Prospects of Satra Properties?

Query: I am the regular follower of this blog and I do appreciate for all the timely given opinions and suggestions. I would like to know about the prospects of Satra Properties? Indira Chatrjee

Thebullishtrends: Satra Properties share price closed yesterday at Rs.91.70. Satra Properties was incorporated as Express Leasing Limited in the year 1983 to undertake the business of leasing, hire purchase, investments, finance and trading. Mr. Praful Satra and Mrs. Minaxi Satra, our present promoters acquired express Leasing Limited in June 2005 in compliance with SEBI SAST regulations. Subsequently the name was changed to Satra Properties (India) Ltd w.e.f December 2005. The company is having operations in various projects in realty sectors.

Retail Malls: Satra Properties have been developing retail malls under the name ‘Dreams the Mall. The concept of retail includes leisure and entertainment such as multiplexes, game zones, food court and restaurants. The retail model includes both lease able as well saleable projects. We intend to target a primary anchor retail operator at an appropriate stage of development of the malls and market the remaining saleable retail space to other retailers based on the location and demographic profile of the target consumers for the mall.

Commercial properties:
Satra develops commercial space for corporate and high net worth individuals. Thecommercial projects are strategically located in the upcoming commercial hubs of Mumbai.

Residential properties:
The comapny focus in this segment is on premium luxury apartments for the high end consumers. Our continued focus in this segment is to understand our customer needs and their inspirational lifestyles so that we can conceptualize our projects accordingly.

Township project:
The company have ventured into a township project through a project specific company. This project comprises of construction of villas and other amenities at strategic and scenic location. They aim to provide school, temple, community hospital and other infrastructure facilities in our township project.

Hotel Projects:
Satra's focus in this segment is on construction and development of star category hotels. Presently, they are involved in development of star category hotel at Calicut, Kerala and propose to develop star category hotel at Cochin, Kerala.

Scenario of Realty Sector:

According to Goldman Sachs, the Indian economy is expected to continue growing @ 8% or more till 2050. It is slated to become the fourth largest economy by 2050. AT KEARNEY 2004 and UNCTAD concludes that India is 3rd most attractive destination, best off shoring destination and is among the top three investment hot spots in the world.

FDIPolicy-To catalyse investment in townships, housing, built-up infrastructureand construction-development projects as an instrument to generate economic activity the Government has decided to allow FDI up to 100% under the automatic route in townships, housing, built-up infrastructure and construction-development projects, subject to guideline i & ii. i. In case of development of serviced housing plots, a minimum land area of 10 hectares. ii. In case of construction-development projects, a minimum built-up area of 50,000 sq. Mts.
*Foreign venture capital funds are allowed to invest in real estate.
*FDI has been permitted in single branded retail.
*ULCRA (Urban Land Ceiling Regulatory Act) scrapped
Reforms in Rent Control Act, Stamp Duties, Service Tax and Environmental clearances.
With higher degree of professionalism coming in the real estate development, transparency has improved, which has enhanced the comfort level of the investors. Easy accessibility of funding through banks/institutional loans for real estate investors has resulted in increased inflow of accountable funds to the sector.

Geographical Coverage of our operationsThe following maps illustrate the locations of oSatra Properties on-going and planned developments and division by size of projects and land reserves across India.

The real estate industry is booming with approx. 70% of Indian citizens under 40 years of age. Backed by high disposable incomes, augmented through easy bank loans, the young guns are all set to drive the growth of India's real estate sector at an expected 35% p.a. This segment has both the ability and willingness to spend and consume, the two most crucial factors that generate genuine demand. This is expected to propel the sector from its current $15 billion size to $100 billion by 2012.
*Demand for office space -11.7 million sq. ft. in 2007
*Demand for retail space - 8 million sq. ft in 2007 in Mumbai
*Residential demand 100 million units for India

Satra Properties Operating profits are increasing since March'07. The company posted Rs.18.54 cr operating profit and Rs.11.80 cr net profit for the quarter ended Sept'07 though the total expns increased from Rs.8.20(June'07) to Rs.18.54 cr(Sept'07). The financial position of the company is very good. Satra Properties is having a very small equity of Rs.2.92 cr before the bonus issue.Promoters are having 89.91% of stake in the company and just only 5.38% of the stake is available with the public it shows the company promoter's confidence int he company the company is having very low floating stock which will leads the company share to higher levels in the coming months. The prospects of the company is very good inteh coming years.We hope that the company will continue the same tempo in the coming months also as the scenario of the realty sector is very good in the coming years. You are advised to hold this scrip at present levels and you can expect decent gains in the coming months.

Satra Properties has announced bonus issue 2:1 ratio and the stock spilt to Rs.2 face alue of the shares. Now the shares are trading in ex bonus price.