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Research
Prestige Estates Projects - Healthy sales performance continues - Prabhudas Lilladher
Posted On : 2012-06-04 10:56:23( TIMEZONE : IST )
Revenue recognition behind schedule, full year consolidated numbers subdued: Prestige Estate Projects (PEPL) reported revenues of Rs2bn for Q4FY12, sequential growth of 21%. However, the revenues were slightly below estimates on account of certain projects like White Meadows and Prestige Tech Park 3 not achieving the recognition threshold. Margins for the quarter stood at 33.9% as against 30% in Q3FY12, while PAT stood at Rs3.82bn as against Rs2.8bn in Q3FY12.
The company's FY12 consolidated revenues witnessed a decline of 32% to Rs10.5bn as compared to FY11 which had the robust income from Shantiniketan as the project was completed. Further, on account of an extremely high tax rate of 41.5% for consolidated numbers on account of capitalization of certain charges by the subsidiaries which is treated at revenue in the standalone books, PAT witnessed a decline of 52% to Rs0.8bn.
Volumes robust: Although financials were slightly below expectations, volumes stood strong at 1.33m sq.ft backed heavily by the Chennai launch 'Bella Vista' which is a 3m sq.ft project where the company sold 32%. (PEPL's share 60%). As compared to Q3FY12, volumes grew 33% valued at Rs6.4bn. For FY12, the company clocked in sales of 4.9m sq.ft valued at Rs21bn. The management is guiding for sales of Rs25bn for FY13. The company has lined up 19 projects totalling to 9.75m sq.ft for launch in FY13 of which nine projects have already been soft-launched and have received a pretty decent response.
Scale‐up in lease volumes: The total area leased during the quarter stood at 0.58m sq.ft of which 0.23m sq.ft is PEPL's share vis-Ã -vis no leasing towards PEPL's share in Q3. The cumulative area leased stands at 7.98m sq.ft of which 5.03m sq.ft is the company's share and 3.52m sq.ft is for generating rentals. The company clocked in rental revenues of Rs1.6bn during FY12 and is expecting to end FY13 with an exit run-rate of Rs2.25bn.
Valuations: A continuing healthy sales performance, along with an expected scale-up in rental income stream, leads us to retain our positive stance on the stock. As per our estimates, the company's NAV stands at Rs133. Applying a 10% discount to the NAV, we arrive at our target price of Rs120 per share. We maintain 'Accumulate' on the stock.
