Anant Raj Industries - March 2013 Results Preview - Motilal Oswal

- Revenue to decline QoQ with lower contribution from Golf Course Road Project: We expect revenue to grow by 173% YoY to INR1.2b, EBITDA by 150% YoY to INR499m and PAT by 167% YoY to INR326m. We estimate EBITDA margin at 41%. The project level contribution would be broadly stable QoQ, barring contribution from the Golf Course Road Project, which we expect to be muted in 4QFY13 due to lower incremental sales.

- Sales at Golf Course Road Project likely to remain subdued: Sales velocity remains below par at Golf Course Road Project (Sector 63A). ARIL plans to launch the Villa phase (ticket size: INR60m-90m) by April 2013, followed by commercial plots. It sold ~100 additional units in Neemrana (ticket size up at INR1.1m) and 10-15 units in Sector-91 (BSP at INR5.2k/sf).

- Rental income to moderate: We expect the rental run rate to be lower at INR218m (stable QoQ, down from the run rate of INR250m-260m till 2QFY13), despite ramp-up in Kirti Nagar Mall. This is due to (1) cancellations at Manesar IT Park, and (2) termination of lease agreements by Park Land in Hotel Retreat and Exotica. The Exotica contract has been renewed with Mapple (28% of turnover for initial six months, followed by attached minimum guarantee of INR6m/ month). It has tied up with Sagar Ratna for Retreat, where rentals will commence in July 2013 after renovation (minimum guarantee of INR4.5m/month). New leasing remains muted.

- Valuation and view: ARIL trades at ~43% discount to our one-year forward NAV of INR110/share. It is available at 6.4x FY15E EPS of INR9.9 and 0.4x FY15E BV. Maintain Buy.

Source : Equity Bulls

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