Sapm group 2 ppt - real estate sector

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… The Industry Analysis Real Estate Sector –Views & Reviews…
ITM
Presentation By:
Joseph Phillip : Roll No 001
Rachita Patel : Roll No 067
Athira Nair : Roll No 079
Sanjay Kumbhar : Roll No 107
Vinod Bopche : Roll No 109

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*** Flow of Presentation ***
 Introduction
 Segments in Real Estate Sector
 Approach – Bottom to Top
a) Company Overview
b) Sector Overview
c) Indian Economics Overview
 Leader, Challenger & Follower Analysis (DLF, Oberoi & Unitech)
a) Introduction
b) Market Capitalisation & Present Turn over
c) Share Holding Pattern & Equity Trend Analysis
d) P&L, Balance sheet & Cash flow
e) Ratios
 Real Estate Sector Analysis.
 Growth Drivers & Opportunities
 Government Approach & Initiatives
 Conclusion

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*** Introduction ***
 Set to become World’s third largest sector in economy by 2020.
 Real estate sector is the second highest in employment generation next
only to agriculture.
 About 250 ancillary industries such as cement, brick, steel, timber,
building materials etc. are dependent on the real estate industry
 RE Sector contributes almost 6.3% to Indian GDP which is expected to
be 6% in coming years.
 Sector is expected to increase at a compound annual growth rate
(CAGR) of 11.6 per cent during FY 2011–2020.
 The foreign direct investment (FDI) in the sector is expected to touch US$
25 billion in the next 10 years from its current US$ 4 billion

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*** Introduction ***

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*** DLF- Market Leader Analysis ***
Overview
• Col. Raghavendra Singh founded DLF in 1946
• DLF has over 60 years of track record of sustained growth,
customer satisfaction, and innovation.
• The company has 314 million sqft of planned projects with
52 million sqft of projects under construction.
• Primary business : Development of residential, commercial
and retail properties across 15 states - 24 cities in India.
Development Business of DLF:
Includes Homes- Super Luxury, Luxury and
Premium. and Commercial Complexes
• Has 265 million sq. ft. of development potential.
Annuity Business of DLF:
• Consists of the rental businesses of offices and retail.
• 49 Million Sqft area for office & retail devlopment

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• CCI had levied fine on DLF in Aug ust, 2011 for abuse of dominant position,
during selling of flats in 2 DLF projects— DLF Park Palace & The Belaire in
Gurgaon (delays and increase in number of floors from initial plan) following
a complaint by a Bellaire Owners' Association in Gurgaon.
• Competition Appellate Authority (COMPAT) in May 2014 has upheld the
penalty of Rs. 630 Crores imposed on DLF by Competition Commission of
India (CCI) for unfair business practices.
• DLF proposes to challenge the Order passed by the Hon'ble COMPAT in
Hon'ble Supreme Court.
• The share prices declined by 2% upon COMPAT Order.
• DLF plans to raise up to Rs. 1,888 crore via share sale to Institutional Investors
on May 14.-PTI May 12, 2013, 07.13AM IST

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Shareholding Pattern
Indian
Promoters
74.93%
Banks Fin. Inst.
and Insurance
0.32%
FII's
19.90%
Other
Institutional
Investors
0.04%
Private
Corporate
Bodies
0.78%
NRI's/OCB's/For
eign Others
0.11%
Others
0.59%
General
public
3.34%
Indian Promoters Banks Fin. Inst. and Insurance FII's
Other Institutional Investors Private Corporate Bodies NRI's/OCB's/Foreign Others
Others General public

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Company
Name
Net Sales Weightage
(Rs. cr) %
DLF 2,150.04 16.13%
Sobha Developer 1,803.02 13.52%
Omaxe 1,345.64 10.09%
Unitech 1,053.09 7.90%
HDIL 980.53 7.35%
SRS Real Infra 849.56 6.37%
Puravankara 815.26 6.11%
Brigade Ent 776.11 5.82%
Oberoi Realty 595.05 4.46%
Others 22.23%
Total 100.00%
Company Name Last Price
52 wk 52 wk Market Cap Weightage
High Low (Rs. cr) %
DLF 216.55 242.7 120.25 47,408.39 43.81%
Oberoi Realty 247.1 261.55 154 8,110.64 7.49%
Unitech 29.6 29.6 10.86 7,744.25 7.16%
Prestige Estate 210.3 224.65 105.1 7,360.50 6.80%
Godrej Prop 251.1 270.63 153.9 5,002.77 4.62%
Sobha Developer 445.6 455 214.1 4,369.73 4.04%
HDIL 101.55 101.55 26.1 4,254.99 3.93%
Indiabulls Real 94.55 99.1 45.1 4,009.02 3.70%
Others 18.44%
Total 100.00%

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Equity Price

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Introduction
• Oberoi Realty (Oberoi Constructions)
is based in Mumbai,
*** ORL- Market Challenger Analysis ***
• Led by billionaire Vikas Oberoi, it has completed 32 projects
covering approximately 4.979 million sq ft of saleable area spread
across the city of Mumbai.
• Built 34 projects covering 5 million square feet in suburban Mumbai.
Showpiece is Oberoi Garden City, an 80-acre complex.
• Main interest is in Residential, Office Space, Retail, Hospitality and
Social Infrastructure properties in Mumbai.
• Oberoi Constructions started in 1985 from the profits of family's
saffron-trading business. Since 1997, Oberoi has built on inheritance
with several upmarket residential and commercial projects.
• Promoters have 75% stake in Mumbai developer Oberoi Realty,
which took public route in 2010.

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ITM *** Market Capital & Sales ***
Company
Name
Net Sales Weightage
(Rs. cr) %
DLF 2,150.04 16.13%
Omaxe 1,345.64 10.09%
Unitech 1,053.09 7.90%
HDIL 980.53 7.35%
Others 22.23%
Total 100.00%
High Low (Rs. cr) %
DLF 216.55 242.7 120.25 47,408.39 43.81%
Oberoi Realty 247.1 261.55 154 8,110.64 7.49%
Unitech 29.6 29.6 10.86 7,744.25 7.16%
Prestige Estate 210.3 224.65 105.1 7,360.50 6.80%
Godrej Prop 251.1 270.63 153.9 5,002.77 4.62%
Sobha Developer 445.6 455 214.1 4,369.73 4.04%
HDIL 101.55 101.55 26.1 4,254.99 3.93%
Indiabulls Real 94.55 99.1 45.1 4,009.02 3.70%
Others 18.44%
Total 100.00%

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Individuals /
Hindu Undivided
Family
64.85%
Promoter Group
10.15%
Mutual Funds /
UTI
0.21%
Financial
Institutions /
Banks
0.00%
Foreign
Institutional
Investors
13.57% Bodies
Corporate
0.96%
General Public
0.69%
Foreign
Corporate
9.46% NRIs / Trusts
0.11%

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*** Equity Price ***

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I. ACTIVITY RATIO
formulas 2,013 2,012 2,011 2,010
1) Inventory Turnover cogs/avg inventory 0.11 0.03 0.18
2) Receivables Turnover revenuesales/avg receivable
days of sales o/s no.of days in period/receivable t/o
2) Working Capital Turnover sales/avg wc 0.46 0.52 3.46
3) Fixed Asset Turnover sales/avg FA 0.46 0.34 0.40
4) Total Assets Turnover sales/avg total 0.15 0.11 0.15
II. PROFITABILITY RATIO
formula 2,013 2,012 2,011 2,010
1) Gross Profit Margin gross profit/revenue 0.79 0.93 0.68 0.18
2) Operating Profit Margin operating income /revenue 0.54 0.53 0.55 0.05
3) Pre - Tax Margin PBT/revenue 0.75 0.88 0.63 0.06
4) Return on Assets net income/avg total assets 0.08 0.07 0.07
5) Return on Capital Employed EBIT /ST debt+LT debt+eq cap+GR+pref shares 0.11 0.10 0.09
6) Return on Equity PAT-Pref dividend/avg total equity+GR 0.08 0.07 0.07
III. SOLVENCY RATIO
formulas 2,013 2,012 2,011 2,010
1) Debt to Asset ST Debt+LT Debt/Total assets 0.00 0.00 0.00
2) Debt to Equity ST Debt+LT Debt+Pref CAP/equity+GR 0.00 0.01 0.01
3) Debt to Capital ST Debt+LT Debt/(equity+pref+GR) 0.00 0.00 0.00
4) Interest Coverage EBIT/interest payment 1,305.8 1,319.7 1,532.6
IV. LIQUIDITY RATIO
formulas 2,013 2,012 2,011
1) Current Ratio CA/CL 2.62 3.01 2.55
2) Quick Ratio (cash+STMI+B/R)/(creditor+b/p+bank o/d)
3) Cash Ratio (cash+STMI+B/R)/(b/p+bank o/d)
4) Defensive Interval Ratio
(cash+STMI+B/R)/daily cash exp to run
producton
V. VALUATION RATIO
formulas
PE Ratio Market P S / EPS 5.33 7.81 11.26 950
EPS EAT-Pre. Dividend/ No. Equity shares 46.37 36.10 24.15 0.25
OBEROI
OBEROI
OBEROI
OBEROI

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Introduction
• Founded by 5 partners, Ramesh Chandra, Dr. S. P. Shrivastava, Dr. P K
Mohanti, Dr. Ramesh Kapur and Dr. Bahari
• Originally formed as United Technical Consultant Private Ltd in 1972 as a
soil investigation company.
• later moved into civil engineering contracts in 1974.
• Company began to enter into real estate in 1986
• Started to increase focus in Real Estate in 2000
• Unitech Limited is India's second largest real estate investment
company,[and has recently claimed to be the largest real estate builder in
the country
• Based in New Delhi and ranks 1484, in Forbes Global 2000 listing of the
top 2000 public companies in the world by Forbes magazine,
• 32nd in India Its construction business includes highways, roads,
powerhouses, transmission lines, it has residential projects called
Unitech Cities/Uni World, in major cities of India
*** Unitech- Market Follower Analysis ***

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*** Shareholding ***
Promoters
48.00%
Institutions
29.54%
Corporate
Bodies
3.49%
Individuals
17.45%
Others
1.51%

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*** Market Capital & Sales ***
Company
Name
Net Sales Weightage
(Rs. cr) %
DLF 2,150.04 16.13%
Omaxe 1,345.64 10.09%
Unitech 1,053.09 7.90%
HDIL 980.53 7.35%
Others 22.23%
Total 100.00%
High Low (Rs. cr) %
DLF 216.55 242.7 120.25 47,408.39 43.81%
Oberoi Realty 247.1 261.55 154 8,110.64 7.49%
Unitech 29.6 29.6 10.86 7,744.25 7.16%
Prestige Estate 210.3 224.65 105.1 7,360.50 6.80%
Godrej Prop 251.1 270.63 153.9 5,002.77 4.62%
Sobha Developer 445.6 455 214.1 4,369.73 4.04%
HDIL 101.55 101.55 26.1 4,254.99 3.93%
Indiabulls Real 94.55 99.1 45.1 4,009.02 3.70%
Others 18.44%
Total 100.00%
 Unitech Ltd has signed a
Rs 800 crore (US$ 128.17
million) deal to lease an
800,000 sq ft space at IT
Special Economic
Zones (SEZ) in North

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*** Equity Price ***

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I. ACTIVITY RATIO
formulas 2,013 2,012 2,011 2,010
1) Inventory Turnover cogs/avg inventory 0.10 0.04 0.04 0.05
2) Receivables Turnover revenuesales/avg receivable 1.02
days of sales o/s no.of days in period/receivable t/o 4.30
2) Working Capital Turnover sales/avg wc -0.75 0.38 0.22 0.24
3) Fixed Asset Turnover sales/avg FA 0.17 0.20 0.28 0.33
4) Total Assets Turnover sales/avg total 0.07 0.08 0.10 0.11
II. PROFITABILITY RATIO
formula 2,013 2,012 2,011 2,010
1) Gross Profit Margin gross profit/revenue 0.55 0.58 0.59 0.55
2) Operating Profit Margin operating income /revenue 0.10 0.20 0.39 0.40
3) Pre - Tax Margin PBT/revenue 0.25 0.36 0.40 0.37
4) Return on Assets net income/avg total assets -0.17 0.02 0.03 0.03
5) Return on Capital Employed EBIT /ST debt+LT debt+eq cap+GR+pref shares 0.04 0.05 0.06 0.06
6) Return on Equity PAT-Pref dividend/avg total equity+GR 0.01 0.03 0.05 0.07
III. SOLVENCY RATIO
formulas 2,013 2,012 2,011 2,010
1) Debt to Asset ST Debt+LT Debt/Total assets 0.23 0.28 0.38 0.54
2) Debt to Equity ST Debt+LT Debt+Pref CAP/equity+GR 0.30 0.38 0.63 1.21
3) Debt to Capital ST Debt+LT Debt/(equity+pref+GR) 0.30 0.38 0.63 1.21
4) Interest Coverage EBIT/interest payment 1.9 2.6 3.2 3.1
IV. LIQUIDITY RATIO
formulas 2,013 2,012 2,011 2,010
1) Current Ratio CA/CL 1.13 0.89 0.93 1.13
2) Quick Ratio (cash+STMI+B/R)/(creditor+b/p+bank o/d)
3) Cash Ratio (cash+STMI+B/R)/(b/p+bank o/d)
4) Defensive Interval Ratio
(cash+STMI+B/R)/daily cash exp to run
producton
V. VALUATION RATIO
formulas 2,013 2,012 2,011 2,010
PE Ratio Market P S / EPS 26.32 12.41 9.54
EPS EAT-Pre. Dividend/ No. Equity shares 1.12 2.42 3.77 4.03
UNITECH
UNITECH
UNITECH
UNITECH
UNITECH

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*** Growth Drivers ***

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*** Investment Opportunities ***
 International Monetary Fund (IMF)Projected to growth 15% YoY over the
next 3-5 years as against a 12-13 per cent nominal growth of India's GDP
 Rs 34 trillion (US$ 544.73 billion) by 2016.
 India's office space stock is estimated to rise by 40 per cent to 642.2
million sq ft by 2017,
 Knight Frank India Real Estate Consultant- Indian cities will have some of
the fastest rental growths in the region over the period 2013-17.
 Cushman & Wakefield, real estate services firm- The share of luxury retail
space in India will be 1.4 per cent by 2015,
 The townships, housing and built-up infrastructure garnered total FDI
worth US$ 22,671.95 million in the period April 2000-August 2013.
 Construction (infrastructure) activities during the period received FDI
worth US$ 2,280.95 million, according to the Department of Industrial
Policy and Promotion (DIPP).

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Government Initiatives
 Government of India has realized the significance of real estate sector and
has given some relaxation of the norms and regulations keeping in view of
Employment Generation, Tax Revenues & Encouraging Investment.
 FDI policy- 100 per cent FDI in the construction development- through the
automatic route.
 DIPP is looking at relaxing FDI norms further, proposed a reduction in the
minimum capitalisation for wholly-owned subsidiaries from US$ 10 million to
US$ 5 million, and from US$ 5 million to US$ 2.5 million for joint ventures with
Indian partners.
 MHUP initiatives-The Ministry of Housing and Urban Poverty Alleviation
(MHUPA) is to provide affordable housing for poor people living in urban
areas.
 The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) is one its
flagship schemes, a reform driven investment programme which started
with the objective of creating economically productive, efficient, responsive
and inclusive cities.
 The Real Estate (Regulation and Development) Bill, 2013, as approved by
the Union Cabinet is a pioneering initiative aimed at delivering a uniform
regulatory environment to protect the consumer, help in quick verdicts of
disputes and ensure systematic growth of the sector.
*** Government Initiatives ***

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*** Government Initiatives ***

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*** Market Dynamics ***
Market Dynamics
 Rapid growth in the residential, commercial and industrial
segments.
 The real estate sector of India is projected to post annual
revenues of US$ 180 billion by 2020 against US$ 66.8 billion in
2010-11,
 A compound annual growth rate (CAGR) of 11.6%.
 The demand is expected to grow at a CAGR of 19% in 2010-
2014, with

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*** Sector Analysis ***

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High Low (Rs. cr) %
DLF 216.55 242.7 120.25 47,408.39
43.81%
Oberoi Realty 247.1 261.55 154 8,110.64
7.49%
Unitech 29.6 29.6 10.86 7,744.25
7.16%
Prestige Estate 210.3 224.65 105.1 7,360.50
6.80%
Godrej Prop 251.1 270.63 153.9 5,002.77
4.62%
Sobha Developer 445.6 455 214.1 4,369.73
4.04%
HDIL 101.55 101.55 26.1 4,254.99
3.93%
Indiabulls Real 94.55 99.1 45.1 4,009.02
3.70%
Others 18.44%
Total
100.00%
Company Name
Net Sales Weightage
(Rs. cr) %
DLF 2,150.04 16.13%
Sobha Developer 1,803.02
13.52%
Omaxe 1,345.64 10.09%
Unitech 1,053.09 7.90%
HDIL 980.53 7.35%
Others 22.23%
Total 100.00%

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*** Recommendation ***

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*** Abbrivations***

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*** References ***
http://www.cci.in/pdf/surveys_reports/real-estate-sector-india.pdf
http://www.gbm.scotiabank.com/English/bns_econ/retrends.pdf
http://www.isc.hbs.edu/Porter_Strategy_Real_Estate1.pdf
http://www.bseindia.com/stock-share-
price/stockreach_corpinfo.aspx?scripcode=533273&expandable=8
http://en.wikipedia.org/
Ministry of Finance, Press Information Bureau (PIB), Media Report, Department of
Industrial Policy and Promotion (DIPP), CREDAI, The Union Budget 2013-14

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Sapm group 2 ppt - real estate sector