Buy Anant Raj Industries; target of Rs 132: Motilal Oswal

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Buy Anant Raj Industries; target of Rs 132: Motilal Oswal

Motilal Oswal is bullish on Anant Raj Industries and has recommended buy rating on the stock with a target of Rs 132 in its May 30, 2011 research report.

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RELATED NEWS Buy HDIL; target of Rs 225: PINC Research Buy Deepak Fert; target of Rs 205: KRChoksey Hold Gujarat Industries; target of Rs 102: BP Equities ALSO READ See previous views by Motilal Oswal See what other Experts & Brokerages are saying about Anant Raj Ind See messages about Anant Raj Ind Anant Raj Ind BSE | NSE 31/05/12 Are Mutual Funds betting on Anant Raj Ind?

Motilal Oswal is bullish on Anant Raj Industries and has recommended buy rating on the stock with a target of Rs 132 in its May 30, 2011 research report.

"Anant Raj Industries' results for 4QFY11 were in line with our expectations. EBITDA grew 73% YoY to Rs 455m (v/s our estimate of Rs 469m); EBITDA margin expanded to 72% (v/s 62% in 3QFY11). The increase in EBITDA margin is attributable to steady increase in realizations in its pre-sold Manesar projects (price increased to ~ Rs 3,000/sf v/s initial launch rate of Rs 2,400/sf in 1QFY11).

Revenue grew 86% YoY to Rs 634m (v/s our estimate of Rs 758m) while net profit increased by just 3% YoY to Rs 306m (v/s our estimate of Rs 301m). The key contributors to 4QFY11 revenue were: (1) Manesar phase I and II (~Rs 290m), (2) Kapasera project (~Rs 90m), (3) New Gurgaon - Sector 91 project (Rs 35m), and (4) rental income from commercial / hotel projects (~Rs 194m). Revenue booking has been muted since both the Manesar and Kapasera projects were sold out in 3QFY11 and only incremental revenue on construction progress has been recognized. With this, ~48% of Manesar and 76% of Kapasera project sales have been booked till date. ARIL's FY11 revenue increased by 36% to Rs 4.2b, EBITDA declined by 9% to Rs 2.6b and net profit de-grew by 30% to Rs 1.7b.

In 4QFY11, ARIL's gross debt stood at Rs 9.7b (v/s Rs 9.3b as at December 2010). Net debt stood at Rs 8.2b (v/s Rs 7.1b in 3QFY11), implying net debt-equity of 0.22x. The stock trades at 9x FY12E EPS of Rs 7.5 and 0.5x FY12E BV of Rs 132, and at ~ 58% discount to our NAV estimate of Rs 165. Maintain Buy, with a target price of Rs 132 (20% discount to NAV)," says Motilal Oswal research report.

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