DLF – Marginal Recovery in Q1 FY 2010

DLF revenues of Rs17.46bn and earnings of Rs3.96bn were down 55% YoY and 79% YoY respectively. EBITDA margins of 45% surprised, despite the fall in revenues; would await more details on this. The company has also announced dividend of Rs2/share for FY09.

Construction activity has picked up, now 42msf under contrs (vs. 36.5msf in 4Q), particularly resi projects; also delivered 1msf of off/comm. space. Pre-sold ~2.5msf in the qtr – Delhi, Capital Greens (2msf); and Bangalore (0.5msf); Total developable area down to 423msf (vs. 425msf earlier due to sale of few projects/land. De-notified 5-SEZs as commercial / IT space demand still muted – though pick-up in enquiries.

DAL outstanding recd to the tune of Rs25bn in the qtr (vs. target Rs20bn), this has lowered receivable to Rs26bn (vs. Rs49bn as of Mar 09), expects another Rs5bn during FY10.

Better than expected qtr though sustaining these margins going forward appear difficult. Operationally, improved construction activity and reducing DAL receivables and debt are positive signs.