Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Asset sales in 2Q likely
DLF’s PAT miss in 1Q was driven by lower other income and higher
interest costs. While higher interest costs would sustain and even move
up, other income will remain volatile. DLF’s margins reverted back to mid-
40s after a scare in 4Q as company pushed through its plotted sales
strategy. Net debt increased marginally as company’s operating cash
flows can only barely meet interest payment obligations at the current
pace of business. Management has guided for some key asset sales
during 2QFY12 itself and can be a near-term trigger for the stock.
Ebitda beat but PAT miss on below Ebitda items
DLF net profit for 1QFY12 came at Rs3.6bn, down 13% YoY and 13% below
estimates. The miss was on below Ebitda line items with lower other income
(asset sale loss) & higher interest (capitalization of new buildings, 50bps cost
hike) wiping out gains from 7% higher than expected Ebitda. We factor in
higher interest cost by cutting our FY12-14 earning estimates by 3-5%.
Revenues rose 21% YoY on higher plot sales – 7% ahead of estimates. Ebitda
margins were inline at 45%, rebounding from one-off 25% in 4QFY11.
Sales volumes up 18% YoY, leasing inline
1Q sales volumes of 2.2m sf were up 18% YoY largely on new launch activity
(Indore and Gurgaon plotted). A part of spill-over of Gurgaon sales to 2Q
made 1Q volumes a bit lower than expectations. Leasing activity at 0.95m sf
was down 17% YoY/30% QoQ. Net of cancellations, leasing volumes at 0.73m
sf were inline for the annual target of 2.5m-3.0m sf of leasing. Rentals
increased 9% QoQ to Rs47/sf/mth.
Small net debt increase a negative; Large asset sale eyed
A net debt increase of Rs1.25bn QoQ, though small, was still a
disappointment. Company spent c.Rs3.5bn on capex and land buying which
could not be completely financed out of operational cash flows post interest
payment of Rs5.8bn. Completion of large asset sales (Rs10bn+) is expected
in the next six months and management aims to utilize the proceeds for debt
reduction – any large reduction here would be a positive.
Deliveries on track, guidance maintained
DLF delivered 1.9m sf of lease assets in 1Q. It has maintained its targets of
delivering 12m sf+ of properties during FY12, led by c.10m sf of completions
in Gurgaon luxury housing segment. While management has continued with
its cautious tone on the sector, it remains fairly confident of meeting its
targets of launches, leasing, deliveries and asset sales during the year. DLF
not missing its guidance will be a major improvement. Maintain O-PF.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Asset sales in 2Q likely
DLF’s PAT miss in 1Q was driven by lower other income and higher
interest costs. While higher interest costs would sustain and even move
up, other income will remain volatile. DLF’s margins reverted back to mid-
40s after a scare in 4Q as company pushed through its plotted sales
strategy. Net debt increased marginally as company’s operating cash
flows can only barely meet interest payment obligations at the current
pace of business. Management has guided for some key asset sales
during 2QFY12 itself and can be a near-term trigger for the stock.
Ebitda beat but PAT miss on below Ebitda items
DLF net profit for 1QFY12 came at Rs3.6bn, down 13% YoY and 13% below
estimates. The miss was on below Ebitda line items with lower other income
(asset sale loss) & higher interest (capitalization of new buildings, 50bps cost
hike) wiping out gains from 7% higher than expected Ebitda. We factor in
higher interest cost by cutting our FY12-14 earning estimates by 3-5%.
Revenues rose 21% YoY on higher plot sales – 7% ahead of estimates. Ebitda
margins were inline at 45%, rebounding from one-off 25% in 4QFY11.
Sales volumes up 18% YoY, leasing inline
1Q sales volumes of 2.2m sf were up 18% YoY largely on new launch activity
(Indore and Gurgaon plotted). A part of spill-over of Gurgaon sales to 2Q
made 1Q volumes a bit lower than expectations. Leasing activity at 0.95m sf
was down 17% YoY/30% QoQ. Net of cancellations, leasing volumes at 0.73m
sf were inline for the annual target of 2.5m-3.0m sf of leasing. Rentals
increased 9% QoQ to Rs47/sf/mth.
Small net debt increase a negative; Large asset sale eyed
A net debt increase of Rs1.25bn QoQ, though small, was still a
disappointment. Company spent c.Rs3.5bn on capex and land buying which
could not be completely financed out of operational cash flows post interest
payment of Rs5.8bn. Completion of large asset sales (Rs10bn+) is expected
in the next six months and management aims to utilize the proceeds for debt
reduction – any large reduction here would be a positive.
Deliveries on track, guidance maintained
DLF delivered 1.9m sf of lease assets in 1Q. It has maintained its targets of
delivering 12m sf+ of properties during FY12, led by c.10m sf of completions
in Gurgaon luxury housing segment. While management has continued with
its cautious tone on the sector, it remains fairly confident of meeting its
targets of launches, leasing, deliveries and asset sales during the year. DLF
not missing its guidance will be a major improvement. Maintain O-PF.
No comments:
Post a Comment