Buy Kolte Patil Developers; target of Rs 321: HDFC Securities

HDFC Securities' research report on Kolte Patil Developers

KPDL reported sequential recovery in pre-sales at 0.55msf (57% QoQ) in 3QFY21. In terms of value, sales grew by 63% QoQ. With the launch of two projects at the end of December, management is confident of achieving full- year guidance of 1.8mn sq ft for FY21. A sharp rebound in the collection (Rs 3.8bn vs Rs 2bn in 2QFY21) led to reduction in net D/E to 0.41x from 0.52x on Sep-20.

Outlook

We cut our FY21 estimate by 70% to account for deferment in revenue recognition and maintain BUY on KPDL, with an unchanged target price of Rs 321/sh, given comfortable balance sheet (net D/E 0.4x) and robust launch pipeline (~5.9mn sqft). Any delay in launches key risk to our estimates.