Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Target: 155 Horizon: 9-12 mon
Investment Rationale
Company Background
Indiabulls Real Estate (IBREL) is one of India's largest listed
developers currently developing 57 million square feet of
residential and commercial real estate. IBREL has an
additional land bank in excess of 3,050 acres. More than
90% of IBREL's portfolio by value is in the three major
markets of Mumbai, NCR and Chennai. IBREL's has acquired
land in excess of Rs. 3,000 crores through government land
auctions alone over the past five years.
IBREL is engaged in carrying on the business of real estate
projects advisory, construction and development of real
estate projects and in power generation.
Its real estate business focuses on developing a product
portfolio consisting of homes. As of March 31, 2010, 6,396
residential apartments were under development. During the
fiscal year ended March 31, 2010 (fiscal 2010), it developed
4,758 residential apartments.
Investment Rationale
Diversified Land bank & Properties
Lower Parel - IBREL’s projects in Lower Parel, Mumbai
account for 50 -60% of total net asset value. Completion
of commercial properties (3.3m sqft) and subsequent
remaining leasing and time bound construction of
residential portion (3.3m sqft) to act in favour of IBREL
going ahead.
Gurgaon - IBREL has launched two projects in Gurgaon,
located near Dwarka.
Panvel - The project has seen very good response in the
last 18 months with prices increasing. The approval for
setting up of the Navi Mumbai airport close to the
project led to a sharp run up in prices and prices has
moved from Rs. 1800-2000 Sqft to Rs.3200-3500 sqft in
15 months. Company has huge land bank in Panvel
apart from residential project.
Delhi - The project was under dispute delayed due to
litigation. It has now got green signal from the court we
expect company to re-launch the project within the next
12 months.
Value Unlocking -Demerger of power business
IBREL has a 58.5% stake in Indiabulls Power is planning
to demerge its investment in the power subsidiary into
a separate entity. IBREL's board has already approved a
restructuring scheme, under which the power business
will be demerged to Indiabulls Infrastructure and Power
Ltd (IIPL) and each shareholder of IBREL will get 2.95
shares of IIPL. Approval of the scheme will be key trigger
for the stock as the power business is progressing in
implementations of various projects. The Company’s
five thermal power projects, with a combined capacity
of 6,615 megawatts (MW), are underway. During fiscal
2010, it entered into long-term power off-take
agreements for Amravati Phase I Power Project and the
Bhaiyathan Power Project
Revenue visibility with low debt on books
Many projects have been launched and announced by
the company, all are which under construction and will
be completed in next 2-3 years. The balance sheet of
the company also looks attractive with lower debt on
books compared to its peers. D/E ratio is 0.14 for FY10.
Financial performance of FY11 has shown revival in
business
9months FY11 shows a top line growth of 1169% from
68crs to 871 crs y-o-y and in bottom line it has turned
profit of 148crs from loss reported in 9mFY10. The
earnings for the period have been Rs. 3.51.
Industry scenario
Currently the industry scenario is a little blip on
expectations on drop of residential prices, lower
commercial rentals, corporate governance issues and
overall negative sentiments in the market. But these
lower prices are posing an opportunity for the aspirants
to buy new homes/land/space which may help to
increase the demand in the market gradually.
Valuation
Looking at the various on going projects, progress on
the power business front the company is expected to
show better performance going forward. We expect
company to post EPS of ~Rs. 5.25 for FY11 and ~RS. 7.12
for FY12. We have a target price of Rs. 155
Concerns
Any further investment in the land assets may increase the
debt levels in the books.
Approval delays hamper the execution of the projects.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Target: 155 Horizon: 9-12 mon
Investment Rationale
- Diversified Land bank & Properties - Construction work picking in most of the geographies
- Value Unlocking -Demerger of power business
- Revenue visibility and low debt levels
- Financial performance of FY11 has shown revival in business
- Industry scenario
Company Background
Indiabulls Real Estate (IBREL) is one of India's largest listed
developers currently developing 57 million square feet of
residential and commercial real estate. IBREL has an
additional land bank in excess of 3,050 acres. More than
90% of IBREL's portfolio by value is in the three major
markets of Mumbai, NCR and Chennai. IBREL's has acquired
land in excess of Rs. 3,000 crores through government land
auctions alone over the past five years.
IBREL is engaged in carrying on the business of real estate
projects advisory, construction and development of real
estate projects and in power generation.
Its real estate business focuses on developing a product
portfolio consisting of homes. As of March 31, 2010, 6,396
residential apartments were under development. During the
fiscal year ended March 31, 2010 (fiscal 2010), it developed
4,758 residential apartments.
Investment Rationale
Diversified Land bank & Properties
Lower Parel - IBREL’s projects in Lower Parel, Mumbai
account for 50 -60% of total net asset value. Completion
of commercial properties (3.3m sqft) and subsequent
remaining leasing and time bound construction of
residential portion (3.3m sqft) to act in favour of IBREL
going ahead.
Gurgaon - IBREL has launched two projects in Gurgaon,
located near Dwarka.
Panvel - The project has seen very good response in the
last 18 months with prices increasing. The approval for
setting up of the Navi Mumbai airport close to the
project led to a sharp run up in prices and prices has
moved from Rs. 1800-2000 Sqft to Rs.3200-3500 sqft in
15 months. Company has huge land bank in Panvel
apart from residential project.
Delhi - The project was under dispute delayed due to
litigation. It has now got green signal from the court we
expect company to re-launch the project within the next
12 months.
Value Unlocking -Demerger of power business
IBREL has a 58.5% stake in Indiabulls Power is planning
to demerge its investment in the power subsidiary into
a separate entity. IBREL's board has already approved a
restructuring scheme, under which the power business
will be demerged to Indiabulls Infrastructure and Power
Ltd (IIPL) and each shareholder of IBREL will get 2.95
shares of IIPL. Approval of the scheme will be key trigger
for the stock as the power business is progressing in
implementations of various projects. The Company’s
five thermal power projects, with a combined capacity
of 6,615 megawatts (MW), are underway. During fiscal
2010, it entered into long-term power off-take
agreements for Amravati Phase I Power Project and the
Bhaiyathan Power Project
Revenue visibility with low debt on books
Many projects have been launched and announced by
the company, all are which under construction and will
be completed in next 2-3 years. The balance sheet of
the company also looks attractive with lower debt on
books compared to its peers. D/E ratio is 0.14 for FY10.
Financial performance of FY11 has shown revival in
business
9months FY11 shows a top line growth of 1169% from
68crs to 871 crs y-o-y and in bottom line it has turned
profit of 148crs from loss reported in 9mFY10. The
earnings for the period have been Rs. 3.51.
Industry scenario
Currently the industry scenario is a little blip on
expectations on drop of residential prices, lower
commercial rentals, corporate governance issues and
overall negative sentiments in the market. But these
lower prices are posing an opportunity for the aspirants
to buy new homes/land/space which may help to
increase the demand in the market gradually.
Valuation
Looking at the various on going projects, progress on
the power business front the company is expected to
show better performance going forward. We expect
company to post EPS of ~Rs. 5.25 for FY11 and ~RS. 7.12
for FY12. We have a target price of Rs. 155
Concerns
Any further investment in the land assets may increase the
debt levels in the books.
Approval delays hamper the execution of the projects.
No comments:
Post a Comment