Post significant deleveraging, risk profile is lower than before for DLF, CLSA said.
Shares of DLF gained more than 7 percent from day's low on August 23 after global brokerage maintained buy call on the stock with a target price of Rs 228, implying 58 percent potential upside from current levels.
The stock gained nearly 2 percent in afternoon after losing more than 5 percent to fresh 31-month low of Rs 136.70 intraday. At 1336 hours IST, it was quoting at Rs 147, up Rs 2.70, or 1.87 percent on the BSE.
"Management mounted credible defence as an old legal matter popped up. The issue raised in petition filed before Supreme Court is indeed immaterial," CLSA said.
"News flow risk remains in the near term, but post significant deleveraging, risk profile is lower than before," the global brokerage house said.
The stock lost 16 percent in the previous session after the company received a notice from the Supreme Court for non-disclosure of key information related to Haryana land case in Qualified institutional placement (QIP) 2019.
But Ashok Tyagi, Wholetime Director of DLF denied this, saying all material disclosures had been made in the QIP and complaint is about 5-6 acres of land by a company which is not company's subsidiary."
In an interview to CNBC-TV18 on August 22, he further said, "DLF has received the notice from Supreme Court a month ago and SC notice does not ask us for any disclosures. SC has asked DLF & SEBI whether the complainant should be impleaded in the case."
Last month, the real estate major had said that promoters infused the last tranche of funds amounting to Rs 2,250 crore into the company in June quarter. Hence with a total infusion of Rs 11,250 crore, DLF has now successfully completed the entire process of transformation of its balance sheet, it added.DLF reported over two-fold jump in its consolidated net profit at Rs 414.72 crore for the quarter ending June (against Rs 172.77 crore YoY) despite a fall in revenue, driven by an exceptional income of Rs 296.51 crore.The Great Diwali Discount!
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