DLF - 4QFY2013 Result Update - Angel Broking

For 4QFY2013, DLF reported a disappointing set of numbers, both on the revenue and profitability fronts. For 4QFY2013, the company reported a revenue of Rs. 2,226, a decline of 15.0% yoy, which is below the consensus estimate of a revenue of Rs. 2,553cr. The EBIDTAM came in at 32.6%, which is below the street's estimate of 38.7%, mainly due to (a) nil revenue booking from its new-launched projects Skycourt and Ultima, (b) higher contribution from older projects with lower operating margins and (c) cost escalations in some of the projects. Owing to lower-than-expected operating performance, one item loss, and a high interest expense, the company reported a PAT loss of Rs. 4cr for the quarter vs a profit of Rs. 213cr in 4QFY2012.

Operating performance remains weak: For 4QFY2013, the company recorded sales booking of 1.99mn sqft, a decline of 12.3% qoq, mainly due to lack of new launches and weak demand. The leasing activity also remained subdued during the quarter. Leased area during the quarter stood at 0.52mn sqft (vs 0.69mn sqft as in 3QFY2013 and 0.64mn sqft as in 4QFY2012).

Outlook and Valuation: During the quarter, owing to delay in closure of Aman resort sales, net debt of the company increased by Rs. 300cr sequentially to Rs. 21,731cr. Going forward, on the back of new launches, we expect sales volume of 8mn sqft and 9mn sqft for FY2014 and FY2015 respectively. In the short term, we continue to remain positive on the company's near-term plans of debt reduction. Further, with the high value of new project launches and monetization of non-core assets, we expect improvement in cash flow going forward. We value DLF on a SOTP basis and slightly adjust our NAV to Rs. 338/share due to delay in launch of phase V in Gurgaon, and apply a 30% discount to our SOTP value to arrive at a target price of Rs. 236. We thus recommend Buy on the stock.

Source : Equity Bulls

Keywords