Incorporated in 2008, P.E. Analytics, also known as PropEquity, offers a proprietary Real Estate Business Intelligence and Analytics platform on a B2B model. Serving developers, the construction industry, investors, banks, housing finance companies, equity research firms, financial institutions, and mortgage insurers, the company delivers reliable real estate data, analytics, and market research reports. These services are available in various formats and pricing tiers on an annual subscription basis. PropEquity provides monthly updates on information for over 1.6 lakh projects by more than 45,000 developers across 44 cities, ensuring comprehensive pan-India coverage.
P.E. Analytics Focuses on High-Margin Project Monitoring
In its recent conference call (May 2024), P.E. Analytics announced that their primary focus is on project monitoring, a high-margin product for the company.
Promoters:
P.E. Analytics is promoted by Mr. Samir Jasuja.
Financials:
Financial Overview
The company’s financials show consistent sales growth, though the percentage growth is modest. Over the past four years, the company has maintained a very healthy operating profit margin. With no debt and positive free cash flows nearly every year, the company is financially robust.
Key ratios, such as ROE and ROCE, have consistently exceeded 15%, indicating strong financial performance.
Financial Insight
Excluding the growth in other income, there’s a decline in the Profit after Tax (PAT) in FY 2023. However, the company’s reserve and surplus of over 50 crores signify ample funds for expansion without external borrowing. The decision to retain earnings rather than declare dividends aligns with the company’s growth-oriented strategy, prioritizing cash for expansion and future growth initiatives.
Company’s Competitive Strengths
- Robust Database: The Company has an unparalleled proprietary database, offering extensive coverage across 44 cities in India. With over 13 years of real estate data encompassing more than 180 data points and continuous monthly updates spanning 156 months, the database sets the company apart. Its comprehensive coverage includes data on over 42,000 developers, 136,000 projects, and a staggering 97,000,000 units, establishing a formidable moat in the industry.
- Strong Financial Foundation: Bolstered by a strong balance sheet, the company operates with zero debt and consistently generates positive free cash flows. With reserve and surplus exceeding 50 crores, the company’s financial position is robust, providing a solid foundation for sustained growth and expansion initiatives.
Company’s Weaknesses
While it’s challenging to identify significant weaknesses, one aspect to consider is the cyclical nature of the real estate industry, which could potentially impact the company’s performance. However, during a recent conference call, the management addressed this concern, providing reassurance regarding the company’s resilience and ability to navigate through market cycles.
My Viewpoint
After reading the DRHP and Annual Reports, I found the company to be strong financially and operationally. However, the recent conference call transcript raised some concerns. Instead of focusing on its three major product verticals, the company plans to venture into multiple new areas, such as:
- Real Estate Private Equity Fund
- YouTube Channel (already started)
- Auto Valuations (unrelated to their core business)
- Education Vertical
- International Markets
While they might be right in their approach, as an investor, I prefer companies that stay focused on their core strengths rather than trying to do too many things at once.
Leave feedback about this