KOLTE PATIL DEVELOPERS
Aconstruction company headquartered in Pune, Kolte Patil Developers is engaged in the development and management of both commercial and residential projects. The company has recently sold its land parcel at Wakad suburb for a consideration of ₹160 crore as a part of strategic divestment. Moreover, despite demonetisation, it posted decent growth in both pre-sales. Considering this, the company is expected to maintain its 0.5x debt-equity with strong operating cash flows. Going forward too, the company’s 70% of launch portfolio under LIG/MIG would benefit from the government’s affordable housing scheme and thereby aid recovery from FY19E. Financially, the company has reported exuberant 50% and 53% revenue and PAT growth in FY17 on the back of robust performance from Life Republic, Mirabillis and Corolla projects. Implementation of RERA may result in consolidation or shut down of small builders. Thereby, we recommend a Buy on the scrip, for a target of ₹182 and with a stop loss of ₹147.