INSUBCONTINENT EXCLUSIVE:
Citi has a sell call on DLF with a target price of Rs 161.
The current market price of DLF is Rs 194.50.
Time period given by the brokerage
is one year when DLF price can reach the defined target
achieving FY19 pre-sales of Rs22bn to Rs22.5bn
Reported PL and BS was impacted by adoption of IND AS 115 revenue recognition standard which led to reversal of approx
Rs140bn of past revenue and associated profit
DCCDL) net debt increased to Rs71.2bn from Rs62.7bn at 4QFY18 end due to capex and purchase of land
DCCDL net debt was broadly flat in 1QFY19
Consolidated DLF (ex DCCDL) cash flow was negative Rs7.5bn
DCCDL) managed to break even on operating cash flow basis (including external interest payout but excluding interest on Rs85bn debt due to
Achieving break-even on OCF basis is key in our view
DLF is targeting to bring down debt to zero through a combination of 1) Rs22.5bn balance infusion from promoters for warrants 2) QIP
DCCDL net leasing at 0.14msf was muted in 1QFY19 (0.28msf in 4QFY18 and 0.20msf in 1QFY18)
this will accrue to company as projects are handed over during the next couple of years
Valuations remain expensive especially in the context of impending dilution and still weak demand environment
