Hold DLF; target of Rs185: Edelweiss
Edelweiss is bullish on DLF has recommended hold rating on the stock with a target price of Rs 185 in its research report dated August 28, 2017
August 29, 2017 / 01:14 PM IST
Edelweiss' research report on DLF
DLF board has approved sale of promoters’ 40% equity stake in DCCDL for a pre-tax amount of INR119bn. Promoter will infuse most of the deal proceeds into DLF and the company will need to raise additional public capital as well. Post-deal, we estimate company’s net debt to reduce by ~INR134b. This, however, will come at the expense of significant equity dilution (36-44%, we believe) and negates gains from debt reduction — (-)5% to (-)11% NAV/share impact.
Rental income should see meaningful uptick only post FY19. We maintain ‘HOLD/SU’.
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