Mumbai-based real estate developer Peninsula Land, (part of the diversified Ashok Piramal Group,) has revised the development plans for its Pune and Hyderabad projects from commercial to residential projects. This will help speed up the cash-flow turnaround, as residential properties have lower-gestation period than commercial projects.
The company’s cautious approach and an asset light model helped it beat the realty slowdown. Going ahead, the company is also looking at acquiring land in western and southern parts of the country. With average cost of land being low at Rs 175 per sq ft, its decision to sell upfront part of its commercial projects has kept it assets light.
Peninsula, which has debt on its books aggregating Rs 400 crore and a cash pile of Rs 175 crore, has also received approvals for its Rs 750 crore QIP. At 0.3 times debt-equity ratio, it is one of the least leveraged real estate companies. The company is currently valued at 13 times its trailing twelve months earnings. This makes it one of the few low P/E companies in this sector.
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