Unitech gains on plan to repay loans to mutual funds

Source :IIFL:Capital Market / 12:31 , Sep 17, 2010


Unitech gained 1.15% to Rs 88.25 at 12:31 IST on BSE, on reports the company will repay all the money it owes to mutual funds for the first time since 2001 after boosting revenue from homes sales.


Meanwhile, the BSE Sensex was up 180.23 points, or 0.93% at 19,597.72.


On BSE, 13.48 lakh shares were traded in the counter as against an average daily volume of 39.96 lakh shares in the past one quarter.
The stock hit a high of Rs 89.10 and a low of Rs 87.90 so far during the day. The stock had hit a 52-week high of Rs 114.90 on 17 September 2009 and a 52-week low of Rs 65.10 on 25 May 2010.


The large-cap stock had underperformed the market over the past one month till 16 September 2010, rising 1.22% compared with the Sensex's return of 7.57%. It had outperformed the market in past one quarter, gaining 24.20% as against 11.19% rise in the Sensex.


The company has an equity capital of Rs 503.57 crore. Face value per share is Rs 2.


Unitech has cut loans from mutual funds to Rs 60 crore and the company expects to repay the rest this month, Managing Director Sanjay Chandra said in an interview to a news agency.


Unitech expects high-end residential properies to account for a quarter of sales in the next couple of years from a fifth now, Chandra said. 


Unitech's average cost of debt has declined to 12%, from a peak of 14% in 2008, Chandra said. The New Delhi-based developer has switched to borrowing from state-run Indian banks that extend loans with longer maturities, Chandra said. The average tenure of its loans has risen to three years from two years during the crisis, he said.


Unitech, which had a peak debt of Rs 10900 crore in December 2008, has reduced liabilities to about Rs 6000 crore, Chandra said. Net debt levels have declined to about Rs 5200 crore, he said. Unitech will generate cash of between Rs 2200 crore and Rs 2300 crore this year after deducting interest costs, Chandra said.
Unitech's consolidated net profit rose 14% to Rs 180.04 crore on 53% surge in sales & other receipts to Rs 828.57 crore in Q1 June 2010 over Q1 June 2009.