Prozone Intu Properties Ltd

Realty
FV – Rs 2; 52wks H/L –38.75/23.5; TTQ – 15.86 Lacs; CMP – Rs 38 (As On October 18th 2016; 11.30);                         

         Market Cap – Rs 571.5 Crs

Consolidated Financials and Valuations for FY16 (Amt in Rs Crs unless specified)

Equity Capital	Net worth	Long Term Debt	Total Sales	PAT	BV (Rs)	EPS (Rs)	P/E	Industry P/E	P/BV	Promoter’s Stake	Beta
30.52	551	222	95	7.38	36	0.48	79.2	30.91	1.1	32.84	0.93

 

Standalone Financials and Valuations for Q1 FY17

Equity Capital	Net worth	Total Sales	PAT	BV (Rs)	TTM EPS (Rs)	TTM P/E	Industry P/E	P/BV	Promoter’s Stake	Beta
30.52	413	2	1.01	27	0.07	542	30.91	1.41	32.84	0.93

 Valuation Parameters:

1. Long Term Debt to Equity – 0.40
2. ROE % – 1.3
3. Market Cap/Sales – 6

Radhakrishna Damami has bought 19.7 lakh equity shares of the company during July –September quarter.

http://www.moneycontrol.com/news/buzzing-stocks/prozone-indu-zooms-20-after-radhakishan-damani-picksstake_7633121.html

 

Key Updates:

• Key Business Strategy – Develop Large scale Land Parcels for Mixed Use development with 75% of the Land to be developed as Residential & Commercial – Build & Sell model whereas 25% of the Land to be developed as Retail – Build & Lease Model.
• The Company has 17.79 mn sq. ft. of Fully Paid Upland bank in prime locations with 1.2 mn developed till date and more than 16.5 mn sq. ft. balance to be monetized which is being developed in different phases .
• Robust Balance sheet with Low Leverage at 0.35x.
• At current valuation, the Land bank valuation for the company is expected to be Rs. 20,000 mn.
• The Company owns six land banks in strategic city locations across the country comprising a total of 17.8 million square feet of developable area.

Projects in Pipeline:

1. Residential Properties in Nagpur (Prozone Palms township is being developed in 2 phases and Phase 1 of the same is spread over 11 acres of land with 2001608 sq. ft. of saleable area. Prozone Palms offers 14-storey towers with a total of 1176 flats with a wide range of luxurious 2 BHK, 3 BHK & 4 BHK apartments meticulously planned for spacious living.)
2. Indore (Prozone Palms township is being developed in 2 phases and Phase 1 of the same is spread over 11 acres of land with 2361662 sq. ft. of saleable area. Prozone Palms phase 1 offers 18-storey towers with a total of 1574 flats with a wide range of luxurious 2 BHK, 3 BHK & 4 BHK apartments meticulously planned for spacious living.)
3. Coimbatore (Retail development to have 664000 sq ft of GLA spread over 2 phases. Prozone Palms township is being developed in single phase and is spread over 11 acres of land with 1512000 sq. ft. of saleable area. Prozone Palms phase 1 offers 18-storey towers with a total of 1088 flats with a wide range of luxurious 2 BHK, 3 BHK & 4 BHK apartments meticulously planned for spacious living.)

All of these are luxurious retail townships with premium Clubhouse Infrastructure like as kids play area, meditation centre, aroma garden, therapeutic walk, multipurpose court, swimming pool, jacuzzi, barbeque pavilion, outdoor dining plaza, jogging/cycling track, amphitheatre etc.

Overview:

• Prozone Intu Properties Limited is an India-based retail and residential-led mixed-use real estate development company. The Company is engaged in the business of designing, developing, owning and operating of shopping malls, commercial and residential premises.
• It owns 15 properties, 10 of the top 25 shopping centers with a dominant market share. It is a joint venture between Provogue (India) Ltd and Capital Shopping Centres Plc.
• The Company operates in two segments: leasing and outright sales.
• Prozone Intu Properties Ltd. (Prozone Intu) is jointly developed by Provogue (India) Limited and Intu Properties Plc set up to create, develop and manage world-class regional shopping centres and associated mixed-use developments Pan-India.
• Prozone Intu strategy is to participate and dominate in the retail space in Tier 2 and 3 cities in which robust urbanization is expected, which will result in growth of consuming middle class from 300 to 500 million in next 5 years.
• Intu Properties is UK’s Largest Retail Real Estate Company.
• Intu Properties plc is a UK FTSE 100 listed Company owning and managing assets worth more than 8.9 bn pounds. They own 17 properties, 12 of which are among the top 25 shopping centers in the UK, representing ~ 38% UK market share.
• Intu Properties plc has more than 21mn sqft of retail space; 400 million customer visits a year.

The Company subsidiaries include Alliance Mall Developers Co Private Limited (AMDPL), Omni Infrastructure Private Limited (OIPL), Hagwood Commercial Developers Private Limited (HCDPL), Empire Mall Private Limited(EMPL), Royal Mall Private Limited(RMPL) , Jaipur Festival City Private Limited (JFCPL) and Kruti Multitrade Private Limited (KMPL).

Management:

• Nikhil Chaturvedi – MD
• Salil Chaturvedi– Deputy MD
• Punit Goenka – Chairman
• Anurag Garg – CFO

Major Non-Promoter Holdings:

Sr.No	Non – Promoters	No. of Shares held	% of Shares Held
1	Nailsfield Ltd (Account FDI)	43995788	28.83
2	Nailsfield Ltd (Account FII)	5415000	3.55
3	Sandeep G Raheja	4489600	2.94
4	Rakesh Jhunjhunwala	3150000	2.06
5	Lo Funds Asia Consumer	2250000	1.47
6	Rajesh R Narang	2324160	1.52
7	Acacia Partners LP	2243375	1.47
8	Cavendish Asset Management Ltd	1797065	1.18
9	Radhakrishna Damani	1970283	1.29

 

Consolidated Financial Trends (In Rs. Crs) :

Particulars	FY16	FY15	FY14	FY13	FY12
Equity Paid Up	30.52	30.52	30.52	30.52	30.52
Networth	551	500	506	516	614
Total Debt	222	218	176	152	127
Net Sales	95	68	58	84	58
Other Income	8	4	6	7	8
PAT	7.38	-6.5	-9.16	-8.94	-22.88
Book Value (Rs)	36	33	33	34	40
EPS (Rs)	0.48	-0.43	-0.6	-0.59	-1.5

 

The Company does not have any Short term Borrowings. Total Debt is all Long term Debt.

Risks:
E-Commerce Players coming in according to which there is a huge threat to stores in shopping malls as people are preferring online rather than offline which is a major risk. Other risks involved are:

• Brand Risk , Business Risk and Economic Risk.
• Real estate being capital intensive industry has strong correlation with domestic and global growth and slowdown can restrain fresh demand and availability of capital.
• Delay in execution of the project can result in cost overruns which in turn impacts company’s reputation and returns.
• Delay in land acquisition due to internal factors can affect the company.
• Contractor or Sub- Contractor issues regarding commitments made earlier.
• Volatility of prices in the real estate sector. ( Most projects are sold on’ no price escalation’ basis)
• Regulations of the government and REITs. (Real Estate Investment Trusts.)