HDFC Securities' research report on Kolte Patil Developers
KPDL reported operationally weak 1QFY21 with pre-sales of 0.31mn sqft (0.67/0.51msf QoQ/YoY), for a presales value of Rs 1.64bn. Life Republic project in Pune continued to garner strong response (45% of pre-sales). Loss of Rs 312mn was driven by fixed cost absorption on lower revenue and low margin projects in mix. COVID-19 shutdown for the most part of April & May-20 also impacted revenue recognition. 1QFY21 collections dipped as expected, and stood at Rs 1.05bn (vs Rs 3.8b/3.6bn QoQ/YoY).
Outlook
We maintain BUY on KPDL as it has a) comfortable liquidity position (Net D/E 0.37x, ready inventory of Rs 2.6bn,) b) strong affordable residential project mix (at average <Rs 5,500/sqft realization) & c) robust launch pipeline (~8-10mn sqft). Proceeds of Rs 450mn (of Rs 910mn total) from strategic land monetisation has kept liquidity from deteriorating. Delay in demand recovery due to Covid-19 is a key risk to our estimates. No change in FY21/22 estimates.
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