Strong Upcoming Order Book and Surging Net Profits; Maintain BUY
Est. Vs. Actual for Q4FY24: Revenue – INLINE; EBITDA – MISS; PAT –INLINE
Changes in Estimates post Q4FY24
FY25E/FY26E: Revenue: 0%/0%;EBITDA:0%/0%; PAT: 8%/12%
Recommendation Rationale
Robust Order Book and Healthy Pipeline: The management anticipates an upcoming real estate portfolio of 3.9 mn sq. ft. in addition to its ongoing projects in the coming years. It has indicated a potential revenue of over Rs 7,600 Cr from upcoming projects in locations such as Dahisar, Goregaon, Marine Lines, Pali Hill, and Ghatkopar, among others. The management has provided guidance on real estate sales visibility amounting to Rs. 15,000 Cr, which includes both ongoing inventory and upcoming launches. Additionally, its EPC business order book remains healthy at Rs 823 Cr.
Asset Light Model and Financial Discipline: The management is focused on adopting an asset-light business model, emphasizing Joint Ventures (JV), Development Management (DM), and Redevelopment projects. This approach is expected to enhance the company’s bottom-line performance without straining the balance sheet. By combining this model with financial discipline, the company aims to achieve scalability and ensure timely project completion. Currently, its debt-to-equity ratio stands at -0.4, indicating a favourable financial position. Moreover, the company is cash-flow positive, with an Operating Cash Flow (OCF) of Rs 572 Cr. It maintains liquidity of Rs 741 Cr. and boasts impressive profit margins, with a 25% EBITDA margin and 24% PAT margin, which are anticipated to further improve, particularly for ultra-luxury projects.
Sector Outlook: Positive
Company Outlook & Guidance: We maintain a BUY rating on the stock as we continue to remain positive on the company’s long-term prospects.
Current Valuation: DCF-based valuation
Current TP: Rs 270/share (Earlier TP: Rs 270/share).
Recommendation: With a 34% upside from the CMP, we maintain our long-term BUY rating on the stock.
