DLF - PAT weak on cost adjustments; operations in line - Religare

DLF's Q3 revenues/PAT at Rs 13.1bn/2.5bn came in below our and street estimates on (a) final cost adjustments (Rs 5.6bn) in near-completion projects, (b) losses in Aman Resorts (Rs 0.8bn) and (c) weak POCM revenue (under new revenue recognition methodology).

Operational numbers were otherwise good with new sales/leases/deliveries of 2.27msf/0.44msf/ 0.42msf. Net debt reduced Rs 18bn QoQ to Rs 213.5bn (in line with FY13 guidance of Rs 190bn). While revenue recognition may lag under the new revenue recognition methodology, improvement in operations will be the key stock trigger.

Maintain BUY with a TP of Rs 285.

Source : Equity Bulls

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