Buy Unitech - Motilal Oswal

UNITECH 3QFY11: Below estimates; Pre-sales stable; Lowering PAT and NAV est; Trades at 55% discount to FY12 NAV; Buy

Unitech's 3QFY11 results are below estimate. EBITDA stood at Rs2.1b , an increase of ~12.4%YoY, while EBITDA margin stood at 31.6% v/s 24% in 2QFY10.

Revenues stood at Rs6.6b down ~14.8%YoY (v/s est. Rs8b), while net profit is down by 36.7%YoY to Rs1.1b (v/s est.Rs1.8b).

Management expects to achieve sales of ~10msf aggregating to Rs50b for FY11. Till date 9MFY11, it has achieved sales of 7.2msf aggregating to ~Rs33b.

Unitech trades at ~55% discount to its FY12 NAV of Rs81/share. It trades at 11x FY12E EPS of Rs3.3 and 0.9x FY12E BV of Rs42.9/share.

Management expects to achieve sales of ~10msf aggregating to Rs50b for FY11. Till date 9MFY11, it has already achieved sales of 7.2msf aggregating to ~Rs33b. We had assumed sales volumes of ~12msf, which we are lowering to ~10msf. Key catalysts for Unitech which could further drive up our NAV in the near to medium term could be 1) likely listing of UT Infra sometime in 1QFY12 and 2) successful acquisition of UCP. Buy.

Source : Equity Bulls

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