GANESH HOUSING

THE RISE OF BHUMIPUTRA
Ganesh Housing-The Rise Of The Bumiputras

Ahmedabad based Ganesh Housing sits upon 615 acres of City based land, with plans to deliver built up area in excess of 9 mn sqft per annum by the year 2014. At Rs 29 lakh per acre, Ganesh Housing is the most under-valued stock in the Indian Real Estate space. Colossal investments that exceed Rs 5 lakh crore planned for Gujarat would mean a massive shift in demography for key cities of Gujarat resulting into substantially higher demand for Residential and Commercial Real Estate space. Surprisingly public ownership is a mere 9 per cent in the company Equity.

The word "Bumiputra" means the "Sons Of The Soil" in the Indonesian language "Bahasa". Hailing from Ahmedabad, Govindbhai Patel and his 37 year old son Shekhar Patel-promoters of Ganesh Housing are doing to the Real Estate space what other Gujarati industrialists have done to the manufacturing space.

For the year ending March 2008, Ganesh Housing reported Revenues of Rs 157 crore with after tax profits of Rs 108 crore. This works out to an EPS of Rs 32, and a PE of 1.5. Considering that Ganesh paid out a dividend of Rs 4.50 per share the stock offers a dividend yield of roughly 10 per cent. Ganesh Housing had a Book Value of Rs 128 per share with a Debt Equity ratio of 0.19 as of March 2008. At today's CMP the company carries a market cap and an enterprise value of a mere Rs 180 crore, which seems like an under-valuation and possibly builds into the current stock price all the prevailing negatives.

Unlike most other Real Estate developers in India, Ganesh did not join the rush to build up land bank in the CY07. Instead it selectively picked up parcels of land in Ambavadi, SG Road, Thaltej, Ognaz, Godhani, Adalaj, Sola and Paldi concenterating its focus on the City of Ahmedabad and the unraveling growth potential. Total Land Holdings now exceed 615 Acres, all located within Ahmedabad, with the possibility of another 400 acres coming in should Ganesh Plantations get merged with Ganesh Housing. Investment in Fixed Assets was just Rs 43 crore, with close to Rs 190 crore being put into Inventories and Advances implying activity of Building Real Estate rather than the acquisition of Land.

Two Residential projects Mahalaya and Shangri La will be completed in FY09, alongside one Mall. It is the future that seems more exciting.

Ahmedabad-The Premier Investment Destination

Over the next decade Ahmedabad is likely to emerge as the premier investment destination in India. At the Vibrant Gujarat summit 2007, Industrialists from across the World pledged Rs 460,000 crore as Investments dedicated to Gujarat.

The State Government is doing its best in pulling in these investments. For instance the Indo-Japanese Dedicated Freight Corridor that links Delhi with Bombay will have about 40 per cent of its stretch passing through Gujarat. A Dedicated Delhi-Bombay Industrial corridor stretching 150 kms on either side of the DFC will be developed for setting up new industrial units that will involve an amount of $ 15 bn.

Ahmedabad, the 7th largest city in the country will see increased focus with the building up of the Rs 33,000 crore Gujarat International Finance and Technology City. Alongside which would come up the Sabarmati Water Front Development, that would involve paving the 11.5 km stretch of the Sabarmati river that passes through the City, retaining fresh water in Sabarmati for use all around the year and commercial real estate development on either side of the river.

The development of the Dholera port will give Ahmedabad city the port status in addition to hosting an International Airport. A 25000 acre Special Economic Zone is proposed to be built between Ahmedabad and Dholera, which along with Kandla and Pipavav will handle close to 40 per cent of the cargo traffic emanating from the country.

This massive development with the core centre in Ahmedabad would not only mean the creation of millions of jobs in Gujarat, but an unforeseen migration of civilians to the twin cities of Gandhinagar and Ahmedabad. This would mean creation of a huge number of Residential Apartments, Villas and Gated Complexes alongside dedicated Malls, a job to which Ganesh Housing is particularly attuned.

THE COMPANY HAS APPROVED A BUYBACK AT RS.101. BUY AT CURRENT MARKET PRICE OF 62.



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