CapitaLand India Trust Financial Analysis: Net Profit Growth of 14% YoY

Business Description

CapitaLand India Trust (CLINT) is a Singapore-listed real estate investment trust (REIT) focused on investing in Indian real estate assets. Its portfolio includes IT parks, industrial facilities, logistics parks, and data centers. As of FY 2024, CLINT manages properties across major cities in India, including Bangalore, Chennai, Hyderabad, Pune, and Mumbai. The company has a strong sustainability focus, with 94% of its portfolio being green-certified.

CLINT has a diversified portfolio comprising 10 IT parks, 3 industrial facilities, 1 logistics park, and 4 data center developments. Its total assets under management (AUM) stand at S\$3.7 billion, reflecting a 26% year-on-year (YoY) growth.

The trust operates in a competitive market with key competitors in the Indian commercial real estate sector, such as Embassy REIT and Brookfield India REIT. It holds a competitive advantage through its strategic locations, strong tenant base, and long-term growth pipeline.

Revenue Streams, Customer Base, and Competitive Advantage

CLINT generates revenue primarily from rental income from its IT parks, industrial facilities, and logistics assets. The trust benefits from a diversified tenant base of 336 tenants, with the largest tenant contributing only 11% of the portfolio’s base rent. Notable tenants include Tata Consultancy Services, Infosys, and Amazon, reflecting a focus on technology, software development, and engineering sectors.

The trust’s competitive advantage lies in its green-certified portfolio, high committed occupancy (95% excluding acquisitions), and strategic investments in high-growth segments such as data centers and logistics parks.

Financial Statement Analysis

Income Statement

CLINT reported a total property income of INR 17,378 million (S\$277.9 million) for FY 2024, which represents a 21% YoY increase. Net property income (NPI) grew by 14% YoY to INR 12,859 million (S\$205.6 million). Income available for distribution rose by 9% YoY to INR 6,346 million (S\$101.5 million). This growth was driven by higher rental income from existing properties and contributions from recent acquisitions.

The trust declared a distribution per unit (DPU) of 6.84 Singapore cents for FY 2024, up 6% YoY.

Balance Sheet

Total assets as of 31 December 2024 stood at INR 281.1 billion (S\$4,481.1 million), while total borrowings were INR 110.6 billion (S\$1,763.5 million), resulting in a gearing ratio of 38.5%. Adjusted net asset value (NAV) per unit increased 19% YoY to S\$1.38.

Cash Flow Statement

While specific cash flow figures are not detailed in the report, the trust has a strong capital management framework. It retains 10% of its income for greater flexibility in growth and has committed capital expenditures for data center developments and property acquisitions.

Key Highlights for Investor Action

• Dividend Growth: DPU increased by 6% YoY to 6.84 Singapore cents.
• Net Profit Growth: NPI increased by 14% YoY, driven by higher rental income and new acquisitions.
• Sustainability: 94% of the portfolio is green-certified, aligning with global ESG trends.
• Future Growth: Strong pipeline with 244 MW of data center developments and large-scale acquisitions in IT parks and logistics parks.
• High Occupancy: Committed occupancy of 95% (excluding acquisitions) ensures stable revenue streams.

Special Activities

Key initiatives to improve profitability include:

• Termination of the master agreement with Arshiya for seven warehouses and in-house operational restructuring to stabilize logistics park performance by 2H FY 2025.
• Planned completion of 244 MW of data center developments, targeting high-growth areas such as Mumbai, Hyderabad, and Chennai.
• Forward purchases in high-demand locations such as Bangalore and Hyderabad, with a total development pipeline of 22.7 million sq ft.

Recommendations

For Current Investors

Hold the stock. CLINT’s consistent dividend growth, strong financial performance, and strategic investments in high-growth segments make it a compelling long-term investment. The trust’s focus on sustainability and diversification further enhances its appeal.

For Potential Investors

Buy the stock. CLINT’s robust growth trajectory, attractive dividend yield of 6.4%, and exposure to India’s booming IT and real estate sectors provide strong reasons to invest. The trust’s strategic pipeline and high occupancy rates ensure future profitability.

Disclaimer

This recommendation is based on the financial report provided and assumes no unforeseen circumstances impacting the company’s operations. Investors are advised to conduct their own due diligence before making any investment decisions.

Report Details

Date of Report: 27 January 2025

Reporting Period: Financial Year 2024

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