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Findings analysis & conclusion

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  • 1. CHAPTER 4 Analysis & Findings 54
  • 2. The balance sheet of DLF for last 5 years has been presented below:- Balance Sheet of DLF ------------------- in Rs. Cr. ------------------- Mar '06 Mar '07 Mar '08 Mar '09 Mar '10 12 mths 12 mths 12 mths 12 mths 12 mths Sources Of Funds Total Share Capital 37.77 305.88 340.96 339.44 339.48 Equity Share Capital 37.77 305.88 340.96 339.44 339.48 Share Application Money 0.00 0.00 0.00 0.00 0.00 Preference Share Capital 0.00 0.00 0.00 0.00 0.00 Reserves 607.16 346.92 10,928.19 12,035.39 12,490.53 Revaluation Reserves 0.00 0.00 0.00 0.00 0.00 Networth 644.93 652.80 11,269.15 12,374.83 12,830.01 Secured Loans 3,010.93 6,242.81 4,945.91 7,979.97 11,590.19 Unsecured Loans 2.99 526.48 3,440.49 1,635.00 1,047.67 Total Debt 3,013.92 6,769.29 8,386.40 9,614.97 12,637.86 Total Liabilities 3,658.85 7,422.09 19,655.55 21,989.80 25,467.87 Mar '06 Mar '07 Mar '08 Mar '09 Mar '10 12 mths 12 mths 12 mths 12 mths 12 mths Application Of Funds Gross Block 108.91 365.58 1,533.72 1,968.40 2,002.85 Less: Accum. Depreciation 29.24 37.01 59.34 152.87 273.84 Net Block 79.67 328.57 1,474.38 1,815.53 1,729.01 Capital Work in Progress 456.73 665.03 1,781.79 1,657.73 1,718.51 Investments 1,397.28 769.17 1,839.83 2,956.32 6,558.88 Inventories 472.12 4,281.07 5,928.13 6,627.43 6,533.69 Sundry Debtors 26.55 173.79 930.18 212.89 607.96 Cash and Bank Balance 11.89 19.30 968.03 51.26 171.43 Total Current Assets 510.56 4,474.16 7,826.34 6,891.58 7,313.08 Loans and Advances 2,466.47 4,807.90 10,492.80 11,117.09 11,609.93 Fixed Deposits 115.08 160.19 26.79 709.94 0.00 Total CA, Loans & Advances 3,092.11 9,442.25 18,345.93 18,718.61 18,923.01 Deffered Credit 0.00 0.00 0.00 0.00 0.00 Current Liabilities 1,197.33 3,059.67 2,531.21 1,699.75 2,025.90 Provisions 169.61 723.25 1,255.16 1,458.64 1,435.66 Total CL & Provisions 1,366.94 3,782.92 3,786.37 3,158.39 3,461.56 Net Current Assets 1,725.17 5,659.33 14,559.56 15,560.22 15,461.45 Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00 Total Assets 3,658.85 7,422.10 19,655.56 21,989.80 25,467.85 Contingent Liabilities 1,643.36 3,818.81 3,047.92 4,875.99 7,423.38 Book Value (Rs) 170.76 4.27 66.10 72.91 75.59 55
  • 3. Profit & Loss account of DLF ------------------- in Rs. Cr. ------------------- Mar '06 Mar '07 Mar '08 Mar '09 Mar '10 12 mths 12 mths 12 mths 12 mths 12 mths Income Sales Turnover 953.46 1,101.66 5,496.96 2,827.90 2,729.42 Excise Duty 0.00 0.00 0.00 0.00 0.00 Net Sales 953.46 1,101.66 5,496.96 2,827.90 2,729.42 Other Income 191.32 327.48 560.90 1,004.57 491.01 Stock Adjustments -2.58 -8.72 -6.06 0.00 0.00 Total Income 1,142.20 1,420.42 6,051.80 3,832.47 3,220.43 Expenditure Raw Materials 0.00 0.00 0.00 0.00 0.00 Power & Fuel Cost 0.00 0.00 0.00 0.00 0.00 Employee Cost 16.76 44.82 103.78 71.12 130.57 Other Manufacturing Expenses 577.64 237.75 2,141.29 778.34 889.25 Selling and Admin Expenses 43.65 136.16 146.06 159.03 0.00 Miscellaneous Expenses 6.23 15.77 27.72 56.01 284.23 Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00 Total Expenses 644.28 434.50 2,418.85 1,064.50 1,304.05 Mar '06 Mar '07 Mar '08 Mar '09 Mar '10 12 mths 12 mths 12 mths 12 mths 12 mths Operating Profit 306.60 658.44 3,072.05 1,763.40 1,425.37 PBDIT 497.92 985.92 3,632.95 2,767.97 1,916.38 Interest 146.15 356.25 447.65 809.86 847.24 PBDT 351.77 629.67 3,185.30 1,958.11 1,069.14 Depreciation 3.90 9.44 25.68 114.08 126.05 56
  • 4. Other Written Off 0.00 0.00 41.79 37.86 0.00 Profit Before Tax 347.87 620.23 3,117.83 1,806.17 943.09 Extra-ordinary items 1.11 1.24 0.36 33.05 -2.32 PBT (Post Extra-ord Items) 348.98 621.47 3,118.19 1,839.22 940.77 Tax 120.47 214.56 543.52 261.00 175.71 Reported Net Profit 227.44 405.77 2,574.40 1,547.77 765.06 Total Value Addition 644.27 434.50 2,418.85 1,064.51 1,304.06 Preference Dividend 0.00 0.00 0.00 0.00 0.00 Equity Dividend 1.55 340.97 681.93 339.44 339.48 Corporate Dividend Tax 0.22 57.95 115.89 28.91 11.38 Per share data (annualised) Shares in issue (lakhs) 377.68 15,294.21 17,048.33 16,972.09 16,973.91 Earning Per Share (Rs) 60.22 2.65 15.10 9.12 4.51 Equity Dividend (%) 40.00 100.00 200.00 100.00 100.00 Book Value (Rs) 170.76 4.27 66.10 72.91 75.59 57
  • 5. Cash Flow of DLF ------------------- in Rs. Cr. ------------------ Mar '06 Mar '07 Mar '08 Mar '09 Mar '10 12 mths 12 mths 12 mths 12 mths 12 mths Net Profit Before Tax 347.90 620.33 3117.92 1808.77 943.09 Net Cash From Operating Activities -64.36 -2626.83 -1505.81 1365.86 395.24 Net Cash (used in)/from Investing Activities -2146.23 -628.34 -6482.00 -1151.17 -2420.00 Net Cash (used in)/from Financing Activities 2251.52 3233.37 8945.90 -437.54 1434.95 Net (decrease)/increase In Cash and Cash Equivalents 40.93 -21.80 958.09 -222.85 -589.80 Opening Cash & Cash Equivalents 5.11 46.05 24.16 982.25 759.40 Closing Cash & Cash Equivalents 46.05 24.25 982.25 759.40 169.60 58
  • 6. Key Financial Ratios of DLF ------------------- in Rs. Cr. ------------------- Mar '06 Mar '07 Mar '08 Mar '09 Mar '10 Investment Valuation Ratios Face Value 10.00 2.00 2.00 2.00 2.00 Dividend Per Share 4.00 2.00 4.00 2.00 2.00 Operating Profit Per Share (Rs) 81.18 4.31 18.02 10.39 8.40 Net Operating Profit Per Share (Rs) 252.45 7.20 32.24 16.66 16.08 Free Reserves Per Share (Rs) 159.66 2.25 63.84 69.75 -- Bonus in Equity Capital -- 87.50 78.51 78.87 -- Profitability Ratios Operating Profit Margin(%) 32.15 59.76 55.88 62.33 45.29 Profit Before Interest And Tax Margin(%) 26.43 45.40 50.28 42.99 28.68 Gross Profit Margin(%) 31.63 47.79 55.41 58.30 39.82 Cash Profit Margin(%) 20.20 29.04 43.60 44.29 28.67 Adjusted Cash Margin(%) 20.22 29.05 43.60 44.29 27.74 Net Profit Margin(%) 19.86 28.38 42.49 40.36 -- Adjusted Net Profit Margin(%) 19.88 28.39 42.49 40.36 23.87 Return On Capital Employed(%) 13.50 13.15 18.13 11.90 6.96 Return On Net Worth(%) 35.27 62.16 22.84 12.50 5.96 Adjusted Return on Net Worth(%) 35.29 62.17 22.84 12.49 5.98 Return on Assets Excluding Revaluations 4.53 4.27 66.10 72.91 75.59 Return on Assets Including Revaluations 4.53 4.27 66.10 72.91 75.59 Return on Long Term Funds(%) 14.90 15.35 22.40 13.36 7.02 Liquidity And Solvency Ratios Current Ratio 1.51 1.75 2.34 2.96 5.47 Quick Ratio 1.91 1.36 3.28 3.83 3.58 Debt Equity Ratio 4.67 10.37 0.74 0.78 0.99 Long Term Debt Equity Ratio 4.14 8.74 0.41 0.58 0.97 Debt Coverage Ratios Interest Cover 3.63 3.22 8.38 3.52 2.45 Total Debt to Owners Fund 4.67 10.37 0.74 0.78 0.99 Financial Charges Coverage Ratio 3.41 2.77 8.12 3.42 2.26 Financial Charges Coverage Ratio Post Tax 2.58 2.17 6.90 3.10 2.05 Management Efficiency Ratios Inventory Turnover Ratio 2.43 0.33 -- -- -- Debtors Turnover Ratio 62.46 11.00 9.96 4.95 5.62 Investments Turnover Ratio 2.43 0.33 -- -- 0.42 Fixed Assets Turnover Ratio 1.88 1.44 -- -- -- Total Assets Turnover Ratio 0.26 0.15 0.28 -- 0.11 Asset Turnover Ratio 8.75 3.01 3.60 1.46 1.36 Average Raw Material Holding -- -- -- -- -- Average Finished Goods Held -- -- -- -- -- Number of Days In Working Capital 651.37 1,849.36 953.52 1,980.86 2,039.31 Profit & Loss Account Ratios 59
  • 7. Material Cost Composition -- -- -- -- -- Imported Composition of Raw Materials Consumed -- -- -- -- -- Selling Distribution Cost Composition 2.80 5.75 0.83 2.09 -- Expenses as Composition of Total Sales 11.72 18.06 2.18 3.51 4.48 Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit 0.77 98.30 30.99 23.79 45.86 Dividend Payout Ratio Cash Profit 0.76 96.07 30.19 21.67 39.37 Earning Retention Ratio 99.23 1.72 69.01 76.19 54.28 Cash Earning Retention Ratio 99.24 3.95 69.80 78.32 60.73 AdjustedCash Flow Times 13.02 16.30 3.17 5.66 14.15 Mar '06 Mar '07 Mar '08 Mar '09 Mar '10 Earnings Per Share 60.22 2.65 15.10 9.12 4.51 Book Value 170.76 4.27 66.10 72.91 75.59 60
  • 8. Competition Last Price Market Cap. (Rs. cr.) Sales Turnover Net Profit Total Assets DLF 361.30 61,328.21 2,419.21 765.06 25,467.85 DB Realty 431.30 10,491.75 - - 3,416.11 HDIL 254.00 10,414.10 1,491.99 596.65 11,169.45 Oberoi Realty 275.80 9,052.67 - - - Indiabulls Real 200.05 8,037.82 33.99 22.45 5,296.28 Prestige Estate 216.00 7,086.39 - - - Godrej Proper 713.80 4,985.89 - - 1,270.33 Sunteck Realty 682.75 4,299.02 16.38 7.24 394.10 Anant Raj Ind 133.75 3,946.91 286.81 237.17 3,592.33 Sobha Developer 366.85 3,597.47 1,114.00 136.70 3,162.51 61
  • 9. Balance Sheet ------------------- in Rs. Cr. ------------------- DLF DB Realty HDIL Indiabulls Real Mar '10 Mar '10 Mar '10 Mar '09 Sources Of Funds Total Share Capital 339.48 243.26 358.84 189.04 Equity Share Capital 339.48 243.26 358.84 51.50 Share Application Money 0.00 0.00 78.00 232.20 Preference Share Capital 0.00 0.00 0.00 137.54 Reserves 12,490.53 2,853.75 6,680.90 3,505.84 Revaluation Reserves 0.00 0.00 0.00 0.00 Networth 12,830.01 3,097.01 7,117.74 3,927.08 Secured Loans 11,590.19 2.39 4,051.72 1.84 Unsecured Loans 1,047.67 316.69 0.00 1,367.35 Total Debt 12,637.86 319.08 4,051.72 1,369.19 Total Liabilities 25,467.87 3,416.09 11,169.46 5,296.27 DLF DB Realty HDIL Indiabulls Real Mar '10 Mar '10 Mar '10 Mar '09 Application Of Funds Gross Block 2,002.85 24.24 190.53 24.64 Less: Accum. Depreciation 273.84 8.42 9.83 5.35 Net Block 1,729.01 15.82 180.70 19.29 Capital Work in Progress 1,718.51 0.73 1,389.09 0.00 Investments 6,558.88 1,773.48 596.48 2,507.18 Inventories 6,533.69 97.37 8,033.66 0.00 Sundry Debtors 607.96 0.00 200.72 10.73 Cash and Bank Balance 171.43 43.18 297.33 9.28 Total Current Assets 7,313.08 140.55 8,531.71 20.01 Loans and Advances 11,609.93 1,571.84 1,211.52 2,775.15 Fixed Deposits 0.00 0.00 490.05 0.00 Total CA, Loans & Advances 18,923.01 1,712.39 10,233.28 2,795.16 Deffered Credit 0.00 0.00 0.00 0.00 Current Liabilities 2,025.90 84.76 808.41 18.79 Provisions 1,435.66 1.55 421.69 6.56 Total CL & Provisions 3,461.56 86.31 1,230.10 25.35 Net Current Assets 15,461.45 1,626.08 9,003.18 2,769.81 Miscellaneous Expenses 0.00 0.00 0.00 0.00 Total Assets 25,467.85 3,416.11 11,169.45 5,296.28 Contingent Liabilities 7,423.38 2,023.60 436.45 919.94 Book Value (Rs) 75.59 127.31 196.18 138.14 62
  • 10. Profit & Loss account ------------------- in Rs. Cr. ------------------- DLF DB Realty HDIL Indiabulls Real Mar '10 Mar '10 Mar '10 Mar '09 Income Sales Turnover 2,729.42 0.00 1,491.99 45.03 Excise Duty 0.00 0.00 0.00 0.00 Net Sales 2,729.42 0.00 1,491.99 45.03 Other Income 491.01 284.80 106.36 94.73 Stock Adjustments 0.00 32.82 1,591.97 0.00 Total Income 3,220.43 317.62 3,190.32 139.76 Expenditure Raw Materials 0.00 0.00 0.00 0.00 Power & Fuel Cost 0.00 0.00 0.00 0.00 Employee Cost 130.57 2.47 45.15 18.96 Other Manufacturing Expenses 889.25 31.98 1,914.77 0.30 Selling and Admin Expenses 0.00 0.00 31.86 12.03 Miscellaneous Expenses 284.23 14.06 11.68 2.68 Preoperative Exp Capitalised 0.00 0.00 -69.07 0.00 Total Expenses 1,304.05 48.51 1,934.39 33.97 DLF DB Realty HDIL Indiabulls Real Mar '10 Mar '10 Mar '10 Mar '09 Operating Profit 1,425.37 -15.69 1,149.57 11.06 PBDIT 1,916.38 269.11 1,255.93 105.79 Interest 847.24 35.65 515.55 79.83 PBDT 1,069.14 233.46 740.38 25.96 Depreciation 126.05 5.42 5.10 2.55 Other Written Off 0.00 0.00 0.00 0.00 Profit Before Tax 943.09 228.04 735.28 23.41 Extra-ordinary items -2.32 0.00 -5.64 0.00 PBT (Post Extra-ord Items) 940.77 228.04 729.64 23.41 Tax 175.71 0.65 132.99 6.85 Reported Net Profit 765.06 227.39 602.30 16.56 Total Value Addition 1,304.06 48.51 1,934.38 33.97 Preference Dividend 0.00 0.00 0.00 13.75 Equity Dividend 339.48 0.00 0.00 0.00 Corporate Dividend Tax 11.38 0.00 0.00 2.34 Per share data (annualised) Shares in issue (lakhs) 16,973.91 2,432.59 3,588.43 2,575.21 Earning Per Share (Rs) 4.51 9.35 16.78 0.11 Equity Dividend (%) 100.00 0.00 0.00 0.00 Book Value (Rs) 75.59 127.31 196.18 138.14 63
  • 11. Disinvestment Plans of Non-core assets / businesses Progress on divestment plan on track Targeting potential divestment proceeds in excess of Rs 2500 Crores in 15-18 months Rs. 294 Crs recovered during the quarter DLF Retail Brands - Wholly owned subsidiary, having paid up equity capital of Rs. 8 Crs, engaged in the business of retailing various life style / luxury brands. For FY10, the business had revenue’s of approx.Rs 33 Crs, with losses of approx. Rs 25 Crs (cumulative losses of approx. Rs.45 Crs) Preferential allotment to a promoter company at par resulting in • Infusion of Rs 92 crores by the promoter company to take 92% stake at par via new share allotment • Dilution of DLF stake from 100% to 8% post promoter infusion • Rationale - identified as non-core business, recovers shareholder loans Aman Resorts • Operating performance continues to improve as global economic environment stabilizes • Explore possibilities for strategic partnerships to further strengthen the business model 64
  • 12. 65
  • 13. 66
  • 14. Going Forward Further strengthening of cash flows / profitability via -  Right pricing strategy Budgetary controls  Value engineering  Timely execution / deliveries  Material Inflation could impact EBIDTA margins going forward  Continue to focus on the Balance Sheet through debt reduction and improving the quality of the debt portfolio  Focus on execution and sale of stock in existing projects, with selective launches in ensuing quarters  Sale of commercial office towers to provide impetus to profitability  Focus on non-core asset divestment to continue, leading to rationalization of our core real estate portfolio  Given stable cash flows, Company is comfortable with a debt equity of 0.75x. On a longer term sustainable basisthis ratio is expected to be lower for FY11 targeting between 0.4x -0.5x  Well positioned to capture increased momentum in leasing demand provided clarity on the Govt. policy front; improve leasing seen in Q1 67
  • 15. CHAPTER 5 Conclusion 68
  • 16. Conclusion • The net profit has decreased from 1547 crores to 766 crores in FY10 as compared to FY09. • The company uses generally accepted principles in India. • The company has initiated strategic and comprehensive portfolio adjustments concentrating both on real estate assets and non-real estate business,with a view to exit non-core businesses. • EBIDTA margins 51% versus 54%. • The sales has decreased from 2827 crores to 2729 crores in FY10. • Continue to focus on the Balance Sheet through debt reduction and improving the quality of the debt portfolio • Well positioned to capture increased momentum in leasing demand provided clarity on govt. policy front , improved leasing seen. 69
  • 17. CHAPTER 6 Suggestions Or Recommendations 70
  • 18. SUGGESTIONS • DLF should exit from non core business and concentrate on real and non real estate business. • DLF should have parallel products in order to support economy during recession. • DLF should expand their projects to other areas in India so as to compete with upcoming players such as Ansals and Unitech. • DLF should enforce expert policies so as to curb serious competition and maintain its market standing. 71
  • 19. CHAPTER 7 Limitations of the Study 72
  • 20. Limitations Of The Study • Time constraint was one of the reason that hindered the study. • As project is based only on secondary data many factors were excluded from the study. • Inadequate information on the topic also limits the study and analysis. • Only a generalized view is given in the research so as to make simpler for common man to understand. 73
  • 21. Bibliography SITES REFFERED • www.Wikipedia.com • www.Ask.com • www.Google.com • Dlf official site • www.moneycontrol.com LITERATURE REFFERED • Economic times • Various catalogues 74
  • 22. DEPARTMENT OF MANAGEMENT MAHARAJA AGRASEN INSTITUTE OF MANAGEMENT STUDIES Attendance Sheet Name of the Student : University Enrollment No. : Name of the Supervisor from the Industry : S.No. Date Time Progress Report Signature of the student Signature of Supervisor (Institute) 1 2 3 4 5 6 7 8 9 10 *Minimum (8out of 10) 80% attendance compulsory. 75