The shares of this smallcap company clocked a 5 percent upper circuit after acquiring redevelopment rights of Miami Apartments in South Mumbai. In just six months, the stock has delivered more than 150 percent return to its shareholders.
Price Movement:
With a market capitalization of Rs. 10,806 crores, the shares of Puravankara Ltd started Friday’s trading session on a higher note at Rs. 456.95, clocking a 5 percent upper circuit compared to its previous close of Rs. 435.20 apiece.
Is Puravankara a buy or sell? What is its Fair Value? What are the company's health parameters? What are the positive and negative factors driving the company -- ProTips? Know all the answers on the company's overview page here.
What Happened:
Such a bullish movement in the share price was observed after the company in an exchange filing announced that it had acquired the redevelopment rights of a society Miami Apartments at Breach Candy.
This acquisition is a strategic move for the company as it marks its entry into the uber-luxury South Mumbai market, where rates (as per market sources) are estimated in the range of Rs 1,25,000 and Rs 1,40,000 per sq. ft.
Furthermore, Puravankara has also strengthened its presence in Lokhandwala, Andheri West, following a November 2023 acquisition of redevelopment rights for two societies covering 3 acres. The company has now been selected as the preferred developer for four more societies, totaling around 1.30 acres.
Additionally, Puravankara has signed a Joint Development Agreement (JDA) for a 1.95-acre land parcel in the Electronics City micro-market, which will have a saleable area of 2,60,000 square feet. This location is strategically positioned near the Kudlu Gate Metro Station, enhancing its accessibility to social infrastructure.
Management Commentary:
Commenting on the strategic announcement, Ashish Puravankara, MD, Puravankara Limited, said, “Our entry into South Mumbai with the redevelopment of Miami Apartments at Breach Candy marks a significant milestone for Puravankara Ltd.
This project showcases our commitment to delivering unparalleled luxury and reinforces our vision to create iconic living spaces in the most coveted locations.
We are excited to bring our expertise to South Mumbai and redefine the standards of luxury living in this prestigious neighbourhood while strengthening our presence in other markets.”
Financials:
Looking at the company’s financial statements, the revenue decreased by around 28 percent from Rs. 920 crores during the March quarter to Rs. 658 crores in the June quarter. Contrastingly, the net profits showcased a transition from a net loss of Rs. 7 crores to a net profit of Rs. 15 crores during the same timeframe.
Future Outlook:
The company is actively acquiring land to support future developments, which is critical for maintaining a competitive edge in the market.
Puravankara is also looking to launch new projects in key locations such as Whitefield and Sarjapur in Bengaluru, Kelambakkam near Chennai, and Khondwa in Pune. The upcoming launches are expected to significantly contribute to sales in the latter half of FY25.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 2.24 percent and a return on capital employed (RoCE) of 20.30 percent for the period spanning FY23-24. Furthermore, the net profit margin during FY23-24 was 2.24 percent.
Company Profile:
Puravankara Limited is a leading Indian real estate development company founded in 1975 and headquartered in Bangalore. The company operates in the residential and commercial sectors, having developed projects in multiple cities across India including Bengaluru, Chennai, Kochi, Coimbatore, Pune, Mumbai and Hyderabad.
Written By Vaibhav Patil
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