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Puravankara reported 3QFY12 results that were ahead of our estimates
on the top line, below on margins and in line in terms of earnings.
However, operationally, the quarter was weak, with sales volumes -21%
and sales value -20% q-q due to the lack of new launches, while sales in
older projects remain slow. The situation in 4QFY12 is expected to be
better though as the company has launched Provident Harmony in
Bangalore and plans to launch Purva Seasons soon in Bangalore too.
We remain positive on the company given our expectation of an
improvement in cash flows over the next 18 months and cheap
valuations at a 53% discount to NAV.
Conference call highlights:
Puravankara has launched Provident Harmony, a 548-unit mid income
housing project in North Bangalore. Of the 240 units launched in
January, 125 have already been sold at an average price of
INR3,200/sqft.
Purva Seasons, a higher income project in CV Raman Nagar in
Bangalore, is expected to be launched in February 2012.
The company has INR10bn of unbilled revenues from sold projects
along with INR12.5bn of unsold inventory. It plans to collect this
combined INR22.5bn of cash in the next 18 months, which to us
appears an optimistic target. We believe that it will take it another 24
months to collect this cash by completing the under-construction
projects and liquidating the inventory. It needs to spend INR10bn of
construction cost on the same, making its operating cash positive over
the next 18-24 months.
It has a debt repayment of INR3.1bn coming up in the next 12 months
along with INR1.6bn of interest cost. It has refinanced INR850mn and
plans to refinance another INR1.5bn to be comfortable on the debt
repayment front.
Puravankara’s average cost of debt is 15.3%, which is stable q-q.
Key results highlights:
The company sold 0.45mn sqft worth INR1.6bn during the quarter,
with most of the volumes driven by the higher income projects rather
than the mid-income projects. This is the lowest volume sold in the last
five quarters and the lowest sales value in the last six quarters,
suggesting an impact from increased launches from competitors.
Weighted average realizations were up 3% q-q.
Revenues were 6% ahead of our estimate up 12% y-y and 2% q-q.
Gross margins, though +440bps y-y, were 210bps below our estimate.
Interest cost was higher than our estimate and so was the tax rate,
though a prior period income helped PAT to come in line with our
expectation.
On the balance sheet front, net debt again went up INR111mn
sequentially, with net debt/equity remaining stable at 0.69x.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Puravankara reported 3QFY12 results that were ahead of our estimates
on the top line, below on margins and in line in terms of earnings.
However, operationally, the quarter was weak, with sales volumes -21%
and sales value -20% q-q due to the lack of new launches, while sales in
older projects remain slow. The situation in 4QFY12 is expected to be
better though as the company has launched Provident Harmony in
Bangalore and plans to launch Purva Seasons soon in Bangalore too.
We remain positive on the company given our expectation of an
improvement in cash flows over the next 18 months and cheap
valuations at a 53% discount to NAV.
Conference call highlights:
Puravankara has launched Provident Harmony, a 548-unit mid income
housing project in North Bangalore. Of the 240 units launched in
January, 125 have already been sold at an average price of
INR3,200/sqft.
Purva Seasons, a higher income project in CV Raman Nagar in
Bangalore, is expected to be launched in February 2012.
The company has INR10bn of unbilled revenues from sold projects
along with INR12.5bn of unsold inventory. It plans to collect this
combined INR22.5bn of cash in the next 18 months, which to us
appears an optimistic target. We believe that it will take it another 24
months to collect this cash by completing the under-construction
projects and liquidating the inventory. It needs to spend INR10bn of
construction cost on the same, making its operating cash positive over
the next 18-24 months.
It has a debt repayment of INR3.1bn coming up in the next 12 months
along with INR1.6bn of interest cost. It has refinanced INR850mn and
plans to refinance another INR1.5bn to be comfortable on the debt
repayment front.
Puravankara’s average cost of debt is 15.3%, which is stable q-q.
Key results highlights:
The company sold 0.45mn sqft worth INR1.6bn during the quarter,
with most of the volumes driven by the higher income projects rather
than the mid-income projects. This is the lowest volume sold in the last
five quarters and the lowest sales value in the last six quarters,
suggesting an impact from increased launches from competitors.
Weighted average realizations were up 3% q-q.
Revenues were 6% ahead of our estimate up 12% y-y and 2% q-q.
Gross margins, though +440bps y-y, were 210bps below our estimate.
Interest cost was higher than our estimate and so was the tax rate,
though a prior period income helped PAT to come in line with our
expectation.
On the balance sheet front, net debt again went up INR111mn
sequentially, with net debt/equity remaining stable at 0.69x.
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