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Indiabulls Real an underperformer: HDFC Securities
HDFC Securities has maintained an underperformer rating on Indiabulls Real Estate. Revenues grew by 3% YoY but de-grew by 52% QoQ. The QoQ de-growth was a due to 54% fall in income from Real Estate Projects Advisory.
HDFC Securities has maintained an underperformer rating on Indiabulls Real Estate in its February 2, 2009 research report. "Revenues grew by 3% YoY but de-grew by 52% QoQ. The QoQ de-growth was a due to 54% fall in income from Real Estate Projects Advisory. The EBITDA of Construction and Development of Real Estate Projects and Investment advisory segments continued to be negative at Rs 171 million. The challenge before the company and IPIT is to complete construction of the office space at Jupiter Mills and lease it out. Rentals from Jupiter would commence only in FY 10 as fit-outs for the leased space are still in progress."
"The funding requirements for IPIT continue to exist even after considering the lease security deposits of Rs 840 million current liabilities of Rs 2 billion remain. The company will also require another Rs 3 billion in construction costs to utilize the additional FSI of 1.6 msf. The only upside risks are the timely completion of and leasing of the remaining office space at Jupiter Mills, Elphinstone Mills and the financial closure of the Amravati power project. Therefore we maintain our Underperformer rating on the stock," says HDFC Securities' research report.
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