Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Nimbus Projects Limited CMP: 34. December 4, 15 Stock Details BSE code 511714 BSE ID NIMBSPROJ Face value ( ) 1 No of shares (m) 7.5 Market cap ( m) 53 3 days avg. daily vol (No) 8,67 Free float ( m) 63 Dividend yield FY15 (%) Stock performance (%) Absolute Rel. to Sensex nm 1M 3M 1M -4.3% 7.5% -7.3% -5.3% 6.8% -3.% Shareholding Pattern* (%) Promoters FIIs DIIs Others 74.7%.%.% 5.% *As of September 15 Relative Chart Company Overview Nimbus Projects Ltd. is engaged in the real estate business of constructing group housing societies in the National Capital Region (NCR). The company also constructs residential flats through Special Purpose Vehicles (SPVs). Industry Overview The Indian real estate sector has witnessed high growth in recent times with the rise in demand for office as well as residential spaces. According to the Planning Commission of India, it is estimated that by 3, about 6 million people are expected to live in cities, which points to huge demand for affordable housing. Moreover, the government initiatives of focus on urbanization, smart city program and improvement in infrastructure will enhance the outlook for the sector. Financial Performance Nimbus reported a net profit of 1.5 million in FY 15, which corresponds to a 13.4% growth compared to FY 14. The company s revenue from operations for FY 15 rose 6.5% to 185.4 million compared to 174.1 million in the previous year. 6 5 Nimbus (LHS) Sensex 31, 3, 9, 4 8, 3 7, 6, 5, Table1: Key Financials (Y/e March) 1 4, 3,, Sales ( m) 16. 174.1 185.4 YoY Growth (%) NA -19.4% 6.5% EBITDA ( m) 44.4 (3.7) 16.6 EBITDA Margin.5% -18.8% 8.9% Source: Bloomberg PAT ( m) 18.7 (44.7) 1.5 EPS ( ). (5.7). YoY Growth (%) NA NM 13.7% Source: Company, Karvy Investment Advisory 1
Background and Business Description Nimbus Projects Ltd. engaged in the real estate business of constructing group housing societies in the National Capital Region (NCR). Apart from constructing its own projects, the company is also engaged in construction of residential flats through special purpose vehicles (SPVs) and these SPVs have been allotted plots of land on long term lease, under Builders Residential Scheme (BRS) of the New Okhala Industrial Development Authority (NOIDA) and Yamuna Expressway Authority (YEA). The total lease hold area allotted to the company along with SPVs is around,65, sq. meters and the projects are under various stages of construction. Projects that are being developed by the company along with SPVs: The Hyde Park The Golden Palms Express Park View II Golden Palm Village Key Strengths Nimbus key strengths comprise of its well-accepted brand, contemporary architecture, well-designed projects in strategic locations, strong balance sheet, and stable financial performance even in testing times. Risks & Concerns The performance of the company is subject to sales and rental realizations from its projects. Fluctuations in prices due to prevailing market conditions will hamper the company s operations. Inability to design projects that will meet customer preferences and to have timely approvals will impact sales volume through reduced bookings. Timely execution of projects require regular flow of finances, hence inadequate funding resources may lead to high interest rates which impacts company s operating performance. Board of Directors Table : Composition of Board Name Mr. Bipin Agarwal Mr. Lalit Agarwal Mr. Surinder Singh Chawla Mr.Pratap Singh Negi Ms. Anu Rai Source: Company Relation with Company Chairman cum Managing Director Whole Time Director cum Company Secretary Non-Executive Independent Director Non-Executive Non-Independent Director Non-Executive Non-Independent Director
Industry Overview Real estate sector is one of the most globally recognized sectors and it comprises of four sub sectors- housing, retail, hospitality and commercial. Real estate is the second largest employer in India and it is expected to grow at 3% over the next decade. Growth in the corporate environment and the demand for office space as well as urban and semiurban accommodations and infrastructure requirements points to the growth of this sector. For the period FY 8- the market size of this sector is expected to grow at a compounded annual growth rate (CAGR) of 11.% to reach $18 billion by. Sectors such as IT and ITeS, retail, consulting and e-commerce have registered high demand for office space in recent times. In 14, investments in office space witnessed a four-fold rise to $ billion compared to the previous year. Delhi-NCR is the biggest office market in India with 11 million sq ft, out of which 88 million sq ft is occupied. Delhi s Central Business District (CBD) of Connaught Place has been ranked as the sixth most expensive prime office market in the world with occupancy costs at $16 per sq ft per annum. According to the Department of Industrial Policy and Promotion (DIPP), the construction development sector in India has received foreign direct investments (FDI) that amounts to $4.1 billion for the period April -June 15. The Government of India has taken several initiatives to encourage the development in real estate sector. The Smart City Project, where there is a plan to build 1 smart cities, is a prime opportunity for the real estate companies. Competition analysis Nimbus operates in a highly fragmented market. The following table is the comparison of the company with few of its competitors. Company CMP ( ) Mcap ( m) Rev ( m) OPM (%) EPS ( ) PE (x) Nimbus Projects Limited 34 4.9 185.4 9.%. 11.7 King Infra Ventures Ltd 6.5 91. 4.9 6.7%.4 4.9 Neo Infracon Ltd 54.1 87. 1.7 1.8%. 7.3 Source: BSE 3
Financial Analysis For the period ending 31 March, 15 Nimbus revenues grew at a decent rate of 6.5% than that of FY 14. The company s EBITDA margin stood at 8.9%, attributable to the decline in company s operating expenses. It also reported earnings per share of.1 for FY 15. Year end March Income statement ( million) Revenue 16. 174.1 185.4 % growth NA -19.4% 6.5% EBITDA 44.4-3.7 16.6 % EBITDA margin.5% -18.8% 8.9% Depreciation and amortization 7. 6.8 8.5 EBIT 57.9-37. 8.4 Interest.7.6.4 PBT 37. (39.6) 8. Tax 18.5 5.1 6.5 Net profit 18.7 (44.7) 1.5 % growth net profit NA NM 13.4% Balance sheet ( million) Shareholder fund 98. 1,147.5 1,148.9 Long term liab 918.6 1,87.4 1,119.8 Current liab 169.7 143.6 45. Fixed assets 7.4 77. 68.4 Current assets 659.1 811.3 63.4 Cash & cash equi 8.6 4.3 13.9 Cash flow statement Cash flow operations -835.4 -.1 43.4 Cash flow from investing -177.7-5.7-59.4 Cash flow from financing 761.6 186.4-93.4 Per share data EPS ( ). (5.7). CEPS ( ) 3.5 (5.1) 1.4 DPS ( ) NA NA NA BVPS ( ) 117.1 147. 157. Financial Ratios % ROE 1.9% NM.1% ROCE 5.% NM.7% Debt/Equity 1.9% 9.%.9% Interest coverage ratio.8 NM.6 Current ratio 3.9 5.6 13.3 Cash ratio.5 1.7.9 Source: Company, Karvy Investment Advisory 4
Financial Snapshot Revenue growth (%) EBITDA margin (%) 5 1% 6 3% 15 1 5 5% % -5% -1% -15% -% -5% 4 - -4 % 1% % -1% -% -3% Revenue ( m) % growth EBITDA ( m) % EBITDA margin Net Profit Margin (%) BVS & EPS 4 - % 1% % -1% 5 4 3 1 4 - -4-6 -4-6 Net Profit ( m) % net profit margin -% -3% Book value per share ( ) EPS diluted ( ) -8 Liquidity ratio 15 4 3 1 3 5 1 1 Current ratio Cash ratio Source: Karvy Investment Advisory 5
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