KBC Global Ltd. share price target

Karda Construction Ltd. (KARDA), incorporated in 2007 is a real estate company from Nasik which develops and sells residential and residential-cum-commercial projects. Its a part of the Karda Group, founded by promoter Mr. Naresh Karda in year 1994. The company primarily focuses in the residential real estate which forms major chunk of their portfolio which is almost more than 95%. KARDA is almost present across all segments that is affordable, comfortable, luxury and some commercial areas also,...

The Karda Constructions Group is a well-established Nashik based group having its presence in the construction industry for more than two decades, The group was founded by Mr. Naresh Karda in 1994. KCL has been concentrating on affordable housing in the...

KARDA's, two and half decades of experience, strong presence in Nasik region, established brand and reputation, its proven execution capabilities, strong project pipeline, vast land reserves and an ability to identify new products are amongst its key strengths which could enhance their visibility among the customers and market. Further, the government is backing the sector with several initiatives like a push to develop 100 cities into smart cities, initiatives like Housing for all by 2022 for a growing population in both urban as well as rural India backed by both...

We expect KCL to record strong revenue growth over FY19 and FY20, aided by execution of ongoing and planned projects, and a growing Nashik real estate market. The company is currently in the process of executing 11 projects while 3 further projects are planned. The project pipeline provides strong revenue and cash flow visibility. We expect margins to improve from FY18 levels, driven by increased operating efficiency as well as lower finance cost as a percentage of revenues. Consequently we expect healthy EPS growth in spite of the dilutive impact of equity capital infusion via the IPO....

KCL has a strong project pipeline of 13 ongoing and 3 planned projects with an aggregate carpet area of approximately 17.6 lakh sq ft. Further, its experience in affordable housing puts it at an advantageous position...

IPO NOTE

The company has Strong project pipeline providing cash flow visibility, currently company has 13 ongoing projects and 3 planned Projects with 17,13,725 square feet carpet area. Recently in order to expand its portfolio of services the Company has ventured into Government as well as private sector Construction Contracts, leading to a conglomerate diversification. Further, the government is backing the sector with several initiatives like a push to develop 100 cities into smart cities, initiatives like “Housing for all by 2022”. Moreover, On the upper price band of `180 with expected EPS of `11.2 for FY18, Estimated P/E works out at 16.07x. Taking into risk consideration, company generates entire sales from certain geographical regions of Nashik, oversupply in real estate sector and non unique Business model shows that valuations are not reasonable hence, We recommend to be ‘NEUTRAL’ for this IPO.

As of now, the company has successfully completed 17 projects Band totaling 1,107 housing and commercial units of total carpet area of 10.5 lakh sq. feet in the residential (8.6 lakh sq. feet) and residential-cum-office space (1.9 lakh sq. feet) segments....

Strong presence in Nashik: Nashik's realty market is geared for rapid growth going forward given its proximity to major cities like Mumbai and Pune and current saturation of the realty markets in both these cities. The Company as on the date (5 March 2018) has successfully completed and delivered 10,50,525 sq. ft. of carpet area, comprising of 17 projects and 1,107 units. The company believes that having an experience of over two...