Prime Ur­ban De­vel­op­ment In­dia Ltd

Money Times - - Techno Funda - By Nayan Pa­tel

(BSE Code: 521149) (CMP: Rs.34.80) (FV: Rs.2)

We had rec­om­mended this stock at Rs.33.65 on 20 Fe­bru­ary

2017, where-af­ter it zoomed to Rs.47.40 fetch­ing 40.86% re­turns in a short span of time. In­cor­po­rated in 1936, Prime Ur­ban De­vel­op­ment In­dia Ltd (PUDIL), for­merly known as Prime Tex­tiles Ltd, is en­gaged in real estate de­vel­op­ment. It de­vel­ops vil­las and res­i­den­tial com­mu­nity with lux­u­ri­ous apart­ments; and com­mer­cial spa­ces such as malls and shop­ping and of­fice com­plexes. It has been pri­mar­ily in­volved in real estate de­vel­op­ment in Tamil

Nadu for the last 10 years. It also trades and ex­ports cot­ton yarns.

PUDIL has an eq­uity cap­i­tal of just Rs.5.33 crore sup­ported by re­serves of Rs.22.42 crore. The pro­mot­ers hold 71.03% of the eq­uity cap­i­tal, which leaves 28.97% stake with the in­vest­ing pub­lic.

For FY17, the Com­pany’s net profit de­clined to Rs.9.71 crore from Rs.14.49 crore in FY16 on lower sales of Rs.56.88 crore fetch­ing an EPS of Rs.3.64. Dur­ing Q4FY17, its net profit de­clined to Rs.3.28 crore from Rs.7.02 crore in Q4FY16 on lower sales of Rs.16.41 crore fetch­ing an EPS of Rs.1.23. It de­clared 20% div­i­dend for FY17 with book clo­sure date as 5 Au­gust 2017. PUDIL at its Board Meet­ing held on 21 June 2017, agreed to ac­quire 58,02,925 eq­uity shares of Rs.10 each at a pre­mium of Rs.60.71/share con­sti­tut­ing 100% of the paid-up eq­uity share cap­i­tal of New Line Buildtech Pvt. Ltd (NLBPL). NLBPL will be­come a wholly-owned sub­sidiary of PUDIL upon com­ple­tion of the share ac­qui­si­tion/trans­fer process. On FY17 re­sults, Vice Chair­man of the Com­pany said that “FY17 will be marked as an im­por­tant year for real estate de­vel­op­ers in In­dia.

The Gov­ern­ment of In­dia’s proac­tive pol­icy mea­sures such as De­mon­eti­sa­tion, Real Estate Reg­u­la­tion Act, (RERA), REIT leg­is­la­tion,

GST Act and an­nounce­ment in the bud­get with re­spect to af­ford­able hous­ing have brought in a lot of cred­i­bil­ity into the sec­tor and most im­por­tantly cus­tomer con­fi­dence. Th­ese mea­sures bode well for or­ga­nized play­ers like us and will lead to strength­en­ing of our po­si­tion in the mar­ket. Ac­cord­ing to him, cus­tomer de­mand which re­mained a chal­lenge for the last few years may see an uptick with the re­cent gov­ern­ment an­nounce­ments on in­ter­est sub­sidy on home loans and re­duc­tion of the in­ter­est rates on home loans by the bank­ing in­sti­tu­tions.

“Go­ing for­ward, our fo­cus shall be on af­ford­able hous­ing. With the fi­nan­cial and op­er­a­tional re­sources, we are con­fi­dent to grow our real estate foot­print in the years to come. We be­lieve that FY18 will be a good year on the back of var­i­ous pol­icy ac­tions and a pos­i­tive busi­ness en­vi­ron­ment,” he added. Cur­rently, the stock trades at a P/E of just 9.47x. In­vestors can buy this stock with a stop loss of Rs.26. On the up­per side, it could zoom to Rs.42 lev­els in the medium-term and fur­ther to Rs.50+ in the long-term.

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