Current price BSE 65.60

Sector Real Estate

No of shares 237149686

52 week high 133.90

52 week low 63.00

BSE Sensex 28192.02

Nifty 8550.90

Average Volume 189973

BSE Code 532891

NSE Symbol PURVA

Recommendation

– BUY/HOLD

Date – 23/03/2015

Puravankara Projects Ltd.

Company Overview

The Puravankara Projects Limited (PPL) was incorporated on 3rd June 1986 in Mumbai as a private limited

company under the name of Puravankara Constructions Private Limited. Now it emerged as a leading real

estate developer, provides residential flats and commercial, serving the needs of a discerning clientele. The

Company's operations cover Bangalore, Kochi, Chennai, Coimbatore, Hyderabad, Mysore, Colombo and the

United Arab Emirates (U.A.E). Also have representatives in the United Kingdom and the United States. The

network of the company expanded to Bangalore in the year 1987 and commenced its operations in Bangalore

during the year 1990, also launched its first residential project.

Puravankara has the distinction of being the first developer to obtain FDI in the Indian real estate industry

through its joint venture with Singapore based Keppel Land Limited, the property arm of the 54% government

owned conglomerate, Keppel Corporation Limited. The joint venture company, Keppel Puravankara

Development Private Limited, has on-going housing projects in India.

The Company has grown from strength to strength, having successfully completed 36residential / commercial

projects spanning 7.80 million square feet. Currently, it has 29 million square feet of projects under

development, with an additional 88 million square feet in projected development over the next 7-10 years. An

ISO 9001 certification by DNV in 1998 and a DA2+ rating by CRISIL are testament to Puravankara’s

reputation as a real estate developer of the highest quality and reliability standards.

PPL was certified as an ISO 9001 compliant company by DNV in the year 1998. PPL made its foray into the

affordable housing segment and launched a 100% owned subsidiary called Provident Housing and

Infrastructure during in August of the year 2008. The current market capitalization stands at Rs 1,554.52 crore.

Category No. of Shares Percentage

Promoters 177,862,264 75.00

Foreign Institutions 23,507,160 9.91

NBFC and Mutual Funds 19,016,963 8.02

Other Companies 5,057,947 2.13

Foreign - OCB 4,660,598 1.97

General Public 3,964,674 1.67

Financial Institutions 2,213,033 0.93

Others 457,696 0.19

Foreign - NRI 405,431 0.17

Directors 3,920 0.00

Market Cap (Rs Cr) – 1561.63

Company P/E (x) – 13.07

Industry P/E (x) – 29.69

Book Value (Rs) – 76.36

Price / BV (x) – 0.86

Dividend (%) – 38.40%

EPS (TTM) – 5.04

Dividend Yield (%) –2.92%

Face Value - 5

Share Holding Pattern Financial Details

Industry Overview

The Indian real estate sector is one of the most globally recognized sectors. In the country, it is the second

largest employer after agriculture and is slated to grow at 30 per cent over the next decade. It comprises four

sub sectors - housing, retail, hospitality, and commercial. The growth of this sector is well complemented by

the growth of the corporate environment and the demand for office space as well as urban and semi-urban

accommodations. It is also expected that this sector will incur more non-resident Indian (NRI) investments in

the near future, as a survey by an industry body has revealed a 35 per cent surge in the number of enquiries

with property dealers.

The Indian real estate market size is expected to touch US$ 180 billion by 2020. The housing sector alone

contributes 5-6 per cent to the country's gross domestic product (GDP). Also, in the period FY08-20, the

market size of this sector is expected to increase at a compound annual growth rate (CAGR) of 11.2 per cent.

Retail, hospitality and commercial real estate are also growing significantly, providing the much-needed

infrastructure for India's growing needs.

Real estate has emerged as the second most active sector, raising US$ 1.2 billion from private equity (PE)

investors in the last 10 months. Foreign investors have bought tenanted office space worth over US$ 2 billion

in India in 2014, a four-fold rise compared to the previous year, in order to increase their rent-yielding

commercial assets in Asia's third largest economy.

The Indian real estate sector has witnessed high growth in recent times with the rise in demand for office as

well as residential spaces. According to data released by Department of Industrial Policy and Promotion

(DIPP), the construction development sector in India has received foreign direct investment (FDI) equity

inflows to the tune of US$ 24,012.87 million in the period April 2000-December 2014.

Balance Sheet

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

Income

Sales Turnover 922.68 815.26 527.57 413.01 501.24

Net Sales 922.68 815.26 527.57 413.01 501.24

Other Income 43.86 2.59 0.96 9.08 7.00

Stock Adjustments 455.74 176.67 508.71 0.00 0.00

Total Income 1,422.28 994.52 1,037.24 422.09 508.24

Expenditure

Employee Cost 67.82 54.96 37.84 16.47 14.63

Other Manufacturing Expenses 866.42 447.94 670.75 282.72 307.15

Selling and Admin Expenses 0.00 0.00 0.00 21.07 12.93

Miscellaneous Expenses 139.64 98.54 64.55 3.20 3.07

Preoperative Exp Capitalised 0.00 0.00 0.00 -140.82 -104.03

Total Expenses 1,073.88 601.44 773.14 182.64 233.75

Operating Profit 304.54 390.49 263.14 230.37 267.49

PBDIT 348.40 393.08 264.10 239.45 274.49

Interest 201.11 220.83 192.15 143.46 106.86

PBDT 147.29 172.25 71.95 95.99 167.63

Depreciation 6.32 5.44 4.27 1.37 1.26

Profit Before Tax 140.97 166.81 67.68 94.62 166.37

Extra-ordinary items 0.00 0.00 2.12 -1.47 0.00

PBT (Post Extra-ord Items) 140.97 166.81 69.80 93.15 166.37

Tax 34.93 54.53 22.41 9.30 29.81

Reported Net Profit 106.03 112.28 47.40 83.86 136.56

Total Value Addition 1,073.88 601.44 773.14 182.64 233.76

Equity Dividend 45.53 26.70 21.34 21.34 0.00

Corporate Dividend Tax 7.74 4.54 3.46 3.54 0.00

Per share data (annualised)

Shares in issue (lakhs) 2,371.50 2,134.20 2,134.24 2,134.24 2,134.24

Earning Per Share (Rs) 4.47 5.26 2.22 3.93 6.40

Equity Dividend (%) 38.40 25.00 20.00 20.00 0.00

Profit and Loss Account

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

Sources Of Funds

Total Share Capital 118.58 106.71 106.71 106.71 106.71

Equity Share Capital 118.58 106.71 106.71 106.71 106.71

Reserves 1,692.32 1,477.42 1,396.37 1,373.78 1,316.67

Networth 1,810.90 1,584.13 1,503.08 1,480.49 1,423.38

Secured Loans 993.75 1,348.95 899.83 1,072.86 766.92

Unsecured Loans 264.25 118.07 95.46 37.85 8.50

Total Debt 1,258.00 1,467.02 995.29 1,110.71 775.42

Total Liabilities 3,068.90 3,051.15 2,498.37 2,591.20 2,198.80

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

Application Of Funds

Gross Block 119.39 110.18 95.13 66.62 63.56

Less: Accum. Depreciation 42.83 37.60 33.68 31.53 27.90

Net Block 76.56 72.58 61.45 35.09 35.66

Capital Work in Progress 0.21 0.55 1.87 1,045.69 1,153.68

Investments 57.26 61.49 55.77 53.74 52.74

Inventories 2,218.20 1,773.11 1,600.75 1,181.08 714.94

Sundry Debtors 262.75 215.81 137.82 73.89 99.41

Cash and Bank Balance 135.75 205.38 56.36 41.65 31.20

Total Current Assets 2,616.70 2,194.30 1,794.93 1,296.62 845.55

Loans and Advances 1,221.36 1,136.53 1,176.70 401.58 433.40

Fixed Deposits 0.00 0.00 0.00 15.01 15.63

Total CA, Loans & Advances 3,838.06 3,330.83 2,971.63 1,713.21 1,294.58

Current Liabilities 841.90 384.32 559.32 227.42 309.98

Provisions 61.30 29.98 33.02 29.12 27.85

Total CL & Provisions 903.20 414.30 592.34 256.54 337.83

Net Current Assets 2,934.86 2,916.53 2,379.29 1,456.67 956.75

Total Assets 3,068.89 3,051.15 2,498.38 2,591.19 2,198.83

Contingent Liabilities 309.56 286.89 32.15 68.09 107.29

Book Value (Rs) 76.36 74.23 70.43 69.37 66.69

Dividend History

Index and Company Price Movement Comparison

Company Forecast

Symbol Value Action

RSI(14) 55.036 Buy

STOCH(9,6) 25.361 Sell

STOCHRSI(14) 100.000 Overbought

MACD(12,26) -0.060 Sell

ADX(14) 54.472 Buy

Williams %R -36.364 Buy

CCI(14) 140.8805 Buy

ATR(14) 0.1643 Less Volatility

Highs/Lows(14) 0.0964 Buy

Ultimate Oscillator 56.483 Buy

ROC 0.535 Buy

Bull/Bear Power(13) 0.1460 Buy

Technical Indicators

PBIT – 30.85 v/s 47.08

RoCE – 11.14 v/s 12.70

RoE – 7.86 v/s 9.57

Net Profit Margin – 10.97 v/s 13.72

Return on net worth – 5.85 v/s 7.08

D/E Ratio – 0.69 v/s 0.93

Interest Cover – 1.70 v/s 1.76

Current Ratio – 1.92 v/s 1.84

Reserves – 1692.32 cr v/s 1477.42 cr

PAT – 106.03 cr v/s 112.28 cr

Total assets – 3068.89 cr v/s 3051.15

Net sales – 922.68 v/s 815.26

Book Value – 76.36 v/s 74.23

Important Ratios (YoY)

Days BSE NSE

30 76.38 76.46

50 78.51 78.54

150 88.09 88.15

200 92.68 92.77

Simple Moving Average

Investment Rationalize

Puravankara Projects Ltd. is one of the most reputed player of the Indian real estate industry with sales of Rs.922 crore and

reveres of Rs.1692 crore.

In India real estate is considered as one of the most preferred investment destination and most of Non Resident Indians (NRI)

investment is being done in real estate.

Company is able to generate and increase revenue even in the adverse market situations and the cost of debt is currently at

14.8%, which is continuously decreasing in the last three years.

Improvement in economic condition along with reduction in interest rates and increase in number of nuclear families with

modern view on high quality living space will increase the sales of the company.

The inventory of the company stands at Rs.2218 crore , Puravankara will be able to capitalize of inventory when the demand

picks up.

The projects of the company are mostly located in Bangalore, Chennai, Kochi, Coimbatore, Hyderabad, etc which is quickly

becoming real estate hubs of the nation.

The time taken for completing the projects is among the lowest among the industry which adds to the competitive advantage of

the company.

The stock is trading at Rs.65 which is below the Book Value of Rs.76 and Price to sales Ratio of the company stands at 1.68,

which means the stock is available at discounted price.

Revenue from fully owned subsidiaries such as Provident Housing, which among the top player in economy housing segment

will add to the profits of the company along with its projects in Colombo and United Arab Emirates.