Operations strong; pick-up in deliveries/rentals key
PEPL posted steady sales in Q3FY14 (1.5msf/Rs 9.4bn) aided by the big
launch (Lakeside Habitat) in Bengaluru. This along with collections/leases of
Rs 5.9bn/~0.7msf mean that the company remains comfortably placed
vis-à-vis its full-year guidance. We however expect launches to moderate as
the focus shifts to inventory liquidation and execution. Thus, a pick-up in
deliveries and an improvement in the rental portfolio should be the key
performance indicators for PEPL from here on. Maintain BUY.
New sales remain buoyant: PEPL reported pre-sales of 1.55msf/Rs 9.4bn helped by
the launch of Lakeside Habitatin Bengaluru. As of Dec’13, PEPL has achieved 82% of
its annual sales target. Management suggests a moderation in new launches for a few
quarters, which should mean a corresponding moderation in volumes.
Collections remain steady: Customer advances came in at Rs 5.9bn, thus meeting
79% of its annual collection target of Rs 23bn. Management indicated that the QoQ
decline in customer advances was normal, and the number should pick up again in
Q4FY14. We also expect customer advances to improve through FY15 as new sales
start contributing.
P/L numbers to remain flat: While construction activity across projectsremains on
track, the P/L numbers may not improve significantly in the absence of big projects
hitting the revenue-recognition threshold. We estimate Q3FY14 revenue/PAT at
Rs 4.7bn/Rs 0.8bn (-2%/+1% QoQ), and as per management, these numbers should
improve in Q4 led by the first-time revenue recognition fromsome projects.
Maintain BUY: PEPL has improved itsscale of business, which is reflected in its
sales/launches. We however expect launches to moderate for the next few quarters
and hence see limited near-term volume growth potential. Thus, a pick-up in
deliveries/an improvement in the rental portfolio remain key growth triggers. BUY.
��
PEPL posted steady sales in Q3FY14 (1.5msf/Rs 9.4bn) aided by the big
launch (Lakeside Habitat) in Bengaluru. This along with collections/leases of
Rs 5.9bn/~0.7msf mean that the company remains comfortably placed
vis-à-vis its full-year guidance. We however expect launches to moderate as
the focus shifts to inventory liquidation and execution. Thus, a pick-up in
deliveries and an improvement in the rental portfolio should be the key
performance indicators for PEPL from here on. Maintain BUY.
New sales remain buoyant: PEPL reported pre-sales of 1.55msf/Rs 9.4bn helped by
the launch of Lakeside Habitatin Bengaluru. As of Dec’13, PEPL has achieved 82% of
its annual sales target. Management suggests a moderation in new launches for a few
quarters, which should mean a corresponding moderation in volumes.
Collections remain steady: Customer advances came in at Rs 5.9bn, thus meeting
79% of its annual collection target of Rs 23bn. Management indicated that the QoQ
decline in customer advances was normal, and the number should pick up again in
Q4FY14. We also expect customer advances to improve through FY15 as new sales
start contributing.
P/L numbers to remain flat: While construction activity across projectsremains on
track, the P/L numbers may not improve significantly in the absence of big projects
hitting the revenue-recognition threshold. We estimate Q3FY14 revenue/PAT at
Rs 4.7bn/Rs 0.8bn (-2%/+1% QoQ), and as per management, these numbers should
improve in Q4 led by the first-time revenue recognition fromsome projects.
Maintain BUY: PEPL has improved itsscale of business, which is reflected in its
sales/launches. We however expect launches to moderate for the next few quarters
and hence see limited near-term volume growth potential. Thus, a pick-up in
deliveries/an improvement in the rental portfolio remain key growth triggers. BUY.
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