Karvy Stock Broking has recommended underperfomer rating on Puravankara Projects with a target of Rs 107, in its April 22, 2010 research report.
"In this quarter Purvanakara has announced a Joint Venture with Desarrolladora Homex, S.A.B de C.V, through its subsidiary Homex India Private Limited (Homex) for affordable housing segement and the first project is expected to be launched in Chennai. Also in the affordable housing space Provident housing (Subsidiary of Purvanakara focused on affordable housing) has started ramping up operations on a significant scale and has give Rs. 3.55 billion contract to JMC projects for constructions of entry level homes in Bangalore. This contract is to be completed within a period of 30 months. Given the backdrop of improving volumes in the Bangalore real estates markets due to improved demand driven by the look uo in IT Industry volumes, we expect a 33% (QoQ) and 43% (YoY) increase in sales. The EBIDTA is expected to be up 33% (QoQ) and 248% (YoY) and Net profits increase would be up 58% (QoQ) and 231% (YoY)."
"We maintain our NPV for the company at Rs 133 per share. Applying a discount of 20% to our FY11E NPV of the company, we set a target price of Rs 107 on the stock. We rate the stock as a Under Performer at current levels."
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