TARC-Emerging Top-Class Real Estate Player Three years ago, TARC split from Anantraj under a family settlement. The first listing was a lower circuit at Rs 20. I had the opportunity to see the whole story unfold and the story is still unfolding. What did I know? They had a debt of Rs 1200 crore, a Residential project near Manesar, 250 acres of land bank in and around Delhi. They also had some land acquisition claims against the state governments involved another Rs 200 crore or so. I had occasion to speak with numerous HNI investors and certain investment bankers, all of whom voiced different concerns on a stock that quoted at Rs 20. I also had a chance to meet with the company promoters and the management, which had a clear focus-sell all that was baggage and not core, build only Residential Real Estate. A lot of transactions were undertaken to let go of warehousing and logistics facilities, the Manesar project was completed and delivered. The earlier lenders IndiaBulls and YesBank, both troubled institutions were given the go by and Bain Capital came in to replace the debt. That process removed troubled and troublesome bankers leaving the management to undertake new Residential projects. Over this period, TARC marquee Tripundara was launched and was a sell-out. What was launched at Rs 15,000 psft now quotes at Rs 28,000 psft. Then Kailasa 1.0 was launched in Central Delhi. On the anvil are Kailasa 2.0 and Ishva in Gurgaon. In my personal opinion, the GDV under TARC should be roughly Rs 14000 crore. Additionally, nature helped their cause. Covid and WFH made people think of living spaces and nuclear homes closer to work if not entirely WFH. Land became a much sought after commodity, with Gurgaon land alone moving up from Rs 60,000 per sq yard to the present Rs 225,000 per sq yard. The 250 acre land bank under Tarc is now worth Rs 5000 crore, slightly lower than it's current market cap. In addition, there are three projects under varying stages of construction which barely skim the land bank of the company. In it's second refinancing, TARC is seeking to raise Rs 750 crore and pre-pay Bain's debt. What will be subsequently raised will only be identifiable project finance for three impending projects. Here my feeling is that TARC will not need very large sums of money, because owned land is being developed and normally pre-booking amounts of 20-30 per cent are sufficient to undertake the construction work. The next 4-5 years will see atleast one project of TARC getting completed, cash flows generated and the capital structure will keep getting stronger. Revenue and profitability will become easier to forecast and sustain, making a very renewable earnings model in place. This is how some numbers will look: (In Crores) FY25 FY26 FY27
Pre-Sales 5000 7000 9000 Collection 2200 4500 6700 Outflow 1150 1650 2800 Net Surplus 1050 2850 3900 Pipeline 8000 8500 8500 The company has experience centers for each of their projects before launch at their site. An experience Centre costs about 15crores which is extremely tastefully made with the top-notch technology and equipment. This also includes a Model Apartment and a material display used for the infrastructure. This additional expense enables them to charge about 1000-1500 per square feet additional (150 crore for a project like Ishva and 200 for Kailasa). It also helps them to make more direct sales and bypass channel partners which saves them an additional 3% on those sales. The company can generate cumulative surplus of 7800 crores by FY27 end. New project launches and their pre-sales need to be tracked closely. The company has a good potential to deliver once the ongoing 3 projects are successfully handed over. It is a brand in the making. -- Kindly email stock reports at STOCKRESEARCHER@googlegroups.com For sharing knowledge -- NIFTYVIEWS.COM NOW A FREE OPEN SOURCE WEBSITE. http://www.niftyviews.com/ Disclaimer :- "The opinions expressed by the members on this board are based on their individual experience and perceptions and to share information with other members with the best of intentions to help fellow members in investment decisions as equity investment is a risky venture.The administrator of www.Niftyviews.com just provide a platform for the authors to express their opinion and take no guarantee for the genuineness of the same."ANY member of this forum doesnt prepare or publish any research report; or ii. provide research report; or iii. make 'buy/sell/hold' recommendation; or iv. give price target; --- You received this message because you are subscribed to the Google Groups "Niftyviews.com" group. To unsubscribe from this group and stop receiving emails from it, send an email to stockresearcher+unsubscr...@googlegroups.com. To view this discussion on the web, visit https://groups.google.com/d/msgid/stockresearcher/CAHgtNZxW6bYbd5Qyx7ooFbZd1OJr15A9EHJnCSZD2cmawG1ueA%40mail.gmail.com.
