DLF looks to axe more debt this fiscal year

DLF, the country’s largest realtor by market capitalisation, is looking to reduce its debt-to-equity ratio to 0.5-0.6 by next year from 0.73 at present.

The company has debt repayments of Rs2,890 crore to make this financial year (April-March), of which it has paid Rs1,224 crore as of September-end, officials said at a conference call on Thursday.

That leaves Rs1,666 crore due in the second half of this financial year, but if the company decides to target a debt:equity ratio of 0.5, it will have to pay up a further Rs3,000 crore, say analysts.

An analyst from a domestic brokerage told DNA, “They can come down till 0.65-67, but pulling it down to 0.5-0.6 is quite impossible. Their operational cash flows are not so high as to pay off that huge an amount.”

The company had an operating cashflow of Rs2,000 crore in the September quarter. Net profit fell 4.85% to Rs418 crore from Rs439 crore in the corresponding quarter last year.

Saurabh Chawla, executive director, finance, DLF, said in the conference call that going forward, the key concern for the realtor would be the sharp increase in commodity prices and firmness in labour prices in the industry.

“We are trying to mitigate the inflationary hurdles which could become an issue in the medium term,” Chawla said. DLF saw seen its land costs double in the September quarter — up 110% to Rs807.99 crore over the September quarter of the last financial year.

On DLF’s guidance to launch 12-15 million square feet (msft) by the end of the financial year, Chawla said the company might not be able to reach the upper band of the estimate but would look at completing 12 msft.

DLF is launching 2-3 plotted developments in Sector 73- Gurgaon and one in greater Chandigarh near Mohali-Panchkula. It is also launching a plotted development in Indore, a premium apartment block in south Delhi and a residential project in south India.

In the commercial office space segment, the company booked 1.5 msft by completing a building in Cybercity Gurgaon, taking the total commercial rent space to 2.5 msft. DLF is targeting 3-4 msft of leasing by the end of the financial year.

With regards to the mill land in Mumbai bought from National Textile Corp (NTC), DLF expects to start the project in June, six months behind the earlier plan of December, as some approvals are still pending.

DLF has also booked Rs413 crore through land monetisation and is looking at selling parcels in New Gurgaon where it has one surplus land parcel, as also though sale of some hotels and 3-4 non-core land parcels.