Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Indiabulls Real Estate
Overweight
INRL.BO, IBREL IN
4Q11 hits a speed-breaker. Value case still intact
• 4Q below expectations – IBREL reported 4Q FY11 PAT of Rs 236MM
sharply below estimates and 3Q (Rs 784MM). This was primarily on
account of: 1) Demerger of Indiabulls Wholesales (PAT impact Rs
234MM), 2) Higher interest expense of Rs 465MM on P&L, 3) Higher
power business operating losses ( Rs 100MM), and 3) Lower margins
and a higher tax rate (50%). Revenues during the Q went up by an
impressive 40% Q/Q; however margins on this were lower at 21% (vs.
32% last Q adj. for power losses). We are awaiting a clarification from
the company on this. Because of the below estimate 4Q results, full year
FY11 PAT at Rs 1.6B was lower than our estimate of Rs 2.3B.
• Operational highlights – New bookings for 4Q stood at Rs5.6B/1.2msf
vs. 3Q at Rs8.7/2.3msf implying a slowdown at the margin. This may be
due to an increase in prices effected in Panvel / Gurgaon. Overall FY11
order bookings however remain healthy at 5.9msf/Rs48.4B and higher
than FY10 levels (3msf / 14B) thanks to lower parel projects. Leasing
has picked up over the last 2-3Qs with 0.9msf being leased in FY11.
This takes the overall leasing to 1.6msf of the total 3.3msf of office
space in lower parel projects (IPIT). Area under construction stands at
17msf (vs. 8.9msf in FY10) almost flat Q/Q.
• Balance sheet highlights – Net debt for RE business at Rs 18.3B has
remained stable Q/Q and as per the company it is unlikely to see a big
change in the next one year. Overall debt increase of Rs 26B during the
year was primarily on account of new land acquisitions of Rs 23.4B. On
a Q/Q basis Inventory/ loan advances and current liabilities have seen a
sharp Q/Q decline (Net effect Rs 5B down on B/S). This could be
attributable to effect of wholesale business demerger.
• During April promoters of IBREL have bought an additional 2.6% stake
in the company. Current promoter holding stands at 25.57%.
• We reduce our Mar-12 SOTP based PT to Rs 205 (vs. 230 earlier) to
factor in: a) decline in the value of the power business, and 2) MTM loss
(30%) on Worli land in the absence of any clarity on final FSI. In our
SOTP, we value lower parel assets at avg Rs 10K psf; remaining land at
cost; Worli at a 30% discount to acq. cost & power business at a 20%
holding co discount.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Indiabulls Real Estate
Overweight
INRL.BO, IBREL IN
4Q11 hits a speed-breaker. Value case still intact
• 4Q below expectations – IBREL reported 4Q FY11 PAT of Rs 236MM
sharply below estimates and 3Q (Rs 784MM). This was primarily on
account of: 1) Demerger of Indiabulls Wholesales (PAT impact Rs
234MM), 2) Higher interest expense of Rs 465MM on P&L, 3) Higher
power business operating losses ( Rs 100MM), and 3) Lower margins
and a higher tax rate (50%). Revenues during the Q went up by an
impressive 40% Q/Q; however margins on this were lower at 21% (vs.
32% last Q adj. for power losses). We are awaiting a clarification from
the company on this. Because of the below estimate 4Q results, full year
FY11 PAT at Rs 1.6B was lower than our estimate of Rs 2.3B.
• Operational highlights – New bookings for 4Q stood at Rs5.6B/1.2msf
vs. 3Q at Rs8.7/2.3msf implying a slowdown at the margin. This may be
due to an increase in prices effected in Panvel / Gurgaon. Overall FY11
order bookings however remain healthy at 5.9msf/Rs48.4B and higher
than FY10 levels (3msf / 14B) thanks to lower parel projects. Leasing
has picked up over the last 2-3Qs with 0.9msf being leased in FY11.
This takes the overall leasing to 1.6msf of the total 3.3msf of office
space in lower parel projects (IPIT). Area under construction stands at
17msf (vs. 8.9msf in FY10) almost flat Q/Q.
• Balance sheet highlights – Net debt for RE business at Rs 18.3B has
remained stable Q/Q and as per the company it is unlikely to see a big
change in the next one year. Overall debt increase of Rs 26B during the
year was primarily on account of new land acquisitions of Rs 23.4B. On
a Q/Q basis Inventory/ loan advances and current liabilities have seen a
sharp Q/Q decline (Net effect Rs 5B down on B/S). This could be
attributable to effect of wholesale business demerger.
• During April promoters of IBREL have bought an additional 2.6% stake
in the company. Current promoter holding stands at 25.57%.
• We reduce our Mar-12 SOTP based PT to Rs 205 (vs. 230 earlier) to
factor in: a) decline in the value of the power business, and 2) MTM loss
(30%) on Worli land in the absence of any clarity on final FSI. In our
SOTP, we value lower parel assets at avg Rs 10K psf; remaining land at
cost; Worli at a 30% discount to acq. cost & power business at a 20%
holding co discount.
No comments:
Post a Comment