DLF post Q4 net loss of Rs 1,860 crore

India’s largest real estate developer DLF reported a net loss of Rs 1,860 crore for the quarter ended March 31 due to reversal of deferred tax assets (DTA) as it adopted a lower tax rate.

Following the poor performance investors dumped DLF shares, pushing prices 3% lower.

The stock price is down over 26% in the last 3 months and was quoting at Rs 150.80, down Rs 5.60, or 3.58%.

NOIDA headquartered developer had posted a net profit of Rs 436.56 crore in the year-ago period.

Total income fell to Rs 1873.8 crore as against Rs 2,660.95 crore in the corresponding period of the previous year.

For FY20, DLF reported a net loss of Rs 583.19 crore as against a net profit of Rs 1,319.22 crore in FY19. Total income fell to Rs 6,884.14 crore in FY20 from Rs 9,029.41 crore in the preceding year.

The novel Coronavirus pandemic had led to an industry-wide short-term recalibration of demand and expects some semblance of normalcy to return by the December quarter.

On the COVID-19 pandemic, it noted that it has led to industry-wide short-term recalibration of demand.

DLF’s net sales bookings rose 2% to Rs 2,485 crore during the last fiscal year but fell short of target due to the nationwide lockdown imposed in March to control the COVID-19 pandemic and cancellations of units in some of its projects in Gurugram.

The company had achieved sales bookings of Rs 2,435 crore during the 2018-19 financial year and had given a guidance of Rs 2,700 crore for the 2019-20 fiscal.

The company reported gross sales of Rs 3,450 crore and net sales of Rs 2,485 crore, owing to the lockdown impact in March 2020 and Camellias cancellation.

The gross sales bookings increased by 10 percent to Rs 3,450 crore during the last fiscal year from Rs 3,125 crore in the previous year.

The company has sufficient liquidity to sail through these uncertain times. As for rental collections, DLF has observed sustained success in office rental collections. It has provided comprehensive business continuity support to all stakeholders and continues to receive positive feedback from its tenants.

Going ahead Covid-19 is expected to amplify the impact of the slowdown in real estate market as retail sentiment dampens further
The residential sales momentum could see major declines during the lockdown as customers have deferred their purchase decisions. Also, with several auspicious festivals (Gudi Padwa, Yugadi, etc) falling during lockdown, there is expected to be a steep volume loss/deferral for real estate players

The second order impact will be construction delays as resumption hinges on labourers returning to sites

Net net we believe that DLF’s operations are expected to show significant drop in business over the next 12 to 15 months until demand picks up again and this may lead to further downward pressure on the stock ahead.

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