Value pick in RE space - sunteckindia.com · a strong selling-point for mid-income housing. ... Jaipur, near to city’s ... industrial toa residential and commercial plot

©

Your success is our success

Emkay

Init

iati

ng

Co

vera

ge

Emkay Global Financial Services Ltd. 1

Financial Snapshot (Consolidated) (Rsmn)

YE- Net EBITDA EPS EPS RoE EV/

Mar Sales (Core) (%) APAT (Rs) % chg (%) P/E EBITDA P/BV

FY12A 205 90 43.9 44 0.7 -20.4 0.6 594.9 338.6 3.7

FY13E 322 146 45.5 39 0.6 -11.6 0.6 672.7 199.5 3.7

FY14E 11,567 8,718 75.4 4,622 73.4 11,762.5 48.8 5.7 3.5 2.2

FY15E 12,718 8,240 64.8 3,408 54.1 -26.3 25.6 7.7 3.0 1.8

Sunteck RealtyValue pick in RE space

May 02, 2013

Rating

Buy

CMP Rs417

Target Price Rs585

EPS Chg FY14E/FY15E (%) Na

Target Price change (%) Na

Nifty 5,930

Sensex 19,504

Price Performance (%) 1M 3M 6M 12M

Absolute 4 -14 31 10

Rel. to Nifty 1 -12 24 -3

Source: Bloomberg

Relative price chart

300

345

390

435

480

525

May-12 Jul-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13

Rs

-30

-20

-10

0

10

20%

Sunteck Realty (LHS) Rel to Nifty (RHS) Source: Bloomberg

Stock Details Sector Real Estate

Bloomberg SRIN IB

Equity Capital (Rs mn) 126

Face Value(Rs) 2

No of shares o/s (mn) 63

52 Week H/L 564/ 295

Market Cap (Rs bn/USD mn) 26/ 487

Daily Avg Volume (No of sh) 17,998

Daily Avg Turnover (US$mn) 0.1

Shareholding Pattern (%) Mar'13 Dec'12 Sep'12

Promoters 73.4 73.4 72.1

FII/NRI 5.7 5.7 5.8

Institutions 0.2 N/A 0.2

Private Corp 11.3 10.7 11.3

Public 9.3 10.2 10.6 Source: Bloomberg

Tejas Sheth [email protected] +91-22-66242482

n Mumbai-centric fully-paid clear-title land bank, prudent capital structure, and across-the-consumer-segment product offering make SRL a promising bet in the listed RE space

n Cash generation visibility and a healthy balance sheet give us a lot of comfort. OCF of Rs 22bn from ongoing projects and Rs 8bn from planned projects are expected over the next 6 years

n Concentrated land bank with proximity to key competition and a subdued Mumbai housing market are the major risk factors. The missing project execution pedigree is a concern

n Initiate coverage with a BUY rating and a 1-year TP of Rs 585. Conservative estimations on the sales timeline and realizations add to favourable risk-to-reward at the CMP

Sunteck Realty Ltd. (SRL) has well-located, clear-title and fully-paid Mumbai-centric land bank; but it has to deliver on project execution

SRL has a 15.2msf of land bank, with 81% of it in Mumbai. All the land parcels are either purchased from private owners or are in JD with land-owners. Also, SRL’s most valuable land parcels are strategically located, one in the heart of BKC, Mumbai’s new CBD, while others are situated outside the upcoming Oshiwara railway station in the suburbs, which is a strong selling-point for mid-income housing. With land bank in place, the major risk remains in project executions, wherein SRL lacks a strong pedigree, though it plans to alleviate the problem by working with renowned contractors.

Prudent capital management and visibility of operating cashflows

SRL’s absolute debt at Rs 3.6bn and D/E of 0.4x are amongst the lowest in the listed RE space. The company has a prudent capital structure on the back of its core strategy of partnering with PE players and land-owners for its growth. Going forward, there is strong visibility of OCF generation of Rs 30bn from its ongoing and planned projects, which should lead to zero debt by FY16. In the worst case scenario, if SRL fails to sell a single sq ft over the next 4 years, it will have a deficit of only Rs 1.7bn in its cashflows. This deficit is a meagre 6% of its value of unsold inventory from ongoing projects,

Lower affordability and envisaged supply, Mumbai housing demand and softening pricing – SRL well placed to mitigate these concerns

Over the last 36 months, income growth in Mumbai has been at a much lower rate than the increase in housing prices, which has steeply affected the affordability quotient. As per Liases Foras, absorption of housing in Mumbai has been stagnant over the last 9 quarters, while project launches have increased, leading to higher inventory. We believe that the Mumbai housing demand and pricing have softened, and project activities may be subdued in the coming year. SRL is well placed in this scenario, since its large key projects, which are well located, are nearing completion. Also, it is planning to launch low-ticket value houses. All these should help SRL boost its sales.

NAV at Rs 585/share gives a 40% upside on CMP

Our SOTP NAV estimation at WACC of 13.2% and a cap rate of 9.8% give a TP of Rs 585. Value of leased assets, 3 BKC projects and Goregaon Project is equal to 82% of the current market cap of around Rs 26bn, giving an upside from the balance projects and land bank in Mumbai and outside.

Sunteck Realty Initiating Coverage

Emkay Research May 02, 2013 2

Mumbai-centric land bank – fully-paid, clear-title, well-located

Sunteck Realty Ltd. (SRL) has land banks across 20 projects, of which 10 are ongoing projects. These 20 projects have a total saleable area (SBA) of 31.8msf, of which SRL’s economic interest is at 15.2msf, with a total share in developable area (DBA) at 18.9msf.

Important attributes of SRL’s land bank

§ The land bank is fully-paid, though there is an outstanding payment of Rs 10bn to the government towards fungible FSI payable over the next five years. The same will be paid from customer advances.

§ All the land parcels have clear title, and none of the projects are part of any slum rehabilitation, where the development risks are high.

§ SRL’s most valuable land parcels are in BKC and Goregaon West, a part of Mumbai’s western suburbs. Both locations are planned by MMRDA – a cash-rich regional urban development government body. While BKC is the new CBD of Mumbai, the 23-acre land in Goregaon West is located just outside a new railway station (Oshiwara) - a strong selling-point for mid-income housing projects in Mumbai.

§ SRL’s three residential projects in BKC demand monopoly in BKC, as there is no other land bank earmarked by MMRDA for residential project. In Oshiwara, SRL has the biggest land parcel for taking advantage of the new railway station.

§ Of the 15.2msf of SBA (SRL’s share) across 20 projects, SRL’s 100%-owned projects are 6 with SBA of 6.5msf, and the other 14 projects are through JVs and JDs with PE investors and/or land-owners.

§ Apart of BKC and Goregaon (W) land parcels, SRL two other key land parcels located in Island City in Mumbai – one at Dadar and other at Mahalaxmi. Both these projects are in a JD with the land owner and has total SBA (SRL’s share) of 0.45msf and 0.28msf respectively.

§ SRL’s largest land parcel outside Mumbai is an 80-acre land parcel in the heart of Jaipur, near to city’s railway station at Bani Park. SRL’s JV company has signed a JD agreement with the land-owner. The land is being converted for usage from an industrial to a residential and commercial plot. The going rate in the location is Rs 60mn/acre.

Exhibit 1: More than 80% of SRL’s 15.2msf SBA is in Mumbai…

Goregaon37%

Thane 20%

BKC7%

Mulund4%

Others - Mum13%

Jaipur18%

Others - ROI1%

Source: Company, Emkay Research

Exhibit 2: With 83% of the same in the residential segment

Residential 83%

Office13%

Retail4%




Lower affordability and envisaged rising supply, Mumbai housing demand and softening pricing; but SRL is well placed in this scenario

We do not see any room for capital value appreciation and pricing power in the Mumbai housing market in view of its low affordability quotient and oversupply

Affordability quotient

The housing price in India and more so in Mumbai has witnessed a sharp rise over the last 7 years on the back of growing income, changing lifestyles and easy credit availability. The increase after the global meltdown in 2008-09 has been steeper, with a sharp bounce from the trough seen in mid-2009. But, at the same time, the increase in salary across sectors, more so in BFSI, is diminishing as per AON Hewitt’s Salary survey. The recently published survey states that the salary increase would be the lowest over the last 4 years.

Exhibit 3: AON Hewitt’s Salary Survey projects lower Increase...

10.6%11.9%

10.3%11.7%

12.6%12.9%10.7%

0.0%

3.0%

6.0%

9.0%

12.0%

15.0%

2010 2011 2012 2013

Projected Actual

Source: Aon Hewitt, Emkay Research

Exhibit 4: …More so in the BFSI segment

10.5%

12.7%

8.0%

10.0%

0.0%

3.0%

6.0%

9.0%

12.0%

15.0%

2010 2011 2012 2013

Source: Aon Hewitt, Emkay Research

According to Liases Foras, a renowned real estate research firm in India, prices in Mumbai have doubled from its lows of mid-2009, while they increased by 40% from their 2008 peaks. Over the same period, the inflation-adjusted increase in corporate salaries has been much lower, leading to lower affordability quotient. With the rising price, the quarterly absorption run-rate has stagnated at around 10msf.

Exhibit 5: Sales are stagnant with rising prices over the last 8 quarters

0

5

10

15

20

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

90

120

150

180

210

Sales (msf) Price Index (LHS)

Source: Liases Foras, Emkay Research

Going forward, we believe, there would be absolutely no room for any rise prices in Mumbai. In fact, there could be some softening in terms of time correction or payment schemes (20:80).



Oversupply in housing space would add pressure to the current stagnant demand

With Maharashtra State Assembly Elections around the corner, the approvals process will speed up, as the incumbent government would like to clear all long-pending files with new DCR in picture. With approvals in hand, many builders would launch housing projects, which had come to a standstill on the back of new DCR. As per Liases Foras, the Mumbai housing market witnessed more supply than absorption, which led to rising inventory in absolute terms as well as in terms of quarter.

Exhibit 6: Launches in Mumbai housing market

0

10

20

30

40

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

mn

sq

ft


Exhibit 7: Rising inventory on higher supply & lower absorption

0

40

80

120

160

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

0

4

8

12

16

Inventory - msf Inventory - No. of Quarters (RHS)


SRL is well placed to overcome/mitigate this concern

Near-completion of projects

SRL’s high-ticket projects at BKC are nearing completion. These would be among a few other projects in Mumbai scheduled for completion. While Signature Island is already given for fit-out, Signia Isles and Signia Pearl will be completed by 2015.The completed projects would always have more takers than those under development, due to huge completion timeline risk in India’s real estate market. Also, the pricing of BKC projects at Rs 40,000 per sq ft. is fair against Rs 70,000-plus per sq. ft. for completed projects in Worli and Rs 30,000 per sq. ft. for ongoing projects in much-congested Lower Parel

Well-located projects

SRL’s key projects in BKC and Goregaon West are strategically located. In real estate, especially in Mumbai, location does have a strong selling-point. While super luxury projects are located at the head of CBD, mid-income housing projects are just outside the upcoming railway station, a huge advantage in Mumbai.

Low-ticket size offering

SRL is planning to offer small-size, low-value apartments in Mumbai. While most developers are not offering anything below 2BHKs valued at upwards of Rs 15mn, SRL is looking to offer 1, 1.5, 2 (smaller) BHKs, with a ticket-size of Rs 8-13mn in its Phase-2 of Sunteck City, Goregaon West. We feel that this strategy should create volumes, as it would reach to the masses. Besides, no other renowned developer is offering such products.



Partnering in growth has led to prudent capital management

SRL’s core strategy has always been to partner with investors or land-owners, and keep the capital requirement to minimum. This strategy has helped the company to keep the balance sheet healthy unlike most developers across India.

Although the cost of partnering is higher than the cost of debt, the advantage is that the company is not under any threat of servicing the debt, leading to better management of the capital and business.

Of the current land bank of 15.2msf (SRL’s share), 43% is fully owned by SRL, while the balance 57% is through JV and a combination of JV-JD route. This approach has helped the company to have minimal debt on the balance sheet. The entire portfolio of land has been acquired over the last 7 years with debt maintained at minimal levels.

Exhibit 8: Ownership-wise break-up of land bank

Own43%

JV9%

JD / JV48%


Going forward, SRL is planning to acquire new land parcels on its own to be funded chiefly through surplus cashflows from large projects, namely, BKC and Goregaon West.

As per our estimates, SRL’s debt will increase in FY14 because of cash outflow towards taxes, land payments and fungible FSI. Although it will still have gross debt in FY15 due to deal structures at the SPV level, at the consolidated level SRL will be in net cash, which it will utilise on new land acquisitions

Exhibit 9: SRL’s Net debt to be negative by FY15

-1000

0

1000

2000

3000

4000

5000

FY

10

FY

11

FY

12

FY

13E

FY

14E

FY

15E

Rs

mn

Source: Emkay Research



Strong cashflows generation envisaged

SRL’s huge portion of cash outflow is back-ended on the project timeline, due to payments for additional FSI, mainly to MMRDA and for tax outflows, since revenue is accounted on the Completion Method.

SRL has 2.6msf of its share of SBA under development, wherein construction has started. Of this, 0.9msf is sold, and the company is yet to receive Rs 9.3bn from buyers. Against this, the company has a committed cash outflow of Rs 2.9bn towards the FSI cost, Rs 4.6bn to complete the whole project, and Rs 3.55bn towards taxes on accounting of the sold portion.

Even if the company fails sell a single sq ft over the next 4 years, it will have a deficit of only Rs 1.7bn in its cashflows. This deficit is a meagre 6% of its unsold value estimated at projects’ average realization/sq.ft. and not on the last sold rate.

On monetization of the whole saleable area and excluding the taxes towards the same, SRL would generate net operating cashflows of Rs 22.6bn. The rental income will take care of corporate overheads. Hence, this whole amount would flow into the balance sheet, unless spent on new land acquisitions. We have taken a timeline of 6 years in our estimations.

Exhibit 10: Operating cashflows from ongoing Projects As on FY13

Rs mn (except area in Mn Sq ft) Project SRL's

Saleable Area 3.5 2.6

Total Area Sold 1.2 0.9

Unsold Area 2.3 1.7

Value of Sold Area 26400 18560

Outstanding Receivables from Sold Area 13246 9330

Sales Value of Unsold Area @ Avg. Rate 40341 29918

Total Land Cost

Land Cost Payables on Ongoing Projects 4200 2882

Total Construction Cost

Construction Cost to be Spent to Complete Ongoing Projects 6080 4633

Taxes Outflow on Sold Area 4961 3553

Taxes Outflow on Total Area 12342 9114

Net Cash flows from Sold Area post all Commitments -1995 -1738

Net Cash flows from Total Area post all Commitments 30966 22619


Also, taking into account the launch pipeline from the current land bank, SRL would further add Rs 8bn towards OCF. This will aggregate a total of Rs 30bn of OCF collected over the next 6 years (shown in Exhibit 10)

The major driver of this estimated cashflows is the sale booking traction in three BKC projects.

Some of the key assumptions in our OCF estimations are as follows:

§ A 6-year timeline for sales booking of BKC projects, higher than management’s estimation of 4 years. Realizations are assumed at Rs 38,000/sq.ft. as against the last rate of Rs 40,000/sq.ft.

§ Average realizations of Sunteck City at Rs 12,700/sq.ft. for all phases, with a peak realization of Rs 13,500/sq.ft. The going rate in the vicinity is around Rs 15,000/sq.ft. for a ready product.

§ Outstanding payments towards the fungible FSI of Rs 10bn is accounted.

§ Tax rate of 33% taken for tax calculations.



Exhibit 11: SRL’s share of OCF would be Rs 30bn till 2020…

-3000

0

3000

6000

9000F

Y11

FY

12

FY13

E

FY14

E

FY15

E

FY16

E

FY17

E

FY18

E

FY19

E

FY20

E

Rs

mn


Exhibit 12: …mainly driven by sales bookings of BKC projects

0

50000

100000

150000

200000

<FY

09

FY

10

FY

11

FY

12

FY

13

FY14

E

FY15

E

FY16

E

FY17

E

FY18

E

FY19

E

FY20

E

Sq

Ft

Signature Island Signia Isles Signia Pearl


Risks and Concerns

Other than risks pertaining to the Mumbai housing market discussed above, we believe that the two major risks at the company level are as follows:

Missing pedigree in project execution

Being a fairly new company in real estate development, SRL has not showcased a completed large development. This missing pedigree in project execution does raise business risks on two fronts, namely, delays in projects, which affect cashflows, and lower consumer confidence, which affect sales-booking momentum and hence cashflows

In the past, SRL’s key projects were delayed, and the company had attributed the same to changes made in FSI of the project by MMRDA.

SRL is planning to mitigate this risk by appointing marquee contractors and developing a strong in-house team for overseeing project executions.

Concentrated land bank and cashflows

SRL’s land bank in terms of value is concentrated in Mumbai and more so in BKC and Goregaon West. Although both locations are good, concentration restricts scalability in terms of sales booking, pricing and cash generation.



Value ingrained, at CMP gives a 40% upside

We have valued SRL at Rs 585/share on the SOTP basis by valuing its leased assets at cap-rate of 9.8% (200bps above the 10-year G-Sec Yield), NPV of its ongoing and planned projects at WACC of 13.2% and land bank at the ongoing FSI value.

Value of leased assets, 3 BKC projects and Goregaon Project, is equal to 82% of the current market cap of around Rs 26bn, thereby giving an upside from the balance projects’ land bank in Mumbai and outside the city.

Also, nearly 57% of NAV estimated come from leased assets, ongoing projects and planned projects, which will be launched over the next 18 months.

SRL gives us comfort on three fronts with regard to valuations:

§ Strong cashflows visibility

§ Adjusted debt of merely Rs 2.2bn

§ Well-located land parcels

The two concerns for the same are:

§ Highly concentrated valuations

§ Concentrated ownership raises liquidity issues

Key assumptions:

§ Discount rate @ 13.2%

§ Cap-rate of 9.8% (200bps above the 10-year G-Sec Yield)

Exhibit 13: Leased asset, BKC and Goregaon Projects = Current mkt. cap

0

5

10

15

20

25

30

35

40

Current Mkt Cap NAV Est.

Rs

bn

Others

Island City Mumbai

Thane + Mulund

Goregaon

BKC

Leased Assets


Exhibit 14: Stage-wise valuation break-up

Leased Assets

6%

Ongoing Projects

38%

Planned Projects

13%

Land Bank43%




SRL vs. Peers

Oberoi Realty (OBRE) is the closest comparison to SRL in the listed place. Both cater to Mumbai’s real estate development and are well-located land bank. On the business front, Sobha Developers is the closest competitor, as both derive their value from the housing segment.

On comparison of valuations, SRL as an investment proposition is a high risk-high return vis-à-vis OBRE. We have an Accumulate rating on OBRE with a TP of Rs 325 and a 28% upside from the CMP, while for SRL our estimated NAV is Rs 585, giving a 40% upside from the CMP

Exhibit 15: SRL vs. Peers

Unit OBRE SRL SDL

Leased Assets mn sq ft 1.64 0.15 0

Lease Income Rs mn 1460 220 0

Leased Assets Value Rs mn 20867 2245 0

Other Assets Value Rs mn 3397 0 2250

Land Bank mn sq ft 9.0 15.2 220

Ongoing Project mn sq ft 5.7 2.6 15.2

Area Sold mn sq ft 4.2 0.9 6.8

Area Unsold mn sq ft 1.6 1.7 8.4

Receivables - Sold Area Rs mn 9564 9330 18133

Unsold Value @ avg. rate Rs mn 26416 29918 58402

Total Inflows Rs mn 35980 39248 76535

Net Debt / (Cash) Rs mn (14278) 1030 13208

NAV Rs mn 105485 36830 46942

NAV / Share Rs 322 585 479

CMP RS 252 415 400

Upside % 28% 41% 20%

Net Liquid Assets-to-NAV % 37% 3% -23%

Ongoing Projects-to-NAV % 25% 38% 46%

Land Bank-to-NAV % 38% 58% 77%

Total 100% 100% 100%

Inventories – WIP Rs mn 7603 21320 13207

Customer Advances Rs mn 7181 13059 4293

Inventories-to-Customer Advances times 1.1 1.6 3.1




Annexure

Sunteck Realty: A brief profile Sunteck Realty Ltd. (SRL) was incorporated in 2000 by first-generation entrepreneur Kamal Khetan, with the objective to develop real estate space in Mumbai. Mr. Khetan is known for his abilities to acquire valuable land parcels in Mumbai

SRL entered real estate space by acquiring and developing three office spaces at BKC and in the western suburbs of Mumbai over 2001-03, with a total leaseable area of 0.15 mn sq. ft. (msf).

In 2006, SRL acquired its first land parcel at BKC for residential development in partnership with India REIT PE Fund, with a total saleable area of 0.7 msf. In 2010, the company outbid other developers in the second round of land sale to maintain its monopoly over BKC’s housing space.

SRL has a 50:50 JV with Ajay Piramal Group for developing projects. As on today, the JV has 13 projects under various stages of development, with a total saleable area of 16.6msf

SRL is among a very few companies in the listed real estate space that follows a conservative accounting policy. The company accounts its revenue on a ‘project completion’ basis in comparison to the ‘percentage completion’ method followed by most listed real estate players.

Exhibit 16: SRL's Mumbai Land Bank




Key Financials (Consolidated)

Income Statement Y/E Mar (Rsmn) FY12A FY13E FY14E FY15E

Net Sales 170 302 11,547 12,698

Growth (%) -15.8 77.6 3,724.8 10.0

Expenditure 115 176 2,849 4,478

Raw Materials 0 50 2,704 4,311

Employee Cost 23 26 30 34

Other Exp 92 100 115 132

EBITDA 90 146 8,718 8,240

Growth (%) 45.6 62.8 5,857.7 -5.5

EBITDA margin (%) 43.9 45.5 75.4 64.8

Depreciation 15 16 16 16

EBIT 75 131 8,702 8,225

EBIT margin (%) 36.7 40.6 75.2 64.7

Other Income 99 50 50 50

Interest expenses 51 107 107 90

PBT 123 74 8,645 8,185

Tax 65 20 3,106 2,939

Effective tax rate (%) 52.6 27.4 35.9 35.9

Adjusted PAT 58 54 5,539 5,246

Growth (%) -5.5 -7.5 10,164.6 -5.3

Net Margin (%) 28.5 16.8 47.9 41.2

(Profit)/loss from JVs/Ass/MI -14 -15 -917 -1,838

Adj. PAT After JVs/Ass/MI 44 39 4,622 3,408

E/O items 0 0 0 0

Reported PAT 44 39 4,622 3,408

PAT after MI 44 39 4,622 3,408

Growth (%) -20.4 -11.6 11,762.5 -26.3

Balance Sheet Y/E Mar (Rsmn) FY12A FY13E FY14E FY15E

Equity share capital 3,091 3,270 3,270 3,028

Reserves & surplus 3,900 3,903 8,484 11,846

Net worth 6,991 7,173 11,754 14,874

Minority Interest 40 40 40 40

Secured Loans 2,635 1,008 2,001 364

Unsecured Loans 2,247 2,630 2,920 1,920

Loan Funds 4,882 3,638 4,921 2,284

Net deferred tax liability 7 12 17 22

Total Liabilities 11,920 10,863 16,732 17,220

Gross Block 936 936 936 936

Less: Depreciation 103 118 134 149

Net block 834 818 802 787

Capital work in progress 0 0 0 0

Investment 670 670 670 670

Current Assets 23,783 26,643 29,814 32,355

Inventories 19,036 21,320 25,190 25,751

Sundry debtors 369 561 561 561

Cash & bank balance 274 274 274 3,254

Loans & advances 4,096 4,478 3,778 2,778

Other current assets 9 10 10 10

Current lia & Prov 13,367 17,268 14,554 16,591

Current liabilities 13,354 17,245 14,531 16,568

Provisions 12 23 23 23

Net current assets 10,417 9,375 15,260 15,764

Misc. exp 0 0 0 0

Total Assets 11,920 10,863 16,732 17,220 Cash Flow Y/E Mar (Rsmn) FY12A FY13E FY14E FY15E

PBT (Ex-Other income) -11 4 8,575 8,115

Depreciation 15 16 16 16

Interest Provided 51 107 107 90

Other Non-Cash items 0 0 0 0

Chg in working cap -939 1,047 -5,880 2,482

Tax paid -60 -20 -3,106 -2,939

Operating Cashflow -945 1,153 -288 7,763

Capital expenditure -7 0 0 0

Free Cash Flow -951 1,153 -288 7,763

Other income 134 70 70 70

Investments -64 0 0 0

Investing Cashflow 63 70 70 70

Equity Capital Raised 99 164 -20 -267

Loans Taken / (Repaid) 859 -1,244 1,283 -2,637

Interest Paid -51 -107 -107 -90

Dividend paid (incl tax) -21 -21 -21 -21

Income from investments 0 0 0 0

Others 0 -15 -917 -1,838

Financing Cashflow 886 -1,222 218 -4,853

Net chg in cash 0 0 0 2,980

Opening cash position 274 274 274 274

Closing cash position 274 274 274 3,254

Key Ratios Y/E Mar FY12A FY13E FY14E FY15E

Profitability (%)

EBITDA Margin 43.9 45.5 75.4 64.8

Net Margin 28.5 16.8 47.9 41.2

ROCE 1.5 1.6 63.4 48.7

ROE 0.6 0.6 48.8 25.6

RoIC 0.7 1.3 67.7 56.6

Per Share Data (Rs)

EPS 0.7 0.6 73.4 54.1

CEPS 0.9 0.9 73.6 54.3

BVPS 111.0 113.9 186.6 236.1

DPS 0.2 0.3 0.3 0.3

Valuations (x)

PER 594.9 672.7 5.7 7.7

P/CEPS 445.3 481.0 5.7 7.7

P/BV 3.7 3.7 2.2 1.8

EV / Sales 179.1 96.7 2.6 2.0

EV / EBITDA 338.6 199.5 3.5 3.0

Dividend Yield (%) 0.1 0.1 0.1 0.1

Gearing Ratio (x)

Net Debt/ Equity 0.6 0.4 0.4 -0.1

Net Debt/EBIDTA 47.1 20.4 0.5 -0.2

Working Cap Cycle (days) 18,076.2

10,319.7

472.9 359.0



DISCLAIMER: Emkay Global Financial Services Limited and its affiliates are a full-service, brokerage, investment banking, investment management, and financing group. We along with our affiliates are participants in virtually all securities trading markets in India. Our research professionals provide important input into our investment banking and other business selection processes. Investors may assume that Emkay Global Financial Services Limited and/or its affiliates may seek investment banking or other business from the company or companies that are the subject of this material and that the research professionals who were involved in preparing this material may participate in the solicitation of such business. Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest. Additionally, other important information regarding our relationships with the company or companies that are the subject of this material is provided herein. This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject Emkay Global Financial Limited or its group companies to any registration or licensing requirement within such jurisdiction. Specifically, this document does not constitute an offer to or solicitation to any U.S. person for the purchase or sale of any financial instrument or as an official confirmation of any transaction to any U.S. person unless otherwise stated, this message should not be construed as official confirmation of any transaction. No part of this document may be distributed in Canada or used by private customers in United Kingdom. All material presented in this report, unless specifically indicated otherwise, is under copyright to Emkay. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior express written permission of Emkay. All trademarks, service marks and logos used in this report are trademarks or registered trademarks of Emkay or its Group Companies. The information contained herein is not intended for publication or distribution or circulation in any manner whatsoever and any unauthorized reading, dissemination, distribution or copying of this communication is prohibited unless otherwise expressly authorized. Please ensure that you have read “Risk Disclosure Document for Capital Market and Derivatives Segments” as prescribed by Securities and Exchange Board of India before investing in Indian Securities Market. In so far as this report includes current or historic information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed.

Emkay Global Financial Services Ltd. 7th Floor, The Ruby, Senapati Bapat Marg, Dadar - West, Mumbai - 400028. India

Tel: +91 22 66121212 Fax: +91 22 66121299 Web: www.emkayglobal.com

www.emkayglobal.com

Documents

Value pick in RE space - sunteckindia.com · a strong selling-point for mid-income housing. ... Jaipur, near to city’s ... industrial toa residential and commercial plot