Kolte-Patil Developers Ltd. share price target

Kolte Patil Developers Ltd. (KPDL) delivered 2QFY17 Revenue, EBIDTA & Net Profit, 19.6/(2.0)/0.1% ahead of our estimate. Tuscan and Jazz were key project driving revenue growth. The impact of demonetization would reflect in 2HFY17E. Accordingly, we have re-calibrated our FY17-18E EPS estimate 5-21% lower to factor in the same.

Over last 1-yr, Kolte Patil Developers Ltd (KPDL) has underperformed BSE Realty Index by ~40%. Exit of incumbent CEO, change in top leadership and weak real estate markets impacted new launches, resulting in KPDL achieving lowest presales (FY16 - 2mn sqft) in last 5yrs.

Kolte Patil Developers Ltd (KPDL) reported muted 2QFY16 results because of delay in revenue recognition in a few projects. Pickup in real estate sentiment will augur well for the company and result in strong pre-sales momentum.

Whilst Kolte Patil Developers Ltd. (KPDL) 1QFY16 results were in line, multiple head winds pose challenge on new sales. Only solace is strong FY16E launch pipeline of ~9.2mn sqft with ~80% of saleable area below Rs10mn.

We attended the recently held `Nest Fest? of Kolte-Patil Developers? (KPDL) that was held at SSPMS Grounds, Pune between 6-8th February, 2015. The event showcased thirteen KPDL projects with ticket sizes ranging from Rs 3-100mn and attracted over 30,000 footfalls.