Buy Ganesh Housing; target Rs 203: Sushil Finance

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Buy Ganesh Housing; target Rs 203: Sushil Finance

Sushil Finance has recommended to buy Ganesh Housing Corporation with a target of Rs 203 in its report dated November 22, 2011.

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Sushil Finance has recommended to buy Ganesh Housing Corporation with a target of Rs 203 in its report dated November 22, 2011.

"Ganesh Housing Corporation Ltd. (GHCL) has come out with decent set of numbers for Q2FY12. During the quarter ended Q2FY12, GHCL's revenue is up by 20.2% YoY to Rs.449.6 mn. During the quarter the company witnessed an area booking of 42,435 SF vs. 26,464 SF in Q1FY12. Majority of the bookings has come from the company's commercial project GCP Business Centre at 15,547 SF followed by residential projects Maple County & Maple County-II at 9,000 SF each, Shangrila 4,590 SF, Suyojan 2,385 SF and Satva 1,913 SF."

"GHCL constructed 173,175 SF of Area during Q2FY12 and completed the construction of Satva & Suyojan Projects. Shangrila is about to get complete and will be ready for possession by December 2011E. The company is well on track to deliver Maple County-I & Maple County-II projects at their scheduled completion date. Maple County-I is likely to be complete by end of FY12E and Maple County-II is likely to be complete by Q1FY13E. The company has started construction at Sundervan Epitome located at Satellite area and has constructed ~18% of 234,476 SF. The project is scheduled to complete by end of FY13E."

"GHCL is likely to launch the phase-I of Million Minds residential project in January 2012E on an area of 726,676 SF with an expected realization of ~Rs.2,800 PSF. The phase-I of Smile City is also scheduled to be launched in January 2012E with the launch of 100 villas."

"The company has seen a 253% YoY increase in its interest and financial charges to Rs.116.8 mn. Total debt and cash & bank balance of the company as on 30th September, 2011 stood at Rs.3152.8 mn and Rs.106.7 mn respectively."

"GHCL has come out with decent set of numbers for Q2FY12. It has so far developed 17 MSF, and is likely to further develop 34.28 MSF (Smile City & Million Minds) of area in the next 8-10 years. The company is in the process of ramping up its execution capability from current 0.5 MSF to 3.5 MSF per annum gradually over next 4-5 years which will boost the revenues substantially. From current D/E of 0.5 the management has indicated to become debt free over next 2 years which will help improve the margins going forward. Thus, considering strong local brand, huge developable land bank, smarter execution strategy and healthy cash flows from existing projects we continue to maintain our BUY recommendation on the stock with a NAV based price target of Rs 203, says Sushil Finance research report.

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To read the full report click on the attachment