DLF has lost an anti-trust case (pertaining to Park Place, Magnolias and Belaire) after the Competition Appellate Tribunal (Compat) upheld certain findings of the Competition Commission of India (CCI), and is now required to pay penalty of R630 crore. While the company has the right to appeal against the order in the Supreme Court, it is unclear whether it would have to pay the penalty under protest right away.
While DLF may face impact of R820 crore on NAV (post levying interest of 9% pa), the impact on NAV/share is limited at R4.5. We currently have a ‘buy’ on the stock with a target price of R246. Having achieved its debt target of R17,500 crore by FY14, led by successful completion of its asset monetisation drive, going forward DLF’s stock performance hinges on pick up in performance of its development property.