Prestige Estates - 3QFY13 Results Update - Motilal Oswal

PEPL's 3QFY13 revenues scaled up 2x QoQ (+2.9x YoY) to INR4.9b, in line with our expectation, led by revenues from key projects like Kingfisher Tower, Tranquility, Parkview and Sunnyside. EBITDA stood at INR1.4b (+2.8x YoY, +96% QoQ), while margin declined to 28.9% (down 1.1pp QoQ) due to change in project mix. PAT grew +228% YoY to INR920m (2x QoQ).

- Pre-sales stood at 1.4msf (INR7.5b) v/s 1.6msf (INR8.2b) in 2QFY13 v/s 1msf (INR4.7b) in 3QFY12. With this, PEPL crossed its FY13 sales guidance of INR25b pre-sales within 9MFY13 sales of 5.1msf (INR25.8b), against our FY13E/14E estimates of INR30b/32b.

- 9MFY13 rentals stood at ~INR1.6b v/s estimates of INR2.1b/INR2.9b/INR4b for FY13E/14E/15E. Management guided for exit rental run-rate of INR2.6b.

- Customer collections remain steady at INR5.1b (stable QoQ) on the back of (1) healthy sales, execution progress and (2) reduction in debtors from completed projects (down by ~INR1b QoQ). 9MFY13 collections stood at INR14.4b v/s a guidance of INR15b and our est of INR18.5b.

- Our interaction with the management suggests OCF of INR0.4-0.5b, which resulted into a marginally negative FCFE (post interest expense of INR0.5b). This led to a consolidated net debt of INR18.1b (v/s INR18b in 2QFY13) and ~INR1.3b QoQ increase in PEPL's effective share of net debt, which stood at INR16.3b (0.65x).

- Consolidated net debt was stable QoQ at INR18.1b (v/s INR18b in 2QFY13), while PEPL's effective stake in net debt is up by INR1.3b QoQ to INR16.3b (0.65x).

- The stock trades at PER of 11.2x FY15E EPS, 1.7x FY15E BV and 18% discount to our NAV. Maintain Buy with a target price of INR220.

Source : Equity Bulls

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