Monday, October 20, 2008

Stock Idea: Peninsula Land

Peninsula Land has posted flat results for quarter ending September 08, with PBT placed at Rs.60.82 crores for the quarter against Rs.60.28 crores of the corresponding quarter in the previous year. Even total income for the quarter, though marginally down, could be termed as flat, which is at Rs.110.54 crores for the quarter against Rs.117.37 crore of Q2 FY 08.

The company is developing two major projects in Mumbai viz. Ashoka Towers at Parel and Ashoka Garden at Sewree. The first project is owned by the company, which has been more than 50% complete with over 95% project having been sold by the company. So, inspite of a sharp rise in realty prices in Parel, the company has not gained much as entire project has been sold, below Rs.10,000 per sq. feet against Rs.20,000 per sq. feet ruling now, which at one time had crossed Rs.26,000 per sq. ft. However, with progress in the project, the company is booking part of its revenue and profits. Also, this project has started giving transfer fees to the company, as buyers of flats in the project have started re-selling flats.

In case of Ashoka Garden project at Sewree, the company is entitled to receive 22% of sale proceeds, as its share of profit, as it is being developed for Swan Mill. Another property of Swan Mills at Kurla, in which the company is entitled for same 22% revenue sharing, is almost complete.

So not much improvement in the business activities of the company are visible or expected and hence the same kind of results are expected for the next two quarters as well.

PAT for the quarter rose to Rs.54.60 crores (Rs.33.69 crores) due to lower tax burden of Rs.2.78 crores (Rs.22.94 crores), which has resulted in higher EPS of Rs.2.08 against Rs.1.58 of Q2 FY 08.

FY 09 is likely to have an EPS of Rs.7 and share is presently ruling at Rs.25. Present market capitalisation of Rs.700 crores factors in the expected profit from the undergoing projects.

Due to steep corrections having seen in other realty stocks, this has also corrected but further downside looks minimal.
Source: sptulsian.com

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