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DLF’s 2QFY2012 results were below our expectations. The company’s revenue
increased by 6.9% yoy to `2,532cr. OPM for the quarter came in at 46.3%, up
711bp yoy, above our expectation of 43.0%. PAT declined by 11.0% yoy to
`372cr, below our expectation of `399cr.
Earnings below expectation: DLF reported 6.9% yoy growth in its revenue to
`2,532cr. Leasing volume dipped during the quarter to 0.66mn sq. ft. compared
to 0.97mn sq. ft. in 1QFY2012 and 2.0mn sq. ft. in 2QFY2011. The company
booked 1.3mn sq. ft. in 2QFY2012 compared to 2.2mn sq. ft. in 1QFY2012
and 2.1mn sq. ft. in 2QFY2011. OPM came in at 46.3%, up 711bp yoy, on
account lower cost of construction compared to sales on a yoy basis. Operating
profit grew by 26.3% yoy to `1,173cr because of higher revenue and margin
expansion. Interest cost grew by 21.3% yoy (up 6.0% qoq) to `526cr due to
increased leverage and lower capitalization of interest on the back of project
completion. Reported PAT came in at `372cr, down 11.0% yoy (up by 3.9% qoq)
and below our estimate of `399cr. The company monetized `245cr of non-core
assets during the quarter.
Outlook and valuation: DLF is optimistic on selling ~12mn sq. ft. in FY2012.
The company plans to change its sales mix by selling more plotted land during
the year. However, there is a risk to the company’s guidance, considering the
delay in approvals and slowdown in the recent months on the back of interest
rate hike. We expect DLF to book ~12mn sq. ft. in FY2012 and expect flat
volume growth in FY2013E, considering the weaker macro environment. Further,
DLF lacks near-term triggers, given the kind of muted visibility on debt reduction,
though the company plans to divest `6,000cr–7,000cr in 2–3 years to reduce
debt. Hence, we recommend Neutral on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
DLF’s 2QFY2012 results were below our expectations. The company’s revenue
increased by 6.9% yoy to `2,532cr. OPM for the quarter came in at 46.3%, up
711bp yoy, above our expectation of 43.0%. PAT declined by 11.0% yoy to
`372cr, below our expectation of `399cr.
Earnings below expectation: DLF reported 6.9% yoy growth in its revenue to
`2,532cr. Leasing volume dipped during the quarter to 0.66mn sq. ft. compared
to 0.97mn sq. ft. in 1QFY2012 and 2.0mn sq. ft. in 2QFY2011. The company
booked 1.3mn sq. ft. in 2QFY2012 compared to 2.2mn sq. ft. in 1QFY2012
and 2.1mn sq. ft. in 2QFY2011. OPM came in at 46.3%, up 711bp yoy, on
account lower cost of construction compared to sales on a yoy basis. Operating
profit grew by 26.3% yoy to `1,173cr because of higher revenue and margin
expansion. Interest cost grew by 21.3% yoy (up 6.0% qoq) to `526cr due to
increased leverage and lower capitalization of interest on the back of project
completion. Reported PAT came in at `372cr, down 11.0% yoy (up by 3.9% qoq)
and below our estimate of `399cr. The company monetized `245cr of non-core
assets during the quarter.
Outlook and valuation: DLF is optimistic on selling ~12mn sq. ft. in FY2012.
The company plans to change its sales mix by selling more plotted land during
the year. However, there is a risk to the company’s guidance, considering the
delay in approvals and slowdown in the recent months on the back of interest
rate hike. We expect DLF to book ~12mn sq. ft. in FY2012 and expect flat
volume growth in FY2013E, considering the weaker macro environment. Further,
DLF lacks near-term triggers, given the kind of muted visibility on debt reduction,
though the company plans to divest `6,000cr–7,000cr in 2–3 years to reduce
debt. Hence, we recommend Neutral on the stock.
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