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DBS Vickers on Tuesday downgraded Ascendas India Trust (a-iTrust) to a "hold" from a "buy", and cut its target price to S$1.15 a unit from S$1.20.
Since the research house upgraded the trust to a "buy" 18 months ago, its price has rallied more than 30 per cent.
"However, with a weaker-than-expected Q1 2018 results and limited upside to our target price, we expect a-iTrust's share price to pause for breath,'' DBS Vickers said.
"We suggest that investors wait for a better entry point, to gain exposure to a well-managed and expanding Indian business space portfolio."
With a portfolio which includes seven world-class IT business parks in India, A-iTrust reported a distribution per unit (DPU) of 1.31 Singapore cents for its fiscal first quarter ended June 30, 2017, down 4 per cent from a year ago.
It said the DPU would have been stable at 1.37 cents if the one-off settlement with a tenant at Park Square was excluded. Its performance was also affected by higher current income tax expenses and income hedging losses arising from the appreciation of the Indian Rupee against the Singapore Dollar.
DBS Vickers said a-iTrust's healthy outlook appears priced in for now.
"While we too remain positive on a-iTrust's outlook, forecasting DPU compound annual growth rate (CAGR) over 2017 to 2020 of around 7per cent per annum - on the back of positive rental reversions given favourable demand and supply dynamics in its key markets as well as the ramp-up of earnings from recently acquired or soon to be completed developments - we believe this has largely been priced in for now."
At 1:20pm, a-iTrust is hovering around S$1.155 a unit, down 0.5 Singapore cent, or 0.431 per cent.