Prestige Estates Projects - Q3FY12 Result Update - Emkay

Reco: HOLD
CMP: Rs 86
Target Price: Rs 81

Collections ramp-up needed

- Prestige Estates Projects' (PEPL) Q3FY12 results are below expectations; Gross Margins on residential segment fell substantially QoQ and is expected to stabilize at 35-40%

- Collections from large completed projects remain subdued, PEPL expects to collect 75% over 2 quarters. Net Core Working Capital from residential segment was stable QoQ.

- PEPL sold 1.0msf in Q3FY12, of which 0.9msf was in Residential space and balance in Commercial. Company leased 0.07msf (own share) in the quarter, as expected.

- We maintain our Hold rating with TP of Rs 81. We would re-rate stock positively once company generates composite +ve operating cashflows and reduce debt in absolute terms.

Source : Equity Bulls

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