MumbaiRealEstate PL 220312

MumbaiRealEstate
Recoverystillsometimeaway
March20,2012 Kejal Mehta kejalmehta@plindia.com +91-22-66322246 Dhrushil Jhaveri dhrushiljhaveri@plindia.com +91-22-66322232 BSESensexv/sMumbaiRealEstate
BSE Realty SENSEX Mumbai (Ex DB Realty)
Sales registrations down 11% YoY at 4,203 Execution affected as developers submit revised plans under new DCR RBI pauses on rates, whilst reiterating loose monetary policy stance Slow pace of monetary easing could derail sector recovery Lease registrations up 6% YoY to 8,515
Recoverycontingentonpaceofeasing
February 2012 sales registrations are down 11% YoY and 5% MoM to 4,203. Sales registrations trend continues to remain weak, hovering at ~4000-4500 levels. Post clarity emerging on the new DCR rules in January, the city continues to witness increased action on the launches front. However, our interaction with developers reveal that they are submitting revised project plans to the municipality to take advantage of new fungible FSI, which is affecting execution at these projects. Thus, as approvals under new DCR would take at least three months to come, execution is expected to be affected till then, acting as a further dampener on sales. On the monetary policy front, RBI has paused yet another time, leaving the repo rate unchanged, although reiterating its loose monetary policy stance in their latest monetary policy review. The extent of cuts undertaken by the Central bank, along with the pace of easing, would decide the trajectory of recovery for the sector. At the current juncture, the sector is in need of aggressive cuts from the Central bank, as both, developer balance sheets and customer affordability, remain stressed. However, the Central banks monetary easing is expected to be slow and calibrated in lieu of continuing risks on the inflation front. In terms of lease transactions, February 2012 numbers stood at 8515, exhibiting a growth of 6% YoY.
130
80
30
Sep-10
Dec-10
Sep-11
Mar-10
Mar-11
Dec-11
Jun-10
Jun-11
Source:Bloomberg
Mar-12
StockPerformance (%) 1M Sensex (5.6) BSERealEstate (15.7) Ajmera Realty Godrej Properties HDIL Hubtown Indiabulls Real Est. Oberoi Realty Orbit Corporation Peninsula Land Phoenix Mills Sunteck Realty (15.3) (3.4) (25.4) (17.1) (14.5) (8.5) (15.6) (15.5) 2.4 (6.3)
Exhibit1: Trailing3monthSalesRegistrationsinMumbai 6M 1.0 (3.9) (12.7) (4.8) (18.5) (5.0) (20.5) 17.2 48.5 (15.6) (0.1) 22.8 12M (3.4) (14.7) (30.4) 5.8 (41.1) (16.0) (38.5) 16.1 11.2 (37.8) 22.1 16.9
(nos)
25,000 23,000 21,000 19,000 17,000 15,000 13,000 11,000 9,000 7,000 5,000
Source:DGRMumbai,PLResearch
Prabhudas Lilladher Pvt. Ltd. and/or its associates (the 'Firm') does and/or seeks to do business with companies covered in its research reports. As a result investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of the report. Investors should consider this report as only a single factor in making their investment decision. Please refer to important disclosures and disclaimers at the end of the report
Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12
SectorUpdate
(nos)
(nos)
100%
150%
200%
50%
0%
-50%
10,000
12,000
2,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12
4,000
6,000
8,000
March 20, 2012

Source:DGRMumbai,PLResearch Source:DGRMumbai,PLResearch Exhibit2: Trailing3monthYoY%growth Exhibit6: RegistrationofLeaseAgreementsinMumbai Exhibit4: RegistrationofSaleDeedagreementsinMumbai
Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12
143% 140% 122% 106% 74% 37% 16% 9% -1% -6% -12% -19% -24% -24% -25% -28% -23% -21% -21% -28% -26% -24% -23% -18% -14% -11%
(YoYgr.) (YoYgr.)
70% 60% 50% 40% 30% 20% 10% 0% -10% -20% -30%
20% 18% 7% 26% 15% 21% 10% 12% 17% 3% 7% 0% 12% 20% 34% 32%
15% 5%
25%
35%
-25%
-15%
-5%
140% 120% 100% 80% 60% 40% 20% 0% -20% -40%

123% 113% 128% 79%
Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11
-19% 11% 19% 4% 23% 23% 58% 1% 10% 6%
22% 19% 9% -1% -13% -3% -20% -29% -21% -22% -30% -30% -1% -27% -31% -25% -22% -25% -20% -9% -13% -11%
Exhibit3: Trailing3monthleasesYoY%growth
12% 13% 15% 18% 17% 21% 15% 15% 13% 11% 0% 5% 6%
Exhibit5: YoY%growthinSaleDeedregistrations
Exhibit7: YoY%growthinLeaseAgreementregistrations
19% 20% 16% 14% 8% 14% 11% 15% 16%
Mumbai Real Estate
Jan-12
5%
33% 23% 18%
(YoYgr.)
(YoYgr.)
100% 80% 60% 40% 20% 0% -20% -40% -60%
100%
150%
200%
50%
0%
-50%
March 20, 2012

79% 8% -19% 5% -20% -23% 15% 13% -5% -23% -3% -32% -44% -22% -9% -12% -6% -5% -11% -19% 144% 125% 141%
41% 54% 70% 79% 37% 64% 68%
Exhibit10: MumbaiSuburbSaleDeedRegistrations
Exhibit8: MumbaiIslandCitySaleDeedRegistrations
20% 12% 0% -3% -12% -4% -21% -30% -26% -26% -34% -32% -1% -26% -27% -26% -24% -27% -23% -10% -13% -9%
(YoYgr.)
(YoYgr.)
250% 200% 150% 100% 50% 0% -50% -100%
20%
40%
60%
80%
0%
-40%
-20%
19% 16% 7% 28% 17% 22% 24% 12% 17% -1% -20% 36% 10% 23% 36% 2% 10% 10% 8% 6% 23% 31% 11% 9% 6% 64%
-66%
21% 29% 11% 19% 7% 17% 17% 16% 30% -18% 11% -12% 1% 18% -10% 27% 14% -6% 21% -15% 27% -63% 22% 6%
Exhibit11: MumbaiSuburbLeaseAgreementRegistrations
Exhibit9: MumbaiIslandCityLeaseAgreementRegistrations
228%
Mumbai Real Estate
Mumbai Real Estate
Prabhudas Lilladher Pvt. Ltd. 3rd Floor, Sadhana House, 570, P. B. Marg, Worli, Mumbai-400 018, India Tel: (91 22) 6632 2222 Fax: (91 22) 6632 2209 RatingDistributionofResearchCoverage
60%
55.7%
%ofTotalCoverage
50% 40% 30% 20% 10% 0% Buy Accumulate Reduce
25.0% 17.1% 2.1% Sell
Accumulate Sell TradingSell UnderReview(UR) : : : : Outperformance to Sensex over 12-months Over 15% underperformance to Sensex over 12-months Over 10% absolute decline in 1-month Rating likely to change shortly
PLsRecommendationNomenclature
BUY Reduce TradingBuy NotRated(NR) : : : :
Over 15% Outperformance to Sensex over 12-months Underperformance to Sensex over 12-months Over 10% absolute upside in 1-month No specific call on the stock
This document has been prepared by the Research Division of Prabhudas Lilladher Pvt. Ltd. Mumbai, India (PL) and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of PL. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, PL has not independently verified the accuracy or completeness of the same. Neither PL nor any of its affiliates, its directors or its employees accept any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient's particular circumstances and, in case of doubt, advice should be sought from an independent expert/advisor. Either PL or its affiliates or its directors or its employees or its representatives or its clients or their relatives may have position(s), make market, act as principal or engage in transactions of securities of companies referred to in this report and they may have used the research material prior to publication. We may from time to time solicit or perform investment banking or other services for any company mentioned in this document. ForClients/RecipientsinUnitedStatesofAmerica: All materials are furnished courtesy of Direct Access Partners LLC ("DAP") and produced by Prabhudas Lilladher Pvt. Ltd. ("PLI"). This material is for informational purposes only and provided to Qualified and Accredited Investors. You are under no obligation to DAP or PLI for the information provided herein unless agreed to by all of the parties. Additionally, you are prohibited from using the information for any reason or purpose outside its intended use. Any questions should be directed to Gerard Visci at DAP at 212.850.8888.
March 20, 2012

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MumbaiRealEstate

March 20, 2012

140% 120% 100% 80% 60% 40% 20% 0% -20% -40%

Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11

19% 20% 16% 14% 8% 14% 11% 15% 16%

Mumbai Real Estate

33% 23% 18%

100% 80% 60% 40% 20% 0% -20% -40% -60%

March 20, 2012

250% 200% 150% 100% 50% 0% -50% -100%

Mumbai Real Estate

Mumbai Real Estate

50% 40% 30% 20% 10% 0% Buy Accumulate Reduce

25.0% 17.1% 2.1% Sell

March 20, 2012

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