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Fundamental Report
Residential
Stock Data The Residential sector though is not as healthy as when the Sensex was at
BSE Code 503031 the 21000 level is still likely to flourish as the large growing population
NSE Code PENINLANDEQ base should sustain demand. Increased demand for luxury apartment
Market Cap Rs 1,899.96 Cr complexes across the major cities.
52 week H/L Rs 87.80/15.20
Retail
Industry Realty
Bloomberg PENL@IN
The major cities have already seen a growth in retail space especially in
Code
shopping centres, malls and grocery shops. The focus in India is now
Reuters Code PENL.BO
shifting to the smaller tier 2 cities like Amritsar, Ludhiana, Pune and
Ahmedabad. Retail Majors such as Walmart of the US have opened a store
in Ludhiana in a Joint Venture with the Bharti Group.
Share Holding Pattern
Commercial
Others,
20.70% With India Inc. continuing to shine and a major influx of MNC’s and
Banks/FI, growth in the outsourcing sector should drive demand for Grade A
4.90% infrastructure.
Promoters,
MF’s/UTI, 53.70%
0.30%
FIIS,
20.50%
Be Wealthy, Be Wise Peninsula Land Ltd.
Company Profile
Company has tied with Arrow The Piramal group has a diversified business interest and has
Webtex (JV) to foray into the recently established itself in key industries such as real estate and retail.
hospitality business. In which
The groups varied businesses are managed by highly innovative and
both the entities will invest Rs 1
entrepreneurial talent. The group has a common vision and philosophy for
billion in the initial phase to build
all its businesses across various industries. Since its inception in 1997 the
10 hotels of 100 rooms each.
real estate arm of the Peninsula group has developed 3 Million Sq. ft in
real estate land and another 20 Million Sq. ft is under planning and
development. The Peninsula’s group majority projects have been in
Western India mostly Mumbai till date, however the group does have
ambitious plans to spread its network through out India. The Peninsula
group also has the accomplishment of being ranked in the top 100
companies of India by ET500 ratings.
Business Portfolio
Peninsula land
Company eyeing cities like Peninsula land which forayed into the real estate sector in 1997 has built
Mumbai, Pune, Nagpur, Nashik, Retail Malls, Corporate Offices, IT Parks, SEZ’s and Residential
Kolhapur in Maharashtra and Apartments. The Peninsula group was the first to venture into the
Ahmedabad, Surat, Jamnagar, development of an organized retail malls with its “Crossroads” brand in
Mundra port in Gujarat and Goa Mumbai. The group took advantage of the India’s thriving demographics to
for their hospitality business. The build and develop three successful malls.
first phase is expected to be
operational in the next 2 years.
67, Rajgir Chambers, 8th Floor, Shahid Bhagat Sing Marg, Fort Mumbai – 400 023
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Be Wealthy, Be Wise Peninsula Land Ltd.
Retail Malls
Peninsula Commercial
Peninsula IT parks
67, Rajgir Chambers, 8th Floor, Shahid Bhagat Sing Marg, Fort Mumbai – 400 023
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Be Wealthy, Be Wise Peninsula Land Ltd.
Peninsula SEZ
Peninsula Residential
67, Rajgir Chambers, 8th Floor, Shahid Bhagat Sing Marg, Fort Mumbai – 400 023
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Be Wealthy, Be Wise Peninsula Land Ltd.
Apparels & Textiles Pvt. Ltd. This forward integration move focuses on garments for women, men and children in
the international market.
Financials
67, Rajgir Chambers, 8th Floor, Shahid Bhagat Sing Marg, Fort Mumbai – 400 023
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Be Wealthy, Be Wise Peninsula Land Ltd.
Peninsula Land Ltd. posted results for June 30th 2009 below market
expectations. Market & investors were expecting revenue to grow to Rs
160 Cr for the June 2009 Quarter. The company’s sales revenue was
however down 6.76% from 123.89 Cr in June 2008 to 115.52 Cr in June
2009 despite huge expectations from the market. The reason could be
attributed to the housing meltdown in the US that impacted the Indian
market as well. Peninsula’s operating expenses were down from 82.9 Cr to
70.1 Cr by 15.40% for the June 2008 to June 2009 period, as a result
Profit after tax went from 31.25 cr form the quarter ended June 30 2008
to 32.85 cr in June 2009, an increase of 5.12% despite of lower sales
revenue in the period. This gain could be attributed to a higher realization
in property value sold per sq ft. The profits of the Peninsula group mainly
increased as a result of sale of their upcoming residential properties Ashok
Towers and Ashok Gardens. The group has already sold 50% of its
property at Peninsula Business Park their latest commercial project.
Peninsula groups’ revenue break up for the quarter ended June 30 2009
was from Centre Point at 42 Cr, Peninsula Business Park at 35 Cr, Ashok
Tower at 31 cr and Ashok Garden at 3 Cr. The latest quarter saw a revival
in their residential projects as they sold a total of 35000 Sq ft in Ashok
The company plans to build two Towers and Ashok Gardens from the quarter ended March 2009. The group
residential projects in Nashik on also has two commercial projects under construction which should be
112 acres of land, ready within FY10. OPM in % terms is up from 33.08% in June 2008 to
39.28% in June 2009. Net Profit Margin a profitability ratio for the
Peninsula group was up from 25.22% in June 2008 to 28.43% in June
2009. This was a healthy sign for the group as higher profit margin
indicates a more profitable company that has better control over its costs.
The company’s EPS was up from Rs.1.12 in June 2008 to Rs. 1.18 in June
2009 on quarterly basis.
Investment Argument
67, Rajgir Chambers, 8th Floor, Shahid Bhagat Sing Marg, Fort Mumbai – 400 023
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Be Wealthy, Be Wise Peninsula Land Ltd.
• RBI has decided to extend exceptional concessional treatment to
the commercial real estate exposure.
• The group has new promising projects like Peninsula Business Park,
Ashok Towers and Gardens which are still under construction and
90% sold.
• There are too many big players in the Indian real estate markets
such as DLF and Unitech that the Peninsula group has to compete
with.
67, Rajgir Chambers, 8th Floor, Shahid Bhagat Sing Marg, Fort Mumbai – 400 023
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Be Wealthy, Be Wise Peninsula Land Ltd.
Investment conclusion
Major real state players like DLF, Unitech and Peninsula Group are
planning new ventures in residential, commercial, IT Parks and SEZ
segments. Peninsula is working on large residential/commercial projects in
different cities. Most of the project will be completed in upcoming 2-3
years which will give solid surge in company’s top line growth. Company’s
bottom line growth will be strengthening by reducing operating expenses &
by property appreciation.
Valuation
Our enthusiasm in Peninsula Land Ltd. stock has been geared up by the
encouraging demand of residential & commercial property. Further, we
expect the company to continue generating higher revenue income after
completion of its recent project, which would lead a higher effective ROE
on the residential/commercial projects. Decent budgetary allocations for
the project development and the company’s diversification into Retail,
Textiles and Hospitality, also provide scope for higher returns. Company’s
long term prospectus is very bright as most of the development projects
being planned for the future & developing in tier II cities. Peninsula Land
Ltd, the only real estate company in the country after DLF, Unitech, is set
to benefit significantly from this scenario.
The stock at the current market price of Rs 70.80 trading 13.09 times to
its earnings per share of Rs 5.36 and 85.60 times to its book value of
0.82,it is expected to provide huge upside potential from Rs 60 in medium
to long – term.
67, Rajgir Chambers, 8th Floor, Shahid Bhagat Sing Marg, Fort Mumbai – 400 023
© Focus Shares & Securities Pvt. Ltd. Tel +91-22-67474300-01 Fax +91-22-22641345 Website: www.focuscomtrade.com
Be Wealthy, Be Wise Peninsula Land Ltd.
Research Team
Prepared By:
Varun Taparia
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67, Rajgir Chambers, 8th Floor, Shahid Bhagat Sing Marg, Fort Mumbai – 400 023
© Focus Shares & Securities Pvt. Ltd. Tel +91-22-67474300-01 Fax +91-22-22641345 Website: www.focuscomtrade.com