Neutral on DB Realty: JP Morgan

JP Morgan recommends `Neutral’ rating on DB Realty with March ‘11 target price of 480. DB Realty reported Q2 net income of 120 crore marginally ahead of the estimate of 110 crore. FY11 PAT guidance stand maintained at 830 crore versus 200 crore achieved in H1. As per the company, revenue recognition of the two new projects along with the accelerated TDR sales should help PAT acceleration over H2FY11.

On the pre-sales front the company has already achieved 1600 crore or about 45% of its full year target. Overall, the company continues to see healthy traction in its South Mumbai portfolio despite Q2 being seasonally weak. Additionally, response to soft launch of Bandra MIG colony has been good. However, earnings surprise over Q2/Q3, possible stake divestment of Bandra project and improvement in pre-sale levels of new projects should translate into steadily improving earnings/RoE profile.