ash7979

Hi,

I would like to discuss future of Unitech as RE company, as they are launching new projects which they are saying gonna complete in 2-3 yrs I dont think that Unitech gonna survive by that time, My reasoning for this:

1. Unitech is having very much cash crunch & Unitech is selling its own properties in delhi & around, even Unitech has sold its own office in Saket for some bank or banking institution.

2. Unitech's cash flows are so dried up that they are not able to complete their previous projects itself in gurgaon, see how their project Fesrco is almost delayed by a year or so, this clearly indicate that they dont have money to complete its old projects.

3.Its very difficult Unitech to borrow more money from the Banks or financial institutions as they already have pile of debt on their balance sheet...& thats why they have to sell their majority share in Unitech wireless to Telenor for a total cash deal to generate some cash for RE projects.

4. Unitech was one of the best RE company that used to build large & luxurious appartments & now see they have launch a project in Noida which is having around 1000-1100 area for 3BHK flats, this is very uncommon for unitech & even for NCR itself.

5. Unitech stock on stock market already has quite a beating & I think now if market hear any further bad news abt the unitech then I think Unitech will have satyam kind of end...i.e. its stock prices going down by multifold & that will make Mr chandra poorer by multi million ...

And last but not least, ppls are not buying unitech property like they used to do earlier, so I think that sums up that unitech not gonna survive in near future (3-5 years of time)....

Others members opinion on this welcome !!!

wiseman

I remember almost a year ago, I had first posted on this forum stating things like 50-80% drop and the possible bankruptcy of many RE builders. At that time most people were too shocked to agree and probably thought some mad guy.

Now, I have overcome that mad reputation - after prices of builder came down to nearly 95% lower(!). But here are my thoughts now.

I still believe that property prices have way to go downwards before stabilising and coming back up. But I don't know if any of these companies will go bankrupt and disappear from the scene. If a total fraud like Satyam could be artificially propped up and rescued, I see the same happening to others in similar boat.

Please note that the Telenor money transfer has not happened yet and Telenor is finding it difficult to raise that kind of money. So, the debt stone around DLF, Unitech and other companies remain a serious threat. Another year or two of low volume and price markets and many of these guys will become a pale shadow of their former selfs.

I believe that many of these companies will give us great opportunity at prices in single-digits - example Unitech may go down to Rs 6 per share. The RE market is sure to come back to 2008 levels sometime in the future, maybe around a decade or more later. At these levels and investment in these companies would see these companies go beyond their previous peaks. Unitech was at a high of Rs.580. If your Rs.6 investment were to go to Rs.600 in 10 years or even as short as 5 years, would you feel bad?!!! And this does not include dividends which only sweetens the deal as it is tax free in your hands.

This is one RE related type of investment I would certainly like to make. Don't buy the house. Buy the builder of the house. And make 10 times more than on the house!!!

cheers

ash7979

do u believe unitech can come up from 6 rs to 600 in 10 yrs??? I think you are dreaming too much...

but this is for sure india RE story is not gonna end now..its a cycle,now we have more supply then demand & in may be 2-3 years we will see again less supply & more demand...But at that time I dont think DLF & Unitech will still rule, maybe some other player come into the mkt, so I still believe that buying property is still more beneficial than buying the builder (off course builder's stock !!!)

rishiruskin

hi ...does anyone have any idea abt unitech sector 33 project...i,e. unitech residencies...co is saying tht they have already sold some ten towers in this....

ur comments r welcome

ogreme

I have booked a 3 bhk in unitech residencies with the rate of 3300 and in the span of 3 month rate are already gone up by Rs. 200-300. That's right I have seen the few towers sold with in a few days time. Like I inquired when tower H booking was on but with in days H and then D was sold out. The location is good and after all the name of builder always has an edge.

Venkytalks

A very old thread, but still my two bits for what its worth.

Unitech has a net worth greater than its liabilities, so of course it will survive.

I expect its shares to come down to Rs. 6 (or 10 or sone such) too, over the next six months. The recent RBI bet tightening is an early indication. Already price has dropped.

Unitech is selling at a good price in residences.

Uniworld garden was also sold out at a fantastic price. Lots of people made a killing, prices are rising now.

I expect slow rise in prices for the next 4 years, 5-10% per annum.

That is not enough for Unitech to be wildly profitable.

That I expect in 2015.

gaurav1979gupta

Folks

The Key point or Buzz World is how good is Operating Cash Flow < For any Capital intensive sector > and what is cash Conversion Cycle .

Liabilites and Assests are more suspetible of manipulation and So these terminologies does not hold much value at least in near terms of post recession hit scenerio .

Well 6 to 500 .<Well No assets class have grown unless there is a clear cut probablity of Hero or Zero and that is exactly what happend in Satyam .>

Venkytalks

Hi Gaurav. While what you say is true, a company like Unitech hit by cash crunch will just stop building and wait for better times. Unitech will not suffer, its shareholders will for a fe years. So will the buyers. When times change, Unitech will sell some land, offer a few apartments cheaper than they are worth and be back in business.

That is exactly what they did this march. They have already succeeded. If there is a 6 year depression, that is what they will do.

The promotor does not suffer. He is a RE businessman and knows his RE cycle. Only shareholders and buyers will suffer.

Satyam was a great buying opportunity at one point in its fall. Unitech was also another fantastic opportunity. I missed both buses for thinking conventional doom and gloom.

Wiser now but still not sure of the next bus.