STOCK VIEW - AJMERA REALTY

Ajmera Realty & Infra India Ltd
BSE code:513349
cmp:117

The idea of picking up a real estate stock was that we have been seeing renewed interest in the sector. Taking a call on Ajmera Realty, if I go by the land bank held by the company, I find the all the land held are fully paid, that means, nothing has to be paid on the land account.Apart from that, majority of them are under development, except for a tranche of 67 acres which the company is holding at Kanjurmarg, Mumbai. The net present value (estimated) is about Rs 3000 crore, and on that, a composite development plan of residential, commercial, shopping, multiplexes, hospitality is expected. 72 acres of land will translate into developable of about 10 million sq feet, so that is going to take place maybe in the next 6 months.They have a second project at Wadala, with about 2 million sq feet of land bank. The net present value of that is estimated at about Rs 2,000 crore. They also have presence in Bangalore and suburbs of Mumbai at Kalyan.If I take a call on these land stocks held by the company, the net present value works out to about Rs 5,000-6,000 crore while the market cap is just Rs 400 crore.Since the company does not have any debt obligations, no unpaid land, no controversy with respect to ownership or possession of land, I think they are in a superior position to take advantage of this situation. Going forward, they should be able to monetize these land assets which will reflect in the working of the company. Taking that into consideration, the share has a potential to move to about Rs 200 in the next 18 months.