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Last Updated : Aug 14, 2012 11:28 AM IST | Source: CNBC-TV18

HDIL Q1 PAT seen down 26% to Rs 140 cr

The Mumbai-based real estate developer Housing Development and Infrastructure (HDIL) is set to announce its results for the quarter ended June 2012. Analysts on an average expect the profit after tax to fall by 26% year-on-year to Rs 140 crore, but YoY numbers are not comparable due to change in accounting policy.

 
 
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The Mumbai-based real estate developer Housing Development and Infrastructure (HDIL) is set to announce its results for the quarter ended June 2012. Analysts on an average expect the profit after tax to fall by 26% year-on-year to Rs 140 crore, but YoY numbers are not comparable due to change in accounting policy.


Revenues are seen going down by 6.5% to Rs 479 crore and earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to decline 36% to Rs 187 crore during the same period.


Operating profit margin during the quarter is likely to be at 36% as against 57.3% in a year ago period and 42.3% in the previous quarter.


On quarter-on-quarter basis, revenues are seen going down by 23% and EBITDA down by 29%. Profit after tax is seen falling by 55%. In the previous quarter (March), HDIL added tax write-back of Rs 75.2 crore, hence reported profits were much above estimates.


What to watch out for:


Analysts expect poor sales for HDIL, which is heavily dependent on weak Mumbai market, impacting the launch of new projects.


HDIL earnings are substantially dependent on floor space index (FSI) sales because 100% of fourth quarter revenues came from FSI land sales.


Till the financial year 2010-11, TDR (transfer of development rights) had contributed more than 80% to total revenues, but approval delays due to change in DCR (development control regulations) has significantly constrained new launches.


Sales will see a big dip as revenue recognition for disclosed FSI sales (Goregaon, Popular Car Bazaar and Eveready land) has been largely completed by 4QFY12.


With deferment of completion target of its three residential projects (Premiere, Galaxy and Metropolis) to third and fourth quarters of FY13, no revenue will be recognized under PCM (Project Completion Method) in first half of FY13.


FSI sale at Virar/Vasai and transactions under negotiations (Metropolis, Andheri) would be the key contributors to revenue.

Also, cash conversion takes much longer in FSI sales, which reflects in higher debtor days (from 42 in FY11 to 106 days in Q4FY12)



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First Published on Aug 14, 2012 09:26 am
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