Buy Indiabulls Real Estate - Motilal Oswal

Indiabulls Real Estate (IBREL IN; Mkt Cap USD1.9b, CMP Rs210, Buy)

- Indiabulls Real Estate (IBREL) reported better than expected results for 2QFY11. EBITDA increased to Rs812m v/s Rs217m in 1QFY11.

- Revenue was Rs3b v/s Rs132m in 2QFY10 and Rs1.7b in 1QFY11, while net profit was Rs509m v/s Rs47m in 2QFY10 and Rs252m in 1QFY11.

- In 2QFY11, IBREL sold ~1.84msf amounting to Rs31b v/s Rs3b in 1QFY11 and Rs17.1b in cumulative sales till 1QFY11.

- Management is in the process of finalizing a restructuring plan for IBREL's 58.6% holding in Indiabulls Power (IBPOW). The stated objective of the restructuring is to streamline different businesses, address IBPOW's capex requirements and allow IBREL to emerge as a focused RE company.

We are revising our target price for IBREL from Rs252 (based on 10% discount to our FY12E NAV of Rs280/share) to Rs280 (1x FY12E NAV of Rs280/share). IBREL is available at 27% discount to its FY12E NAV of Rs280/share and trades at 19.2x FY12E EPS of Rs11 and 0.84x FY12E BV of Rs247. Re-iterate Buy.

Source : Equity Bulls

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