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Peninsula Land
3QFY11 – More land acquisitions
Peninsula signed land deals worth `5.5bn (aiming at ~`25bn in
12-18 months) over 9MFY11. We expect the company to seal
some major deals in the next few months. New project launches
took place in Nasik and Goa, at higher-than-estimated prices;
older projects are in the final handover phase. We roll over our
NAV and target price to Mar ’12e (from Sep ’11e), to `81/share.
Results review. Revenue largely arose from Peninsula Business
Park (~60%) and Peninsula TechnoPark (~30%). Given few
land/ project purchases, gross debt increased (net D/E: 0.18x).
`5.5bn land deals signed. Five additional deals were signed in
3QFY11 – three city-centric, one township and one villa
development. As it continues with its asset-light model, with
funds coming in from sold properties, Peninsula is likely to
complete some large-ticket deals in coming months.
Operational update. Peninsula launched its Goa & Nasik
properties where construction commenced in Oct ’10 at prices
higher than we estimated. We expect new property launches
(NapeanSea Road, Mumbai; Hinjewadi, Pune; and JP Nagar,
Bangalore) from 1QFY12.
Valuation and risks. We roll over our NAV and price target to
Mar ’12e, to `81 vs. `78 for Sep ’11e. At current market price, the
stock trades at 0.9x Mar ’12e P/BV. Risks: Overvalued land
purchases, delay in receivables.
Results Review
The major share of Peninsula Land’s revenue arose from Peninsula
Business Park (~60%) and Peninsula TechnoPark (~30%). New
projects launched after Dec ’10 did not fall within revenue
recognition. Given the few land/project purchases, the gross debt
increased (net D/E of 0.18x).
3QFY11 results review
Most of the revenue in 3Q was recognized from Peninsula Business Park
and Peninsula TechnoPark. The company’s strategy to stay ‘in cash’ to
fund land-buying led to debt increasing in the quarter. Construction of
Peninsula Business Park has been funded by debt, and receivables used to
acquire properties.
Even though project debt repayment would commence in FY12, we do
not see a challenge to the balance sheet, given receivables expected from
Alok Industries (~`1.65bn to be received) sales and lease commencement
on 0.6m sqft of Peninsula Business Park, and receivables from Peninsula
TechnoPark (~`1.4bn) and Ashok Gardens (0.04m sqft to be sold).
`5.5bn land deals signed
Five additional deals were signed in 3QFY11 – three in city centers,
one township and one beach resort development. As it continues
with its asset-light model and with funds from properties sold,
Peninsula would complete some large-ticket deals in coming
months.
Focusing on project additions
3QFY11 project additions
In 3QFY11, Peninsula acquired land parcels/projects in Mumbai, Pune
and Bangalore. These were a mix of JDAs, JVs and outright purchases.
Peninsula also managed to acquire city-centre land parcels across cities.
Looking for more land
We reckon Peninsula would continue its land-purchase spree. Given its
strategy to acquire a mix of urban and sub-urban land parcels, it could also
bid for the NTC Mills auction in Mumbai. It is also seeking to acquire
some properties in the lucrative South Mumbai market (Napean Sea Road,
Carmichael Road) in JVs. Further, it is among the short-listed developers
for a property in Thane.
Operational update
After construction commencing in Oct ’10, Peninsula recently
launched its Goa and Nasik properties at prices higher than our
estimates. We expect new property launches, namely Napean Sea
Road and Bangalore, from 1QFY12. We assume longer gestation
periods and sales assumptions for Peninsula Business Park, given
the oversupply of ready space in the micro market and the selling
price quoted by the company.
New launches
Peninsula recently launched two properties in Goa (`8,500/sqft luxury
project) and in Nasik (~`3,000/sqft suburban project). It has received
clearance for its Pune project and construction has begun. Commencing
construction before launching a project for sale would realize higher
selling prices due to construction visibility.
Project launches and execution to drive value
We believe that timely launches of the acquired projects and execution
would drive valuations going forward. The company would have to ramp
up execution/sales force as it is entering new markets, besides Mumbai.
Peninsula Business Park
The 0.6m sqft of Peninsula Business Park sold to Alok Industries in FY09
is likely to be handed over in 4QFY11/1QFY12. The company has started
marketing the remaining 0.6m sqft, which would be ready in the next two
quarters. Given the current supply in Lower Parel and the South-Central
Mumbai market, we assume longer gestation periods for sales and leasing
estimates for 0.6m sqft.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Peninsula Land
3QFY11 – More land acquisitions
Peninsula signed land deals worth `5.5bn (aiming at ~`25bn in
12-18 months) over 9MFY11. We expect the company to seal
some major deals in the next few months. New project launches
took place in Nasik and Goa, at higher-than-estimated prices;
older projects are in the final handover phase. We roll over our
NAV and target price to Mar ’12e (from Sep ’11e), to `81/share.
Results review. Revenue largely arose from Peninsula Business
Park (~60%) and Peninsula TechnoPark (~30%). Given few
land/ project purchases, gross debt increased (net D/E: 0.18x).
`5.5bn land deals signed. Five additional deals were signed in
3QFY11 – three city-centric, one township and one villa
development. As it continues with its asset-light model, with
funds coming in from sold properties, Peninsula is likely to
complete some large-ticket deals in coming months.
Operational update. Peninsula launched its Goa & Nasik
properties where construction commenced in Oct ’10 at prices
higher than we estimated. We expect new property launches
(NapeanSea Road, Mumbai; Hinjewadi, Pune; and JP Nagar,
Bangalore) from 1QFY12.
Valuation and risks. We roll over our NAV and price target to
Mar ’12e, to `81 vs. `78 for Sep ’11e. At current market price, the
stock trades at 0.9x Mar ’12e P/BV. Risks: Overvalued land
purchases, delay in receivables.
Results Review
The major share of Peninsula Land’s revenue arose from Peninsula
Business Park (~60%) and Peninsula TechnoPark (~30%). New
projects launched after Dec ’10 did not fall within revenue
recognition. Given the few land/project purchases, the gross debt
increased (net D/E of 0.18x).
3QFY11 results review
Most of the revenue in 3Q was recognized from Peninsula Business Park
and Peninsula TechnoPark. The company’s strategy to stay ‘in cash’ to
fund land-buying led to debt increasing in the quarter. Construction of
Peninsula Business Park has been funded by debt, and receivables used to
acquire properties.
Even though project debt repayment would commence in FY12, we do
not see a challenge to the balance sheet, given receivables expected from
Alok Industries (~`1.65bn to be received) sales and lease commencement
on 0.6m sqft of Peninsula Business Park, and receivables from Peninsula
TechnoPark (~`1.4bn) and Ashok Gardens (0.04m sqft to be sold).
`5.5bn land deals signed
Five additional deals were signed in 3QFY11 – three in city centers,
one township and one beach resort development. As it continues
with its asset-light model and with funds from properties sold,
Peninsula would complete some large-ticket deals in coming
months.
Focusing on project additions
3QFY11 project additions
In 3QFY11, Peninsula acquired land parcels/projects in Mumbai, Pune
and Bangalore. These were a mix of JDAs, JVs and outright purchases.
Peninsula also managed to acquire city-centre land parcels across cities.
Looking for more land
We reckon Peninsula would continue its land-purchase spree. Given its
strategy to acquire a mix of urban and sub-urban land parcels, it could also
bid for the NTC Mills auction in Mumbai. It is also seeking to acquire
some properties in the lucrative South Mumbai market (Napean Sea Road,
Carmichael Road) in JVs. Further, it is among the short-listed developers
for a property in Thane.
Operational update
After construction commencing in Oct ’10, Peninsula recently
launched its Goa and Nasik properties at prices higher than our
estimates. We expect new property launches, namely Napean Sea
Road and Bangalore, from 1QFY12. We assume longer gestation
periods and sales assumptions for Peninsula Business Park, given
the oversupply of ready space in the micro market and the selling
price quoted by the company.
New launches
Peninsula recently launched two properties in Goa (`8,500/sqft luxury
project) and in Nasik (~`3,000/sqft suburban project). It has received
clearance for its Pune project and construction has begun. Commencing
construction before launching a project for sale would realize higher
selling prices due to construction visibility.
Project launches and execution to drive value
We believe that timely launches of the acquired projects and execution
would drive valuations going forward. The company would have to ramp
up execution/sales force as it is entering new markets, besides Mumbai.
Peninsula Business Park
The 0.6m sqft of Peninsula Business Park sold to Alok Industries in FY09
is likely to be handed over in 4QFY11/1QFY12. The company has started
marketing the remaining 0.6m sqft, which would be ready in the next two
quarters. Given the current supply in Lower Parel and the South-Central
Mumbai market, we assume longer gestation periods for sales and leasing
estimates for 0.6m sqft.
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