HDIL can test Rs 100: SP Tulsian

HDIL can test Rs 100 in next six months, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "The focus is more on the Mumbai based real estate properties because in the last maybe one month or so when you check with the real estate developers we have seen that there has been good renewed interest coming in into the projects. Earlier the long gestation projects which were having a completion period of 3 to 5 years people were very weary of buying properties in those projects, but again now that seems to be returning back. People have started taking because of the difference between the ready possession properties and under construction properties because the difference has gone as high as 40%. So considering that that’s a basic theme of picking up HDIL."
He further added, "HDIL is one of the largest developers in the Mumbai and Mumbai Suburbs because they have a very huge parcel of land at Vasai-Virar belt which is also now catching up very fast. It’s extreme Western Suburbs of Mumbai. Apart from that if you see the SRA projects, which they have undertook for Mumbai Airport they have completed a big chunk of the alternate accommodation or the premises, which they have built at Vidyavihar for which the transfers of the tenants which are about maybe 75,000-80,000 families at Mumbai Airport that will start happening. So that will be a huge value unlocking for the company."
"If you see the Q4 results company has not sold any TDR (Transfer of Development Rights) in that quarter because DCR (Development Control Rules) came in the middle of January and the real takeoff or the demand for TDR has started coming in the month of April. So in spite of not having sold any significant quantity of TDR in Q4, overall FY12 results have been reasonable by the company, which they have posted with top-line of Rs 2,000 crore and cash profit of close to about Rs 900 crore, which translated into an EPS of Rs 19. Though EPS is not too material for any real estate company, but if I take the Net Present Value of the properties held by the companies that works out to about Rs 17,000-18,000 crore on a conservative estimate."
"Now the market cap of Rs 3,000-3,500 crore and debt of close to about Rs 4,000 crore. So if you take the Net Present Value per share it works out to about Rs 300 plus and the share is now ruling at Rs 75. I am not saying that the stock can really move to those levels, because generally the real estate stocks are ruling at 30-40% of its present value of the properties held. But I feel that stock looks to have bottomed out. The renewed buying interest, anything which starts accelerating in the stock can make it move to about Rs 100 in next six months or so."