Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Feet on the Street: Increased launch activity from Sobha, Prestige
We see increased pace of launches by Sobha, Prestige, DLF
We introduce our residential launch tracker for companies under our
coverage. As per available data, cumulatively companies under our
coverage launched 22.5 mn sqft of projects in 1QFY12 vs 13.0 mn sqft in
4QFY11. We saw the largest increase in Sobha Developers, Prestige Estates
and DLF while Godrej Properties and Oberoi realty had minimal launches.
Cumulatively, we saw the largest increase in activity in Bangalore.
Recent data points indicate stable demand
PropEquity data indicates total sales of 127 mn sq. ft in 4QFY11 compared
with 136 mn sq. ft with cumulative value of Rs476 bn vis-a-vis Rs470 bn in
3QFY11. Preliminary data from 1QFY12 indicates stable demand in South
India markets (Bangalore, Chennai) while slower demand from NCR market
(National Capital Region comprising Delhi, Noida, Gurgaon etc). However,
we highlight that absorption in NCR market remains very high compared to
South Indian markets. Recent RBI credit disbursement data indicates a
growth of 19% towards mortgages since March 2010.
Price movement will determine affordability, in our view
We believe that affordability will increasingly depend on price movements
since the impact of a likely increase in interest rates will be offset by an
increase in salaries. Affordability will likely come under pressure,
wherever prices increase, which we believe would result in a decline in
volumes. We find affordability reasonable in Bangalore while Mumbai
market appears expensive. Affordability has been helpful in predicting
demand movement as in Mumbai when demand increased sharply as
affordability improved by 40% on account of lower interest rates and
pricing.
Our preferred residential companies are Sobha (On CL), and HDIL
We maintain our Buy rating on Sobha Developers (12-m FY12E RNAV
based TP of Rs340, On CL) as we believe that expansion into new cities will
drive volumes and revenue growth for the company over FY11-FY13E. We
also maintain our Buy ratings for Oberoi Realty (12-m FY12E RNAV based
TP of Rs322) and HDIL (12-m FY12E RNAV based TP of Rs216) on the back
of the rational pricing strategy followed by these Mumbai-based
developers. Key risks to our view include rapid price hikes exerting
pressure on volumes, interest rate risk and volatility in input costs.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Feet on the Street: Increased launch activity from Sobha, Prestige
We see increased pace of launches by Sobha, Prestige, DLF
We introduce our residential launch tracker for companies under our
coverage. As per available data, cumulatively companies under our
coverage launched 22.5 mn sqft of projects in 1QFY12 vs 13.0 mn sqft in
4QFY11. We saw the largest increase in Sobha Developers, Prestige Estates
and DLF while Godrej Properties and Oberoi realty had minimal launches.
Cumulatively, we saw the largest increase in activity in Bangalore.
Recent data points indicate stable demand
PropEquity data indicates total sales of 127 mn sq. ft in 4QFY11 compared
with 136 mn sq. ft with cumulative value of Rs476 bn vis-a-vis Rs470 bn in
3QFY11. Preliminary data from 1QFY12 indicates stable demand in South
India markets (Bangalore, Chennai) while slower demand from NCR market
(National Capital Region comprising Delhi, Noida, Gurgaon etc). However,
we highlight that absorption in NCR market remains very high compared to
South Indian markets. Recent RBI credit disbursement data indicates a
growth of 19% towards mortgages since March 2010.
Price movement will determine affordability, in our view
We believe that affordability will increasingly depend on price movements
since the impact of a likely increase in interest rates will be offset by an
increase in salaries. Affordability will likely come under pressure,
wherever prices increase, which we believe would result in a decline in
volumes. We find affordability reasonable in Bangalore while Mumbai
market appears expensive. Affordability has been helpful in predicting
demand movement as in Mumbai when demand increased sharply as
affordability improved by 40% on account of lower interest rates and
pricing.
Our preferred residential companies are Sobha (On CL), and HDIL
We maintain our Buy rating on Sobha Developers (12-m FY12E RNAV
based TP of Rs340, On CL) as we believe that expansion into new cities will
drive volumes and revenue growth for the company over FY11-FY13E. We
also maintain our Buy ratings for Oberoi Realty (12-m FY12E RNAV based
TP of Rs322) and HDIL (12-m FY12E RNAV based TP of Rs216) on the back
of the rational pricing strategy followed by these Mumbai-based
developers. Key risks to our view include rapid price hikes exerting
pressure on volumes, interest rate risk and volatility in input costs.
No comments:
Post a Comment