Buy Prestige Estates; target Rs 220: Motilal Oswal
Motilal Oswal is bullish on Prestige Estates Projects (PEPL) and has recommended buy rating on the stock with a target price of Rs 220 in its February 13, 2013 research report.
February 18, 2013 / 16:33 IST
Motilal Oswal is bullish on Prestige Estates Projects (PEPL) and has recommended buy rating on the stock with a target price of Rs 220 in its February 13, 2013 research report.
"PEPL's 3QFY13 revenues scaled up 2x QoQ (+2.9x YoY) to INR4.9b, in line with our expectation, led by revenues from key projects like Kingfisher Tower, Tranquility, Parkview and Sunnyside. EBITDA stood at INR1.4b (+2.8x YoY, +96% QoQ), while margin declined to 28.9% (down 1.1pp QoQ) due to change in project mix. PAT grew +228% YoY to INR920m (2x QoQ).""Pre-sales stood at 1.4msf (INR7.5b) v/s 1.6msf (INR8.2b) in 2QFY13 v/s 1msf (INR4.7b) in 3QFY12. With this, PEPL crossed its FY13 sales guidance of INR25b pre-sales within 9MFY13 sales of 5.1msf (INR25.8b), against our FY13E/14E estimates of INR30b/32b. 9MFY13 rentals stood at ~INR1.6b v/s estimates of INR2.1b/INR2.9b/INR4b for FY13E/14E/15E. Management guided for exit rental run-rate of INR2.6b. Customer collections remain steady at INR5.1b (stable QoQ) on the back of (1) healthy sales, execution progress and (2) reduction in debtors from completed projects (down by ~INR1b QoQ). 9MFY13 collections stood at INR14.4b v/s a guidance of INR15b and our est of INR18.5b.""Our interaction with the management suggests OCF of INR0.4-0.5b, which resulted into a marginally negative FCFE (post interest expense of INR0.5b). This led to a consolidated net debt of INR18.1b (v/s INR18b in 2QFY13) and ~INR1.3b QoQ increase in PEPL's effective share of net debt, which stood at INR16.3b (0.65x). Consolidated net debt was stable QoQ at INR18.1b (v/s INR18b in 2QFY13), while PEPL's effective stake in net debt is up by INR1.3b QoQ to INR16.3b (0.65x). The stock trades at PER of 11.2x FY15E EPS, 1.7x FY15E BV and 18% discount to our NAV. Maintain Buy with a target price of INR 220," says Motilal Oswal research report.Non-Institutions holding more than 90% in Indian cos Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.To read the full report click on the attachment 
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