DLF Q1: Analysts expect PAT to fall 29% at Rs 206 cr

Moneycontrol Bureau

DLF, India's largest real estate company, will declare its first quarter earnings today. Analysts on an average expect profit after tax of the company to fall by 29 percent year-on-year to Rs 206 crore, according to a CNBC-TV18 poll.

Revenues may rise just 1 percent to Rs 2,220 crore in April-June quarter from Rs 2,197 crore in a year ago period.

Earnings before interest, tax, depreciation & amortisation (EBITDA) are likely to drop by 16.5 percent Y-o-Y to Rs 890 crore and operating profit margin may slip sharply to 40 percent in first quarter from 48.5 percent Y-o-Y.

What to watch out for:

Analysts feel the company's new launches (like Crest) will not hit the revenue recognition threshold during the quarter. Also, having delivered 9 million square feet (msf) in Q4, its recognition base has reduced.

Margin will slip Y-o-Y due to relatively higher contribution from older projects with less than 30 percent margin. Recent projects with 45 percent margin would follow the new accounting practise and hence, that will contribute to revenue from Q4FY14.

Margins will, however, improve on a Q-o-Q basis as Q4FY13 margins were impacted by cost escalation and reduction in interest expense.

Crest launch

With the vacation of the stay order on the ‘Crest’ project by the Supreme Court, the project is on track now. DLF launched 0.85 msf in phase 1 of Crest.

It sold 250 flats at a rate of Rs 18000 per square feet at the project within a couple of days of the launch.

Key things to watch out for are launch of Camelia (Magnolias II) and traction on asset monetization.