DLF Q2 sales likely to be weak on pre-festive slackness

Real estate firm DLF will declare its second quarter (July-September) results today. Analysts feel sales of the company are likely to be weak sequentially on account of pre-festive slackness.

According to a CNBC-TV18 poll, even its operational performance will be lacklustre Q-o-Q due to lack of new launches in September quarter, which may drag pre-sales. Pre-sales were very strong in June quarter due to Crest which sold 0.8 million square feet (msf) at an average price of Rs 17500 per square feet.

Analysts expect profit after tax of the real estate company to increase 9 percent year-on-year (down 17.2 percent quarter-on-quarter) to Rs 150 crore in three-month period ended September 2013.

Revenues during September quarter rose 8 percent on yearly basis (down 5 percent sequentially) to Rs 2,200 crore.

Earnings before interest, tax, depreciation and amortisation (EBITDA) may jump 17 percent Y-o-Y (down 4.6 percent Q-o-Q) to Rs 873 crore and operating profit margin may expand 240 basis points Y-o-Y (down 50 basis points Q-o-Q) to 39 percent in the quarter gone by.

Analysts are concerned about the company's debt, which was at Rs 20,370 crore at the end of June 2013. The management guided that the company will reduce its debt to Rs 17,500 crore by end of FY14.

On the non-core asset divestment front, the situation is status-quo as the Aman deal is now open for re-bidding and is expected to take some time to fructify.

The stock lost 40 percent in the last six months as the Aman resort asset sale hit a roadblock after Zecha missed 2 payment deadlines in March and June. The management says they are in talks with other PE players for the same.