The shares of the leading real estate developer gained up to 11 percent after Motilal Oswal, a well-known brokerage recommended a ‘buy’ rating.
With a market capitalization of Rs 4,248.65 crore, the shares of Kolte Patil Developers Ltd were trading at Rs 558.85 per share, increasing around 8.08 percent as compared to the previous closing of Rs 517.05 apiece.
Looking into Kolte Patil Developers’s performance, revenue decreased by 79 percent from Rs 368 crore in Q3 FY23 to Rs 76 crore in Q3 FY24. During the same period, net loss magnified from Rs 27 crore to Rs 63 crore.
Motilal Oswal, one of the well-known brokerages in India, gave a ‘Buy’ call on the reality stock with a target price of Rs 700 apiece, indicating a potential upside of 25 percent from Wednesday’s price of Rs 558.85 per share.
Here is the rationale behind the bullish potential upside target:
● According to the brokerage, the company currently has a strong project pipeline and enough balance sheet capacity to pursue new opportunities and sustain development. It intends to attain a pre-sales CAGR of 25% over the medium term.
● The company’s project pipeline is about 33 msf, comprising 3.5 msf of present inventories, 11.5 msf of incoming projects, and 18 msf of future pipelines.
● Motilal Oswal stated that the corporation has frequently focused on sustaining excellent cash flow and revenue growth. Over the last four years, Kotle Patil has had a consistent stream of post-tax operational cash flow of Rs 400-500 crore.
● Kotle Patil has been focused on its aggressive project addition approach, which has resulted in the developer acquiring 6 million square feet of projects with a revenue potential of Rs 5,400 crore, evenly split between Pune and MMR, during the past 18 months.
The firm has 15 community restoration projects in Mumbai, with two completed, five ongoing, and eight in the works. By FY25, Mumbai and Bengaluru will account for 30% of total sales value.
Kolte Patil Developers saw a 26% YoY growth in pre-sales volumes to 2.89 million sq. ft. and launched 2.73 million sq. ft. of projects in Pune and Mumbai in 9M FY24. New releases account for 57% of the pre-sales value.
Kolte-Patil Developers Limited develops residential, commercial, and IT parks, rents immovable assets, offers retail services and administers real estate projects. It operates in three Indian markets: Pune, Mumbai, and Bangalore.
Written by:- Abhishek Singh
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