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DLF Limited Overweight
DLF.BO, DLFU IN
1QFY12 - Headline profit below but core estimates
inline, marginal debt reduction
DLF reported 1QFY12 consolidated earnings of Rs 3.6B down 13% Y/Y.
In brief, headline basis numbers were below estimates but on a core basis
results met expectations. This was 10% below estimates on account of
sharply lower other income, higher interest costs and elevated non core
business losses. At EBITDA level company largely met expectations. Net
debt declined marginally by RS 1B during the Q. Overall debt reduction
was muted in 1Q on account of Rs4B increase in fixed assets/investments.
Operating cash flows for the quarter at Rs8.4B have improved by Rs1.9B
over Jun-10 levels.
Key Financial highlights- 1] Revenue of Rs 24.5B increased 21% y/y
marginally below expectations 2] EBITDA Margins(core basis) at 47%
were higher than expectations but below 1Q11 levels of 51%. Note that
impact of cost escalations (done in 4Q) was not taken into account in
1Q11; 3] Losses in non core business (insurance and hotels) stay
elevated at Rs479MM in 1Q (4Q11 level Rs 118MM). 4] Other income
during the Q declined to Rs 574MM (-57% Y/Y) and was one of the
main reasons for the disappointment.
Key operating highlights- 1] Sales bookings of 2.2 msf (Rs 11B) were
up 16% Y/Y driven by Gurgaon plotted launch (1.1 msf). Target for the
year is around Rs 65-70B in value terms 2] Leasing of additional 0.73
msf with office leasing rates showing improvement at the margin.
Guidance for year at 3msf 3] Deliveries were 1.9 msf with target of >12
msf for FY12 4] Asset divestment of Rs 1.6B but management is guiding
to increased traction here in specific large assets and maintaining its
guidance of Rs 60-70B divestment over next 2-3 years.
Commentary on outlook highlight challenges ahead- Management
commentary on sector outlook is bearish given overall tight liquidity,
high interest rates and a challenging economic environment which are
impacting both home sales and office leasing. Further, the new proposed
land acquisition bill could likely adversely impact acquisitions for
urban/industrial purposes.
More to follow after conference call- Our estimates for FY12 are below
guidance and factor in 7 msf of plot sales (vs. 10-12 msf guidance) and 3
msf of office leasing
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
DLF Limited Overweight
DLF.BO, DLFU IN
1QFY12 - Headline profit below but core estimates
inline, marginal debt reduction
DLF reported 1QFY12 consolidated earnings of Rs 3.6B down 13% Y/Y.
In brief, headline basis numbers were below estimates but on a core basis
results met expectations. This was 10% below estimates on account of
sharply lower other income, higher interest costs and elevated non core
business losses. At EBITDA level company largely met expectations. Net
debt declined marginally by RS 1B during the Q. Overall debt reduction
was muted in 1Q on account of Rs4B increase in fixed assets/investments.
Operating cash flows for the quarter at Rs8.4B have improved by Rs1.9B
over Jun-10 levels.
Key Financial highlights- 1] Revenue of Rs 24.5B increased 21% y/y
marginally below expectations 2] EBITDA Margins(core basis) at 47%
were higher than expectations but below 1Q11 levels of 51%. Note that
impact of cost escalations (done in 4Q) was not taken into account in
1Q11; 3] Losses in non core business (insurance and hotels) stay
elevated at Rs479MM in 1Q (4Q11 level Rs 118MM). 4] Other income
during the Q declined to Rs 574MM (-57% Y/Y) and was one of the
main reasons for the disappointment.
Key operating highlights- 1] Sales bookings of 2.2 msf (Rs 11B) were
up 16% Y/Y driven by Gurgaon plotted launch (1.1 msf). Target for the
year is around Rs 65-70B in value terms 2] Leasing of additional 0.73
msf with office leasing rates showing improvement at the margin.
Guidance for year at 3msf 3] Deliveries were 1.9 msf with target of >12
msf for FY12 4] Asset divestment of Rs 1.6B but management is guiding
to increased traction here in specific large assets and maintaining its
guidance of Rs 60-70B divestment over next 2-3 years.
Commentary on outlook highlight challenges ahead- Management
commentary on sector outlook is bearish given overall tight liquidity,
high interest rates and a challenging economic environment which are
impacting both home sales and office leasing. Further, the new proposed
land acquisition bill could likely adversely impact acquisitions for
urban/industrial purposes.
More to follow after conference call- Our estimates for FY12 are below
guidance and factor in 7 msf of plot sales (vs. 10-12 msf guidance) and 3
msf of office leasing
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