DLF missed its FY10 sales target of 15 million sq ft by 16% and achieved sales of 12.6 million sq ft (total value of Rs 71.5 billion at an average realisation of Rs 5,700/ sq ft) across the national capital region (NCR), Bangalore, Goa, Kochi and Indore. DLF?s net debt as on March 10 rose to Rs 164 billion on account of consolidation of group firms CARSF/DAL.
In FY10, DLF repaid debt of Rs 56 billion against mandatory payment of Rs 35.5 billion. Further cost of debt declined to 10.5% in March 2010 from 11.9% in December 2008. DLF fell significantly short of its original non-core asset sales target of Rs 55 billion. Q4FY10 saw sales of Rs 5.7 billion taking the total to Rs 18 billion in FY10. DLF has now pared down its target to Rs 27 billion over next 12 to 18 months.
DLF had declared revenue of Rs 19.9 billion (rise of 78% YoY), earnings before interest, taxes, depreciation and amortisation (Ebitda) of Rs 10 billion (rise of 547% YoY) and profit after tax (PAT) of Rs 4.3 billion (rise of 168% YoY) in Q4FY10 on a consolidated basis. DLF?s development business witnessed sustained volumes with 3.6 million sq ft booked in Q4FY10 taking the total bookings to 12.6 million sq ft for FY10.
The inability to reach the target for residential and non-core asset sales is a dampener. However, DLF still remains the preferred play on the back of the revival in the commercial segment, which is expected in FY11. At CMP of 299, DLF trades at 16% discount to our revised target price of Rs 354.
DLF has restructured its business model along two lines, three development companies (Gurgaon, Super Metros and the Rest of India). Rental company (including integrated CARAF/ DAL).
In FY10, DLF launched a total of 13.2 million sq ft across various locations and projects. During FY10 DLF added 21 million sq ft of projects under construction taking the total to 56 million sq.ft. DLF expects its debt-to-equity ratio (D/E) as on June 10 to be in the range of 0.65x to 0.75x (post adjustment of purchase of DSIPL/SC Asia CCPS for Rs 30.58 billion in April 2010) and plans to bring down by March 2011 in the range of 0.4x to 0.5x.
DLF?s focus remains on monetising its non core-assets/business with a target to generate cash flows of Rs 27 billion over next 12 to 18 months (Dwarka: Rs 8 billion, TIDCO: Rs 9 billion, others: Rs 10 billion). DLF is now targeting sales of 15 to 18 million sq.ft in FY11.