Kolte-Patil - Unlocking The Growth Potential: Motilal Oswal Initiates Coverage With A Buy

Motilal Oswal Report

After a decade of muted performance, Kolte Patil Developers Ltd. is witnessing a strong growth in pre-sales as bookings reported 36% compound annual growth rate over FY21-23. Given its strong pipeline, we believe the company can maintain 25% CAGR in pre-sales at least for the next two years with further room for growth from new project additions. 

While sustainability of growth beyond that level depends on its ability to close new project additions, the pick-up in pace of BD activity in the last 18 months as well as strong balance sheet should enable Kolte-Patil to focus on project acquisitions. Its past track record of steady margins and cash flows also implies that growth will be underpinned by profitability and execution.

We the existing pipeline and targeted project additions of Kolte-Patil in FY24 based on an net present basis to arrive at a fair of Rs 700, indicating potential upside of 34%. We initiate coverage on the stock with a Buy rating.

Key downside risks:

1. inability to add new projects as intended will hurt future growth; and

2. any slowdown in demand momentum will lead to a reduction in our pre-sales estimates and also a reduction in spending on new project additions.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.