Satra Properties, Buy

Satra Properties, Buy

CMP: Rs 97 Target Price: Rs 125

Satra Properties India Limited (SPIL) is one of the leading Real Estate companies in Mumbai, with various projects completed and under construction in the Island city. SPIL has over 4.3mn sqf of saleable area under construction which would be delivered in the next 3-5 years.

Company Background

SPIL is a 23 year old company, previously known as ‘Express Leasing Company’; the company was into the leasing business. ‘Express Leasing Company’ was acquired by Mr. Praful Satra in 2005 through open offer in compliance with SEBI regulation & its name was changed to ‘Satra Properties India Ltd’. The company is into the real estate business developing high quality retail space in India’s financial hub - Mumbai and have achieved successful completion of nearly 2 mn sqf of space under its various group companies.

Valuation

SPIL has aggressive plans going forward by spreading out in Tier I-II cities and in other real estate related businesses like SEZs and also township project to give further boost to our NAV estimates. Considering price escalation and postponement in few projects we have revised our revenue expectations for the company. At CMP of Rs 97, the stock is attractively priced at 5.1x and 1.9x of its FY2009E and FY2010E EPS of Rs 18.9 and

Rs 51.8 respectively. We reiterate ‘BUY’ rating on the stock with a revised target price of Rs 125/share.

Finqst, February 20, 2008