Nomura maintains Buy on Unitech for target of Rs 112

Nomura has maintained its ‘Buy’ rating on realty company Unitech with a slightly revised price target of Rs 112 per share.

“We adjust our target price slightly to Rs 112 per share from Rs 114 per share. On the 10 million square feet (sqft) that the company has sold to date, it has begun construction on about 3.7mn sqft while the rest will be brought under construction by end 3QFY10.

This means that some projects may not reach the 20% completion threshold for revenue booking in FY10 and hence cashflows in FY10 would also get pushed back. We adjust our estimates for cashflows in FY10 and push back part of them to FY11E and FY12E, which results in the small reduction in target price. The stock trades at a 29% discount to our NAV of Rs 103 per share and hence we maintain a Buy rating,” the report said.