Thanks for starting this thread. I briefly looked at the stock, but didn’t take a position as it ran away in circuits from high 40s. Couple of qs to ask:
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Out of the 1.5 cr sq.ft under construction per IM, c.1 cr is yet to be developed while c.0.5 cr is under development. I guess that further pushes cash flows out by quite a bit. Equity value = NPV of cash flows, so perhaps on a discounted basis, then 190 cr market cap (+ 30 cr debt) = 300-350 cr of net profit to be received
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What happens to the profitability if sales are delayed? My high-level channel checks indicate Gujarat property market is very weak – so sales are likely to be quite sluggish.
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Promoter quality/ Corporate governance? (Don’t have a view….but there were some comments on a VP thread in Arvind Ltd around quality that were a bit dis-comforting)
Having said that, I really like the absence of debt (c.30 cr) in this entity. The sector is in the dumps, which means this is likely a good time to buy. But, not sure if this is the play to back here. Other real estate names that are quite cheap relative to potential sales value are Peninsula Land, Nitesh Estates. Any experienced investors who can provide their insight on how to value real-estate companies?
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