India's largest realty company DLF's net debt rose by nearly Rs 800 crore (Rs 8 billion) in the third quarter of this fiscal to Rs 20,694 crore (Rs 206.94 billion) and the company plans to launch eight million sq ft of area to boost cash flow and cut debt.
According to analyst presentation, DLF's net debt has increased to Rs 20,694 crore as on December 31, 2010, against Rs 19,913 crore (Rs 199.13 billion) at the end of second quarter of this fiscal.
The average cost of debt increased to 10.8 per cent from 10.5 per cent in September. The debt increased mainly due to investment in purchasing land and repayment of preference shares, it added.
DLF had invested about Rs 500 crore (Rs 5 billion) during the third quarter, mainly to consolidate land holdings in the existing projects. The company plans to consolidate more land bank in strategic locations for contiguity.
"In a couple of strategic location, such as Gurgaon and Chandigarh, we will consolidate our land bank in the next 2-3 quarters. There will be about Rs 300-400 crore (Rs 3-4 billion) investment in each quarter in land for the next couple of quarters," DLF executive director (finance) Saurabh Chawla said in an investor conference call.
In order to reduce its debt, DLF said the company would continue to focus on improving operational cash flow through new launches and divestment of non-core assets.
The company plans to launch eight million sq ft of new area in the coming few quarters at locations like Chandigarh, Gurgaon, Delhi, Kochi and Hyderabad.
"Focus will be on launches in the fourth quarter of this fiscal to substantially improve cash-flow from operations," the presentation said.
DLF posted a marginal decline in consolidated net profit at Rs 465.67 crore (Rs 4.656 billion) for the quarter ended December 31, 2010, as against Rs 467.89 crore (Rs 4.6 billion) in the year-ago period.
The consolidated sales during the quarter, however, increased by 22.42 per cent to Rs 2,479.93 crore (Rs 24.799 billion) from Rs 2,025.77 crore (Rs 20.257 billion) in the year-ago period.
During the quarter, the company raised Rs 403 crore (Rs 4.03 billion) from selling its non-core assets. It has so far sold assets worth Rs 2,900 crore (Rs 29 billion) against a target of Rs 4,500 crore (Rs 45 billion), excluding the wind power business.
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