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Narendra Properties


Narendra Properties operates in the building construction industry. 

It purchases land and converts them to residential houses, complexes, flats, commercial space (on selective basis) primarily near Chennai’s IT corridor.   There appears to be a lot of unmet demand for residential space from the working population.

The company reported reasonably stable performance over the last five years – reporting about 3cr of operating profits on revenues of 11cr.  It did not employ any debt in its operations.

The business is tied directly to general economic activity and more specifically to the fortunes of the IT sector in Chennai.  It is subject to the interest-rate environment, which impairs demand for house properties in a high interest-rate environment.   Moreover, its performance is dependent on its ability to execute projects in a timely fashion – the absence of which will lead to the disappearance of earnings.

The business is subject to heavy competition in the real estate market pressuring selling prices.  It is also subject to escalating costs with increasing land prices (forcing it to push out of city limits) as well as commodity prices for construction (cement, steel, etc.).  

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