\nJune 30,2012<\/td>\n | 25,060<\/td>\n | 5.02%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Take a look at the above table. It shows very clearly that the debt of the company has gone up year on year since 2007. Any company which takes on more debt does so in the hope that the extra money helps it to expand and thus earn more money in the process. But is that the case with DLF?<\/p>\n \n\n\nDate<\/td>\n | Total Quarterly Income (in rupees crore)<\/td>\n<\/tr>\n | \nJune 30,2007<\/td>\n | 3121<\/td>\n<\/tr>\n | \nJune 30,2008<\/td>\n | 3846.3<\/td>\n<\/tr>\n | \nJune 30,2009<\/td>\n | 1746<\/td>\n<\/tr>\n | \nJune 30,2010<\/td>\n | 2161<\/td>\n<\/tr>\n | \nJune 30,2011<\/td>\n | 2503<\/td>\n<\/tr>\n | \nJune 30,2012<\/td>\n | 2329<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n The table above throws up some very interesting numbers. The total quarterly income of DLF as on June 30, 2007(the period between April 1, 2007 and June 30, 2007) was at Rs 3,121 crore. The total quarterly income of DLF as on June 30, 2012(the period between April 1, 2012 to June 30,2012) was Rs 2329 crore or 25.3% lower. \nSo the debt of the company has gone up by 140% in the last five years. But during the same period the quarterly income has fallen by a little over 25%. To be fair to the company quarterly sales do not always reflect the annual trend. So let\u2019s take a look at the annual numbers and see how they stack up.<\/p>\n \n\n\nDate<\/td>\n | Total Yearly Income (in rupees crore)<\/td>\n<\/tr>\n | \nMarch 31,2008<\/td>\n | 14655.01<\/td>\n<\/tr>\n | \nMarch 31,2009<\/td>\n | 10392.55<\/td>\n<\/tr>\n | \nMarch 31,2010<\/td>\n | 7791.31<\/td>\n<\/tr>\n | \nMarch 31,2011<\/td>\n | 10091.54<\/td>\n<\/tr>\n | \nMarch 31,2012<\/td>\n | 10207.88<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n The table above throws up some very interesting numbers. The total quarterly income of DLF as on June 30, 2007(the period between April 1, 2007 and June 30, 2007) was at Rs 3,121 crore. The total quarterly income of DLF as on June 30, 2012(the period between April 1, 2012 to June 30,2012) was Rs 2329 crore or 25.3% lower. \nSo the debt of the company has gone up by 140% in the last five years. But during the same period the quarterly income has fallen by a little over 25%. To be fair to the company quarterly sales do not always reflect the annual trend. So let\u2019s take a look at the annual numbers and see how they stack up.<\/p>\n \n\n\nDate<\/td>\n | Total Quarterly Income (in rupees crore)<\/td>\n<\/tr>\n | \nJune 30,2007<\/td>\n | 3121<\/td>\n<\/tr>\n | \nJune 30,2008<\/td>\n | 3846.3<\/td>\n<\/tr>\n | \nJune 30,2009<\/td>\n | 1746<\/td>\n<\/tr>\n | \nJune 30,2010<\/td>\n | 2161<\/td>\n<\/tr>\n | \nJune 30,2011<\/td>\n | 2503<\/td>\n<\/tr>\n | \nJune 30,2012<\/td>\n | 2329<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n As we can see from the above table the total income of DLF has come down by 30% in the last four years. Though it has recovered to some extent in the last two years. What is interesting is that between March 31, 2008 and March 31, 2012, the debt of the company has more than doubled to Rs 25,066 crore. \nWhat does all this tell us? Here is a company which is earning less money than it was in the past but is constantly taking on more and more debt. More debt means more interest to pay as well. As the annual report of DLF dated March 31, 2012, points out \u201cthe company\u2019s borrowings from banks and others have a effective weighted average rate of 12.38% p.a. calculated using the interest rates effective as on March 31, 2012 for the respective borrowings.\u201d \nThis means the company is paying an interest of 12.38% on its debt of Rs 25,066 crore. This translates into a yearly interest of Rs 3103.8 crore. This works out to 30.4% of the yearly income of Rs 10,207.88 crore and is much more than the companies last quarterly income. The interest burden of the company this year is 2.7 times its last year\u2019s net profit of Rs 1,168.68 crore. \nOther than the interest to be paid the company also needs to pay off the debt that is maturing. Its total debt of Rs 25,060 crore is a little over 21.4 times its last year\u2019s profit and two and a half times its annual income. \nThis tells us that the company is in a financial mess. It is highly unlikely that the company will be able to pay off its debts from its normal sources of income and profit after tax. Given this, the only way out for the company is to sell off its various assets as well as non-core businesses. \nBut that is easier said than done. It has been trying to sell its wind power business for a while now. Media reports also suggest that it is in the process of selling off Aman Resorts its foray into luxury hospitality business. The hotel DLF set up with Robert Vadra is also reported to be on the block. A couple of months back DLF managed to sell off its 17.5 acre land plot in Mumbai\u2019s Lower Parel area to Lodha Developers for Rs 2750 crore. The company also managed to sell off Adone Hotels and Hospitality for Rs 567 crore. All these investments got the company into the financial mess that it is in as it took on more and more debt to expand. The company also claims to have a land bank with a developmental potential of 345million square feet. \nIn the economic environment that prevails it is becoming more and more difficult for DLF to sell of its assets like land and other businesses. \nDLF had listed on the stock exchanges in July 2007 with great fanfare. The stock price reached an all time high of Rs 1207 in January 2008. Anybody who bought the stock at its peak, like a lot of investors did, would have seen the value of his investment fall by a whopping 82.1% by now, making the stock one of the biggest destroyers of stock market wealth over the last few years. Chances are this might just continue in the days to come. \nThe article originally appeared on www.firstpost.com on October 13, 2012.\u00a0http:\/\/www.firstpost.com\/investing\/even-without-vadragate-the-dlf-stock-should-be-a-sell-489374.html<\/a> \n(Vivek Kaul is a writer. He can be reached at vivek.kaul@gmail.com. He does not own any DLF stock. Neither is he on short on it. He may have some indirect investment in DLF through the equity mutual fund route) \n \n <\/p>\n","protected":false},"excerpt":{"rendered":"The stock price of DLF closed yesterday at Rs 218.9 yesterday. It was down by 9.7% during the week. None of the major stock brokerages has changed its recommendation on the stock since Arvind Kejriwal attacked the company. Nevertheless there are strong rumors going around that the brokerages are getting their real estate analysts to … <\/p>\n Read more<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"qubely_global_settings":"","qubely_interactions":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2,14],"tags":[231,328,1014,3290],"qubely_featured_image_url":null,"qubely_author":{"display_name":"Vivek Kaul","author_link":"https:\/\/vivekkaul.com\/author\/vivekkaul\/"},"qubely_comment":0,"qubely_category":"Analysis<\/a> Business<\/a>","qubely_excerpt":"The stock price of DLF closed yesterday at Rs 218.9 yesterday. It was down by 9.7% during the week. None of the major stock brokerages has changed its recommendation on the stock since Arvind Kejriwal attacked the company. Nevertheless there are strong rumors going around that the brokerages are getting their real estate analysts to…","jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/posts\/1027"}],"collection":[{"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/comments?post=1027"}],"version-history":[{"count":0,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/posts\/1027\/revisions"}],"wp:attachment":[{"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/media?parent=1027"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/categories?post=1027"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vivekkaul.com\/wp-json\/wp\/v2\/tags?post=1027"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}} | | | |