Hope you are doing well.
Off-late there’s been a buzz that the demand for the real estate is picking and the real estate stocks are expected to do well.
In the past we haven’t recommended any real estate stock, nor do we have any real estate stock under coverage for our Premium Members.
Recently we were reading about Eldeco Housing and Industries which is primarily focused on Lucknow market and has had a good track record over the past few years.
Below, we have shared notes from the Q4 FY 23 con-call of the company. Hope you find the details useful for your own investments or to add the stock to your watch list.
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Eldeco Housing and Industries – Notes from Q4 FY 23 con-call
– General Points
- Fiscal 2023 was a flat year for us
- Due to the lack of new launches, sales remained flat throughout the year
- Despite signing up for some new projects, we were unable to move them to the launch stage owing to land assembly issues, and approval issues
- We expect the issues to get resolved in the first or second quarter of the current financial year
- The positive side of this delay is that the prices have turned up in our micro-markets and the launches will happen at price points higher than our original underwriting
– Operational Highlights
- During the year, the company handed over 4.15 lakhs square feet with the registration of 322 homes
- The FY ‘23 collections were INR 158 crores. The area booked for the financial year was 2.01 lakhs square feet
- We have successfully added land bank of 20.91 acres between April 2022 and March 2023
– New Projects
- We have received RERA registration for our new residential project, Latitude 27, and construction has commenced. We plan to formally launch it by the end of May, 2023
- We expect strong sales from Imperia Phase 2, which we will launch during the second half of the year
- Apart from these, we have signed two new projects where land assembly and approvals are under process
- These are all residential. So it will be a 50-50 split between horizontal plotted development and group housing which is apartments. All will be in the Lucknow area
- As of now we are focused on the Lucknow market. U.P. itself is growing very fast now. It is a 20 crores population. And real estate and urbanization is really exploding in this part of the country
– Real estate market
- The demand for quality real estate, particularly residential real estate, continued its strong trajectory in FY ‘23
- The size of the industry, which has been stagnant for nearly 10 years, is predicted to grow in the next 3-4 years substantially
- Lucknow’s real estate market remained robust during the year. Demand was not a concern, but supply was a concern due to the absence of new launches
- I expect the market size to double in the next three to four years. Had it not been for the supply constraint in Lucknow, it could have already done so
- This year we have seen the highest improvement in realization in the last many years on a per square foot basis. Last year it was INR 3,800 per square foot. This year it is INR 4,600 nearly
- The last year was outlier in terms of residential market realization. The prices increased on an average by 20%
- The area which is available for sale in existing projects is about a million square feet
- And similar areas are already planned in the forthcoming projects. And this is not counting the fresh projects which we have not declared
- So 2 million square feet at an average utilization of INR 4,500 to 5,000 per square foot which is what our latest numbers are. So that is the sale value of INR 900 to INR 1,000 crores. this will all get booked in the next 2-3 years
- The revenue will get recognized towards the latter part of this period, 3-4 years
Disclaimer: This is not a recommendation to buy/sell Eldeco Housing and Industries. The securities quoted are for illustration only and are not recommendatory.
SEBI Research Analyst Registration No. INH100001690
Research Analyst Details
Name: Ekansh Mittal Email Id: [email protected] Ph: +91 727 5050062
Details of Associate: Not Applicable
Analyst Certification: The Analyst certify (ies) that the views expressed herein accurately reflect his (their) personal view(s) about the subject security (ies) and issuer(s) and that no part of his (their) compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report.
Address – 7, Panch Ratan, 7/128, Swaroop Nagar, Kanpur – 208002, Contact No. – +91-7275050062
Compliance Officer – Mr. Ekansh Mittal, +91-9818866676, ekansh@
Grievance Redressal – Mittal Consulting, grievances@
“Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors”.
“Investment in securities market are subject to market risks. Read all the related documents carefully before investing.”
The views expressed are based solely on information available publicly and believed to be true. Investors are advised to independently evaluate the market conditions/risks involved before making any investment decision
This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. Ekansh Mittal/Mittal Consulting/Katalyst Wealth is not soliciting any action based upon it. This report is not for public distribution and has been furnished to you solely for your information and should not be reproduced or redistributed to any other person in any form. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. Ekansh Mittal or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Neither Ekansh Mittal, nor its employees, agents nor representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. Ekansh Mittal/Mittal Consulting or any of its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement.
The recipients of this report should rely on their own investigations. Ekansh Mittal/Mittal Consulting and/or its affiliates and/or employees may have interests/ positions, financial or otherwise in the securities mentioned in this report. Mittal Consulting has incorporated adequate disclosures in this document. This should, however, not be treated as endorsement of the views expressed in the report.
We submit that no material disciplinary action has been taken on Ekansh Mittal by any regulatory authority impacting Equity Research Analysis.
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Whether the research analyst or research entity or his associate or his relative has any financial interest in the subject company/companies and the nature of such financial interest – No
Whether the research analyst or research entity or his associates or his relatives have actual/beneficial ownership of 1% or more securities of the subject company (at the end of the month immediately preceding the date of publication of the research report or date of the public appearance) – No
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