Indian Property

7/31/2019 Indian Property

1/17www.morganmarkets.

Asia Pacific Equity Research13 January 2012

India PropertyOutlook 2012: Markers for a recovery

Real Estate

Saurabh KumarAC

(91-22) 6157-3590

[email protected]

Gunjan Prithyani

(91-22) 6157-3593

[email protected]

J.P. Morgan India Private Limited

See page 13 for analyst certification and important disclosures, including non-US analyst disclosures.J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware ththe firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a singfactor in making their investment decision.

Property stocks in their limited trading history in India have reacted tovolumes and not pricing. With physical prices at peak and stocks near

Lehman valuation lows, we see a potential for this anomaly to reverse.Affordability calculations show that if mortgage rates come down by50bps and prices by 15%, mortgage payment/income levels will go back to

2009 (recovery) levels across markets, thus improving volumes. We see

both of these as plausible events unfolding through this year. However, as

history shows, its best to wait for volumes to recover on an anecdotalbasis first and then buy stocks later, rather than guessing it in advance.We move into CY 12 with DLF, Phoenix and Prestige as our top picks.

Volumes returning Or are we just reading in too much? Of late price

competitive launches (Prestige Tranquility, DLF Bangalore, SunteckGoregaon, Airoli) seem to have garnered good offtake. A broad basedcorrection isnt underway yet though in overheated micro markets (esp.Mumbai) pricing has taken a hit. Given repayment overhang & growthhunger, we think developers are slowly adopting to a more pragmaticapproach. For ready-to-move in inventory, we see limited pricing downsidegiven constrained supply. However, we think new launched inventory needsto correct by 15-20% to entice end users/investors from a risk rewardperspective.

Key market calls for 2012: We see Mumbai as a potential dark horsegiven pent up demand building through last 14 months. Notification of newbuilding code norms and price discounting (which is underway) combined

with rate cuts could lead to improvement in volumes from a low base. Weexpect Bangalore will continue with its good run though growth rates maymoderate at the margin. NCR, however, may be sluggish given bunching upof large deliveries which might lead to action shifting to the secondarymarket. Office demand, in our view, is likely to be subdued, as thatsegment lags macro recovery. Our outlook for retail malls remainsconstructive as seen in occupancies of newly completed properties thoughrentals might not be able to move up meaningfully.

Key stocks for CY12: We continue to stick to our framework of pickingstocks with (1) Low level of associated regulatory/political risks, (2) Abilityto raise financing in a constrained market, and (3) Prime land holdingscoupled with (4) Reasonable valuations. On this framework, DLF (debt

reduction)/ Phoenix (asset stabilization) and Prestige (strong presales)come out well and are our top picks. We believe IBREL is cheap butneeds confidence on group to improve which may take time. HDIL is on ourwatch list as a candidate for potential maximum improvement infundamentals, as traction can build up meaningfully in a short period of timearound the airport project and debt repayment issues in FY13.

Figure 1: Property Price Index vs. BSERealty performance- A stark divergen

Source: Bloomberg, C&W

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100

150

Property Price Index BSE Realty


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Asia Pacific Equity Research

13 January 2012Saurabh Kumar(91-22) [email protected]

Table of ContentsKey stock picks.......................................................................................................3

Then vs. now A brief comparison vs. 2008...........................................................4

Property price cuts of 15% required to bring affordability back to FY09 levels.....5

Key market calls .....................................................................................................6

Office lags macro recovery; 2012 likely to remain muted.....................................8

Retail performance in line with trend.......................................................................8

Ability to manage cash flows remains the key..........................................................9

Deliveries are getting bunched up in 2012/13 which may keep pre launch andsecondary pricing in check ............. ............. ............. ............. ............. .............. .......9

Valuations cheap but stock prices lack catalysts. Buy backs and promoter buying

have happened in select names...........................................................................113QFY12 will lead to higher performance divergence..............................................12


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Key stock picks

In the current backdrop, our preference is for companies that offer high absolute

valuation upside with lower concomitant regulatory/credit risks. We rate the stockson four parameters viz. Valuations (current & relative to GFC), Exposure toregulatory/ political risks, ability to withstand a credit crunch (given the experienceof 2008, past track record and current cash flows) and visible share price catalysts.Our risk reward framework here places an equal emphasis on risks (regulation /credit) relative to reward (valuations / catalysts).

Within this framework, DLF, PEPL and Phoenix emerge as our top picks. Theseare companies which, we believe, offer the best risk reward balance with near termshare price catalysts, prime on book assets, high annuity streams and where we donot see any stress on credit profile.

a) DLF/ Debt Reduction- Progress on debt reduction driven by non core asset

sales remains the key stock catalyst. Recent announcements point to a

decent traction on the same with closure of Rs20B worth of transactions

over the last 6 months. Progress on sale of Aman resorts, albeit delayed,

remains the key to watch out for. Current valuations at 1.2x FY13E P/B arealso accommodative, in our view.

b) Prestige Estates/ Improving pre sales and rent growth. Operating trends

for the company continue to remain solid given market leadership position

in Bangalore. Debt levels for the company are relatively low as well.

Operationally the company continues to deliver fairly strong results and ison track to achieve our stabilized cash flow of Rs 6.3B in the next 2 years.

c) Phoenix Only listed retail real estate play. With the opening of 3 market

cities, the company has emerged as the largest retail landlord in the country.Response to the recent mall launches has been encouraging and overall the

company seems to be on track to achieve Rs3B rental income by FY13 end.Relaxation of FDI in retail could further boost sentiment.

Table 1: India Property - Relative ranking (top 3 marked out on each parameter)

CompaniesOverall

rank

Ability towithstand

credit stressRelative

valuationsStock

catalystsRegulatory

risksPhoenix 1 2 10 2 1DLF 2 4 5 1 7IBREL 3 6 1 3 8PEPL 4 7 7 4 1OBER 5 1 7 5 7Sobha 6 9 6 6 1HDIL 7 5 3 7 8Unitech 8 8 2 8 8JPIN 8 3 4 11 8Indian hotels 10 10 9 10 1GPL 11 11 11 9 1

Source: Company, Bloomberg, J.P. Morgan estimates.


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Then vs. now A brief comparison vs. 2008

Property stocks in their limited trading history in India have reacted almost

exclusively to volumes and not pricing. With physical prices at peak and stocks nearLehman lows, we see a potential for this anomaly to reverse. Affordability

calculations show that if mortgage rates come down by 50bps and prices by 15%,

mortgage payment/income levels will go back to 2009 (recovery) levels across

markets thus improving volumes. We see both of these as plausible events unfolding

through this year. However, as history shows, its best to wait for volumes to recover

on an anecdotal basis first and then buy stocks rather than guessing it in advance.

Figure 2: India Property Price Index vs. BSE Realty performance

Source: Bloomberg, C&W, J.P. Morgan. Both index rebased to 100 as at Mar-09

The current state of India physical property markets gives a sense of dj-vu (similar

to 2008) with uncertain macro, deteriorating affordability and high prices adversely

impacting volume trends and sector share price performance. The sector, in general,

has now traded back to Lehman levels or even lower in terms of valuations. While

funding environment has been tight for the sector, the situation isnt all that bad as in

the 2008 downturn. Most companies albeit are looking to sell down non core assets

and downsize landholding to bring down the overall debt levels.

Drawing a parallel to 2009, sector revival hereon would hinge on a combination

of:

a) Decline in mortgage rates- Policy rates seem to have peaked with RBI

guiding to a reversal in monetary policy cycle. Major Banks/HFCs are

offering fixed rate schemes for initial 3-5 years and few HFCs have also

started offering discounts of upto 25bps on floating mortgage rates.

b) Lower unit sizes in new launches thereby reducing the overall ticket size.One of the leading developers, Hiranandani, has recently announced 1BHK

apartments in its township in Thane. We expect others to follow the suit.

c) Sharp cut in property pricing Yet to see any meaningful price cuts.

Of the above 3 conditions, there seems to be some visibility on two conditions i.e.

peaking of mortgage rate and reduced sizes in new launches. While we have not seen

meaningful property price cuts as yet, some initial signs of price discounting have

come through in overheated markets (EMI subvention scheme in Mumbai/NCR etc).

While this implies that some price correction is imminent, the timing and extent may

be hard to call. Any sharp cut in property prices (10-15%), as and when it happens,

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Mar-09 Jun-09 Sep-09 Dec -09 Mar-10 Jun-10 Sep-10 Dec-10 Mar11 J un 11 Sep 11

Property Price Index BSE Realty


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would ease affordability concern over 2H. This should trigger physical volume

recovery and shortly stock price recovery, in our view.

Property price cuts of 15% required to bring affordabilityback to FY09 levels

If developers take meaningful price cuts (10-15%) , we estimate affordability

(EMI/Monthly Income) should come down from current 45-50% levels to

comfortable 30%/40% in NCR/Mumbai respectively, thereby bringing it back to

2009 (recovery) levels.

In our calculations below, we are assuming prices to drop by 5-15% from peak

levels, mortgage rates coming off by 50bps and incomes remaining largely stable

Y/Y. Improved affordability should in turn aid a strong revival in residential

absorption trends, which have been fairly muted over the past 6 months in keymarkets like Mumbai/NCR.

Figure 3: Mumbai Affordability- EMI/Monthly Income (assuming mortgage rate decline of 50bpsand price cut of 15%)

Source: Bloomberg, J.P. Morgan

Figure 4: NCR Affordability (assuming mortgage rate decline of50bps and price cut of 15%)

Source: C&W, Bloomberg, J.P. Morgan

Figure 5: Bangalore Affordability (assuming mortgage rate decline of50bps and price cut of 5%)

Source: C&W, Bloomberg, J.P. Morgan

35%

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35%

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55%

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65%

70%

Affordability metrics to start

improving over 2H driven by

decline in mortgage rates and

lower selling prices/unit sizes


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Figure 6: HDFC Mortgage rates (floating) vs. benchmark rates

Source: Bloomberg

Key market callsResidential markets in Mumbai have been witnessing sluggish trends over the past

12 months, which has led to significant pent up demand. Current absorption run rate

in Mumbai is close to bottom seen in 2008 downcycle and hence could potentially

bounce back sharply, if meaningful price cuts start coming through in new launches.

Regulatory environment in Mumbai has started to improve with notification of new

FSI norms in the city and approvals starting to come through at the margin. This

should aid launch activity, which was at a standstill over the last year.

Bangalore, in our view, should continue to witness steady volumes trends on the

back of planned affordable launches and decent salary/hiring trends in IT/ITeS

industry despite macro headwinds. Prices in the city havent appreciated

meaningfully either thereby keeping the affordability under check.

Gurgaon could be a potential laggard in 2012 as a large number of deliveries

coincide with sluggish demand trends. This could result in oversupply issues and

keeping the pricing under check. According to Prop Equity, Gurgaon will witness

delivery of ~32000 units, which is more than double of 2011 completions.

Figure 7: Mumbai suburbs Residential absorption close to 2008 lows

Source: Prop Equity, J.P Morgan

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Absorption (units) Mean levels

Mortgage rates seem to have

peaked with banks/HFCsoffering 25bps discount to

floating rates to entice

customers even as pressures on

cost of funding remain.

Volumes in Mumbai have been

sluggish for the past 12 months.

Current absorption run rate in

Mumbai is close to bottom seen

in 2008 down cycle.


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Figure 8: Gurgaon- Residential absorption near mean levels

Source: Prop Equity

Figure 9: Bangalore Residential absorption trends remain stable

Source: Prop Equity

Figure 10: Gurgaon Residential supply trends (units)

Source: Prop Equity

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2008 2009 2010 2011 2012 2013 2014 2015

Supply (units)

Absorption trends in Gurgaon

remain healthy. However,demand has been moderating

over the last few months, after

touching record high levels early

last year.

Bangalore continues to witness

healthy trends on the back of

encouraging response to

affordable launches.

Gurgaon is expected to witness

delivery of ~32000units, which is

more than double of 2011

completions.


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Office lags macro recovery; 2012 likely to remain muted

Office leasing, after witnessing record levels in 1HCY11, has started to slow down

over the last 2Qs due to uncertain macro weighing down on corporate expansionplans. Office demand revival typically lags macro economic recovery and hence isnt

likely to do well in 2012, in our view.

Even while rents havent recovered post 2008 downturn, they are unlikely to improve

as supply outstrips absorption. Rentals in few prime locations in Bangalore (CBD),

Mumbai (BKC) and Gurgaon albeit may remain firm given low vacancy levels.

Figure 11: India Office Absorption Trends (msf)

Source: DTZ

Retail performance in line with trend

CY11 marked the beginning of strong revival for retail leasing with new malls being

launched at high occupancy levels and decent pre-leasing witnessed across the

upcoming malls. Retail absorption at 10 msf for CY11 more than doubled ascompared to 2010. We expect the buoyancy in the retail segment to sustain through

2012, given the strong consumption trends across key metros and lack of quality

retail mall supply.

CY11 and CY12 are big years in terms of new project completions. Most of these

recently completed malls or upcoming projects have substantial lease commitments

in place. Further, any clarity on potential FDI relaxation should benefit the retail

developers (DLF, Phoenix, Raheja). Retail rents have started to appreciate over the

last 2Qs and are likely to remain firm given strong absorption trends.

Figure 12: Pan India Retail Demand Supply Trends

Source: JLL REIS

7.2 6.8 7.7

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Absorption (msf) Supply (msf)

Macro uncertainty has started to

weigh on corporate expansion

plans thereby adverselyimpacting office space demand.

Office leasing, after witnessing

record levels in 1HCY11, has

been slowing over the last 2Qs.

Retail segment has been

witnessing strong leasing overthe last year with new malls

opening at high occupancies.

Outlook CY12 remains buoyant

on the back of large pre

commitments in place.


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Ability to manage cash flows remains the key

Debt reduction is likely to remain the key focus area for most companies in 2012.

This, we believe, will be driven by combination of land/asset sales and improvementin operational cash flows. Number of companies have embarked on an asset sale

program and have seen decent momentum on the same (albeit after delays) in the

recent past.

Improved traction herein should help resolve the cash flow/refinance issues of the

companies and aid sentiment for stock prices. Further, expected reversal in monetary

policy actions should ease credit availability for the sector as overall liquidity

conditions improve over 2H.

Table 2: Asset Sale program by key listed companies

DLF Company has seen decent traction on its asset sales over the recent past. Key transactions concluded over Dec-Q include - sale ofNoida IT Park to IDFC, Pune IT Park to Blackstone and land sale in Gurgaon to M3M. Aman Resorts sale, however, seems to havebeen delayed. This should help company bring down debt levels.

HDIL FSI sales done in Goregaon, Virar Vasai. Further, the company is looking to monetize its Kochi and commercial assets (in AndheriW etc). Progress herein would ease refinance issues of the company.

GPL Company recent sold 49% stake in Gurgaon project to Sun Appollo and is evaluating stake sales to PE players in other projects aswell.

Source: Company reports, J.P. Morgan

Deliveries are getting bunched up in 2012/13 which may

keep pre launch and secondary pricing in check

Execution will be the key differentiator among developers in 2012. Delivery

commitments of most developers in 2012 are substantial as launches done in 2009

(post 2008 downturn) complete 3 years of construction cycle. Gurgaon and South

Indian markets of Bangalore/Chennai are likely to witness record number of

deliveries, more than double of those seen in 2010.

Among key developers, DLF is guiding to deliveries of 12msf+ primarily coming

from completions in Gurgaon and Chennai. Unitech has 7 msf of projects in finishing

stages (primarily pre FY09 projects), which should also get delivered in 1HCY12.

Deliveries commitments for Bangalore developers viz Sobha/PEPL/Puravankara also

are fairly sizeable in 2012. These commitments, if managed well, would be an

important milestone for execution abilities.


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Figure 13: Gurgaon Residential supply trends (units)

Source: Prop Equity

Figure 14: Mumbai Residential supply trends (units)

Source: Prop Equity

Figure 15: Bangalore Residential supply trends (units)

Source: Prop Equity

Figure 16: Bangalore Residential supply trends (units)

Source: Prop Equity

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Valuations cheap but stock prices lack catalysts. Buy backsand promoter buying have happened in select names.

Indian property developer stock prices have de-rated almost 70% Y/Y due to aconfluence of tightening credit, deteriorating macro and rising regulatory/politicalrisks. The sector, in general, has now traded back to Lehman levels or even lower interms of valuations. This even as balance sheets and physical market volumes are ingeneral in a much better shape vs. GFC levels

Given the sharp fall in share prices and cheap valuations, few companies have

announced buy back plans. Insider activity (promoter buying) has also been fairly

prominent in few names over the last six months. IBREL and Ansal Housing have

announced share buy back plans; while there has been promoter buying across a

number of mid cap names (Sobha/Parsvnath, JPIN etc).

Table 3: India Property - Valuation Summary

MarketCap P/E EPS growth P/B ROE

US$MM FY12E FY13E FY 12E FY13E FY12E FY13E FY12E FY13EDLF 6,523 20.5 18.7 -3% 9% 1.3 1.2 6% 7%Unitech 1,247 8.4 8.1 -2% 3% 0.5 0.5 5% 6%Jaypee 1,104 4.4 4.4 -13% 1% 1.0 0.8 24% 20%Oberoi 1,478 14.8 11.7 -3% 26% 1.9 1.7 14% 15%Godrej Properties 873 37.4 22.4 -11% 67% 4.4 3.8 12% 18%HDIL 584 3.5 2.9 1% 19% 0.3 0.3 9% 9%IBREL 504 9.3 6.5 63% 43% 0.2 0.2 3% 3%Phoenix 556 25.3 18.4 30% 37% 1.6 1.4 6% 8%Prestige 477 15.8 7.7 -12% 105% 1.1 0.9 7% 13%Sobha 435 12.6 8.9 -4% 41% 1.0 0.9 9% 11%Indian Hotels 923 56.5 19.7 -194% 187% 1.6 1.5 3% 8%

Source: Bloomberg, J.P. Morgan estimates, Pricing as of Jan 12, 2012 close.

Figure 17: Sector Performance chart

Source: Bloomberg, J.P. Morgan

500

1,000

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5,000 Policy breather-

RBI permitted real estateloan restructuring comes

as a breather.

Reduction in bank

provisioing and risk weightrequirements for loans to

real estate

Hom e loan rate cuts

accounced.

Volumes pick up in the massresidential launces (at 20-25%

discunt to peak).

Price showing signs of

stabilization and even start toincrease in Mumbai/NCR

Equity raisings startLeverage concerns allay

Provisioningnorms for

commercial realestate raised to1% from 0.4%

Developer financing completelyhalts. Incremental sales at a

standstill. Asset liability mismatchon balance sheet worsens

Signs of revival in office market

with lease enquiries picking up.

RBI disallowed

resttructuring of l oans

Introduction of servicetax on residential sales

Withdrwal of tease rhome loan

schemes

Residential volumes start to taper off

esp in Mumbai as prices increase.

Pick up in transactions in land market

Incidence of service tax reduced

RBI increased riskweights on home loans

>Rs7.5M and provisitionfor teaser home loans

LTV's on housing loanscapped at 80%

Home loan rate hikesstart coming through

Sharp stock specific

declines for thecompanies whose names

emerged in the 2Gtelecom scam bribe

CCI ruling against

DLF impoisngpenalty for

execu ting one sidedagreement

New FSInorms

proposed for

Mumbai

Scrappingof car park

FSI policyin Mumbiai

RBI signals

a pause ininterest rate

hikes onslowinggrowth

LIC bribe

for loanscandal


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3QFY12 will lead to higher performance divergence

3Q results are likely to be muted for NCR and Mumbai-based developers given

sluggish demand trends, subdued launch activity and higher finance costs. Evenwhile Bangalore developers have been reporting impressive operating numbers

(record high pre sales, launches etc), reported financial numbers are unlikely to

surprise positively as new launches will not start contributing to the financials

immediately (given POCM accounting).

We expect DLF and Sobha to report some Q/Q debt reduction on the back of non

core asset sales (for DLF) and improved operational cash flows (for Sobha). While

there have been consistent disappointments on this front in the recent past, we

believe any meaningful headline debt reduction in 3Q would be key to watch out for

and would be taken positively by the markets.

GPL, on the other hand, would report higher debt levels (on the back of conclusion

of Jet BKC deal (Dec-Q Net D/E at 1.7xE). We expect reported PAT albeit to be

higher Y/Y and Q/Q on the back of recent PE stake sale (other income) and

improved contribution from ongoing projects.

Table 4: India Developers - 3Q results expectations

Revenues (Rs MM) EBITDA (Rs MM) PAT (Rs MM)Q3FY12E Q2FY12 Q3FY11 Q3FY12E Q2FY12 Q3FY11 Q3FY12E Q2FY12 Q3FY11

DLF 24,371 25,324 24,799 11,075 11,730 11,780 3,152 3,724 4,657Unitech 6,091 6,261 6,598 1,703 1,381 2,088 1,132 925 1,114HDIL 4,625 4,407 4,554 2,266 2,321 2,665 1,400 1,486 2,519Indiabulls 4,996 3,320 3,997 1,499 1,026 1,229 744 394 766Oberoi 1,639 2,226 3,987 885 1,155 2,469 848 1,114 2,052

Prestige 1,614 1,281 3,636 579 493 935 309 263 544Godrej Properties 1,610 1,306 482 386 202 65 361 101 177Sobha 3,690 3,294 3,629 846 755 820 454 409 490Phoenix 484 474 451 348 333 327 234 239 238Jaypee Infratech 6,650 7,158 7,554 3,458 3,933 4,742 2,722 3,106 3,789

Source: Company reports and J.P. Morgan estimates.


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Companies Recommended in This Report (all prices in this report as of market close on 12 January 2012)DLF Limited (DLF.BO/Rs191.85/Neutral), Housing Development and Infrastructure Ltd. (HDIL)

(HDIL.BO/Rs70.30/Neutral), Indiabulls Real Estate (INRL.BO/Rs56.55/Overweight), Phoenix Mills(PHOE.BO/Rs193.05/Overweight), Prestige Estate Projects Limited (PREG.BO/Rs72.65/Overweight)

Analyst Certification: The research analyst(s) denoted by an AC on the cover of this report certifies (or, where multiple researchanalysts are primarily responsible for this report, the research analyst denoted by an AC on the cover or within the documentindividually certifies, with respect to each security or issuer that the research analyst covers in this research) that: (1) all of the viewsexpressed in this report accurately reflect his or her personal views about any and all of the subject securities or issuers; and (2) no part ofany of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or viewsexpressed by the research analyst(s) in this report.

Important Disclosures

Beneficial Ownership (1% or more): J.P. Morgan beneficially owns 1% or more of a class of common equity securities of HousingDevelopment and Infrastructure Ltd. (HDIL), Indiabulls Real Estate.

Client: J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as clients: Prestige Estate ProjectsLimited, Housing Development and Infrastructure Ltd. (HDIL).

Company-Specific Disclosures: Important disclosures, including price charts, are available for compendium reports and all J.P. Morgancovered companies by visiting https://mm.jpmorgan.com/disclosures/company , calling 1-800-477-0406, or [email protected] with your request.

Date Rating Share Price(Rs)

Price Target(Rs)

01-Aug-07 OW 611.70 725.00

01-Nov-07 OW 927.95 1050.00

01-Apr-08 OW 627.00 810.00

18-Jun-08 OW 492.35 750.00

21-Jul-08 OW 463.40 518.00

12-Nov-08 OW 244.60 375.00

03-Feb-09 OW 132.90 200.00

04-May-09 OW 230.90 260.00

03-Aug-09 OW 396.15 440.00

16-May-10 OW 298.55 375.00

26-May-11 OW 210.05 280.00

03-Aug-11 OW 222.05 255.00

13-Nov-11 N 227.50 240.00

0

339

678

1,017

1,356

1,695

2,034

Price(Rs)

Jul

07

Apr

08

Jan

09

Oct

09

Jul

10

Apr

11

Jan

12

DLF Limited (DLF.BO) Price Chart

OW Rs518 OW Rs260

OW Rs1,050 OW Rs750 OW Rs200 OW Rs255

W Rs725 OW Rs810 OW Rs375 OW Rs440 OW Rs375 OW Rs280 N Rs240

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.

Initiated coverage Aug 01, 2007.
https://mm.jpmorgan.com/disclosures/companyhttps://mm.jpmorgan.com/disclosures/companymailto:[email protected]://mm.jpmorgan.com/disclosures/companymailto:[email protected]


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Price Target(Rs)

17-Jan-11 OW 135.35 180.00

18-May-11 OW 147.45 165.00

03-Nov-11 OW 100.25 140.00


Price Target(Rs)

30-Nov-10 OW 206.10 280.00

29-Jun-11 OW 192.00 260.00

15-Nov-11 OW 207.70 250.00

0

56

112

168

224

280

336

Price(Rs)

Oct

10

Jan

11

May

11

Aug

11

Dec

11

Prestige Estate Projects Limited (PREG.BO) Price Chart

OW Rs180 OW Rs165 OW Rs140


Initiated coverage Jan 17, 2011.

0

156

312

468

624

780

936

Price(Rs)

Nov

07

Aug

08

May

09

Feb

10

Nov

10

Aug

11

Phoenix Mills (PHOE.BO) Price Chart

OW Rs280 OW Rs260OW Rs250


Initiated coverage Nov 30, 2010.


15/17

15




Price Target(Rs)

18-Jun-08 OW 471.45 855.00

21-Jul-08 OW 335.49 545.00

02-Nov-08 OW 144.25 230.00

29-Jan-09 N 96.20 100.00

25-May-09 N 293.60 290.00

20-Jul-09 OW 234.10 315.00

30-Jul-09 OW 267.85 330.00

20-Jan-10 OW 386.25 440.00

30-Mar-10 OW 289.55 350.00

11-Nov-10 OW 254.30 330.00

13-Feb-11 N 147.35 160.00

14-Nov-11 N 85.50 105.00


Price Target(Rs)

29-May-09 UW 225.55 200.00

23-Jul-09 N 222.00 242.00

09-Oct-09 N 293.65 295.00

10-Feb-10 OW 167.35 273.00

19-Jan-11 OW 118.40 230.00

02-May-11 OW 124.95 205.00

The chart(s) show J.P. Morgan's continuing coverage of the stocks; the current analysts may or may not have covered it over the entireperiod.J.P. Morgan ratings: OW = Overweight, N= Neutral, UW = Underweight

Explanation of Equity Research Ratings and Analyst(s) Coverage Universe:J.P. Morgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform theaverage total return of the stocks in the analyst's (or the analyst's team's) coverage universe.] Neutral [Over the next six to twelve months,we expect this stock will perform in line with the average total return of the stocks in the analyst's (or the analyst's team's) coverageuniverse.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of the stocksin the analyst's (or the analyst's team's) coverage universe.] In our Asia (ex-Australia) and UK small- and mid-cap equity research, eachstocks expected total return is compared to the expected total return of a benchmark country market index, not to those analystscoverage universe. If it does not appear in the Important Disclosures section of this report, the certifying analysts coverage universe can

be found on J.P. Morgans research website, www.morganmarkets.com.

Coverage Universe: Kumar, Saurabh S: Ascendas India Trust (AINT.SI), DLF Limited (DLF.BO), Housing Development andInfrastructure Ltd. (HDIL) (HDIL.BO), Indiabulls Real Estate (INRL.BO), Indian Hotels (IHTL.BO), Ishaan Real Estate Plc (ISH.L),

0

318

636

954

1,272

1,590

1,908

Price(Rs)

Jul

07

Apr

08

Jan

09

Oct

09

Jul

10

Apr

11

Jan

12

Housing Development and Infrastructure Ltd. (HDIL) (HDIL.BO) Price Chart

OW Rs330

OW Rs545 N Rs100 OW Rs315 OW Rs350 N Rs160

OW Rs855OW Rs230 N Rs290 OW Rs440 OW Rs330 N Rs105


Initiated coverage Jun 18, 2008.

0

240

480

720

960

1,200

1,440

Price(Rs)

Mar

07

Dec

07

Sep

08

Jun

09

Mar

10

Dec

10

Sep

11

Indiabulls Real Estate (INRL.BO) Price Chart

N Rs295

N Rs242

UW Rs200 OW Rs273 OW Rs230OW Rs205


Initiated coverage May 29, 2009.


16/17

16



Jaypee Infratech (JYPE.BO), LIC Housing Finance (LICHF.BO), Oberoi Realty (OEBO.BO), Prestige Estate Projects Limited(PREG.BO), Shriram Transport Finance (SRTR.BO), Unitech Ltd (UNTE.BO)

J.P. Morgan Equity Research Ratings Distribution, as of January 6, 2012

Overweight

(buy)Neutral

(hold)Underweight

(sell)

J.P. Morgan Global Equity Research Coverage 47% 42% 12%IB clients* 52% 45% 36%

JPMS Equity Research Coverage 45% 47% 8%IB clients* 72% 62% 58%

*Percentage of investment banking clients in each rating category.

For purposes only of FINRA/NYSE ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a holdrating category; and our Underweight rating falls into a sell rating category.

Equity Valuation and Risks: For valuation methodology and risks associated with covered companies or price targets for coveredcompanies, please see the most recent company-specific research report athttp://www.morganmarkets.com , contact the primary analystor your J.P. Morgan representative, or [email protected] .

Equity Analysts' Compensation: The equity research analysts responsible for the preparation of this report receive compensation basedupon various factors, including the quality and accuracy of research, client feedback, competitive factors, and overall firm revenues,which include revenues from, among other business units, Institutional Equities and Investment Banking.

Registration of non-US Analysts: Unless otherwise noted, the non-US analysts listed on the front of this report are employees of non-USaffiliates of JPMS, are not registered/qualified as research analysts under NASD/NYSE rules, may not be associated persons of JPMS,and may not be subject to FINRA Rule 2711 and NYSE Rule 472 restrictions on communications with covered companies, publicappearances, and trading securities held by a research analyst account.

Other Disclosures

J.P. Morgan ("JPM") is the global brand name for J.P. Morgan Securities LLC ("JPMS") and its affiliates worldwide. J.P. Morgan Cazenove is a marketing

name for the U.K. investment banking businesses and EMEA cash equities and equity research businesses of JPMorgan Chase & Co. and its subsidiaries.

Options related research: If the information contained herein regards options related research, such information is available only to persons who havereceived the proper option risk disclosure documents. For a copy of the Option Clearing Corporation's Characteristics and Risks of Standardized Options,

please contact your J.P. Morgan Representative or visit the OCC's website at http://www.optionsclearing.com/publications/risks/riskstoc.pdf

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17/17



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