10000 to 4crs in 18 months 1000rs to 50crs 300% returns 75% promoter holdings A 50 bagger A sureshot 5 bagger Analysis Another fraud? Auto ancillaries Bank sector Blind sell Brand plays Broking Bse Nse Buy calls cements Ceramics/tiles Counters I don't like Debt free businesses Delisting candidates demerger bets Disclosure- I own them Domestic consumption plays E-Commerce pick Education Exit at rallies Famous analysts Famous stocks FMCG Footwear future multibaggers Gems andJewellery Hidden gems High conviction ideas High dividend plays High potential small caps High ROE stocks Holding companies Hotel sector How they looted you.. Indian stock market Infrastructure sector Interesting Microcaps IT KPO Landbank plays largecap ideas Less than 5 PE stocks Liquor Logistics Market lessons Market outlook for 2013 and 2014 Market underperformers Meeting with the CEO Metals Monopoly businesses My 5 baggers My Favourite counters My paid stock recommendations My stock picking techniques nse bse tips Oil exploration Operator calls Paints Penny stock outlook penny stock updates Pharma sector Poultry stocks PSU Publicity freaks Real estate Renewable energy plays Safe bets Sell recommendations Share market Live shipping stocks short term call SOTP plays stock tips stock under 10rs Stocks to watch out for Strong bonus candidates Takeover candidates TATA product tea Textiles The 13 bagger The 45 bagger Trading companies Transformers Turnaround bets Tyres Uncertain/Risky business models Unique businesses

Search This Blog(Over 800 companies covered in the blog).

Archives : Old artciles

Saturday, November 15, 2008

Real Estate: Dust To Dust, Ashes To Ashes

Mosl(Cutting Estimates):Sector is in a mess with highly leveraged players like HDIL and Unitech the most vulnerable. However, while the industry has resisted so far, but existing properties are to fetch discounted price while new launches are likely to be deferred by all entities especially Purvankara, Omaxe, Parsvnath.

Delay In Launches: Most of the real estate (RE) companies have indicated that they have decided to hold back or go slow on new project launches, while some companies such as Omaxe and Puravankara have indicated that they have frozen all new launches indefinitely.Given the current slump in volumes in the RE industry across verticals, we have considered lag in development for all projects across segments and companies. This in turn would result in delay in the cash flows and revenues from these projects.

Financial Impact: Puravankara and IBREL are the worst hit, with FY09E net profitbeing lowered by 37% and 56%, respectively. Unitech takes the next big hit, with FY09E net profit lowered 11%.

Realization assumptions:We expect list prices of residential and commercialproperties to drop across the country. While this would negatively impact the valuations and revenues from new projects, we feel list prices of existing projects are also vulnerable.

Company impact:Almost all companies would be affected by lower realizations
across cities and verticals.

Construction cost assumptions:We expect construction cost for RE companies to
moderate, primarily due to decline in raw material prices such as steel (down by 30%
YTD) and cement. Several RE companies have indicated a possibility of lower
employee cost as a result of salary cuts and moderation in employee base.

Company impact:Almost all companies would be impacted.

Others:We expect leverage for RE companies to increase in the medium term, due to weak sales/demand. Further, we expect the cost of borrowing for RE companies toremain high in the medium term, in spite of proactive measures by RBI. As a result, the profitability of RE companies could be negatively impacted on account of higher interest cost.

Company Impact:Highly leveraged companies like Unitech and HDIL would be most affected as major portion of their debt has been raised in the recent past.

I can be reached

No comments:

Important Disclaimer&Privacy policy

This blog does not share personal information with third parties nor do we store any information about your visit to this blog other than to analyze and optimize your content and reading experience through the use of cookies.You can turn off the use of cookies at anytime by changing your specific browser settings.This privacy policy is subject to change without notice and was last updated on 20.3.2013. If you have any questions, feel free to contact me directly here: Investment in equity shares has its own risks.Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that I consider reliable. I,however,do not vouch for the accuracy or the completeness thereof.This material is for personal information and am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.The stock price projections shown are not necessarily indicative of future price performance.The information herein, together with all estimates and forecasts, can change without notice.

Subscription to Arunthestocksguru

Enter your email address:

Delivered by FeedBurner