DLF Company Update; Concerns linger; Reduce; Target: Rs 203 ::Emkay

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DLF Company Update; Concerns linger; Reduce; Target: Rs 203

n    Exit to PE investor, post-merger structure and blockage of capital in assets with low visibility have stretched DLF’s balance sheet

n    Core-business cash generation will go towards debt servicing; only divestment of non-core assets will lead to meaningful reduction in company’s debt

n    DLF’s plotted-development focused strategy plays low on value economics, but is a smart respite given the current economic environment and company’s financial health

n    Valuing the company on SOTP-basis with NAV at Rs 203 with Reduce rating. Post-crisis, the stock trades at lowest P/BV justified by lowest ROE and highest D/E ratio