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Strengths: PE Investment soars in reality $1656 million (Yr 2011) (75% change) $944 Million (yr 2010) Demand for the office space continues to be higher side for IT/ITES Sector
(63.6% Change) 1983 crore Sluggish Demand Regulatory Issue Deleveraging Threats: Margin Pressure Liquidity Pressure Demand for the retails commercial Spaces is expected to be low in 2012
Ratio Analysis
Quick Ratio
4.00 3.50 3.00 2.50 2.00 1.50 1.00 1.00 0.50 0.00 0.00 2009 2010 2011 2009 2010 2011 7.00 6.00 5.00 4.00 3.00 2.00
Current Ratio
2009
2010
2011
ROCE Ratio
12% 10% 8% 6% 4% 2%
3.00
2.50 2.00 1.50 1.00 0.50 0.00
2009 2010 2011
0%
2009
2010
2011
DLF or Unitech ?
We recommend Unitech for long-term BUY for the following reasons: EBIDTA margins have improved sequentially by and going forward we expect margins to improve further as contribution of older projects reduces. Unitech's asset value is strong but management has to focus on certain key decisions such as: 1) reducing debt level further with some large asset sale or creating a basket of non-core assets for sale that will help improve cash inflow and strengthen the business, (2) Increasing the work force further to improve the execution level which is likely to help saving both financial cost and generate cash flows faster. (3) approval of court decision for listing of Unitech Infra.