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Real Estate
ƒ “Housing for all” –one of the top agendas of government…
Housing for all by 2022 is one of the topmost agendas of the
government. We can gauge its effect from the significant reforms
taken in Q3FY15 by the government. The Cabinet has approved FDI
norms in the housing construction sector with a reduction in
minimum built-up area requirement from 50,000 square metre (sq
m) to 20,000 sq m and reduction in minimum capital requirement
from $10 million to $5 million. Also, the Department of Industrial
Policy and Promotion (DIPP) has eased exit norms for foreign
investors. The investor can exit on completion of the project or after
three years from the date of final investment subject to the
development of trunk infrastructure. In addition to this, there was the
recent ordinance on amendments to the Right to Fair Compensation
& Transparency in Land Acquisition, Rehabilitation and Resettlement
Act, 2013. It relaxed norms for land purchases for affordable
housing, defence, rural infrastructure, industrial corridors and PPP
projects where consent for affected families & social impact
assessment clauses have been relaxed. Now these amendments
would lead to fast-track development as cumbersome procedures
will be shortened and legal hassles will also come down in
affordable housing. Consequently, these measures would lead to
better liquidity and faster execution.
ƒ Volume to see traction, going ahead…
With significant positive reforms for the real estate sector and new
launches in the pipeline, we anticipate sales volume will grow from
hereon for our real estate coverage universe. We expect our
coverage sales volume to grow 23.6% YoY largely due to 192.8%
YoY growth to 83,000 sq ft in sales volume for Oberoi Realty mainly
on account of significant sales volume from Oberoi Exquisite. Also,
we expect 45.2% YoY growth in sales volume to 4.5 mn sq ft for
Mahindra Lifespace led by new launches like affordable housing in
Chennai and Boisar, weekend homes in Alibaug, etc. Furthermore,
we expect Sobha to post 8.1% YoY growth in sales volume to 0.8
mn sq ft.
ƒ Coverage universe revenue to grow at 29.7%; PAT to grow at
18.4%...
We expect our real estate coverage universe revenues to grow
29.7% largely on account of a significant sales performance. The
bottomline of our real estate coverage universe is expected to grow
18.4% YoY backed by 36.3%, 5.9% and 1.0% YoY growth in
bottomline for Oberoi Realty, Mahindra Lifespace and Sobha
Developers, respectively.
Company specific view (Real Estate coverage universe)
Company Remarks
Oberoi Realty We expect Oberoi to post sales volume of ~83,000 sq ft largely on account of
significant sales volume from Oberoi Exquisite. Furthermore, we expect launch of
Mulund and Borivali project to be pushed forward to Q4FY15E. On the financial
front, Oberoi's revenues are expected to grow 45.6% YoY to | 248.3 crore with
bottomline growing 36.3% YoY to | 92.8 crore due to better operating margins
Sobha Developers Sobha managed to launch projects aggregating 1.6 mn sq ft in Q2FY15 in
Bengaluru, Thrissur and Chennai. Hence, we anticipate sales volumes will grow
8.0% YoY to 0.8 mn sq ft. On the financial performance front, we expect topline to
grow 17.4% YoY to | 637.6 crore. We expect the bottomline to remain flat at |
58.7 crore mainly due to higher operating expenses
Mahindra Lifespace With the new launches in affordable housing in Chennai & Boisar and other
projects like "Weekend Homes" in Alibaug, etc. we expect sales volume to grow
45.2% YoY to 4.5 lakh sq ft. Consequently, we expect top line to grow 98.8% YoY
to | 114.4 crore. However, we anticipate PAT will show muted growth of 5.9%
YoY to | 17.6 crore mainly due to higher tax expense as compared to last year
Source: Company, ICICIdirect.com Research
LINK
http://content.icicidirect.com/mailimages/IDirect_ConsolidatedPreview_Q3FY15.pdf
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
Real Estate
ƒ “Housing for all” –one of the top agendas of government…
Housing for all by 2022 is one of the topmost agendas of the
government. We can gauge its effect from the significant reforms
taken in Q3FY15 by the government. The Cabinet has approved FDI
norms in the housing construction sector with a reduction in
minimum built-up area requirement from 50,000 square metre (sq
m) to 20,000 sq m and reduction in minimum capital requirement
from $10 million to $5 million. Also, the Department of Industrial
Policy and Promotion (DIPP) has eased exit norms for foreign
investors. The investor can exit on completion of the project or after
three years from the date of final investment subject to the
development of trunk infrastructure. In addition to this, there was the
recent ordinance on amendments to the Right to Fair Compensation
& Transparency in Land Acquisition, Rehabilitation and Resettlement
Act, 2013. It relaxed norms for land purchases for affordable
housing, defence, rural infrastructure, industrial corridors and PPP
projects where consent for affected families & social impact
assessment clauses have been relaxed. Now these amendments
would lead to fast-track development as cumbersome procedures
will be shortened and legal hassles will also come down in
affordable housing. Consequently, these measures would lead to
better liquidity and faster execution.
ƒ Volume to see traction, going ahead…
With significant positive reforms for the real estate sector and new
launches in the pipeline, we anticipate sales volume will grow from
hereon for our real estate coverage universe. We expect our
coverage sales volume to grow 23.6% YoY largely due to 192.8%
YoY growth to 83,000 sq ft in sales volume for Oberoi Realty mainly
on account of significant sales volume from Oberoi Exquisite. Also,
we expect 45.2% YoY growth in sales volume to 4.5 mn sq ft for
Mahindra Lifespace led by new launches like affordable housing in
Chennai and Boisar, weekend homes in Alibaug, etc. Furthermore,
we expect Sobha to post 8.1% YoY growth in sales volume to 0.8
mn sq ft.
ƒ Coverage universe revenue to grow at 29.7%; PAT to grow at
18.4%...
We expect our real estate coverage universe revenues to grow
29.7% largely on account of a significant sales performance. The
bottomline of our real estate coverage universe is expected to grow
18.4% YoY backed by 36.3%, 5.9% and 1.0% YoY growth in
bottomline for Oberoi Realty, Mahindra Lifespace and Sobha
Developers, respectively.
Company specific view (Real Estate coverage universe)
Company Remarks
Oberoi Realty We expect Oberoi to post sales volume of ~83,000 sq ft largely on account of
significant sales volume from Oberoi Exquisite. Furthermore, we expect launch of
Mulund and Borivali project to be pushed forward to Q4FY15E. On the financial
front, Oberoi's revenues are expected to grow 45.6% YoY to | 248.3 crore with
bottomline growing 36.3% YoY to | 92.8 crore due to better operating margins
Sobha Developers Sobha managed to launch projects aggregating 1.6 mn sq ft in Q2FY15 in
Bengaluru, Thrissur and Chennai. Hence, we anticipate sales volumes will grow
8.0% YoY to 0.8 mn sq ft. On the financial performance front, we expect topline to
grow 17.4% YoY to | 637.6 crore. We expect the bottomline to remain flat at |
58.7 crore mainly due to higher operating expenses
Mahindra Lifespace With the new launches in affordable housing in Chennai & Boisar and other
projects like "Weekend Homes" in Alibaug, etc. we expect sales volume to grow
45.2% YoY to 4.5 lakh sq ft. Consequently, we expect top line to grow 98.8% YoY
to | 114.4 crore. However, we anticipate PAT will show muted growth of 5.9%
YoY to | 17.6 crore mainly due to higher tax expense as compared to last year
Source: Company, ICICIdirect.com Research
LINK
http://content.icicidirect.com/mailimages/IDirect_ConsolidatedPreview_Q3FY15.pdf
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