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UBS Investment Research
Indiabulls Real Estate
S teady 2Q
Event: 2Q better than UBSe & consensus; operationally steady
2Q Revenues grew 11% YoY to Rs 3.3bn driven by higher value recognition of
Panvel. EBITDA grew strongly to Rs 1bn with margins at 31% (vs. 12% in Q1).
Q2 Net Income of Rs394mn declined 23% YoY but was impacted by one-time
interest expense of Rs 350mn. Pre-sales healthy at 1.2msf (vs. 0.78msf Q1);
leasing steady at 0.18msf (vs. 0.17msf in Q1); 1.96msf of 3.3msf leased. IBREL
acquired 34acres of Navi Mumbai land (Rs 1bn). Net debt flat at Rs 11.1bn.
Impact: Lowering PT & earnings to factor in lower pre-sales visibility
We lower our FY12E/13E est. by 30%/19% & PT by 31% to Rs 125 factoring in
lower pre-sales visibility, likely margin pressures & higher interest costs. That said,
we maintain a 20% earnings CAGR through FY14E on better execution
momentum & execution picks up on mid-income projects.
Action: Maintain Buy; Valuations outweigh risks
Though we see near-term Mumbai market weakness as an overhang, we believe
stock is trading below leased IPIT portfolio value (Rs85/sh). Further, with launch
momentum picking up (Navi Mumbai, Worli & Gurgaon) and restructuring clarity
on power subsidiary likely in Q3/Q4, we see progress on both as sentiment
positive.
Valuation: Trading at distressed levels
We lower our PT by 31% to Rs 125 on a higher 45% discount (40% earlier) to
revised NAV of Rs 225 (vs. Rs 315 earlier). With stock trading at 1) 70% disc to
NAV 2) 0.3x P/B FY12E, we believe valuations outweigh risks at current levels.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Indiabulls Real Estate
S teady 2Q
Event: 2Q better than UBSe & consensus; operationally steady
2Q Revenues grew 11% YoY to Rs 3.3bn driven by higher value recognition of
Panvel. EBITDA grew strongly to Rs 1bn with margins at 31% (vs. 12% in Q1).
Q2 Net Income of Rs394mn declined 23% YoY but was impacted by one-time
interest expense of Rs 350mn. Pre-sales healthy at 1.2msf (vs. 0.78msf Q1);
leasing steady at 0.18msf (vs. 0.17msf in Q1); 1.96msf of 3.3msf leased. IBREL
acquired 34acres of Navi Mumbai land (Rs 1bn). Net debt flat at Rs 11.1bn.
Impact: Lowering PT & earnings to factor in lower pre-sales visibility
We lower our FY12E/13E est. by 30%/19% & PT by 31% to Rs 125 factoring in
lower pre-sales visibility, likely margin pressures & higher interest costs. That said,
we maintain a 20% earnings CAGR through FY14E on better execution
momentum & execution picks up on mid-income projects.
Action: Maintain Buy; Valuations outweigh risks
Though we see near-term Mumbai market weakness as an overhang, we believe
stock is trading below leased IPIT portfolio value (Rs85/sh). Further, with launch
momentum picking up (Navi Mumbai, Worli & Gurgaon) and restructuring clarity
on power subsidiary likely in Q3/Q4, we see progress on both as sentiment
positive.
Valuation: Trading at distressed levels
We lower our PT by 31% to Rs 125 on a higher 45% discount (40% earlier) to
revised NAV of Rs 225 (vs. Rs 315 earlier). With stock trading at 1) 70% disc to
NAV 2) 0.3x P/B FY12E, we believe valuations outweigh risks at current levels.
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