Basic brief about the company:
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It is the property development arm of Aditya Birla group.
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The company was previously into manufacturing of paper and textiles and in recent years pivoted to the real estate sector, divesting from its earlier businesses
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The company operates under the brand name “Birla Estates”
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The company has a market capitalization of Rs 16,000 crore (approx.) and its share price trades at Rs 1420
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During the financial year the company achieved pre-sales (bookings) of approx. Rs 8000 crores with a target to take it upto Rs 15,000 cr in 3 years
I am looking at analyzing this company as a long term investment. Open to the community now, to share their analysis and thoughts on the company and the sector as a whole.
2 key specific questions which I have here:
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Is this a right time to enter into real estate stocks, given the cyclical nature of this business and the current cycle has been there for maybe 5 years now
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How does one really anaylze a real-estate business, given that the cash flows and profits of a project are easily spread out over multiple years. A PE or EV/EBITDA would probably not be the best metric for real estate companies. What should one really look at to understand the right valuation - Bookings, Gross Development Value (GDV), collections, etc.?