Buy Peninsula Land; target of Rs 46: PINC Research

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Buy Peninsula Land; target of Rs 46: PINC Research

PINC Research is bullish on Peninsula Land and has recommended buy rating on the stock with a target of Rs 46 in its January 20, 2012 research report.

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RELATED NEWS Hold HDFC Bank; target Rs 513: Unicon Investment Accumulate Dish TV India; target of Rs 73: Emkay Accumulate Dish TV India; target of Rs 71: PLilladher ALSO READ See previous views by PINC Research See what other Experts & Brokerages are saying about Peninsula Land See messages about Peninsula Land Peninsula Land BSE | NSE 31/05/12 Are Mutual Funds betting on Peninsula Land?

PINC Research is bullish on Peninsula Land and has recommended buy rating on the stock with a target of Rs 46 in its January 20, 2012 research report.

"Peninsula (PENL) reported a topline of Rs454mn for Q3FY12; down 8.4% QoQ and in-line with our estimate. EBITDA Margin stood at 33.3% and was up 236bps QoQ. Reported PAT at Rs105mn fell 22.9% QoQ (PINCe - Rs116mn). We see the following concerns for the company (i) Competition for PENL in selling/leasing the phase-II of Peninsula Business Park (PBP)(0.6msf) due to stiff competition from Alok Infra, causing delays in cash inflow and recognition of revenue, (ii) Weak project launches leading to poor revenue & cash flow visibility, (iii) PENL has acquired land for residential projects both in and outside Mumbai. These acquisitions have increased the debt levels and could be a concern if there is further delay in launching new projects."

"PENL reported a topline of Rs454mn for Q3FY12; down 8.4% QoQ and in-line with our estimate. Revenue during the quarter was mainly recognized from Swan techno park (Rs330mn), Ashok Garden (Rs60mn) and rentals (Rs60mn). EBITDA Margin stood at 33.3% and was up 236bps QoQ. Reported PAT at Rs105mn fell 22.9% QoQ (PINCe - Rs116mn). Adjusted PAT at Rs67mn was lower than our estimate of Rs266mn as interest cost was higher than our estimate. It also reversed Rs38.5mn of forex loss it had provided on its forex loan in the previous quarter. PENL has acquired land for residential projects both in and outside Mumbai. These acquisitions have increased the debt levels and could be a concern if there is further delay in launching new projects. Also, for leasing/sale of PBP-II, we expect PENL to face stiff competition from Alok Infra to which it sold PBP Phase-I. We believe that lease/sale of PBP and strong new launches are going to be key for PENL to generate enough cash flows. We expect PENL to launch projects in Alibaug (0.05msf) and J.P.Nagar, Bengaluru (0.58msf) in H1FY13. PENL launched projects in Lonavala and Goa in Q3FY12 and in Nashik in H1FY12."

"We maintain our BUY rating and have a Target Price of Rs46 on the stock after assigning a discount of 20% to gross NAV and a WACC of 14%. To improve valuations further, PENL will have to improve cash flows by aggressively launching new projects and improve sale/lease of PBP," says PINC Research report. 

Institutional holding more than 40% in Indian cos

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To read the full report click on the attachment