Stock Review: Ashiana Housing and Finance

 

 

Ashiana Housing and Finance is a small-sized real estate company based in Delhi. It has strong fundamentals, good projects and no leverage. The company mainly develops group housing, and nearly 15% of its projects constitute of apartments for active senior citizens. Ashiana is strong in facilities management. This helps it to get more customers through referrals.

GROWTH DRIVERS & CONCERNS

Ashiana has saleable area of 72 lakh square feet (lsf) across ongoing projects in cities like Bhiwadi, Jaipur, Jamshedpur and Jodhpur. It has also entered into a hotel management agreement with Hyatt Place for developing the Marine Plaza hotel & retail area in Jamshedpur with 1.8 lakh square feet of saleable land. The company has been steadily increasing its booked area, and its average realisation for the June quarter was Rs 2,187 per square feet. Among its future projects, the company has 57 lsf of estimated saleable land in Bhiwadi and 4.7 lsf in Jodhpur.
One of the company's major concerns is its stalled project for seniors at Lavasa, which is awaiting environmental clearances. The company has a saleable land bank of 6.8 lakh square feet in Lavasa facing uncertain prospects. This project constitutes 10% of its current project portfolio.

FINANCIALS

The company's consolidated performance in the June quarter was subdued. Operating profit dropped by 12.5% y-o-y and net sales fell by 8%. This was on account of no contribution from the Lavasa project and non-recognition of revenues from joint ventures.

 
The company has targeted booking of 16 lsf of land in FY12. With almost one-fourth of this being booked in the June quarter, the company appears to be on track to achieve its target for this fiscal. It is expecting average realisations to be around Rs 2,000-2,100 per square feet.

The company's stock is fairly priced at six times its last twelve months earnings. Ashiana's market cap of 284 crore is a little over twice its last twelve months consolidated net sales. In the last three months, while the ET Real Estate Index has depreciated by 16%, the company's stock has appreciated by 25%. Investors interested in value buying in the real estate space can consider this small-cap stock.