maybe to hold prices so that no one sells at 7500 and sets new benchmarks.

Originally posted by deveshkayal Originally posted by xbox  If I have to take exposure to this sector, i will prefer HDIL for its presence in Mumbai but then the stock cannot be an exception when the whole sector falls. The other day i read in TOI that a builder is buying existing flats at Rs.22,000/sq.ft in Boriwali when the prevailing rates are around Rs.7000/sq.ft.

Since I happen to be born and brought up in Borivli, a few points:  the property was sold at Rs 22,000 sq  ft because the building is located on prime  area on the main road. Building a multiplex would provide a huge jump in revenue for the builder.

Quite a few such deals have collapsed after media reported it. Nothing stops the residents of the buildings nearby from offering their own buildings for Rs 15,000 or Rs 12,000 a sq ft.  In fact secretaries of a number of housing societies have been sending feelers to construction companies to have their properties re-developed. Very few actual plans get converted on the ground.

A few entities like Reliance are using front agencies to buy prime properties for the retail ventures.

Regarding HDIL, the TDR rates in Mumbai have collapsed in the past week - from Rs 3500 to Rs 1400 after Vilasrao Deshmukh govt ordered all slums being redeveloped to increase area of new flats by 20 per cent.

HDIL will take a big hit as a result of Deshmukh's order. The company is redeveloping slums on airport land. On the one hand HDIL will have to spend a huge bomb to build bigger houses. It hoped to earn by putting up buildings northwards from the airport from the TDR it earned from the airport project.

Now due to oversupply, TDR value has crashed. Already existing constructions are having their prices cut. Soon the newer buildings coming up in six months will be even cheaper.

We saw this in 1994-95 when the Shiv Sena-BJP government started the slum redevelopment programme. As prices crashed, the programme failed and builders who amassed TDRs initially had to take a beating.



Edited by shivkumar - 15/Apr/2008 at 2:22pm

Originally posted by vijayM Originally posted by basant Never take growth at such fancy figures. I have mentioned this before that growth in excess of RoE is a mathematical impossibility subject to some caveats. Punj looks attractive but it is more of a 30%- 40% company.   BASANT JI,   With this in mind, PEG=89/40 = 2.23 (over valued). This would also mean a proj eps of only 4.7 by mar09 whereas consensuc is >17. CONFUSING   vijayM

Punj will earn around 13rs EPS for 08.


Edited by kanagala - 15/Apr/2008 at 9:59pm