DLF says debt no longer an issue; see discernible uptick in cash flows from H2FY20

DLF promoters will infuse capital into the company by June end as the firm is looking to bring down the total net debt around a range of Rs 2,000-2,400 crore by the end of the fiscal year 2019-20, said Ashok Tyagi, whole-time director. "So debt per se for us has now ceased to be a story," he added.

DLF exceeded their FY19 booking guidance and have guided for bookings of Rs 2,700 crores in FY20. "Our EBItDA next year will be around Rs 2300-2400 crore and so EBITDA to interest ratio next year would around 10:1 down from 1:1 a few years back,” he said.

Tyagi further said the company has repaid around Rs 350 crore to Indiabulls Housing Finance, with Rs 180 crore remaining to be paid. DLF does not have any exposure to non-banking financial companies, except Housing Development Finance Ltd, and plans to repay Rs 750 crore of outstanding non-convertible debentures to mutual funds in a year.

He also confirmed that they have not been approached by any builders or developers for the acquisition of the projects that they have not been able to execute on their own but some of the impacted banks or financial institutions have spoken to them. However, the company has enough development potential and so have no evinced interest in any acquisition opportunities, he said.

When asked about the unsold inventory, he said, "of the sales that we have made till March 2019, our residual receivables are about Rs 2800 crore and the residual constructing spend including some of the capex for clubs etc is about Rs 2100 crore."

Therefore, the receivables more than cover for the residual construction, he said, adding that the value of unsold inventory is around Rs 11,300 crore.

However, with the current pace of traction on the sales front that inventory is expected to be liquidated in a period of 3-4 years, said Tyagi.

Going forward, the operating cash flows are expected to continue to improve and from Q2, DLF will see a discernible strength after the company deploys QIP money for paying our debts etc and the interest outflow to Cyber City should cease by September, he said.

In the second half, DLF will see a discernible uptick in cash flows. “It will stay positive across the quarters but we will see significant jump up in that in Q3 and Q4, “said Tyagi.

With regards to the liquidity crisis, he said, “In every micro market be it Delhi, Mumbai, Bengaluru the real estate sector needs to be split into 3-4 major players who have fixed their balancesheets, have access to liquidity, have restarted their sales and are generally not in stress,” he said. However, several small and medium players are still under stress, he added.