Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Focus on debt reduction
Presenting at the CLSA Forum, DLF’s management reiterated their
confidence on debt reduction of Rs30bn in FY12 as large asset sales come
through. Execution is the focus currently with 12m sf+ of deliveries
targeted in FY12. Office leasing is expected to meet 2.5-3m sf FY12
guidance even as 2Q may trend lower than average given weaker macros.
Plotted development strategy continues to being pursued for residential
projects though mortgage rate hikes imply that volume buoyancy is
missing.
Large asset sales from 2Q to trigger debt reduction
DLF is expected to conclude an Rs4bn land sale in Gurgaon in 2Q with cashflows
to be received fully by 3Q end. Sale of a Rs4-5bn IT-Park in Noida and
Rs8-9bn IT-SEZ in Pune will most probably conclude in 3Q. The Pune SEZ
requires an approval from the government for a stake sale and DLF is
optimistic about receiving it shortly. Combined with sale of Aman hotels in
4Q; management is hopeful of a debt reduction of Rs30bn by Mar12.
Delivery push in FY12 to mitigate inflation risk
After project deliveries of only 9.2m sf in last two years, DLF continues to
push for >12m sf in deliveries in FY12 as some of its large projects in Phase V
Gurgaon, Chennai and Kolkata reach their last stages. Push for deliveries are
seen as an inflation mitigation step. Deliveries should help DLF boost
customer goodwill (5+ years since launch) as well as establish the company
in new locations (Kolkata and Chennai), paving way for follow-on launches.
Leasing guidance maintained; Rs17.5bn in annuity income in FY12
DLF continues to maintain its 2.5-3.0m sf guidance of new office leases to be
signed in FY12 even as 2Q volumes may trend lower than 1Q following
weaker macros. Lease rents have largely remained stable over the last two
years but DLF believes that lower supply pressures and strong take-up of
good quality stock will lead to rental gains in FY12. Overall, management
expects Rs14.5bn in rental income in FY12 (+13% YoY) and a further Rs3bn
in other annuity business ventures (power, maintenance) to support its debt.
Plotted strategy maintained; cautious on residential volumes
Management re-emphasized their focus on plotted development as a major
project segment for FY12. DLF enjoys better margin defence and accelerated
cash flows on plot sales and as such the plotted sales strategy goes well with
overall balance sheet focus. Mortgage rate hikes of 300bps over the last year
though have curtailed volume buoyancy in residential markets, though led by
plots and luxury housing; sales are expected to reach 10m sf level of FY11.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Focus on debt reduction
Presenting at the CLSA Forum, DLF’s management reiterated their
confidence on debt reduction of Rs30bn in FY12 as large asset sales come
through. Execution is the focus currently with 12m sf+ of deliveries
targeted in FY12. Office leasing is expected to meet 2.5-3m sf FY12
guidance even as 2Q may trend lower than average given weaker macros.
Plotted development strategy continues to being pursued for residential
projects though mortgage rate hikes imply that volume buoyancy is
missing.
Large asset sales from 2Q to trigger debt reduction
DLF is expected to conclude an Rs4bn land sale in Gurgaon in 2Q with cashflows
to be received fully by 3Q end. Sale of a Rs4-5bn IT-Park in Noida and
Rs8-9bn IT-SEZ in Pune will most probably conclude in 3Q. The Pune SEZ
requires an approval from the government for a stake sale and DLF is
optimistic about receiving it shortly. Combined with sale of Aman hotels in
4Q; management is hopeful of a debt reduction of Rs30bn by Mar12.
Delivery push in FY12 to mitigate inflation risk
After project deliveries of only 9.2m sf in last two years, DLF continues to
push for >12m sf in deliveries in FY12 as some of its large projects in Phase V
Gurgaon, Chennai and Kolkata reach their last stages. Push for deliveries are
seen as an inflation mitigation step. Deliveries should help DLF boost
customer goodwill (5+ years since launch) as well as establish the company
in new locations (Kolkata and Chennai), paving way for follow-on launches.
Leasing guidance maintained; Rs17.5bn in annuity income in FY12
DLF continues to maintain its 2.5-3.0m sf guidance of new office leases to be
signed in FY12 even as 2Q volumes may trend lower than 1Q following
weaker macros. Lease rents have largely remained stable over the last two
years but DLF believes that lower supply pressures and strong take-up of
good quality stock will lead to rental gains in FY12. Overall, management
expects Rs14.5bn in rental income in FY12 (+13% YoY) and a further Rs3bn
in other annuity business ventures (power, maintenance) to support its debt.
Plotted strategy maintained; cautious on residential volumes
Management re-emphasized their focus on plotted development as a major
project segment for FY12. DLF enjoys better margin defence and accelerated
cash flows on plot sales and as such the plotted sales strategy goes well with
overall balance sheet focus. Mortgage rate hikes of 300bps over the last year
though have curtailed volume buoyancy in residential markets, though led by
plots and luxury housing; sales are expected to reach 10m sf level of FY11.
No comments:
Post a Comment