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HDIL reported 1Q net earnings of Rs2.1B, 10% ahead of our expectations,
while revenues and operating earnings were largely in line with estimates; the
earnings beat was driven primarily by higher other income. On the operating
front, progress on TDR volumes and residential sales was satisfactory.
Importantly, near-term revenue/earnings visibility for the company remains
fairly high with FSI sales of Rs7B pending recognition and a number of
projects nearing completion (>Rs15B of sales). Even though valuations at
5.7x FY13E P/E and 0.5x FY13E P/BV seem attractive; until visibility on the
airport project improves, rerating catalysts will be limited, in our view.
PAT beats estimate on FSI sales, TDR holding up: Key financial
highlights for 1Q: 1)Revenue of Rs5B (+11% Y/Y, -4% Q/Q) included FSI
sales of Rs3.3B from Andheri project (Popular Car Bazaar); 2) TDR sales
during the Q were 0.65msf at avg. price of Rs2.5K psf (vs. 0.9msf at
Rs2.5K psf in 4Q). Q/Q slowdown in TDR volumes is attributable to slow
project approvals in Mumbai given ongoing FSI policy review; 3] net debt
as of Jun-Q stands at Rs39B, down by Rs530MM vs. Mar-Q. Further, the
company repaid additional debt of Rs1.6B in July.
FY12 more about FSI sales: Key operating highlights: 1) New bookings
were Rs1.9B (vs. Rs1.5B in 4Q) with only one new project launch of 0.8msf
in Mulund during the Q; 2) for FY12, the company is guiding to large lowto-
mid-income launches in Sahad (5msf) and Panvel; 3) FSI sales in Vasai
Virar are likely to be the key contributor to bookings going into FY12 (at
avg price of Rs800-1000psf). The company is looking at an overall target of
15-18msf of sales over the next 15-18 months; 4) O/S order book of
Rs46.3B and FSI sales of Rs7-10B provide healthy visibility over FY12/13.
Airport project still awaits clarity on eligibility norms: Relaxation of
eligibility norms remains the key impediment to the rehab progress for the
airport, and as of now there is limited clarity from the government despite
news flow in early June/July pointing to a possible solution. Until the project
is resolved we see limited catalysts for the stock price despite its relatively
cheap valuations and healthy gearing levels.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
HDIL reported 1Q net earnings of Rs2.1B, 10% ahead of our expectations,
while revenues and operating earnings were largely in line with estimates; the
earnings beat was driven primarily by higher other income. On the operating
front, progress on TDR volumes and residential sales was satisfactory.
Importantly, near-term revenue/earnings visibility for the company remains
fairly high with FSI sales of Rs7B pending recognition and a number of
projects nearing completion (>Rs15B of sales). Even though valuations at
5.7x FY13E P/E and 0.5x FY13E P/BV seem attractive; until visibility on the
airport project improves, rerating catalysts will be limited, in our view.
PAT beats estimate on FSI sales, TDR holding up: Key financial
highlights for 1Q: 1)Revenue of Rs5B (+11% Y/Y, -4% Q/Q) included FSI
sales of Rs3.3B from Andheri project (Popular Car Bazaar); 2) TDR sales
during the Q were 0.65msf at avg. price of Rs2.5K psf (vs. 0.9msf at
Rs2.5K psf in 4Q). Q/Q slowdown in TDR volumes is attributable to slow
project approvals in Mumbai given ongoing FSI policy review; 3] net debt
as of Jun-Q stands at Rs39B, down by Rs530MM vs. Mar-Q. Further, the
company repaid additional debt of Rs1.6B in July.
FY12 more about FSI sales: Key operating highlights: 1) New bookings
were Rs1.9B (vs. Rs1.5B in 4Q) with only one new project launch of 0.8msf
in Mulund during the Q; 2) for FY12, the company is guiding to large lowto-
mid-income launches in Sahad (5msf) and Panvel; 3) FSI sales in Vasai
Virar are likely to be the key contributor to bookings going into FY12 (at
avg price of Rs800-1000psf). The company is looking at an overall target of
15-18msf of sales over the next 15-18 months; 4) O/S order book of
Rs46.3B and FSI sales of Rs7-10B provide healthy visibility over FY12/13.
Airport project still awaits clarity on eligibility norms: Relaxation of
eligibility norms remains the key impediment to the rehab progress for the
airport, and as of now there is limited clarity from the government despite
news flow in early June/July pointing to a possible solution. Until the project
is resolved we see limited catalysts for the stock price despite its relatively
cheap valuations and healthy gearing levels.
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