DLF - More clarity leads to Upgrade - Emkay

Reco: BUY
CMP: Rs 261
Target Price: Rs 310

- DLF to focus on developing hard & soft infrastructure in Gurgaon to enhance its value proposition to its customers. This should help in higher sales traction and realisations

- Surplus Cashflows from Operations to improve over 3 years with new housing launches of ~Rs 160bn, expected increase in rentals from Rs 17bn to 27bn & reduced cost of debt

- Net debt to reduce significantly through divestments, equity dilution & surplus operating cashflows. Mgmt. expects net debt at Rs 100bn; our estimation at Rs 125bn over 3yrs

- 0Upgrade our TP to Rs 310 / and our rating from Accumulate to Buy. High concentration to Gurgaon market for growth and valuation is the biggest risk to our TP

Source : Equity Bulls

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