Broker's call: DLF (Buy)

| Updated on March 12, 2020

ICICI Securities

DLF (Buy)

CMP: ₹156.9

Target: ₹250

DLF was reeling under high debt levels in its development business (residential and commercial sales) over FY14-FY17. Post the sale of promoter stake in the rental arm DCCDL to GIC Singapore in Q3FY18, promoters have since infused ₹9,000 crore in DLF, which has helped the company to, significantly, bring down debt levels.

Post its qualified institutional placement fund raise of ₹3,200 crore and balance infusion of promoter funds of ₹2,250 crore, DLF’s ex-DCCDL net debt had reduced to ₹3,400 crore and post the settlement of DCCDL payables by DLF of ₹8,700 crore, DLF’s net debt as of December 2019 stands at ₹4,900 crore. With regard to debt reduction, DLF is targeting to bring this down to around ₹2,500 crore through monetisation of land parcels and exiting joint ventures in FY21E.

We revise our target price to ₹250/share (earlier ₹266) factoring in longer sales cycle for premium residential projects and upgrade our rating to ‘buy’ from ‘add’ post the decline in stock price over the last month.

Published on March 12, 2020

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