New Delhi: India’s largest developer by market value, DLF Ltd, has reduced its dues from DLF Assets Ltd (DAL) to Rs2,600 crore in the three months to June, compared with Rs4,906 crore in the preceding quarter.
Between April and June, DLF received Rs2,500 crore from DAL towards payment for commercial properties it had sold to DAL, exceeding a target of Rs2,000 crore, the realtor said in a statement released late evening on Thursday. DAL is owned by the promoter family of DLF and buys and holds completed commercial assets of the builder.
Fairly good: DLF’s Gurgaon office. Ramesh Pathania / Mint
In May, promoters of DLF sold a 9.9% stake in the company for Rs3,860 crore to raise money to buy out hedge fund DE Shaw and Co. Lp’s investment in DAL and infuse capital into DAL.
“It was expected that DLF would have received funds from DAL,” said Adhidev Chattopadhyay, a research analyst at Centrum Broking Ltd. However, clarity is still needed on whether DLF will buy out DE Shaw’s stake in DAL, Chattopadhyay said.
Rajiv Singh, vice-chairman, DLF, told analysts during a conference call after posting the firm’s June quarter results that DE Shaw will soon exit DAL, but added that the hedge fund is “demonstrating a commitment” to the firm and a decision will be taken keeping this in mind.
DLF has also brought down its net debt to Rs11,686 crore at the end of the June quarter, against an opening debt of Rs13,958 crore through the sale of non-core assets and funds received from DAL.
By March, DLF plans to halve its debt to Rs6,186 crore. It plans to raise Rs5,000 crore through the sale of non-core assets and expects an additional Rs500 crore from DAL during the fiscal year to 31 March, the company said in a presentation on its website.
The firm, which reported its first quarter results on 30 July, saw net profit plunge by 78.74% to Rs396 crore from Rs1,863.97 crore in the year-ago quarter. Revenue fell 54.60% to Rs1,746 crore from Rs3,810.62 crore a year ago.
The margin of earnings before interest, taxes, depreciation and amortization (Ebitda) margin, however, was higher at 47% against 28% in the March quarter and 62% during the year-ago quarter. Ebitda margin is essentially operating income before depreciation and amortization expressed as a percentage of net sales.
“After a few difficult quarters last fiscal, we have seen a fairly good first quarter of the current fiscal,” Singh said in the statement. “Construction activity has gained momentum and response to new launches has been encouraging.”
DLF saw a marked improvement in bookings in the June to 2.67 million sq. ft of home and commercial space, compared with just 0.77 million sq. ft in the preceding three months. DLF shares closed down 1.48% to Rs396.15 on the Bombay Stock Exchange on a day the benchmark Sensex index rose 1.83%.