Peninsula Land

Results weak; in line with expectations

June 10, 2008 „ Results: Peninsula Land (PLL) declared weak results for 4QFY08. This was

Q4FY08 Result Update

primarily on account of the stop-work notice issued by the Municipal
Corporation of Greater Mumbai, whereby the company had to stop work
Rating Outperfomrer
on four of its Mumbai projects in Q3FY08 and Q4FY08. The company
Price Rs66 resumed some part of the work in March 2008, while the notice was fully
Target Price Rs129 withdrawn with effect from April 2, 2008. Topline for the quarter
Implied Upside 94.9% witnessed 8% YoY decline, while PAT witnessed 42% decline.
Sensex 15,066
„ Ashok Towers - major revenue driver: The company booked 65% of its
(Prices as on June 9, 2008)
quarterly revenue from Ashok Towers, a residential project located in
Parel. While 94% of the project has been pre-sold, 55% construction has
been completed. PLL booked another 13% of its revenue from Peninsula
Trading Data
Business Park and 17% from the sale of TDRs, which were generated from
Market Cap. (Rs bn) 18.5
the company’s Bhandup project.
Shares o/s (m) 279.5
Free Float 46.6% „ 117% CAGR revenue growth expected over 2 years: PLL has four on
3M Avg. Daily Vol (‘000) 1,002.9
going projects in Mumbai, which are likely to drive its revenue and
profits over FY09 and FY10. We expect revenue growth of 117%
3M Avg. Daily Value (Rs m) 98.3
accompanied with PAT growth of 119%.

„ Valuation: Our estimate of the company’s NAV, excluding the SEZs,

which have not been notified (as well as the newly acquired land at
Major Shareholders Hyderabad) stands at Rs101, while we attribute a value of Rs28 to the
Promoters 53.4% realty fund. At the CMP, the company is trading at 34% discount to the
Foreign 18.9% NAV. We rate the stock Outperformer.
Domestic Inst. 6.6%
Public & Others 21.1%

Key financials (Y/e March) FY07 FY08 FY09E FY10E

Revenue (Rs m) 3,272 3,574 10,858 16,842
Growth (%) 19.1 9.2 203.8 55.1
Stock Performance
EBITDA (Rs m) 1,742 1,509 5,400 8,939
(%) 1M 6M 12M PAT (Rs m) 1,294 1,321 3,526 6,302
Absolute (32.3) (55.7) (40.0) EPS (Rs) 6.1 4.7 12.6 22.5
Growth (%) (15.7) (23.1) 167.0 78.7
Relative (20.6) (29.8) (45.2)
Net DPS (Rs) 0.6 0.5 0.5 0.5

Source: Company Data; PL Research

Price Performance (RIC: PENL.BO, BB: PENL IN) Profitability & valuation FY07 FY08 FY09E FY10E
(Rs) EBITDA margin (%) 53.2 42.2 49.7 53.1
180 RoE (%) 57.6 19.1 29.5 37.3
160
RoCE (%) 26.0 17.3 38.7 44.1
EV / sales (x) 5.2 4.3 1.3 0.8
140
EV / EBITDA (x) 9.7 10.2 2.7 1.4
120
PE (x) 10.8 14.0 5.2 2.9
100 P / BV (x) 3.8 1.8 1.4 0.9
80 Net dividend yield (%) 0.01 0.01 0.01 0.01
60 Source: Company Data; PL Research
Apr-08
Dec-07

Feb-08
Jun-07

Aug-07

Oct-07

Jun-08

Kejal Mehta Subramaniam Yadav

KejalMehta@PLIndia.com SubramaniamYadav@PLIndia.com
Source: Bloomberg +91-22-6632 2246 +91-22-6632 2241
 Peninsula Land

Q4FY08 result overview (Rs m)

Y/e March Q4FY08 Q4FY07 YoY gr. (%) Q3FY08 FY07 FY08 YoY gr. (%)
Net sales 1,112 1,204 (7.6) 224 3,272 3,574 9.2
Expenditure
Construction, mfg. & others 803 574 39.9 94 1,413 1,830 29.5
% of net sales 72.3 47.7 42.2 43.2 51.2
Personnel cost 57 38 47.9 50 116 235 101.7
% of net sales 5.1 3.2 22.5 3.6 6.6
Total expenditure 860 613 40.4 145 1,530 2,065 35.0
EBITDA 252 591 (57.4) 79 1,742 1,509 (13.4)
Margin (%) 22.7 49.1 35.3 53.2 42.2
Other income 77 8 867.5 0 16 108 586.1
Depreciation 10 2 405.0 5 13 26 99.7
EBIT 319 597 (46.5) 74 1,745 1,591 (8.8)
Interest (90) 18 NM (27) 129 (66) NM
PBT 409 580 (29.4) 100 1,616 1,657 2.5
Total tax 115 73 (320) 75 194 157.8
% PBT 28.0 12.5 NM 4.7 11.7
PAT 295 507 (41.9) 420 1,541 1,463 (5.0)
Extraordinary item (47) (172) (41) (252) (152)
Share of associates - - - 4 15
Minority interest - - - 1 (5)
PAT after minority int. 247 335 (26.2) 379 1,294 1,321 2.0

June 10, 2008 2

 Peninsula Land

Prabhudas Lilladher Pvt. Ltd.

3rd Floor, Sadhana House, 570, P. B. Marg, Worli, Mumbai-400 018, India.
Tel: (91 22) 6632 2222 Fax: (91 22) 6632 2209

PL’s Recommendation Nomenclature

BUY : > 15% Outperformance to BSE Sensex Outperformer (OP) : 5 to 15% Outperformance to Sensex
Market Performer (MP) : -5 to 5% of Sensex Movement Underperformer (UP) : -5 to -15% of Underperformace to Sensex
Sell : <-15% Relative to Sensex
Not Rated (NR) : No specific call on the stock Under Review (UR) : Rating likely to change shortly

This document has been prepared by the Research Division of Prabhudas Lilladher Pvt. Ltd. Mumbai, India (PL) and is meant for use by the recipient only as information
and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of PL. It should not be considered or taken
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completeness of the same. Neither PL nor any of its affiliates, its directors or its employees accept any responsibility of whatsoever nature for the information,
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Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The
suitability or otherwise of any investments will depend upon the recipient's particular circumstances and, in case of doubt, advice should be sought from an independent
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June 10, 2008 3