Anant Raj Industries - Sales strong, rentals decline - Prabhudas Lilladher

Broadly in-line: Anantraj reported revenues of Rs1.7bn, growth of 88% YoY & 34% QoQ, slightly ahead of our estimates on account of a land sale worth Rs126m. Besides, the quarter also witnessed the 'Sector 63', Gurgaon project crossing the revenue threshold this quarter.

EBITDA margins stood at 42% as against 53% in Q3FY12 as well as a similar number in Q2FY13. The lower margins would also be on lower margin land sales during the quarter. PAT stood at Rs531m, growth of 68% YoY & 7% QoQ, in-line with our estimates.

Sales & Revenue Break-up: Sales during the quarter was largely contributed by Sector 63, Gurgaon (~80%) and the remaining by 'Neemrana' and 'Maceo' (Sector 91, Gurgaon) projects. With regards to revenue recognition, 16.8% was contributed by Maceo, 20.7% by Manesar, 12% by Neemrana, 35.5% by Sector 63, Gurgaon and 15% together by rentals and land sales.

Rentals witnessed a sequential decline: Rentals declined from Rs153m in Q2FY13 to Rs130m due to the expiry of the management contract on one of its hotels. The shift from one operator to another led to a lag of three months. Besides, some leases also expired at Manesar IT Park which has not yet been renewed.

Valuations: The company's net assets are valued at Rs44.3bn, of which, we deduct debt of Rs12.8bn which gives us a value of Rs31.5bn, translating to Rs107/share. To arrive at our target price, we have valued the company at 15% discount to NAV which gives a value of Rs91. We maintain 'Accumulate'.

Source : Equity Bulls

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