By SP Tulsian
· Parsvnath Developers is a Realty Developer, having presence in 14 states and 41 cities, with total of 220 million sq. ft. of area under development. Of this, 55% to 60% area is in ‘A’ class cities, and 55% to 60%, of this, is in NCR region.
· The company has over 22 integrated township, 30 commercial complexes, 28 residential complexes, 18 hotels, 5 IT Parks and 7 SEZs, located Pan India, with major presence in Greater Noida, Lucknow, Pune, Agra, Gurgaon, Jaipur and Shirdi.
· The company has posted extremely good consolidated results for quarter ending December 07, wherein total income was at Rs.497 crores with EBITDA of Rs.186.65 crores, PBT of Rs.172 crores and PAT of Rs.112.57 crores giving an EPS of Rs.6.09 on equity of Rs.184.69 crores.
· For 9 months ending December 07, total income was at Rs.1,324 crores with PAT of Rs.318 crores giving an EPS of Rs.17.20. Hence, FY 08 is likely to have a topline of close to Rs.2,000 crores and PAT of above Rs.450 crores, giving an EPS of close to Rs.24.
· The issued capital of the company, as at 31-12-07, is at Rs.184.69 crores, of which promoters are holding above 80%. The present price, results in a market capitalization of close to Rs.5,000 crores. As the company is virtually debt free, the per sq. ft. cost of land works to Rs.225 per sq. ft. which reflects the hidden worth of the company.
· The company is developing commercial complexes, hotels and shopping, majority of which is being leased out, which would give good annuity income to the company, as also retaining assets in the books of the company.
· The company had raised Rs.997 crores through IPO, of which Rs.592 crores has been utilized upto 31-12-07 and Rs.498 crores is still remaining with the company, to be used for the business of the company.
· This is one of very few realty company, which has been aggressively acquiring land bank in all parts of the company, without going in for any debt raising or equity dilution. This augurs well for future growth of the company.
· The major profits of the company are coming from self owned projects. EBITDA margin of 38% is quite comparable with the industry leaders. PAT of the company has also been reported after an effective tax liability of 30%. In December 07, quarter, tax liability was at Rs.55 crores while for 9 months ending 31-12-07, the same was at Rs.148 crores.
· The company has never got its correct valuations, when compared with other Realty players, either of large category or mid-sized companies. This was corrected last month when share price touched an all time high of Rs.600, but slipped back sharply to Rs.270, below its issue price of Rs.300 per share.
· Share at Rs.270 per share makes an excellent bet with downward risk of about Rs.20 while potential to rise by about Rs.130 in couple of months. Since the company is backed by huge land bank, valuations are bound to come, sooner or later. A safe bet for medium term which can give a return of 50% in the next 6 – 8 months.
Zerodha (Trading & Demat Account)
RHP
