Peninsula Land looks cheap: Irani

ALSO READ See previous views by Mehraboon Irani See what other Experts & Brokerages are saying about Peninsula Land See messages about Peninsula Land Peninsula Land BSE | NSE 09/02/12 Are Mutual Funds betting on Peninsula Land?

Peninsula Land is looking cheap, says Mehraboon Irani , VP-PMS, Centrum Broking.

Irani told CNBC-TV18, "Peninsula Land is one of the cheapest stocks available value wise in the real estate space and it is a must in anybody's portfolio who wants an exposure to real estate. It is an Ashok Piramal Group company. I think the company has got lovely brands in place, Ashok in residential, Peninsula in corporate and Crossroads as far as retail goes. Now most of the companies in real estate have a problem as far as leveraging goes. If you look at this company, the company has got USD 4.37 billion debt and USD 6.35 billion of cash and in fact their earning interest net of this is up around USD 0.17 billion every year."

He further added, "The company is a real estate development player, fully integrated and it has so far developed and sold just around 2.35 million sq ft. But they have in hand something around 31 million sq ft more which is going to be developed and sold over the next two-three quarters."

"The projects right now are in Bombay, Pune, Nasik, Hyderabad and Goa. I think if you look at this project of Swan Mills Land which they had taken over is the center point project that itself they are going to get around 22% of the revenues besides that the Ashoka Towers, the Ashoka Garden, the Peninsula Technopark, all these are projects which are going on and which should ultimately end up giving decent fund to the company - a company which has absolutely no strain on the balance sheet."

"It is around 25-30% lower than the price it had touched in the recent past, so at the present level there is no downside. I think this is a must in an investor's portfolio. According to me the game has just begun as far as Peninsula goes - long way to go. The target for the day is Rs 83.50."

"The NPV of this stock is Rs 120 according to us and the stock is available at daily 35% discount to that. That is one way of looking at it. I think at any point of time over the next one year if the stock goes back to Rs 110-120, look at your returns in this company - a company in which stock price wise you are not hurt despite what we have seen in the real estate segment. Look at the peak performance in 2008-2009 when virtually every real estate company was in serious trouble, this company did well, cash flow wise as well as profitability wise. The company which grew in a very dirty phase and that is the company where you should be. A disclosure over here - holding it for our clients and we are looking at buying more into the counter."