InvestorQ : Why was the performance DLF so bad in the quarter and why the profits fall so sharply?
Lavanya Subramanian made post

Why was the performance DLF so bad in the quarter and why the profits fall so sharply?

Anamika Sodhani answered.
7 months ago

This is not exactly a comparable quarter for DLF as it was racked by weak demand, labour problems and supply chain disruption. Losses were bound to happen and that is happened to DLF also as it reported 48.7% lower net profits at Rs.227 crore in the Sep-20 quarter.

One good thing is that the company has bounced from the lows of June. In fact, sequentially, DLF recovered from the reported loss of Rs.71.52 crore because at that point of time the lockdown had virtually brought construction activity to a grinding halt.

Even on the top line front, the net profit fell by 11.18% at Rs.1723 crore during the September quarter. This was assisted by strategic reduction in debt and also better cost control exercised by DLF in the quarter.

However, the new bookings are beginning to look up in the case of new sales bookings for the September quarter. In fact, new bookings in the September quarter rose to Rs.853 crore from Rs.152 crore in the sequential Jun-20 quarter.

DLF broadly has two aspects to its business; the commercial rental business and the residential construction business. The commercial rental business is still showing good traction and it is the retail where they are awaiting a pick-up back to normal levels.

At the same time, DLF is also firming up plans to launch mid-income housing in the Rs.60-80 lakh category as it is this segment that seeing the most action across cities. DLF is also on target to go zero debt by middle of next year. DLF currently has a working rental asset portfolio of 35 million SFT across key Indian geographies.