Buy Parsvnath Developers – Religare

Ranbaxy Group promoted Religare, in a research report initiating coverage on PAN India Realty Developer Parsvnath Developers has put a BUY recommendation with a price target of Rs 512.

  • Parsvanath has land bank of 153 million sft which can be fully developed over the next 5 years. Clea ownership and title of land bank with a low acquisition cost of just Rs 233 / sft.
  • Land Bank spread across 47 cities in 17 states with 80% in tier-ii and tier-iii cities.
  • Well diversified portfolio of 103 projects across diverse segments such as commercial, SEZ, IT Parks, metro stations, hospitality. Construction projects of 74 mn sft underway, the highest amongst real estate developers in India
  • Delhi Metro Rail contract to BOT. Also earn commercial rental on these properties but its a long gestation projects.

Parsvnath is expected to report topline of Rs 2,574 crore for FY-2008 and Rs 4,324 crore for FY-2009. Corresponding bottom line is expected to be Rs 555.7 crore and Rs 970 crore giving a fully diluted EPS of Rs 31.1 and Rs 54. Parsvnath Developers is trading at a P/E multiple of mere 10.8 and 6.2 on projected earnings way below the industry average of 17.3 and 14.8. Buy with a price target of Rs 512.