Jaypee Business

School
A constituent of Jaypee Institute of Information Technology
(Declared Deemed to be University u/s 3 of UGC Act)
A-10, Sector 62, Noida (UP) India 201 307
www.jbs.ac.in

International Business Environment

And Export Import

Corporate Internship Report

Internship Report submitted as a partial requirement for the award of the two
year
Master of Business Administration Programme
MBA 2014-16

UFLEX LIMITED

Corporate Internship Supervisor

Name: Mr. Rajeev Malhotra
(VP – Export Division)

JBS-Faculty Supervisor: Dr. Sujata Kapoor

Start Date for Internship: 15.04.2015

End Date for Internship: 15.06.2015

Report Date: 17.06.2015

1
 Project Report

on

International Business Environment

And Export Import

At

UFLEX LIMITED

Submitted By:

Himanshu Sharma

14609127

(M.B.A-I)

In Regular Degree Programme of Master of Business

2
 Jaypee Business School, Noida

SELF CERTIFICATE
(DECLARATION)

I, Himashu Sharma, student of MBA 2014-2016 studying at Jaypee Business

School Noida, declare that the project work entitled “International Business
Environment And Export Import ” was carried by me in the partial fulfilment
of MBA program.

This project was undertaken as a part of academic curriculum according to the

college rules and norms and it has not commercial interest and motive. It is my
original work. It is not to be submitted to any other organization for any other
purpose.

3
CERTIFICATE FROM THE ORGANIZATION

4
ACKNOWLEDGEMENT
Gratitude is a heart’s memory and putting the feeling of the heart into words, is an art.
Those who excel in this art are ultimately successful.

Determination, hard work and patience are the key to success. Completing a project
would not have been possible without the encouragement and support of many people.
At this point of time, I would like to acknowledge all those who have made a major
contribution its development.

I take this opportunity to express my profound gratitude and deep regards to my guide
Dr. Rajnish Kumar Misra – Professor-M.B.A-Jaypee Business School, for her exemplary
guidance, monitoring and constant encouragement throughout the course of this project.
The help and guidance given by her time to time shall carry me a long way in the journey
of life on which I am about to embark.

I would also like to express a deep sense of gratitude to Ms. Veena Bansal for his
cordial support, valuable information and guidance, which helped me in completing this
project through various stages.

I am obliged to all Division teams of ATS Infrastructure Ltd. , for the valuable information
provided by them in their respective field. I am grateful for their cooperation during the
period of my assignment.

Lastly, I thank almighty, my parents, brother, sister and friends for their constant
encouragement without which this assignment would not be possible.

Suraj Singh

5
TABLE OF CONTENTS

Seri Topic Page

al No.
No.

1. Executive Summary 7

2. Introduction & Objectives 8

3. Company Analysis 10

4. Industry Analysis 15

5. Financial Analysis 25

6. Research Project 35

7. Conclusions & Recommendations 45

8. Key Learnings 48

9. Annexure 49

10. References 52

6
Executive Summary

The core objective of the internship is to fulfil the requirement of the MBA program as
prescribed by the JIIT University. An intern has to prepare project report at the end of the
internship period but the main objective of the internship is to get the hands-on
experience of the real world organization. The internship was completed with the
objective of getting practical knowledge in the Sales and Marketing Division of ATS
Infrastructure Limited.

As an intern, I realized that I was successful to gather a lot of significant learning

experiences which would be helpful in my future career. The Sales and Marketing
Division of ATS Infrastructure Limited offered me ample space and opportunities, not only
to learn but also to exhibit my skills as a operations team member. I could use my
theoretical knowledge of operations in real practice while participating in many
discussions. I was actively involved in the Morning Meetings where everyone shared
Safety Contact for the day.

I successfully completed all the assigned tasks and handed them over to my Corporate
Mentor at the end of the internship. I thoroughly enjoyed the challenges that came along
every single day. I could also bring some minor improvisations during my internship
which were able to leave their marks.

Following are some of the salient features of the project –

 Customers/Investors have a short history of real estate investment but are currently increasing their

allocation to the real estate, more so than Equities, Debt, and Commodities.

 Despite of developers investing their large part of funds on Entertainment centers like Shopping Malls,

Multiplexes etc. large part of customers prefer to invest in Residential Projects such as Plots ,

Group Housing, and Townships.

 Residential Property is gaining as an attractive mode of investment of middle

class people leading to growing demand.

 With the shifting of more and more companies and offices to the suburbs, growth in suburban

residential real estate market has also been witnessed. Lavish townships with good quality construction

replete with luxurious amenities and facilities are now coming up. Survey reveals the factors or

specifications needed by the customers where they are investing their funds and also the lack of

facility in their previous or current residence.

7
I hope this project in its present form may be able to achieve its objectives. I will
welcome if any suggestion, comments will be given through the study.

Introduction & Objectives

Introduction
Introduction to ATS Infrastructure Ltd.

ATS Infrastructure is about all the colours of life. ATS New Project is the pioneer
project in Yamuna Expressway. Top-of-the-line plans with some of the most high-end
facilities, ATS Infrastructure Village has a swimming pool, gymnasium, squash, tennis
Courts, putting Infrastructure, club house, shopping arcade, 100% power back-up and
24 hour security. With state-of-the-art facilities, ATS Infrastructure New Project is
slated to be a landmark of Yamuna Expressway.

ATS believes in providing not just comfortable homes, but also a complete lifestyle to
its customers. The willingness to go above and beyond the customers' expectations,
and the devotion to build the client's dream homes, has driven the long list of
accomplishments. The carefully thought out concepts are executed with precision
that eliminates the risk of even slight imperfections.

Every ATS property is a testimony of the joy that can be seen in the faces of its
residents. They endorse us without being asked, sharing their experiences with
friends and building spontaneous goodwill for us. If you're considering a home in one
of our current projects, why not have a word with someone who lives in an ATS
development?

Founded in the year 1998, the ATS Group is promoted and run by the dynamic
professional Getambar Anand. In the short span of a decade ATS has emerged as a
trusted brand in the real estate industry, providing quality homes to its customers.

Introduction to Project – Customer / Investor perception

about investing in Real Estate
Investing in real estate presents both unique problems and opportunities. Real
estate is a non-liquid, localized investment vehicle. It is immobile, of limited
supply, indestructible, and physically real. It is difficult to own buildings-they
require maintenance, tenants, regular updating, and are subject to fire, hurricane,
and location advantages/disadvantages.

Real Estate Investing has created more millionaires than any other investment
vehicle in this country. Investing in real estate is one of the safest and smartest
investments that you can make. Real estate appreciates at a rate far greater than
the rate of the inflation, builds equity, provides a steady return on investment,
provides cash flow, and can offer substantial tax benefits.

Real estate is almost completely dependent on local conditions. One should invest
in real estate only if he or she knows the local situation well-including the local

8
 economy, market conditions, political environment, building controls, etc. All of
these factors can be critical to the success or failure of an investment.

Objectives of the study

In this project report of mine I would be focusing my attention on some of the important
objective that would also be the part of my study. The following are the objectives:

- To study the Corporate World.

- To understand the practical implication of theoretical concepts studied in 1 st year

of MBA curriculum.
- To study the details of company i.e. company profile in terms of brief profile,

mission, objectives, different department and projects completed and which are

soon coming in future.

- Understanding and comparing two industries in terms of financial analysis which

includes analysis of Balance sheet, Profit & Loss Account, Cash Flow statement

and different financial ratios like activity ratio, profitability ratio etc.
- To analyze the Indian retail industry.
- To study the culture and management of a firm.
- To do a research and thus reaching at a conclusion.
- Preparing Questionnaire and getting it filled by Customers / investors.
- Critically examining and evaluating response of respondents from Sample data.

9
COMPANY PROFILE
Brief Profile

ATS Group

Founded in the year 1998, the ATS Group is promoted and run by the dynamic
professional Getambar Anand. In the short span of a decade ATS has emerged as a
trusted brand in the real estate industry, providing quality homes to its customers. ATS
today is a conglomerate with operations in across NCR, Chandigarh, Goa and Dehradun.
Ranked among the best developers in India, ATS in the name behind some of the most
distinguished residential projects in the country.

A Name Called Trust

Select an ATS project as your destination and your decision is accompanied by a feeling
of inner peace that arises from complete trust. A rock solid faith in the quality of
construction. The relief of not having to spot loopholes and sneaky fine print. The
knowledge that you are secure in the hands of the most trusted name and knowing that
your interests will continue to be served much after the project is completed and handed
over.

Top-Notch Professionals

ATS has a policy of working only with the best. This is especially true when we choose the
employees of company as well as architects for our projects. If you're considering an ATS
home, chances are it would have been designed by one of the top names in the field, like
Hafeez Contractor, who has changed the shape of the skyline of Mumbai, Gurgaon and
Noida with 166 residential buildings and more than 150 commercial complexes,
recreation and sports facilities, hotels and resorts. And, Oru Bose, the International
Architectural firm based out of Florida and renowned for cutting edge design and
innovative township planning. You can have your peace of mind knowing well that the
structure of the building has been designed by world renowned architects and the
plumbing plan has passed the master of architecture

Easy Financing

It'll come as no surprise that ATS projects are preferred properties for banks too. This is
because of the customer profile that ATS attracts and because ATS projects are all 'clean'
deals. We get our projects approved by institutions like HDFC, ICICI Bank, IDBI Bank, UTI
Bank and LIC, which provides you with multiple options for your loan requirements.

10
With each home a hallmark of an incredible amalgamation of luxury, comfort and style,
ATS homes have been crafted keeping the dreams of the residents in mind. At ATS, each
brick that is laid speaks of an immensely unique craftsmanship and each apartment that
is created is an avant-garde piece of work.

With its pristine lush greenery, architectural marvels and a host of resident-centric
facilities, ATS Greens offers future home buyers a perfect get away from the city
mayhem, while they are right in the heart of the city. With celebration of life as the
recurring theme of home planning, the residents find it difficult to break away from the
almost surreal beauty of their homes, but when they do, they are greeted by lush
greenery and vast expanse of sprawling gardens with quiet little corners for relaxation
and socialising. The homes are such beautifully planned that whether you step out into
the balcony with your cup of morning tea or for an evening stroll in the vast gardens, the
abundant greenery will continue to lend tranquility to your mind.

The company was formed sixteen years ago with a seemingly ambitious commitment of
redefining the parameters by which real estate companies are judged. Though an
ambitious goal for the company still in its infancy, the Group has long proved the critics
wrong by ushering in an era of professionalism, integrity, customer focus and an
unwavering approach to quality. After delivering several world class projects, ATS has, in
a short span, become a name to reckon with in the real estate sector in India. They have
on-board the best in-house team of 1300 designers, engineers, architects foremen and
technicians, who have brought in renewed passion and craftsmanship to the ergonomical
construction designs.

Led by Mr. Getamber Anand, Chairman and Managing Director, a dynamic professional
with a deep sense of commitment to excellence and creativity, the ATS team prides itself
on delivering above and beyond on all its promises.

However, what truly sets ATS apart is not just the high quality of life that it offers to its
customers through splendid boutique homes, but also the fact that the process of
procuring these homes is made as smooth and easy as possible. ATS home buyers have a
sense of deep faith in the company, as rock solid as our construction. This feeling of trust
arises from the knowledge that customer interests will be best served even after
completion and handing over of the homes.

ATS GREENS

Industry group Real estate

Entity type Private limited

11
 Main product/service Future homes

Incorporation year 1998

Size group Top decile

Vision and Mission for the future

 To be passionate in anticipating and providing the best homesand experience

that excites the customers globally.
 The company's long term vision is to become the leading developer in the real
estate sector through introduction of unprecedented ideals of professionalism and
transparency at work. It also envisions creating new standards of work ethics so
that the real estate industry is viewed with the same dignity and respect as the
other industries in the organised sector of our economy.

Company management

NAME DESIGNATION

MR. JOGY P. THOMAS CEO

LT.GEN.(RETD.) H.S.BAGGA PVSM,VSM,CORPORATE HEAD

MR. VIPUL MAHESHWARI CFO

MR. GETAMBER ANAND CHAIRMAN

SWOT Analysis of ATS Infrastructure Ltd.

STRENGTHS

 R & D with ATS Infrastructure Litd. have developed excellent R & D and building
and developing capabilities, which has build a strong customer base and establish
market leadership through the high quality of its units quality.

 The increasing demand for the real estates presents a great opportunity for ATS
Infrastructure Ltd. to increase and scale up the production.

12
WEAKNESS

 Dreamland has low presence in commercial projects. It has no units of commercial

projects.

 Dreamland is mainly focused on residential projects.

 Not looking towards the scope of western UP where demand of residential projects
is increasing.

 Few Projects, thereby less coverage in the market.

OPPORTUNITIES
 There is a scope of business as there is a demand for real estates.
 The big IPO (initial public offering) is a big opportunity of the company.
 The concept of wedding mall.
- The theme based malls are the way to the future.

THREATS
Dreamland has the biggest threat from the global and large players in the real estate like
DLF, UNITECH & OMAXE

ATS Infrastructure Projects

City Completed Projects Upcoming Projects

ATS Greens Village, Sector 93
ATS Pristine
ATS Allure, Yamuna
Noida ATS One Hamlet, Sector 104 Expressway
ATS Pristine, Sector 150

ATS Dolce, Sector Zeta 1

ATS Paradiso
Greater Noida
Yamuna Expressway

ATS Advantage, Phase-2,

Ghaziabad Indirapuram

Gurgaon ATS-I, 109 ATS Triumph, Dwarka

Expressway
ATS Kocoon, Dwarka
Expressway

13
 ATS Tourlamine, Dwarka
Expressway
ATS Gold Meadows Villa,
Derabassi
ATS Gold Meadows Lifestyle,
Derabassi
Chandigarh ATS Gold Meadows Township, CASA Espana
Derabassi
ATS Gold Meadows Prelude
ATS Chandigarh

Facilities provided by ATS

 Common Buildings

Club House
Shopping Center

 Sports

Sports Facility
Kids Play Area
Swimming Pool
GYM

 Landscape

Landscape Garden/Park
Open Space

 Security

Intercom

 Water/Gas/Power

Power Backup
24 Hour Water Supply

 Others

Wi-fi Connectivity
Property Staff

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Lift
Car Parking

INDUSTRY ANALYSIS
Introduction

The Indian real estate sector has come a long way and is today one of the fastest
growing markets in the world. It comprises four sub-sectors – housing, retail, hospitality,
and commercial. While housing contributes to five–six percent of India’s gross domestic
product (GDP), the remaining three sub-sectors are also increasing at a fast pace. The
total realty market in the country is expected to touch US$ 180 billion by 2020.

Real estate in India is being recognised as an infrastructure service that is driving the
economic growth engine of the country. Growing infrastructure requirement in diverse
sectors such as tourism, education, healthcare, etc., are offering several investment
opportunities for both domestic as well as foreign investors. Total investment by private
equity (PE) funds in the real estate sector from January–March 2014 was approximately
Rs 28 billion (US$ 465.19 million). This is a substantial increase of 28 per cent compared
to the previous quarter and close to 2.5 times the investments during January–March
2013.

The role of the Government of India has been instrumental in the development of the
sector. With the government trying to introduce developer and buyer friendly policies, the
outlook for the real estate sector in 2014 does look promising.

Investments Opportunities

15
As corporates look to expand businesses, India is expected to witness major demand for
office space in 2014. Office space absorption across the country’s seven major cities –
Delhi-NCR, Mumbai, Bengaluru, Chennai, Pune, Hyderabad and Kolkata – is likely to
increase seven per cent this year to 29 million square feet (sq ft), according to global real
estate consultant DTZ.

New supply of retail space in shopping malls in India’s top seven cities is expected to
more than double to 11.7 million sq ft in 2014. This will take up the mall stock across
India’s metropolitan cities to 87.7 million sq ft by the end of the year, according to a
report by Jones Lang LaSalle.

The construction development sector, including townships, housing, built-up

infrastructure and construction-development projects garnered total foreign direct
investment (FDI) worth US$ 23,131.64 million in the period April 2000–February 2014.
Construction (infrastructure) activities during the period received FDI worth US$ 2,462.60
million, according to the Department of Industrial Policy and Promotion (DIPP).

The following are some of the major investments and developments in the Indian real
estate sector:
 Larsen & Toubro (L&T) has bagged a major residential order to build 271 villas and
24 towers in Bengaluru. “One of our key focus areas has been the growing
potential in the residential sector and by winning these prestigious orders we
have made significant inroads into this space," said Mr S N Subrahmanyan, Senior
Executive Vice-President (Infrastructure and Construction), L&T.
 Somany Ceramics plans to invest Rs 150 crore (US$ 24.93 million) over the next
12–24 months for capacity expansion and brand building. “We are looking to
finalise two joint ventures (JV) soon. The capacity of our own facilities will also be
expanded to shore up total production by 15 million sq m,” according to Mr
Abhishek Somany, Joint Managing Director, Somany Ceramics.
 Lodha Developers has acquired Clariant Chemicals’ 87-acre plot of land in Thane,
Mumbai, for Rs 1,154 crore (US$ 191.76 million). “Thane is a rapidly developing
part of the Mumbai Metropolitan Region and we see strong, sustained demand for
quality homes in the region,” said Mr Abhinandan Lodha, Deputy Managing
Director, Lodha Group.
 Xander Group has invested Rs 370 crore (US$ 61.47 million) in Kapstone
Constructions, a subsidiary of Mumbai-based developer, Rustomjee. Kapstone
Constructions is currently developing the Rustomjee Urbania township in Thane,
spread over 127 acres.
 Ambience Group plans to invest about Rs 1,800 crore (US$ 299.07 million) over
the next four years to develop two housing projects in Noida and Gurgaon,
comprising 1,100 housing units and a 350-acre township at Panipat.
 Ansal Buildwell Ltd has signed a memorandum of understanding (MoU) with
Bahrain-based VKL Holdings, Al-Namal Group. The MoU will provide both
companies the opportunity for joint development in the housing and infrastructure
sectors in both India and Bahrain.

Market Size

The market size of the Indian real estate sector stood at US$ 55.6 billion in 2010–11 and
is expected to touch US$ 180 billion by 2020. In fact, the demand is expected to grow at

16
a compound annual growth rate (CAGR) of 19 per cent in the period 2010–2014, with Tier
I metropolitan cities expected to account for about 40 per cent of this growth.

The net office space absorption across the top eight cities – Delhi-NCR, Mumbai,
Bengaluru, Chennai, Hyderabad, Pune, Kolkata and Ahmedabad – was up 58 per cent
during January–March 2014 as compared to the corresponding period last year, according
to real estate consultancy Cushman & Wakefield. Among the eight cities, Ahmedabad and
Delhi-NCR recorded a threefold increase in net absorption during the period over
January–March 2013.

The number of new launches in the residential segment during the first quarter of 2014
has increased by 43 per cent at 55,000 units across eight major cities. Bengaluru
recorded the largest number of units launched at an increase of 22 per cent at 16,838
units, followed by Mumbai and Chennai, according to a report by Cushman & Wakefield.

Market size of real estate in India

The market size of real estate in India is expected to increase at a CAGR of 11.2
per cent during FY2008 – 2020.

Government Initiatives

The Government of India has allowed FDI up to 100 per cent in development projects for
townships and settlements. Hundred per cent FDI is also permitted in the hotel and
tourism sector through the automatic route.

A committee on Streamlining Approval Procedure for Real Estate Projects (SAPREP) was
constituted by the Ministry of Housing & Urban Poverty Alleviation (MHUPA) to streamline
the process of seeking clearances for real estate projects.

The Real Estate (Regulation and Development) Bill, 2013, as approved by the Union
Cabinet is a pioneering initiative aimed at delivering a uniform regulatory environment to
protect the consumer, help in quick verdicts of disputes and ensure systematic growth of
the sector.

17
 FDI in real estate as a per cent of total FDI in India
Total FDI in the real estate sector during April 2000 – September 2013 stood at around US$ 22.7 billion.

The relaxation of the FDI ceiling saw big names joining hands with the Delhi
based developments to announce India’s largest FDI in the reality sector.
Groups showing interest in India include major Indian and International
Companies.

With property boom spreading in all directions, real estate in India is touching new
heights. However,
the growth also depends on the policies adopted by the government to facilitate
investments mainly
in the economic and industrial sector. The new stand adopted by Indian government
regarding foreign
direct investment (FDI) policies has encouraged an increasing number of countries to
invest in Indian
Properties.

India has displaced US as the second-most favored destination for FDI in the world. As
the investment
scenario in India changes, India which has attracted more than three times foreign
investment at US$ 7.96
billion during the first half of 2005-06 fiscal, as against US$ 2.38 billion during the
corresponding period of
2004-05, making India amongst the "dominant host countries" for FDI in Asia and the
Pacific (APAC).

The positive outlook of Indian government is the key factor behind the sudden rise of
the Indian Real
Estate sector - the second largest employer after agriculture in India. This budding
sector is today
witnessing development in all area such as - residential, retail and commercial in
metros of India such as
Mumbai, Delhi & NCR, Kolkata and Chennai. Easier access to bank loans and higher
earnings are some of
the pivotal reasons behind the sudden jump in Indian real estate.

Road Ahead

18
The Indian construction and real estate sector continues to be a favoured destination for
global investors. Several large global investors, including a number of sovereign funds,
have taken the first move by partnering with successful local investors and developers
for investing in the Indian real estate market. This is expected to result in high
transaction activity, especially in income yielding commercial office assets during 2014.
The residential asset class looks to have great potential for growth. “With housing
requirements growing across cities and funds investing in the asset class primarily in the
form of NCDs providing fixed returns, investments in the right project have the potential
to yield healthy returns,” said Mr Sanjay Dutt, Executive Managing Director – South Asia,
Cushman & Wakefield.

Further, demand for space from sectors such as education and healthcare has opened up
ample opportunities in the real estate sector. The country still needs to add three million
hospital beds to meet the global average of three for every 1,000 people.

Exchange Rate Used: INR 1 = US$ 0.0166 as on May 2, 2014

Why Invest In Indian Real Estate?

Flying high on the wings of booming real estate, property in India has become a dream

for every potential investor looking forward to dig profits. All are eyeing Indian property

market for a wide variety of reasons:

 It’s ever growing economy which is on a continuous rise with 8.1 percent increase

witnessed in the last financial year. The boom in economy increases purchasing

power of its people and creates demand for real estate sector.

 India is going to produce an estimated 2 million new graduates from various

Indian universities during this year, creating demand for 100 million square feet of

office and industrial space.

 Presence of a large number of Fortune 500 and other reputed companies will

attract more companies to initiate their operational bases in India thus creating

more demand for corporate space.

 Real estate investments in India yield huge dividends. 70 percent of foreign

investors in India are making profits and another 12 percent are breaking even.

 Apart from IT, ITES and Business Process Outsourcing (BPO) India has shown its

expertise in sectors like auto-components, chemicals, apparels, pharmaceuticals

19
 and jewellery, where it can match the best in the world. These positive attributes

of India is definitely going to attract more foreign investors in the near future.

The relaxed FDI rules implemented by India last year has invited more foreign investors

and real estate in India is seemingly the most lucrative ground at present. The revised

investor friendly policies allowed foreigners to own property, and dropped the minimum

size for housing estates built with foreign capital to 25 acres (10 hectares) from 100

acres (40 hectares). With this sudden change in investment policies, the overseas firms

can now put up commercial buildings as long as the projects surpass 50,000 square

meters (538,200 square feet) of floor space.

Indian real estate sector is on boom and this is the right time to invest in property in

India to reap the highest rewards.

Segments in Indian Real Estate Sector

Demand for Residential Space expected to grow sharply

Key drivers involved in growth of demand of residential space are :

20
 - Rapid Urbanization
- Decreasing Household size
- Easy availablity of home loans
- Repatriation of NRIs
- Policy Support
- Increasing Tourism

Demand analysis of top 7 cities (‘000 units) 2010-14

Government Policies helping the real estate sector prosper

Commercial Sector

 India has been hit by the global outsourcing waves. If IT/ITES continues to grow at the estimated
growth rate for the next four years it will be an approximately US$24 bn. Industry by FY 2010.
 NASSCOM-MCKINSEY surveys have predicted that the ITES sector in India will provide jobs to
1.1mn sq. ft. of office space.

21
  Over the course of the past five to ten years, the major occupier of the commercial real estate has been
the IT/ITES/BPO sector as opposed to banking, finance, multinational,
corporate and large Indian manufacturing companies. Almost 80 percent of
demand for commercial space today is thanks to the above sector.
 Accordingly, a shift is happening towards cheaper and larger locations in the
suburbs closer to dense population pockets supplying quality workforce at
competitive rates. Thus, a gradual decline in the status of the CBDs, which is
already experiencing vacancy rates of over 20-30 percent, is expected over time.
 More and more developers are building quality built-to suit space catering to the
end user in the suburbs. In a nutshell, there will be a huge demand for commercial
space in suburban area of major cities.
 Most developers are providing a more efficient and better class of product than
they were five years ago. At cheaper costs. These products are of a global
standard and developers are using new age technologies in order to reduce
delivery times.
 The capital values of commercial properties have moved up by 10-12 percent over
the past 12 months, even though the rental values have remained the same. This
disparity will cease once the interest rates moving upwards.
 Looking into the future, we expect supply to continue to match demand. A
number of developers will put up quality products on to the market, thereby
stabilizing rental property rates.

Residential Sector

22
  Residential property is gaining ground as an attractive mode of investing for middle-
class people leading to growing demand.
 The residential market has picked up due to the lower interest rates coupled with
easy accessibility to loans.
 The increase in prices of residential properties nationally has been 15-20 percent. This can be largely
attributed to the increase in the land prices as well as the input costs.

 With the shifting of more and more companies and offices to the suburbs, growth in the suburban
residential real estate market has also been witnessed. Lavish townships with good
quality construction with luxurious amenities and facilities are now
coming up.
 The demand for good housing is evident, as most of these developments have witnessed a pre-
construction booking of 75-80 percent and even 100 percent in some
cases, both by end users and investors.
 There is the total national housing shortage of 41 mn. Units. Out of the above,
close to 80 percent consists of housing for the weaker section.
 A study has shown that 50 percent of the formal housing in the country is
accessed through the rental route and not ownership. It is thus pertinent to put in
place an environment to encourage more stock of rental housing.

Retail Sector

 Retail is considered the world’s largest private industry with total sales of US$ 6.6tn. With close to
12 mn. Outlets, India has the largest outlet density in the world. The consumers demand for
international quality ambience, convenience and infrastructure will drive future growth.

23
  Retailing is becoming the next boom industry with organized retail being a market of US$6 bn. It is
due to the growing eight fold in the coming decade. It is expected that the share of modern retail shall
grow from about 8 percent in 2007 to 20 percent by the end of the decade.
 The total retail industry growing exponentially at 8.5 percent per annum and consumer spending has
increased at 12 percent per annum during the last 3 years.
 The Indian consumer today is evolving. The increased purchasing power of the urban educated middle
class, more exposure to brands and products through television and foreign trips, and the growing
number of working couples has led to a change in buying habits and thus the retail scope in India today
about 50 mn. Sq. ft. of organized retail space will be coming up across the country by the year 2010.
 However, the real estate industry is at a critical point. Currently, we have a depleting pool of retailers
and successful department store chains with a lot of shopping center space competing for the same
tenants. This accordingly, creates an opportunity for foreign retailers. There is a dire need to
allow 100 percent in retailing.
 Developers who can show most ingenuity in creating an interesting environment, both from a shopping
and an experimental standing point, will be the ones that will create an asset that will withstand the test
of times.
 A notable trend in the market is the development of integrated retail-cum-entertainment centers. An
increasing number of retailers are focusing on malls as opposed to stand-alone developments. Several
factors determine a retailer’s attraction towards a particular mall. A recent survey revealed that, for a
retailer, the most important parameters in selecting a mall as a potential location are:

1. Consumer demographics
2. Developer reputation
3. Cost of leasing space
4. Quality of other tenants
5. Car parking
6. Support facilities
7. Infrastructure
8. Maintenance

Whilst the number of shopping malls has seen a surge in the recent past, the future development is now focused
on providing for leisure activities as well. A significant number of multiplexes are being developed as an
integral part of retail malls, along with amenities such as food courts and video game parlors. PVR, INOX,
Satyam Cineplex’s and Shringar Films are diving the multiplex business expansion across the nation while Appu
Ghar, The Delhi Based Amusement Park, has plans of starting operations in at least two new locations.

The next step in the evolution of malls in India is specialty malls and theme malls that
cater to a specific target audience. These would include wedding malls, auto malls, home
accessories and life style malls, factory outlet malls, etc.

24
Some of these chains after setting up in the metros are already looking to foray in to the
non-metros to reach out to a broader customer base.

Forecasted New Retail Space Distribution by 2010

NCR Mumbai Pune Hyderabad Bangalore Chennai Kolkata

NCR; 22%
Others; 35%

Mumbai; 15%
Others Kolkata; 8% Pune ; 4%
Chennai; 4% Bangalore ; 5% Hyderabad; 7%

Source: Knight Frank Research

Distribution of current retail space in NCR

Noida; 5%
Noida Gurgaon Ghaziabad; 26%
Greater Noida Delhi
Gurgaon; 26% Faridabad Ghaziabad
Greater Noida; 17%
Faridabad; 4%
Delhi; 22%

Source: Knight Frank Research

25
FINANCIAL ANALYSIS

Analysis of Profit& Loss statement, Balance Sheet & Cash Flow

Statements

(ATS & DLF)

Profit & Loss Account Comparison

Description 2013(in Rs. Cr.) 2012(in Rs. Cr.)

ATS DLF ATS DLF
Income
2,150.0 3,491.3
Sales Turnover 902.84 4 875.95 2
Excise Duty 0 0 0 0
2,150.0 3,491.3
Net Sales 902.84 4 875.95 2
1,154.8 1,091.3
Other Income 4.83 0 5.98 4
Stock Adjustments 0 0 0 0

3,304.8 4,582.6
Total Income 907.67 4 907.67 6

Expenditure
3,105.4 2,014.1
Raw Materials 3 0 0 0
Power & Fuel Cost 0 36.18 0 23.67
Employee Cost 0.27 118.55 0.32 127.12
Other Manufacturing
Expenses 0 305.57 0 932.88
Selling and Admin
Expenses 0 0 0.13 0
Miscellaneous Expenses 2.85 300.24 7.14 297.74
Preoperative Exp
Capitalised 0 0 0 0

3,108.5 2,021.6 1,381.4

Total Expenses 5 760.54 9 1

1,389.5 2,109.9
Operating Profit -3.65 0 -4.05 1
PBDIT 1.27 2,544.3 1.93 3,201.2

26
 0 5
1,709.8
Interest 0 9 1.75 1553.78
1,647.4
PBDT 1.27 834.41 0.18 7
Depreciation 0.55 141.89 0.32 139.84
Other Written Of 0 0 0 0
1,507.6
Profit Before Tax 0.72 692.52 -0.14 3
Extra-ordinary items -0.03 -2.76 0 -0.45
PBT (Post Extra-ord
Items) 0.69 689.76 -0.14 465.47
Tax 0.18 188.20 0.10 0
1,041.7
Reported Net Profit 0.53 501.56 0.36 3
1,381.4
Total Value Addition 3.12 760.53 7.59 0
Preference Dividend 0 0 0 0
Equity Dividend 0 355.95 0 339.68
Corporate Dividend Tax 0 60.49 0 55.10
Per share data
(annualised)
16,987. 16,983.
Shares in issue (lakhs) 156.05 19 151.05 86
Earning Per Share (Rs) 0.21 2.95 0.14 6.13
Equity Dividend (%) 0 100.00 0 100.00
Book Value (Rs) 7.34 86.03 7.14 85.35

Balance Sheet

All figures in Rs. Cr.

Description 2013 2012
ATS DLF ATS DLF

Sources Of Funds
Total Share Capital 25.17 339.74 25.71 339.68
Equity Share Capital 25.17 339.74 25.17 339.68
Share Application
Money 0 0 0 0
Preference Share
Capital 0 0 0 0

14,274.4 14,156.8
Reserves 0.32 6 0.36 8
Revaluation Reserves 0 0 0 0
14,61 14,496.5
Networth 26.58 4.20 26.07 6
Secured Loans 0.63 10,785.9 0 11,844.6

27
 8 7
Unsecured Loans 36.93 315.05 0 130.45
11,101.0 11,975.1
Total Debt 37.56 3 0 2
25,715.2 2 26,471.6
Total Liabilities 64.14 3 6.07 8

Application Of Funds
Gross Block 8.32 2,667.55 6.75 2,481.27
Less: Accum.
Depreciation 1.73 640.48 1.16 511.97
Net Block 6.59 2,542.55 5.59 1,969.30
Capital Work in
Progress 0 6,876.55 0 2,196.95
Investments 10.96 8,875.60 32.97 7,046.65
Inventories 35.85 0 4.69 8,111.07
Sundry Debtors 4.89 389,38 6.91 519.28
Cash and Bank 36
Balance 8.80 9,264.99 1.48 6.57
15,842.8
Total Current Assets 49.54 6 13.02 8,996.92
15,842.8 15,858.1
Loans and Advances 5 6 9.32 7
Fixed Deposits 0 0 10.67 0
Total CA, Loans & 25,107.8
Advances 54.54 5 33.07 9,022.55

Defered Credit 0 0 0 573.78

Current Liabilities 7.76 9,819.84 45.54 9,596.33
15,258.7
Provisions 0.20 444.61 0.13 6
10,264.4 17,8909
Total CL & Provisions 7.96 5 45.67 8
14,843.4
Net Current Assets 46.58 0 -12.60 42.26
Miscellaneous
Expenses 0 0 0.09 0
26,289.5 26,471.6
Total Assets 64.13 7 26.05 6

10,887.8 12,730.3
Contingent Liabilities 0 5 0 6
Book Value (Rs) 10.34 86.03 10.14 85.35

Cash Flow Statement

All figures in Rs. Cr.

Description 2013 2012

28
 ATS DLF ATS DLF

Net Profit Before Tax 0.41 692.53 0.25 1507.71

Net Cash From Operating Activities -31.23 -74.00 26.05 419.15
Net Cash (used in)/from Investing
Activities -1.34 2756.93 9.00 1158.71
Net Cash (used in)/from Financing
Activities 37.53 -2723.40 -38.85 -1354.43

Net (decrease)/increase In Cash and

Cash Equivalents 4.96 -4048 -3.81 223.44
Opening Cash & Cash Equivalents 4.99 355.32 8.80 131.84
Closing Cash & Cash Equivalents 9.95 314.84 4.99 355.28

29
RATIO ANALYSIS OF ATS WITH DLF

1) Liquidity Ratios
Liquidity ratios are used to determine a company’s ability to meet its short-term debt
obligations. Investors often take a close look at liquidity ratios when performing
fundamental analysis on a firm. Since a company that is consistently having trouble
meeting its short-term debt is at a higher risk of bankruptcy, liquidity ratios are a good
measure of whether a company will be able to comfortably continue as a going concern.
The higher the value of the ratio, the larger the margin of safety that the company
possesses to cover short-term debts.

Current Ratio Includes – Current Ratio and Quick Ratio

Current Ratio

One of important function of the financial manager is to maintain sufficient liquidity.

Current ratio is an important criterion to test the liquidity and also the short term
Solvency.

The ratio of 2:1 is considered as standard of current ratio.

Mathematically, Current Ratio = Current Assets ÷ Current Liabilities

ATS DLF
2010 0.69 2.59
2011 0.74 2.37
2012 0.82 1.49
2013 0.98 1.46
TABLE-1

2.5

1.5 ATS
DLF
1

0.5

0
2010 2011 2012 2013

GRAPH-1

30
Quick Ratio

This ratio also tests liquidity.But it is a more refined test of liquidity and solvency.

This ratio takes into consideration the liquid assets only which are directly convertible
into cash. The current assets like inventories which are two steps away from the cash are
excluded.

Mathematically,

Cash + Marketable Securities + Receivables

Quick Ratio =
Current Liabilities
Alternatively, quick ratio can also be calculated using the following formula:

Current Assets − Inventory − Prepayments

Quick Ratio =
Current Liabilities

A quick ratio of 1:1 is considered adequate.

In general, the higher the ratio, the greater the company's liquidity (i.e., the better able
to meet current obligations using liquid assets.

Company/year ATS DLF

2010 0.97 1.60
2011 1.02 1.37
2012 0. 75 1.06
2013 0.67 0.91
TABLE-2

1.8
1.6
1.4
1.2
1
ATS
0.8 DLF
0.6
0.4
0.2
0
2010 2011 2012 2013
GRAPH-
2

31
 INTERPRETATION
 In above table1 and Graph 1 current ratio of ATS in 2010 was 0.69 but last year it
was 0.98. On the other hand current ratio of DLF in 2010 was 2.59 where as in
last year it is 1.46. From the above it can be concluded that the financial position
of DLF is better than the ATS in terms of current ratio because DLF have more
variations in current ratio as compare to ATS . But Current Ratio of DLF is
decreasing every year while it is increasing for ATS, thus implying that financial
position of ATS is getting better.

 From Table 2 and Graph 2, the quick ratio of ATS in 2010 was 0.97 times and last
year it was 0.67 . It kept declining from 2010, but on the other hand quick ratio of
DLF in 2010 was 1.60 times and in 2011 was 1.37 but this ratio got declining
again. Last year quick ratio was 0.91. From this it can be concluded that both the
companies have declining quick ratio but DLF has a better ratios than DLF. Thus,
DLF has a better financial position than ATS in terms of quick ratio.

2) Profitability Ratios
Profitability ratios measure a company’s ability to generate earnings relative to sales,
assets and equity. These ratios assess the ability of a company to generate earnings,
profits and cash flows relative to relative to some metric, often the amount of money
invested.

They highlight how effectively the profitability of a company is being managed.

For most of these ratios, having a higher value relative to a competitor's ratio or the
same ratio from a previous period is indicative that the company is doing well.

Profitability ratios show a company's overall efficiency and performance. We can divide
profitability ratios into two types: margins and returns.

Ratios that show margins represent the firm's ability to translate sales dollars into profits
at various stages of measurement. Ratios that show returns represent the firm's ability to
measure the overall efficiency of the firm in generating returns for its shareholders.

Margin Ratios includes :

- Operating Profit Margin

- Gross Profit Margin
- Net Profit Margin
- Cash Flow Margin

Return Ratios includes :

- Return on Assets (also called Return on Investment)

- Return on Equity

- Cash Return on Assets

32
Here, we have analyzed only Operating Profit margin, Gross Profit Margin and Net Profit
Margin which are described below:

Operating Profit Margin

Operating margin is a measurement of what proportion of a company's revenue is left

over after paying for variable costs of production such as wages, raw materials, etc. A
healthy operating margin is required for a company to be able to pay for its fixed costs,
such as interest on debt.

Operating profit is also known as EBIT and is found on the company's income statement.
EBIT is earnings before interest and taxes.

The operating profit margin looks at EBIT as a percentage of sales.

The operating profit margin ratio is a measure of overall operating efficiency,

incorporating all of the expenses of ordinary, daily business activity.

The calculation is: EBIT/Net Sales = _____%.

Both terms of the equation come from the company's income statement.

Company /year ATS DLF

2010 3.2 48.42

2011 3.6 39.25

2012 4.8 40.54

2013 5.3 33.78

Table No. :3

60

50

40

30 ATS
DLF
20

10

0
2010 2011 2012 2013
Graph
No. : 3

33
Gross Profit Margin

A financial metric used to assess a firm's financial health by revealing the proportion of
money left over from revenues after accounting for the cost of goods sold. Gross profit
margin serves as the source for paying additional expenses and future savings.

The gross profit margin looks at cost of goods sold as a percentage of sales.

This ratio looks at how well a company controls the cost of its inventory and the
manufacturing of its products and subsequently pass on the costs to its customers.

The larger the gross profit margin, the better for the company.

The calculation is: Gross Profit/Net Sales = ____%.

Both terms of the equation come from the company's income statement.

Company/ year ATS DLF

2010 1.16 44.06

2011 1.81 32.65

2012 2.32 33.39

2013 2.75 23.54

TABLE-4

50
45
40
35
30
25 ATS
20 DLF

15
10
5
0
2010 2011 2012 2013

Graph No. : 4

34
Net Profit Margin

Profit margin is very useful when comparing companies in similar industries.

A higher profit margin indicates a more profitable company that has better control over
its costs compared to its competitors.

When doing a simple profitability ratio analysis, net profit margin is the most often
margin ratio used.

The net profit margin measures profitability after consideration of all expenses including
taxes, interest, and depreciation.

The calculation is: Net Income/Net Sales = _____%.

Both terms of the equation come from the income statement.

Company/ year ATS DLF

2010 1.43 22.29

2011 3.22 16.61

2012 4.65 11.74

2013 4.95 7.82

TABLE - 5

25

20

15
ATS
10 DLF

0
2010 2011 2012 2013

Graph No. : 5

35
INTERPRETATION

In table 3 we have calculated operating margin of ATS and DLF In case of ATS
operating margin in 2010 was 3.2, it keep on increasing and in 2013 it came 5.3.
On the other hand operating margin of DLF in 2010 was 48.42 and in 2013 it
came 33.78 . In terms of profitability DLF is better than ATS.

In table 4 the gross profit margin has been calculated. Here in case of ATS, the
gross profit margin in year 2010 was 1.16 and it kept declining and became 2.75
in 2013. On the other hand in case of DLF the gross profit margin in the year of
2010 was 44.06% and the ratio of this company was also declining and came to
23.54% last year. From this it can be concluded that the ATS has more variation in
Gross Profit as compared to DLF.

In table 5, the net profit margin has been calculated. In ATS the ratio in 2010 was
1.43 and after it kept declining and last year it reached to 4.95. On the other hand
in case of DLF in year 2010 it was 22.29 and in 2013 it was 7.82. The financial
position of DLF is better than the ATS in terms of net profit.

36
PROJECT / DETAILED STUDY

Topic : Customer / Investor perception about investing in Real Estate

Investing in real estate presents both unique problems and opportunities. Real estate is a

non-liquid, localized investment vehicle. It is immobile, of limited supply, indestructible,

and physically real. It is difficult to own buildings-they require maintenance, tenants,

regular updating, and are subject to fire, hurricane, and location

advantages/disadvantages.

Real Estate Investing has created more millionaires than any other investment vehicle in

this country. Investing in real estate is one of the safest and smartest investments that

you can make. Real estate appreciates at a rate far greater than the rate of the inflation,

builds equity, provides a steady return on investment, provides cash flow, and can offer

substantial tax benefits.

Real estate is almost completely dependent on local conditions. One should invest in real

estate only if he or she knows the local situation well-including the local economy,

market conditions, political environment, building controls, etc. All of these factors can be

critical to the success or failure of an investment.

There are two types of properties that can be invested in are: residential and commercial.

 Commercial properties, as their name suggests, are properties that are sold or

leased to businesses. These can include retail areas, warehouse spaces, industrial

properties, restaurants, and much more.

 Residential properties are homes, duplexes, condos, townhouses, and rental

properties rented or sold to individuals and families.

The Investors can invest in both types of properties! This is because a new real estate

investor may spread himself or herself a bit too thin by trying to attract both businesses

and tenants or families to both residential and commercial properties. Plus, residential

37
real estate investing is very different from commercial real estate investing. Different

skills, networking procedures, and even marketing are required for each.

It may be simpler to focus on one type of buyer or renter and one type of property, at

least at first.

For a beginning real estate investor, residential real estate investing makes a great deal

of sense. There are many advantages for the beginner investor, and even seasoned

investor, interested in residential real estate investing. One major advantage is that there

is already an extensive financing industry in place for residential properties. In fact,

anyone can get funding in order to buy a residential property. There are even

government programs and special programs in place to help those with little money buy

their first home.

Residential real estate investing can also be very attractive because there's always a

target market interested in this type of property. When the economy takes a downturn,

businesses may tighten their belts first. However, families and individuals will still need

places to live. They will still be renting, and even buying properties. The fact that there

are government initiatives and many types of mortgage programs ensures that home

buyers continue buying even when the economy is in a slump. This can make residential

real estate investing slightly less risky for real estate investors.

There is simply always a market, something that cannot always be said for commercial

property investing.

Another major advantage of residential real estate investing is that it takes far less

money to get started. While commercial properties tend to be more expensive,

residential homes can be purchased for very little. Distressed properties and foreclosed

properties, in particular, can often be purchased for less than their actual market value.

This makes getting started in residential real estate investing relatively simple. An

38
investor can simply purchase a property that is being sold for less than its value. He or

she can use traditional mortgages or business loans in order to make the purchase.

After some renovating or even just cleaning up, the investor can then resell the property

for considerably more and therefore make a profit. It is really that simple.

There are many advantages to residential real estate investing. For those new to the real

estate investing game or even for seasoned investors wishing to expand a portfolio with

some more solid investments, residential properties are great investment opportunity.

Real estate investing is a business where the realtors will be investing in his business for

a period. These investors buy the property under a bond and sell this to other dealer who

holds up the property for a certain period and again he sells them to the buyer i.e. the

owner. In real estate investing, contract based transaction is also involved. While

investing or dealing the property, the realtor can hold the property for a fixed period to

complete the contract. After a period when the realtor sells the property, they get a huge

amount of profit

Real Estate Investors Benefits

In my opinion, even with the many opportunities out there today, becoming a real estate

investor is still one of the smartest choices for many would-be entrepreneurs, and here's

why. Unlike other choices:

Becoming a real estate investor actually carry less risk.

The truth is everyone needs real estate sooner or later. Businesses need retail space in

order to house their shops or store their supplies, and families need homes in which to

live.

This constant demand ensures that the smart real estate investor always has willing

audiences looking for his or her product. This is simply not true of people who sell

information products or who work at home at other careers.

39
The earning potential for real estate investors are sky-high.

Because real estate investors are selling very high tag items -- homes sell for anywhere

from tens of thousands to millions of dollars -- the profit margins can be terrific.

At the same time, start up costs for the real estate investors are not prohibitive. If you

want to own your own chain of restaurants, you may need to invest hundreds of

thousands of dollars or go deep into debt in order to purchase the space, supplies, and in

order to hire the staff. You can realistically become a real estate investor while still at

college and living in a dorm room.

You do not have to have specialized knowledge, tons of ready cash, or much of anything

else except knowledge and focused determination. The truth is, there are already a

number of mortgage products, loan products, and other financial resources in place to

help the would-be real estate investor get started. After the first real estate deal or two,

the real estate investor generally has enough money of his or her own to start investing

in more properties.

Therefore, the real estate investor does not have to stay in debt and therefore face the

risk of losing money in a bad economy.

Becoming a real estate investor can be deeply satisfying.

A real estate investor helps families find an ideal home, helps people with bad credit find

a property that they thought they could not afford, and helps businesses established a

base of operations. It can be truly rewarding for the real estate investor to make such a

deep impact on people's lives. At the same time, the real estate investor enjoys complete

freedom. He or she does not have to report to a boss, spend hours in a cubicle, or even

spend hours at home.

"This sort of freedom - combined with the truly awesome earnings potential of

being an investor - makes real estate investing a wonderful part time business

opportunity."

40
If you want to earn a real living while enjoying greater freedom, consider all your options.

Once you do, you may find that becoming a real estate investor makes the most sense.

This is the opportunity that allows you to survive in just about every economy and allows

you to enjoy a truly rewarding career and truly terrific profits

Real Estate Investors Losses

He can make plenty of costly mistakes, and real estate investing can be considered as a

high stakes, high risk game. The end result to failure could cost them much more than

their pride.

1) Data Collection

As a preliminary for the business development of the company it was essential to find the
customer/investor perception about investing in real estate.

For collecting the information a questionnaire was designed focusing on the main cities in
NCR like Greater Noida, Noida, New Delhi and Ghaziabad where the company is operating
its projects.

The respondents in our sample size are professionals from major public and private
institutions which include managers, consultants, proprietors, business class etc.
Approximately 200 questionnaires were filled and ultimately collected 169 with positive
response that they have their interest in investing their funds in real estate.
Table 1 summarizes the total sample size which reflects that majority of respondents
have their interest in real estate.
Table: 1 Sample size and Respondents:

City Total Respondents Interested in Real

Estate

Greater Noida 30 25

Noida 30 26

Ghaziabad 30 24

New Delhi 30 26

41
 Total 120 101

No. Of Respondents Interested in Real Estate

Noida Greater Noida Ghaziabad

Noida 25% New Delhi
New Delhi 25% Greater Noida 26%
Ghaziabad 24%

Primary Data

The whole of the study is primary data based oriented through a questionnaire. The contents of the
questionnaire are:
 Interest in investing in real estate.
 Reasons for investing in real estate. (Short term, Long term, End use, Recurring Returns)
 Risk factor in real estate and Return.
 Project they like to invest their funds. (Office Spaces, Plots, Shopping Malls, Multiplexes, Group
housing)
 In which assets class they find themselves most comfortable. (Real Estates, Equities, Debt and
Commodities)
 Their need for specifications and factors they find appropriate where they are
investing their funds.
 Lack of facility in previous or current residence.

2) Findings & Analysis

The company, ATS Infrastructure Ltd. has presently 8 projects out of which 7 have

been already cleared and one is yet to be executed. The developers expect 30-40%

returns/profit margins, although it varies from projects to projects due to various

reasons like time, cost of purchase, etc.

42
 - Question 1 among the questionnaire reflects the real estate investment policy

specifically. We asked our respondents do you have interest in investing your

funds in real estate.

The answer to the question 1 indicate that a surprising number of respondents, nearly

101 out of 120 have their interest in investing their funds in real estate.

Exhibit 1: Question 1

Do you have interest in investing in Real Estate!

No. of Respondents

Not Interested 16%

Interested 85%

Interpretation:

Certain increase in property prices in the last four years, high income, cheaper loan

rates, no longer adverse to debt and ready to discount future earnings today could be the

main reasons for development of interest in real estate of customers.

Exhibit 2: Question 2

Reasons for investing in Real Estate!

43
 Reasons for Investing

60

50
Short Term Long Term End Use Recurring Earning
40

30

20

10

Interpretation:

Since real estate has beaten all forms of investment in last four years and sought to be

emerging as a key element in customers/investors portfolio and by paying an EMI instead

of paying taxes and rent they develop a compulsory saving habit and create a valuable

asset for a long period of time could be a possible reason for this above result

Exhibit 3: Question 3

Top risk factors in Real Estate!

44
 Top Risk Factors
Asset Volatility

40 Lack of reliable data

35
30 Legal and Regularoty risk

25
Risk of poor professional advice
20
15
Hard to determine best oppurtunities
10
5
0

Interpretation:

Risk of poor profession advice, legal and regularity risk, hard determining the best

opportunities are the top three factors. Change in government policies, change in trend

and fashion cold be the main reason for above.

Exhibit 4: Question 4

Project in which customers/investors like to invest!

45
 Projects of Interest

45
40
35
Office Spaces Shopping Malls Plots Multiplex es Group Housing
30
25
20
15
10
5
0

Interpretation:

There’s been an evident shift in perception and mindset in the Indian middle class over

the last five to ten years, thanks to the impact of liberalization and opening up of the

Indian economy, a rise in average income across households, and a palpable desire to

own things ‘now’. The most crucial aspect of this ‘shift’ in the consumer’s mindset is

perhaps explained by the fact that the young (or Next Generation) are more in charge of

their lives and eager and impatient to assume the world. It’s a generation that is

independent, self-reliant and nuclear in nature. And it is this eagerness that is succeeding

that has fuelled a drive to own what one desires the most: a home, a car and a healthy

lifestyle. Other drivers have been incentives from the government to buy homes,

improved quality of buildings and property services and a bouquet of financial options.

Tax concessions, property price dips and lower interest rates have also helped.

Exhibit 5: Question 5

The question ask “on a 5-point scale,….how does the long term expected return for the

real estate component and your portfolio compare with the long term expected return for

the following asset class in your portfolio”?

In which of the following asset classes are you most comfortable in investing

your funds.

46
The research report that most respondents believe real estate has an expected return a

little above that for equities and debt. They expect commodities too significantly and

somewhat less.

What factors might explain this apparent contradict?

 First, allocation might not be based on modern portfolios theory.

 Second additional factors affecting risk and return estimates-such as higher

relative cost of real estate.

 Consistent with this notion is the real estate has done well relative to stocks and

bonds recently, a number of customers reported investing in real estate only

recently.

The question asks about the factors or specifications to be included by developer where

the customers/investors are investing their funds.

Exhibit :

The factors listed below are most demanding among all:

 Affordable price range.

 Availability of loan at low interest rates.

 Easy payment plan.

 Clear title of property.

 Resale value.

 Connectivity to schools, hospitals, entertainment centers.

 Peaceful locality

 Pollution free environment.

 Quality construction and maintenance.

 Safety and Security, Water Availability, Power Back-Up, Car Parking, Recreational

Facility, Club Membership etc.

 ROI (Return on Investment)

47
Thus, we found that respondents are interested in investing in real estate and at the
same time developers are successful in satisfying the real estate investors. Each
developer has an average of 30-40% profit margins, although it varies from projects to
projects because of factors like cost of purchase, time, etc.

CONCLUSION / RECOMMENDATIONS

CONCLUSION

Three types of return on investment (ROI) are found with real estate. They are Cash
Flow, Return on Taxes, and Appreciation.

First: Before tax Cash Flow

Cash Flow is the amount returned to the investor annually as cash. It represents
the most direct type of return, since it is money one can “put in his pocket” right
away and as a result is most desirable.
However, the amount returned as cash may not be that significant, and by itself
would not justify the investment. Cash Flow typically will be lowest in the early
years of a projects, and may initially even be negative, meaning additional cash
will need to be put into the project over the short term. Cash Flow hopefully will
stabilize after a number of years, but often still will be the least of the three ROIs.

Second: Return on Taxes

Many investors, especially those in higher tax brackets, are less concerned with
cash return than they are with the tax advantages of real estate investment. For
them, real estate provides some of the best tax opportunities available.

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 Third: Appreciation
The greatest Return on Investment is typically from appreciation, which is the
continuing increase in the value of a property due t higher market values each
year. Properties can have significant increases in value over time due simply to
such market forces.

The assumption of property appreciation may initially seem contradictory, for tax
law assumes a decrease in the value of property over time. But such depreciation
is a theoretical assumption, while true market instead shows increases over time.

The relative high ROI due to appreciation represents one of the primary reasons
for investing in real estate. However, this return is realized only on the sale of the
property, and is dependent on an investor being able to tie up his or her money
for an extended period of time.

Real estate investing is not for those who need a regular, predictable return on
their investment. But it can be very rewarding for those who can invest relatively
large amounts and wait for favorable market conditions.

Important Factors in Decision to Invest in Real Estate

1. Location

2. Price – higher and better use, will market allow for better cash inflow

3. Demand - what is the competition among buyers?

4. Existing leases – are they good or bad

5. Existing operating expenses

6. Competition – what are new properties coming on market, will they improve
our property and make it more valuable

7. Condition – look for cosmetic problem not structural

8. Replacement cost

9. Terms of financing

10. Economic cycle – is the timing good or is there a down-swing

11. Motives of seller – why are they selling (ask them)

Being a new to the market ‘ATS Infrastructure Ltd.’ has a good start, as is has tried to
engage itself towards residential projects which have a competitive advantages over
the commercial projects.

Since, Real Estate Market is on a boom, it’s a great opportunities for real estate
developers to develop its
market share and increase its profit margins.

ATS Infrastructe Pvt. Ltd., a real estate developer, presently dealing in residential
properties enjoy a number of advantages over other companies.

Residential projects have a large market and even when the economy is downturn,
people need place to

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live. As a result, they are less risky and have a high tag earning potentials as
compared to commercial
projects.

It also requires less capital for investment than commercial projects and if you want
to resell, you can
easily get customers in a short span of time and make a profit.

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RECOMMENDATIONS
 In reality asset allocation is far more sophisticated process. It varies from person

to person and depends on person’s financial plan, family background, disposal

income, age, and investor’s preferences. So before targeting the customers the

company should consider the factor.

 Consider middle- aged person from a middle class background seeking a stable

life long job. He cannot be expected to invest in equities and property. His

preference would be bank FDs. On the other hand, a market savvy young couple

in the corporate sector with high cash surplus would prefer to invest in property.

The age factor should be properly defined before targeting.

 Company should state to its customers that since real estate has beaten all forms

of investment in last 4 years and sought to be emerging as a key element in

customer’s portfolio and by paying an EMI instead of paying taxes and rent, they

develop a compulsory saving habit and create a valuable asset for a long period

of time.

 Tremendous demand for residential property such as group housing, residential

plots, and townships rather than commercial property. The company should focus

on developing the residential property more rather than commercial property.

 There should be an option for discount for customers from registered dealers of

the company.

 Customers should be approached and asked them to see sample flat without

forcing them to buy the flat. The conveniences should be born by the company.

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KEY LEARNING’S
Key learning’s involved during internship are :

- Exposure to real business world.

- Study of Indian Retail Industry.
- Analysis of Indian Retail Industry.
- Financial Analysis and comparison of ATS with DLF of balance Sheet, Profit & Loss
Account and Cash Flow Statement.
- Studied the meaning and importance of different financial ratio including
Profitability ratio and Liquidity ratio.
- Collecting the sample data for research work.
- Analysing and reaching up to a conclusion from the collected data.
- Prepared the questionnaire.
- Interaction with customers related to research and selling of property.

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 Annexure-1
Questionnaire

What are the customer’s and investors perceptions about investing in Real Estate!

Introduction

Thank you for taking the time to complete the survey. Your feedback is integral to our
academic research how customers think about investing in real estate. Specifically we
want to uncover why the real estate is such a limited part of most of the customers and
organization portfolios.

Your answer will remain strictly confidential and will be used for research purpose only.
The survey should take about 5-7 minutes to complete. Thank you once again for your
time.

NAME: AGE:
ADDRESS: OCCUPATION:

1. Do you have interest in investing your funds in Real Estate?

[ ] Yes [ ] No

If yes, please answer the following questions.

2. Have you ever invested your funds in Real Estate?

[ ] Yes [ ] No

3. Reasons for investing in Real Estate?

[ ] Short Term Return [ ] Long Term Return

[ ] End Use [ ] Recurring Return

[ ] we do not invest in Real Estate

4. Top risk factors in real estate and return?

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 [ ] Asset volatility [ ] Lack of reliable valuation data

[ ] Legal and Regularity risk [ ] Risk of poor Profession advice

[ ] Hard to determine the best opportunities [ ] any other

5. Various big players had registered its presence across the country with a healthy
mix of projects. In which project you would like to invest your funds.

[ ] Office Spaces [ ] Shopping Malls

[ ] Plots [ ] Multiplexes

[ ] Group Housing [ ] Any Other, Please

specify_________

6. For which of the following assets classes are you most comfortable in investing
your funds.
Least Comfortable Most Comfortable
1 2 3 4 5
Don’t Know _ _ _ _ _

Real Estate _ _ _ _ _

Equities _ _ _ _ _

Commodities _ _ _ _ _

Debt Markets _ _ _ _ _

7. Almost every builder providers the following specifications in his project like:

 Affordable Price Range, Availability of loan at low interest rates, Easy Payment
Plan.
 Connectivity to Public Transport, Work Place.
 Proximity to Schools, Hospitals, Entertainment Centers.
 Clear title of property, Resale value.
 Peaceful locality, Pollution free environment.

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  Quality Construction, Maintenance, Safety & Security, Water Availability, Power
Back-Up, Car parking facility, Recreational facility, Club Membership etc.
 Return on Investment (ROI)

Any other factor or specification you find appropriate or useful in the area you are
investing, please specify______________________________________________

8. Brand Name is something that immediately comes into your mind. Please rate the
developers according to brand image

_ DLF _ UNITECH _ OMAXE _ ANSALS _ ELDECO

_ DREAMLAND _ EROS _ PARSVNATH

9. Please specify lack of facility in your previous or current residence.

__________________________________________________________________________________________
____________________________________________________________

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REFERENCES
www.atsinfrastructure.com

http://www.ibef.org/industry/real-estate-india.aspx

http://www.crisil.com/pdf/capitalmarket/Industry-content.pdf

www.moneycontrol.com

www.reit.com

www.indianground.com/real_estate_india.aspx

www.economywatch.com/investment/real-estate-investment.html

www.real-estate-investment-information.com

www.greatrealestateinvestinginfo.com

http://www.dlf.in

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