HDFC Securities is bullish on Kolte Patil Developers has recommended buy rating on the stock with a target price of Rs 311 in its research report dated August 07, 2019.
HDFC Securities' research report on Kolte Patil Developers
In order to maintain like to like comparison, KPDL provides key financials under POCM as well. The like-to-like comparison vs our estimates is as follows: 1QFY20 revenue: Rs 3.1bn (11% YoY, 21% beat), EBITDA: Rs 677mn (+21% YoY, 8% miss) & APAT: Rs 165mn (-11% YoY, 56% miss, post adjusting Rs 280mn notional gain on OCD fair valuation). Pre-sales robust in soft real estate market: Despite sectoral headwinds during 1QFY20, KPDL has been able to record 0.5mn sqft pre-sales a growth of 9% YoY (led by strong traction in Life Republic, Jazz, Tuscan and Western Avenue projects). Pre-sales value grew 10% YoY to Rs 2.8bn whilst realization remained muted at Rs 5,616/sqft. KPDL maintained its ~3mn sqft of annual pre-sales guidance on back of ~3mn sqft of new launches planned during 2HFY20E. The launches will be mix of Life Republic, Downtown and DMA projects.
KPDL financial performance under POCM was below our estimates. Despite this strong pre-sales, robust collections and debt reduction are key positives. We maintain BUY with SOTP based TP of Rs 311/sh.
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