Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Regulatory Disclosure: 
Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

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Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

Kolte Patil Developers / Equity Bottom-Up

<ul>
<li>Kolte Patil delivered on the optimistic expectations for Q4FY23 which led to a stellar close for FY23 with all-time-high pre-sales and robust deliveries.</li>
<li>Its flagship project, Life Republic, was at an inflection point as outlined in our original thesis. It contributed immensely in FY23 and is now all set for accelerated growth.</li>
<li>Despite high base of FY23, Kolte Patil is all set to post a strong FY24 with 25% pre-sales growth, led by new launches and strong sustenance sales.</li>
</ul>


Kolte Patil delivered on the optimistic expectations for Q4FY23 which led to a stellar close for FY23 with all-time-high pre-sales and robust deliveries.
Its flagship project, Life Republic, was at an inflection point as outlined in our original thesis. It contributed immensely in FY23 and is now all set for accelerated growth.
Despite high base of FY23, Kolte Patil is all set to post a strong FY24 with 25% pre-sales growth, led by new launches and strong sustenance sales.


Kolte Patil: Strong Q4FY23 In Line With The Optimistic Expectations

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

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Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Thematic (Sector/Industry)

<ul><li>Radico Khaitan: Radico’s Q4FY23 print was weak, with EBITDAM at 9.5% (a 30-quarter low) and PAT falling by 20% despite sustained P&amp;A outperformance</li><li>Net sales grew by 2% YoY (HSIE 5%), with IMFL volumes marginally declining by 0.7% to 7.24mn cases (four-year CAGR at 9%)</li><li>P&amp;A volume/revenue grew by 17/18% (HSIE 14/15%) on a four-year CAGR basis, volumes grew in the high teens</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Radico Khaitan: Radico’s Q4FY23 print was weak, with EBITDAM at 9.5% (a 30-quarter low) and PAT falling by 20% despite sustained P&amp;A outperformanceNet sales grew by 2% YoY (HSIE 5%), with IMFL volumes marginally declining by 0.7% to 7.24mn cases (four-year CAGR at 9%)P&amp;A volume/revenue grew by 17/18% (HSIE 14/15%) on a four-year CAGR basis, volumes grew in the high teensContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily: Radico Khaitan, Kolte Patil Developers

<ul><li>Record FY23 presales expected for most of the players: Going by the numbers for FY23 reported to date by top developers, we expect annual presales for most of them to surpass their previous highs</li><li>Godrej, Macrotech and Sobha, all reported their lifetime high in residential sales with INR 122/120/52bn respectively</li><li>The annual growth also has been substantial with Godrej growing by 55%, Macrotech by 34% and Sobha by 34%</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Record FY23 presales expected for most of the players: Going by the numbers for FY23 reported to date by top developers, we expect annual presales for most of them to surpass their previous highsGodrej, Macrotech and Sobha, all reported their lifetime high in residential sales with INR 122/120/52bn respectivelyThe annual growth also has been substantial with Godrej growing by 55%, Macrotech by 34% and Sobha by 34%Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

<ul><li>We attended the Kolte Patil (KPDL) analyst meet in Pune where it showcased a few of its projects including its flagship township project - Life Republic (LR), its premium project 24K (fully sold-out) and one of its affordable projects Little Earth (a brownfield acquisition of stalled project)</li><li>In summary, KPDL is targeting a higher mix of premium projects (under 24K brand) and higher sale volume affordable housing in LR, Little Earth and other projects, it expects to generate enough cash flow through this mix to support its annual Business Development (BD) capex of INR 4-5bn which is INR 25-30bn worth of GDV</li><li>Also, KPDL is expected to achieve INR 27bn presales in FY24, helped by robust priority launches of INR 57bn.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We attended the Kolte Patil (KPDL) analyst meet in Pune where it showcased a few of its projects including its flagship township project - Life Republic (LR), its premium project 24K (fully sold-out) and one of its affordable projects Little Earth (a brownfield acquisition of stalled project)In summary, KPDL is targeting a higher mix of premium projects (under 24K brand) and higher sale volume affordable housing in LR, Little Earth and other projects, it expects to generate enough cash flow through this mix to support its annual Business Development (BD) capex of INR 4-5bn which is INR 25-30bn worth of GDVAlso, KPDL is expected to achieve INR 27bn presales in FY24, helped by robust priority launches of INR 57bn.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kolte Patil Developers (Update): Premiumisation to Drive the Next Leg of Growth.

<ul>
<li>Kolte Patil reported weaker than expected Q3FY23 accounting earnings due to slight delay in arrival of OC for some projects. However, sales velocity and business development activity was robust.</li>
<li>Reported Q3FY23 earnings had weak margins due to revenue contribution from two low-margin projects.</li>
<li>Q4FY23 is on track to be strong both in terms of reported earnings (which depends on the timing of OC) and sales velocity.</li>
</ul>


Kolte Patil reported weaker than expected Q3FY23 accounting earnings due to slight delay in arrival of OC for some projects. However, sales velocity and business development activity was robust.
Reported Q3FY23 earnings had weak margins due to revenue contribution from two low-margin projects.
Q4FY23 is on track to be strong both in terms of reported earnings (which depends on the timing of OC) and sales velocity.


Kolte Patil: Q4FY23 Is All Set to Bring a Strong Close to FY23

India

Unitech Limited is a real estate development company.  The Company develops self-sustaining residential areas, commercial spaces, amusement parks, infrastructure development, thermal power plants, transmission lines, highways, flyovers, industrial facilities, steel plants, and overseas turnkey projects.

Marathon Nextgen Realty Limited is a real estate development company. The Company develops commercial and residential projects throughout India.

Ajmera Realty & Infra India Ltd manufactures color coated galvanized steel and aluminum coils/roofing sheets.  The Company supplies a range of coating specifications in polyester, plastisol, and other materials to suit individual customer requirements.

Nirlon Ltd. develops real estate.  The Company develops office parks.

OMAXE Limited is a real estate development and construction company focused on commercial and residential projects.

Peninsula Land Ltd. is a Real Estate Development company. The Company undertakes development of upscale residential communities.

Ashiana Housing Ltd. develops real estate in both the residential and commercial sectors.

Hubtown Limited offers construction and real estate development services. The Company develops, sells and leases commercial, residential, retail, and industrial properties.

Texmaco Infrastructure & Holdings Ltd manufactures a wide range of industrial machinery.  The Company's products include textile machinery, boilers, super heaters, economizers, pressure vessels, chimneys, bridges and structural equipment for chemicals, paper, cement and steel factories.  Texmaco also manufactures railway rolling stocks, railway equipment and sugar mill machinery.

Texmaco Infrastructure & Holdings (TXM IN)

Arihant Superstructures Ltd. is a full service construction company.

Guangzhou R&F Properties Co., Ltd. operates real estate businesses. The Company provides housing renovation, housing loans, real estate brokerage, property management, and other services. Guangzhou R&F Properties also operates hotel management.

Far East Consortium International Limited, through its subsidiaries, develops and invests in real estate.  The Company also operates hotels.

Far East Consortium International (35 HK)

YunNan Metropolitan Real Estate Development Co., Ltd. operates in property development business. It also manufactures and markets beer and fruit wines, plastic film for agricultural use and grows chinaberry.

Shanghai New Huang Pu Industrial Group Co., Ltd. develops, sells, and leases residential and commercial real estate properties.  The Company also renovates old buildings.  Shanghai New Huangpu provides food and entertainment services and trades building materials.

Shanghai New Huang Pu Industrial Group Co., Ltd.  (600638 CH)

Shanghai New Huang Pu Industrial Group Co., Ltd. 

Wolong Real Estate Group Co., Ltd. develops residential and commercial real estate projects.

Wolong Real Estate Group Co, Ltd. (600173 CH)

Shining Building Business Co., Ltd. develops, sells, and leases residential and commercial buildings which are constructed by independent construction companies.

Jiangsu Phoenix Property Investment Co Ltd develops and manages residential and commercial real estate properties.

Tianjin Tianbao Infrastructure Co., Ltd. manufactures and markets cement products and other construction materials.  The Company also develops and constructs real estate properties.

Tianjin Tianbao Infrastructure Co.Ltd. (000965 CH)

Hong Fok Corporation Limited is an investment holding company whose principal activities consist of property investment, property development, property management, and investment trading.

Shimao Property Holdings Limited develops real estate projects in China.

Kolte-Patil Developers Ltd. builds residential housing, commercial complexes, and mixed residential and commercial projects.

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Kolte Patil Developers (KPDL IN)

Kolte Patil: Strong Q4FY23 In Line With The Optimistic Expectations

An investment in Kolte Patil has potential to more than double over the next 2-3Y. The firm has scaled up to the next level over the past couple of...

Ankit Agrawal, CFA

HSIE Results Daily: Radico Khaitan, Kolte Patil Developers

Radico Khaitan: Radico’s Q4FY23 print was weak, with EBITDAM at 9.5% (a 30-quarter low) and PAT falling by 20% despite sustained P&A outperformance

HDFC Securities

Real Estate - Stable Performance

Going by the numbers for FY23 reported to date by top developers, we expect annual presales for most of them to surpass their previous highs

HDFC Securities

Kolte Patil Developers (Update): Premiumisation to Drive the Next Leg of Growth.

In summary, KPDL is targeting a higher mix of premium projects (under 24K brand) and higher sale volume affordable housing in LR, Little Earth and...

HDFC Securities

Kolte Patil: Q4FY23 Is All Set to Bring a Strong Close to FY23

An investment in Kolte Patil offers an upside potential of 50%. Kolte Patil is on track to post a strong FY23 and is guiding for another 25-30% pre...

Ankit Agrawal, CFA

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