Based on my understanding It has an inventory of 2100 crores which has a margin for nearly 40% to 50% which translate to 1000 crores. The ODC project if i heard right will have a top line of 10000 crores over the years and assuming a lower margin of 20% could translate to 2000 crores. Company has good debt equity ratio.So it all depends on sales and execution over 3-4 years. Promoters have also invested with a lock in of one year.
The beauty of statistics and numbers is from which lens you look at it. What if I say similar things happened in other industries which led to bankrupcy of many players leading to supply constraints followed by okaish demand revival leading to better days for survivors my view is this sector is undergoing huge huge consolidation. There is a bloodbath going where 60-70 percent of players ( read those who got in just due to greed or political black money ) and can’t even manage working capital as they never bothered to create brand , focus on execution are going to get wiped off. The survivors who have genes to survive ( read strong balance sheet, execution n customer satisfaction mindset ) will see a good long term future . All said and done , real estate sector is cyclic one n when cycle turns ,the best of best also goes through tough time and hence it’s not a big and forget business . Entry n exit both need intelligent timing
If you look into realty stocks, most of stocks re-rated in PE terms but non of the company has good sales booking growth and collection growth inline with PE growth!
Caution - company booking revenue on pre-sales (New booking) and does not have good collection might get corrected once people loose hope!
Getting hit by debt crisis -
Raising money at 9.25% interest rate (5th Oct 2018)
Earlier was on 20th July, 2018 at 8.40%
Within three month significant rise in interest rate.If real estate inventory does not improve sell velocity, rise in interest rate will definitely impact balance sheet of real estate companies in a big way
Since the Covid outbreak, I was keeping a close eye on Real Estate cos, but I was very fearful as to which co to ponder upon, finally through this thread I can start somewhere now…