Group-8 Draft Report

21202217 ABHISHEK MAHAPATRA

2. Industry analysis: 3
The porter’s five force model include the following : 3
Competition in the industry 3
Potential of new entrants into the industry 3
Power of suppliers 3
Power of customers 3
Threat of substitute products 4

3. Macro environment : 4
Political Factors 4
Economic Factors 5
Social Factors 5
Technological Factors 5
Environmental Factors 5
Legal Factors 6

4. Internal analysis. 6
Resource: 6
Capabilities: 6
Strengths: 7
Weakness: 7

5. Central problem. 7

6. Competitive positioning. 8
VIP FRAMEWORK OF UNITECH LTD 8
1. Background of the company

The Indian real estate investment firm Unitech Limited, with its headquarters in New Delhi,

previously asserted its dominance as the nation's biggest home function Object.

The corporation, which has its headquarters in New Delhi, is ranked 1484 in the Forbes Global 2000

ranking of the top 2000 public companies worldwide and 32nd in India. Highways, roads, power

plants, transmission lines, and residential projects dubbed Unitech Cities/Uni World are all part of

its construction business. These projects can be found in cities like Mumbai, Delhi, Kolkata,

Bhubaneswar, Chennai, Hyderabad, Mohali, Bangalore, Kochi, Noida, Greater Noida, Agra, Lucknow,

Varanasi, Gurgaon, and Ghaziabad.

Former joint ventures LG - Unitech Carlson (Radisson) - Unitech Hyundai - Unitech Singapore

Consortium.

In order to conduct soil investigations, Ramesh Chandra, Dr. S. P. Shrivastava, Dr. P. K. Mohanti, Dr.

Ramesh Kapur, and Dr. Bahri founded United Technical Consultant Private Ltd in 1972. In 1974,

they expanded into civil engineering contracts. The business entered the real estate market in 1986

and began to put more emphasis on it in 2000. It was India's second-largest listed real estate firm a

few years ago.

Partnerships

Be it firms like Som, Callison and HOK in real estate- Unitech has a history of successful

partnerships with leading global organizations. Its blue-chip customer portfolio in real estate

includes clients like Fidelity, HSBC, Sun Life, Marriott, Reebok, IBM, RBS, Ernst & Young, Bank of

America and LG.

Financial statement

Revenue of the last financial year was 1764.94 cr.

Net sale- mar 17-889.34cr, mar 18- 1240.37cr, mar 19- 508.03cr, mar20-1144.66cr, mar21-

86.03cr. Profit & loss statement- mar17- (-190.89cr), mar 18- (-189.77cr), mar 19- (-649.61cr),

mar20- (-937.28cr), mar21- (-1175.88cr).

The porter’s five force model include the following :

Competition in the industry

Even while the threat of new competitors is currently minimal, an improvement in the economy will

surely change this situation. The current state of the economy, including challenges in getting

capital, poor sales in the retail and service sectors, little to no commercial construction, and intense

competition among existing industry competitors, is the main contributor to this low entry threat.

However, there aren't many entrance hurdles (aside from the need for finance) and there aren't

many problems with economies of scale or brand loyalty. These challenges can be handled by

aiming for maximum lease occupancy and picking businesses deliberately that already have strong

consumer brand loyalty.

Potential of new entrants into the industry

Although the threat posed by new competitors is currently minimal, this situation will inevitably

alter if the economy improves. This low entry threat is mostly a result of the current economic

climate, which includes challenges in acquiring money, bankruptcies in the retail and service sectors

coupled with slow sales, little to no commercial construction, and fierce competition among existing

industry competitors.

Power of suppliers

Suppliers pose a serious hazard. There are many suppliers to pick from, which lessens their actual

threat to the sector, but there are also many inputs needed for this industry to function. For this

industry to become profitable and stay profitable, each input is essential. This industry is impacted

by banks and other private equity firms, both in terms of whether a venture will be financed and

how much it will cost. Property owners also have the ability to influence the price of real estate.

Compared to residential real estate, commercial real estate is substantially more expensive.

Power of customers

Buyers pose a serious threat. The retail and service-oriented business sectors are extremely

important to this sector. Although customers are not the main threat in this situation, they have a big
 impact on how businesses run, which has an impact on the real estate operations sector. As a result,

this industry loses when customers aren't spending money and new enterprises aren't starting up

(or when existing ones are closing).

Threat of substitute products

Substitutes pose a moderate to minimal threat. Due to the geographic and demographic benefits

made possible by the management business, the majority of buyers in this sector opt to lease

property. Furthermore, renting is more advantageous when compared to the price of purchasing

prime real estate. This is especially true for chain stores that sell niche goods and take up little

space. To form a joint venture and privately control the business facilities would be another

replacement, or alternative, for this industry.

3. Macro environment :
There is no doubt that real estate is one of the most dynamic, fast-paced, and competitive industries

in the world today. Therefore, buying, selling, and managing properties require a combination of

skills and expertise. In addition, the changing market, new laws and regulations, and the latest

technology are all contributing to the volatility of the industry. As a result, there is a lot of

uncertainty for both sellers and buyers.

Political Factors

Government policies and regulations can change the real estate market and drive demand and

supply. For example, the governments in many countries have been encouraging people to save

more and invest in property.

Political stability and instability also impact on the housing market. Investors are encouraged to buy

more when a country has political stability. Conversely, there may be less demand for properties

during political instabilities, particularly during wars which often damage many buildings.
Economic Factors

Economic environment is the next component of this PESTEL analysis of the real estate industry.

Factors such as interest rates and inflation influence the real estate market and can make it more or

less attractive to investors.

One of the most important factors driving the real estate industry is demand. This is a function of

both current and future demand. Current demand is the result of factors like population growth and

changes in demographics, affordability, and the level of economic growth. These, in turn, are

influenced by interest rates, government policies, and the level of financial security.

Social Factors

Social environment is a key element in this PESTEL analysis of the real estate industry. There are

many factors to consider here. For instance, consumer behavior drives the real estate market. This

market is shaped by the way people want to live, the types of properties they want to buy, and their

economic and financial situations.

Population growth is also a major factor shaping the real estate demand and supply. Similarly,

education levels play an important role in shaping consumer behavior and spending patterns. This

has a direct impact on real estate demand and supply.

Technological Factors

As the real estate industry becomes more reliant on technology, the impact of technology on it

becomes more visible. The use of Big Data in real estate has led to innovations like artificial

intelligence, and virtual reality. With real estate technology, the process of buying or selling a

property can be completely automated. This has led to increased efficiency and reduced costs.

With rising consumer expectations and emerging technologies, real estate is being seen as a key

component of a ‘Smart City’.

Augmented Reality is one of the most exciting real estate technologies today. It has been around for

a while but is finally seeing mass adoption in the real estate sector.

Environmental Factors

Energy usage is one of the largest environmental impacts of the real estate sector. It is a result of

factors like building new properties, managing existing properties, and the use of gas and electricity
 appliances. Likewise, real estate has a significant carbon footprint. This contributes to global

warming and environmental degradation.

Developing real estate sometimes results in closing down outdoor space where children and adults

can play and perform leisure activities. In addition, more people living in urbanized areas leads to

water waste, food waste, noise pollution, and air pollution. Therefore, both governments and

property developers need to explore avenues to reduce the impact of the housing industry on the

environment.

Legal Factors

Legal environment is the last part of discussion in this PESTEL analysis of the real estate industry.

Government legislation plays an important role in shaping the real estate market. Laws can be

passed to protect the environment, allow new technologies to be developed, or govern real estate

licensing. These laws and regulations can drive up the cost of real estate as well. It is worth noting

that different countries have different property ownership laws which may impact on the purchasing

decisions of property buyers.

4. Internal analysis.

Resource:

● Unitech has excellent human resource policies and a unique work culture and

environment offers one of the best places to work which is shown by the 0

employee turnover since the last 3 years.

● Unitech has one of the biggest base of contractors across cities and is still growing

making its operational execution more efficient every passing day

Capabilities:

● Since unitech believes in Product Standardization it will result in economies of

scale and will help in quick execution, it is currently working on implementing

various process changes to speed up construction activity.

engineering design esp. for mid/ affordable housing for which it acquired a

structural design firm to enhance in house design capabilities.

● Unitech has a CSR group named Sankalp working towards making better living

standards for the society that involves itself in skill building, environment

protection, child education and energy efficiency.

Strengths:

● The biggest strength of Unitech Limited is that it has decades of experience in real

estate and has a wide customer and partner base giving it a strong national

presence.

● Unitech offers a diversified product mix in real estate comprising world-class

commercial complexes, IT/ITes parks, SEZs, integrated residential developments,

schools, hotels, malls, golf courses and amusement parks making it one of India’s

largest real estate builders and second largest real estate investment company .

Weakness:

● There has been a decline in operational performance where the company is

currently running through loss with PAT value of -326 cr.Also its returns have

reduced by 72.9% since 2018 currently standing at 1.85 rupees are a concern.

Making it stand at a low piotroski score of 3 and altman index of low indicating

high chances of solvency mostly due to most of the offices going remote location

affecting its major chunk of revenue that used to come from rent.

● Global presence and international tie-ups are very less.

5. Central problem.
It has been a downfall for Unitech, which was the largest publicly traded real estate business in

India in 2007 until being taken over by the government.

Real estate company Unitech was a rising star around the turn of the century, with a sizable market

valuation, the title of second-largest developer in India, and a stronger foothold in the telecom

industry.
 Its 2009 agreement with Telenor of Norway for a combined telecom business, Uninor, failed. Sanjay

Chandra, the managing director, was detained for his suspected participation in the Rs 1.85 lakh

billion 2G spectrum scandal two years later. All of the defendants in the case were cleared by a

Delhi court in 2017, a judgment that has been contested by the CBI and the Enforcement

Directorate.

In line with many other real estate firms that benefited from the boom, Unitech also rapidly grew

between 2005 and 2007 and started a number of projects all throughout the nation. However, the

projects turned into a problem when the cash crunch struck and sales slowed.

Later, the promoters committed over 73% of their 17.92% interest in Unitech, giving the business a

market capitalization of Rs 1,906 crore. The business has delivered 5.18 million square feet and has

33.16 million square feet under development, according to its 2016–17 annual report.

According to current media sources, Unitech owes more than 16,000 purchasers from its delayed

projects Rs 7,800 crore. Additionally, the corporation is heavily indebted, owing around Rs 6,700

crore.

Unitech managed to keep up its ambitious expansion, starting construction projects and purchasing

property. The company immediately encountered difficulties. Sanjay and Ajay were detained in 2017

on suspicion of stealing money from homeowners.

The Chandra family-sponsored company's fortune, which had been on a phenomenal development

trajectory during the 2003–2008 boom, took a turn for the worse in 2008 when Unitech Wireless,

one of its subsidiaries, bid and won a pan–India telecom license for 2G spectrum.

The same year, Unitech sold a share it had purchased for Rs 1,650 crore under the scandalous first-

come, first-served telecom policy for over 67% of the firm to Telenor of Norway for over Rs 6,000

crore.

6. Competitive positioning.

VIP FRAMEWORK OF UNITECH LTD

Name Last Price Market Cap. Sales Net Profit Total Assets
 (Rs. cr.) Turnover

DLF 384.75 95,237.62 4,053.55 1,335.35 30,916.86

Macrotech Dev 956.70 46,076.53 8,365.91 1,133.46 23,027.09

Godrej Prop 1,250.35 34,762.35 1,473.45 525.98 14,454.18

Oberoi Realty 931.40 33,865.91 1,012.48 381.88 8,790.29

Phoenix Mills 1,532.90 27,373.79 283.59 369.88 5,465.61

Prestige Estate 443.15 17,764.18 4,559.20 947.30 8,944.70

Brigade Ent 496.35 11,444.16 2,160.76 308.86 5,194.38

Mahindra Life 407.30 6,294.65 252.81 42.89 1,656.12

NBCC (India) 32.95 5,931.00 5,546.62 182.86 1,774.75

Sobha 620.30 5,883.29 2,714.10 112.80 4,754.66

Sunteck Realty 389.95 5,710.82 218.54 12.90 2,364.98

Unitech 1.85 484.02 86.03 -1,976.80 5,776.83

Information:

1.Growth in Net Profit with Increasing Profit Margin

INSIDER & INSTITUTIONAL ACTIVITY

Equity Capital: 3,035.72 Cr FV: 2.00

Period MF Net Purchase / (sold) FII Net

LAST 3M 24,812.28 6,191.54

LAST 6M 76,270.39 -16,098.05

LAST 12M 216,957.61 -174,164.26

Some details on the DLF share price and the Unitech share price.The promoters of DLF hold a

75.0% stake in the company.In case of Unitech the stake stands at 5.1%.

Unitech share price was Rs 1.85.Its share price remain unchanged by 0%.

Some process boundaries were like Supreme Court asks Unitech board to upload on its

website timeline for completion of stalled projects.