Accumulate HDIL; target of Rs 146: PLilladher

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Accumulate HDIL; target of Rs 146: PLilladher

Prabhudas Lilladher is bullish on Housing Development and Infrastructure (HDIL) and has recommended accumulate rating on the stock with a target of Rs 146 in its August 12, 2011 research report.

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Prabhudas Lilladher is bullish on Housing Development and Infrastructure (HDIL) and has recommended accumulate rating on the stock with a target of Rs 146 in its August 12, 2011 research report.

"HDIL reported better than expected results on account of higher than expected FSI sales. The company reported revenues to the tune of Rs 5,022m, a growth of 11% YoY, however down 4% QoQ. TDR volumes disappointed, down 24% sequentially and 41% YoY to 0.65 msf while TDR realizations were flattish (down 4% QoQ) at Rs 2500/sf. As a result TDR revenues for the quarter fell sharply, down 26% QoQ and 50% YoY to Rs 1625m. FSI sales of Rs 3,300 m emanating from the Popular Car Bazaar FSI sale (now fully recognized) saved the day boosting the topline during the quarter. EBITDA margins were reported at 52.9% compared to 59.3% in Q1 FY11. Consequently PAT stood at Rs 2091m, up 6% QoQ, however down 11% YoY."

"With an overall slowdown in the Mumbai realty market the company witnessed a slowdown in sales at it's existing projects where it has ~30% unsold inventory. The company's new launch Whispering Tower phase 2 received a tepid response selling only ~10% of the project at launch. The company has witnessed sales bookings to the tune of Rs 1,900m in the quarter, out of which Rs 604m was from the newly launched phase 2 of Whispering Towers. In terms of launch pipeline the company expects to launch Shahad and Panvel properties in the next few months, as most of the approvals for these projects are in place."

"With the Mial project slowing down, the company's future dependence on FSI sales is likely to increase. During the year the company is likely to book sales of its FSI at Siddarthnagar a deal that has already been signed as well as incremental FSI sales at Vasai-Virar. Siddharthnagar FSI sales are likely to contribute Rs7-10bn starting from Q2. As per our estimates, the company's NAV stands at Rs243. We are basing our target price at a 40% discount to the NAV. We maintain 'Accumulate', with a target price of Rs146," says Prabhudas Lilladher research report.

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