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DLF---------------------------------------------------------------------------- Maintain UNDERPERFORM
New report: 3Q FY11 disappoints - weakness in volumes and cash flows continues
● DLF reported weak 3Q FY11 results as PAT of Rs4.7 bn was 21%
below our estimates, primarily due to lower other income and
higher tax realisation. Revenues at Rs24.8 bn went up 5% QoQ
but were 7% below our estimates. 3Q11 EPS stood at Rs2.74.
● DLF sold 2.48 mn sq ft in 3Q11 and has achieved 6.5 mn sq ft for
9M11. New launches were impacted due to approval delays but
management expects to launch over 8 mn sq ft in 4Q11 which
appears aggressive. In the annuity business, DLF leased 1.68 mn
sq ft in 3Q11 and a total 4.2 mn sq ft has been leased in 9MFY11.
● Operating cash flows after interest and taxes were negative Rs1.9
bn in 3Q11. Cash flows have remained weak for past several
quarters which is a concern. DLF spent Rs3.5 bn on buying land
in 3Q11 calling it a strategic move. Net debt increased further to
Rs220 bn and gearing stood at 0.85x as of December 2010.
● We revise our target price to Rs210 and reduce EPS estimates for
FY11/12 by 11%/3%, respectively. With future growth prospects
appearing bleak, we maintain our UNDERPERFORM rating.
3Q11 results 21% below estimates
DLF reported weak 3Q FY11 results as PAT of Rs4.7 bn was 21%
below our estimates, primarily due to lower other income and higher
tax realisation. Revenues at Rs24.8 bn went up 5% QoQ but were 7%
below our estimates. Development revenues at Rs17.3 bn were flat
QoQ. 3Q11 EPS stood at Rs2.74 and 9M11 EPS stands at Rs7.63.
DLF sold 2.48 mn sq ft in 3Q11 and has achieved 6.5 mn sq ft for
9M11 against the full-year FY11 guidance of 12 mn sq ft. New
launches were impacted due to approval delays but management
expects to launch over 8 mn sq ft in 4Q11 which appears aggressive.
In the annuity business, DLF leased 1.68 mn sq ft in 3Q11 and a total
4.2 mn sq ft has been leased in 9MFY11.
Operating cash flows negative, land buying in focus again
We calculate operating cash flows after interest and taxes to be
negative Rs1.9 bn in 3Q11. Cash flows have remained negative for
past several quarters which is a concern. DLF spent Rs3.5 bn on
buying land in 3Q11 calling it a strategic move. Net debt increased
further to Rs220 bn and gearing stood at 0.85x as of December 2010.
Cut EPS estimates, reduce target price
DLF has indicated that it will focus on protecting margins even at the cost
of volumes going forward, which we believe is not a prudent strategy in
the current macro environment. We cut our FY11-12 EPS estimates by
11%/ 3%. Our Mar-12 NAV stands at Rs269/share and we reduce our
target price to Rs210 (from Rs221). With operating cash flows unlikely to
turn positive anytime soon and future growth prospects appearing bleak,
we maintain our UNDERPERFORM rating.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
DLF---------------------------------------------------------------------------- Maintain UNDERPERFORM
New report: 3Q FY11 disappoints - weakness in volumes and cash flows continues
● DLF reported weak 3Q FY11 results as PAT of Rs4.7 bn was 21%
below our estimates, primarily due to lower other income and
higher tax realisation. Revenues at Rs24.8 bn went up 5% QoQ
but were 7% below our estimates. 3Q11 EPS stood at Rs2.74.
● DLF sold 2.48 mn sq ft in 3Q11 and has achieved 6.5 mn sq ft for
9M11. New launches were impacted due to approval delays but
management expects to launch over 8 mn sq ft in 4Q11 which
appears aggressive. In the annuity business, DLF leased 1.68 mn
sq ft in 3Q11 and a total 4.2 mn sq ft has been leased in 9MFY11.
● Operating cash flows after interest and taxes were negative Rs1.9
bn in 3Q11. Cash flows have remained weak for past several
quarters which is a concern. DLF spent Rs3.5 bn on buying land
in 3Q11 calling it a strategic move. Net debt increased further to
Rs220 bn and gearing stood at 0.85x as of December 2010.
● We revise our target price to Rs210 and reduce EPS estimates for
FY11/12 by 11%/3%, respectively. With future growth prospects
appearing bleak, we maintain our UNDERPERFORM rating.
3Q11 results 21% below estimates
DLF reported weak 3Q FY11 results as PAT of Rs4.7 bn was 21%
below our estimates, primarily due to lower other income and higher
tax realisation. Revenues at Rs24.8 bn went up 5% QoQ but were 7%
below our estimates. Development revenues at Rs17.3 bn were flat
QoQ. 3Q11 EPS stood at Rs2.74 and 9M11 EPS stands at Rs7.63.
DLF sold 2.48 mn sq ft in 3Q11 and has achieved 6.5 mn sq ft for
9M11 against the full-year FY11 guidance of 12 mn sq ft. New
launches were impacted due to approval delays but management
expects to launch over 8 mn sq ft in 4Q11 which appears aggressive.
In the annuity business, DLF leased 1.68 mn sq ft in 3Q11 and a total
4.2 mn sq ft has been leased in 9MFY11.
Operating cash flows negative, land buying in focus again
We calculate operating cash flows after interest and taxes to be
negative Rs1.9 bn in 3Q11. Cash flows have remained negative for
past several quarters which is a concern. DLF spent Rs3.5 bn on
buying land in 3Q11 calling it a strategic move. Net debt increased
further to Rs220 bn and gearing stood at 0.85x as of December 2010.
Cut EPS estimates, reduce target price
DLF has indicated that it will focus on protecting margins even at the cost
of volumes going forward, which we believe is not a prudent strategy in
the current macro environment. We cut our FY11-12 EPS estimates by
11%/ 3%. Our Mar-12 NAV stands at Rs269/share and we reduce our
target price to Rs210 (from Rs221). With operating cash flows unlikely to
turn positive anytime soon and future growth prospects appearing bleak,
we maintain our UNDERPERFORM rating.
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