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COMPANY UPDATE

26 SEP 2016

Kolte Patil Developers


BUY
INDUSTRY

REAL ESTATE

CMP (as on 26 Sep 2016)

Rs 123

Target Price

Rs 171

Nifty

8,723

Sensex

28,294

KEY STOCK DATA


Bloomberg

KPDL IN

No. of Shares (mn)

76

MCap (Rs bn) / ($ mn)

9/140

6m avg traded value (Rs mn)

19

STOCK PERFORMANCE (%)


52 Week high / low

Rs 187/96

3M

6M

12M

Absolute (%)

(2.9)

13.1

(23.8)

Relative (%)

(10.1)

1.4

(33.2)

SHAREHOLDING PATTERN (%)


Promoters
FIs & Local MFs

74.54
0.03

FIIs

11.80

Public & Others

13.63

Source : BSE

Parikshit Kandpal
parikshitd.kandpal@hdfcsec.com
+91-22-6171-7317

Eyeing A Comeback
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.
Whilst the strategic implication of these changes
take time to reflect we see visible greenshots in (1)
Incremental contribution from Mumbai projects (2)
Strong pre-sales during 1QFY17 (3) Expected
deleveraging on back of cash flow surplus of Rs 1.31.5bn/yr, and (4) Positive impact on volumes owing
to 7-10% property price correction across portfolio.
A fully approved saleable area of ~10.9mn sqft lends
visibility to KPDLs FY17-19E pre-sales pipe. We
maintain BUY with reduced NAV based TP of Rs
171/sh (our valuation is based on 0.75x our endFY18E NAV forecast). Target Price reduction is on
back of (1) 5-10% base property price correction (2)
Net debt expansion, and (3) Higher NAV discount.
FY17E Pre Sales Recovery - Key Tailwind: Post
exit of Mr. Sujay Kalele (3QFY16), KPDL took time
to consolidate its market positioning. With delay
in few launches and a tough real estate market the
presales momentum got impacted, resulting in 5yr low presales of ~2mn sqft during FY16. The new
management team is laying emphasis on growth
with (1) Focus on inventory monetization even if it
has to offer discounts (2) Optimal spend on
marketing (3) Limited new land acquisition & (4)

Utilization of surplus towards balance sheet


deleveraging. The effects have started from
1QFY17 which saw strong presales (0.66mn sqft).
Strong Cashflows To Help Retire Rs 1bn Debt
Annually: We expect KDPL to achieve Rs 9.2-9.5bn
of real estate collections annually. The spend on
construction is pegged at Rs 5-5.5bn/annum. This
will result in gross surplus of Rs 4-4.5bn from real
estate operations and net surplus post interest
and overheads of Rs 1.3-1.5bn/annum. We expect
the surplus to be utilized towards deleveraging the
balance sheet.
Net D/E may have peaked at 0.5x: During
1QFY17, KPDL net D/E increased to 0.52x (vs 0.46x
end FY16) which we expect to be a peak. We
model for 0.38x Net D/E, end FY18E.
Near-term outlook: We see impact of property
price correction (7-10%) to start reflecting on
presales pickup and BS deleveraging will be
incremental positive catalyst.

FINANCIAL SUMMARY (Consolidated)


Y/E Dec (Rs. in mn)
Operating income
EBITDA
Net profit
EPS (Rs)
RoCE (%)
RoE (%)
P/E (x)
EV/EBIDTA (x)

FY15
6,966
2,044
653
8.6
15.3
7.9
14.2
6.2

FY16
6,854
1,842
591
7.8
11.9
6.9
15.6
7.8

FY17E
8,155
2,252
735
9.7
12.9
8.1
12.6
6.1

FY18E
9,490
2,734
1,023
13.5
15.3
10.4
9.0
4.8

Source : Company, HDFC sec Inst Research

HDFC securities Institutional Research is also available on Bloomberg HSLB <GO>& Thomson Reuters

KOLTE PATIL DEVELOPERS : COMPANY UPDATE

KPDL, post resignation of


CEO, Mr Sujay Kalele during
3QFY16, has been
consolidating its position in
Pune market

The new management team


is working on (1) inventory
monetization even if it has
to offer discounts (2)
Optimal spend on
marketing (3) Limited new
land acquisition & (4)
Utilization of surplus
towards balance sheet
deleveraging.

Property price correction


and lower mortgage rates
will help drive volumes
higher and lead to KPDL rerating over next 1218months

We model for 17.4% FY1618E presales CAGR

FY17E Pre Sales Recovery - Key Tailwind

Since 3QFY16, KPDL has been consolidating its

dominant position in Pune real estate market.


Transition in the senior management team (post
Mr Sujay Kalele resignation during 3QFY16)
impacted overall operational performance.
Shakeup took time to stabilize before heading
towards pickup in presales.
The new management team is in laying emphasis
on growth with (1) Focus on inventory
monetization even if it has to offer discounts (2)
Optimal spend on marketing (3) Limited new land
acquisition & (4) Utilization of surplus towards
balance sheet deleveraging.
Whilst Pune, Bengaluru markets will drive volume
and provide stability, Mumbai will continue to
drive realization higher and add to margin
expansion. KPDL over next 1-2yrs will have about
~1mn sqft of Mumbai projects in advanced stages
of launch. This will add scale and presents strong
growth opportunity.

Historically, it has been seen that a 10-15% price

correction can drive up pre-sales volume by 1520%. This can happen either through direct
developer discounts or 100bps reduction in
mortgage costs. KPDL has already passed about
7% discount on new launches and any reset of
mortgage pricing lower will provide further
catalyst to presales growth.

Whilst KPDL has earlier guided for 12mn sqft

cumulative pre-sales over FY15-17E, with an


average realisation of Rs6,000/sqft, translating
into a sales value of Rs72bn. We have modeled for
7.3mn sqft of presales and Rs 43bn in value with
Rs 5,923/sqft realization over the same period.
The disappointment is largely in the stock price
(40% underperformance vs BSE Realty over 12M)
and attributable to delayed approvals and
unaffordability in Pune market.

Property price correction and lower mortgage


rates will help drive volumes higher and lead to
KPDLs re-rating over next 12-18months.

Pre-Sales Volume And Realization


1Q
FY15

2Q
FY15

3Q
FY15

4Q
FY15

1Q
FY16

2Q
FY16

3Q
FY16

4Q
FY16

Sales booked (mn sqft)


0.61
0.60
Value of sales (Rsmn)
3,434 3,449
Average Rate/sqft
5,611 5,748
Source : Company, HDFC sec Inst Research

0.64
3,898
6,090

1.00
6,000
5,976

0.50
3,003
6,057

0.46
2,822
6,174

0.52
3,040
5,846

0.57
3,790
6,649

CAGR
FY1618E
0.66
2.05
2.39
2.82
17.4
3,704 12,655 13,781 16,315
(3.3)
5,612 6,173 5,755 5,777
13.5
1Q
FY17

FY16

FY17E

FY18E

Page | 2

KOLTE PATIL DEVELOPERS : COMPANY UPDATE

Strong cashflows to help retire Rs 1bn debt annually


Strong collections and
limited capex on
land/rental/fixed assets to
help deleverage balance
sheet

In the exhibit below, we highlight KPDLs proforma


cashflows. We expect KDPL to achieve Rs 9.29.5bn of real estate collections annually. The
spend on construction is pegged at Rs 55.5bn/annum. This will result in gross surplus of Rs
4-4.5bn from real estate operations

Employee cost and over head will consume about

Rs 1.2-1.5bn annually whilst outgo on interest


servicing shall be Rs 0.7-0.8bn. With limited outgo
on maintenance/new land capex, KPDL would be
Rs 1.3-1.5bn/annum cash surplus.

KPDL has guided for Rs 1bn of debt reduction

during FY17E on account of surplus utilization. The


strong sales in Corolla project and traction in
Mumbai pre-sales will drive debt reduction.

KPDL doesnt have any large maintenance/fixed

assets capex and the company neither has big


planned outlay on rental asset business. The
current approval pipeline remains strong
(~10.9mn sqft) and doesnt require any aggressive
land capex to be incurred.

The deleveraging efforts seem to be reasonable on


back of strong real estate collections and limited
capex.

Proforma Cashflows

We expect KPDL to be net


cash surplus annually by Rs
1.3-1.5bn

Rs mn
Real Estate Collections
Construction Spend
Operating Cash flows - Dev Co
Employee+Other Expenses
Taxes
Total OCF
Less: Assets Capex
Less: Land Capex
Net OCF
Less: Interest Outgo
FCFE
Other Income
Net Surplus

FY17E
9,200
5,200
4,000
1,226
528
2,247
100
200
1,947
766
1,181
161
1,342

FY18E
10,120
5,720
4,400
1,386
735
2,280
100
250
1,930
653
1,277
169
1,447

Source: Company, HDFC sec Inst Research

Page | 3

KOLTE PATIL DEVELOPERS : COMPANY UPDATE

We expect consolidated Net


D/E to remain in the
guidance range of 0.2-0.5x

Rs 1bn of annual surplus


cashflow to be utilized
towards debt reduction

NET D/E: may have peaked to remain at 0.2-0.5x range


(Rs mn)
Gross Debt

1QFY16 2QFY16 3QFY16 4QFY16 1QFY17

FY17E

3,280

4,040

6,070

5,930

7,640

(1,160)

(1,160)

(1,030)

(1,030)

(1,970)

370
140

520
80

650
240

820
30

680
400

Net debt

1,610

2,280

4,150

4,050

4,590

4,594

Net Worth
Net Debt/ equity (x)

8,600
0.19

8,740
0.26

8,970
0.46

8,770
0.46

8,860
0.52

9,420
0.49

Structure NCD's
Cash
Current investments

FY18E Comments
Debt increase on account of Corolla
stake purchase, Premium towards TDR
purchase and Mumbai projects
expansion
Deducting NCD & CCD as they are equity
structured as debt by KPDL and JVs

Debt reduction from FY18E on back of


3,891 annual cash surplus generation ~ Rs
1bn
10,333
0.38

Source: Company, HDFC sec Inst Research

Page | 4

KOLTE PATIL DEVELOPERS : COMPANY UPDATE

KPDL has ongoing project


unsold inventory of ~6.2 mn
sqft (we have mapped
~4.5mn sqft in the table)
and is planning 6.4mn sqft
of new launches over next 12yrs
This gives visibility to 2.53mn sqft annual pre-sales
over FY17-19E

Inventory 10.9mn sqft gives visibility on presales


Location

Ongoing Projects
Life Republic - Phase 1, R3
avenue
Corolla - Phase 1 & 2

Hinjewadi, Pune

0.4

Wagholi, Pune

0.7

3,632

Giga Residency

Viman Nagar, Pune

0.3

11,858

Wakad

Wakad, Pune

0.9

6,387

Jazz - I & II

Aundh, Pune
Hennur Road,
Bengaluru
Horamavu,
Bengaluru

0.5

6,646

0.3

3,410

0.4

4,565

0.6

5,510

Kothrud, Pune

0.5
4.5

10,785

Forthcoming Projects
Life Republic - Phase II,
including R1
Corolla - Phase 3

Hinjewadi, Pune

2.0

5,000

Wagholi, Pune

1.3

0.4mn sqft launched as R1 sector, expect further


1mn sqft launch in 4QFY17E
4,000 Expect 1mn sqft of new launch in 2HFY17E

Wakad

Wakad, Pune

1.3

6,200

Stargaze - Phase 2

Bavdhan, Pune

0.6

6,224

Downtown

Kharadi, Pune

0.5

7,017

Kondhwa - Phase 3

Kondhwa, Pune

0.4
0.4

5,012

24K Province
Total

6.4

Ragga
Mirabilis

mn sqft

Exente
KP Towers
Total

Life Republic ~ 1mn sqft and


Corolla ~1 mn sqft may get
launched during 4QFY17E

We have cut our estimates


to factor in delay in revenue
recognition in some of the
projects owing to slower
pre-sales. We have also
recalibrated interest cost
upwards as KPDL has
acquired 100% stake in
Corolla Realty for a
consideration of Rs 1.6bn
largely financed through
debt

Avg Realization
Comments
(Rs/sqft)

Project

Grand Total
Source: Company, HDFC sec Inst Research

4,444

10.9

Change in Estimates
Revenues (Rs mn)
EBITDA (Rs mn)
APAT (Rs mn)
EPS (Rs)

FY17E New
8,155
2,252
735
9.7

FY17E Old
11,451
3,195
1,341
17.7

% Change Comments
(28.8) Slow sales velocity to delay revenue recogs.
(29.5)
(45.2) High interest costs to impact profitability
(45.2)

Source: HDFC sec Inst Research

Page | 5

KOLTE PATIL DEVELOPERS : COMPANY UPDATE

Key assumptions and estimates


We forecast FY16-18E presales CAGR of 17.4% on back
of existing unsold inventory
of 6.2 mnsqft. KPDL may
deliver FY17E presales
guidance beat (2.4mn sqft)
if it gets launch approval of
1mn sqft in LR and 1mn sqft
in Corolla by 4QFY17E

FY15

31.6% FY16-18E PAT CAGR


in line with robust execution
and higher share of own
projects/lower minority
interest outgo

Strong free cash-flow


recovery from FY17E

FY17E

Growth (%)
FY16E
FY17E

Comments

Volume assumptions
We forecast FY16-18E pre-sales CAGR of 17.4% on back
of existing unsold inventory of 6.2 mnsqft. KPDL may
17.9 deliver FY17E presales guidance beat (2.4mn sqft) if it
gets launch approval of 1mn sqft in LR and 1mn sqft in
Corolla by 4QFY17E
Realisation to correct 7-10% across project as newer
0.4 phases may get launched at discount to existing prices
so as to achieve high presales volume
18.4 Sharp uptick in new sales during FY18E

Residential (mn sqft)

2.1

2.4

2.8

16.8

Residential (Rs/sqft)

6,173

5,755

5,777

(6.8)

12,655

13,781

16,315

8.9

Sales (Rs mn)

6,854

8,155

9,490

19.0

16.4

EBIDTA (Rs mn)

1,842

2,252

2,734

22.3

21.4

EBIDTA Margin (%)

26.9

27.6

28.8

74bps

119bps

Net interest expense*

591

766

653

29.5

(14.7)

PAT (Rs mn)

591

735

1,023

24.4

39.2

PAT Margin (%)


EPS (Rs)

8.6
7.8

9.0
9.7

10.8
13.5

40bps
24.4

177bps
39.2

1,368
1
1,369
(1,604)

1,437
29
1,466
(1,313)

(235)

153

Total pre-sales

Back-ended new launches to


results in 17.7% FY16-18E
revenue CAGR

FY16E

Earnings forecast

Cash flows forecast


CFO - a
219
CFI - b
(1,732)
FCF - a+b
(1,512)
CFF-c
1,822
Total change in cash 310
a+b+c
Source: Company, HDFC sec Inst Research

Back-ended new launches to result in 17.7% FY16-18E


revenue CAGR
Stable margins to result in 21.8% FY16-17E EBIDTA
CAGR.
Expansion on account of contribution from Mumbai
projects
No new land acquisition and robust proceeds from
collections to result in reduction in debt and resultant
interest expense
31.6% FY16-18E PAT CAGR in line with robust
execution and higher share of own projects/lower
minority interest outgo
Increase in PAT margins in line with overall estimates

Sharp free cash-flow recovery during FY17-18E

Page | 6

KOLTE PATIL DEVELOPERS : COMPANY UPDATE

Valuation Reduced NAV target of Rs 171/share


GNAV Rs 21.8bn
Rs/sh
Rs mn
Pune
233
Bengaluru
34
Mumbai
17
Land Bank
4
Total GAV
288
Source: Company, HDFC sec Inst
Research

Target Price of Rs 171/sh implies 40.2% upside


%
81
12
6
1
100

We have valued KPDL using DCF and arrived at a

target price of Rs 171/share. Our valuation is


based on 0.75x our end-FY18E NAV forecast. We
have given a NAV discount of 25% to KPDL. Our
base prices factor in a 5-10% price correction in
the Pune market. We have not considered the
likely upside in saleable area once the township
FSI increases from 0.5x to 1x, as the Maharashtra
government gazette is awaited.

Rs mn

New NAV

Old NAV

Gross NAV

21,833

26,320

Less Net debt


Current Investment
NAV
Shares outstanding (mn)
NAV/share
Discount to NAV
Target Price

(4,594)
47.6
17,286
76
228
25%
171

(3,401)
22,919
76
302
15%
257

The State government has already increased FSI

for non-agricultural land based township and is in


the final stages of implementing it for townships
on agricultural land. KPDLs key projects that will
be affected are (1) Life Republic Township, and (2)
Sanjivani township. In terms of value, this could
add about Rs64/share to NAV and about ~20mn
sqft to the gross saleable area or (~10mn sqft
KPDL share).

Change (%) Comments


We have cut property prices by 7-10% across
(17.0)
projects resulting in GAV cut by 17%
35.1 Net Debt as on end FY17E
(24.6) Change higher than GAV owing to increase in Debt
As of Sep-16
(24.6)
NAV discount due to delays in launches
(33.4)

Source: Company, HDFC sec Inst Research

Our GNAV cut is on account of 7-10% property

price correction across projects. KPDL in the past


has offered price rebates in new launches to prop
up presales volumes. The focus has always been to
achieve quick inventory monetization so as to
maintain high cash flows and lower debt.

Pune as a macro market is over supplied and 7-

10% price correction would help floating buyers in


decision making. This price correction impacts our
GNAV lower by 17% (please refer sensitivity in

Page 10). The GNAV got further impacted by


increase in net debt on account of Corolla stake
buyout. KPDL has guided for Rs 1bn of debt
reduction by FY17E.

Pune contributes about 81% to our GNAV,


followed by Bengaluru 12% and Mumbai 6%. The
Mumbai projects are in advance stages of closure
and may add about 0.6-1mn sqft saleable area to
the KPDL portfolio. FSI increase will be key upside
risk to our NAV estimate.
Page | 7

KOLTE PATIL DEVELOPERS : COMPANY UPDATE

Real estate development NAV calculation methodology

We have divided KPDLs entire land bank (with


launch visibility over the next 5 years) into
residential projects (based on the information
given by the company).

We have arrived at the sale price/sq ft. and the


anticipated sales volumes for each project based
on our discussions with industry experts.

We have deducted the cost of construction based


on our assumed cost estimates, which have been
arrived at after discussions with industry experts.

We have further deducted marketing and other

costs that have been assumed at 5% of the sales


revenue.

We have then deducted income tax based on the


tax applicable for the project.

The resultant cash inflows at the project level have


been discounted based on WACC of 16.7% (cost of
equity 21.3% based on beta of 2.1x & debt/equity
ratio of 0.4x). All the project level NAVs have then
been summed up to arrive at the NAV of the
company.

From the NAV, we have deducted the net debt

and likely outgo on balance land payments as of


FY17E to arrive at the final valuation of the
company.

Page | 8

KOLTE PATIL DEVELOPERS : COMPANY UPDATE

Key valuation assumptions

In the exhibit below we highlight our sales and

Our pricing assumptions are


moderate and at a 5-10%
discount to the current
prevailing prices.

cost inflation forecasts. We expect property price


appreciation in line with WPI inflation, i.e. 5% and
peg cost inflation slightly higher at 6%. We
forecast other costs including marketing, SGA and
employee costs at 15% of sales. We have
discounted the cash flows using 16.7% as hurdle
rate.

Base Case Assumptions


Assumptions
Discount rate
Annual rate of inflation - sales price
Annual rate of inflation - cost of construction
Other costs - marketing, SGA, employee cost
(as % sales)
Tax rate

%
17
5
6
15
33

Source: Company, HDFC sec Inst Research

Our pricing assumptions are moderate and at a 5-

10% discount to the current prevailing prices.


Construction cost assumptions are higher than the
KPDL estimates.

Base Property
Assumptions

Price

And

Location

City

Wagholi
Hinjewadi
Kharadi
Undri-NIBM
Mohamad Wadi
Aundh Annexe
Boat Club Road
Kondhwa
Viman Nagar
Aundh
Kalyani Nagar
Bavdhan
Atria
Wakad
Andheri
Vile Parle
Koramangla Block III
Hosur Road
Kannur Road

Pune
Pune
Pune
Pune
Pune
Pune
Pune
Pune
Pune
Pune
Pune
Pune
Pune
Pune
Mumbai
Mumbai
Bangalore
Bangalore
Bangalore

Construction
Prices
Rs/sqft
3,750
5,000
5,100
4,500
4,500
5,200
9,100
4,000
8,900
6,900
7,800
4,700
7,400
5,500
14,500
20,000
6,700
5,900
3,800

Cost
Cost
Rs/sqft
1,800
2,100
2,200
2,200
2,200
2,500
3,500
2,000
3,500
2,600
2,800
2,000
2,800
2,500
7,500
9,500
2,400
2,300
1,800

Source: Company, HDFC sec Inst Research

Page | 9

KOLTE PATIL DEVELOPERS : COMPANY UPDATE

1% increase in average base


sale price impacts our NAV
positively by 2.7%

Every 100bps increase in


sale price inflation impacts
our NAV positively by 6.9%

100bps increase in cost


inputs decreases our NAV by
4.5%

NAV sensitivity analysis


Sensitivity to our assumption of property price

Sensitivity of NAV to changes in cost inflation

Our model is sensitive to changes in the

In our base case, we have assumed cost inflation

NAV Sensitivity To Changes In Base Sale Price

NAV Sensitivity To Change In Cost Inflation

assumptions regarding property prices. For every


1% change in the base property prices, the NAV
will change by approximately 2.7%.

% change in sale
price
NAV/share (Rs)
Change in NAV (%)

(10)

(5)

10

125
148
(27.1) (13.4)

171
-

194
13.5

216
26.1

Source : Company, HDFC sec Inst Research

Sensitivity of NAV to changes in sale inflation

In our base case, we have assumed annual sale


100bps increase in
discounting rate impacts
our NAV negatively by 1.7%

price inflation of 5%. For every 100bps increase in


the annual sale price inflation, the NAV will
increase by approximately 6.9%.

NAV Sensitivity To Change In Sales Inflation


Sales inflation rates
(%)
NAV/share (Rs)
Change in NAV (%)

148
(13.4)

160
(6.7)

171
-

183
6.9

195
13.7

Source: Company, HDFC sec Inst Research

to be 6%. For every 100bps increase in


construction cost inflation, the NAV will change by
approximately 4.5%.

Cost inflation rates (%)


NAV/share (Rs)
Change in NAV (%)

4
187
9.2

5
179
4.6

6
171
-

7
163
(4.5)

8
156
(9.1)

Source : Company, HDFC sec Inst Research

The combined impact of a 100bps increase in sale


price inflation and cost inflation will be a NAV
increase of 2.4%.
Sensitivity of NAV to changes in discount rate

In our base case, we have assumed a discount rate


of 16.7%. For every 100bps increase in the
discount rate, the NAV will fall by ~1.7%.

NAV Sensitivity To Change In Wacc


WACC rates (%)
NAV/share (Rs)
Change in NAV (%)

15
177
3.3

16
174
1.6

17
171
-

18
168
(1.7)

19
165
(3.5)

Source: Company, HDFC sec Inst Research

Page | 10

KOLTE PATIL DEVELOPERS : COMPANY UPDATE

Income Statement (Consolidated)


Y/E March (Rs mn)
Net Sales
Growth (%)
Material Expenses
Employee Expenses
Other Operating Expenses
EBIDTA
EBIDTA (%)
EBIDTA Growth (%)
Other Income
Depreciation
EBIT
Interest
PBT
Tax
PAT
Minority Interest
APAT
APAT Growth (%)
EPS
EPS Growth (%)

FY14
7,642
5.1
4,617
292
524
2,208
28.9
15.0
152
71
2,289
457
1,832
663
1,169
(249)
920
(14.3)
12.1
(14.3)

Source: Company, HDFC sec Inst Research

Balance Sheet (Consolidated)


FY15
6,966
(8.8)
3,798
428
696
2,044
29.3
(7.5)
117
101
2,060
440
1,621
602
1,018
(365)
653
(29.0)
8.6
(29.0)

FY16
6,854
(1.6)
3,869
423
720
1,842
26.9
(9.9)
147
116
1,873
591
1,282
529
753
(162)
591
(9.6)
7.8
(9.6)

FY17E
8,155
19.0
4,677
474
751
2,252
27.6
22.3
161
140
2,274
766
1,508
528
980
(245)
735
24.4
9.7
24.4

FY18E
9,490
16.4
5,371
522
864
2,734
28.8
21.4
169
152
2,752
653
2,099
735
1,364
(341)
1,023
39.2
13.5
39.2

Y/E March (Rs mn)


SOURCES OF FUNDS
Share Capital
Reserves
Total Shareholders Funds
Minority Interest
Long Term Debt
Short Term Debt
Total Debt
Deferred Taxes
Long Term Provisions & Others
TOTAL SOURCES OF FUNDS
APPLICATION OF FUNDS
Net Block
CWIP
Goodwill
Investments, LT Loans & Advs.
Inventories
Debtors
Cash & Equivalents
ST Loans & Advances, Others
Total Current Assets
Creditors
Other Current Liabilities & Provns
Total Current Liabilities
Net Current Assets
TOTAL APPLICATION OF FUNDS

FY14

FY15

FY16

FY17E

FY18E

758
7,297
8,055
1,740
3,131
235
3,366
(37)
13,124

758
7,657
8,415
1,926
3,387
398
3,785
(60)
14,065

758
8,016
8,774
2,886
5,932
5,932
(66)
17,527

758
8,663
9,420
3,131
5,182
5,182
(66)
17,668

758
9,576
10,333
3,472
4,632
4,632
(66)
18,372

903
150
218
154
12,694
851
691
3,028
17,264
1,105
4,460
5,565
11,699
13,124

972
109
218
61
14,672
1,009
405
3,922
20,008
1,175
6,127
7,302
12,706
14,065

1,066
126
1,192
28
17,382
1,418
823
3,517
23,139
1,400
6,625
8,024
15,115
17,527

1,066
126
1,192
48
18,096
1,452
588
3,648
23,785
8,548
8,548
15,237
17,668

1,034
126
1,192
68
19,501
1,690
742
4,050
25,983
10,030
10,030
15,952
18,372

Source: Company, HDFC sec Inst Research

Page | 11

KOLTE PATIL DEVELOPERS : COMPANY UPDATE

Cash Flow (Consolidated)


Y/E March (Rs mn)
PBT before minority
Non-operating & EO items
Taxes
Interest expenses
Depreciation
Working Capital Change
OPERATING CASH FLOW ( a )
Capex
Free cash flow (FCF)
Investments
INVESTING CASH FLOW ( b )
Share capital Issuance
Debt Issuance
Interest expenses
Dividend
FINANCING CASH FLOW ( c )
NET CASH FLOW (a+b+c)
Opening Cash
Closing Cash & Equivalents
Source: Company, HDFC sec Inst Research

Key Ratios (Consolidated)


FY14
1,832
(136)
(717)
457
71
(2,676)
(1,170)
(273)
(1,442)
36
(236)
1,700
(425)
(295)
980
(426)
1,122
695

FY15
1,621
(106)
(595)
440
101
(1,116)
344
(144)
200
148
4
239
(527)
(246)
(534)
(186)
691
505

FY16
1,282
(121)
(622)
591
116
(1,027)
219
(215)
4
(1,517)
(1,732)
2,770
(528)
(421)
1,822
310
405
715

FY17E
1,508
(161)
(528)
766
140
(357)
1,368
(140)
1,228
141
1
(750)
(766)
(89)
(1,604)
(235)
823
588

FY18E
2,099
(169)
(735)
653
152
(562)
1,437
(120)
1,317
149
29
(550)
(653)
(110)
(1,313)
153
588
742

Y/E March (Rs mn)


PROFITABILITY (%)
GPM
EBITDA Margin
EBIT Margin
APAT Margin
RoE
Core RoCE
RoCE
EFFICIENCY
Tax Rate (%)
Asset Turnover (x)
Inventory (days)
Debtors (days)
Payables (days)
Cash Conversion Cycle (days)
Debt/EBITDA (x)
Net D/E
Interest Coverage
PER SHARE DATA
EPS (Rs/sh)
CEPS (Rs/sh)
DPS (Rs/sh)
BV (Rs/sh)
VALUATION
P/E
P/BV
EV/EBITDA
OCF/EV (%)
FCF/EV (%)
FCFE/Market Cap
Dividend Yield (%)

FY14

FY15

FY16

FY17E

FY18E

39.6
28.9
30.0
12.0
11.7
20.8
19.2

45.5
29.3
29.6
9.4
7.9
17.4
15.3

43.5
26.9
27.3
8.6
6.9
11.6
11.9

42.6
27.6
27.9
9.0
8.1
15.5
12.9

43.4
28.8
29.0
10.8
10.4
18.3
15.3

36.2
0.6
538
39
48
528
1.5
0.3
5.0

37.2
0.5
717
49
60
706
1.9
0.4
4.7

41.2
0.4
854
65
69
850
3.2
0.58
3.2

35.0
0.5
794
64
66
792
2.3
0.49
3.0

35.0
0.5
723
60
62
721
1.7
0.38
4.2

12.1
13.1
3.1
106.3

8.6
9.9
1.3
111.1

7.8
9.3
1.2
115.8

9.7
11.6
1.5
124.3

13.5
15.5
2.0
136.4

10.0
1.1
5.4
(9.8)
(12.1)
2.8
2.5

14.2
1.1
6.2
2.7
1.6
4.7
1.1

15.6
1.1
7.8
1.5
0.0
30.0
1.0

12.6
1.0
6.1
0.1
8.9
5.2
1.2

9.0
0.9
4.8
0.1
10.0
8.3
1.7

Source: Company, HDFC sec Inst Research

Page | 12

KOLTE PATIL DEVELOPERS : COMPANY UPDATE

RECOMMENDATION HISTORY
Kolte-Patil

Date
6-Nov-15
26-Sep-16

TP

280

CMP
166
123

Reco
BUY
BUY

Target
257
171

230
180
130

Rating Definitions
Sep-16

Aug-16

Jul-16

Jun-16

May-16

Apr-16

Mar-16

Feb-16

Jan-16

Dec-15

Nov-15

Oct-15

Sep-15

80

BUY

: Where the stock is expected to deliver more than 10% returns over the next 12 month period

NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period
SELL

: Where the stock is expected to deliver less than (-)10% returns over the next 12 month period

Page | 13

KOLTE PATIL DEVELOPERS : COMPANY UPDATE


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Page | 14