DLF - Cutting Estimates - Motilal Oswal

DLF - 3QFY11 Concall: Ups commercial lease guidance and maintains residential sales guidance for FY11; Target net DER of 0.5-0.6x by FY12; Cutting estimates

Management re-iterated FY11 resi sales guidance of ~12-15msf. Sales achieved till 9MFY11 stood at ~6.5msf, implying sales of 6-8.5msf, seems challenging.

Management mentioned that delay in new launches in 3QFY11 was due to delay in getting necessary Government approvals.

During 3QFY11, DLF surpassed its annual commercial lease guidance of ~3-4msf. Management has guided for total leasing for FY11 to be upwards of ~5msf.

There is an ongoing income tax claim of Rs12b against DLF from FY09, which it is contesting in court and has not made any provision for the same.

During 3QFY11, DLF incurred ~Rs5b on land purchase and capex. Management expects a recurring outgo of ~Rs3-4b on account of land acquisition.

DLF has ~24msf of operational and ~16msf of under construction assets in commercial/ retail vertical. We expect the company to be the key beneficiary from the ongoing revival in the commercial and retail verticals across different micro-markets. DLF trades at a P/E of 17.8x FY12 EPS of Rs12.6 and 13.5x FY13 EPS of Rs16.6. Our FY13E NAV for DLF is Rs397/share.

Source : Equity Bulls

Keywords