Kolte Patil Developers

Stock Opportunities
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KOLTE PATIL DEVELOPERS (KPDL)

CMP a 93.60 (as on 26 mar 2014), TTM PE - 5.72 , MCAP a 710 cr

KPDL are primarily Pune based developers having about 8-10 % market share in Pune. They have some projects in Bengaluru also and have recently forayed into Mumbai redevelopment projects. The company is present in all segments a economy (Umang homes), MIG a township and non township projects, and Luxury ( 24K brand)

**INVESTMENT RATIONALE )- **

Even in a tough environment the company has trebled its revenues since 2007 without much increase in debt. The stock in my opinion is undervalued as other realty companies with good balance sheets like Ashiana, Godrej Properties, Oberoi realty, Sobha Developers are trading at much better valuations. The company foray in Mumbai is expected to increase margins. Company has good amount of saleable property which provides future visibility. Also the corporate governance standards seems to be decent.

Request feedback from other VPas and Pune members.

Pardon me for the long post.

NEGATIVES / RISKS a

  1. Risks associated with realty sector.

  2. Govt policy risk a any unfavourable change in govt policy a delay in approvals.

  3. Macro risks a if the economy remains subdued and the job creations remain limited, the public will not have purchasing power and sales will be affected. For the sector to perform well the economy needs to grow at a healthier pace. In the absence of demand the stock is unlikely to deliver good returns.

  4. High inflation and high interest rates will again affect the demand.

  5. Rising land prices will make further expansion difficult… Rise in input costs ( materials, labour etc) will affect profitability.

  6. Liquidity risk. Unablility to raise funds.

  7. Rising Competition. Decline in apartments prices.

  8. Much of the sale is coming from IT / ITES sector, any slowdown can affect growth. Company has high exposure to Pune.

  9. Though I have not been able to find any corporate governance issues, if any such issue pops up in future, or acts of mgmt. incompetency like unablility to complete projects in time and poor quality of construction etc can damage brand value.

POSITIVES a

  • Since 2007, the outstanding shares are almost same - 7.6 cr. Bet 2007 to 2013, Even though the revenue has incr 3 times from 230 to 750 cr, . the debt level has remained in limits and fluctuated between 150 - 190 cr. Margins have been affected as the overall economy is down, np has increased from 83 to 124 cr.

  • High promoter holding 74% + , no pledging of shares.

  • The company seems to have decent corporate governance standards, it has made a nice presentation for share holders and also the annual report is quite informative where the mgmt. clearly states some of its strategies. Company has recently appointed Deloitte as auditors ( KPMG are internal auditors).

  • Company has a dividend policy of 15-25% of annual profits. Div yield at present share price is 3%+

  • If the company is able to maintain leadership in Pune , then mgmt. must be doing something right.

  • Presence of reputed companies like ICICI ventures and ILFS as joint venture partners in different projects. I feel with this the chances of outright fraud by mgmt. is less. Also the partnership is in form of equity stake and not in debt so KPDL does not have to give any assured return to other stakeholders.

  • Assigned aCRISIL A+/Stablea’ rating to the long-term bank facilities and non-convertible debentures.

  • Though all the executive board members are family members, the CEO is professional guy from ISB, Hyderabad.

  • The company is presently selling about 2.5 msf in a year but targets to sell about 8 msf. The company has the potential to do so , only thing needed is the demand and approvals.

  • The management seems to be more concerned with the cash flow / working capital and is willing to reduce prices if required to maintain cash flow.

OTHER INFO

  • 51.7 msf (million square feet) of saleable land in Pune , Bengaluru and Mumbai. (company share abt 28 msf).

  • The company has recently purchased 34 acres of land in Pune ( Wakad ) for about 350 cr mainly through internal accruals. The exact debt level will be known with March 2014 results.

  • Company has invested 68 cr in Aluform technology to reduce slab cycles and labour.

  • Share in revenues a Mumbai 1%, Bengaluru a 7%, Pune a 92%

foray into Mumbai will aid margin expansion and reduce working capital cycle. The company has recently won 2 bids for redevelopment in Mumbai. Total 3 projects in 1st year of operation. As per mgmt, the company bids only through tenders for Private society redevelopment projects. In these cases the company does not have to incur costs for purchase of land. The upfront costs include rentals given to tenants and tenants are provided new and bigger flats in new construction, while the rest is available with the builder to sell. The cost of construction can be recovered by selling apartments in advance to the buyers. This reduces the working capital requirement of the company. Amendment of new Development Control Regulations rules by the Maharashtra Government has further shifted focus to redevelopment in Mumbai. FSI for redevelopment of old housing societies has been raised from 2.5 to 3.

The company treats the land as raw material and does not see land banks as an asset. Due to this the debt levels remain in limits. The mgmt intends to maintain net debt / equity ratio below 0.3 at all times.

KPDL prefers to invest in only those parcels of land that are free of any title issues and where most approvals are already in place. While such land parcels might command a price premium, we believe that the benefits of lower risk of delay in starting construction and hence final delivery are far higher in such land deals which outweigh the premium we pay at the start. In addition, given our positioning and brand strength, we are able to command a premium to the prevailing market rates from customers which more than offsets the premium we pay for such land parcels

We purchase a land parcel outright when (a) we can predict the sales velocity with reasonable certainty, (b) the cost per square feet of land is less than 40% of the expected sales price per square feet, © that the land parcel falls under the correct urbanization zone which increases the visibility on future appreciation potential of the particularland parcel, and (d) most approvals are already in place and construction can commence in a reasonable time frame. Where there is uncertainty or lack of clarity on any of the four points mentioned earlier, we go for the joint- development/joint-venture route

The Company also remains open to an outright purchase or a joint venture deal provided that the land costs (KPDL share) are within INR 200 Crores and that all requisite approvals are already in place.

Article by forbes.

a http://forbesindia.com/article/work-in-progress/the-steady-rise-of-punes-koltepatil-developers/36993/1

DISCLOSURE - invested. Views are biased.

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Their customers don’t seem to be happy with them. There have been multiple cases of delayed possession.

Source -http://ravikarandeekarsblog.blogspot.in/2014/01/Kolte-Patil-Developers-Ivy-Estate-Wagholi-Pune-India-Complaints.html

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Hi,

I am staying in Pune since last 9 years. I stay in Kolte Patil developed society named Sayali Garden in Aundh area.

From my personal experience there have been problems with possession. The builder completes 75% of project very fast and takes up 98% of flat money. For the remaining 25% they take very long time and project completes in snail pace.

The quality of flats are also below average. Materials used are deteriorate quality. I had to change everything from washbasin to commode to sink after 3 years as all had some problems.

Not sure whether investing wise it this a good pick, but if you are buying a flat from this developer I would definitely not recommend as there are many other better options.

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Hi Neerav,

I had also seen complaints on the net , but I guess there will be complaints against almost every builder. Also I am not putting this company in the slot of high quality / highly ethical builders. I feel the price was undervalued, they have good financial track record, disclosures are good if you compare with other developers. I had purchased properties from 2 developers in lucknow and I was also not happy with either of them. There are issues with all developers - Ansal , Omaxe, Parsvnath. So these things have to be taken into account for valuation.

Hi Sunil,

many thanks for the feedback. so now we can consider Kolte Patil as average quality developers at the most. I am not an expert in this area, but from my limited experience , I have noticed that the builders develop the common areas nicely with quality materials and they cut corners everywhere else. I have similar problems like yours in my flat also. I guess these issues will not be there in luxury flats but the prices will be very high and there will be other complaints.

Please advise if as a buyer in pune, can you get better flats at the same price ( same location - more or less).

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Considering TTM revenue of 789 crore, a single development worth 700 cr seems a big move. Need to check additional details on type of deal with PE fund, share, project duration etc.

Pune friends: can anyone weigh in on Market potential?

Kolte Patil Developers, Ask Property Acquire Land Parcel In Pune

Pune based @Kolte_Patil Limited along with realty fund @ASK_Property has acquired a 30-acre land parcel at Kondhwa in Pune for around R160 Cr.

The land parcel has total development potential of around 1.5 Mn sq ft and has also procured the necessary approvals for a residential project there. The plans are to develop a middle-income housing project, targeting revenues worth R700 Cr.

ASK Property has invested in the project through its special opportunities Fund II, which had raised 1000 Cr from the domestic market in 2012. This is the PEâs fourth investment in Puneâs real estate market.

ASK Property was planning to pump in investments of R500 Cr by fiscal end, targetting towards various mid-income residential projects.

http://www.dealcurry.com/2014042-Kolte-Patil-Developers-Ask-Property-Acquire-Land-Parcel-In-Pune.htm

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Nice post, Manish.

I haven’t tracked this co much but saw their recent presentation and few things were quite impressive. One key thing to note was that a big chunk of project are nearing completion and very good nos may be reported in coming times. Interesting co to work more on.

Regards,

Ayush

Disc: Do not hold

â â 710 cr

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Sujay Kalele, Group CEO and Varun Parwal, Head â Corporate Finance & Investor Relations.Key take aways of conference call by Capital Mkt;

Q1FY15 witnessed a pre-sales of 0.61 msf. (up 38% YoY) at a significant price appreciation of 16% to Rs 5616/sft. In terms of number of units the company sold 569 units in Q1FY15.

Three Jewels' project in Kondhwa (Pune) got overwhelming response. After the soft launch of the project in Q4FY14 (last quarter), the company undertook a pan Maharashtra launch in June 2014 and till date have successfully sold half the inventory in phase I of the project. The company has also received an encouraging response to the soft launch of our Bavdhan project in Pune during the quarter.

Revenue growth and profitability for Q1FY15 suffered as some of ongoing projects reached maturing stage and some other not yet hit the revenue recognition threshold. The company expect revenue trajectory to improve going forward as projects, launched earlier during the year, are expected to hit the revenue recognition threshold in second half of FY2015.

The company received âLocation Clearance' for the âSanjivani Integrated Township' at Urse. Earlier in Q4FY14 the second phase of Life Republic got âLocation Clearance'. Expect both these projects to significantly contribute to the growth of the company in coming years.

Sanjivani Integrated Township project is on 275 acres of land of which about 110 acres is for golf course and in balance the company will develop 6 mln sft including common amenities area of 1 mln sft. So residential saleable area will be 4.5-5 mln sft and of which 1/3 rd will be villas and low rises and balance will be high rise apartments.

Sanjivani Integrated Township project â The company is yet to get Letter of Intent, environment clearance and Master Plan approval. The efforts are on for getting LoI which will happen in next couple of months. Once LoI and forest clearance is obtained infra development can be taken up. Once master plan approval happens the company can start sales booking. Internal target for launch of this project is Q4FY15.

The company is confident of its strategic vision of 12 msf. of new sales bookings over the next three years given robust launch pipeline with all key approvals in place.Customer decision making cycle has improved with the time period come down.Commenced sales for link road project at Mumbai.Compared to Pune and Bombay, doing business is easy in Bangalore as the approval cycle is very less not more than 12 months.

Life Republic Phase II, Down Town, Bavdhan, Kondhwa (Three Jewels' project) and Botanica are some of the project that will come up for revenue recognition in H2FY15.Already the approval process is slow so no further slowdown is possible. During Loksabha elections there is no impact on approvals.

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FROM AR FY 14

Avg realisation up 14 % to Rs 5412 / sqft.

sales vol of 2.1 m sq ft.

delay in approvals - situation improved at the later end of the last year,

strong launch pipeline 2015.

approvals of about 5m sq ft .

handed over 3.6 m sqft

expect deliveries of 5 m soft in FY 15-16

2 parcels purchased in fy 14 - 34 acre -

  1. wakad , pune for 350 cr and

  2. partnered with ASK fund for Kondhwa , south pune, 30 acre for 160 cr.

inspite of above purchases net debt / equity = 0.17 as on 31 mar 2014.

Crisil rating A+/ stable, company expects to bring down the cost of debt.

Pune townships Sanjivani and Life Republic awarded Gold rating by Indian Green building council. Giga Residency and Downton projects have also recd same.

sales bookings picked up in Q4 FY14 to 0.79 million square feet of new sales,

The Company has a broad portfolio with ticket sizes ranging from40 lac to upwards of5 crore. However, majority of its sales (~60-70%) are focused towards the middle-income group with an average ticket size between50 lakhs to1 crore.

new launches in fy 14 = 2.7 m sqft

target for next 3 years sales -( total for next 3 yrs) = 12 m sqft

Selling expenses increased as more projects got activated and operations expanded to Mumbai.

Net profit for FY 2014 stood at92 crore as compared to107 crore recorded in FY 2013.

good div payout ratio.

I expect the company to reach sales of abt 4 - 5 m sq ft in 3 years. The company is targeting average realisation of 6000 rs per sqft for next 3 years.

However, the share price is already run up and doesn’t seem cheap now. I still expect the stock to deliver 25-30 % returns in next 3 years.

In Mumbai, they are going to launch the project on the link road. it will not have much effect on the top line and bottom line. There seems to be a delay for other 2 redevelopment projects in Mumbai. Also, recent Supreme court ruling regarding open spaces and 6 m space between the buildings is a negative.

Disc - invested.

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Co rep.by Sujay Kalele, Group CEO.Key takeaways of Conf Call by Capital Mkt;

Despite a seasonally weak quarter the company has delivered a strong performance in terms of pre-sales. New sales bookings in Q2FY15 stood at 0.6 million square feet (msf), up 32% against 0.45 msf in Q2FY14. And the value of area sold stood at Rs 344 crore in Q2FY15 up 32% compared to Rs 260 crore in Q2FY14. The average sales price realization in Q2FY15 stood at Rs 5748/sft as compared to Rs 5738/sft in Q2 FY14

New sales bookings in H1FY15 stood at 1.2 msf(up 35% against 0.9 msf in H1FY14) valued at about Rs 688 crore (up 45% from Rs 475 crore in H1FY14) with average sales price realization of about Rs 5681/sft in H1FY15 compared to Rs5644/sft in H1FY14.Against a sales value (including partner share of about 15-20%) of Rs 4199 crore as end of Sep 2014, the gross revenue recognized was just Rs 2944 crore and gross revenue to be recognized or unrecognized was at Rs 1255 crore. Assuming no incremental sales 40% of unrecognized revenue will get recognized in second half.

In Q3FY15 the company expects Kandhwa, Giga Residency, Stargaze (at Bhavdan, Pune) and Jazz I project has to come up for revenue recognition. The company has sold area valued about Rs 160-170 crore in Kandhwa project and the company expects atleast about 35% to come up for revenue recognition in Q3FY15 and balance in Q4FY15. As far as Giga the company has sold stocks to the extent of Rs 80 crore and all will come up for recognition in Q3FY15. Jazz II project will come up for revenue recognition in Q4FY15.

Change in FSI norms in Pune market will positively impact 3 of the township projects of the company resulting in incremental FSI to the tune of 1.5-1.7 msf. Incremental premium cost is not more than Rs 200/sft for the company. The three projects where additional FSI available are Bhavdan (about 0.25 msf), Life Republic Phase I (about 0.6 msf) and Ivy Estaes (about 0.5 msf).

Execution continues as per plan with many of its projects under execution reaching maturity. It expects to see an uptick in its revenue trajectory in H2FY15 as several recent launches hit the recognition threshold.New launches continue to perform well, meeting expectations of the company. It further saw the launch of the second phase of its Jazz project in Aundh during the quarter which was well received.Construction cost outflow in Q2FY15 is 90 crore. But there will be substantial jump in construction cost in Q3FY15 and Q4FY15 to about Rs 100-120 crore and Rs 150-180 crore as some key projects move to next stage of construction which involves intense construction activity.

Kotak Securities are the main arranger of NCD issue and as per the latest update there was some interest and expect to close the issue post Deepavali. NCD issue was underwritten to the extent of 75% by two marquee players. The company looks at Rs 70-75 crore from this and will be used to repay existing loan.No acquisition of land as of now. But the company is confident of winning new redevelopment projects in Mumbai soon.Steel and cement prices have been stagnant in the first half of current fiscal. That was good for the industry. Seeing some input pressure going forward.

The approaching festive season has boosted sales. The October 2014 sales so far were in excess of Sep 2014. Expect sale performance to be further bolstered going forward with anticipated improvement in consumer sentiment.With a healthy launch pipeline with all key approvals in place, the company is on a strong footing and confident of successfully executing its strategic vision laid out for long term growth.
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Co repr by Sujay Kalele, Group CEO.Key takeaways of call by Capital Mkt;

Revenues for the quarter ended Dec 2014 was up 17% to Rs 220 crore. With EBITDA margin stand contracted by marginal 40 bps (at 30%) the growth at EBITDA moderated to 15% to Rs 66 crore. Eventually the PAT (after minority interest) was down by 3% to Rs 19.8 crore with higher minority payout as well as no contribution from sale of land parcel as in corresponding previous period.

The company continues to sustain sales momentum. New sales bookings in Q3FY15 and 9mFY15 increased by 46% and 38% respectively to 0.64 msf and 1.9 msf compared to corresponding previous period. Value of area sold in Q3FY15 and 9mFY15 increased by 54% and 48% respectively to Rs 390 crore and Rs 1077 crore compared to corresponding previous period. Collections have also improved a healthy 30% on sequential basis to Rs 260 crore.

Pune Market: Performance of projects launched earlier this year in Pune continue to be good, especially Three Jewels at Kondhwa, where sales have been strong and significant price appreciation was achieved within a short time period.

Mumbai Market: In line with the guidance, the company commenced the execution of Link Palace project on Khar-Linking road in Mumbai during December 2014. Further, the company won three more projects in the Western suburbs of Mumbai in Khar (W), Malad (W) and Goregaon (W), taking the total tally to six redevelopment projects in Mumbai with a saleable area of about 0.6 million sft. This establishes the company as one of the largest listed real estate developers in the society redevelopment space. The company will continue to expand in Mumbai through suitable redevelopment projects.

The revenue to see gradual recovery going forward drove by contribution from recently launched projects i.e. Jazz, Kondhwa, Bavdhan, Giga Residency.The RBI's recent rate cut signals turn of the economic cycle and bodes well for the sector going forward. The company expect to see a significant uptick in its revenue and profit trajectory going forward as it continue to execute to the strategic vision as it have laid out.

Average price realization (APR) in Q3FY15 stood at Rs 6090/sft with the Pune APR stand at Rs 6034/sft and Mumbai APR stand at Rs 21671/sft.Sold 40000 sft commercial project (Alyssa) on Richmond road for a consideration of Rs 36 crore in Q3FY15.In Q3FY15 construction cost incurred were Rs 140 crore and the company spend about Rs 70 crore towards premium payment across projects for additional FSI.

Talwalkar deal is Rs 56 crore for 850000 sft. The deal is inked as land sale plus construction contract to save stamp duty for client. So the consideration towards land amounting Rs 13 crore is already received by the company.Building brand presence in Bengaluru increased contribution through activation of all projects in pipeline

Of the gross sale value of Rs 4589 crore as end of Dec 2014, the company recognized revenue to the tune of Rs 3207 crore and unrecognized revenue was about Rs 1382 crore giving strong revenue visibility.

In next two quarters the company looks to launch about 5-6 msf. Some key projects to be launched are Down Town Phase II, which is expected to be launched next month. Life Republic Phase II is scheduled to be launched in March 2015. Sanjivini township project is also expected to be launched in Q1FY16. Some other key projects are, Ega, Kondhwa Project, Ivy and Baghdhan. If environment committee meets the company expects launch of couple of more project in H1FY16.

Life Republic the company got additional FSI for 9 lakh sft of which 3 lalh sft is under execution as part of Phase I. But the balance 6 lakh sft is clubbed with Phase II.No land acquisition is planned in next couple of quarters.

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@admin : Please take a note of the message from Sandeep Roy. He is polluting multiple threads.

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Kolte Patil 3Q results.

The good part is that sales bookings are up 38% yoy and sales value by 48% yoy for 9M.

For 9M sales value is 1077 Cr.

This gives good visibility for the future revenue. Going by 9M fig , the company should be able to book about 1400 Cr of sales in this FY. I expect the company to reach sales of about 3000 Cr in FY 17. I believe the overall sentiment is better and with economy improving , the real estate should also show improvemnt. Also the avg sales price realization for this qtr is up by 7% to 6063 /sqft.

The DISAPPOINTMENT is that the margins have not improved. Other good builders have NPM margins of 20% + whereas Kolte is presently having abt 15%. Poddar Developers which are in affordable, LIG and MIG segment also have much better margins. I was expecting KP to show improvement in margins.

One reason for low margins obviously could be unethical Promoters sucking out money like other real estate and infra players. However, the comforting factor is good dividend payout, fair amount of disclosures by the company in AR and presentations, Deliotte and Haskins as auditors.

Another reason i can think of is that the revenue that the company is booking now is arising from sales made in past 3 years ( percentage completion method). So the company could have offered discounts / benefits to customers to encourage sales. The company is including these discounts in Selling expenses which are on a higher side ( 11.6 cr vs 4.1 cr QoQ). ( As an investor i would prefer these discounts to be deducted from revenue).

Anyway i will wait for 2 more qtrs to give the company benefit of doubt, however, if the margins dont improve it will be a big disappointment.

The company had entered into DMA (development aggrement ) with another builder to develop their property and launch and sell 24K appartments. Also the no. of re-development projects in Mumbai have gone up from 3 to 6 nos with 0.6 msf selling area. These developments I believe are positive and will help the company in working capital mgmt and improving margins ( but same should reflect in reported numbers). As in these cases company doesnt have to incur Capex for purchase of property.

Disc : Invested . Above is not a recomm but merely views.

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Kolte Patil 3Q results.

The good part is that sales bookings are up 38% yoy and sales value by 48% yoy for 9M.

For 9M sales value is 1077 Cr.

This gives good visibility for the future revenue. Going by 9M fig , the company should be able to book about 1400 Cr of sales in this FY. I expect the company to reach sales of about 3000 Cr in FY 17. I believe the overall sentiment is better and with economy improving , the real estate should also show improvemnt. Also the avg sales price realization for this qtr is up by 7% to 6063 /sqft.

The DISAPPOINTMENT is that the margins have not improved. Other good builders have NPM margins of 20% + whereas Kolte is presently having abt 15%. Poddar Developers which are in affordable, LIG and MIG segment also have much better margins. I was expecting KP to show improvement in margins.

One reason for low margins obviously could be unethical Promoters sucking out money like other real estate and infra players. However, the comforting factor is good dividend payout, fair amount of disclosures by the company in AR and presentations, Deliotte and Haskins as auditors.

Another reason i can think of is that the revenue that the company is booking now is arising from sales made in past 3 years ( percentage completion method). So the company could have offered discounts / benefits to customers to encourage sales. The company is including these discounts in Selling expenses which are on a higher side ( 11.6 cr vs 4.1 cr QoQ). ( As an investor i would prefer these discounts to be deducted from revenue).

Anyway i will wait for 2 more qtrs to give the company benefit of doubt, however, if the margins dont improve it will be a big disappointment.

The company had entered into DMA (development aggrement ) with another builder to develop their property and launch and sell 24K appartments. Also the no. of re-development projects in Mumbai have gone up from 3 to 6 nos with 0.6 msf selling area. These developments I believe are positive and will help the company in working capital mgmt and improving margins ( but same should reflect in reported numbers). As in these cases company doesnt have to incur Capex for purchase of property.

Disc : Invested . Above is not a recomm but merely views.

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Any latest updates on the stock post Q1 2015 results. Anyone still tracking the stock closely.

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The revenues had grown by only about 13% yoy. there was a fall in NPM margins. Overall the results were not good IMO.
The sales bookings yoy have also reduced, which is not a healthy sign.
The stress on the real estate sector is rubbing on the company.
Though i am still bullish on the stock in the long run but not sure of good returns in the short to medium term.
Have reduced stake after Q1 results.
Need to see margins improving.

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one thing that caught my attention is that the Mcap of 1300 cr is less than the inventory cost of 1467 cr on books ( which accounts for ~70% of total assets) .

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Disc - i have exited from the stock. Though i am still interested and believe it to be a good company . The AR for 2015 is quite impressive.
But the entire real estate sector is under stress. I am looking for an increase in sales bookings.

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Though I personally stay away from Real Estate sector for stock investment, probably this act, if implemented with right spirit, can change the perspective of this sector.

Builders who have good disclosures like Kolte Patil might do well after this act. We need to wait and see whether this brings in some buyer confidence into the sector, and stability in stock prices.

I am closely watching this sector after this act.

Disc: I do not have investment in any Real Estate stock.

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Continuing the discussion from [Kolte Patil Developers](Kolte Patil Developers

Kolte Patil is one of the few companies in Pune who have professionalized their management. They are also very focused sales & marketing organization. If you look at their AR you will find they disclose more than is required. While the initial reason i invested in the company was because its Market Capitalization was less than the value of land it owns, after i delved deeper i am pretty sure it deserves a value more than Mr Market ascribes to it. RERA when it comes into being in Mah will benefit companies like Kolte Patil enormously

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KPDL june results and presentation is out. 2 things i liked .
1- the NP margin has improved yoy
2 - i have been waiting for an improvement in the sales booking yoy. This qtr the company reported higher sales booking - 370 cr over 300 cr yoy.
As per presentation , the company is expecting pre-sales growth of about 20% for this financial year . In my opinion, this is the most important indicator of improvement in demand. Will need to watch every qtr. Also we need to monitor the results of other companies to verify if it is across the board. That will signal improvement / turnaround in real estate.
The company had delivered about 400+ units this qtr and targets to deliver 2500 units in this year. That signals decent revenue growth for the upcoming year, coupled with improvement in margins can help post good growth in bottomline.

Negatives- The revenue yoy is flat. Need to see if the margins are sustainable. Also, company should show growth in the topline in the next quarters to verify a positive trend in the market.

Disc : Re-entered the stock. views are biased. This is not a recommendation to buy / sell.

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