Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Research

| More

Maintain BUY on Prestige Estates Projects - Time to consolidate - HDFC Securities

Posted On: 2020-06-26 12:55:47


Mr. Parikshit D Kandpal, Institutional Research Analyst, HDFC Securities.

Prestige Estates Projects (Q4FY20): Time to consolidate. Maintain BUY
(TP Rs 280, CMP Rs 221, MCap Rs 871 bn)

We maintain BUY on PEPL with SOTP of Rs 280/sh. We have decreased our FY21/22E EPS estimates by 40%/31% to factor in protracted recovery from COVID-19 related slowdown in sales velocity as well as construction, and delayed launches. PEPL pre-COVID re-rating was backed by robust expansionary plans on asset build out and likely de-leveraging through REIT. New business development initiatives in Mumbai market and stake purchase in DIAL hotel in Delhi was being looked at geographical diversification. COVID-19 puts spanner in the wheel and we believe it's time for PEPL to refine capital allocation and restrict high exposure to hospitality and Mumbai premium/office projects. As such FY21E residential collections will remain subdued and headwinds like work from home & retail footfall/hotel occupancy normalization will take time. Nonetheless PEPL remain well placed to tide over near term weakness with timely fund raise of Rs9bn during 4QFY20 and likely pre REIT placement in FY21E.

Weak 4QFY20 financial performance: PEPL reported 4QFY20 Revenue/EBIDTA of Rs 19.8/5.0bn. EBIDTA margin came in at 25.2% (vs 24.7/26.8% YoY/QoQ). APAT stood at Rs 154mn (-89/-90% YoY/QoQ). Weak performance resulted in Rev/EBIDTA/APAT miss of 26/30/90% respectively vs. our estimates. Shutdown for the last 15 days of Mar-20 led to rev shortfall of ~2bn.

COVID dampens sales as well as construction velocity: Labor availability at 30-40% is gradually picking up. While things are looking up in Bengaluru already, PEPL has put on hold construction plans for Mumbai projects. As expected, Office Leasing continues to perform, Malls/Hospitality severely impacted & expected to pick up only in 2HFY21. Moratorium on interest availed for most projects as inflow has been virtually nil in Malls/Hospitality. However, few malls have started opening up with ~30% footfall, esp. in Bangalore, which is encouraging. While no signs of Hospitality picking up yet, costs have been brought down to ~20% level by firing all contractors, barely breaking even.

Steady 4QFY20 pre-sales and collections: PEPL gross pre-sales volume/value stood at 2.1mn sqft (+27% QoQ)/Rs 12.1bn (-8% QoQ, includes Rs 1.6bn commercial strata sales). The Company achieved FY20 gross pre-sales value of Rs 45.6bn (PEPL share Rs 37.8bn). The quarter saw strong collections (PEPL share) of Rs 10.9bn with the total collections for FY20 at Rs 37.6bn as guided.

BS concerns receding as leverage moderates: Net debt has reduced by Rs 10bn QoQ to Rs 76.7bn in 4QFY20. The Net D/E stands at 1.43x post Rs ~9bn equity infusion. However, (1) Recent allotment of preference shares to GIC for a consideration of Rs 4.2bn and further Rs 4.6bn equity raise from institutional investors, (2) Likely fund raise of ~Rs25bn ($300-400mn) from - select PE investors pre-REIT, (3) REITs eventual listing in FY22E provides sufficient liquidity to PEPL capex plans while maintaining debt at current position, significantly improving the D/E structure. No further equity dilution planned at entity level.

Shares of PRESTIGE ESTATES PROJECTS LTD. was last trading in BSE at Rs.221.55 as compared to the previous close of Rs. 223.6. The total number of shares traded during the day was 21988 in over 1034 trades.

The stock hit an intraday high of Rs. 229.95 and intraday low of 216. The net turnover during the day was Rs. 4921961.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Tata Consultancy Services - Q1FY21 Result Update - ICICI Securities

Arvind Fashions - Company Update - ICICI Securities

Result Preview - Telecom - ICICI Securities

Result Preview - Banking & Financial Services - ICICI Securities

1QFY21 Results Preview for Banks & NBFC's - A washout quarter - HDFC Securities

Maintain REDUCE on Tata Consultancy Services - Positives factored in - HDFC Securities

National Aluminium - Quant Pick - ICICI Securities

Cement - Q1FY21 Result Preview - ICICI Securities

Consumer Discretionary - Q1FY21 Result Preview - ICICI Securities

Paints - Dealer Check - July 2020 - ICICI Securities

Auto and auto ancillary - Q1FY21 Result Preview - ICICI Securities

Real Estate (Sector Update) - Greenshoots visible - HDFC Securities

Cement (Sector Update) - Prices, retail sales hold up despite COVID - HDFC Securities

TCI Express - Branch economics, cost levers as margin tailwinds - ICICI Securities

Mishra Dhatu Nigam - Space order inflow may slow down in FY21 - ICICI Securities

Century Plyboards - Compelling BUY; top pick in building materials - ICICI Securities

Building material - Sector Update - ICICI Securities

ISGEC Heavy Engineering - On a strong footing despite macro headwinds - ICICI Securities

Telecom - Growth breaks due to Covid-19 crisis - ICICI Securities

Pfizer Ltd - Company Update - ICICI Securities

Petronet LNG - Quant Pick - ICICI Securities

Earnings Wrap Q4FY20: Quarter end lockdown takes toll, one-offs rule Q4FY20

Autos & Transportation Sector Update Report - Focus on '3Cs' - HDFC Securities

Banking Sector Credit Trends - Weakness building - HDFC Securities

India Equity Strategy Report - Back to pre-covid levels - HDFC Securities

Strategy: Cyclicals to lead earnings recovery over FY20-22 - ICICI Securities

JK Cement - Ripe for re-rating - ICICI Securities

Phillips Carbon Black - Company Update - ICICI Securities

Information Technology - Q1FY21 Result Preview - ICICI Securities

Motherson Sumi Systems Ltd - Company Update - ICICI Securities

HDFC Ltd - Quant Pick - ICICI Securities

Auto Sales Data for June 2020 - Angel Broking

FMCG - Sector Review 4QFY20 - Disruption visible, growth divergence increases - HDFC Securities

Maintain ADD on ONGC - Impairment loss drags earnings - HDFC Securities

Maintain BUY on Ahluwalia Contracts - Looking ahead - HDFC Securities

RIL-Intel Deal - Angel Broking

Strategy: 'Out of turn' change in NIFTY50 due to Vedanta delisting - ICICI Securities

Time Technoplast - Q4FY20 Result Update - ICICI Securities

Monthly Auto Volumes - July 2020 - ICICI Securities

Oil & Natural Gas Corporation - Q4FY20 Result Update - ICICI Securities

Minda Industries - Q4 FY20 Result Update - ICICI Securities

Auto Sales - June 2020 - Acuité Ratings & Research

Bharat Electronics - Q4FY20 Result Update - ICICI Securities

Petronet LNG - Q4FY20 Result Update - ICICI Securities

Tata Steel - Q4FY20 Result Update - ICICI Securities

Phoenix Mills - Q4FY20 Result Update - ICICI Securities

Jun-20 Volumes expectations: Sales to rise over 2x from May-20 levels for Hero, Maruti - HDFC Securities

Maintain REDUCE on RBL Bank - Risks more evident - HDFC Securities

Maintain ADD on Subros - Expect market share gains to continue - HDFC Securities

Maintain ADD on Petronet LNG - One offs in opex drag profitability - HDFC Securities







Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019