DLF Unitech Comparative Financial Analysis

FINANCIAL ACCOUNTING

CONSTRUCTION INDUSTRY COMPANY COMPARISON

GROUP TWO

samedi 28 novembre 2009



SINCE 1971. LAND BANK OF OVER 14,500 ACRES. PRIMARILY ACTIVE IN

NCR (NOIDA)

STARTED AS DELHI LAND AND FINANCE IN 1946.

LAND BANK IN 32 CITIES. MOST ACTIVE IN NCR



SINCE 1971. LAND BANK OF OVER 14,500 ACRES. PRIMARILY ACTIVE IN

NCR (NOIDA)

STARTED AS DELHI LAND AND FINANCE IN 1946.

LAND BANK IN 32 CITIES. MOST ACTIVE IN NCR




INDIA’S LARGEST REAL ESTATE DEVELOPMENT COMPANY - 39,369 CRORE RUPEES TOTAL ASSETS (2009)

HEADED BY KUSHAL PAL SINGH DESCENDENT OF THE COMPANY’S FOUNDERS

COMPANY HAS USED ASSETS OBTAINED IN DELHI AND GURGAON TO EXPAND TO OTHER INDIAN MARKETS INCLUDING MUMBAI, TAMIL NADU AND BANGALORE

CREATING JOINT VENTURES WITH FIRMS SUCH AS LAING O’ROURKE (UK CONSTRUCTION COMPANY) FOR ALL LANDMARK PROJECTS, AND HILTON HOTELS FOR HOTEL VENTURES

FOCUSING ON STRENGTHENING ITS LATERAL AND VERTICAL BUSINESS DRIVERS



CLAIMS TO BE INDIA’S SECOND LARGEST REAL-ESTATE INVESMENT COMPANY - 10,538 CRORE RUPEES TOTAL ASSETS (MARCH 2009)

FOUNDED IN 1971 BUT FOCUSED WHOLLY ON REAL-ESTATE SINCE 1986

DIVERSIFYING INTO TELECOMS IN COOPERATION WITH NORWAY’S TELENOR GROUP

ENVISION FOR 50% GROWTH PER YEAR SINCE 2008


ECONOMIC ANALYSIS

In recent years the Indian economy has been, and expects to continue to grow at a rate of approx 8% until 2020.

Deregulation and positive demographic trends combined with attractive economic investment opportunities have meant that the Indian economy has been growing amongst the fastest in the world, has experienced positive FDI (recently crossing $100bn since 2000).

An increasing balance of payments gap, with current account deficit of $37.2 in 2008-9 (OECD figures) and a challenging macroeconomic environment (inflation of 13% at August 2008), 26% fall in value of Rupee, and major disruption to Real Estate sector.


SECTOR ANALYSIS

The Real Estate sector was amongst the worst hit by the global slowdown started by Lehman Brothers’ collapse in 2008.

Uncertainty and job losses inhibited many people from purchasing new homes, while uncertain and unfavourable trading conditions pushed companies to delay capital intensive projects. Real Estate requires both high capital investment and economic security, thus fell victim to current crisis.

Economic indicators have improved (inflation back to 5% end 2008), while urbanisation and sector demand projection promise a rapid return to health in 2009.


0

15

30

45

60

3638

47

36

55

40

DLF Ltd. UNITECH Ltd.

Net Profit Margin (PAT/Sales) (%)

200720082009

DLF Ltd. UNITECH Ltd.2009 54,75 39,752008 46,53 35,712007 35,95 38,42


0 10 20 30 40 50 60

39,75

54,75

UNITECH Ltd.

DLF Ltd.

Net Profit Margin 2009 (%)

DLF Ltd. UNITECH Ltd.Net Profit Margin 2009 54,75 39,75


0

20

40

60

80

78

6261 63

72

67

DLF Ltd.UNITECH Ltd.

Gross Profit Margin (%)

200720082009


2009 72 66,8

2008 61 63,2

2007 77,8 62


0

25

50

75

100

86,28

61,4464,45 62,72

92,63 91,38


Opera8ng Ra8o (Total Opera8ng Expenses/Sales)

200720082009



0

16

33

49

65

63,6660,78

57,78

61,6264,85 64,47


Cash Opera8ng Profit Ra8o

200720082009




0

10

20

30

40

50

39,130

42,21644,65

42,1939,51

41,53


Opera8ng Ra8o (%)(Total Opera8ng Profit/Sales)



0

0,1

0,2

0,3

0,4

0,5

0,6

0,7

0,8

0,9

0,6258

0,8471

0,2284

0,4807

0,1250

0,2587


Return On Equity

200720082009


0

0,1

0,1

0,2

0,2

0,3

0,3


Return On Investment

200720082009


DLF Ltd. UNITECH Ltd.2009 9,09 7,372008 15,48 10,23

0

4

8

12

16

DLF Ltd.

UNITECH Ltd.

Earnings Per Share

20082009


DLF Ltd. UNITECH Ltd.2009 Rs. 2 Rs. 0,102008 2 0,25

0

0,5

1,0

1,5

2,0


Dividend Per Share 200720082009


DLF Ltd. UNITECH Ltd.2009 0,22 0,01362008 0,129 0,024

0

0,075

0,150

0,225

0,300


Dividend Payout Ra8o

20082009



0

2,25

4,50

6,75

9,00


Liquid Ra8o

200720082009



0

0,125

0,250

0,375

0,500


Super Quick Ra8o

200720082009



0

1,1

2,2

3,3

4,4

5,5

6,6

7,7

8,8

9,9

11,0


Debt-‐Equity Ra8o

200720082009



0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0


Interest Coverage Ra8o

200720082009



0

5

10

15

20

25

30

DLF Ltd.

UNITECH Ltd.

Debtors / Turnover Ra8o (Sales/Sundry Debtors)

200720082009



0,2

0,3

0,5

0,6


Working Capital Turnover Ratio

2007 2008 2009


0

10

20

30

40


Fixed Assets Turnover Ra8o

200720082009




0

50

100

150

200


Average Collec8on Period

200720082009



0

0,2

0,3

0,5

0,6


Total Assets Turnover Ra8o

200720082009



0

0,1

0,3

0,4

0,6

0,7

0,9

1,0

DLF Ltd.

UNITECH Ltd.

Inventory Turnover Ra8o

200720082009



0

400

800

1200

1600

2000


Inventory Holding Period

200720082009


INVENTORY EVALUATION ANALYSIS

Unitech:

Materials etc are valued at lower of cost or market value

Scrap valued at Net realizable value

Work in Progress valued at estimated cost.

Shuttering and tools valued at amortized cost, spread over 3 years


INVENTORY EVALUATION ANALYSIS

DLF:

Land and plots at the commencement of construction are valued at lower of cost/ estimated cost and net realizable value.

Constructed properties other than Special Economic Zone (SEZ) projects is valued at lower of cost/ estimated cost and net realizable value


DLF Unitech Comparative Financial Analysis

Economy & Finance

cost estimated

land bank

land bank

opera8ng ra8o

net realizable

indian economy

delhi land

primarily