Hi Aniket,
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U are right that out of 1.5cr, 1cr is yet to start. I guess thats why the total cashflows and profits are calculated over next 4-5 years. Their second largest project has revenue of 600cr and its a plotted development project, so there is hardly any construction cost to it. Company just have to build necessary infrastructure in and around the land parcel and sell the plots. So construction cost in such projects are between 25-30% of the total revenue. Arvind is 45% partner in tht project so total revenue of tht project should be about 1300cr (including the land owners share) and cost of say maximum 30% so say about 400cr, hence their profitability in tht project alone should be about 200cr over the period of time.
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Their largest project Uplands has a revenue potential of 1200cr, out of which in prelaunch they sold 200cr of stock which was way more than their full years target. So although the real estate market is slow, they seem to be selling good. Also its a golf theme based project which is the only golf theme project in one of the fastest growing city of Ahmedabad. So sales shouldnt be a challenge, which they have demonstrated as well.
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Promoters are Arvind limited, Sanjay Lalbhai group. They are supposed to be one of the very well respected and largest group in Denim in India. They have Mr. Vallabh Bhansali from Enam and Mr. Bakul Dholakia (Ex-Director IIM Ahmedabad) on their board of the parent company Arvind Limited.
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Also in my humble opinion, the market value of the company is present value of all future cashflows and not only future cashflows of next 4-5 years. The assumption by abhijit, I think doesnt include the reinvestment of the profits/paying back to shareholders by the company and hence provide a much larger and safe opportunity to invest.
Discl – Invested at about 75.
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