DLF - March 2013 Results Preview - Motilal Oswal

- P&L to remain weak: We estimate revenue at INR17.1b (down 35% YoY), EBITDA at INR7.5b (down 6% YoY) and PAT at INR1.4b (down 36% YoY). We account for no major contribution from the recently concluded asset divestments in other income, as (1) DLF has already booked INR0.65b loss provision for Aman Resort transaction in 3QFY13, and (2) the Wind Mills transaction happened almost at book value.

- Annual sales to weaken due to delay in luxury launches: DLF launched three projects in 4QFY13, including (1) Ultima (1.2msf, New Gurgaon Sector-81 at INR9-10k/sf), (2) super luxury project (plots and villas with ticket size of INR17m-85m) at Samavana, Kasauli, and (3) Prime Tower Okhla, New Delhi (at INR15k/sf). However, delay in the launch of its super luxury projects, Crest and Camellia to 1HFY14, would impact annual sales run rate meaningfully (we estimate INR40b v/s INR53b in FY12 and INR24.8b in 9MFY13).

- Leverage to remain largely unaltered: After INR18.7b QoQ reduction in 3QFY13, we expect DLF's net debt to remain largely unaltered. Further debt reduction hinges on receipt of payment related to Aman and Wind Mills divestment. We expect operating cash flow to improve.

- Valuation and view: DLF trades at 19.5x FY15E EPS of INR11.8, 1.4x FY15E BV, and at ~21% discount to our NAV estimate of INR300/share. Maintain Buy.

Source : Equity Bulls

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