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Housing Development & Infrastructure Ltd (HDIL) ---------------------- Maintain NEUTRAL
3Q11: Uncertainty on MIAL project leads to other new investments
● HDIL reported 3Q11 PAT of Rs2.5 bn, up 18% QoQ and was in
line with estimates. Revenues at Rs4.6 bn increased 22% QoQ, of
which TDR sales of 1.25 mn sq ft contributed Rs3.9 bn and the
rest came from 1 mn sq ft of FSI sale in the Vasai-Virar region.
● Clarity on certain policy decisions relating to eligibility of slum
dwellers is pending in the MIAL project, leading to delays. HDIL is
also awaiting clarity on land allotment for Phase-III of the project.
As a result, HDIL has invested Rs13 bn into other new projects.
● HDIL generated positive operating cashflows of Rs627 mn in
3Q11. Net debt stood at Rs37.9 bn and net debt:equity was 0.4x
as of December 2010. Management intends to bring down debt
levels by 15-20% from the current levels by March 2012.
● We now assume 50% probability of MIAL project’s success. MIAL
project now contributes Rs47/share and newly acquired projects
contribute Rs64/share to our forward NAV of Rs255/share. We
revise our target price to Rs154 (Rs189 earlier) and cut
FY11/FY12 EPS estimates by 10%/17%, respectively.
HDIL reported 3Q11 PAT of Rs2.5 bn, up 18% QoQ and was in line
with estimates. Revenues at Rs4.6 bn increased 22% QoQ, out of
which TDR sales of 1.25 mn sq ft contributed Rs3.9bn and the rest
came from 1 mn sq ft of FSI sale in the Vasai-Virar region.
3Q11 and 9MFY11 EPS stood at Rs6.1 and 16.9, respectively.
Delays in MIAL project, other new investments made
Despite 7,000 units being completed for rehabilitation, slum dwellers
have not yet shifted since clarity on certain policy decisions relating to
eligibility of slum dwellers is pending. HDIL is also awaiting clarity on
land allotment for the project’s Phase-III. In light of delays in the MIAL
project, HDIL has invested Rs13 bn from funds raised in September
2010 and other internal accruals into new projects. HDIL generated
positive operating cashflows of Rs627 mn in 3Q11. Net debt stood at
Rs37.9 bn and net debt:equity was 0.4x as of December 2010.
Management intends to bring down debt levels by 15-20% from
current levels by March 2012.
Reduce target price, cut EPS estimates
We now build in further delay on the project and assume 50%
probability of MIAL project’s success. MIAL project now contributes
Rs47/share and newly acquired projects contribute Rs64/share to our
forward NAV of Rs255/share. We revise our target price to Rs154
(from Rs189 earlier), valuing it at 30% discount to March 2012 GAV.
Our FY11/FY12 EPS estimates decline by 10%/17%, respectively.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Housing Development & Infrastructure Ltd (HDIL) ---------------------- Maintain NEUTRAL
3Q11: Uncertainty on MIAL project leads to other new investments
● HDIL reported 3Q11 PAT of Rs2.5 bn, up 18% QoQ and was in
line with estimates. Revenues at Rs4.6 bn increased 22% QoQ, of
which TDR sales of 1.25 mn sq ft contributed Rs3.9 bn and the
rest came from 1 mn sq ft of FSI sale in the Vasai-Virar region.
● Clarity on certain policy decisions relating to eligibility of slum
dwellers is pending in the MIAL project, leading to delays. HDIL is
also awaiting clarity on land allotment for Phase-III of the project.
As a result, HDIL has invested Rs13 bn into other new projects.
● HDIL generated positive operating cashflows of Rs627 mn in
3Q11. Net debt stood at Rs37.9 bn and net debt:equity was 0.4x
as of December 2010. Management intends to bring down debt
levels by 15-20% from the current levels by March 2012.
● We now assume 50% probability of MIAL project’s success. MIAL
project now contributes Rs47/share and newly acquired projects
contribute Rs64/share to our forward NAV of Rs255/share. We
revise our target price to Rs154 (Rs189 earlier) and cut
FY11/FY12 EPS estimates by 10%/17%, respectively.
HDIL reported 3Q11 PAT of Rs2.5 bn, up 18% QoQ and was in line
with estimates. Revenues at Rs4.6 bn increased 22% QoQ, out of
which TDR sales of 1.25 mn sq ft contributed Rs3.9bn and the rest
came from 1 mn sq ft of FSI sale in the Vasai-Virar region.
3Q11 and 9MFY11 EPS stood at Rs6.1 and 16.9, respectively.
Delays in MIAL project, other new investments made
Despite 7,000 units being completed for rehabilitation, slum dwellers
have not yet shifted since clarity on certain policy decisions relating to
eligibility of slum dwellers is pending. HDIL is also awaiting clarity on
land allotment for the project’s Phase-III. In light of delays in the MIAL
project, HDIL has invested Rs13 bn from funds raised in September
2010 and other internal accruals into new projects. HDIL generated
positive operating cashflows of Rs627 mn in 3Q11. Net debt stood at
Rs37.9 bn and net debt:equity was 0.4x as of December 2010.
Management intends to bring down debt levels by 15-20% from
current levels by March 2012.
Reduce target price, cut EPS estimates
We now build in further delay on the project and assume 50%
probability of MIAL project’s success. MIAL project now contributes
Rs47/share and newly acquired projects contribute Rs64/share to our
forward NAV of Rs255/share. We revise our target price to Rs154
(from Rs189 earlier), valuing it at 30% discount to March 2012 GAV.
Our FY11/FY12 EPS estimates decline by 10%/17%, respectively.
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