RESULTS REVIEW 3QFY19 14 FEB 2019 Prestige Estates Projects BUY HDFC securities Institutional Research is also available on Bloomberg HSLB <GO>& Thomson Reuters Launches lagging 3QFY19 Revenue came in at Rs 10.8bn, Rs 1bn lower due to IND AS 115. Margins came in at 31.9% (vs 20.0/27.7% YoY/QoQ). PEPL had deliveries of 7mn sqft in 3QFY19 alone (record deliveries of ~24mn sqft in 9MFY19, 141% ahead of full year guidance) leading to total unrecognized revenue of ~130bn, incl. ~Rs 75bn of earlier reversals (re-recognition over 2.5-3 years). With 1.6mn sqft launched in 3QFY19, PEPL’s 9MFY19 launches stand at 3.2mn sqft across Bengaluru, Chennai and Hyderabad (vs 10mn sqft guidance for FY19E). Pre sales (PEPL’s share) continued to stand out at ~1.2mn sqft in 3QFY19 (+55% YoY, led by Jindal City – 16% share in pre-sales). With PEPL not looking at any private deal for its annuity portfolio (after the GIC deal fell through in 2QFY19), it might look to either tap the capital markets or look for a 25% stake sale. Capex intensity is expected to remain high (Rs 1.5-1.8bn/quarter). Monetisation of completed inventory of ~Rs 28bn remains key. We maintain BUY with Rs 292/sh TP. Highlights of the quarter HDFC platform update: PEPL expects to complete deployment of the Rs 25bn commitment over the next 4 quarters with Prestige Smart City already in the bag. Further 1 project should see closure by FY19-end and another 2 by Dec 19-end. With PEPL looking at distressed opportunities, it can route a suitable one via this platform (ex JDAs which will be on Standalone). Leasing taking off well: PEPL’s leasable assets now have an annual exit rental income potential of Rs 7,668mn with an incremental projected exit rental of Rs 959mn by FY19E end. PEPL has further properties under construction with ~Rs 3.3/1.0bn annual potential in commercial/ retail (incremental cost: Rs 8.0/4.0bn) Near term outlook: PEPL has a launch pipeline of ~10mn sqft including Prestige Smart City (under the HDFC platform), Nirvana, Finsbury. Prestige has ~Rs 17bn pending possession money to be received in addition to ~Rs 25bn of completed inventory. We remain constructive. Financial Summary* Year Ending March (Rs mn) 3QFY19 3QFY18 YoY (%) 2QFY19 QoQ (%) FY18 FY19E FY20E FY21E Net Sales 10,776 12,723 (15.3) 13,225 (18.5) 54,986 50,316 52,799 56,121 EBITDA 3,437 2,543 35.2 3,660 (6.1) 10,940 14,221 14,846 15,552 APAT 581 894 (35.0) 968 (40.0) 3,618 4,724 4,459 4,522 Diluted EPS (Rs) 1.5 2.4 (35.0) 2.6 (40.0) 9.6 12.6 11.9 12.1 P/E (x) 20.7 15.9 16.8 16.6 EV / EBITDA (x) 13.0 10.2 9.9 9.5 RoE (%) 10.2 9.4 10.4 10.0 Source : Company, HDFC sec Inst Research, * Consolidated INDUSTRY REAL ESTATE CMP (as on 13 Feb 2019) Rs 200 Target Price Rs 292 Nifty 10,794 Sensex 36,034 KEY STOCK DATA Bloomberg PEPL IN No. of Shares (mn) 375 MCap (Rs bn) / ($ mn) 75/1,052 6m avg traded value (Rs mn) 50 STOCK PERFORMANCE (%) 52 Week high / low Rs 345/163 3M 6M 12M Absolute (%) 8.9 (20.5) (35.7) Relative (%) 6.3 (16.2) (40.8) SHAREHOLDING PATTERN (%) Promoters 70.00 FIs & Local MFs 1.86 FPIs 27.07 Public & Others 1.07 Source : BSE Parikshit D Kandpal, CFA [email protected]+91-22-6171-7317 Kunal Bhandari [email protected]+91-22-6639-3035
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RESULTS REVIEW 3QFY19 14 FEB 2019
Prestige Estates Projects
BUY
HDFC securities Institutional Research is also available on Bloomberg HSLB <GO>& Thomson Reuters
Launches lagging 3QFY19 Revenue came in at Rs 10.8bn, Rs 1bn lower due to IND AS 115. Margins came in at 31.9% (vs 20.0/27.7% YoY/QoQ). PEPL had deliveries of 7mn sqft in 3QFY19 alone (record deliveries of ~24mn sqft in 9MFY19, 141% ahead of full year guidance) leading to total unrecognized revenue of ~130bn, incl. ~Rs 75bn of earlier reversals (re-recognition over 2.5-3 years).
With 1.6mn sqft launched in 3QFY19, PEPL’s 9MFY19 launches stand at 3.2mn sqft across Bengaluru, Chennai and Hyderabad (vs 10mn sqft guidance for FY19E). Pre sales (PEPL’s share) continued to stand out at ~1.2mn sqft in 3QFY19 (+55% YoY, led by Jindal City – 16% share in pre-sales).
With PEPL not looking at any private deal for its annuity portfolio (after the GIC deal fell through in 2QFY19), it might look to either tap the capital markets or look for a 25% stake sale. Capex intensity is expected to remain high (Rs 1.5-1.8bn/quarter). Monetisation of completed inventory of ~Rs 28bn remains key. We maintain BUY with Rs 292/sh TP.
Highlights of the quarter
HDFC platform update: PEPL expects to complete
deployment of the Rs 25bn commitment over the next 4
quarters with Prestige Smart City already in the bag.
Further 1 project should see closure by FY19-end and
another 2 by Dec 19-end. With PEPL looking at
distressed opportunities, it can route a suitable one via
this platform (ex JDAs which will be on Standalone).
Leasing taking off well: PEPL’s leasable assets now have
an annual exit rental income potential of Rs 7,668mn
with an incremental projected exit rental of Rs 959mn
by FY19E end. PEPL has further properties under
construction with ~Rs 3.3/1.0bn annual potential in
3QFY19 Revenue came in at Rs 10.8bn (-15.3/-18.5% YoY/ QoQ) (Impact of IND AS 115: revenue lower by Rs ~1.0bn) Margins came in at Rs 31.9% (vs 20.0/27.7% YoY/QoQ) Interest cost was Rs 1.8bn (+107/-4.2% YoY/QoQ). PAT came in at Rs 581mn (-35/40% YoY/QoQ) Prestige was also able to deliver 1.6mn sqft in 3QFY19 alone (~4.7mn sqft in 9MFY19)
PRESTIGE ESTATES PROJECTS : RESULTS REVIEW 3QFY19
Page | 3
Strong pre-sales momentum continues
During 3QFY19, overall pre-sales increased 55.1% YoY to 1.21mn sqft, with ~Rs 8.0bn in value (realization of Rs 5,995/sqft). With gross lease momentum 0.33mn sqft in 3QFY19 (9MFY19 – 1.4mn sqft; 68% of FY19E guidance). Rental income stood at Rs 1,874mn (Prestige’s share) vs Rs 1,817mn in 2QFY19.
PEPL’s leasable assets now have an FY19E exit rental income potential of Rs 8,628mn (commercial + retail) which is already 8% ahead of the FY19-exit guidance. PEPL has to incur incremental Rs 49.6bn further for development in ongoing residential projects.
While launches were muted in FY18, PEPL has launched projects in Bengaluru, Chennai and Hyderabad of ~3.2mn sqft in 9MFY19 (vs 10mn sqft guidance for FY19E). PEPL has some key projects in the launch pipeline (~10mn sqft) including Prestige Smart City (under the HDFC platform), Nirvana, Finsbury. As a lot of the planned launches are on self owned land parcel (rather than JDAs), the share of PEPL in collections will be significantly higher.
With annuity income witnessing steady growth, PEPL has further properties under construction with ~Rs 3.3/1.0bn annual potential in commercial/ retail respectively (with approx. cost to be incurred pegged at Rs 8.0/4.0bn).
Prestige Share - Sales Area And Value Trend (Rs mn) 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19
Source : Company, PS – Prestige Share, OA – Over All
1.6mn sqft of launches during 3QFY19 in majorly in Bengaluru PEPL is likely to maintain pole position in the southern markets, with 1-1.2x pre-sales volume in the micro-market vs. nearest Bengaluru competitor During 3QFY19, PEPL share total pre-sales was 1.21mn sqft with ~Rs 9.3bn in value (realization of Rs 7,742/sq ft) Gross leasing volume is 0.33mn sqft in 3QFY19
PRESTIGE ESTATES PROJECTS : RESULTS REVIEW 3QFY19
Page | 4
Net D/E reduced to 1.79x QoQ
3QFY19, consolidated gross debt stands at Rs 85.2bn (an increase of Rs 2.9bn QoQ).
The leverage ratios are not strictly comparable with prior periods on account of Rs 10.2bn AS115 reversals from FY19 opening reserves. While we remain cautious of PEPL’s rising debt levels on account of outgo for land acquisitions and capex for annuity assets, we find comfort in the fact that debt is largely being backed by Rent securitization (32%) /Receivable discounting (11%), and the residential segment’s debt is about 43%. We don’t foresee any near-term liquidity concerns for PEPL.
In the exhibit below, we highlight that PEPL’s cash flow situation is comfortable, with FY19-21E cumulative cash surplus of Rs 1.3bn after meeting land/capex requirements. Prestige has ~Rs 17bn pending possession money to be received in addition to ~Rs 25bn of completed inventory (expected to be monetized over the next 4 quarters)
With a ramp-up in rental income (refer to table below), PEPL will have multiple avenues of de-leveraging its balance sheet, viz REIT’s or stake sale in Rent co. Also, monetisation of residential inventory nearing completion will help cash flows and ease pressure on the balance sheet.
Source: Company, *1QFY19 onwards leverage ratios are not strictly comparable with previous quarters on account of reversal in reserves of Rs 10.1bn on adoption of IND AS 115
Gross debt has increased significantly on account of consolidation of associate entities (Rs 2.9bn) in addition to the cash outlay of Rs 3.4bn for completing the acquisition Prestige has ~Rs 17bn pending possession money to be received in addition to ~Rs 25bn of completed inventory (expected to be monetized over the next 4 quarters) Further inflows from new launches and HDFC platform to help pare down debt PEPL’s leasable assets now have an annual exit rental income potential of Rs 7,668mn with an incremental projected exit rental of Rs 959mn projected by FY19E end
Total Annuity Asset Capex - II 6.4 6.4 6.3 Includes Office, Hotel and Retail capex
Cash Flow Post Capex III = I - II 4.1 4.2 4.2
Land Payments 2.0 2.0 2.0
Stake Buyouts (Exora and others) - - -
Dividend Paid 1.8 1.8 1.8
Others - - -
Capital Outflows IV 3.8 3.8 3.8
Net Inflows V = III -IV 0.3 0.5 0.5 Cash flow break even
Source: Company, HDFC sec Inst Research
Cash flow breakeven as PEPL incurs asset capex
PRESTIGE ESTATES PROJECTS : RESULTS REVIEW 3QFY19
Page | 6
Summary Of Key Assumptions And Estimates
Estimates Growth (%)
Comments
FY19E FY20E FY21E FY19E FY20E FY21E
Volume assumptions
Residential - Prestige share (mn sqft)
4.8 4.9 5.0 49.0 1.6 1.6 New pre-sales will come from existing unsold inventory and new launches
Average rate (Rs/sqft) 6,962 6,938 7,123 3.3 (0.3) 2.7 Price realisation will remain muted as unsold inventory puts pressure on pricing of new launches
Sales value - Prestige share (Rs mn)
33,749 34,170 35,644 53.9 1.2 4.3 Pre-sales to be driven by ~50% from the existing stock and the balance from new launches
Rental Income:
Gross area for lease (mnsf) 16.8 16.8 18.7 17.1 - 11.0 Forum Shantiniketan, Forum Mysore, Falcon Tower, Cessna, and Trade Tower will contribute to incremental leasing
Residential Sales (Rs mn) 34,686 35,076 37,531 (20.3) 1.1 7.0 Muted residential sales CAGR as pre-sales slowed down on account of weak demand
Rental income (Rs mn) 7,398 8,460 9,314 19.4 14.4 10.1
Others (Rs mn) 8,232 9,264 9,276 56.4 12.5 0.1
Total 50,316 52,799 56,121 (8.5) 4.9 6.3
EBIDTA (Rs mn) 14,221 14,846 15,552 30.0 4.4 4.8 4.6% EBIDTA CAGR for FY19-21E on higher rental income and increasing contribution from high-margin inventory
EBIDTA Margin (%) 28.3 28.1 27.7 836.8 (14.7) (40.5) Margins to expand on better realisations
Net interest expense* 7,011 7,063 7,478 83.2 0.7 5.9 Interest increase in line with capex
12.2% FY19-21E rental income CAGR 4.6% EBIDTA CAGR for FY19-21E on higher rental income and increasing contribution from high-margin inventory
PRESTIGE ESTATES PROJECTS : RESULTS REVIEW 3QFY19
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Estimates Growth (%)
Comments
FY19E FY20 FY21E FY19E FY20E FY21E
PAT (Rs mn) 4,724 4,459 4,522 30.6 (5.6) 1.4 Muted PAT CAGR
PAT Margin (%) 9.4 8.4 8.1 280.8 (94.2) (38.8)
EPS (Rs) 12.6 11.9 12.1 30.6 (5.6) 1.4
Cash flows forecast
CFO - a 7,904 8,507 10,777
CFI - b (1,147) (2,042) (2,931)
FCF - a+b 6,757 6,465 7,846
Free cash flow recovery
CFF-c (7,835) (5,818) (6,233)
Total change in cash - a+b+c
(1,078) 648 1,613
Source: Company, HDFC sec Inst Research
Strong Free cash flow over FY19-21E
PRESTIGE ESTATES PROJECTS : RESULTS REVIEW 3QFY19
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Valuation SOTP valuation – Reduced TP of Rs 292/sh
We have adopted the DCF methodology to arrive at
PEPL’s NAV/share. We value the residential real
estate business at Rs 138/share, commercial annuity
assets at Rs 161/share, retail assets at Rs 43/share,
hospitality at Rs 26/share, project management at Rs
12/share, land bank at Rs 38/share, net deposits to
land owners at Rs 21/share and reduced net debt at
Rs 149/share to arrive at a NAV valuation of Rs
309/share for the company.
For a land bank beyond five years, we have valued it
at current market rates. We maintain BUY on PEPL
with SOTP valuation of Rs 292/share.
We believe organised real estate will benefit over
the long term on account of RERA. In the near term,
uncertainties around new project approvals may
impact new launches and hence cash flows. Overall
RERA is expected to reduce cost of capital for the
sector and improve transparency.
Rs mn Rs/share
(New) Comments
Residential - for sale 51,647 138 NAV based on the methodology discussed
Commercial - lease 60,755 162 NAV based on the methodology discussed
Retail - lease 16,263 44 NAV based on the methodology discussed
Hospitality 9,584 26 10x FY19E EV/EBIDTA
Project management 4,515 12 8x FY19E EV/EBIDTA
Land bank 14,174 38 At current market prices without incorporating construction margins
Deposits (net) 7,772 21 With the land owner for JDA
Total GAV (Rs mn) 164,235 441 Gross net asset value
Less: Net Debt - FY19E - Economic interest 55,737 149 Taken 80% PEPL share of the total net debt
NAV 109,466 292
NAV discount (%)
-
Final NAV
292
Source: HDFC sec Inst Research
We value the residential real estate business at Rs 138/share Commercial annuity assets at Rs 162/share, retail assets at Rs 44/share, hospitality at Rs 26/share, project management at Rs 12/share Land bank at Rs 38/share and net deposits to land owners at Rs 21/share Adding all these we arrive at Gross Asset Value of Rs 441/sh We reduce net debt at Rs 149/share to arrive at total NAV valuation of Rs 292/share for PEPL and Maintain BUY Reduction in TP (vs/ Rs 314/sh earlier) is majorly on account of the increased FY20E Net Debt
PRESTIGE ESTATES PROJECTS : RESULTS REVIEW 3QFY19
Page | 9
Real estate development – NAV calculation methodology
We have divided PEPL’s entire land bank (with launch
visibility of the next five years) into residential
projects (based on the information given by the
company).
We have arrived at the sale price/sqft and the
anticipated sales volumes for each project based on
our discussions with industry experts.
We have deducted the cost of construction based on
our assumed cost estimates, which have been arrived
at after discussions with industry experts.
We have further deducted marketing and other costs
assumed at 5% of the sales revenue.
We have deducted income tax based on the tax
applicable for the project.
The resultant cash inflows at the project level have
been discounted, based on WACC of 14% (cost of
equity 17% based on beta of 1.5x and debt/equity
ratio of 0.67x). All the project-level NAVs have then
been summed up to arrive at the NAV of the
company.
For commercial office/retail space, we have
discounted rentals using 14% WACC for the
forecasted period and terminal value using the cap
rate of 8.5%.
For land beyond a five-year visibility, we have valued
at current market price.
We have valued hotels at 10x FY19E EV/EBIDTA and
the project management business at 8x FY19E
EV/EBIDTA
From the GNAV, we have deducted the net debt (80%
PEPL economic share) as of FY19E to arrive at the
NAV of the company.
We have used WACC assumption of 14% on account of high debt on books In commercial office/retail space, we have discounted rentals using 14% WACC for the forecasted period and terminal value using the cap rate of 8.5% We have valued hotel at 10x FY19E EV/EBIDTA and the project management business at 8x FY19E EV/EBIDTA We have taken PEPL’s share of economic interest in net debt at 80% to arrive at our NAV estimate of Rs 281/sh
PRESTIGE ESTATES PROJECTS : RESULTS REVIEW 3QFY19
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Key valuation assumptions
In the exhibit below, we highlight our sales and cost inflation forecasts. We expect property price appreciation in line with WPI inflation, i.e., 5%. We forecast other costs including marketing, SGA and employee costs at 5% of sales.
Base Case Assumptions (%) Discount Rate 14.0
Annual Rate Of Inflation-Sales Price 5
Annual Rate Of Inflation-Cost Of Construction 6
Other Costs – Marketing, SGA, Emp Cost (as % of sales) 5
Source: HDFC sec Inst Research
In the exhibit below, we highlight our sales price and construction cost forecasts. Our pricing assumptions are moderate, and at a 0-10% discount to current prevailing prices.
Base Property Price And Construction Cost Assumptions
Location Prices
Rs/sqft Cost
Rs/sqft
Bangalore 4,300-10,000 3,000-3,500
Chennai 4,500-5,500 2,000-2,500
Kochi 4,500-8,500 2,500 -3,500
Hyderabad 4,200-6,000 2,000-2,500
Source: HDFC sec Inst Research
NAV sensitivity analysis Sensitivity to our assumption of property price Obviously, our model is sensitive to changes in the
assumptions regarding property prices. For every 1% change in the base property prices, the NAV will change by approximately 2.5%.
% Change In Sale Price (10) (5) 0 5 10
NAV/share (Rs) 219 255 292 327 364
Change In NAV (%) (24.8) (12.5) - 12.2 24.6
Source: HDFC sec Inst Research
Sensitivity of NAV to changes in sales inflation In our base case, we have assumed an annual sale
price inflation of 5% (see exhibit above). For every 100bps increase in the annual sales price inflation, the NAV will increase by approximately 4.3%.
NAV Sensitivity To Change In Sales Inflation Sales inflation rates (%) 3 4 5 6 7
NAV/share (Rs) 265 280 292 305 320
Change in NAV (%) (9.3) (4.2) - 4.3 9.7
Source: HDFC sec Inst Research
Sensitivity of NAV to changes in cost inflation In our base case, we have assumed cost inflation to
be 6% (see exhibit above). For every 100bps increase in construction cost inflation, the NAV will change by approximately 3.2%.
NAV Sensitivity To Change In Cost Inflation Cost Inflation Rates (%) 4 5 6 7 8
NAV/share (Rs) 309 302 292 283 275
Change in NAV (%) 5.8 3.3 - (3.2) (5.7)
Source: HDFC sec Inst Research
The combined impact of a 100bps increase in sale price inflation and cost inflation will be a NAV increase of 1.1%.
We expect property price appreciation in line with WPI inflation, i.e., 5%. We forecast other costs including marketing, SGA and employee costs at 5% of sales
For every 1% change in the base property prices, the NAV will change by approximately 2.5% For every 100bps increase in the annual sale price inflation, the NAV will increase by approximately 4.3% For every 100bps increase in construction cost inflation, the NAV will change by approximately 3.2% The combined impact of a 100bps increase in sale price inflation and cost inflation will be a NAV increase of 1.1%
PRESTIGE ESTATES PROJECTS : RESULTS REVIEW 3QFY19
Page | 11
Sensitivity of NAV to changes in discount rate In our base case, we have assumed a discount rate of
14%. For every 100bps increase in the discount rate, the NAV will fall by 4.2%.
NAV Sensitivity To Change In WACC WACC Rates (%) 12.0 13.0 14.0 15.0 16.0
NAV/share (Rs) 315 303 292 280 269
Change In NAV (%) 8.0 3.9 - (4.2) (7.9)
Source: HDFC sec Inst Research
For every 100bps increase in the discount rate, the NAV will fall by 4.2%
PRESTIGE ESTATES PROJECTS : RESULTS REVIEW 3QFY19
Page | 12
Income Statement - Consolidated Year ending March (Rs mn) FY17 FY18 FY19E FY20E FY21E
Net Sales 47,745 54,986 50,316 52,799 56,121
Growth (%) (13.7) 15.2 (8.5) 4.9 6.3
Material Expenses 33,541 38,582 27,598 30,297 32,431
Employee Expenses 2,933 2,952 3,968 3,960 4,209
Other Operating Expenses 2,073 2,512 4,528 3,696 3,928
EBIDTA 9,198 10,940 14,221 14,846 15,552
EBIDTA (%) 19.3 19.9 28.3 28.1 27.7
EBIDTA Growth (%) (13.7) 18.9 30.0 4.4 4.8
Other Income 872 679 2,105 2,210 2,321
Depreciation 1,637 1,547 3,188 3,328 3,635
EBIT 8,433 10,072 13,138 13,728 14,238
Interest 3,160 3,827 7,011 7,063 7,478
PBT 5,273 6,245 6,127 6,666 6,760
Tax 1,600 2,135 2,083 2,000 2,028
PAT 3,673 4,110 4,044 4,666 4,732
Minority Interest (1,095) (533) (481) (533) (541)
Share of associates 121 136 267 327 331
EO items (net of tax) 160 95 894 - -
APAT 2,539 3,618 4,724 4,459 4,522
APAT Growth (%) (36.4) 42.5 30.6 (5.6) 1.4
EPS 6.8 9.6 12.6 11.9 12.1
EPS Growth (%) (36.4) 42.5 30.6 (5.6) 1.4
Source: Company, HDFC sec Inst Research
Balance Sheet - Consolidated Year ending March (Rs mn) FY17 FY18 FY19E FY20E FY21E
SOURCES OF FUNDS
Share Capital 3,750 3,750 3,750 3,750 3,750
Reserves 40,398 43,577 44,758 47,462 50,229
Total Shareholders Funds 44,148 47,327 48,508 51,212 53,979
Minority Interest 2,027 2,300 2,781 3,314 3,855
Secured 55,550 66,582 73,240 76,240 79,240
Unsecured 1,844 7,571 1,844 1,844 1,844
Total Debt 57,394 74,153 75,084 78,084 81,084
Deferred Taxes 1,722 1,745 1,745 1,745 1,745
Other Non Current Liabilities 1,771 1,863 2,236 2,683 3,219
TOTAL SOURCES OF FUNDS 107,062 127,388 130,353 137,038 143,883
BUY : Where the stock is expected to deliver more than 10% returns over the next 12 month period
NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period
SELL : Where the stock is expected to deliver less than (-)10% returns over the next 12 month period
Date CMP Reco Target
8-Feb-18 296 NEU 316
16-Apr-18 305 NEU 316
31-Jul-18 264 BUY 316
11-Oct-18 179 BUY 317
31-Oct-18 195 BUY 309
11-Jan-19 221 BUY 314
14-Feb-19 200 BUY 292
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Prestige Estates TP
RECOMMENDATION HISTORY
PRESTIGE ESTATES PROJECTS : RESULTS REVIEW 3QFY19
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Disclosure: We, Parikshit D Kandpal, CFA, & Kunal Bhandari, ACA, authors and the name subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. HSL has no material adverse disciplinary history as on the date of publication of this report. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative or HDFC Securities Ltd. or its Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. 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HSL or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from t date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction in the normal course of business. HSL or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither HSL nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. HSL may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. We have not received any compensation/benefits from the subject company or third party in connection with the Research Report. HDFC securities Limited, I Think Techno Campus, Building - B, "Alpha", Office Floor 8, Near Kanjurmarg Station, Opp. Crompton Greaves, Kanjurmarg (East), Mumbai 400 042 Phone: (022) 3075 3400 Fax: (022) 2496 5066 Compliance Officer: Binkle R. Oza Email: [email protected] Phone: (022) 3045 3600 HDFC Securities Limited, SEBI Reg. No.: NSE-INB/F/E 231109431, BSE-INB/F 011109437, AMFI Reg. No. ARN: 13549, PFRDA Reg. No. POP: 04102015, IRDA Corporate Agent License No.: HDF 2806925/HDF C000222657, SEBI Research Analyst Reg. 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