Unitech And Residential And Commercial Property

Unitechhas had positive newsflow recently with the government approving Telenor’s(a partner in telecom venture) proposal to hike the stake in Unitech  Wireless to 74 per cent. The company has hada good first seven months (March to September) going by the response to itslaunches aggregating to 21.30 mnsqft of residential and commercialproperty. The company has managed to book sales Rs 4,000 crore from thesale of 10.11 mnsqft. It plans to launch about 30 mnsqft and achieve about 20mnsqft  of pre-sales in this fiscal, saysan analysts. Of the past projects which total an area of 22.31 mnsqft, thecompany has delivered about a fifth and expects to complete delivery of therest by March 2011. Improved cash flow from the sale of hotels and plots (Rs940 crore), two QIPs (Rs 4,400 crore) and Rs 386 crore from Unitech Wireless have helped bring down debt levels toabout 0.6 times from 1.7 times last year.

Like DLF, the company is eyeing the affordable housingsegment and has launched projects under the Unihomes brand catering tobudgets between Rs 10-30 lakh range. After the sale of about 900 units at itsUnihomes project in Noida, the company is planning to launch more apartments under this brand. Analystsestimate that the company is likely  tohave a strong second quarter on the back of higher project and asset sales.Considering the recent spurt in sales at its new launches and balance sheetdeleveraging is already factored into the current price and it is trading at apremium to its NAV, expect little upside to flow through in the current fiscal.