DLF gains after good sequential Q3 earnings

DLF rose 1.59% to Rs 146.75 at 10:10 IST on BSE after consolidated net profit rose 45% to Rs 145 crore on 16% increase in total income to Rs 2590 crore in Q3 December 2013 over Q3 December 2012.

The result was announced after market hours on Friday, 14 February 2014.

Meanwhile, the BSE Sensex was up 63.56 points, or 0.31%, to 20,430.38.

On BSE, so far 1.77 lakh shares were traded in the counter, compared with an average volume of 8.30 lakh shares in the past one quarter.

The stock hit a high of Rs 147.75 and a low of Rs 145 so far during the day. The stock hit a 52-week high of Rs 289.20 on 12 March 2013. The stock hit a 52-week low of Rs 120.25 on 6 August 2013.

The stock had underperformed the market over the past one month till 14 February 2014, sliding 8.05% compared with the Sensex's 3.17% fall. The scrip had underperformed the market in past one quarter, falling 0.76% as against Sensex's 0.16% decline.

The large-cap real estate company has an equity capital of Rs 356.29 crore. Face value per share is Rs 2.

DLF's EBITDA (earnings before interest, taxes, depreciation and amortization) rose 32% to Rs 1144 crore in Q3 December 2013 over Q3 December 2012.

DLF's consolidated net profit fell 48.99% to Rs 145 crore on 13.05% increase in total income to Rs 2590 crore in Q3 December 2013 over Q3 December 2012. EBITDA rose 7% to Rs 1144 crore in Q3 December 2013 over Q3 December 2012.

The company has met the goals of non-core divestments with the successful consummation of divestiture transactions such as Aman Resorts, Pramerica Insurance joint venture (JV) and final settlement with DDA on the Dwarka land piece. With this the company is poised to meet its guidance of reducing the Net debt to Rs 17500-18000 crore by end of the financial year ending March 2014 (FY 2014).

As on date, the net debt stands at Rs 17400 crore (approximately). The company is comfortable with its current net debt levels and expects these to continue at similar levels till the economic cycle improves. However, the quality of debt shall continue to improve as annuity incomes continue to grow - currently almost 70% of the net debt is backed by annuity flows.

During the last 2 quarters, the economic environment in the country has further worsened leading to slowdown in demand in all sectors including real estate. The company expects slow growth and high interest rate environment to continue atleast for the next 2 quarters - till middle of the financial year ending March 2015 (FY 2015). In spite of these economic conditions, the company shall continue to invest capex in creating high quality annuity yielding assets and invest in the upgradation of land through requisite approvals, consolidation and investment in infrastructure. The company shall continue to focus on growth through aggressive construction of projects, hence creating high value, high quality real estate products ready to be unlocked as and when the economic cycle turns positive.

In a separate announcement. DLF announced appointment of three directors on its board, subject to requisite approvals. The appointments will allow DLF to further strengthen its management and leverage the vast experience of new directors in the current competitive business environment, the company said in a statement.

The former President of Institute of Chartered Accountants of India, Mr. Ved Kumar Jain, has been appointed as independent director on the board. Mr. Jain has more than 3 decades of rich experience in advising a number of large corporates on critical issues of management, finance, taxation, and governance. He specialises in direct taxes and has handled complicated tax matters, appeals and tax planning matters for large corporates. Mr. Jain was on the Board of Governors of the Indian Institute of Corporate Affairs under Ministry of Corporate Affairs. He is an author of several books on direct taxes. He is also serving on the boards of a number of private and public sector companies, DLF said.

The company has also appointed Mr. Mohit Gujral and Mr. Rajeev Talwar as Whole-Time Directors for a period of five years, the company added.

DLF has 314 million square feet (msf) of planned projects with 52 msf of projects under construction. DLF's primary business is development of residential, commercial and retail properties. The company has a unique business model with earnings arising from development and rentals. Its exposure across businesses, segments and geographies, mitigates any down-cycles in the market. From developing 22 major colonies in Delhi, DLF is now present across 15 states-24 cities in India.

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