DLF Debt concerns status-quo REDUCE :Emkay

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DLF

Debt concerns status-quo

REDUCE

CMP: Rs 223                                       Target Price: Rs 220

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n     Management confirms Our stance : Any meaningful reduction in debt will only come from divestment of Non-core assets, major cash from operations will go towards debt servicing

n     Company sold 2.2 msf in the quarter valued at ~Rs 11.0bn, leased 0.75 msf of office space which is in-line to management’s target of 2.5-3.0 msf in FY12

n     Large ticket non-core divestment are at advance stage, we believe company needs to negotiate regulatory hurdles to get a break through in two SEZ divestments

n     We upgrade our target price to Rs 220 but maintain Reduce  rating considering the current macro environment and still sometime and clarity for debt overhang to lower