>UNITECH (IDFC SSKI)

HIGHLIGHTS OF Q2FY10 RESULTS
• The consolidated earnings of Unitech Ltd. for Q2FY10 was boosted by lower interest costs; although lower than our estimates due to lower than expected revenue recognized.

• Net sales for the quarter declined by 48%yoy and 5%qoq to Rs5.09bn, was lower than our estimates of Rs6.4bn, primarily due to lower revenue recognized from asset sale (Rs700mn in Q2FY10 against Rs1.2bn in Q1FY10). However revenue recognized based on PoCM increased sequentially by 5% to Rs4.39bn in Q2FY10 from Rs4.19bn in Q1FY10.

• Operating profit for the quarter stood at Rs2.97bn (our estimates at Rs3.8bn). Operating margins for the quarter at 58.5% (against our estimate of 59.3%) was lower by 350bps yoy.

• Interest expense declined by 55%yoy and 54%qoq to Rs603m in Q2FY10 as proceeds from QIP issuance was utilized to repay debt.

• Unitech’s consolidated earnings for Q2FY10 grew by 13%qoq to Rs1.77bn (down 51%yoy), was lower than our estimate of Rs2.21bn.

Other Key Highlights
• Since 1st April 2009, Unitech has launched ~21msf of properties and successfully sold ~10.1msf of launched properties.

• Unitech has repaid debt of ~Rs25bn from the receipt of funds of ~Rs43bn raised through QIP route in two tranches as on Jul’09. Resultant, total debt has reduced to ~Rs65bn from Rs90bn at the end of FY09.

• Cash and bank balance at the end of Q2FY10 was Rs7.4bn (Rs6.4bn in FY09).

To read the full report: UNITECH