@Dev_S
Thanks for your kind message. In my understanding, there are times with no fundamental changes, the market prices moves away from core value like penddumlum swing. However, extreme optimism/pessimism is known only in hindsight. Currently, I see couple of factors driving decline in Embassy unit price in last quarter:
- Liquidation from the Promoters
- Expected increase in interest rate
- No substantial increase in distribution despite higher than anticipated performance hotel business. (On conference call management did mention that margin/cash for distribution are lower in percentage terms from hotel business then commercial rents)
Further, management did suggested exploration of development in new building in existing complex/SEZ related issues/ acquisition of Chennai office park. All these factors, while good in long terms, in medium term are unlikely to result in improvement in distribution. Hence, in my understanding, prices are likely move in range bound, till the distribution per unit increase. This is my understanding and may be completely wrong.
Discl: I have holdings in Embassy REIT. My view may be biased. Not a SEBI registered advisor. Not a substitute for debt class. Not recommending any investment action
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