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B&K Securities
HDIL (Buy — Ourperformer)
CMP: ₹100.05
Target: ₹110
Third consecutive quarter of decline in net debt (down about 24 per cent over last three quarters) alleviates leverage concerns to a great extent. However, until last quarter, a large part of deleveraging had come true as for the management’s efforts to realise pending receivables from consummated FSI sales, possession-linked milestone payments and sale of non-core assets. Fresh bookings/collections from fresh bookings were missing. Not undermining the importance of the above mentioned efforts, fresh bookings remain critical for positive cash flows on a sustainable basis. Here, with early signs of revival in fresh bookings, the quarter raises hopes. For FY15, as the management strives to launch new projects, we remain hopeful of existing efforts to de-lever balance sheet finding support from core operations. Considerably deleveraged balance sheet would also mean that the management bandwidth remains relatively less occupied with de-leveraging efforts and focuses more on core operations.
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