SWOT Analysis

Introduction

Construction Industry is one of the most booming industries in the whole world. This industry is mainly an urban based one which is concerned with preparation as well as construction of real estate properties. Construction Industry Trends all over the world show a rise in its rate of growth. Construction industry contributes a huge chunk to the world GDP amounting to 1/10th of the same.This industry has immense potential in generating huge amount of employment. It has been found out that construction industry offers employment to around 7% of the total employed work force around the globe. Construction Industry is the largest sector in respect of consumption of energy. It consumes around 2/5th of the total consumed energy through out the world.The most significant aspect associated with the construction industry trends is increased use of the latest IT technologies for pacing up the work. Cutting edge technology is being adopted by world's one of the biggest industries for leveraging purposes and is mainly being used in raising the efficiency level of engineering and designing of construction industry. It has been found out that the paper oriented format of operation in the construction industry is not at all a cost effective approach because it eats around sixteen billion US dollars in US real estate sector only. Construction Industry Trends show that the utilization of information technology has helped the industry to save a lot of fund which could be channelized in more fruitful directions.

Construction Industry in India

Today, India is the second fastest growing economy in the world. The IndianConstruction Industry is an integral part of the economy and a conduit for a substantialpart of its development investment, is poised for growth on account of industrialization,urbanization, economic development and people's rising expectations for improvedquality of living.

In India, construction is the second largest economic activity after agriculture.Construction accounts for nearly 65 per cent of the total investment in infrastructure andis expected to be the biggest beneficiary of the surge in infrastructure investment overthe next five years. Investment in construction accounts for nearly 11 per cent of India’sGross Domestic Product (GDP). €239.68 billion is likely to be invested in theinfrastructure sector over the next five to 10 years - in power, roads, bridges, cityinfrastructure, ports, airports, telecommunications, which would provide a huge boostto the construction industry as a whole. Investment into this sector could go up to €93.36 billion by FY2010. With such bullish prospects in infrastructure, affiliated industries such as cement are on a high. Cement consumption, for the first time, is set to exceed the 150-million tonne mark. Reflecting the demand for the commodity, capacity utilisation rose to over 100 per cent to touch102 per cent in January 2007 with despatches touching 14.10 million tonnes as againstthe production of 14 million tonnes. As opportunities in the sector continue to come tothe fore, foreign direct investment has been moving upwards. The real estate andconstruction sectors received FDI of €216.53 million in the first half of the current fiscal year.

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Industry Segments

REAL ESTATE

Residential (Housing & Development) Industrial (Industrial Parks, Factories, Plants, etc.) Corporate (Office, Research Centres) Commercial (Retail: Malls, Shops, Showrooms; Hotels; etc. )

INFRASTRUCTURE

Roads Railways Urban infrastructure (improved housing, watersupply and sanitation, schools, universities, health and security, etc.) Ports Airports Power

Indian Real Estate Sector

Real Estate is a €8 bn (by revenue) Industry in India. It is projected to grow to €34 bn by2010. It has witnessed a revolution, driven by the booming economy, favorabledemographics and liberalised foreign direct investment (FDI) regime. Growing at ascorching 30 per cent, it has emerged as one of the most appealing investment areas fordomestic as well as foreign investors. The second largest employing sector in India (including construction and facilities management), real estate is linked to about 250 ancillary industries like cement, brick and steel through backward and forward linkages. Consequently, a unit increase in expenditure in this sector has a multiplier effect and the capacity to generate income as high as five times.

Government InitiativesThe Government has introduced many progressive reform measures to unlock thepotential of the sector and also meet increasing demand levels.

100 percent FDI allowed in reality projects through the automatic route. In case of integrated township, the minimum area to be developed has been brought down

to 10 hectares from 40 hectares. Urban Land (Ceiling and Regulation) Act,1976 repealed by increasingly larger number of

states enactment of Special Economic Zones Act. 51 percent FDI allowed in single brand retail outlets 100 percent in cash and carry through

the automatic route.

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Opportunities

With the economy surging ahead, the demand for all segments of the real estate sector islikely to continue to grow. The Indian real estate industry is likely to grow from €7 billion in 2005 to €58 billion in by 2015. Given the boom in residential housing, IT, ITeS, organised retail and hospitality industries, this industry is likely to see increased investment activity. Foreign directinvestment alone might see a close to six-fold jump to €19 billion over the next 10 years.Railways, Airports and Power. Projects worth €1.872 billion are coming up to developSpecial Economic Zones. India has a large and growing middle class population of 300 million people, out of which a large section is need on new houses. It is estimated that there is a nationalhousing storage of 41 million units. Retailing is becoming the boom industry withorganized retail being a market of €4.494 billion. Water supply and sanitation projectsalone offer scope for annual investment of €4.27 billion. The Ministry of Power has formulated a blueprint to provide reliable, affordable and quality power to all users by 2012. This calls for an investment of €54.67 billion in the next five years.The government of India has permitted FDI up to 100% for development of integratedtownships in India last year.

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RESEARCH METHODOLOGY

Meaning of Research

Research Methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done systematically. Research’ may be defined as “ the manipulation f things, concepts or symbols for the purpose of generalizing to extend, correct or verify knowledge, whether that Knowledge aids in the construction of theory or in the practice of an art”. Thus it is an original contribution to the existing stock of knowledge of making for its advancement Need, Scope and Objectives of the Study.

Purpose of Study

The purpose of the study is to conduct the SWOT analysis of 3 Companies in Real Estate sector i.e. DLF Ltd., Sobha Developers Ltd. and Unitech Ltd. SWOT analysis of these companies show the Strengths and Weakness of the companies in terms of Financial and Marketing and Opportunities and Threats to the companies in future. This report also helps in understanding the opportunities available to real estate companies in future.

Research design

Research design is known as framework within which the whole activity of research and methods or procedures is clearly mentioned under which the research is to conduct.

Descriptive Research: Descriptive and conclusion oriented type of research has been used in this study. Conclusive research has as its major objective the description of something usually financial and market characteristics or functions. In other words descriptive research is a research where in researcher has no control over variable. It just resents the picture which has already been studied.

DATA COLLECTION AND DATA ANLYSIS

Sources of Data Collection: - Research work was descriptive in nature. Information was collected mainly from Secondary sources. Secondary data are those data, which have already been collected by someone else which already had been passed through the statistical process. Secondary data was collected through Company’s websites, different market related websites, Annual reports of companies and their different published materials.

Tools of analysis and Presentation: - After collecting, the data was analyzed through various statistical tools and techniques. The analysis of data requires a number of closely related operations such as establishment of categories, the application of these categories to raw data through coding, tabulation and then drawing statistical inferences.

Tables: - Comparative balance sheets, profit and loss accounts and financial ratios of companies for the period 2007-2011 is formed and a proper interpretation is given.

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Factor Analysis: - It includes analysis of different qualitative attributes especially used in marketing analysis of the companies.

Techniques used for analysis

Comparative Statements: - Comparative Balance Sheets and Comparative Profit and Loss Accounts of the companies are prepared and proper analysis has been taken out of them.After analysis, a proper Interpretation of each is given.

Financial Ratios: - Financial ratios are used in the report for proper analyze of Financial statements can be evaluated. The important ratios calculated are :

Dividend Per Share Operating Profit Per Share Operating Profit Margin Gross Profit Margin Net Profit Margin Return On Capital Employed Return On Net Worth Current Ratio Quick Ratio Debt Equity Ratio

Limitations of the Study

Even though every possible effort has been made to make this report authentic, accurate and complete in itself, still number of limitations remained. Some of them limitations are mentioned as under

The research is confined to only real estate sector in Construction industry due to time constraint and does not show a pattern applicable to all the Industry.

In a rapidly changing industry, analysis on one day or in one segment can change very quickly. The environmental changes are vital to be considered in order to assimilate the findings.

Marketing analysis in the study lacks variations as Market Strategy are not disclosed by the respective companies.

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Overview

DLF has over 60 years of track record of sustained growth, customer satisfaction, and innovation. The company has 349 of planned projects with 44.9 percent of projects under construction.

DLF's primary business is development of residential, commercial and retail properties. The company has a unique business model with earnings arising from development and rentals. Its exposure across businesses, segments and geographies, mitigates any down-cycles in the market. From developing 22 major colonies in Delhi, DLF is now present across 18 states-28 cities in India.

Development BusinessThe development business of DLF includes Homes and Commercial ComplexesThe Homes business caters to 3 segments of the residential market - Super Luxury, Luxury and Premium. The product offering involves a wide range of products including condominiums, duplexes, row houses and apartments of varying sizes.

DLF is credited with introducing and pioneering the revolutionary concept of developing commercial complexes in the vicinity of residential areas. DLF has successfully launched commercial complexes and is in the process of marking its presence across various locations in India.

The development business at present has 273 msf of development potential with 35.03 msf of projects under construction.

Annuity BusinessThe annuity business consists of the rental businesses of offices and retail.With over six decades of excellence, DLF is a name synonymous with global standards, new generation workspaces and lifestyles. It has the distinction of developing commercial projects and IT parks that are at par with the best in the world. DLF has become a preferred name with many IT & ITES majors and leading Indian and International corporate giants, including GE, IBM, Microsoft, Canon, Citibank, Vertex, Hewitt, Fidelity Investments, WNS, Bank of America, Cognizant, Infosys, CSC, Symantec and Sapient, among others.

The company has land resource of 68 % for office and retail development, with 9.21% of projects under construction.

DLF has a strong management team running independent businesses, though complementing each other in cases of opportunities of mixed land use. DLF's mission is to build a world-class real estate development company with the highest standards of professionalism, ethics and customer service and to thereby contribute to and benefit from the growth of the Indian economy.

Vision Mission & Values

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DLF Vision

To contribute significantly to building the new India and become the world’s most valuable real estate company.

DLF Mission

To build world-class real-estate concepts across six business lines with the highest standards of professionalism, ethics, quality and customer service.

DLF Values Sustained efforts to enhance customer value and quality Ethical and professional service Compliance and respect for all community, environmental and legal requirements.

Financial Performance

The company reported Net Sales of INR 2916.08 crore during the fiscal year ended March 31, 201. The company’s Net Sales increases at a compounded rate of 21.51% during the period 2007-2011 with an annual increase of 29.39% over fiscal year 2010. During the fiscal year 2011, its operating profit margin was 61.03% as against an operating profit margin of 45.29% in fiscal year 2010. During the fiscal year 2011, the company registered a net profit margin of 31.37% as against a net margin of 23.87% in the fiscal year 2010.

Key Facts

Corporate Address: Shopping Mall, Third Floor, Haryana, 122002, India

Industry: Construction – Real Estate

Ticker symbol, Stock Exchange: 532868(BSE)

No. of Employees: 3,542

Financial year ended: March

EPS: 7.48

Shares in Issue (lakhs): 16975.72

Book Value (in crore): 81.35

Market Cap. (Rs crore): 45204.54

Key Executives

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Name Designation

Rajiv Singh Vice Chairman

T C Goyal Managing Director

Pia Singh Whole Time Director

G S Talwar Non Executive Director

D V Kapur Non Executive Director

K N Memani Non Executive Director

M M Sabharwal Non Executive Director

Ravinder Narain Non Executive Director

B Bhushan Non Executive Director

N P Singh Non Executive Director

History

The DLF Group was founded in 1946. We developed some of the first residential colonies in Delhi such as Krishna Nagar in East Delhi, which was completed in 1949. Since then we have been responsible for the development of many of Delhi’s other well known urban colonies, including South Extension, Greater Kailash, Kailash Colony and Hauz Khas.Following the passage of the Delhi Development Act in 1957, the state assumed control of real estate development activities in Delhi, which resulted in restrictions on private real estate colony development. We therefore commenced acquiring land at relatively low cost outside the area controlled by the Delhi Development Authority, particularly in the district of Gurgaon in the adjacent state of Haryana.This led to our first landmark real estate development project – DLF Qutab Enclave, which has now evolved into DLF City. DLF City is spread over 3,000 acres in Gurgaon and is an integrated township, which includes residential, commercial and retail properties in a modern city infrastructure with schools, hospitals, hotels and shopping malls. It also boasts of the prestigious DLF Golf and Country Club with night golfing facilities.

Financial Analysis of Company for Last 5 years

Financial analysis of the Company includes Analysis and Interpretation of company’s Balance Sheet, Profit and Loss Accounts and Ratios for the last 5 years. Following is the Balance Sheet and Profit and Loss Account of DLF Ltd. for last five years along with there Theoretical and Graphical Interpretation.

PROFIT AND LOSS ACCOUNT

Particulars (Rs. In Cr) March'11 March'10 March'09 March'08 March'07

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Net Sales 2916.08 2307.08 2827.9 5496.96 1101.66Operating Expenses Material Consumed 0 0 0 6.56 8.72Manufacturing Expenses 848.68 889.25 778.34 2141.29 237.75Personnel Expenses 89.9 90.5 71.12 103.78 44.82Selling Expenses 53.71 56.92 59.28 45.7 63.42Administrative Expenses 143.99 225.45 156.3 128.16 88.51Total Operating Expenses 1136.28 1262.12 1065.13 2424.99 443.22Operating Profit 1779.8 1044.96 1762.77 3071.97 658.44Other Income 1130.06 896.76 1006.72 560.74 327.67EBDITA 2909.86 1941.72 2769.49 3632.71 986.11Depreciation 129.77 125.05 114.08 25.68 9.44EBIT 2729.69 1774.2 2617.55 3565.24 976.67Interest 1286.7 847.24 809.86 447.65 356.25EBT 1442.99 926.96 1807.69 3117.59 620.42Income Tax 309.05 175.77 261 543.52 214.56PAT 1133.94 751.25 1546.69 2674.07 405.86Other Non Cash Adjustment

30.16 2.06 33.05 0.36 1.24

Reported net Profit 1269.55 765.06 1577.59 2574.59 406.91 Equity Dividend 339.51 339.48 339.44 681.93 340.97Preference Dividend 0 0 0 0 0Dividend Tax 0 11.38 28.91 115.89 57.95Retained Earnings 930.04 414.2 1209.24 1776.77 7.99

Interpretation of Profit and Loss Account

1) Sales in year ending march 2011 is 2916.08 crore which is 26.39% more than the last year.2) In year 2007-08 company sales increase up to 5496.96 crore which is highest in last 5 years.3) Operating profit of the company for year ending march 2011 is 1779.80 crore which is 70.38%

more than last year. Total operating expenses also reduced from 1262.12 crore to 1136.28 crore.4) Earning Before Depreciation, Interest and Taxes is 2909.86 crore.5) Profit after Taxes is 1133.94 in March 2011 which is 50.81% more than last year.

BALANCE SHEET

Particulars (Rs. In Cr) March'11 March'10 March'09 March'08 March'07SOURCES OF FUND

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Owner's FundEquity Share Capital 339.51 339.48 339.44 340.96 305.88Preference Share Capital 0 0 0 0 0Reserve and Surplus 13470.98 12490.53 12035.39 10928.19 346.92Total Owner's Fund 13810.49 12830.01 12374.83 11269.15 652.8Loan FundsSecured Loan 14700.7 11590.19 7979.97 4945.91 6242.81Unsecured loan 358.85 1047.67 1635 3440.49 526.48Total Loan Fund 15059.55 12637.86 9614.97 8386.4 6769.29Total 28870.04 25467.87 21989.8 19655.56 7422.1 USES OF FUNDSFixed AssetsGross Block 2143.37 2002.85 1968.4 2002.85 2143.37Less: Accumulated depreciation 400.27 273.84 152.87 273.84 400.27Net Block 1743.1 1729.01 1815.53 1729.01 1743.1Capital Work In Progress 2199.25 1718.51 1657.73 1718.51 2199.25Investments 7037.24 6558.88 2956.32 6558.88 7037.24Net current AssetsCurrent Assets , Loan and Advances 24251.8 18944.48 18718.61 18345.93 9442.25Less: Current Liabilities and provision 6361.36 3483.03 3158.39 3786.37 3782.92Total Net Current Assets 17890.44 15461.45 15560.22 14559.56 5659.33 Total 28870.03 25467.85 21989.8 19655.56 7422.1 Contingent Liabilities 10141.63 7423.38 4875.99 3047.92 3818.81No. of Equity Shares (in lacs) 16975.72 16973.91 16972.09 17048.33 15294.21

Interpretation of Balance Sheet

1) Liquidity position of the company is quite good as Net Working Capital is increasing yearly. Current assets are 24251.81 crore which is 28.01% more than last year. Current liabilities also increased from 3483.03 crore to 6361.36 crore.

2) Fixed Assets of the company is 1743.10 crore in March 2011 as compared to 1729.01 crore in March 2010 and 1815.53 crore in March 2009. Total loan fund in March 2011 is 15059.09 crore in which secured loans are 97% of total. Unsecured loans are paid out this year.

3) Profitability condition of DLF Ltd. is good as there is increase in Reserve and Surplus during the last 5 years. This can also happen as company is retaining profits.Financial Position of the company is good but Debt is area of concern.

RATIO ANALYSIS

Ratios Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

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Dividend Per Share 2 2 2 4 2

Operating Profit Per Share (Rs) 10.48 6.16 10.39 18.02 4.31

Operating Profit Margin (%) 61.03 45.29 62.33 55.88 59.76

Gross Profit Margin (%) 56.58 39.82 58.03 55.41 47.79

Net Profit Margin (%) 31.37 23.87 40.36 42.49 28.38

Return On Net Worth (%) 9.19 5.96 12.5 22.84 62.16

Current Ratio 3.51 5.03 2.96 2.34 1.75

Quick Ratio 2.49 3.56 3.83 3.28 1.36

Debt Equity Ratio 1.09 0.99 0.78 0.74 10.37

Interpretation of Ratios of DLF Ltd.

1) Dividend per Share is constant from last 3 years but 50% less than March 2008 when the economy is on boom.

2) There is an increase in Operating profit per share by 70.13% from last year.3) Gross Profit Margin is near about 55% except fiscal year 2010. But in fiscal year 2011 it again

reach at the same level.4) Return on net worth falls as investment increases in last 3 years. This means that resources are

not properly used during last 3 years.5) Current Ratio of the company is quite high as idle current ratio is 2. Company’s current asset is

more than needed as against liability.6) Quick ratio is also very high at 2.49. So, this means that company there is very much cash

available with company.

Marketing Analysis of Company for Last 5 years

DLF Ltd. Marketing and promotions experts continually develop exciting activities to increase shopper traffic and facilitate tenant sales at their malls. All this is backed by well etched out advertising and PR initiates for the efficacy of the marketing plans.The Market Analysis includes Products and Services, Projects completed and Current Project, and Promotional Activities.

PRODUCTS AND SERVICES

The main products of DLF Ltd. are Luxury and Super Luxury Homes Premium Houses

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Villas, IT Parks, Luxury Malls and Commercial Complexes SEZs.

It deals in Real Estate development and Property rental. Its main Brands are DLF and DLF emporium.

PROJECTS

Completed projects of DLF Ltd. in last 5 years are listed below. In residential section, The SUMMIT, The PINNACLE, DLF Royalton Tower etc. These all

are Luxury and Super Luxury Homes, Premium Houses and Villas. In IT SEZs and Parks, main are DLF cyber SEZ, Gurgaon, DLF Akruti IT SEZ, pune, DLF

IT Park, Chandigarh etc. In Complexes and Malls, main are Nestle House Gurgaon, DLF Atria Gurgaon, City Centre

New Delhi etc. DLF group has ongoing projects across 19 cities - Gurgaon, Ambala, Derabassi, Shimla, Amritsar, Ludhiana, Noida, New Delhi, Jaipur, Indore, Mumbai, Pune, Goa, Kochi, Chennai, Bangalore,Hyderabad, Bhubhaneshwar and Kolkata. Some of them are DLF Regal Greens, DLF Express Green etc.

PROMOTIONAL ACTIVITIES

Setting objectives and budgets to define promotional plans for project’s. Handling various agencies (creative/media/OOH/events) to implement the marketing plans

(Trade Marketing and ATL) for launch and sales of premium residential properties. Responsible for agency briefing and designing creative, merchandise elements for ATL

and BTL promotional activities. Organize events and activities to promote the projects. Initiating and developing relationships with key decision makers in Corporate for business

development.

SWOT Analysis of DLF Ltd.

DLF Ltd.’s strength and challenges are examined with two terms i.e. Financial and Marketing. We characterized our ‘SWOT’ in these terms:

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http://www.indianground.com/bhubaneshwar/real-estate-bhubaneshwar.aspx

http://www.indianground.com/hyderabad.aspx

http://www.indianground.com/bangalore.aspx

http://www.indianground.com/kochi/kochi.aspx

http://www.indianground.com/goa/residential.aspx

http://www.indianground.com/pune.aspx

http://www.indianground.com/mumbai.aspx

http://www.indianground.com/indore/indore-real-estate.aspx

http://www.indianground.com/noida/residential.aspx

http://www.indianground.com/amritsar/amritsar.aspx

Strengths (Positive, Internal): Positive Attributes currently present in DLF Ltd. in Financial and Marketing terms.Weaknesses (Negative, Internal): Financial and Marketing issues that limit the current or future growth opportunities for DLF Ltd.Opportunities (Positive, Internal and External): Areas where DLF Ltd. can remedy its weaknesses.Threats (Negative, Internal and External): Trends that threaten DLF Ltd.’s future and attractiveness to new industry from financial and marketing threats.

STRENGTHS

Financial: Liquidity position of the company is quite good as Net Working Capital is increasing yearly.

Current assets are 24251.81 crore which is 28.01% more than last year. Current liabilities also increased from 3483.03 crore to 6361.36 crore.

Long term financial position is good as Fixed Assets of the company is 1743.10 crore in March 2011 as compared to 1729.01 crore in March 2010 and 1815.53 crore in March 2009.

Cash balance of the company is increasing n the last 3 years. There is increase in Inventories of the company from last year by more than 25%.

Marketing: DLF Ltd. is uniquely positioned in emerging and profitable segment. It has clear market

leadership position in commercial, retail, and lifestyle apartments. These segments are highly profitable and have significant entry barriers.

The company is in better position to face the macro challenges. Middle income housing segment is more susceptible to emerging macro concerns and challenges.

DLF Ltd. has a huge land bank stands at 13055 acres and ttal developed area of 612 million sq. ft. For DLF, Land cost stands at Rs. 154 billion i.e. an average of Rs 252 per sq. ft., which provides competitive advantage.

WEAKNESSES

Financial: Current Ratio of the company is very high than standard, so company is not utilizing its

current assets to its full. Profits of the company falls drastically in fiscal year ended March 2011, which means

company is not in a very good financial strength. There is increase in Debt of company by 25% from last year.

Marketing: There is a macroeconomics risks associated with company. Any further tightening measures

and policy changes by the government to curb speculation and overinvestment could adversely affect the bottom lines and cash flows of property developers and sentiment of home buyers.

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The real risk of decline in property prices, and concentration in Gurgaon. The sharp acceleration in real estate prices over the past three years, there exists a real probability of a price correction in certain pockets.

The main problem is the new arrivals in the real sector despite of various strong competitors in the market already.

OPPORTUNITIES

New and emerging markets provide opportunities for DLF Ltd. in countries such as China and India.

To diversify and add breadth to its brand, DLF Ltd. licenses its name to makers of Luxury, Super Luxury homes and more.

Dlf Ltd. can expand its business outside India as govt. has applied 100% FDI in real sector. This will help in expand there business through joint ventures with different companies.

THREATS

Long term market instability and uncertainty may damage the opportunities and prevent the expansion of training and development facilities.

Current economic situation may have an adverse impact on construction industry. Political and security conditions in the region and Late legislative enforcement measures

are always threats to any industry in India. Infrastructure safety is a challenging task in construction industry.

Lack of political willingness and support on promoting new strategies. Natural abnormal casualties such as earth quake and floods are uncertain and can prevent

the construction boom. Inefficient accessibility in planning and concerning the infrastructure and signs.

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Overview

Sobha Developers Ltd, a Rs. 15 billion company, is one of the largest and only backward integrated real estate players in the country. With three decades of experience in creating resplendent interiors of palaces and masterpieces in the Middle-East, Mr. PNC Menon founded Sobha Developers in 1995 with a clear vision to transform the way people perceive quality in the real estate sector in India. Since inception the company has always strived for benchmark quality, customer centric approach, robust engineering, in-house research, uncompromising business ethics, timeless values and transparency in all spheres of business conduct, which have contributed in making it a preferred real estate brand in India. Sobha is primarily focused on residential and contractual projects. Company's residential projects include presidential apartments, villas, row houses, super luxury apartments, luxury apartments, semi-luxury apartments and plotted development along with amenities such as clubhouse, swimming pool and shopping complex. In all its residential projects the company lays strong emphasis on environment management, water harvesting and high safety standards. On the contractual side, the company has constructed a variety of structures for corporates including corporate offices, convention centres, software development blocks, multiplex theatres, hostel facilities, guest houses, food courts, restaurants, research centres and club houses. Some of Sobha’s prestigious clients include Infosys, Taj Group, DELL, Mico, HP, Timken, Biocon, Institute of Public Enterprises (IPE), Bosch, Hotel Leela Ventures and others. As of 30 September 2011, Sobha has completed 73 Real Estate projects and 198 Contractual projects covering total Super Built-up area of 43.34 million sq. ft. and total developed area of 47.37 million sq. ft. The Company currently has 45 ongoing Real Estate projects in 6 cities across India aggregating to 16.16 million sq. ft. and 39 Contractual projects aggregating to 9.03 million sq. ft. under various stages of construction. Sobha has made a foot print in 21 cities and 11 states across India. The backward integration model is one of the key competitive strengths of Sobha. This literally means that the Company has all the competencies and in-house resources to deliver a project from conceptualization to completion. Backward integration includes an interiors division with one of India’s largest wood working factory, a metal works and glazing factory, and a concrete products factory. The company has also set up Sobha Academy, a training centre that offers world-class training in building construction with state-of-the-art facilities. Sobha is an organization where quality meets excellence, technology meets aesthetics and passion meets perfection.

Vision, Mission & Philosophy

Vision - Transform the way people perceive 'Quality'

Mission - No Short Cuts to Quality

Philosophy - Passion at Work

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Financial Performance The company reported Net Sales of INR 1401.65 crore during the fiscal year ended on March

2011. The company’s Net sales incrase at a compounded rate of 3.98% during the period 2007-2011 with a year on year growth of 30.20% over fiscal year 2010. During the fiscal year 2011, its operating profit margin was 20.60% as against as operating profit margin of 22.35% in fiscal year 2010. During the fiscal year 201, the company registered a net profit margin of 12.46% as against a net profit margin of 12.21% in the fiscal year 2009.

Key Facts

Corporate Address: #368, 7th cross, Wilson Garden, Bangalore, 560027, India


Ticker symbol, Stock Exchange: 532784 (BSE), SOBHA (NSE)

No. of Employees: 1852

Completed Projects: 73 Real Estate projects and 198 Contractual projects

Financial year End: March


EPS: 22.16



Key Executives

NAME Designation

P N C Menon Chairman/Chair Person

Ravi Menon Vice Chairman

J C Sharma Managing Director

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P Ramakrishnan Deputy Managing Director

R V S Rao Independent Director

Anup Shah Independent Director

S K Gupta Independent Director

M Damodaran Independent Director

History

This Company was incorporated as Sobha Developers Private Limited on August 7, 1995 by their Promoter Mr. P.N.C. Menon. Their first residential project in Bangalore was launched in September 1997 and was completed in two years by September 1999. Thereafter, it began constructing it first contractual project, the Corporate Block for Infosys Technologies Limited, Bangalore that was completed in September 2000, which took ten months to complete. Till date they have developed and constructed 21 residential projects in Bangalore aggregating 1,552 apartments and covering approximately 2.98 million sq. ft.of super built up area; and constructed 75 contractual projects in the eight states of India, covering approximately 8.42 million sq. ft.of super built up area and two commercial projects in Bangalore aggregating 0.11 million sq. ft.of super built up area. They were initially incorporated as a private limited company on August 7, 1995. The status of Company was subsequently changed to a public limited company by a special resolution of the members passed at an extraordinary general meeting held on May 8, 2006. The fresh certificate of incorporation consequent on change of name was granted to the Company on June 2, 2006, by the Registrar of Companies, Karnataka.


Financial analysis of the Company includes Analysis and Interpretation of company’s Balance Sheet, Profit and Loss Accounts and Ratios for the last 5 years. Following is the Balance Sheet and Profit and Loss Account of Sobha Developers Ltd. for last five years along with there Theoretical and Graphical Interpretation.


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1) Sales in fiscal year ending 2011 is 1401.78 crore which is 30.20% more than last year which is 1076.61 crore. The company’s Net sales increase at a compounded rate of 1.71% during the period 2007-2011.

2) Interest paid by the company also reduced from 67.14 crore to 42.93 crore in 2011.3) There is no issue of Shares in fiscal year 2011 whereas Earning Per share during this

period is Rs 18.61 as compared to last year EPS of 13.94.4) Equity Dividend percentage also increase in last two years after economic slow down in

2008.

BALANCE SHEET

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Particulars (Rs. In Crore) Mar '11 Mar '10 Mar '09 Mar '08 Mar '07Net Sales 1401.78 1076.61 1244.39 1828.76 1288.2Operating expensesRaw Materials 70.07 66.59 95.77 122.91 105.15Power & Fuel Cost 7 1.7 1.91 2.61 2.31Employee Cost 124.24 96.29 126.09 126.21 81.4Other Manufacturing Expenses 722.98 515.9 598.01 1030.2 692.54Selling and Admin Expenses 150.85 129.93 132 170.82 120.6Miscellaneous Expenses 28.25 18.67 20.76 22.38 30.04Total Operating Expenses 1103.39 829.08 974.54 1475.13 1032.04Operating Profits 298.39 247.53 269.85 353.63 256.16Other Income 15.91 12.06 16.92 11.97 2.88PBDIT 314.3 259.59 286.77 365.6 259.04Interest 42.93 67.14 105.21 59.69 48.07PBDT 271.37 192.45 181.56 305.91 210.97Depreciation 27.77 32.31 36.03 35.04 24.39Profit Before Tax 243.6 160.14 145.53 270.87 186.58PBT (Post Extra-ord Items) 243.6 160.26 145.53 270.87 186.57Tax 61.14 23.61 35.85 42.58 25.06Reported Net Profit 182.46 136.66 109.68 228.3 161.52Total Value Addition 1033.32 762.48 878.78 1352.21 926.89Preference Dividend 0 0 0 0 0.46Equity Dividend 29.42 24.52 7.29 47.4 40.1Corporate Dividend Tax 4.89 4.17 1.24 8.1 6.89Earning Per Share (Rs) 18.61 13.94 15.04 31.32 22.09Equity Dividend (%) 30 25 10 65 55

Book Value (Rs) 189.33 174.22 149.45 135.57 111.87

Particulars (Rs. In Crore) Mar '11 Mar '10 Mar '09 Mar '08 Mar '07SOURCES OF FUNDOwner's FundEquity Share Capital 98.06 98.06 72.9 72.9 72.9Preference Share Capital 0 0 0 0 0Reserves 1758.56 1610.4 1016.59 915.44 742.64Total Owner's Fund 1856.62 1708.46 1089.49 988.34 815.54Loan FundsSecured Loans 1202.62 1446.59 1878.34 1438.09 545.23Unsecured Loans 8.35 7.45 33.84 324.96 38.45Total Loan Fund 1210.97 1454.04 1912.18 1763.05 583.68Total 3067.59 3162.5 3001.67 2751.39 1399.22

USES OF FUNDSFixed AssetsGross Block 314.77 294.21 293.02 271.13 233.37Less: Accumulated depreciation 177.49 151.3 119.8 84.18 49.48Net Block 137.28 142.91 173.22 186.95 183.89Capital Work in Progress 66.8 63.2 51.56 1652.05 902.83Investments 51.61 42.94 36.16 29.4 52.77Inventories 972.64 1017.39 1049.19 787.86 377.8Net current AssetsCurrent Assets , Loan and Advances 3550.6 3528.49 3324.26 1450.05 893.78Less: Current Liabilities & Provisions 738.7 615.03 583.55 567.04 634.04Total Net Current Assets 2811.9 2913.46 2740.71 883.01 259.74

Total 3067.59 3162.51 3001.65 2751.41 1399.23Contingent Liabilities 368 192.94 138.27 109.35 8.61No. of Equity Shares (lakhs) 980.64 980.64 729.02 729.02 729.02

Interpretation of Balance Sheet1) Liquidity position of the company is average as there is decline in Net Working capital

from 2913.46 crore to 2811.9 crore but it is a small decline of 3.61%. Current liabilities increases from 615.03 crore to 738.7 crore in fiscal year 2011.

2) Long term position of company is not good as depreciation is continually increasing in last five years and Net Fixed Assets decreases at compounded rate of 5.63% in the period of 2007-2011.As there is a big difference between loan funds and fixed assets , this means that Loans Fund are used towards Working capital of Company.

3) There is an increase in Reserve and Surplus in last 5 years this means that company is retaining its profits with it.

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RATIO ANALYSIS


Dividend Per Share 3 2.5 1 6.5 5.5





Return On Capital Employed (%) 9.32 7.17 8.03 12 16.75


Current Ratio 2.59 3.1 2.72 1.24 1.4

Quick Ratio 3.48 4.07 3.89 1.17 0.81


Interpretation of Ratios of Sobha Developers Ltd.

1) Dividend per Share varies in the Last 5 years. It is maximum at 6.5 in fiscal year ending March 2008 and after that it falls down to 1 in 2009 as effect of economic slow down in economy. In March 2011, it is 3 as 20% more than last year.

2) Operating profit per share increase with 20.22% from last year of Rs.25.24. It is maximum at Rs. 48.51 in fiscal year ending March 2008.

3) Gross profit margin is falling in the last 4 years with a compound rate of 7.99%.4) Return on capital employed is also varying in last 5 years. It is highest in march 2007 and then

gradually falls but it again rise in march 2011 at 9.32%.5) Current ratio of the Sobha developers ltd. is quite satisfactory but the Quick Ratio is very much

high.6) Debt equity ratio is good as there is more source of fund from equity shareholders rather than

debt.

Marketing Analysis of Company for Last 5 years

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Sobha Developers Ltd. Marketing and promotions experts continually develop exciting activities to increase shopper traffic and facilitate tenant sales at their malls. All this is backed by well etched out advertising and PR initiates for the efficacy of the marketing plans.The Market Analysis includes Products and Services, Projects completed and Current Project, and Promotional Activities.


The main products of Sobha Developers Ltd. are

Mattresses Modular Office Furniture Hospitality Furniture Housing Furniture Interior decoration Structural Glazing and architectural metal works Concrete products

It deals in Real Estate Development and Construction of various residential and other projects. Its main Brands are Sobha Restoplus, Sobha furniture etc.

PROJECTS

Sobha Developers ltd. has mainly its projects in Bangalore. Completed projects of SOBHA DEVELOPERS Ltd. in last 5 years are listed below.

In Residential, main completed projects are Sobha Chrysanthemum Bangalore, Sobha Lavender, Sobha Emeralds Coimbatore etc.

In Commercial, main projects are Sobha Pearl and Sobha Alexander. In Residential, Current projects are Sobha Garnet and Sobha Carnation, both at Pune, Sobha

Serene and Sobha Mereta at Chennai etc.Sobha Developers Ltd. has a direct contract with Infosys Technologies Ltd. about development of its buildings. Their main projects with Infosys are at various cities of India like Pune, Bangalore, Chennai, Chandigarh etc.


Sobha Developers Ltd. is using various types of promotional activities for increase in its sales. It is providing different offers like Discounts on Flats, Villas etc. It maintains initiating and developing relationships with key decision makers in Corporate for business development.It also organizes various events and activities to promote its projects.

SWOT Analysis of Sobha Developers Ltd.

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Sobha Developers Ltd.’s strength and challenges are examined with two terms i.e. Financial and Marketing. We characterized our ‘SWOT’ in these terms:Strengths (Positive, Internal): Positive Attributes currently present in Sobha Developers Ltd. in Financial and Marketing terms.Weaknesses (Negative, Internal): Financial and Marketing issues that limit the current or future growth opportunities for Sobha Developers Ltd.Opportunities (Positive, Internal and External): Areas where Sobha Developers Ltd. can remedy its weaknesses.Threats (Negative, Internal and External): Trends that threaten Sobha Developers Ltd.’s future and attractiveness to new industry from financial and marketing threats.

STRENGTHS

Financial: Operating profit per share increase with 20.22% from last year of Rs.25.24. It is maximum

at Rs. 48.51 in fiscal year ending March 2008. Current ratio of the Sobha developers ltd. is quite satisfactory but the Quick Ratio is very

much high. Sales in fiscal year ending 2011 is 1401.78 crore which is 30.20% more than last year

which is 1076.61 crore. The company’s Net sales increase at a compounded rate of 1.71% during the period 2007-2011.

Interest paid by the company also reduced from 67.14 crore to 42.93 crore in 2011.Marketing:

Sobha Developers’s projects are known for there design, construction and innovation. Sobha Developers’s good working relationships with financial institutions, enhances its

ability to raise funding for large projects at competitive rates. Scale of Operation and experience in execution of large projects better positions Sobha

Developers to identify and successfully implement new projects. Ability to work and effectively raise with government agencies to ensure timely completion

of projects.

WEAKNESSES Financial:

Long term position of company is not good as Net Fixed Assets decreases at compounded rate of 5.63% in the period of 2007-2011.As there is a big difference between loan funds and fixed assets , this means that Loans Fund are used towards Working capital of Company.

Cash and Bank balance also falls in fiscal year ended march 2011 by 25% from fiscal year ended march 2010.

There is an increase in current liabilities of the company of which growth rate is more than growth rate of currents assets. There is a decrease in investment also in the last 3 years.

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Marketing: Location of the Sobha Developers Ltd. is a big constraint as its main business id developed

in Bangalore and it’s nearby. It has to expand its business all over the India. The main problem is the new arrivals in the real sector despite of various strong

competitors in the market already. Sobha Developers need to keep there projects development in order to retain its operational

efficiency.

OPPORTUNITIES

Real Sector is a developing market and it will become a very booming market in the future. As Government has applied 100% FDI in the real sector, there is a very good possibility in

Mergers, joint ventures or strategic alliances with foreign companies. Sobha Developers should move into new markets that offer improved profit. The company

needs a diversification in its products and business line. The company should move towards other cities in India other than Modern Cities. There is

much opportunities of development in other cities rather than already developed cities

THREATS

Top competitors for Sobha Developers ltd. are: DLF Ltd., Unitech Ltd, Tata Projects ltd. etc. these are very strong giants in Total Indian Market.

The supply chain has very few suppliers, leaving Sobha developers very little to negotiate or switch to.

There is a strong price war between the competitors in the sector. Everybody is providing more facilities at lower prices than its competitors, moving customer towards themselves leaving companies with low profitability.

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Overview

Established in 1972, Unitech is today a leading real estate developer in India. Known for the quality of its products, it is the first developer to have been certified ISO 9001:2000 in North India and offers the most diversified product mix comprising residential, commercial/IT parks, retail, hotels, amusement parks and SEZs.

The well-recognised brand was yet again conferred with the title of "Superbrand" by Superbrands India in 2009. The Company is also the recipient of the CW Architect and Builders Award, 2008 for being one of India's Top Ten Builders. Unitech has long partnered with internationally acclaimed architects and design consultants including SOM (USA), BDP (UK), Maunsell AECOM (HK), MEA Systra (France), Callison Inc. (USA), FORREC (Canada), SWA and HOK (USA) for various projects. It has an enviable clientele for commercial projects including Fidelity, McKinsey, Bank of America, Ford Motors, Nike, EDS, Hewitt, Amdocs, Ernst & Young, Reebok, Keane, Seagrams, Perfetti, Exxon Mobil and AT Kearney. Unitech Scrip is one of the most liquid stocks in the Indian stock markets and was the first real estate company to be part of the National Stock Exchange's NIFTY 50 Index. The company has over 600,000 shareholders.

Recently the Company has ventured into the infrastructure business by launching Unitech Infra, thus leveraging its decades of experience and expertise in real estate.

Unitech is known for the quality of its products and is the first real estate developer to have been certified ISO 9001:2000 certificate in North India. The Unitech brand is well recognised in India and was once again conferred with the title of “Superbrand” by Superbrand India in 2010. The Company is the recipient of the CW Architect and Builders Award, 2008 for being one of India's Top Ten Builders.

Unitech scrip is one of the most liquid stocks in the Indian stock markets and was the first real estate company to be part of the National Stock Exchange's NIFTY 50 Index.

Vision, Mission & Philosophy

VisionTo be India’s leading Real Estate company with a Pan-India Footprint, and be the company of first choice amongst our customers to address their needs across all realty verticals.

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MissionTo satisfy every customer’s need for a better experience through quality construction and employee contentment. Unitech has a well-managed architectural and engineering team that has closely partnered and worked with internationally acclaimed architects and many others, to achieve both aesthetic and efficient designs. We are a customer oriented company and we believe in putting in our best foot forward in our journey to the pinnacle.

PhilosophyA toddler learns his A,B,C’s from a school. He grows up to be a top notch executive working in a cyber park. He buys a house to flaunt his independence. He unwinds in a hotel and catches up with his friends in a clubhouse. He shops in a mall and takes his family to the nearby theme park. And finally, satisfied, he hangs up his shoes in his private villa. A common success story.

Financial Performance

The Company reported Net Sales of INR 1344.46 crore during the fiscal year ended 2011. The company’s net sales decline at a compounded rate of 11.26% during the period 2007-2011 with a year on year decrease of 27.11% over fiscal year 2010. During the fiscal year 2011, its operating profit margin was 17.68% as against an operating profit margin of 37.75% in fiscal year 2010. During the fiscal year 2011, the company registered a net profit margin of 29.72% as against a net profit margin of 24.77% in fiscal year 2010.

Key Facts

Corporate Address: Unitech House, L Block, New Delhi 110017, India


Ticker symbol, Stock Exchange: 507878 (BSE), UNITECH (NSE)

No. of Employees: 2500

Financial year End: March


EPS: 1.95



Key Executives

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NAME Designation

Ramesh Chandra Executive Chairman

Ajay Chandra Managing Director

Sanjay Chandra Managing Director

G R Ambwani Non Executive Director

Sanjay Bahadur Non Executive Director

Minoti Bahri Non Executive Director

Anil Harish Non Executive Director

P K Mohanty Non Executive Director

Ravinder Singhania Non Executive Director

History

The Company was incorporated on 9th February as United Technical Consultants Pvt. Ltd., and was converted into a public Limited company on 3rd October. The company carries on construction of industrial projects on a turnkey basis and execution of housing projects and export orders. In 1985, The name was changed to Unitech Ltd., on 17th October. The company was promoted by a group of technocrats, proficient in the field of soil and foundation engineering and managed by professionals. The Company undertakes projects both in India andabroad. In 1995, The Company entered into partnership with Resources Development Corporation Ltd., Singapore and Comcraft Asia Pacific Pte Ltd., Singapore to set up Automatic Block plants at New Mumbai and Ready Mixed concrete plants at Powai, Goregaon and South City.


Financial analysis of the Company includes Analysis and Interpretation of company’s Balance Sheet, Profit and Loss Accounts and Ratios for the last 5 years. Following is the Balance Sheet and Profit and Loss Account of Unitech Ltd. for last five years along with there Theoretical and Graphical Interpretation.


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Particulars(RS in Cr) Mar '11 Mar '10 Mar '09 Mar '08 Mar '07Net Sales 1344.46 1844.75 1764.09 2467.68 2443.31Operating expensesRaw Materials 7.97 53.71 20.69 26.46 80.53Power & Fuel Cost 0 0 0 0 0Employee Cost 115.41 93.18 106.44 98.43 65.62Other Manufacturing Expenses 884.14 920.51 568.06 981.25 853.98Selling and Admin Expenses 49.58 54.17 53.22 52.7 38.06Miscellaneous Expenses 50.26 24.68 11.56 23.7 15.55Total Operating Expenses 1107.36 1146.25 759.97 1182.54 1053.74Operating Profit 237.1 698.5 1004.12 1285.14 1389.57Other Income 826.96 369.8 686.16 482.36 155.38PBDIT 1064.06 1068.3 1690.28 1767.5 1544.95Interest 329.21 346.7 722.12 393.38 193.71PBDT 734.85 721.6 968.16 1374.12 1351.24Depreciation 6.68 5.95 10.04 8.58 4.54Profit Before Tax 728.17 715.65 958.12 1365.54 1346.7PBT (Post Extra-ord Items) 726.33 696.82 958.12 1365.16 1347.14Tax 218.09 171.13 216.98 334.83 361.27Reported Net Profit 510.08 544.3 739.66 1030.68 983.56Total Value Addition 1099.39 1092.55 739.29 1156.09 973.2Preference Dividend 0 0 0 0 0Equity Dividend 26.16 48.78 20.44 40.58 40.58Corporate Dividend Tax 4.24 8.1 3.47 6.9 6.9Earning Per Share (Rs) 1.95 2.23 4.56 6.35 12.12Equity Dividend (%) 5 10 5 12.5 25

Book Value (Rs) 35.48 32.41 17.61 13.21 14.3


1) Sales in fiscal year ending 2011 is 1344.46 crore which is 27.11% less than last year which is 1844.75 crore. The company’s Net sales decrease at a compounded rate of 11.26% during the period 2007-2011.

2) Operating profit of the company is declining from March 2007 till March 2011 at compounded rate of 29.79%.

3) There is issue of Shares of 1775 lakh in fiscal year 2011 whereas Earning Per share during this period is Rs 1.95 as compared to last year EPS of 2.23.

4) Equity Dividend percentage decreases in fiscal year ending 2011 by 50% as against fiscal year ended 2010.

BALANCE SHEET

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Particulars(RS in Cr) Mar '11 Mar '10 Mar '09 Mar '08 Mar '07SOURCES OF FUNDOwner's FundEquity Share Capital 523.26 487.76 324.68 324.68 162.34Preference Share Capital 0 0 0 0 0Reserves 8758.61 7415.47 2534.89 1819.14 998.66Total Owner's Fund 9281.87 8128.43 2859.57 2143.82 1161Loan FundsSecured Loans 3566.83 3907.54 5931.02 5506.45 2839.67Unsecured Loans 2002.24 1016.02 1747.98 2611.08 765.39Total Loan Funds 5569.07 4923.56 7679 8117.53 3605.06Total 14850.94 13051.99 10538.57 10261.35 4766.06USES OF FUNDSFixed AssetsGross Block 154.27 151.09 148.63 132.05 99.87Less: Accumulated Depreciation 49.78 44.03 40.79 35.96 30.24Net Block 104.49 107.06 107.84 96.09 69.63Capital Work in Progress 10870.28 9666.03 8688.46 7083.41 4408.59Investments 2054.02 1654.15 1954.94 1397.99 518.93Inventories 9.79 5.74 10.48 13.66 32.77Net current AssetsCurrent Assets , Loan and Advances 9827.59 8650.67 6396.35 8749.16 4017.01Less: Current Liabilities & Provisions 8005.45 7025.94 6609.04 7065.3 4248.1Total Net Current Assets 1822.14 1624.73 -212.69 1683.86 -231.09

Total 14850.93 13051.97 10538.55 10261.35 4766.06Contingent Liabilities 1805.68 1649.94 4227.29 2325.69 1640.51No. of Equity Shares (lakhs) 26163.01 24388.01 16233.75 16233.75 8116.88

Interpretation of Balance Sheet

4) Liquidity position of the company is good as there is increase in Net Working capital from 1624.73 crore to1822.14 crore but there is a negative working capital in the fiscal years ended 2009 and 2007.

5) Long term position of company is quite good as depreciation is continually increasing in last five years and Net Fixed Assets of the company is somewhere stable in last 3 years.

6) There is a huge increase in Reserve and Surplus in last 5 years 998.66 crore in 2007 to 8758.61 in 2011.

7) There is an increase in Unsecured Loan in last 3 years.

RATIO ANALYSIS

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Dividend Per Share 0.1 0.2 0.1 0.25 0.5





Return On Capital Employed (%) 4.08 7.96 15.62 13.69 30.39


Current Ratio 1.18 1.19 0.85 1.02 0.94

Quick Ratio 1.23 1.23 0.97 1.24 0.94


Interpretation of Ratios of Unitech Ltd.

7) Dividend per Share does not varies in the Last 5 years. It is maximum at 0.5 in fiscal year ending March 2007 and after that it falls down to 0.1 in 2009 as effect of economic slow down in economy. In March 2011, it is 0.1 as 50% less than last year.

8) Operating profit per share also fall drastically from 17.1% in march 2007 to 0.91 in march 2011 at a compounded rate of 44.38%.

9) Gross profit margin is also fall in the last 3 years with a compound rate of 32.20%.10) Return on capital employed is also varying in last 5 years. It is highest in march 2007 and

then gradually falls till march 2011 at a compounded rate of 33.08%.11) Current ratio of the Unitech ltd. is not good as it is below standard of 2 in the last 5 years

but it is improving in the last 3 years. The Quick Ratio is very much good.12) Debt equity ratio is good as there is more source of fund from equity shareholders rather

than debt.

Marketing Analysis of Company for last 5 years

29

Unitech Ltd. Marketing and promotions experts continually develop exciting activities to increase shopper traffic and facilitate tenant sales at their malls. All this is backed by well etched out advertising and PR initiates for the efficacy of the marketing plans.The Market Analysis includes Products and Services, Projects completed and Current Project, and Promotional Activities


The company’s main services are listed below. Heavy Construction Property Development Consulting Services Telecom Real Estate development Residential Cities Infrastructure Development Transmission tower manufacturing

PROJECTS

Unitech has an experience of developing and leasing more than 8 million sq.ft. of IT/ITes and commercial office spaces in its Grade ‘A’ complexes like Cyber park, Signature Towers, Global Business Parks, Unitech Business Park, Unitech Trade Centre etc.In Residential, Completed projects of Unitech ltd. are Vista Villas in Gurgaon, Unitech Heights in Greater Noida, legacy in Lucknow, Singleton Floors in Chandigarh etc.In Residential, Current Projects of the company are Escape Nirvana Country in Gurgaon, Aspon Greens In Mohali, UNI Homes at Chennai, Bhopal and Ambala, etc.In Commercial, Completed projects in Gurgaon are Global Business Park, Millennium Plaza etc. Current Projects are Nirvana Suites, Infospace in Gurgaon, Grater Noida and Kolkata.In Retail, Current projects of the Company are Gardens Galleria at Bangalore, Lucknow & Mohali, The Great India Palace at Dehradun and Bhopal. Like this there are various other projects ongoing in the country.


Promotional activities of the company include organization of different events and activities for promotion of its projects. A good and fabulous service to the customer and offering him different discounts and credit offers. Setting objectives and budgets to define promotional plans for projects are main activities in the process of Promotional Planning.

SWOT Analysis of Unitech Ltd.

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Unitech Ltd.’s strength and challenges are examined with two terms i.e. Financial and Marketing. We characterized our ‘SWOT’ in these terms:Strengths (Positive, Internal): Positive Attributes currently present in Unitech Ltd. in Financial and Marketing terms.Weaknesses (Negative, Internal): Financial and Marketing issues that limit the current or future growth opportunities for Unitech Ltd.Opportunities (Positive, Internal and External): Areas where Unitech Ltd. can remedy its weaknesses.Threats (Negative, Internal and External): Trends that threaten Unitech Ltd.’s future and attractiveness to new industry from financial and marketing threats.

STRENGTHS

Financial: Liquidity position of the company is good as there is increase in Net Working capital from

1624.73 crore to 1822.14 crore but there is a negative working capital in the fiscal years ended 2009 and 2007. But company is now improving.

Book value of the company is also increased. There is an increase in cash balance with the company in the last 3 years. There is increase in investment of company in fiscal year ended 2011 by 25% from last

year.Marketing:

Unitech is an established brand and is associated with a high level of trust amongst customer and suppliers.

Company’s experience and expertise in the construction business can be leveraged to built its real estate business.

Unitech has well qualified and experienced employee base and proven management team. Attract high caliber management and technical professional due to its leadership position and progressive people practices.

WEAKNESSES

Financial: Sales of the company is falling at a compounded rate of 27.11% for the period 2007-2011

which can become a weakness of the company. Current ratio of the Unitech ltd. is not good as it is below standard of 2 in the last 5 years

but it is improving in the last 3 years. There is increase in current liabilities at a compounded rate of 13.51% for the period 2007-

2011. There is an increase in quick ratio in last 5 years which shows that company’s current liabilities are increasing at a high rate than current assets.

Marketing:

31

Fall in the prices of the residential apartments become a weakness for Unitech ltd. as there is increase in raw material and labor prices in the sector. Govt. has put the ban that there is no hike in the prices in NCR region of the country.

There is an undifferentiated product and services in relation to the competitors. So, this become a weakness as there are very tough competitors who are producing same type of products.

OPPORTUNITIES

Expansion of business in other parts of India. Company can develop the rural area also as there is increasing education and awareness in rural areas. They also can get cheap labor from the rural.

It can invest more in Power generation projects like Hydroelectric or Wind power as these are the future need of energy and there is high demand of them in future.

Investment in raw material i.e. Backward Vertical Integration, everything from precision engineering to aesthetic design, from quality metal glazing to high-class interiors is done in-house. This allows for stringent focus on quality control - which in turn gives our customers a fine combination of precision and aesthetics.

THREATS

Decrease in profitability due to increase in number of entrants. As this sector is booming these days there is increase in number of new entrants in the industry.

Real Estate Sector needs high working capital. As this sector includes more of labor, machinery, at each project, so there is a need of High Working capital.

Unitech ltd. is facing high legal barriers as there are a lot of legal provisions regarding this sector. For Eg, there is a long legal procedure for purchase of new land in big slots.

Existing firm has an edge over the others due to more industrial experience. There is a very tough competition in this sector.

FINANCIAL ANALYSIS32

PROFIT AND LOSS ACCOUNT(of year ended March 2011)

Particulars (Rs. In Crore) DLF Ltd. Sobha Developers Ltd. Unitech Ltd.Net Sales 2916.08 1401.78 1344.46Total Operating Expenses 1136.28 1103.39 1107.36Operating Profits 1779.8 298.39 237.1Other Income 1130.06 15.91 826.96PBDIT 2909.86 314.3 1064.06Depreciation 1286.7 42.93 329.21PBIT 2729.69 271.37 734.85Interest 129.77 27.77 6.68Profit Before Tax 1442.99 243.6 728.17Tax 309.05 61.14 218.09Reported Net Profit 1269.55 182.46 510.08Equity Dividend 406.91 29.42 26.16Corporate Dividend Tax 340.97 4.89 4.24Earning Per Share (Rs) 57.95 18.61 1.95

Interpretation of Profit and Loss Account of 3 Companies

Net Sales: Net sales for the fiscal year ended march 2011 for DLF Ltd. is 2916.08 crore which is 2.08 times and 2.17 times more than Sobha Developers Ltd and Unitech Ltd. respectively.

Operating Expenses: Operating expenses of DLF Ltd. is high but they are more of Unitech Ltd. then Sobha Developers Ltd. by 4 crore which is a minor difference.

Other Income: Other Income of DLF Ltd. and Unitech Ltd. is much higher than Sobha Developers Ltd. as both companies have entry in other markets but Sobha has only market in Real estate.

Net Profit: Net profit of DLF Ltd. is much higher than other two companies but Sobha Developers Ltd. has lowest of 182.46 crore.

EPS: EPS of DLF Ltd. is Rs 57.95 per share in comparison with Rs 18.61 and Rs 1.95 of Sobha Developers Ltd. and Unitech Ltd.

BALANCE SHEET(of year ended March 2011)

Particulars (Rs. In Crore) DLF Ltd. Sobha Developers Ltd. Unitech Ltd.

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SOURCES OF FUNDOwner's FundEquity Share Capital 339.51 98.06 523.26Preference Share Capital 0 0 0Reserves 13470.98 1758.56 8758.61Total Owner's Fund 13810.49 1856.62 9281.87Loan FundsSecured Loans 14700.7 1202.62 3566.83Unsecured Loans 358.85 8.35 2002.24Total Loan Fund 15059.55 1210.97 5569.07Total 28870.04 3067.59 14850.94

USES OF FUNDSFixed AssetsGross Block 2143.37 314.77 154.27Less: Accumulated depreciation 400.27 177.49 49.78Net Block 1743.1 137.28 104.49Capital Work in Progress 2199.25 66.8 10870.28Investments 7037.24 51.61 2054.02Net current AssetsCurrent Assets , Loan and Advances 24251.8 3550.6 9827.59Less: Current Liabilities & Provisions 6361.36 738.7 8005.45Total Net Current Assets 17890.44 2811.9 1822.14

Total 28870.03 3067.59 14850.93Contingent Liabilities 10141.63 368 1805.68No. of Equity Shares (lakhs) 16975.72 980.64 26163.01

Interpretation of Balance Sheet of 3 Companies

Fixed Assets: Net Fixed Assets are Highest of DLF Ltd. at 1743.1 crore which is 12.7 times and 16.7 times higher than Sobha Developers Ltd and Unitech Ltd. respectively. Investment of Sobha Developers ltd. is very low in comparison to other two companies.

Working Capital: In comparison, working capital is highest of DLF Ltd. but its current liabilities is increasing more than current assets at higher rate. Net current assets of Sobha is 23% more than Unitech Ltd.

Liabilities: Total liability of DLF ltd. on March 2011 is 15059.55 crore while it is 1210.97 crore and 5569.07 crore of Sobha Developers Ltd and Unitech Ltd. respectively.

Equity: DLF Ltd. has a equity share capital of 339.51 crore while Sobha Developers Ltd and Unitech Ltd. has 98.06 crore and 523.26 crore respectively. Number of Equity Shares of DLF Ltd is 16975.72 lakh where it is 980.64 lakh and 26163.01 lakh of Sobha Developers Ltd and Unitech Ltd. respectively.

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RATIO ANALYSIS(of year ended March 2011)

Ratios DLF Ltd. Sobha Developers Ltd. Unitech Ltd.Dividend Per Share 2 3 0.1Operating Profit Per Share (Rs) 10.48 30.43 0.91Operating Profit Margin (%) 61.03 20.6 17.68Gross Profit Margin (%) 56.58 18.68 17.19Net Profit Margin (%) 31.37 12.46 29.72Return On Capital Employed (%) 9.45 9.32 4.08Return On Net Worth (%) 9.19 9.82 5.49Current Ratio 3.51 2.59 1.18Quick Ratio 2.49 3.48 1.23Debt Equity Ratio 1.09 0.65 0.6

Interpretation of Financial Ratios of 3 Companies

DLF Ltd.’s Operating Profit Margin is very much high in comparison to other two companies. Due to its strong position in real estate sector DLF Ltd. is enjoying a gross profit margin of 56.58% while Sobha Developers Ltd and Unitech Ltd. are at 18.68% and 17.19%.

Return on capital employed is close between DLF Ltd. and Sobha Developers Ltd. at 9.45% and 9.32% where Unitech Ltd. has only a 4.08% of return, a much lower than other two companies.

Current ratio of DLF Ltd. is very much high at 3.51 while standard is 2. Sobha Developers Ltd. is closest to standard while Unitech Ltd. is below the standard at 1.18 times.

Quick ratio of DLF Ltd. and Sobha Developers Ltd. is very much high in March 2011 while Unitech Ltd. has a satisfactory quick ratio.

Debt equity ratio of DLF ltd. is good while the other two companies have a low debt equity.

MARKETING ANALYSISProjects

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DLF Ltd. has 60 years of experience in this sector which provides it a high benefit in comparison to other real estate companies. It has completed a lot of projects in India .For Eg, The SUMMIT, DLF cyber SEZ, Gurgaon, DLF IT Park, Chandigarh, Nestle House Gurgaon, DLF Atria Gurgaon, City Centre New Delhi etc. Sobha Developers Ltd. has 16 years of experience in this sector. It is very less in comparison to DLF and Unitech. It has completed several projects like Sobha Chrysanthemum Bangalore, Sobha Lavender, Sobha Emeralds Coimbatore, Sobha Garnet and Sobha Carnation, Sobha Mereta at Chennai etc. Sobha Developers has mainly its business near Bangalore. It has mainly contracts with INFOSYS for constructing it’s offices and buildings in various parts of country. The Company has till date completed a total of 13 commercial projects measuring 1,850,000 sq ft (172,000 m2) of Super Built up area. Unitech Ltd. has 39 years of experience in real sector. Some of its completed projects are Cyber park, Signature Towers, Global Business Parks, Vista Villas in Gurgaon, Legacy in Lucknow etc. Some of its current projects are Escape Nirvana Country in Gurgaon, UNI Homes at Chennai, Bhopal and Ambala, Gardens Galleria at Bangalore, Lucknow & Mohali etc.

Diversification of Business

Diversification of Business is an important aspect in concerning market comparison between the companies. DLF is now become a huge Business House. Laing O'Rourke is a UK-based construction company that built Dubai International Airport and London's Millennium Tower. It will construct all DLF's landmark projects. Nakheel of Dubai are partnering with DLF for developing townships in India. WSP Group Plc is also partnering DLF, providing management and consultancy to the built and natural environment. Feedback Ventures is providing consultancy for faster project execution. DLF has also teamed up with Hilton Hotels to jointly develop hotels in India. Unitech Ltd. have recently formed a large joint venture with Norway based Telenor Group to create Unitech Wireless., in August 2009, it secured a 50 billion rupee ($1 billion) loan from State Bank of India(SBI.BO) to fund its mobile phone network rollout. Sobha developers Ltd. has a very few joint ventures. This lack of joint ventures, mergers makes it a weakness for it.

CONCLUSION

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http://en.wikipedia.org/wiki/State_Bank_of_India

http://en.wikipedia.org/wiki/State_Bank_of_India

http://en.wikipedia.org/wiki/Telenor

http://en.wikipedia.org/wiki/Hilton_Hotels

http://en.wikipedia.org/wiki/WSP_Group

http://en.wikipedia.org/wiki/Nakheel

http://en.wikipedia.org/wiki/Laing_O'Rourke

In the years ahead, the Commercial Real industry in India has to overcome various challenges

with respect to housing, environment, transportation, power or natural hazards. Commercial Real

Estate industry is growing at a faster rate in the India. The gains of large investments in the

mega-projects eventually will feedback to the construction industry itself in the form of better

economy and improved work conditions.

SWOT analysis of three real estate companies

concluded that there is a need of huge investment in real estate sector. This analysis brings the

Strength and Weakness of and Opportunities and Threats to these companies. Also, between

these companies DLF Ltd. is a strong company in this sector followed by Unitech. Sobha

Developers Ltd. is a small company in comparison with other two but it is growing at a very

higher rate.

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BIBLIOGRAPHY

The various Websites used are: -

http://www.indianmirror.com/indian-industries/construction.htmlhttp://info.shine.com/ http://en.wikipedia.org/wiki/Construction_industry_of_Indiahttp://www.unitechgroup.com/http://www.dlf.inhttp://www.sobhadevelopers.com/http://www.moneycontrol.com/stocksmarketsindia/http://economictimes.indiatimes.com/

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http://economictimes.indiatimes.com/

http://www.moneycontrol.com/stocksmarketsindia/

http://www.sobhadevelopers.com/

http://www.dlf.in/

http://www.unitechgroup.com/

http://en.wikipedia.org/wiki/Construction_industry_of_India

http://info.shine.com/company/DLF-Limited/859.aspx

http://www.indianmirror.com/indian-industries/construction.html

Documents

SWOT Analysis