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DLF Limited
Management Meeting Takeaways
Quick Comment – DLF CFO, Ashok Tyagi,
presented at Morgan Stanley India Summit 2011:
Following are the key highlights.
DLF viewed India’s F11 physical market story as
strong pickup in leasing demand (in volume terms)…
However, according to management, rentals were flattish
(except in some micro markets, such as Gurgaon, where
rentals have risen from the bottom of Rs40 psf to Rs55
psf now).
…but this year its target is to improve on rental
rates rather than volumes: The retail segment remains
weak, but policy action on (allowing) FDI inflows into
multi-brand retail could boost leasing demand.
Land-bank focus will be in 10 key markets: NCR,
Chandigarh, Mumbai, Kolkata, Bangalore, Chennai,
Hyderabad, Kochi, Indore and Pune. The company will
exit from other city markets. Of these 10 markets,
Gurgaon (including Manesar) and Chandigarh (including
Mullanpur, Mohali and Panchkula) have greater
importance. Most of DLF’s land-bank is now zoned,
according to the management.
De-leveraging – DLF believes that the optimal debt
for the company is Rs100-120 bln: That is down from
Rs214 bln as of March 2011); it seeks to achieve this
level in three years. For F12, it plans to lower debt by
Rs30-40 bln (Rs35 bln from sale of non-core assets and
Rs10 bln from internal accruals). Of the 10-12 msf new
sales target for F12, DLF aims to gross Rs40 bln from
the sale of plots (10msf) and Rs30 bln (2msf) from sale
of premium housing. In general, DLF achieves a high
(70%) sales to launch ratio, which it seeks to maintain.
Stock catalysts include: new launch momentum
(including Gurgaon plots), Mumbai car park policy clarity
(Lower Parel launch) and visibility of softer local macro
(inflation and interest rates).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
DLF Limited
Management Meeting Takeaways
Quick Comment – DLF CFO, Ashok Tyagi,
presented at Morgan Stanley India Summit 2011:
Following are the key highlights.
DLF viewed India’s F11 physical market story as
strong pickup in leasing demand (in volume terms)…
However, according to management, rentals were flattish
(except in some micro markets, such as Gurgaon, where
rentals have risen from the bottom of Rs40 psf to Rs55
psf now).
…but this year its target is to improve on rental
rates rather than volumes: The retail segment remains
weak, but policy action on (allowing) FDI inflows into
multi-brand retail could boost leasing demand.
Land-bank focus will be in 10 key markets: NCR,
Chandigarh, Mumbai, Kolkata, Bangalore, Chennai,
Hyderabad, Kochi, Indore and Pune. The company will
exit from other city markets. Of these 10 markets,
Gurgaon (including Manesar) and Chandigarh (including
Mullanpur, Mohali and Panchkula) have greater
importance. Most of DLF’s land-bank is now zoned,
according to the management.
De-leveraging – DLF believes that the optimal debt
for the company is Rs100-120 bln: That is down from
Rs214 bln as of March 2011); it seeks to achieve this
level in three years. For F12, it plans to lower debt by
Rs30-40 bln (Rs35 bln from sale of non-core assets and
Rs10 bln from internal accruals). Of the 10-12 msf new
sales target for F12, DLF aims to gross Rs40 bln from
the sale of plots (10msf) and Rs30 bln (2msf) from sale
of premium housing. In general, DLF achieves a high
(70%) sales to launch ratio, which it seeks to maintain.
Stock catalysts include: new launch momentum
(including Gurgaon plots), Mumbai car park policy clarity
(Lower Parel launch) and visibility of softer local macro
(inflation and interest rates).
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