Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Trading at close to bottom valuations
Pessimistic scenario being built
in; unlikely to transpire — BUY
for 51% upside
Action: Negative sentiment overdone, stock is cheap
HDIL has corrected 18.5% YTD vs. an 8.9% fall in the benchmark BSE
Sensex. The stock is now trading at a 34% discount to our revised NAV,
0.6x FY12F P/B and 9.5x FY12F P/E, which we think is building in an
unlikely pessimistic scenario. The stock is discounting the entire airport
slum rehabilitation project which we consider unfair; we believe the project
may be delayed another 12-18 months but we do not share the Street’s
view that it may not move forward at all. The recent shifting of 300 families
to HDIL’s rehabilitation site in Kurla (W) bears out our confidence.
Catalysts: Progress on airport project, Mumbai property price
correction and de-leveraging
Progress in the shifting of families around the airport should be a major
catalyst. Further, a correction in property prices in the city could lead to a
pick-up in volumes and sentiment for property stocks, while de-leveraging
of the balance sheet through operational cash flows will likely bring back
investor confidence. A pause in rate hikes could also improve sentiment.
Valuation: Cutting NAV and TP estimate by 36% to account for
delays, demand slowdown and price corrections
We cut our NAV estimates by 36% to INR235 per share and do not
attribute any discount to NAV to arrive at our target price. The NAV
reduction is on account of building in another 12-month delay in the airport
slum rehabilitation project and no value for the 65 acres of land around the
airport post slum clearance, a 15% price correction and lower sales
volumes for the next two years and cost increases of 10%
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Trading at close to bottom valuations
Pessimistic scenario being built
in; unlikely to transpire — BUY
for 51% upside
Action: Negative sentiment overdone, stock is cheap
HDIL has corrected 18.5% YTD vs. an 8.9% fall in the benchmark BSE
Sensex. The stock is now trading at a 34% discount to our revised NAV,
0.6x FY12F P/B and 9.5x FY12F P/E, which we think is building in an
unlikely pessimistic scenario. The stock is discounting the entire airport
slum rehabilitation project which we consider unfair; we believe the project
may be delayed another 12-18 months but we do not share the Street’s
view that it may not move forward at all. The recent shifting of 300 families
to HDIL’s rehabilitation site in Kurla (W) bears out our confidence.
Catalysts: Progress on airport project, Mumbai property price
correction and de-leveraging
Progress in the shifting of families around the airport should be a major
catalyst. Further, a correction in property prices in the city could lead to a
pick-up in volumes and sentiment for property stocks, while de-leveraging
of the balance sheet through operational cash flows will likely bring back
investor confidence. A pause in rate hikes could also improve sentiment.
Valuation: Cutting NAV and TP estimate by 36% to account for
delays, demand slowdown and price corrections
We cut our NAV estimates by 36% to INR235 per share and do not
attribute any discount to NAV to arrive at our target price. The NAV
reduction is on account of building in another 12-month delay in the airport
slum rehabilitation project and no value for the 65 acres of land around the
airport post slum clearance, a 15% price correction and lower sales
volumes for the next two years and cost increases of 10%
No comments:
Post a Comment