I think there are 2 important things which Ambit report clearly misses out:
- PEL has raised Rs.7,000 Cr. of equity out of which ~Rs.5,000 Cr. has been earmarked for Financial services (if I am not mistaken against a total loan book of Rs.50,000+ Cr. PEL has total equity of Rs.10,000 Cr. which is very low leverage levels - they can easily do a 1 Lakh crore loan book with this much equity)
- For calculating the ALM the Ambit report strictly goes by scheduled repayment of loans sanctioned and not the actual cash flows. Generally the loans sanctioned by PEL would have significant pre-payment. For example loans for construction of Residential Projects would have automatic pre-payment based on sales collection similarly if a developer has taken a land loan at 13 - 16% with repayment at the end of 3rd/4th years as soon as he gets approvals within 12-24 months he would refinance this loan with a construction loan facility from a bank. (you can refer to the PEL con call where Mr.Khushru Jijina talks about collections and the figures are quite strong and need to be factored in for ALM mismatch)
Further I would like to add one more thing here a general gyaan about real estate sales being slow is missing the real picture - the smaller developers are destroyed by demonetisation and RERA but the top 10 developers in each city (which is the focus of PEL) are gaining market share - you can just plot the unit sales & collection figures of the top listed developers and you would get a true picture, PEL is focusing on these developers and not on Real Estate market.
Yes, Real Estate lending has inherent Risks and we should monitor the book for defaults (my earlier answer about how having a sister concern with real estate development capability is a big advantage for PEL and allows them to take over projects in case they see default) but I feel PEL is moving towards lower risk book - they are diversifying the book and reducing the risk across the portfolio - from initial promoter funding which is the riskiest form of Real Estate lending they have now gone ahead and started home loans, LRD Loans, Hotel Funding etc