Prestige Estate Projects - March 2013 Results Preview - Motilal Oswal

- P&L to remain strong: We expect PEPL to maintain its scaled-up run rate, with steady execution and likely commencement of revenue from projects with high pre-sales (like Bell Vista and Royal Woods). We estimate standalone revenue at INR4.8b (+138% YoY), EBITDA at INR1.5b (+116% YoY) and PAT at INR914m (+139% YoY).

- Pre-sales to surpass our earlier estimate: During 4QFY13, PEPL launched (1) Brooklyn Heights (0.27msf, at INR7k-7.5k/sf) in Banashankari (Bangalore) and sold ~60%, and (2) West Wood at Rajaji Nagar (1.02msf, at INR7.5k/sf) and sold ~75%. These coupled with steady run rate from ongoing projects would help take annual sales to ~INR33b (v/s our earlier estimate of INR30b). PEPL plans to launch ~12msf along with two Chennai projects, and plans a phased launch of Lakeside Habitat and Electronic City in FY14.

- Minor delay in Cessna, Vijaya Mall completion: We see moderate delay in overall completion of Cessna Block-7 (would generate rent from July 2013) and Vijaya Mall (expected inauguration in April 2013), while Exora Block-3 would commence rentals from April/May 2013. The management expects 50-60% occupancy for Vijaya Mall (Chennai) during inauguration. We estimate actual rentals of INR2.05b in FY13 and annualized rentals of INR2.8b (delayed to 2QFY14 onwards).

- Valuation and view: The stock trades at a ~26% discount to our oneyear forward SOTP value of INR220/share, 10.1x FY15E EPS of INR16.1 and 1.6x FY15E BV. Maintain Buy.

Source : Equity Bulls

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