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Unitech – Slow Execution remains a concern
Launches: Company is on track to meet its ~10 msf launch guidance between
Jan-Sept 2011. Till Jun-11, company had launched ~7.5msf and Q2 has seen
new projects come through in Gurgaon/Chennai. Key launches: (a) Two phases
of Anthea (Wild Flower Country) launched in Sector 70 Gurgaon- average pricing
of ~Rs 5500/sf and (b) Crest View (Wild Flower Country), Gurgaon launched
recently- average pricing is ~Rs 5000/sf. Beyond this ~10msf, the company has
in place a launch pipeline to hit the markets during the festive season in Q3.
Sales: New launches have seen healthy response: (a) Anthea- Phase-1 of 300-
350 units has been sold out and in Phase-II, 100-150 units of 300 units are sold;
(b) Crest View has seen ~40% of the 450 units sold (Source: Prop Equity). Good
traction is visible in Gurgaon markets (partly due lack of launches in that market).
Leasing: Company is looking to maintain its ~0.5-0.75msf leasing run rate.
Rentals have gone by 15-20% in Gurgaon, while Kolkata and Noida remain
steady. So far, global macro woes haven't impacted the ground markets.
Deleveraging: Of the ~Rs 10bn debt due for repayment in FY12, ~Rs 2.0b was
repaid in Q1. Unitech has repaid the debt was due in 1H through internal cash
accruals due to lack of refinancing option. Company average cost of debt has
sharply risen to ~13.75-14% (up 175-200bps YoY). Company didn’t have a formal
asset sale program till date. In the recent board meeting, it was decided to
identify list of assets which could be disposed of in order to generate cash flows.
Financial Performance: We expect another weak quarter financially as
execution pace is lagging and input costs are increasing led by inflationary
pressures. We expect revenues to drop and margins to weaken YoY. Ramp-up in
execution is not happening due to funding pressures being faced by the
company. Downward trajectory in PAT is likely to continue.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Unitech – Slow Execution remains a concern
Launches: Company is on track to meet its ~10 msf launch guidance between
Jan-Sept 2011. Till Jun-11, company had launched ~7.5msf and Q2 has seen
new projects come through in Gurgaon/Chennai. Key launches: (a) Two phases
of Anthea (Wild Flower Country) launched in Sector 70 Gurgaon- average pricing
of ~Rs 5500/sf and (b) Crest View (Wild Flower Country), Gurgaon launched
recently- average pricing is ~Rs 5000/sf. Beyond this ~10msf, the company has
in place a launch pipeline to hit the markets during the festive season in Q3.
Sales: New launches have seen healthy response: (a) Anthea- Phase-1 of 300-
350 units has been sold out and in Phase-II, 100-150 units of 300 units are sold;
(b) Crest View has seen ~40% of the 450 units sold (Source: Prop Equity). Good
traction is visible in Gurgaon markets (partly due lack of launches in that market).
Leasing: Company is looking to maintain its ~0.5-0.75msf leasing run rate.
Rentals have gone by 15-20% in Gurgaon, while Kolkata and Noida remain
steady. So far, global macro woes haven't impacted the ground markets.
Deleveraging: Of the ~Rs 10bn debt due for repayment in FY12, ~Rs 2.0b was
repaid in Q1. Unitech has repaid the debt was due in 1H through internal cash
accruals due to lack of refinancing option. Company average cost of debt has
sharply risen to ~13.75-14% (up 175-200bps YoY). Company didn’t have a formal
asset sale program till date. In the recent board meeting, it was decided to
identify list of assets which could be disposed of in order to generate cash flows.
Financial Performance: We expect another weak quarter financially as
execution pace is lagging and input costs are increasing led by inflationary
pressures. We expect revenues to drop and margins to weaken YoY. Ramp-up in
execution is not happening due to funding pressures being faced by the
company. Downward trajectory in PAT is likely to continue.
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