Maintain BUY on Kolte Patil Developers - Launches key monitorable - HDFC Securities

Mr. Parikshit D Kandpal, CFA, HDFC Securities and Chintan Parikh, Institutional Research Analyst, HDFC Securities

KPDL reported an operationally strong quarter with presales of 0.85msf (+27/52% YoY/QoQ) in 4QFY21. In terms of value, sales grew by 43/54% YoY/QoQ to INR 5.1bn. The highest ever quarterly collection of INR 4.4bn in 4QFY21 led to reduction in net D/E to 0.35x from 0.4x in Dec-20. With inventory of 2.9msf and launch pipeline of 7.2msf, KPDL is targeting 3msf presales in FY22. We increase our FY22/FY23 estimates by 7/8% and maintain BUY on KPDL, with a revised target price of INR 320/sh, given comfortable balance sheet and robust launch pipeline. Delay in approvals for launches is the key risk to our estimates.

Financial highlights: KPDL reported revenue at INR 3bn (+33/+56% YoY/QoQ), 10% ahead of our estimates on better-than-expected recovery in execution. However, EBITDA margin under-performance (13.1% vs est. 29.1%) led to 50% miss on EBITDA. Sequential decline in finance cost and depreciation led to APAT of INR 209mn, miss of 45%. On POCM basis, revenue grew by 40% YoY and profit was at INR 421mn (vs INR 312mn profit in 4QFY20). With labour availability at 70-75%, management is hoping for a strong delivery in FY22.

Robust launch pipeline: KPDL reported presales of 0.85msf (+27/+52% YoY/QoQ), with average realisation of INR 5,988/sf. For FY21, total presales stood at 2.1msf/INR 12bn. Contribution from Mumbai increased to INR 1.8bn from INR 0.2bn in FY20 and is expected to double with launch of Verve and Vaayu. Two new projects with saleable are of 1.3msf have been added during the current quarter. KPDL is planning to launch projects across categories and key target markets with saleable area of ~7.2msf and topline potential of INR 57bn. With these launches and 2.9msf inventory, management is expecting presales of 3msf in FY22.

Lean balance sheet provides room for expansion: KPDL reported the highest ever quarterly collection of INR 4.4bn in 4QFY21. On the back of strong operating cash flow of INR 3.2bn in FY21, the company reduced consolidated net debt by INR 1.2bn to 3.1bn as of Mar-21 (net D/E at 0.35x). Its asset-light strategy has helped keep the balance sheet in good shape, which provides scope for expansion.

Shares of KOLTE-PATIL DEVELOPERS LTD. was last trading in BSE at Rs.219.95 as compared to the previous close of Rs. 225.3. The total number of shares traded during the day was 41949 in over 1406 trades.

The stock hit an intraday high of Rs. 229.75 and intraday low of 218.1. The net turnover during the day was Rs. 9337890.

Source : Equity Bulls

Keywords