InitiatingCoverage

AshianaHousingLtd.

April20,2010

BUY

SHAREHOLDING(%)

PioneerinRetirementResortSellingLIFESTYLEnothouses
Ashiana Housing with its pioneering thought process had come up with a new concept of
retirementresortcalledUTSAV inBhiwadicoveringanareaof15.5acre.Successofthis
projectonlyinstillsconfidencethatthismarkethashugepotentialforgrowthinIndia,and
theCompanyhasthereforelaunchedtwomoreprojectsinthesimilarline.Itisnowbuilding
UTSAV in Jaipur and Lavasa spread over an area of 7.5 and 30 acre respectively. The
Companyhasreceivedagoodresponsefortheseprojects,35.8%oftheJaipurprojectand
~60%oftheLavasaprojectforthePhaseIhavealreadybeenbooked.Ithasthusestablished
afirmbrandnamefortheretirementresortprojects.

STOCKDATA

AHFN.BO
ASFIIN

BSECode
NSESymbol

EquivalentAreaConstructedtogrowataCAGRof22.8%
The Companys equivalent area constructed has increased at a CAGR of 38.2% in the last
fouryearsfrom2.5lakhsquarefeetto9.4lakhsquarefeet(FY09).Itislikelytocloseon10.8
LakhsquarefeetofareaconstructedforFY10E,whichitplanstoincreaseto20lakhsquare
feet by FY13E, i.e. a CAGR of 22.8% for the next three years. To keep up to the growth
numbers, the Company already has projects entailing a developable area of 6.7 million
square feet including projects like residential, hotel, retail and retirement resorts, which
gives revenue visibility for the next 34 years. The Company also has developable land of
3.84millionsquarefeetforitsfutureprojects.

523716

Market
Capitalization*

Rs.2200mn
US$49.4mn

Shares
Outstanding*

18.1mn

52Weeks(H/L)

Rs.135/35

Avg.Daily
Volume(6m)

RobustBusinessModel

21,226Shares

AshianaHousinghasarobustbusinessmodel,whichrequireslowercapital.TheCompany,
on the back of its good brand image in TierII and TierIII cities, usually enters into
partnershipprojectwiththelandownersonprofitsharingbasis.Ithasrecentlyenteredinto
a joint development agreement with Mangalam Developers for developing an area of 23
lakhsquarefeetatJaipur.Jointdevelopmentmodellowerstheinvestmentrequirementfor
theCompany.Thus,despiteofoperatinginthedebtpronerealestatesector,theCompany
isnetdebtfree,withhigherROCEandROEof~30%.

PricePerformance(%)
1M

3M

6M

21

24

200DaysEMA:Rs.91
*Onfullydilutedequityshares

OUTLOOK&VALUATION

ANALYST
IshpreetBatra|+912240935091
ishpreet.batra@sushilfinance.com

AshianaHousingisagrowingrealestatefirmwithrevenueandPATCAGRof37%&73%for
lastthreeyears.Onthebackofrobustexecutionbasedbusinessmodel,focusonaffordable
housing in Tier II and Tier III cities, pioneer venture in conceptual projects such as
RetirementhouseUTSAV,theCompanyisexpectedtogrowatCAGRof30%fornextthree
years.Thecompanyiscurrentlyworkingonprojectsentailinganareaof6.7MSF,whileithas
developablelandof3.8MSFforitsfutureprojectsprovidingrevenuevisibilityforthenext5
6years.Beinganetdebtfree,higherROE32.8%&ROCE31.5%firm,thestockisattractively
tradingat3.4xtimesitsFY12EEPS.However,beingrealestatebusinessinnature,wehave
valuedAshianaHousingusingSOTPmethodvaluingrealestatebyNPVandHotel&Retailby
DCF, giving us price objective of Rs.165. Our NPV model is play on volumes and not on
pricing,soanypriceappreciationinthepropertymarket,amidstexpected8%GDPgrowth
willactaspositivesurprise.
DetailReporttofollowshortly.

SALES:
DevangShah|+912240936060/61
devang.shah@sushilfinance.com
NishitShah|+912240935074
nishit.shah@sushilfinance.com

TARGETRs.165

68.3
0.7
0.0
7.2
23.8

ReutersCode
BloombergCode

PRICERs.122

Ashiana Housing Ltd., (Ashiana Housing), a leading player in Indian realty industry, is a
pioneerintheretirementresortconcept.TheCompanyhaschieflyundertakenresidential,
group housing, retirement resorts, and hotel as well as retail projects. It has built and
deliveredprojectsinBhiwadi,Jaipur,JodhpurandJamshedpur.

REALESTATE
Promoters
FII
FI/MF
BodyCorporates
Public&Others

HIGH RISK

KEYFINANCIALS
Y/E
Mar.
FY09
FY10E
FY11E
FY12E

Pleaserefertoimportantdisclosuresattheendofthereport

SushilFinancialServicesPrivateLimited
Office:12,HomjiStreet,Fort,Mumbai400001.

Revenue
(Rsmn)

APAT
(Rsmn)

AEPS
(Rs)

AEPS
(%Ch.)

P/E
(x)

ROCE
(%)

ROE
(%)

P/BV
(x)

906.7
1009.1
1420.3
1984.4

284.0
271.5
435.1
642.5

15.7
15.0
24.1
35.5

(26.6)
(4.4)
60.2
47.7

7.7
8.1
5.1
3.4

32.7
23.8
28.6
31.5

34.6
24.7
30.2
32.8

2.3
1.8
1.3
1.0

ForprivateCirculationOnly.
Member:BSEL,SEBIRegn.No.INB/F010982338|NSEIL,SEBIRegn.No.INB/F230607435.
Phone:+912240936000Fax:+912222665758Email:info@sushilfinance.com

AshianaHousingLtd.

PROFIT&LOSSSTATEMENT (Rs.mn)

BALANCESHEETSTATEMENT(Rs.mn)

Y/EMarch

Ason31stMarch

FY09

FY10E

FY11E

FY12E

NetSales

906.7 1009.1 1420.3 1984.4

Rawmaterial
Consumption

(85.4)

50.5

71.0

99.2

ProjectExpenses

600.8

463.8

639.8

849.2

74.1

82.7

110.8

148.8

TotalExpenditure

702.7

724.8

997.9 1350.1

PBIDT

204.1

284.3

422.5

634.3

0.0

10.1

10.2

10.5

14.9

18.2

21.3

25.8

OtherIncome

131.6

75.1

139.6

185.6

PBTinclOI

320.8

331.1

530.6

783.5

36.8

59.6

95.5

141.0

284.0

271.5

435.1

642.5

StaffCost

Interest
Depreciation

Tax
APAT

FINANCIALRATIOSTATEMENT
Y/EMarch

Growth(%)
NetSales
EBITDA
AdjustedNetProfit
Profitability(%)
EBIDTAMargin(%)
NetProfitMargin(%)
ROCE(%)
ROE(%)
PerShareData(Rs.)
EPS(Rs.)
CEPS(Rs.)
BVPS(Rs)
Valuation
PER(x)
PEG(x)
P/BV(x)
EV/EBITDA(x)
EV/NetSales(x)
Turnover
DebtorDays
CreditorDays
GearingRatio
D/E

FY09

FY10E

FY11E

(28.2)
(45.9)
(26.6)

22.5
31.3
32.7
34.6

15.7
16.5
53.2

7.7

2.3
10.2
2.3

6
25

0.0

11.3
39.3
(4.4)

28.2
26.9
23.8
24.7

15.0
16.0
68.3

8.1
(1.8)
1.8
7.5
2.1

11
26

0.1

40.8
48.6
60.2

29.7
30.6
28.6
30.2

24.1
25.2
91.1

5.1
0.1
1.3
4.8
1.4

11
26

0.0

Source:Company,SushilFinanceResearchEstimates

April20,2010

FY12E
39.7
50.1
47.7
32.0
32.4
31.5
32.8
35.5
37.0
125.5
3.4
0.1
1.0
3.1
1.0

ShareCapital
Reserves&Surplus
NetWorth
SecuredLoans
UnsecuredLoans
TotalLoanfunds
DeferredTax
CapitalEmployed
NetBlock
Cap.WIP
Investments
SundryDebtors
Cash&BankBal
Loans&Advances
Inventory
Othercurrentassets
CurrLiab&Prov
NetCurrentAssets
DeferredTaxAssets
TotalAssets

FY09

FY10E

FY11E

FY12E

180.8
782.0
962.8
7.1
4.0
11.1
5.3
1006.4
281.3
51.9
406.8
15.4
130.1
187.7
583.9
953.2
1609.2
261.0
0.0
1006.4

180.8
1053.5
1234.3
70.0
8.0
78.0
5.4
1344.9
298.1
56.0
560.8
30.3
147.5
168.9
706.4
1059.5
1686.7
425.8
0.0
1344.9

180.8
1467.4
1648.2
70.0
8.0
78.0
5.7
1759.1
316.8
68.9
560.8
42.6
247.0
215.3
994.2
1704.4
2396.1
807.4
0.0
1759.1

180.8
2088.7
2269.6
70.0
8.0
78.0
6.0
2380.8
351.0
77.2
560.8
59.5
338.5
381.8
1389.1
2579.7
3362.0
1386.6
0.0
2380.8

CASHFLOWSTATEMENT(Rs.mn)
Y/EMarch

Profitbeforetax&
ExtraordinaryItems
Depreciation&
Amortization
Chg.inWorkingCapital
CashFlowfrom
Operating

(Incr)/DecrinGross
PP&E
(Incr)/DecrIn
Investments
CashFlowfrom
Investing

(Decr)/IncrinDebt

11
26

(Decr)/IncrinShare
Capital
Dividend
CashFlowfrom
Financing

0.0

CashattheEndofthe
Year

FY09

FY10E

FY11E

FY12E

320.8

331.1

530.6

783.5

12.5

18.2

21.3

25.8

(219.2)

(147.3)

(282.1)

(487.6)

82.4

143.7

173.5

181.0

(40.7)

(35.0)

(40.0)

(60.0)

50.4

(154.0)

0.0

0.0

(16.7)

(193.1)

(52.9)

(68.3)

(14.5)

66.9

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

(21.2)

(21.2)

(13.3)

66.9

(21.2)

(21.2)

130.0

147.5

247.0

338.5

AshianaHousingLtd.

RatingScale

This is a guide to the rating system used by our Equity Research Team. Our rating system
comprisesofsixratingcategories,withacorrespondingriskrating.

RiskRating
RiskDescription
LowRisk

PredictabilityofEarnings/Dividends;PriceVolatility
Highpredictability/Lowvolatility

MediumRisk

Moderatepredictability/volatility

HighRisk

Lowpredictability/Highvolatility

TotalExpectedReturnMatrix
Rating
Buy
Accumulate
Hold
Sell
Neutral
NotRated

LowRisk
Over15%
10%to15%
0%to10%
Negative
NotApplicable
NotApplicable

MediumRisk
Over20%
15%to20%
0%to15%
Negative
NotApplicable
NotApplicable

HighRisk
Over25%
20%to25%
0%to20%
Negative
NotApplicable
NotApplicable

Please Note
ecommendationswithNeutralRatingimplyreversalofourearlieropinion(i.e.BookProfits/Losses).
R
** IndicatesthatthestockisilliquidWithaviewtocombatthehigheracquisitioncostforilliquidstocks,we

haveenhancedourreturncriteriaforsuchstocksbyfivepercentagepoints.
DeskResearchCallisbasedonthepubliclyavailableinformationonthecompanieswefindinterestingand
arequotingatattractivevaluations.Whilewedonotclaimthatwehavecompiledinformationbasedonour
meeting with the management, we have taken enough care to ensure that the content of the report is
reliable.AlthoughwehavechristenedthereportasDeskResearchCalls(DRC),weintendtoreleaseregular
updatesonthecompanyasisdoneinourotherratedcalls.

Additionalinformationwithrespecttoanysecuritiesreferredtohereinwillbeavailableuponrequest.
ThisreportispreparedfortheexclusiveuseofSushilGroupclientsonlyandshouldnotbereproduced,re
circulated, published in any media, website or otherwise, in any form or manner, in part or as a whole,
without the express consent in writing of Sushil Financial Services Private Limited. Any unauthorized use,
disclosureorpublicdisseminationofinformationcontainedhereinisprohibited.Thisreportistobeusedonly
bytheoriginalrecipienttowhomitissent.

This is for private circulation only and the said document does not constitute an offer to buy or sell any
securities mentioned herein. While utmost care has been taken in preparing the above, we claim no
responsibility for its accuracy. We shall not be liable for any direct or indirect losses arising from the use
thereofandtheinvestorsarerequestedtousetheinformationcontainedhereinattheirownrisk.

Thisreporthasbeenpreparedforinformationpurposesonlyandisnotasolicitation,oranoffer,tobuyorsell
any security. It does not purport to be a complete description of the securities, markets or developments
referredtointhematerial.Theinformation,onwhichthereportisbased,hasbeenobtainedfromsources,
which we believe to be reliable, but we have not independently verified such information and we do not
guaranteethatitisaccurateorcomplete.Allexpressionsofopinionaresubjecttochangewithoutnotice.

SushilFinancialServicesPrivateLimitedanditsconnectedcompanies,andtheirrespectivedirectors,officers
andemployees(tobecollectivelyknownasSFSPL),may,fromtimetotime,havealongorshortpositionin
thesecuritiesmentionedandmaysellorbuysuchsecurities.SFSPLmayactuponormakeuseofinformation
containedhereinpriortothepublicationthereof.

April20,2010