[T.S.R:16939] DLF-A Multi-Year Short

DLF-A Multi-Year Short

In market parlance if you can pull down the leader, the sidekicks collapse on their own. DLF does not need to be pulled down, it will fall on it's own weight and the rest of the sector will just follow. 

Here are some facts to ponder upon: 1.DLF's consolidated Sales have fallen from around Rs 14,500 crores in FY08 to Rs 7500 crores in FY10 2.PAT has fallen from around Rs. 7,800 crs in FY08 to Rs. 1800 crs in FY10; 3. Despite Rs 7500 crs of Sales and Rs 1800 crs of PAT there has being a net cash outflow of Rs. 260 crores in FY10; 4. Total Debt has increased from Rs. 12000 crs to Rs. 21,000 crs ; 5.Total Share Capital has increased from around Rs. 1300 crs in FY08 to Rs. 6300 crs in FY10. 6. 

BUY back announced in falling markets @ Rs.500/share to support the stock price followed by a QIP 3-4 months later. 6. Over 215 subsidiaries spread across India, high number of inter subsidiary transactions (including capital and borrowings) and a regional auditor certifying books for each subsidiary.  

Analysts retain a Neutral rating for DLF.  But lower our FY11E-FY13E EPS estimates for DLF by 26%-36% due to a delay in key projects such as NTC Mills in Mumbai, higher construction cost and interest assumptions. 

Key risks: to upside—faster than expected approvals for Mumbai project, faster than expected debt reduction; downside—slower than anticipated asset sales, on the downside; continued slowdown in the commercial property market.

 

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

 

Nothing in this article is, or should be construed as, investment advice.

 

 

 

 

 

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