By 31st August 2012 all the listed companies will be out with their first quarter results. Over the past 15 months the consensus estimate was that Indian companies will grow by 20% of their earnings. That was
downgraded and finally Indian companies grew by around 12%.

For the year end March 2013, the consensus expect around 15% over all growth in earnings and I won’t be surprised if this time too it turns out to be below those estimates.

So, here are few hits and misses after the first quarter results and what values Value Operations estimate for the year end 2013.

Two weeks back, Dean Baker, the co-founder of US based the centre of economic and policy research said that the housing bubble in United kingdom, Canada and Australia is far large then their economies. The house prices have given a return of almost 100% from the year 2001 to 2009. This explains how costly the houses are selling! All those 3 countries have nothing to do with Indian economy.

But if I look at Dean’s point of view and put India’s real estate business in picture, Indian real estate have given returns of almost 400% from 2001 to 2009! Those returns explain the whole story why Indians love investing in real estate!

Ashiana housing also does its business in the same sector. After announcing its full year reports (including cash flows) recently, value operations have given quality and performance rating of A2 to this business.

Ashiana has reported drop of one quarter of sales revenue compare to last year June quarter results and drop of one third of its profits have floated a new story on the surface of real estate for me. Is this a sign of burst of some kind of bubble?

Value Operations expect its intrinsic value for the year end 2013 to be Rs 160. Today it is trading at fair value. This translates a fall of almost 20% in its values compare to its 2012 value (Rs 204).

What do you think are the properties around you are fairly priced or overpriced?