Reco price: Rs 307
Current market price: Rs 312.65
Target price: Rs 436
Upside: 39.5%
Brokerage: IIFL
Our channel checks indicate that TDR prices have increased 5-8 per cent since December 2009 and currently trade at Rs 2,600-2,900 per sq feet. The rate of increase in TDR prices has slowed down. For instance, in Bandra-Khar area, TDR price had increased from Rs 2,450 per sq feet on October 2009 to Rs 2,750 in December. The same is currently hovering around Rs 2,800-2,900.
Volumes have been weak and no large transactions were reported in January 2010. TDR prices are closing in on the previous peak of Rs 3,000-3,200 per sq feet recorded in late 2007, as residential volumes in suburban Mumbai continue to be strong. The brokerage estimates HDIL’s NAV at Rs 436 per share. The NAV estimates assumes long-term TDR price of Rs 2,200 per sq feet, which is significantly lower than current rates. It maintains a buy on the stock with a 12-month price target of Rs 436.
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