Research Insight- DLF LTD.
Sector- Real Estate
ABOUT DLF LTD.
DLF is primarily engaged in the business of colonisation and real estate
development. The operations of the Company span all aspects of real estate
development, from the identification and acquisition of land, to planning,
execution, construction and marketing of projects
DLF Limited (DLF) is a real estate development company in India. It focuses
on the development of residential, commercial and retail properties.
DLF develops duplexes, condominiums, row houses and apartments of
different sizes. It also develops commercial offices and IT parks for the
corporate sector. In addition, DLF constructs shopping and entertainment
spaces across India. The company has 284 million square feet (msf) of
planned projects including 41 msf of projects under construction.
The company also develops, manages and operates hotels; and provides
rental services of offices and retail properties. DLF has its presence across 15
states and 24 cities in India, and headquartered in New Delhi, India.
D L F Ltd. is a public limited company incorporated on 4 July 1963. It is listed on
both, the Bombay Stock Exchange (BSE) as well as on the National Stock
Exchange (NSE).
Based on the distribution of the revenues earned by D L F, the company is
classified into the Housing construction industry. The company is engaged in the
business of building Housing real estate.
D L F ranks 4th in the Housing construction industry in terms of sales revenues
in the year 2018-19.
D L F is a large-sized company with revenues of Rs.62,129.6 million as per the
latest annual report of the company for the year ended 31 March 2020. It ranked
164th in CMIE's rankings by size in 2018-19.
The company earned sales revenues of Rs.23,699.5 million for the year ended
31 March 2020 with a balance sheet size of Rs.423,496.3 million. It owns net
fixed assets of Rs.5,228.3 million and the book value of its total assets is
Rs.423,496.3 million.
D L F has been a profitable company for the past 24 years ended 31 March
2020. It was profitable at the operating level as well as the net level. It earned an
operating profit of Rs.5,423.2 million and a net profit of Rs.10,595.1 million in 31
March 2020.
The company earned an operating margin of 22.9 per cent and a net margin of
21.7 per cent during the year ended 31 March 2020.
D L F is a low leveraged company with a debt-equity ratio of 0.233 times on the
back of a total borrowing of Rs.62,471.4 million.
Management of the company
Name Designation
K P Singh Chairman Emeritus
Mohit Gujral WholeTime Director & CEO
Ashok Kumar Tyagi Whole Time Director
G S Talwar Non Executive Director
K N Memani Non Executive Director
Rajiv Krishan Luthra Non Executive Director
Aditya Singh Non Executive Director
Pia Singh Non Executive Director
Priya Paul Non Executive Director
Name Designation
Rajiv Singh Chairman
Rajeev Talwar WholeTime Director & CEO
Devinder Singh Whole Time Director
D V Kapur Non Executive Director
Pramod Bhasin Non Executive Director
Ved Kumar Jain Non Executive Director
A S Minocha Non Executive Director
Vivek Mehra Non Executive Director
Name CMP Rs. P/E Mar Cap Rs.Cr. Div Yld % NP Qtr Rs.Cr. ROCE %
Godrej Property 1257.20 235.80 31694.17 0.00 7.10 8.58
Oberoi Realty 526.95 27.29 19198.91 0.00 286.65 10.63
Phoenix Mills 749.55 184.22 12849.67 0.00 -35.91 10.33
Prestige Estates 267.50 28.11 10719.07 0.56 59.60 13.18
NBCC 31.20 28.68 5597.47 0.43 42.81 20.54
Brigade Enterpr. 242.65 5083.18 0.41 -17.08 8.24
Peer Comparison
Shareholding Pattern
No Of Shares
100%
Promoters 74.36%
Foreign Institutions 18.28%
Banks Mutual Funds 1.58%
Others 0.73%
General Public 4.24%
Financial Institutions 0.22%
Foreign Promoter 0.59%
SWOT Analysis of DLF LTD.
DLF Limited Strengths
Largest real estate company in India- DLF LTD is the largest
company in market cap. In India
Its exposure across businesses, segments and geographies
reduces the impact of economic cycles- DLF LTD has vide
networking and is engaged in different real estate segment thus
making it a market leader
Experience of over many decades in Indian retail sector with an
expertise in the field- DLF Ltd is the old company with expertise in
real estate segment thus giving it an added advantage of customer
loyality and build market trust that are key in real estate segment.
Company has reduced debt- In recent past the company has reduced it
debt which is a good sign as the more the internal source of financing the
better it is.
DLF Limited Weaknesses
Affected due to lack of regulations and effective policies- Real estate is a
segment that pick slow and fulfils needs of diverse target population, Frauds
etc in this segment act as a disadvantage for the company like DLF Ltd
Majorly present only in India and limited global exposure- DLF is mainly
doing business in India whereas its competitors are spreading to global
market as well.
Financials of the company- Company has low interest coverage ratio. The
company has delivered a poor sales growth of -4.48% over past five years. It
has a low return on equity of 1.81% for last 3 years.
DLF Limited Opportunities
Tax incentives for housing investments- Govt. provide many subsidy to the
builder with tax incentives available in housing investment act as a lucarative.
New innovation and people ready to invest for the leasure- Shortage of
houses in urban areas and the innovation in living spaces like shared flats,
villa etc has added an Oppurtunity for the firm and businesses to widen their
thinking and attract the customers.
DLF Limited Threats
Economic downturn – In Covid 19 time real estate sector is the worst
hit sector because of low demand and lockdown with cash crunch in
the economy. This is expected to be normal in the coming year with the
normalcy in the economy because of vaccine roll out. The losses
though are huge and impacted the business largely.
My View-
DLF is primarily engaged in the business of colonisation and real estate development. The operations
of the Company span all aspects of real estate development, from the identification and acquisition
of land, to planning, execution, construction and marketing of projects. DLF is a leader as per market
cap and its financial are better than its competitors like price to book value is above the industry
average. Dividend yield is high from competitors at .88%. Its overall financial though are week
because of lockdown and recession in market but its overall financial on peer basis are strong and Its
price chart are going up this is because of the normalcy going to arrive after vaccine. Thus future
prospects of this industry are good. Also DLF has been in news recently for its deals of acquisition etc
as tenants are returning, corporates are looking for office space etc. All this positive news is reflected
in its share price charts.
