Motilal Oswal expects Unitech to report a 177 percent growth quarter-on-quarter (growth of 125.2 percent year-on-year) in net profit at Rs 84.1 crore.
Motilal Oswal has come out with its first quarter (April-June) earnings estimates for the real estate sector. The brokerage house expects Unitech to report a 177 percent growth quarter-on-quarter (growth of 125.2 percent year-on-year) in net profit at Rs 84.1 crore.
Revenues are expected to decrease by 17 percent Q-o-Q (up 72.7 percent Y-o-Y) to Rs 704 crore, according to Motilal Oswal.
Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 41.3 percent Q-o-Q (up 105.9 percent Y-o-Y) to Rs 112.6 crore.
Motilal Oswal on Unitech
We expect Unitech's 1QFY14E revenue to grow 73 percent Y-o-Y to INR 7 billion, EBITDA at INR 1.1 billion (106 percent Y-o-Y) and PAT at INR 841 million. EBITDA margin is estimated at 16 percent (2.6pp over FY13 average). Uptick in revenue booked is expected on the back of steady execution progress visible over 2HFY13, and implied margin uptick is due to one-off writedown of bad debtors in 4QFY13.
Focus on new launches was low till date, prior to the recent launch of The palm at Noida (Sector 117) and luxury project The One (Gurgaon Sector 69). Contrary to the past practice, company started construction of these projects during the soft launch. However, due to weakness in the Noida market (which was the key sales driver in FY13), we expect sales velocity to remain weak in 1QFY14E.
With liquidity concern slowly diluting, we expect a steady uptick in execution in each quarter. Company plans to increase the number of on-field labor from 22,000 in March 2013 to 30,000 by December 2013.
Unitech trades at 26 percent discount to its one-year forward NAV estimate of INR 58 and 12.3x FY15E EPS and 0.5x FY15E BV of INR 46.
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