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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 ***
Market Leader
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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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*** DLF- Market Leader Analysis ***
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*** DLF- Market Leader Analysis ***
• 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 Promoters74.93%
Banks Fin. Inst. and
Insurance0.32%
FII's19.90%
Other Institutional Investors0.04%
Private Corporate Bodies0.78%
NRI's/OCB's/Foreign Others0.11%
Others0.59%
General public3.34%
Indian Promoters Banks Fin. Inst. and Insurance FII's Other Institutional Investors
Private Corporate Bodies NRI's/OCB's/Foreign Others Others General public
*** DLF- Market Leader Analysis ***
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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 Price52 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%
*** DLF- Market Leader Analysis ***
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*** DLF- Market Leader Analysis ***
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Equity Price
*** DLF- Market Leader Analysis ***
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*** DLF- Market Leader Analysis ***
Follower
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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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*** Market Capital & Sales ***
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 Price52 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%
*** ORL- Market Challenger Analysis ***
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*** ORL- Market Challenger Analysis ***
Individu-als /
Hindu Undivided
Family64.85%
Promoter Group
10.15%
Mutual Funds /
UTI0.21%
Financial Institu-tions / Banks0.00%
Foreign Institu-tional
In-vestors13.57%
Bodies Corporate
0.96%
General Public 0.69%
Foreign Corporate9.46%
NRIs / Trusts0.11%
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*** Equity Price ***
*** ORL- Market Challenger Analysis ***
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*** ORL- Market Challenger Analysis ***
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*** ORL- Market Challenger Analysis ***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 revenue\sales/avg receivable
days of sales o/s no.of days in period/receivable t/o2) Working Capital Turnover sales/avg wc 0.46 0.52 3.463) Fixed Asset Turnover sales/avg FA 0.46 0.34 0.404) Total Assets Turnover sales/avg total 0.15 0.11 0.15
II. PROFITABILITY RATIOformula 2,013 2,012 2,011 2,010
1) Gross Profit Margin gross profit/revenue 0.79 0.93 0.68 0.182) Operating Profit Margin operating income /revenue 0.54 0.53 0.55 0.053) Pre - Tax Margin PBT/revenue 0.75 0.88 0.63 0.064) Return on Assets net income/avg total assets 0.08 0.07 0.075) Return on Capital Employed EBIT /ST debt+LT debt+eq cap+GR+pref shares 0.11 0.10 0.096) Return on Equity PAT-Pref dividend/avg total equity+GR 0.08 0.07 0.07
III. SOLVENCY RATIOformulas 2,013 2,012 2,011 2,010
1) Debt to Asset ST Debt+LT Debt/Total assets 0.00 0.00 0.002) Debt to Equity ST Debt+LT Debt+Pref CAP/equity+GR 0.00 0.01 0.013) Debt to Capital ST Debt+LT Debt/(equity+pref+GR) 0.00 0.00 0.004) Interest Coverage EBIT/interest payment 1,305.8 1,319.7 1,532.6
IV. LIQUIDITY RATIOformulas 2,013 2,012 2,011
1) Current Ratio CA/CL 2.62 3.01 2.552) 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 950EPS EAT-Pre. Dividend/ No. Equity shares 46.37 36.10 24.15 0.25
OBEROI
OBEROI
OBEROI
OBEROI
UNITECH
Challenger/Emerging
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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 ***
Promoters48.00%
Institutions29.54%
Corporate Bodies3.49%
Individuals17.45%
Others1.51%
*** Unitech- Market Follower Analysis ***
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*** Market Capital & Sales ***
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 Price52 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%
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
*** Unitech- Market Follower Analysis ***
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*** Equity Price ***
*** Unitech- Market Follower Analysis ***
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I. ACTIVITY RATIOformulas 2,013 2,012 2,011 2,010
1) Inventory Turnover cogs/avg inventory 0.10 0.04 0.04 0.052) Receivables Turnover revenue\sales/avg receivable 1.02 days of sales o/s no.of days in period/receivable t/o 4.302) Working Capital Turnover sales/avg wc -0.75 0.38 0.22 0.243) Fixed Asset Turnover sales/avg FA 0.17 0.20 0.28 0.334) Total Assets Turnover sales/avg total 0.07 0.08 0.10 0.11
II. PROFITABILITY RATIOformula 2,013 2,012 2,011 2,010
1) Gross Profit Margin gross profit/revenue 0.55 0.58 0.59 0.552) Operating Profit Margin operating income /revenue 0.10 0.20 0.39 0.403) Pre - Tax Margin PBT/revenue 0.25 0.36 0.40 0.374) Return on Assets net income/avg total assets -0.17 0.02 0.03 0.035) Return on Capital Employed EBIT /ST debt+LT debt+eq cap+GR+pref shares 0.04 0.05 0.06 0.066) Return on Equity PAT-Pref dividend/avg total equity+GR 0.01 0.03 0.05 0.07
III. SOLVENCY RATIOformulas 2,013 2,012 2,011 2,010
1) Debt to Asset ST Debt+LT Debt/Total assets 0.23 0.28 0.38 0.542) Debt to Equity ST Debt+LT Debt+Pref CAP/equity+GR 0.30 0.38 0.63 1.213) Debt to Capital ST Debt+LT Debt/(equity+pref+GR) 0.30 0.38 0.63 1.214) Interest Coverage EBIT/interest payment 1.9 2.6 3.2 3.1
IV. LIQUIDITY RATIOformulas 2,013 2,012 2,011 2,010
1) Current Ratio CA/CL 1.13 0.89 0.93 1.132) 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 2,010PE Ratio Market P S / EPS 26.32 12.41 9.54EPS EAT-Pre. Dividend/ No. Equity shares 1.12 2.42 3.77 4.03
UNITECH
UNITECH
UNITECH
UNITECH
UNITECH
*** Unitech- Market Follower Analysis ***
Real Estate Sector
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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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*** Sector Analysis ***
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*** Sector Analysis ***
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*** Sector Analysis ***
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*** Sector Analysis ***
Indian Economy:Outlook
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*** Sector Analysis ***
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*** Sector Analysis ***
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Company Name Last Price52 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%
*** DLF- Market Leader Analysis ***
Company NameNet 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%
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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?scripcod
e=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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