DLF - Poised for re-rating on favorable macro impetus - Motilal Oswal

Operating consolidation, large ticket divestments to pay off

- DLF is a major beneficiary of recent policy reforms and favorable macro trends.

- Expect meaningful improvement in operating cash deficit (break-even by FY14) on the back of (1) re-aligning core operations to premium business mix, (2) focus on margin protection, and (3) execution ramp-up.

- Success in large divestments implies higher potential to de-leverage, making DLF a strong play on rate downcycle. Expect net DER at 0.8x/0.69x in FY13/14.

- The stock trades at 1.4x FY14E BV and 18% discount to NAV. Buy with TP of INR286.

Source : Equity Bulls

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