Buy DLF; target of Rs 236: HDFC Securities

November 24
02:41 2017

HDFC Securities’s research report on DLF

DLF’s  2QFY18  PAT  came  in  81%  below  estimates,  on account of weak residential  revenue  recognition.  No green shoots yet on B/S recovery, as (1)  DLF has reopened sales only from 1-Nov-2017, post RERA compliance, (2) This  impacted pre-sales over last 5  months (sales  were closed since 1-May-2017),  (3)  Net cancellation of Rs 1.3bn, (3) Weak collections and a step-up  in construction of projects nearing completion have resulted in Rs 17bn increase in net debt vs FY17.

With  projects re-opening, pre-sales will pickup from 3QFY18E. Further, GIC has received CCI approvals for DCCDL deal and fund flow including that from DLF Promoter/QIP is expected in FY18E. As  the impact of demonet  has receded, we reduce the land bank discount of 10-15%. We maintain BUY with increased NAV- based TP of Rs 236/sh.

For all recommendations report, click here

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