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Research
DB Realty - Q3FY13 Result Update - Kantilal Chhaganlal
Posted On : 2013-02-16 20:27:22( TIMEZONE : IST )
In Q3FY13, DB Realty Ltd (DBRL) registered consolidated revenue of Rs. 1245.7 mn, with a growth of 18.9% on Y-o-Y basis whereas it has registered a robust growth of 136.2% on sequential basis. However, the consolidated revenue for 9MFY13 registered a decline of 46.8% on Y-o-Y basis.
In Q3FY13, DBRL's consolidated EBITDA margin improved to 20.5% Vs. 4.9% in Q3FY12. For 9MFY13, DBRL has reported the operating profit of Rs. 377.4 Mn against the operating loss (mainly on account of delay in projects which led to sharp increase in operating cost) of Rs. 135 Mn in 9MFY12. The EBITDA margin for 9MFY13 stood at 14.4%.
Consolidated net profit during the quarter shrunken to Rs. 2.1 Mn against Rs. 117.4 Mn in Q3FY12. The net profit margin stood at mere 0.2% against 11.2% in Q3FY12 mainly due to substantial increase in tax expense (Rs. 153.6 Mn in Q3FY13 Vs. Rs. 14.9 Mn in Q3FY12). For 9MFY13, net profit margin stood at 3% against 13.3% in Q3FY12.
During the quarter the company has seen the good pick up in sales combined with higher per sq ft realization. The company has also made good progress in getting key approvals for to be launched projects and maintain the upward momentum going forward. During the quarter, the collections grew by robust 46% to Rs. 1384 Mn on sequential basis suggesting an improvement in project uptakes.
During the quarter, DBRL was able to step up the sales value to Rs. 4325 Mn. The company has successfully launched two projects during the quarter viz. DB Crown- Tower C, Mumbai and DB Golf links, Pune, DBRL's Orchid suburbia, Kandivali is expected to be completed by March 2013. The company has also restarted its negotiation on 100 acres redevelopment project in Bandra (Mumbai) which it bagged in 2010 and is expecting some positive development on it. The management has also mentioned that the company remain committed to completion and delivery of its projects within stipulated time frames. The company expects an uptake in next six months in project executions and sale.
Valuation:
At CMP of Rs. 86/ share, the stock is trading at significant discount compared to other peers in the industry. We revise DBRL's price outlook to Rs. 150/share (which is at 20% discount to our calculated FY14E NAV, factoring risk for project execution and delays) with 'BUY' rating on DBRL.
Risks: slowdown in DBRL's sales, project execution delays in residential projects and adverse real estate market conditions, Corporate governance practices.
