Challenging the changes INITIATING COVERAGE

Challenging the changes INITIATING COVERAGE Industry Real Estate Mr Kiran Chappar Company Secretary Puravanakra Project Limited (O) 91-80 25599000/ 43439999 Stock metrics Bloomberg code Reuters code BSE Group PVKP IN PPRO.BO BSE Code 532891 NSE Code B PURVA Face Value Rs 5 Market Data Market Cap (Rs mn) 2328.3 52WeekHigh/Low 136.50/64.00 Sensex 16387 Nifty 4917 Average volume 156217 Shareholding Pattern : FIIs, 6.44 DIIs, 1.12 Research Analyst Denil Savla denil.savla@inventuregrowth.com Anshuman Jain igslresearch@inventuregrowth.com 022-40751515 Ext 581,579,582 May 26 th, 2010 Public, 2.48 Promoters, 89.96 I N V E N T U R E. Current Price Rs.86 Target Price Rs 127.5 Potential Upside 48.17% Puravankara Projects Limited (PPL) PPL is engaged in construction of residential and commercial complexes. It enjoys sufficient market share in southern part of India covering Bangalore, Chennai, Cochin, Etc with Land Bank of 125 million Sqft spread around southern part. PPL revenue portfolio has changed from the luxury housing to mixture of Luxury, Provident and entry level housing due to huge potential in the provident & entry level housing in India. Company is also expanding the footprint in nearby countries like Sri Lanka. Company has EBIDTA Margins of 33% and PAT margins of 28% which is inline with its industry peers. PPL has shifted its focus towards turnover from its previous strategy of higher margins. EBIDTA Margins to squeeze but EBIDTA would increase: The company is now focusing on provident & entry level housing where the margins are lower. However they would be playing on turnover thereby increasing the operating net revenue. Valuation We have valued the company on SOTP basis. For arriving at the fair value of its core business & land bank are valued individually. Its real estate business is valued at 1.5x of FY12E book value that comes around Rs 104 whereas land value is valued on NAV which comes around Rs.23.43 to arrive price target of Rs. 127.5 an upside of 48.17%. At Current level, we are recommending BUY ratings on this stock. (Rs in Millions) Year Ended March FY09 FY10 FY11E FY12E Net Sales 4449.04 4898.20 6087.52 7858.52 Growth (%) -21.37 10.10 24.28 29.09 EBIDTA 1366.14 1618.90 1927.86 2399.76 Growth (%) -34.51 18.50 19.08 24.48 PAT 1444.22 1384.60 1645.66 2028.56 Growth (%) -39.84-4.13 18.85 23.27 Book Value 63.96 70.45 78.16 87.66 Price to Book Value 1.36 1.23 1.11 0.99 EBIDTA Margins (%) 36.87 30.71 33.05 31.67 Net Profit Margins (%) 42.43 32.46 28.27 27.03 EPS 6.77 6.49 7.71 9.51 ROE (%) 10.58 9.21 9.87 10.84 EV/EBIDTA (x) 12.37 10.44 8.76 7.04 PE 12.86 13.41 11.28 9.15 Source: IGSL Research 1

TABLE OF CONTENT Sr. No. Particulars Page No. 1 Investment Rationale 3 2 Company Background 6 3 Subsidiaries & Verticals 7 4 Price Target Derivation 8 5 Industry Outlook 10 7 Concerns 12 8 Financial Charts 13 9 Profit & Loss Account Analysis 14 10 Balance sheet Analysis 15 11 Cash flow 15 12 Ratios 16 13 Peer Group Analysis 17 2

Investment Rationale Launching of 18 million Sqft with the mixture of 12 mn Sqft & 6 mn Sqft under Puravankara & Provident housing respectively. 75% of work has been completed and 63% of the total area under development is sold. Launching of 18 million SQFT in next two quarter In next two quarters the company plans to launch 18 million sqft including 12 million sqft under Puravankara brand and another 6 million sqft under Provident Housing. Expecting the growth in real estate as well as the overwhelming respond from the Provident Housing inspires the company to go for aggressive launching. Construction activity in full swing with sales support Of the total 19.01 million sqft under development about 12.79 million sqft is under Puravankara and remaining under Provident Housing. Puravankara is planning to launch 12 mn sq. ft of real estate in FY2011E. 4 mn sq. ft in Chennai, 4 mn sq. ft in Bangalore and 4 mn sq. ft in Kochi. As far as projects under Puravankara brand, the company has achieved a completion of 75% and sold about 63% of the area which is under development. During the quarter ended March 2010 about 3 projects have been completed/ delivered and move out. One new project has kicked in. Similarly the company sold 70% of the area launched under Provident Housing with completion percentage standing at 18%. 55% of the launched Wellworth project has already been sold out. Huge land bank with low cost of Acquisition The current land bank stands at 125.39 million sqft. The company's land bank augmentation in the FY10, were largely in the cities of Chennai and Bangalore. This land has been acquired over the period of time reducing the cost of acquisition. The average cost of land is Rs 100/sqft under Puravankara Projects standalone whereas for Provident Housing will be around Rs 150/sqft - Rs 165/ sqft. However, the company is looking for joint developer as far as acquiring land for its newer provident housing projects. Entering aggressively in low budget housing The company is aggressively working on its provident housing projects. Two projects are in full swing and company is about to launch 6 million sqft in next two quarters whereas 40 million sq. ft. of area will be developed under Provident Housing in next 2 years. The company is also thinking of coming with an IPO of Provident Housing in next 1.5 to 2 years time. 3

JV with Homex to provide housing in the range of Rs 0.8 mn to Rs 1.5 mn Recovery in IT to boost housing as well as commercial demand Rise in demand by NRIs to own second home and also for investment purpose.. Announces JV with Homex for low-cost housing product Puravankara has entered into an agreement with Mexico-based Homex India Pvt. Ltd to form a joint venture company for lowcost housing projects. Puravankara intends to benefit from its access to technology which will help in expediting the delivery of affordable and low-cost housing projects. With entry into low-cost housing, Puravankara now has a diverse product offering for different customer segments like Puravankara developing projects in the price range Rs4.5-7.5 mn, Provident provides housing in the range of Rs1.5-2.5 mn and JV with Homex will provide homes in the range of Rs0.8-1.5 mn. Recovery in IT sector should propel volume recovery in South India Real estate sector in the southern India is on an all time high. It is expected that the industry will grow at a rate of 30% in the next few years due to the recovery in IT sector. The various cities in this region like Bangalore, Chennai, Kochi, Vizag and Hyderabad are witnessing high growth in this sector. These cities have also attracted large sums of investments from NRIs, in residential and commercial projects. Large housing companies have also entered into partnerships and joint ventures with Indian realty developers. Residential real estate Cities in different states of southern India are also seeing a phenomenal rise in residential property prices owing to an increase in demand. This increased demand can be attributed to the rising working population. With higher incomes and loan Facilities provided by various banks, it has become easier to buy a house. Another reason that has contributed to the rise in prices is the high demand by NRIs. Ultra modern residential projects like condominiums, apartments and villas are coming up in different cities. Since these properties offer a high rate of return, it has now become an ideal investment option for NRIs with surplus money. In fact, the property sector in India is Rs.70000-crore industry and the new reported investment is in addition to this amount. This expected additional investment is a three-fold increase over that of the corresponding period of 2008-09. 4

70% of provident housing projects is sold whereas only 18% of the construction is completed. Encouraging response to affordable housing projects Puravankara has received encouraging response to its first two affordable projects of Provident Housing. The first two projects have a total of 5,534 homes, covering an area of 5.7 mn sq. ft (Cosmo City, Chennai 2.2 mn sq. ft and Welworth City in Bangalore 3.5 mn sq. ft, which also includes over 0.2 mn sq. ft of retail space). The price range of homes in these two projects is between Rs1.5 mn and Rs2 mn. Management has indicated that the sale has been encouraging and these projects marginally contributed to revenues in 3QFY10. They have sold 67% in Cosmos City and construction is in full swing. They have also sold 30% in Welworth City and excavation work has started at the site. These projects will start contributing meaningfully to revenues in the next 2-3 quarters. Provident intends to expand its business to other cities and has already tied in 27 acres of land in Coimbatore to launch a 1.5 mn sq. ft housing project. Other land deals which have not been concluded include a 55-acre joint development agreement in Bangalore and 140 acres in Hyderabad. Puravankara is also acquiring 61 acres in Mysore for a Provident Housing project where it has already made 33% of the payment. Most of the JDAs are being signed where the partner gets a 14-20% share in the project. We believe there will be a significant ramp-up of revenues in FY2011E as execution picks up. Reduction in construction cost will improve the margins Provident has given the contract to BL Kashyap for a fixed cost of Rs950/sq. ft and with land cost in the range of Rs250-300/sq. ft; the project will earn net margins of 20-25%. Earlier the construction cost was Rs 1200/ Sqft. Increasing leverage but still far below the industry average Puravankara s D/E has increased over the past two years from 0.50x to 0.54x which is still far below the industry. The company is still in the position to increase its leverage further in case if there is any need of finance. 5

Company Background The Puravankara Group was established in 1975, in response to the growing needs for quality housing and commercial space in the metropolitan cities in India. Since then, the group has grown to be one of the leading real estate developers of the country, serving the needs of the discerning clientele. The Puravankara group with over 33 years of excellence in the upper end of the housing sector across various regions of the country has projects in Bangolore, Chennai, Kochi, Coimbatore, Hyderabad, Mysore and Colombo. The group also has a presence in Dubai and business representative in the United Kingdom and the United States. With a land bank of over 125 mn sq ft, the group has above 20 million sq ft of residential and commercial space currently under construction. Included in this are on-going residential projects amounting to 13.50 million sq ft which comprise of 7800 homes. JV with Keppel Land of Singapore Puravankara has the distinction of being the first to obtain FDI in the Indian real-estate industry through its joint venture with Singapore based Keppel Land Limited, the property arm of the 54% government owned conglomerate, Keppel Corporation Limited. The joint venture company, Keppel Puravankara Development Private Limited, has on-going housing projects in two cities in India. With a large and experienced team of engineers and technicians the Group has a unique in-house project management capability. This together with a host of India's leading architects provides the organization with an experience, capability and expertise unmatched in the Indian real-estate industry. Development activities range from modern designer apartments, through ultra modern and multi-functional integrated bungalow complexes, to plush and very functional commercial complexes. India s first resident s privileges program, Purva Privileges, was launched in 2004.Purva Privileges entitles all Puravankara home owners to an attractive referral program, concierge services and a host of special offers. 6

Subsidiaries of the company Name of the Entity Country of Incorporation Share holding Overseas Subsidiary Companies Puravankara Lanka Holding Pvt Ltd Sri Lanka 100% Puravankara Projects Lanka Pvt Ltd Sri Lanka 100% Purva Corporation Indian Subsidiary Companies Prudential Housing and Infrastructure Development Limited British Virgin Islands 100% India 100% Centurions Housing & Const Pvt Ltd India 100% Melmont Construction Private Ltd India 100% Purva Marine Properties Private Ltd India 100% Nile Developers Private Ltd India 100% Vaigai Developers Private Ltd India 100% Starworth Infrastructure Ltd India 100% Provident Housing Ltd India 100% Associate Companies Keppel Puravankara Development Pvt Ltd India 49% Propmart Technologies Ltd India 32.83% Keppel Magus Development Pvt Ltd India 36.26% Homex India Pvt. Ltd India Source: Company Entering into affordable housing in order to target more individuals. Existing Verticals: Segments Growth Drivers Tie up Change in customers Housing preference from normal homes to leisure homes Targeting the middle class Provident people group by providing Keppel Land Housing Flats at reasonable rates of Singapore Affordable Housing Commercial Source: IGSL Research Targeting lower income group individual which consists of around 70% of the population As of now commercial portfolio is 3% of total revenue and expected to contribute 25% in next 5 years Homex Housing India Pvt. Ltd 7

Price Target Derivation: Value of land is Rs180 per Sqft. For arriving at the fair value of its core business, we have valued the core business on 1.5x FY12E P\BV and its land bank separately. Business Valuation Value (Rs Value Per Method Mn) Share (Rs) Residential P/BV 27743.0 130.10 Commercial - 0.0 0.00 Land Bank Market Value 6249.0 29.28 Total Value SOTP 33992.0 159.38 Discount @20% 6798.4 31.85 Net Value 27193.6 127.43 Source: IGSL Research We have not value the commercial projects... Current PPL 975 of its revenue comes from residential project whereas only 3% comes from commercial. It also has land bank of 125 mn Sqft under its own name. Therefore, we have taken only residential projects & land bank value. Commercial value has been assumed as Zero due to non disclosure of any figures by management. At CMP of Rs 87 per share, PPL is trading at 1.23x of FY10 book value. Considering the currents developments and potential of PPL we have valued PPL at 1.5x of FY12E Book value. As far as land bank is concerned we have valued the land at Rs 180/ Sqft on conservative basis and the cost of acquisition is Rs 100/ Sqft. We have also discount the total value at 20% taking the risk factor and the volatility in the economy. Key Assumption 1. We have kept prices constant until FY10 and thereafter increased these at a CAGR of 5%. 2. We have not factored in reinvestment of profits into new land parcels and the upside potential from that. 3. We have taken in consideration of various project that are under construction to be completed in 5 yrs 4. We have not considered further development and plans of the company. The valuation is purely on current plans of the company. 8

Real Estate Industry Overview: The worst is over and the sector is progressively recovering led by the growth in residential segment. 120000 100000 80000 MW 60000 40000 20000 0 1999-2000- 01 00 Source: IGSL Research. 2001-02 Supply 2002-03 2003-2004- 04 05 2005-2006- 06 07 Demand 2007-08 Fundamentals of the real estate sector are improving as seen by better liquidity and improved demand in the residential segment. Enhanced affordability, lower mortgage rates and better job security have helped revive demand for homes. The worst seems to be over and the sector is progressively recovering led by the residential segment. Key signs of improvement include: 1) Attractively priced new launches in the residential segment have seen good bookings with some projects being sold out within a few days of launch 2) Improved balance sheets of developers through infusion of funds from QIPs and sale of non strategic assets. While the residential segment is witnessing a recovery in demand, the office and retail segments are still sluggish and will take some time to recover as the economy gradually gets back on track. Last year s slowdown has caused several developers to rethink their strategies: 1) Focus has shifted to affordable/mid-income housing from luxury housing; 2) In commercial projects, several developers are moving to 'sale model' to manage liquidity rather than leasing space. Some developers are also converting commercial projects into residential, where possible; 3) Developers are exiting low visibility large township projects and are instead targeting strategically located land parcels in and around key cities; 4) Developers are delaying SEZ projects, especially IT SEZs, because of poor demand. Key triggers for the real estate sector going forward are: 1) Continued improvement in residential demand. The festive season will be an important indicator of this; 2) Increase in property prices; 3) Pick-up in construction activity; 4) Recovery in the office space segment. 9

Better affordability and increased job security have helped revive home demand Property prices have declined upto 25-30% from peak levels Revival in residential demand After seeing a sharp slowdown in demand in 2HCY08, residential demand began picking up from March-April 2009 on the back of better affordability and increased job security. Improved affordability has been a function of lower property prices, smaller apartment sizes and lower interest rates. Several new projects launched since March- April 2009, have seen good demand with many of the projects being sold out within a few days of launch. Increase in residential prices from 2005 to Jul 2008 City % Increase NCR 61% Mumbai Metropolian Region 121% Bangalore 69% Chennail 145% Hyderabad 63% Kolkata 100% Pune 96% Kochi 54% Chandigrah 108% Ahmedabad 116% Source: CRISIL Residential prices have declined substantially Property prices rose rapidly from 2005 to early 2008 and became a deterrent for home buyers resulting in a sharp slowdown in the residential demand. However, since 2HCY08, property prices began correcting and have declined up to 25 30% from their peak levels. This has helped bring back demand in the residential segment. Bangalore INR/Sqft Price Change Q2 CY09 3 Mths 1 Yr Banjara Hills 5500-6100 -3% -11% Jubilee Hills 5300-5700 0% -15% Madhapur, Gachibowli 2400-3000 0% -10% Kukatpally 2300-2800 0% -9% Lavelle Road, Richmond Road 12000-15000 -7% -23% Marathalli, Whitefield 2400-2700 -4% -27% Sarjapur Road, Outer Ring Road 2500-3500 -2% -25% Koramangala 6400-8000 -8% -20% Hebbal, Yelahanka 2800-4000 0% -3% 10

Lower mortgage rates INR/Sqft Price Change Chennai Q2 CY09 3 Mths 1 Yr Boat Club 18000-22000 0-5% Nungambakkam 7000-8000 0-9% Velachery 3800-4000 0-3% OMR 2500-2800 0-12% Home loan rates saw a steady increase in the last two years, till December 2008, with HDFC's floating rates increasing from 9% in December 2006 to 11.75% in November 2008. However, with he reduction in the repo rate from 9% to 4.75%, banks and housing finance companies too have educed home loan rates substantially since December 2008. With steady revival in the economy, job security is growing Better job security In 2008, in addition to high property prices and interest rates, possibility of job losses and payouts deterred customers from buying homes. Given lack of clarity on jobs and income levels, home buyers held back purchases. With improvement in the economic environment since April 2009 people have better visibility of their income levels and this has helped bring back demand in the residential segment. According to a survey conducted by Hewitt Associates, only 6% of 137 surveyed companies reduced salaries and 16% (mainly in the financial services and IT/ITES sector) have a salary freeze. Further, only 5% of the companies are considering layoffs in FY10. Land deals are back With demand fading and developers facing a cash crunch for most part of FY09, land deals had dried up and in fact several developers began evaluating options to sell excess and non-strategic land parcels in an effort to improve cash flows and reduce debt. With signs of revival in demand, developers are once again eyeing land acquisitions but this time selectively with greater discretion. While in the past 2 to 3 years developers were focused on acquiring land/bidding for large township and SEZ projects, the focus seems to have now shifted to strategically located land parcels in and around large cities. In addition, there are several land assets/redevelopment projects that are expected to be put on the block. 11

Change in developers' strategy Increase in property prices going forward is likely to be measured and cautious Focus on affordable housing In the golden period of Indian real estate from 2005 to 2008, developers were largely concentrating on luxury residential projects. However, with rising property prices and home loan rates and large ticket sizes, residential property became out of reach for the large majority of homebuyers. With affordability adversely impacted, residential demand saw a significant slowdown. To bring back demand, developers shifted focus from luxury to affordable housing with the objective of reducing the overall cost of homes. This was achieved by launching new projects where in addition to lower prices per sq. ft., developers also offered smaller sized homes. Price increase a key catalyst going forward After successfully reviving residential demand through new launches at low price points, developers are now tempted to increase prices. Residential prices are beginning to firm up with developers increasing prices in select projects. While residential prices seem to have bottomed out and could begin to move upwards from here, increase in property prices going forward is likely to be measured and cautious so as not to dampen demand. Concerns Slow down in completion of projects Real estate project faces huge list of government formalities. Delay in such formalities may slow down the execution and may affect the revenue of the company. Failure of the acceptance of the product by targeted customer PPL has been developing and concentrating more on provident housing which is targeting middle level income group. The houses are in range of Rs 2 million to Rs 2.5 million. The customer is reluctant to change its location due to various social, psychological factors, etc. 12

EBITDA & PAT margins to come down. The company is entering into low cost housing segment where the margins are low as compare to its previous segment.. 50.00 45.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 43.94 42.43 34.44 35.91 32.46 34.18 32.48 28.27 27.03 25.81 FY08 FY09 FY10 FY11E FY12E EBIDTA % PAT % D/E ratio to come down further. The company already enjoys low debt equity ratio as compare to its peers. It can further 0.62 0.60 0.58 0.56 0.54 0.52 0.50 0.48 0.46 0.44 Debt Equity 0.60 0.54 0.52 0.51 0.51 FY08 FY09 FY10E FY11E FY12E Peers Comparison of EBIDTA% & PAT%... 100% 80% 60% 40% 20% 0% Sobha DLF Unitech Parsvanath Anantraj Inds Puravankara EBIDTA % PAT % 13

Profit & Loss Statement Rs Mn Particulars FY08 FY09 FY10 FY11E FY12E Net Sales 5658.20 4449.04 4898.20 6087.52 7858.52 % Growth 35.73-21.37 10.10 24.28 29.09 Construction Expenses 3118.70 2584.29 2676.50 3544.82 4714.56 % Sales 55.12 58.09 54.64 58.23 59.99 Selling Expenses 237.90 215.80 283.70 273.94 334.77 % Sales 4.20 4.85 5.79 4.50 4.26 General & Admin Expenses 215.70 282.81 319.10 340.90 409.43 % Sales 3.81 6.36 6.51 5.60 5.21 Total Expenditure 3572.30 3082.90 3279.30 4159.66 5458.76 % Growth 27.23-13.70 6.37 26.85 31.23 EBIDTA 2085.90 1366.14 1618.90 1927.86 2399.76 % Growth 53.28-34.51 18.50 19.08 24.48 Other Income 400.23 166.28 140.00 152.80 152.80 Gross Profit 2486.13 1532.42 1758.90 2080.66 2552.56 % Growth 65.64-38.36 14.78 18.29 22.68 Depreciation 11.10 54.61 60.00 62.00 65.00 % of Avg. Block 1.05 4.39 4.64 4.44 4.22 EBIT 2475.03 1477.81 1698.90 2018.66 2487.56 % Growth 67.72-40.29 14.96 18.82 23.23 Interest 7.50 7.62 16.20 18.00 19.00 EBT 2467.53 1470.19 1682.70 2000.66 2468.56 Total Tax 67.00 25.97 298.10 355.00 440.00 EAT 2400.53 1444.22 1384.60 1645.66 2028.56 Source: IGSL Research 14

Balance Sheet Rs Mn FY08 FY09 FY10E FY11E FY12E Sources of Funds Share Capital 1067.10 1067.10 1067.10 1067.10 1067.10 Reserves & Surplus 11059.90 12581.60 13966.20 15611.86 17640.42 Total Shareholders Fund 12127.00 13648.70 15033.30 16678.96 18707.52 Secured Loans 5774.00 8105.70 7500.00 8500.00 9000.00 Unsecured Loans 750.00 40.00 200.00 250.00 450.00 Total Debt 6524.00 8145.70 7700.00 8750.00 9450.00 Total Liabilities 18651.00 21794.40 22733.30 25428.96 28157.52 Application of Funds Gross Block 611.30 632.10 662.10 734.00 806.00 Less: Accumulated Depreciation 114.60 169.20 229.20 291.20 356.20 Net Block 496.70 462.90 432.90 442.80 449.80 Properties held for development 12919.60 13924.34 14620.56 16082.61 17690.87 Investments 887.20 1038.24 1038.20 1038.20 1038.20 Inventories 17.07 197.34 214.72 266.85 344.48 Sundry Debtors 82.36 1146.14 1261.85 1567.74 2023.84 Cash & Bank Balance 34.97 267.94 308.04 201.47 534.13 Loans & Advances 287.82 2766.00 3045.25 3774.26 4872.28 Properties under development 3958.30 5699.75 6269.73 6896.70 8276.04 Properties held for sale 909.50 973.50 1070.85 1177.94 1295.73 Total Current Assets 5290.02 11050.67 12170.43 13884.96 17346.50 Less: Current Liabilities & Provisions 4732.40 4658.77 5526.19 6019.61 8367.85 Net Current Assets 557.62 6391.90 6644.24 7865.35 8978.65 Total Assets 14851.00 21794.63 22733.30 25428.96 28157.52 Cash Flow Rs Mn Particulars FY08 FY09 FY10E FY11E FY12E Profit before Tax & Extraordinary Items 2467.53 1470.19 1682.70 2000.66 2468.56 Add: Depreciation 58.60 55.60 60.00 62.00 65.00 Add: Interest (net) -98.20-7.60 16.20 18.00 19.00 Add: Others 0 88 88.1 200 250 (Profit)/Loss share in Associates -285.90-151.00-140.00-152.80-152.80 Op. Profit before Working Capital Changes 2142.03 1455.19 1707.00 2127.86 2649.76 Changes IN WC -3118.1-1757.1-759.05-782.27-1382.1 Cash Generated from/(used in) Operations -976.07-301.91 947.9516 1345.583 1267.623 Direct Tax Paid -214.80-126.10-298.10-355.00-440.00 Cash Flow From Operating Activities -1190.9-428.01 649.852 990.583 827.623 Cash Used in Investing Activities -5106.3-94.8-190.56-2162.8-1354.7 Net Cash Used in Financing Activities 6273.2 441-419.22 1065.68 859.68 Dividend Paid -210.6-499.30 42.68 42.68 42.68 Interest Paid -842.7-1101.5-16.20-87.00-94.00 Net Inc/(Dec) in Cash and Cash Equivalent -23.97-81.81 40.0716-106.57 332.653 Cash and Cash Equivalents at Beginning of the year 373.75 349.78 267.97 308.04 201.47 Cash and Cash Equivalents at End of the year 349.78 267.97 308.04 201.47 534.13 Source: IGSL Research 15

Ratio Analysis Turnover Ratios FY08 FY09 FY10 FY11E FY12E Net sales to total assets 0.63 0.30 0.22 0.27 0.31 Net sales to Fixed assets 0.76 0.33 0.34 0.40 0.48 Net sales to net working capital 3.94 4.17 0.76 0.84 1.00 Net Working Capital Days 92.76 87.58 477.36 432.01 366.04 Net sales to inventory 35.48 260.64 24.82 28.35 29.45 Net sales to debtors 12.33 54.02 4.27 4.82 5.01 Liquidity ratios Current ratio 1.30 1.25 2.38 2.45 2.31 Inventory Days 10.29 1.40 14.71 12.87 12.39 Valuation Ratios (x) PE 7.73 12.86 13.41 11.28 9.15 EPS 11.25 6.77 6.49 7.71 9.51 P/BV 1.53 1.36 1.23 1.11 0.99 EV/EBIDTA 8.10 12.37 10.44 8.76 7.04 EV/SALES 2.99 3.80 3.45 2.78 2.15 Market Cap/Sales 3.28 4.17 3.79 3.05 2.36 Return Ratios (%) ROCE 16.44 16.67 6.78 7.47 7.94 ROE 19.79 10.58 9.21 9.87 10.84 Margins (%) EBIDTA 43.94 34.44 35.91 34.18 32.48 EBIT 43.74 33.22 34.68 33.16 31.65 PAT 42.43 32.46 28.27 27.03 25.81 Growth (%) Sales 35.73-21.37 10.10 24.28 29.09 EBIDTA 1.05 4.39 4.64 4.44 4.22 PAT 56.83 63.96 70.45 78.16 87.66 Source IGSL Research 16

Peer Group Analysis PE (x) EPS P/BV FY10 FY11E FY12E FY10 FY11E FY12E FY10 FY11E FY12E Sobha 16.70 10.90 6.86 17.3 26.5 42.1 1.59 1.38 1.17 DLF 20.08 13.78 9.82 12.77 18.61 26.12 1.65 1.48 1.29 Unitech 15.31 14.44 11.86 4.30 4.56 5.55 1.44 1.30 1.17 Parsvanath 15.78 13.99 12.79 7.05 7.95 8.7 0.97 0.89 0.82 Anant Raj Inds 9.75 6.30 5.15 10.4 16.1 19.7 0.81 0.72 0.62 Puravankara 13.41 11.28 9.15 6.49 7.71 9.51 1.23 1.11 0.99 Rs Mn Sobha DLF Unitech Parsvanath Anantraj Ind Puravankara Q4 FY10 Net Sales 3995 21508.2 5997 3034.3 891.7 1228.1 Operating Profit 987 10691.9 2770.6 792.4 804.4 395.2 PAT 557 4263.8 1499.25 301 669.6 437.3 Operating Profit Margins 25% 50% 46% 26% 90% 32% PAT Margins 14% 20% 25% 10% 75% 36% FY10 Net Sales 11072 74209.4 23985 7711.4 3418.4 4783.6 Operating Profit 2590 38480 11495 2690.4 3085.3 1735.4 PAT 1367 17202 6822 1338 2692 1453.2 Operating Profit Margins 23% 52% 48% 35% 90% 36% PAT Margins 12% 23% 28% 17% 79% 30% EPS (Rs) 14.92 10.19 2.80 6.99 7.94 6.81 Valuations CMP 285 256 66.4 110.0 101.25 86 Market Cap 30035.8 490973 162058.3 23419.0 34349.6 21433.4 P/E 19.10 25.12 23.76 15.74 12.76 12.63 Key Ratios Debt/Equity 0.82 0.51 0.61 0.96 0.03 0.51 Interest / EBIT 0.34 0.17 0.20 0.29 0.01 0.01 Total Asset/Turnover 0.34 0.17 0.18 0.15 0.09 0.22 Working Capital /Turnover 0.41 0.31 0.24 0.20 0.46 0.74 Per Share Data FV 10 2 2 10 2 5 52 week high 352.95 490.8 118.35 151.35 163.9 136.5 52 week low 118 251.5 61.3 70 82 64 Change from 52 week high (%) -22.15-91.38-79.73-36.04-61.64-58.72 Change from 52 week low (%) 59.16 1.93 6.91 37.08 19.13 25.58 Source: IGSL Research 17

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