Accumulate Prestige Estates; target of Rs 210: PLilladher

Prabhudas Lilladher`s research report on Prestige Estates Projects

“Prestige Estates Projects, Post the strong jump in revenue recognition in Q3FY13 (>100 percent), revenues in Q4FY13 remained strong, witnessing sequential growth of 13.7 percent and YoY growth of 177 percent. Margins witnessed a drop from 28.9 percent in Q3FY13 to 23.6 percent on account of the incentive scheme introduced for the employees, all of which got provided for in the current quarter. PAT stood at Rs890m, 133 percent YoY growth and a marginal sequential decline of 3 percent. Volumes for the quarter stood at 0.89m sq.ft, while the year ended at 5.99m sq.ft as against 4.9m sq.ft in FY12. Realizations in Q4 strengthened to Rs6,085/sq.ft on account of increase in prices in the previously launched projects, while realizations for the year stood at Rs5,212/sq.ft as against Rs4,303/sq.ft in FY12. Hence, in value terms, sales stood at Rs31.2bn, an increase of 48 percent. Further, the company is guiding for sales of Rs43bn in FY14, with slightly stronger realizations, translating to volumes of ~8m sq.ft.” “PEPL ended FY13 with 10.38m sq.ft of launches, of which, 7.89m sq.ft were residential launches, while the remaining were office and retail launches and of the total launches, 10m sq.ft were in Bengaluru. Going forward, the company is looking at launches to the tune of 14m sq.ft in FY14, of which, it expects 10m sq.ft in Bengaluru, while the remaining in other cities like Chennai, Cochin and others. In order to keep its launch pipeline strong, PEPL has been aggressively landbanking. In Q4FY13, the company acquired some projects in Bengaluru and Chennai and is further completing a large acquisition in Chennai. On account of the same, net debt has remained constant despite raising Rs3.6bn through IPP.” “A continuing healthy performance on all fronts, improving operating metrics and a strong outlook for the future aids us in retaining our positive stance on the company. The company’s net asset value, post debt, stands at Rs76.6bn which translates to Rs234/share. Our target price is based on a 10 percent discount to NAV which translates to Rs210. We maintain Accumulate on the stock,” says Prabhudas Lilladher research report.  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.

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