DLF, the biggest real estate company in India, is set to announce its third quarter results on Thursday. Analysts on an average expect profit after tax of the company to rise by 90 percent year-on-year to Rs 490 crore in the quarter due to jump in other income from NTC land sale, according to CNBC-TV18 poll.
However, revenues are expected to be flat at Rs 2,032 crore in the December quarter as against Rs 2,034 crore in a year ago period.
Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to fall by 5.2 percent YoY to Rs 780 crore while operating profit margin is seen declining 440 basis points YoY to 36 percent in the quarter.
Analysts feel the first sign of concrete deleveraging by DLF will be reported in the balance sheet as its net debt will come down by around Rs 1,500 crore to Rs 20,000 crore as against Rs 21,200 crore at end of second quarter of FY13.
December quarter has been a game changer for DLF with the receipt of Rs 2,700 crore from Lodha for NTC land parcel (in Mumbai) and completion of Aman resorts sale transaction (for USD 300 million, which impact will be visible Q4 onwards).
The company also sold part of wind power assets for Rs 282 crore to Bharat Light and Power, which will be reflected in fourth quarter's balance sheet.
According to analysts, debt of the company is expected to come down to Rs 19,000 crore by FY13 while management guided for Rs 18,500 crore by end FY13.
DLF launched one project in New Gurgaon of around one million square feet (sq ft) and another one million sq ft of plotted launches in Mullanpur.
Analysts expect DLF to report around 3 million sq ft of sales in 3QFY13 as against around 3 million sq ft in April-September period of FY13 as DLF launched new residential projects in Bangalore and Gurgaon.
The high impact launches in Gurgaon that were planned in Q3 will now take place in Q4. Hence, fourth quarter is expected to be the best as DLF gets ready to launch more projects especially in its core market Gurgaon.
Investors should watch out for 1) Successful launch of Magnolia II; 2) Pick-up in cash conversion post shift to third-party contractors; and 3) Leasing momentum in the backdrop of FY13 guidance of 2 million square feet (Sq ft).