Valor Estate (533160) Q4 15/16 earnings summary

Executive summary

• FY2015-16 consolidated revenue fell 18% YoY to ₹2,342 mn; net loss was ₹249 mn versus net profit of ₹5.7 mn, while project activity advanced across Mumbai.

• Construction accelerated at DB Crown, Ten BKC launched with Radius Developers, and development permission for a 20-acre Malad East site added ~3.0 mn sq. ft. of saleable area.

• Gokuldham Real Estate Development was amalgamated effective April 1, 2013; FY16 includes its operations, making the year-on-year comparison non-comparable.

Financial highlights

• Consolidated operating revenue was ₹2,180 mn versus ₹2,634 mn YoY; total revenue was ₹2,342 mn versus ₹2,861 mn.

• Consolidated EBITDA was ₹325 mn versus ₹392 mn; operating loss was ₹286 mn versus ₹280 mn, and net loss was ₹249 mn versus net profit of ₹5.7 mn.

• Consolidated EPS was -₹1.02 versus ₹0.02; revenue from operations declined 19% in management’s comparative analysis.

• Standalone gross sales and other receipts rose to ₹1,677 mn from ₹360 mn; net profit was ₹0.8 mn versus a ₹244 mn loss.

• Exceptional items included a ₹75 mn impairment of the Bandra-Worli Sea Link beautification asset; adjusted for this item, reported consolidated loss before tax was ₹358 mn.

Outlook and guidance

• FY17 focus is on delivering high-quality projects and launching new projects; management expected growth momentum to take a couple of quarters given market conditions.

• Management anticipated Indian economic growth above 7% in FY17 and expected industry regulation to improve, with consolidation and efficiency developing over time.

• New development permission at Malad East and a Mira Road JV project with ~2.75 mn sq. ft. saleable area were positioned for future launches; Mira Road was targeted for Diwali 2016.