* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download Ganesh Housing Corporation Ltd
Survey
Document related concepts
International investment agreement wikipedia , lookup
Early history of private equity wikipedia , lookup
Stock trader wikipedia , lookup
Socially responsible investing wikipedia , lookup
Securities fraud wikipedia , lookup
Financial crisis wikipedia , lookup
Systemic risk wikipedia , lookup
Hedge (finance) wikipedia , lookup
Environmental, social and corporate governance wikipedia , lookup
Financial Crisis Inquiry Commission wikipedia , lookup
History of investment banking in the United States wikipedia , lookup
Transcript
Ganesh Housing Corporation Ltd Qualitative Coverage - Strong Buy Rating - CMP: ` 201.75 Sector: Real Estate Nifty: 5452.10 Risk Return Matrix Risk Gujarat based Ganesh Housing Corporation Limited (GHCL) is engaged in the business of construction and real estate development mainly in Ahmedabad. GHCL till date has constructed around 16 million square feet (msf) of residential space in Ahmedabad since their core focus has always been in the residence space. Currently the company has 1.2 msf of residential projects in channel. In the next eight-nine years the company plans to execute 56 msf of space. Market Data Market Cap : ` 6587.1 mn 52 week range : ` 205 / ` 97 Every quarter GHCL is known to roll out one project and at present has four projects in line i.e. Satva, Suyojan, Maple County and Maple County-2. At the end of March 2010 quarter, the company in these projects had 1.656 msf (worth `356.42 crore) of total saleable area under construction, out of which, 1.224 msf (worth `245.07 crore), has already been booked by the customers. Bloomberg : GHFC IN Reuters : GHFC.BO BSE : 526367 NSE : GANESHHOUC Avg Daily Vol. (1 year NSE) : 54,668 No. of Shares : 32.66 mn Shareholding Pattern DII 6% As a strategic move GHCL other then residence project is also focusing on commercial offices, retail malls, SEZ (IT & ITES), hotels and townships. IT-SEZ ‘Million Minds’ and Golf Township ‘Smile City’ are its two major projects in pipeline. Yash Organiser Private Limited subsidiary company of GHCL has its core focus on construction. It is constructing ‘GLOMAX’ the commercial shopping mall in Ahmedabad. Investment Rationale Others 19% City: As of today it is clearly visible that Ahmedabad is well placed for multi-pronged growth since it is growing industrially, commercially, financially, infrastructurally and culturally. The city is centrally connected to all ports in Gujarat and is expected to be the main passage for trade, which is expected to facilitate the growth of new high-end manufacturing industries. Recently a business survey has placed the city as one of the top five destinations for investment in the country. The New International Airport is expected to bring a lot of positivity into city’s investment climate. In the next five years the city is expected to generate large-scale employment through investments worth US$15 billion, hence ensuring steady growth in real estate. Promoter 56% Relative Performance Source: Capitaline Financial Performance (` ` Cr) FY09 FY08 FY07 FY06 FY05 Sales 55.05 127.43 45.45 30.70 14.90 EBITDA 76.77 118.48 41.98 14.76 10.33 Adj PAT 16.79 106.06 16.57 14.47 10.54 EPS (`) 14.85 31.71 9.76 11.76 26.05 Analyst: Swapnil Suvarna Date: August 13, 2010 Overview Return FII 19% Sensex: 18167.03 [email protected] Land Bank: The Company in its books has 662 acres of highly developed land. The accumulated land bank spread across the city of Ahmedabad at critical locations like SG Road, Thaltej, Ognaj, Godhavi, Adalaj and Sola. Recently the company added six acres of land located on SG Road. The company is planning commercial development with a saleable area of 6,75,000 square feet. Strong Financials: In the financial year 2009-10 the company posted net income of `100.57 crore and net profits of `50.6 crore as compared to an income and profit of `89.5 crore and `49.4 crore respectively in the financial year 200809. Ganesh Housing Corporation Ltd Investment Rationale Key Concerns Strategic Alliances: An US based investment firm Monsoon Capital has made an investment of `1,350 million in GHCL’s integrated township project named ‘Smile City’. Single Location Focus: The Company’s entire land bank and projects are concentrated in Ahmedabad itself. Any negative event within the city could impact the company and its future plan significantly. Upcoming Mega Projects: The Company’s biggest project till date is an integrated township project named ‘Smile City’ at Godhavi, which is only 4.5 km away from the Ahmedabad city limits. The entire township is spread over an area of 534 acres. This project has received an FDI investment of `1,350 million through Monsoon Capital and is expected to generate above `32,000 million over the period of seven-eight years. ‘Million Minds’ an IT-ITES SEZ at SG Road in Ahmedabad is spread over an area of 108 acres. In this project of multiple use, 80 acres is notified for development of ITITES SEZ and the remaining 28 acres is would be divided for other developments like residential, commercial, retail, hospitality etc. The company may denotify the above project and change the use of entire 108 acres as SG Road has a good potential for residential, commercial and other developments. Godrej Properties, which is batting heavily on Ahmedabad is already developing township behind GHCL’s land, is a positive to this project. Economic slowdown: A slowdown in the economy due to any internal or external reasons could impact the demand and pricing of real estate. Execution Risk: Though the management has increased its pace of development, any delay in the execution of these projects either through rise in operational cost or unexpected delays would significantly impact the cash flow and the projections of the company. Recommendation We see GHCL as an attractive opportunity for the long term. Thanks to it’s huge low cost land bank and future potential of Ahmedabad city. The company scores a 4 (out of 5) on our star matrix and has been assigned the best risk-reward rating. We recommend a Strong Buy on the stock. Projects Summary Methodology Risk Reward Matrix: We use risk reward matrix to recommend companies that are currently a good buy. At times we may find a very good company but it may be trading at very high price, reducing the ‘Reward’ from investing in it. And at other times we may find an average company available at deep discount, substituting the little risk with higher Reward. We consider the companies risk, potential upside and stocks current market price among others while placing a company in the risk reward matrix. Star Rating: We use star matrix to highlight the inherent strength of the company. We consider the following areas when awarding Star Rating to a company. 1. Investor Friendliness 2. Growth (profit, sales & margins) 3. Management Quality 4. Historical Performance 5. Group Financial Strength 6. Management Aggression and Ability 7. Management Vision The scale if from 1 to 5 with 5 being the best. Disclaimer Ideas1st Research is a registered trademark of Ideas1st Information Services Private Limited. Ideas1st Information Services Private Limited is neither authorized nor regulated by the Financial Services Authority. This document is not for public distribution and has been furnished to you solely for your information and must not be reproduced or redistributed to any other person. Persons into whose possession this document may come are required to observe these restrictions. This material is for the personal information of the authorized recipient, and we are not soliciting any action based upon it. This report is not to be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It is for the general information of clients of Ideas 1st Information Services Pvt. Ltd. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. We have reviewed the report, and in so far as it includes current or historical information, it is believed to be reliable though its accuracy or completeness cannot be guaranteed. Neither Ideas 1st Information Services Pvt. Ltd., nor any person connected with it, accepts any liability arising from the use of this document. The recipients of this material should rely on their own investigations and take their own professional advice. Price and value of the investments referred to in this material may go up or down. Past performance is not a guide for future performance. Certain transactions -including those involving futures, options and other derivatives as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. Reports based on technical analysis centers on studying charts of a stock's price movement and trading volume, as opposed to focusing on a company's fundamentals and as such, may not match with a report on a company's fundamentals. Opinions expressed are our current opinions as of the date appearing on this material only. While we endeavor to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice. Our proprietary trading and investment businesses may make investment decisions that are inconsistent with the recommendations expressed herein. We and our affiliates, officers, directors, and employees world wide may: (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of company (ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company (ies) discussed herein or act as advisor or lender / borrower to such company (ies) or have other potential conflict of interest with respect to any recommendation and related information and opinions. The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report. No part of this material may be duplicated in any form and/or redistributed without Ideas 1st Information Services’ prior written consent. This document is not for public distribution and has been furnished to you solely for your information and must not be reproduced or redistributed to any other person. Persons into whose possession this document may come are required to observe these restrictions. Contact Details Ideas 1st Information Services Pvt. Ltd. 3rd Floor, 28 Rajabahadur Mansion, E-mail: [email protected] Mumbai Samachar Marg, Fort, Website: www.ideasfirst.in Mumbai – 400 001. India. Tel: +91 22 61485717/20 Ideas1st Research is also available on Bloomberg <IFIS> GO