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Unitech + DLF – Book Profits

October 24, 2007

Our on-the-ground checks with industry participants suggest greater evidence of a slowdown – which also seems to be spreading to the office segment in some cities – in property transactions/prices. And many property firms’ diversification
into telecoms is also discomforting. Meanwhile, the stock prices of DLF and Unitech have run up by 47% and 40% respectively in the last few weeks. Despite positive long-term view and upgrades in our 12M DCF-based NAVs and target prices, book partial profits in both the counters. Buy back at lower levels if market corrects.

We are aware of the huge money raising plans by both these companies with PE funds and REITS either in London or Singapore. But moving forward to FY09e fair DCF-NAV based prices for DLF and Unitech are Rs 760 and Rs 300.

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