Prestige Estates Projects Ltd. share price target

Weak P&L: 1QFY17 Consolidated P&L weakened sequentially with revenue at INR9.5b (v/s INR9.6b QoQ), EBITDA at INR1.7b (OPM of 18.1%) v/s INR2.5b (OPM of 26.4%) in 4Q and PAT at INR478m (v/s INR723m). Gearing marginally went down by INR1b QoQ to INR55.8b (net DER of 1.13x). Subnormal presales: Quarterly pre-sales remained subdued at 0.8msf (INR 5.1b) v/s 1.5msf (INR9.9b) in 4Q. Collections up 16%QoQ in 1Q. Leasing and rental runrate was down 1Q, at 0.04msf and INR1.312b respectively. Moderate growth outlook: FY17 guidance comprises 15-25% growth in pre- sales, 10% in collections, 30%-35% in rentals on the back of new completions, and gearing at elevated level of 1-1.25x as capes cycle would continue.

PEPL remains preferred play on Bangalore real estate, which albeit lost momentum, still offers better dynamics. But PEPL’s massive slippage over FY16 (contrary to track record) highlights the magnitude of prevailing weakness in market. Post sharp corrections, stock valuations factor in the concerns of deterioration in capital structure and weakness in operations. At 1.7x/1.6x FY17/18E BV and at an EV of 10x FY18E EBITDA stock offers valuation comfort. Operational normalcy remains near-term trigger. We maintain Buy with target price of INR225.

TTKPT broadly operates under 3 major segments - Pressure Cooker & Pans, Non-stick Cookware and Kitchen Electric Appliances. TTKPT enjoys high brand recall and they spend ~7.2% of their annual sales for brand building and promotional activity, which enables them to dominate most of the segments in which they operate. TTKPT has a market share of ~60% in the outer-lid pressure cooker, ~15% in inner-lid pressure cooker within the organised market and in Induction cook-top space they enjoy a market share of about ~25%. 80% of sales are from products introduced in the last 3 years. TTKPT has network of 30,000 dealers in India. They...

Despite consistent positive news flow on commercial leasing demand, steady pre-sales and successful new launches, Prestige Estates’ (PEPL) share price underperformed Sensex by 28% on 12M relative basis. Going into FY17-18E, we expect further upsides to be triggered by (1) Robust new launches of 12mn sqft, (2) Annuity portfolio nearing maturity by FY17- 18E, and (3) Likely balance sheet deleveraging. HDFC Securities resume coverage with a BUY and SOTP-based TP of Rs 264/sh. Correction presents attractive entry point.

Trendlyne has 2 reports on PRESTIGE updated in the last year from 2 brokers with an average target of Rs 244.5.

Better revenue run-rate amidst OPM dip: 4QFY16 consolidated P&L; strengthened sequentially, with revenue at INR11.1b v/s INR9.8b in 3Q, EBITDA at INR2.2b (OPM of 19.9%) v/s INR2.3b (OPM of 22.5%) in 3Q, and PAT at...

TTKPT broadly operates under 3 major segments - Pressure Cooker & Pans, Non-stick cookware and kitchen electric appliances. TTKPT enjoys high brand recall and they spend ~7.2% of their annual sales for brand building and promotional activity, which enables them to dominate most of the segments in which they operate. In the pressure cooker segment, TTKPT has a market share of ~40% within the organised market and in Induction cook-top space they enjoy a market share of about ~25%. 80% of sales are from products introduced in the last 3 years. TTKPT has network of 30,000 dealers in India. They compete with...