly due to Q4 having certain additional income from sale of parking slots and other ancillary income which was absent in the current quarter. Margins are expected to be in the 60% range going forward. Interest costs were down sharply QoQ on account of higher percentage of capitalization during the quarter.PAT for the quarter stood at Rs346m, a growth of 16% QoQ, although down 25% YoY."

"During the quarter, the company's Gurgaon project (in Sec 91) garnered a good response taking the cumulative sales till date to ~30% of the available inventory at an average rate of 3,100/ sf. Thus revenue recognition to the tune of ~40% of this project was done in the current quarter thereby accounting for majority of the revenues in the residential segment. Manesar and Kapashera projects also contributed to the extent of Rs55m and Rs19m respectively to the revenues for the quarter. In the rental segment, part rentals from the company's Kirtinagar mall have commenced as the mall opening took place in the month of June. However, rentals have only started from the mall's anchor tenant as the other retailers are currently undergoing fit outs. The full impact of this shall be seen from Q3 onwards. The company clocked rental income to the tune of Rs 198m for the quarter."

"As per our estimates, ARIL's NAV stands at Rs169. Our target price is based on a 50% discount to the NAV. We maintain 'Accumulate', with a target price of Rs 84," says Prabhudas Lilladher research report.  

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