The share price of DLF rose nearly 2 percent in the morning trade on May 18 despite reporting weak earnings for the quarter ended March a day earlier.
The real estate developer on May 17 reported a 16 percent year-on-year decline in consolidated net profit at Rs 405.3 crore for the quarter ended March. The company’s consolidated revenue fell 10 percent on-year to Rs 1,547.3 crore in the reported quarter.
Investors were, however, impressed by the strong pre-sales bookings the company’s residential segment saw during the quarter.
DLF reported pre-sales booking of Rs 2,700 crore for the March quarter, which was higher by 158 percent on-year and above analysts’ expectations. The strong order book reflects the firm demand conditions for residential real estate in the country.
DLF launched a plotted development project in Chennai and received a strong response, resulting in bookings of Rs 500 crore, the company said.
Brokerage firm UBS Securities said that the March quarter performance was strong, as it retained its "buy" rating and the price target of Rs 440 on the scrip.
“Believe DLF is well placed in the sector given its strong balance sheet, large owned land bank, which should help deliver above industry presales growth and cash EBITDA margins over medium to long term,” UBS Securities said.
DLF continued to pare its net debt during the March quarter. Net debt in the residential segment declined to Rs 2,600 crore from Rs 3,200 crore in the previous quarter. In the leasing segment, it fell to Rs 19,060 crore in the March quarter from Rs 19,260 crore in the previous quarter.
At 10.20 am, shares of DLF were up nearly 1 percent at Rs 336.9 on the National Stock Exchange.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.