A closer look at Unitech's FY11 Annual Report under-scores the depths which this once Real Estate darling is now plumbing.

-Debtor situation deterioration is a concern with debtors rising 69 per cent yoy to Rs 21.5 bn. Pile-up has happened in Greater Noida properties and certian Commercial projects sold before FY09.

-Unitech's non property revenues declined 22 per cent yoy in FY11 to Rs 2.3 bn, as construction business declined. Key disappointment was a slow 12 per cent yoy rise in Realty Revenues to Rs 29.5 bn.

-Unitech's execution ramp-up was slower than expected here. Deliveries declined 38 per cent yoy to 4.3 mn sq feet. 

-Unitech resorted to exotic accounting to show a lower working capital by reclassifying FY10's cash balance as an investment and writing off half of that during FY11.

-The cash balances of Rs 2.3 bn were shown as yield enhancement certificates and Rs 1.14 bn has been written off in FY11 which equals 14 per cent of PBT. Possibility of another Rs 1.16 bn to be written off in FY12 exists.

-Surprise surprise, the Bank Term loans have been replaced by Public Deposits which rose 4X FY10 numbers, worse the deposits carry the same coupon of 14 per cent just as bank loans did.

-So what was the Rs 6.8 bn raised through equity warrants utilised for? Another Rs 8 bn has been spent on land acquisitions which led the corporate to report a negative cash flow of Rs 6.3 bn against Rs 17 bn in FY10. 

-Even though the markets have debunked the land bank theory the local realtors refuse to see the sharp change in market perceptions.

-This explains why a Rs 35000 stock drops to Rs 29 in a matter of 5 years, and there is more downside.

-EPS will work out to Rs 2.6 in FY12 and Rs 3.2 in FY13, tight conditions may even push the stock to sub Rs 20 levels.