Cautious on HDIL - Kotak

Below estimates - sales momentum to improve

3QFY12 was weak with revenues at Rs4.2 bn (-9% yoy, -4% qoq) and EBITDA at Rs1.6 bn (-43% yoy, -32% qoq) coming lower than our estimates.

EBITDA margins at 37% were lower than estimates as FSI sales came at lower margins. We expect sales momentum to pick up as project launches gather pace on account of clarity on FSI brought by new DCR guidelines in Mumbai. Also, with the Government relaxing eligibility criteria for slum-dwellers, MIAL project should gather pace.

We maintain our BUY rating at a revised target price of Rs130/share (Rs140/share earlier).

Source : Equity Bulls

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