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Result Update August 5, 2015 Rating matrix Rating Target Target Period Potential Upside : : : : Mahindra Lifespace (GESCOR) Buy | 590 24 months 37% Forays into Bengaluru market.… What’s Changed? Target EPS FY16E EPS FY17E Rating Changed from | 625 to | 590 Changed from | 33.6 to | 28.4 Changed from | 48.4 to | 41.9 Unchanged Quarterly Performance (Consolidated) Revenue EBITDA EBITDA (%) PAT Q1FY16 Q1FY15 YoY (% ) Q4FY15 175.0 406.6 -57.0 259.1 41.9 260.9 (83.9) 50.0 23.9 64.2 -4021 bps 19.3 21.6 179.3 (87.9) 30.6 QoQ (%) -32.5 (16.2) 464 bps (29.4) Key Financials | Crore Net Sales EBITDA Adj. PAT Adj. EPS (|) FY14 705.3 170.2 100.6 24.6 FY15E 1,086.1 424.2 116.2 28.4 FY16E 1,255.8 312.1 115.9 28.4 FY17E 1,383.8 388.7 171.2 41.9 FY14 20.4 24.0 19.9 1.6 8.0 5.8 FY15E 17.6 20.7 7.8 1.4 18.3 14.7 FY16E 17.7 20.8 9.9 1.3 7.6 11.0 FY17E 12.0 14.1 7.5 1.2 10.3 13.8 Valuation summary (x) P/ E (Adjusted) Target P/E EV / EBITDA P/BV RoNW (%) RoCE (% ) Stock data Particular Market Capitalization Total Debt Cash and Investments EV 52 week H/L (|) Equity capital Face value Amount | 2050.2 crore | 1237 crore | 77 crore | 3210 crore 664 / 386 | 40.8 crore | 10 Price performance (%) Return % Sobha Developers Oberoi Realty Mahindra Lifespace BSE Realty 1M 0.2 (3.3) 6.6 (1.6) 3M (8.8) (1.5) (2.7) (11.6) | 430 6M (24.3) (6.4) (11.6) (23.2) 12M (20.9) 2.8 (23.1) (26.1) Research Analyst Deepak Purswani, CFA [email protected] ICICI Securities Ltd | Retail Equity Research • Mahindra Lifespace Developers’ (MLDL) standalone net sales declined 65.5% YoY to | 104.6 crore. The sharp decline was on account of the high base effect in Q1FY15 as MLDL had booked | 325 crore sales proceeds from Byculla land development rights • The standalone PAT at | 17.8 crore (de-grew 88.9% YoY) below our estimate of | 30.3 crore mainly on account of lower-than-expected sales and higher interest expense of | 6 crore • On the consolidated front, MLDL's revenues declined 75.2% YoY to | 175 crore. The EBITDA margin was healthy at 23.9% while net profit came in at | 21.6 crore • In terms of sales volume in the residential segment, the company sold 242 units (0.26 mn sq ft) vs. 106 units (0.12 mn sq ft) in Q1FY15 across all projects worth | 185 crore. We also highlight the above sales does not include 85 units worth | 158 crore sold in June, 2015 as sales collection had been lower than 10% of its sales value Expands footprints in Bengaluru market… MLDL has forayed into the Bengaluru market in Q1FY16, with the launch of premium ‘Windchimes’ (0.44 mn sq ft). The initial response has been very good as it managed to sell 72 units aggregating | 101 crore within a week of its launch. With this launch along with sales volume from affordable housing in Boisar & Chennai and planned launch in Mumbai, we anticipate MLDL’s sales volume will grow at a CAGR of 26.1% in FY1517E. Consequently, we anticipate MLDL’s topline and bottomline to grow at 12.9% and 21.4% CAGR, respectively, in FY15-17E. JV with Sumitomo Corp for North Chennai… In Q1FY16, MLDL signed a joint venture agreement with Sumitomo Corporation for the North Chennai industrial park project in the ratio of 60:40. The phase involves development of 300 acres with total investment of | 375 crore. Furthermore, MLDL has also got government approval for conversion of 500 acres from residential and social part to domestic tariff part in Jaipur integrated development. In our view, this development should keep its cash flow on the fast track, going ahead. Reduced leverage & strong parentage gives us comfort… With the sales proceeds from Byculla property development rights, MLDL’s consolidated net debt to equity has come down from 1.1x in FY14 to 0.78x in Q1FY16. The recent JV with Sumitomo Corp would also help it to improve its balance sheet, going ahead. Furthermore, we also derive our comfort in MLDL due to its strong parentage. MLDL is promoted by the Mahindra Group, which has a diversified presence across businesses. The group has exhibited a strong track record of being the top players across business verticals. The strong management lends us comfort that MLDL will emerge as a dominant player in the real estate space as well. Attractive valuation with strong parentage; maintain BUY… Considering the parentage advantage and ramp up in the project portfolio led by recent land acquisition, we believe current valuations (at 0.5x potential NAV and 1.2x FY17 P/BV) are attractive. We maintain our BUY recommendation with a target price of | 590 (0.7x its potential NAV). Variance analysis (Standalone) Particular Income from Operation Q1FY16 Q1FY16E Q4FY15 QoQ (Chg %) Q1FY15 104.6 225.3 131.5 -20.5 303.1 YoY (Chg %) -65.5 Other Income 24.1 30.0 24.1 0.1 39.9 -39.5 Cost of Projects Operating Expenses Employee cost Other expenditure 72.3 4.1 13.2 8.5 58.4 2.1 6.5 5.3 85.4 9.7 14.2 9.8 -15.4 -58.2 -6.8 -13.4 49.4 9.2 9.7 29.2 46.2 -56.0 37.0 -70.8 EBITDA EBITDA Margin (% ) Depreciation Interest 6.6 6.3 1.0 6.0 16.3 7.2 0.5 1.4 12.3 9.4 0.5 4.6 -46.8 - 311 bps 126.1 28.8 205.7 67.8 0.8 7.9 -96.8 -6158 bps 33.3 -25.1 23.7 5.9 17.8 44.4 14.1 30.3 31.4 8.6 22.8 -24.4 -31.3 -21.8 236.9 77.0 159.8 -90.0 -92.3 -88.9 0.3 0.4 0.4 -40.9 0.1 116.7 PBT Taxes PAT Key Metrics Sales Volume (msf) Comments Standalone net sales declined 65.5% YoY to | 104.6 crore. The sharp decline was on account of high base effect in Q1FY15 as MLDL had booked | 325 crore sales proceeds from Byculla land development rights Standalone PAT at | 17.8 crore (de-grew 88.9% YoY) was below our estimate of | 30.3 crore mainly on account of lower than expected sales & higher interest expense Source: Company, ICICIdirect.com Research Change in estimates (| Crore) Revenue EBITDA EBITDA Margin (%) PAT EPS (|) Old 1,383.1 343.7 24.9 137.3 33.6 FY16E New % Change 1,255.8 -9.2 312.1 -9.2 24.9 -4 bps 115.9 -15.6 28.4 -15.5 Old 1,658.2 429.8 25.9 197.8 48.4 FY17E New % Change 1,383.8 -16.6 388.7 -9.6 28.1 219 bps 171.2 -13.4 41.9 -13.4 Comments We have lowered our sales volume & revenues recognisition assumptions Source: Company, ICICIdirect.com Research Assumptions Volume sold in msf Residential Sales Volume MWC leasing (acres) MWCJ leasing (acres) FY13 1.1 FY14 0.9 FY15 1.6 62.8 74.1 49.8 56.0 29.8 59.0 Current FY16E FY17E 1.8 2.6 9.8 62.0 -0.2 65.0 Earlier FY16E FY17E 1.9 2.8 29.8 79.7 Comments We have now considered factored in sales slowdown in our estimates 9.8 100.0 [ Source: Company, ICICIdirect.com Research Consolidated performance… Exhibit 1: Consolidated Performance (| Crore) Total operating income EBITDA EBITDA Margin (% ) Depreciation Interest Other Income Reported PAT EPS (|) Q1FY16 175.0 41.9 23.9 4.2 12.0 12.6 21.6 4.3 Q1FY15 406.6 260.9 64.2 3.2 14.6 29.9 179.3 43.9 YoY (Chg %) -57.0 -83.9 -4021 bps 30.9 -17.8 -58.0 -87.9 -90.3 Q4FY15 259.1 50.0 19.30 3.3 15.0 9.4 30.6 7.5 QoQ (Chg %) -32.5 -16.2 464 bps 27.0 -20.1 34.2 -29.4 -43.3 Source: Company, ICICIdirect.com Research ICICI Securities Ltd | Retail Equity Research Page 2 Company Analysis Sales volume pick-up hinges on new project launches… During the quarter, the company sold 242 units [0.26 million square feet (mn sq ft)] vs. 106 units (0.12 mn sq ft) in Q1FY15 across all projects worth | 185 crore. Historically, MLD has limited land bank in the residential segment. Hence, its sales volume declined from 1.2 million sq ft in FY12 to 0.9 mn sq ft in FY14. However, in the last two years, MLDL has added land inventory of ~4 mn sq ft across various cities like Hyderabad, Pune, Bengaluru and Chennai. With these acquisitions, MLDL currently has a pipeline of 3.9 mn sq ft, which will be launched over the next 12-18 months providing strong visibility over sales volumes. With these acquisitions, we build in residential sales volume of 1.8 mn sq ft and 2.6 mn sq ft in FY16E and FY17E, respectively. 1691 2.5 1.5 444 1.0 1.8 2.6 500 FY13 FY14E FY15 FY16E FY17E Sales V alue (RHS) Source: Company, ICICIdirect.com Research 1000 371 1.6 0.0 1500 999 0.9 0.5 2000 (| crore) 707 2.0 1.1 0.26 0.44 Q4FY15 Q3FY15 Sales Volume 3.0 Q1FY16 0.59 93 0.23 54.0 185 350 300 250 200 150 100 50 0 (mn sq feet) 250 Exhibit 3: Forthcoming project to boost sales volume, going ahead (| crore) 310 Q2FY15 0.7 0.6 0.5 0.5 0.4 0.3 0.2 0.2 0.1 0.0 Q1FY15 0.12 (mn sq feet) Exhibit 2: Volumes remained subdued in last few quarters Sales V olume 0 Sales Value (RHS) Source: Company, ICICIdirect.com Research Exhibit 4: Strong forthcoming project pipeline to push up sales volume, going ahead Existing projects new phases New Projects Location Pune Chennai Chennai Nagpur NCR Mumbai Mumbai Bengaluru Project Antheia subsequent phases Aqualily subsequent phases Happinest Avadi - subsequent phases Bloomdale subsequent phases Luminare–subsequent phases* TheSerenes, Alibaug–subsequent phases Happinest Boisar–subsequent phases W indchimes- Subsequent phases Mumbai Mumbai Forthcoming projects over the next 12-18 months Andheri Sakinaka Company MLDL MRDL MLDL MBDL MHPL MLDL MLDL MHPL MLDL Holding 100% 96% 100% 70% 50% 100% 100% 50% ESA (mn sft) 0.56 0.20 0.29 0.68 0.73 0.11 0.17 0.43 MLDL MLDL 100% 100% Total 0.37 0.32 3.86 [ Source: Company, ICICIdirect.com Research *Joint Development ICICI Securities Ltd | Retail Equity Research Page 3 Consolidated revenues to grow at 12.9% CAGR during FY15-17E… As highlighted earlier, the limited land bank in the residential portfolio has kept MLDL revenues flattish in the last few years. Going ahead, with the recent addition of acquisition from the land bank, we anticipate MLDL’s sales volume will jump from 1.6 mn sq ft in FY15 to 2.6 mn sq ft in FY17E, which should lead to better revenues booking from the residential portfolio. This coupled with land leases from MWC Chennai and Jaipur SEZ will lead to topline at 12.9% CAGR during FY15-17E compared to flattish revenues in the last couple of years. 1800 1600 1400 1200 1000 800 600 1600 1400 1200 1,086.1 1,255.8 1,383.8 (| crore) 705.3 400 200 0 Exhibit 6: Forthcoming project to boost sales volume, going ahead… CAGR - 12.9% 738.3 (| crore) Exhibit 5: Consolidated revenues to grow at 12.9% CAGR during FY15-17E FY13 FY14 FY15E FY16E FY17E 1000 800 600 400 200 109 78 123 96 76 104 122 352 165 96 67 307 624 FY13 FY14 FY15 94 100 137 137 136 130 152 118 760 834 FY16E FY17E Standalone* MWC - Chennai MWC - Jaipur MRDL* MITL* Others Source: Company, ICICIdirect.com Research * Residential segment Source: Company, ICICIdirect.com Research EBITDA margin to improve ahead… Historically, MLDL has enjoyed margins in the range of 28-33% given the higher share of MWC leasing wherein margins are higher. However, the same has dipped to 24.1% in FY14 with lower leasing in Jaipur and delay in approval for remaining 40 acres at Chennai. The sale of Byculla land had boosted MLDL’s margin in FY15. However, going ahead, we expect the EBITDA margin to improve to 28.1% in FY17E as the leasing activity improves across World Cities. 45 39.1 40 24.9 24.1 28.1 35 30 (%) 32.8 25 424.2 312.1 388.7 20 170.2 450 400 350 300 250 200 150 100 50 0 241.9 (| crore) Exhibit 7: EBITDA margins to improve… FY13 FY14 FY15E FY16E FY17E EBITDA 15 10 Margin (RHS) Source: Company, ICICIdirect.com Research ICICI Securities Ltd | Retail Equity Research Page 4 Net profit to grow at 21.4% CAGR during FY15-17E… Given the subdued performance from the residential segmental as well as decline in EBITDA margins, MLDL’s bottomline has declined from 119.1 crore in FY12 to |100.6 crore in FY14. Going ahead, with better sales from the residential segment coupled with high contribution from high margin land leases translating into better EBITDA margin, we expect MLDL’s net profit to grow at a CAGR of 21.4% during FY15-FY17E. Given the improved profitability we expect the RoE of MLDL to inch back to 10.3%. 180 160 140 120 100 80 60 40 20 0 Exhibit 9: Return ratios to bounce back… 171.2 108.2 116.2 100.6 18.3 20 15 115.9 (%) (| crore) Exhibit 8: PAT to grow at 21.4% CAGR during FY15-17E 14.7 8.0 10 5 13.8 10.9 9.9 11.0 7.6 10.3 5.8 0 FY13 FY13 FY14 FY15E FY16E FY14 FY17E Source: Company, ICICIdirect.com Research FY15E RoNW FY16E FY17E RoCE Source: Company, ICICIdirect.com Research Debt to equity ratio to improve from hereon... In Q1FY15, MSDL used the proceeds from the sale of Byculla land to pare its debt by | 195 crore. However, in Q1FY16, MLDL’s gross D/E had risen marginally to 0.89x. Going ahead, we expect the debt to equity ratio to improve, going ahead, on the back of expected healthy financial performance during FY16E and FY17E. Exhibit 10: Quarterly debt to equity ratio trend… 0.8 0.6 0.4 1.1 1.1 1.1 1.1 0.8 0.9 0.9 0.9 0.8 0.8 0.8 1.0 1.0 0.8 0.6 0.7 0.7 0.8 0.8 0.7 0.9 0.7 1.1 0.9 0.6 0.4 0.2 0 1.1 1.2 0.9 (x) (x) 1.2 1 Exhibit 11: Debt to equity to improve, going ahead… 0.7 0.6 0.5 Net D/E Source: Company, ICICIdirect.com Research ICICI Securities Ltd | Retail Equity Research Q1FY16 Q4FY15 Q3FY15 Q2FY15 Q1FY15 Q4FY14 Q3FY14 Q2FY14 Q1FY14 0.2 Gross D/E 0.6 0.0 FY13 FY14 FY15E Gross D/E FY16E FY17E Net D/E Source: Company, ICICIdirect.com Research Page 5 Conference Call Highlights: ICICI Securities Ltd | Retail Equity Research • MLDL signed a joint venture agreement with Sumitomo Corporation for the North Chennai industrial park project. The project will be undertaken in two phases with total land size of 650 acres. The project is to be executed in 60:40 JV. • Under forthcoming new projects in Mumbai, for Andheri project, approvals have been applied for plot A while Plot B is awaiting approvals. For the Saki Naka project, approval process and zone conversion is being initiated. The management is looking forward to these projects in H2 FY16. • Under the JV with Standard Chartered Bank, | 650 crore has already been deployed out of | 1000 crore. The JV is currently scouting for some more land deals to deploy remaining | 350 crore. While, further details are unclear, the deal is likely to be in Maharashtra region • MLDL has done a revenue booking of ~| 48 crore for World Cities in Q1FY16. In terms of sales volume, Q1FY16 sale does not include 85 units worth | 158 crore sold in NCR and Bengaluru locations as the sales collection has been lower than 10% of its sales value Page 6 Outlook and valuation Considering the parentage advantage and ramp up in the project portfolio led by recent land acquisition, we believe current valuations (at 0.5x potential NAV & 1.2x FY17 P/BV) are attractive. We maintain our BUY recommendation with a revised target price of | 590 (0.67x its potential NAV) We have valued MLDL on the NAV methodology as this methodology captures the true value from the long term nature of its SEZ and real estate business. Considering the parentage advantage and ramp up in the project portfolio led by recent land acquisition, we believe current valuations (at 0.5x potential NAV & 1.2x FY17 P/BV) are attractive. We maintain our BUY recommendation with a revised target price of | 590 (0.67x its potential NAV). We have now factored in the delay in pick-up in sales volume at Jaipur SEZ and also factored in the delay in Andheri projects in H2FY16. We have also considered a discounting rate of 14% for the SEZ and real estate business. To value the commercial property such as Evolve IT Park and Canopy, we have used the cap rate of 10%. Exhibit 12: Valuation Mn sq ft/Acres NAV Value MLD (%) S take value Value / share 2300 0.1 11.3 1.5 0.7 983.7 443.7 15.1 388.2 74.3 62.3 89 89 96 96 100 914.7 394.9 13.5 372.7 71.3 62.3 224.0 96.7 3.3 91.3 17.5 15.3 3000.0 0 1.0 21.8 1380.8 173.8 118.0 39.3 1049.7 74 74 74 100 1294.7 128.6 87.3 29.1 1049.7 MMR Andheri Thane Kandivli Boisar 1.9 0.7 0.6 0.1 0.5 680.5 374.0 207.7 45.8 53.1 400 100 100 100 100 Bengaluru 1.0 249.1 NCR- 1.4 Pune NAV Multiple Ta rget Valuation Value MLD (%) Stake value Value / share 1.0x 1.0x 1.0x 1.0x 1.0x 983.7 443.7 15.1 388.2 74.3 62.3 89 89 96 96 100 914.7 394.9 13.5 372.7 71.3 62.3 224 97 3 91 17 15 317.1 31.5 21.4 7.1 257.1 1.0x 1.0x 0.0x 0.0x 291.8 173.8 118.0 0.0 0.0 74 74 74 100 216.0 128.6 87.3 0.0 0.0 53 32 21 0 0 680.5 374.0 207.7 45.8 53.1 166.7 91.6 50.9 11.2 13.0 1.0x 0.8x 0.8x 1.0x 632.1 388.9 155.7 34.4 53.1 100 100 100 100 632.1 388.9 155.7 34.4 53.1 155 95 38 8 13 50 124.6 30.5 1.0x 249.1 50 124.6 31 382.3 70.9 271.0 66.4 1.0x 382.3 70.9 271.0 66 1.7 347.0 100 347.0 85.0 1.0x 347.0 100 347.0 85 Hyderabad 1.1 87.9 100 87.9 21.5 0.8x 70.3 100 70.3 17 Nagpur 1.5 112.2 70 78.5 19.2 0.8x 84.1 70 58.9 14 Alibaug 0.2 38.8 100 38.8 9.5 1.0x 38.8 100 38.8 10 Nasik 0.6 38.1 100 38.1 9.3 0.8x 28.6 100 28.6 7 Net Debt -291.3 100 - 291.3 - 71.3 1.0x -291.3 100 -291.3 -71 NAV Valuation 4009.3 3584.7 877.8 2410.7 590 Project Chennai MWC - Chennai & North Chennai SE Canopy MITL MRDL Avadi MWC Jaipur MWC Jaipur S EZ (in Acres) Evolve IT park - Operational Evolve IT park - Development Residential Area 2816.7 Source: Company, ICICIdirect.com Research Exhibit 13: Valuation FY14 FY15E FY16E FY17E Sales (| cr) 705.3 1086.1 1255.8 1383.8 Growth (%) -4.5 54.0 15.6 10.2 EPS (|) 24.6 65.2 28.4 41.9 Growth (%) -28.8 164.5 -56.4 47.7 PE (x) 20.4 7.7 17.7 12.0 EV/ EBITDA (x) 19.9 7.8 9.9 7.5 RoNW (%) 8.0 18.3 7.6 10.3 Source: Company, ICICIdirect.com Research ICICI Securities Ltd | Retail Equity Research Page 7 RoCE (%) 5.8 14.7 11.0 13.8 Company snapshot 800 700 Target Price | 590 600 500 400 300 200 Jul-17 Apr-17 Jan-17 Oct-16 Jul-16 Apr-16 Jan-16 Oct-15 Jul-15 Apr-15 Jan-15 Oct-14 Jul-14 Apr-14 Jan-14 Oct-13 Jul-13 Apr-13 Jan-13 Oct-12 Jul-12 Apr-12 Jan-12 Oct-11 Jul-11 Apr-11 Jan-11 Oct-10 Jul-10 Apr-10 Jan-10 100 Source: Bloomberg, Company, ICICIdirect.com Research Key events Date FY09 Nov-09 Oct-10 Feb-11 Nov-12 Q1FY14 Q3FY14 May-14 Jun-14 Oct-14 Oct-14 Nov-14 Event Stock corrects sharply as sales volumes plummet Launch of Aqualily, Chennai Buys group firm's land in Kandivali and Ghatkopar Government imposes 18.5% MAT on SEZ developers and units in FY12 Budget, removing MAT exemptions Mahindra Lifespaces debuts in Hyderabad with ‘Ashvita’ - a premium residential complex The consolidated net debt to equity rises to 1.1x due to loans taken for new acquisitions of land, leading to correction in stock price No new projects reach revenue recognition stage leading to sharp decline in revenues Completes sale of Byculla property (MLDL was holder of development rights in the property) where its share of consideration was worth | 325 crore Enters into affordable housing segment (named Happinest) by offering houses in the range of | 10 lakh to | 20 lakh Mahindra Lifespace launches its second affordable housing project "Happinest" in Boisar, a suburb of Mumbai Acquires a land parcel in MMR region for residential development having an estimated development potential of around 0.33 mn sq ft of saleable area Launches new residential project - 'The Serenes' in Alibaug, Maharashtra making its foray into the weekend homes segment Jun-15 MLDL forays into Bengaluru market, by announcing upcoming launch of premium residential project, Windchimes spread over 5.85 acres offering 403 units of luxurious 3 and 4 BHK residences across 2 towers. Company looks to generate revenues of | 700 crore over next four years Source: Company, ICICIdirect.com Research Top 10 Shareholders Rank 1 2 3 4 5 6 7 8 9 10 [ Shareholding Pattern Name Mahindra Group Capital Research Global Investors Amansa Capital Pte Ltd. First State Investment Management (UK) Limited ICICI Prudential Life Insurance Company Ltd. FIL Investment Management (Hong Kong) Limited UTI Asset Management Co. Ltd. Dimensional Fund Advisors, L.P. Amundi Hong Kong Limited Nanda (Arun) Latest Filing Date % O/S Position (m) Change (m) 30-Jun-15 50.8 20.9 0.0 30-Jun-15 6.9 2.8 0.0 30-Jun-15 6.1 2.5 0.0 30-Jun-15 5.5 2.3 0.0 30-Jun-15 3.1 1.3 0.0 31-Mar-15 2.5 1.0 0.0 31-May-15 1.0 0.4 0.0 30-Apr-15 0.9 0.4 0.0 31-Mar-15 0.9 0.4 0.0 30-Jun-14 0.3 0.1 0.1 (in %) Promoter FII DII Others Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 50.86 50.85 50.84 50.83 50.83 30.06 29.37 29.03 28.83 25.83 1.36 1.31 1.23 1.34 1.56 17.72 18.47 18.90 19.00 21.78 [ [[ Source: Reuters, ICICIdirect.com Research Recent Activity Buys Investor name Nanda (Arun) UTI Asset Management Co. Ltd. Haribhakti (Shailesh V) Arjundas (Anita) ICICI Securities Ltd | Retail Equity Research Value 1.19m 0.10m 0.05m 0.02m Shares 0.13m 0.01m 0.01m 0.00m Sells Investor name Tata Asset Management Limited FIL Investment Management (Hong Kong) Limited Value -1.09m -0.13m Shares -0.17m -0.02m Page 8 Financial summary Profit and loss statement | Crore (| Crore) Net Sales Other Income Total Revenue FY14 705.3 50.9 756.2 FY15E 1,086.1 61.5 1,147.6 FY16E 1,255.8 77.1 1,332.9 FY17E 1,383.8 93.3 1,477.0 Operating Expenditure Employee Expenses Administrative Expenses Total Operating Expenditure EBITDA Interest PBDT Depreciation PBT Total Tax PAT before MI Minority Interest Reported PAT Exceptional Items Adjusted PAT EPS (Reported) EPS (Adjusted) 425.7 39.9 69.4 535.0 170.2 50.2 171.0 10.1 160.9 50.9 110.0 9.4 100.6 100.6 24.6 24.6 501.3 55.0 105.6 661.9 424.2 51.4 434.3 13.2 421.0 137.8 283.3 17.1 266.2 150.0 116.2 65.2 28.4 775.0 57.8 110.9 943.7 312.1 126.4 262.8 14.1 248.7 83.6 165.0 49.1 115.9 115.9 28.4 28.4 817.9 60.7 116.4 995.0 388.7 128.0 354.1 15.1 339.0 114.8 224.2 53.0 171.2 171.2 41.9 41.9 Source: Company, ICICIdirect.com Research | Crore FY14 FY15E FY16E FY17E 40.9 2.4 1,218.4 1,261.7 40.9 2.4 1,408.7 1,452.0 40.9 2.4 1,491.7 1,534.9 40.9 2.4 1,614.1 1,657.4 83.5 83.5 83.5 83.5 1,401.1 1,259.4 1,093.4 961.1 43.4 43.4 43.4 43.4 2,789.7 2,838.3 2,755.2 2,745.4 275.9 55.5 220.4 102.2 15.4 337.4 68.7 268.7 102.2 15.4 364.5 82.9 281.6 102.2 15.4 392.6 98.0 294.6 102.2 15.4 301.4 301.4 301.4 301.4 Inventory Debtors Loans and Advances Cash Other Current Assets Total Current Assets Creditors Provisions Net Current Assets 1,776.4 109.0 693.5 66.7 141.8 2,787.4 474.3 162.8 2,150.3 1,850.2 149.8 774.5 19.7 212.8 3,007.1 552.5 303.9 2,150.7 1,816.9 233.0 760.1 61.0 205.6 3,076.7 650.0 372.0 2,054.7 1,783.1 278.4 720.4 113.6 225.6 3,121.0 682.8 406.4 2,031.8 Total Assets 2,789.7 2,838.3 2,755.2 2,745.4 Minority Interest Total Debt Deferred Tax Liability Total Liabilities Assets Total Gross Block Less: Acc Dep Net Block Goodwill on Consolidation Total CWIP Investments | Crore (| Crore) Profit after Tax Depreciation CF before wc changes FY14 100.6 10.1 160.9 FY15E 266.2 13.2 330.8 FY16E 115.9 14.1 256.5 FY17E 171.2 15.1 314.3 Net Increase in CA Net Increase in CL Net CF from op activities (451.4) 160.6 (129.8) (266.7) 219.3 283.4 (28.3) 165.6 393.9 8.2 67.3 389.8 (Purchase)/Sale of FA Other Investments Others Net CF from Inv Activities (29.7) (168.1) 23.4 (200.9) (61.5) 1.1 (61.5) (27.1) 4.1 (27.1) (28.2) (28.2) Change in Equity Capital Change in Loan Fund Others Net CF from Fin Activities 0.0 122.7 (50.3) 253.2 299.0 (50.5) (268.9) 435.4 (226.2) (325.5) (141.7) (127.3) (309.0) Net Cash flow Opening cash Closing cash (77.6) 144.3 66.7 (47.0) 66.7 19.7 41.3 19.7 61.0 52.6 61.0 113.6 FY14 FY15E FY16E FY17E 24.6 24.6 308.9 41.7 65.2 28.4 355.5 103.9 28.4 28.4 375.8 76.4 41.9 41.9 405.8 95.2 24.1 14.3 39.1 24.5 24.9 9.2 28.1 12.4 8.0 5.8 5.9 18.3 14.7 14.7 7.6 11.0 11.1 10.3 13.8 14.3 19.9 20.4 4.8 0.6 2.9 1.6 7.8 7.7 3.0 0.7 1.9 1.4 9.9 17.7 2.5 0.8 1.6 1.3 7.5 12.0 2.1 0.8 1.5 1.2 Turnover Ratios Asset turnover Debtors Turnover Ratio Creditors Turnover Ratio 0.3 6.5 1.5 0.4 7.3 2.0 0.4 5.4 1.9 0.5 5.0 2.0 Solvency Ratios Net Debt / Equity Current Ratio Quick Ratio Debt / EBITDA 1.1 4.4 1.6 8.2 0.9 3.5 1.4 3.0 0.7 3.0 1.2 3.5 0.5 2.9 1.2 2.5 Source: Company, ICICIdirect.com Research Balance sheet (| Crore) Liabilities Equity Capital ESOP Reserve and Surplus Total Shareholders funds Cash flow statement Source: Company, ICICIdirect.com Research ICICI Securities Ltd | Retail Equity Research . Key ratios (Year-end March) Per Share Data EPS EPS (Adjusted) BV Operating profit per share Operating Ratios EBITDA Margin PAT Margin Return Ratios RoE RoCE RoIC Valuation Ratios EV / EBITDA P/E EV / Net Sales Sales / Equity Market Cap / Sales Price to Book Value Source: Company, ICICIdirect.com Research Page 9 ICICIdirect.com coverage universe (Real Estate) EPS (|) P/E (x) EV/EBITDA (x) P/B (x) RoE (%) CMP M Cap Sector / Company (|) TP(|) Rating (| Cr)FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E FY15E FY16E FY17E 279 333 Buy 9,157 9.7 18.0 36.4 28.8 15.5 7.7 19.0 10.0 5.2 2.0 1.7 1.4 6.9 10.8 18.2 Oberoi Realty (OBEREA) Mahindra Lifespace (GESCOR) 430 590 Buy 1,757 65.2 28.4 41.9 7.7 17.7 12.0 7.8 9.9 7.5 1.4 1.3 1.2 18.3 7.6 10.3 353 400 Hold 3,462 24.3 27.3 32.5 16.0 14.2 12.0 9.1 8.3 7.1 1.6 1.5 1.4 9.7 10.2 11.3 Sobha (SOBDEV) Source: Company, ICICIdirect.com Research ICICI Securities Ltd | Retail Equity Research Page 10 RATING RATIONALE ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock. Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction; Buy: >10%/15% for large caps/midcaps, respectively; Hold: Up to +/-10%; Sell: -10% or more; Pankaj Pandey Head – Research [email protected] ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai – 400 093 [email protected] ICICI Securities Ltd | Retail Equity Research Page 11 Disclaimer ANALYST CERTIFICATION We , Deepak Purswani, CFA MBA (Finance), research analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. 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