Poddar Developers – India – Micro Cap
There is some information received through grapevine and other market channels, which to be fair should be in the market to keep symmetry, even though it means short term stupidity.
– The company results are always chequered with profits booked only on actual sale and project completion
– It appears that there will not be sale of buildings and houses over the next couple of months as multiple projects are mid way construction, March 2015 could be a better quarter
– I wished the company to continue in low cost housing < 25 Lacs INR apartment and scale out to other states, but the company is acquiring land for mid income housing in Maharashtra – 60 Lac – 1 Crore INR range of apartments
So expanding out the low income model in other states is also looking unlikely in short term. Becoming a stronger regional player is a bigger focus than becoming a low cost housing specialist pan India in the short term
– I also wished the company to get into NBFC space in low cost housing as Gruh and Repco, given that Dipak Poddar is one of co-founders of Bajaj Finance (first cousin of Rahul Bajaj), co-promoter of Bajaj Auto, and also the promoter of Poddar Developers Ltd
The company has long term plans to get into it but NBFC business is looking unlikely in short term as company has hands full with housing projects.
– One the positive side company has taken in well the Corporate Governance message and expects to improve it in subsequent year.
– We have also learnt that in real estate sector, company provides highest levels of transparency to purchasers/end users of apartment by publishing prices on the website. This is unmatched.
Couple more links:
“We don’t sell more than one flat for a single buyer. We have a 75:25 mix of actual homebuyers and investors,” said Rohit Poddar.
“Poddar Developers launches Rs 825 crore project in Shahapur”
“Poddar Developers eyes Rs 500-cr revenues by FY’17”
I had spotted Atul Auto 20 Rs and invested for myself and partnership in 2012 @ 35 Rs and @45Rs respectively, based on advance from customers (CMP 377 Rs). I see similar strength in Poddar Housing product.
“Besides, we will fund the expansion through internal accruals. We are not keen on raising funds through debt or equity, mainly because of high interest rate and higher cost of valuation.”
Read more at: http://www.livemint.com/Companies/7PHk9NJVwnkZqw6qqwtbuJ/The-future-of-affordable-housing.html?utm_source=cop
– Remains a developing story and likely to stay sideways for next 6-9 months. A product that customer pays for in advance is typically a Bajaj Auto scooter in monopolistic India of 1970s.