Buy Kolte Patil Developers; target of Rs 380: HDFC Securities

HDFC Securities is bullish on Kolte Patil Developers has recommended buy rating on the stock with a target price of Rs 380 in its research report dated May 26, 2023.

Broker Research

May 30, 2023 / 14:07 IST

Buy

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HDFC Securities' research report on Kolte Patil Developers

KPDL reported the highest-ever annual presales of 3.3msf (+21% YoY), valued at INR 22.3bn (+28% YoY), with an average realisation of INR 6,817 per sq. ft. (+6.4% YoY). 49% of the sales came from sustenance inventory. Its flagship project Life Republic (LR) contributed c.50% towards presales. Pune market contributed 80% towards the sale which KPDL is expecting to bring down to 70% by FY25. For FY24, KPDL expects presales of INR 28bn on the back of INR 53bn worth of project launches with an area of 7.3msf (3msf to be launched in H1FY24). Around 30-40% of FY24 presales are expected to come from sustenance inventory. For FY23, KPDL added INR 39bn worth of projects and, for FY24, it expects to add INR 105bn worth of projects, of which INR 25bn worth was added in May’23. This includes two society redevelopment projects in MMR which are expected to be launched by FY24-end. Projects worth INR 35-40bn in the BD pipeline are in the advanced stages of discussion.

Outlook

KPDL expects to fund its GDV addition via internal accrual and from the INR 2.1bn received from Marubeni Corp towards its investment in the Pimple Nilakh project. Also, its comfortable liquidity position with net D/E at 0.11x (board approval of 0.50x) paves the way for accelerated BD activities. We maintain BUY, with an unchanged SOTP-based TP of INR 380.

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