Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Thematic (Sector/Industry)

<p>Real estate sector in India has come a long way over the past decade. From being a fragmented unorganized sector fraught with dealings in cash, the sector has been undergoing significant shifts since introduction of regulations like RERA and GST. At the same time, consumer preferences are shifting towards buying from branded and trusted developers. This is leading to favorable supply and demand shifts in the sector which is helping the organized sector.</p>
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<p>Post this thematic insight, we will follow up with a detailed thesis on our top investment idea in the space. </p>
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Real estate sector in India has come a long way over the past decade. From being a fragmented unorganized sector fraught with dealings in cash, the sector has been undergoing significant shifts since introduction of regulations like RERA and GST. At the same time, consumer preferences are shifting towards buying from branded and trusted developers. This is leading to favorable supply and demand shifts in the sector which is helping the organized sector.

Post this thematic insight, we will follow up with a detailed thesis on our top investment idea in the space. 


A Fat Theme | Organized Real Estate Developers in India - A Decadal Opportunity

Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

<p>For this channel insight, we speak to industry veterans in IT Services and Real Estate with an objective to understand the changing dynamics in the Industry. Our interactions suggest challenging times ahead for IT Services and multiple sectoral dynamics at play in residential real estate.</p>
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<h3>About India Channel Insight </h3>
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<p>Our objective with India Channel Insight is to share snippets from our channel interactions that are part of our research process. These snippets emerging out of these interactions and have been aiding us to generate interesting trade ideas and have often proven to be reliable sources of qualitative alpha.</p>
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For this channel insight, we speak to industry veterans in IT Services and Real Estate with an objective to understand the changing dynamics in the Industry. Our interactions suggest challenging times ahead for IT Services and multiple sectoral dynamics at play in residential real estate.


About India Channel Insight 



Our objective with India Channel Insight is to share snippets from our channel interactions that are part of our research process. These snippets emerging out of these interactions and have been aiding us to generate interesting trade ideas and have often proven to be reliable sources of qualitative alpha.


India Channel Insight | IT Services, Real Estate

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

Equity Bottom-Up

<p>HSIE Results Daily DLF: DLF surprised positively on presales at INR 10bn (6.6x/-5% YoY/QoQ) despite the lockdown during the quarter. While office collection remains robust at 99%, occupancy at DCCDL declined to 86% vs. 88% at Mar 21-end. The consumption of malls rebounded to 50% of pre-COVID level during Jun-21, with footfalls exhibiting a rising trend. With robust Q1FY22, DLF is well on course to achieve INR 40bn presales in FY22, aided by 8msf launches. Net debt also continues to trend down (INR 47.bn vs INR 49bn on Mar-21).</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

HSIE Results Daily DLF: DLF surprised positively on presales at INR 10bn (6.6x/-5% YoY/QoQ) despite the lockdown during the quarter. While office collection remains robust at 99%, occupancy at DCCDL declined to 86% vs. 88% at Mar 21-end. The consumption of malls rebounded to 50% of pre-COVID level during Jun-21, with footfalls exhibiting a rising trend. With robust Q1FY22, DLF is well on course to achieve INR 40bn presales in FY22, aided by 8msf launches. Net debt also continues to trend down (INR 47.bn vs INR 49bn on Mar-21).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily: DLF, Dr. Reddy’s, IndusInd Bank and More

External broker reports(aggregated public sources), Edelweiss Broking Limited

Edelweiss

<h2>Business Overview</h2><p>DLF, incorporated in 1963, is a north India based real estate developer with presence across major markets in India. It is involved in development of various property types – residential, commercial and retail. More than 50% of its land bank is located in Gurgaon. It has ~30msf of leased rental assets located in key metros across India. The company is promoted by Mr. K. P. Singh who has four decades of experience in the Indian real estate industry. DLF boasts of premium brand and equity investment scarcity (i.e., limited real estate plays in the Indian equity market that are liquid). It has a robust rental portfolio which lends high visibility to growing rental income and the ability to grow rental portfolio from internal accruals.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Business OverviewDLF, incorporated in 1963, is a north India based real estate developer with presence across major markets in India. It is involved in development of various property types – residential, commercial and retail. More than 50% of its land bank is located in Gurgaon. It has ~30msf of leased rental assets located in key metros across India. The company is promoted by Mr. K. P. Singh who has four decades of experience in the Indian real estate industry. DLF boasts of premium brand and equity investment scarcity (i.e., limited real estate plays in the Indian equity market that are liquid). It has a robust rental portfolio which lends high visibility to growing rental income and the ability to grow rental portfolio from internal accruals.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

<p>We maintain BUY on DLF, with increased target price of INR 360/sh (roll forward to FY23E, reduce cap rate to 8.5% vs 9.2% earlier and assume 0-5% price increases across projects in line with DLF commentary). DLF: Presales during the quarter remained flattish at INR 10.6bn vs INR 10.2bn QoQ. While office collection remains robust at 100%, occupancy at DCCDL further declined to 89% from 91% at Dec 20-end. Consumption at retail malls reached 90% of 4QFY20 level during the quarter, with footfalls at 81%.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

We maintain BUY on DLF, with increased target price of INR 360/sh (roll forward to FY23E, reduce cap rate to 8.5% vs 9.2% earlier and assume 0-5% price increases across projects in line with DLF commentary). DLF: Presales during the quarter remained flattish at INR 10.6bn vs INR 10.2bn QoQ. While office collection remains robust at 100%, occupancy at DCCDL further declined to 89% from 91% at Dec 20-end. Consumption at retail malls reached 90% of 4QFY20 level during the quarter, with footfalls at 81%.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

India

DLF Ltd. is a real estate development company. The Company develops residential, commercial, and retail properties.

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DLF Ltd (DLFU IN)

A Fat Theme | Organized Real Estate Developers in India - A Decadal Opportunity

Real Estate sector in India is undergoing rapid shift to Organized from Unorganized. This is leading to asset light development opportunities for...

Ankit Agrawal, CFA

India Channel Insight | IT Services, Real Estate

Our interactions suggest challenging times ahead for IT Services and multiple sectoral dynamics at play in residential real estate.

Pranav Bhavsar

HSIE Results Daily: DLF, Dr. Reddy’s, IndusInd Bank and More

HSIE Results Daily DLF: DLF surprised positively on presales at INR 10bn (6.6x/-5% YoY/QoQ) despite the lockdown during the quarter. While office...

HDFC Securities

Pick of the Week - DLF Limited

DLF, incorporated in 1963, is a north India based real estate developer with presence across major markets in India. It is involved in development...

Edelweiss

HSIE Results Daily: DLF

We maintain BUY on DLF, with increased target price of INR 360/sh (roll forward to FY23E, reduce cap rate to 8.5% vs 9.2% earlier and assume 0-5%...

HDFC Securities

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