DLF – Building India

ACHINTYA PRANKIT UTTAM

ARUN KSMANISH WATHARKAR

NISHIGANDHAPANKAJ KUMAR

PRASHANT PATRO

9. Legal Issues

10. Ups and downs seen by DLF in current years

11. Competition Profiling

12. Competitive analysis

13. Strategies Adopted by Competitors & their Impact

14. Financial analysis of Competitors

15. Road Ahead

1. Industry Overview

2. Company Overview

3. DLF’s core business

4. DLF’s Business Model

5. Current track of Business

6. Current Strategies of DLF

7. Strategies adopted by DLF at different phases

8. Financial Analysis of DLF

Agenda

Considering overall economic trends, like GDP, Inflation etc, the year was not favorable for this sector

Tightened credit policy made it difficult to raise funds.

Demand in the housing market varied highly across regions.

NCR, Chennai, Pune saw infusion of new projects due to sustained demand

Bangalore, Kolkata witnessed healthy supply

Hyderabad, Mumbai saw restraints due to stringent changes in Development control rules.

Commercial segment performed well in Mumbai, followed by Bangalore. The supply is expected to grow at moderate rate of 2%.

The organised retail segment, which is expected to grow to US $42.0 bn in 2020, from US $22.5 bn now, will definitely create the demand. FDI in multi brand retail is again a catalyst.

The Indian Real Estate Overview

Housing Growth Trajectory

Company Overview

The largest real estate developer in India

Founded by Raghuvendra Singh in 1946 and is based in New Delhi, India

Builds residential, office, and retail properties.

Pan India presence.

The company earnings arising from development and rentals.

Acquired land at relatively low cost in Gurgaon, after the Delhi development act that controlled the real estate in Delhi

In the mid-1970s, the company started developing their DLF City project at Gurgaon.

Its exposure across businesses, segments and geographies, mitigates any down-cycles in the market.

Developed 22 major colonies in Delhi, DLF is now present across 15 states-24 cities in India.

DLF Limited (Delhi Land & Finance)

Vision

To contribute significantly to build the new India and become the word’s most valuable real estate company

Mission

To build world-class real-estate concepts across six business lines with the highest standards of professionalism, ethics, quality and customer service.

Values

Sustained efforts to enhance customer value and quality

Ethical and professional service

Compliance and respect for all community, environmental and legal requirements.

Vision, Mission & Values

Multi-business, multi-segment across geographies, mitigating cycles in the business

A mix of development earnings and rental / incremental earnings

High quality ‘zoned’ land resource with development potential for more than ten years

Strong execution strengths based on deep long-term relationships with companies like Shapoorji, etc. and partnerships such as LOR, WSP, etc.

Raised resources from capital markets, primarily for investments in long-term businesses such as Hotels and large townships / SEZs

Build-up of embedded value in many businesses, like LOR, DLF Utilities, etc.

Value Proposition

Milestones

2004

2003

2002

1999

1996

1985

1950-64

1946

2012

2011

2010

2009

2008

2007

2006

2005

Launched premium residential complexes with luxurious milieu of the Golf Links

Ventured into organised retail complexes

Ventured into group housing project

Development of 22 urban colonies like SouthEx, GK, KailashColony, Hauz Khas

•Launched 8.3 Km Gurgaon Expressway•2nd automated Car Parking in CP, Delhi

Launched plots in Gurgaon after a decade, creating a suburb- ‘New Gurgaon’

Commenced operations of DLF Emporio, India’s first luxury mall

Significant progress in pursuing and ramping up new businesses –Hotels and Large TownshipsFounded by

ChoudhuryRaghavendra Singh

Commenced development of 3,000-acre DLF City, Gurgaon

Ventured into Grade ‘A’ office spaces in Gurgaon

Commences development of ‘DLF Cybercity” in Gurgaon

Focus on IT Parks and next generation malls

Formed JVs with Prudential for Life Insurance & AMC. Also entered Capital markets

Launched Capital Greens, the largest private sector residential projects in Delhi

Delivered Delhi’s first Automated Car Parking in SarojiniNagar

Business organised on vertical basis: Homes, Office, Retail, Hotels, etc., each independent of the other

Same structure is followed not only at the corporate level, but flows down to the regional/local level

DLF, at the corporate level, plays the role of an aggregator of businesses where stiff, competing interests of different SBUs and businesses get aligned, resulting in sum of parts being worth more than parts

Going forward, DLF plans to monetize subsidiaries/assets to unlock the embedded value

With core businesses reaching stable operating performance, focus is to aggressively ramp up new businesses like hotels, infrastructure, SEZs, etc.

Key focus on execution of projects

The compensation structure within allows the mid / senior level employees for participation in the success of various projects/businesses

Corporate strategy

LOGO

The pyramid symbol and the mission line 'Building India’ is collectively referred to as the DLF Logo.

The company's name is represented in black capital letters. The typeface represents the solidity of the enterprise; emphasizes accountability, responsibility as being a strong and integral part of the Group's ethos.

The pyramid depicts nine smaller pyramids; each composes itself into a larger pyramid all-encompassing in nature and presentation. The pyramid itself and the component pyramids convey cohesion, interdependence, support and foundation, to a common purpose and to achieve greater heights.

The words ’BUILDING INDIA’, is in capitals like the company’s name, and at once conveys DLF’s mission and vision. It is an intrinsic reflection of the Group’s commitment and its 60-year heritage

LOGO

DLF’s Core Business

DLF

Core Business

Homes Office Retail

New Business

Hotels SEZsInfrastru-

cture

Execution Enablers

Invest-ments

DLF’s Core Businesses

Pioneered townships and group housing in India

Offers plots and urban colonies as well

Introduced the super-luxury and luxury category for homes

Business model allows pre-sale of property prior to breaking ground, leading to positive cash flows

Trusted brand with superior execution track record

First group housing project launched in 1996

Operates in three main subcategories:

Super Luxury

Luxury

Mid Income

Homes

India being the major part of growth strategies for every multinational there is a large demand of office space.

DLF is the founder of “Grade A – office leasing market: in India

Offers well-balanced mix of commercial office space including IT/ITES facilities, multi-tenant corporate office buildings and integrated commercial complexes

Continue to leverage location advantages and deep customer relationships to enter new geographies

Operates mainly in two subcategories:

Lease:

Sale

A perfect model of long term rental flows and selling propertiesto a listed business trust, with a long-term fee income as earnings

Office

Given the scarcity of quality organized retail, DLF enjoys the benefits of a portfolio of premium locations across the country and rush by large retailers

DLF envisages to introduce a new retail infrastructure to cater to the need for shopping malls and commercial centers across al segments and all places in India

All major retail players, including new entrants pitch aggressively for space in DLF Malls

Introducing the concept of Next Generation Theme Malls

Operates under two subcategories

Sale: Commercial complexes and smaller malls

Build and sell model for commercial complexes and shopping centers

Introducing commercial spaces with small offices, small shops

Lease: Large malls

Build and lease model for Malls

Leasing would ensure strong and sustained rentals given the increasing demand

Rental values increasing substantially due to better mix

Retail

Operates under a separate entity namely; DLF Hotels Holdings Limited

The objective is to develop, acquire, finance and actively manage world-class hospitality properties

Plans to develop 5000 luxury hotel rooms and 20000 business hotel rooms in next 5 years.

These are being developed under the luxury, business, leisure & recreational segments of the hospitality industry

Operates under three main subcategories:

Hilton JV: Business Hotels/Serviced Apartments

Aman Acquisition: Part of luxury strategy

Other Luxury Hotels

Hotels

SEZs are developed keeping in view the zooming demand for office and commercial space, especially for the knowledge industry

With the economic policies of the country directed towards modern infrastructural development, the focus is also increasingly expanding towards the development of modern Special Economic Zones (SEZs)

DLF is the founder of SEZ market in India, with current occupancy of 98%

IT parks developed at Gurgaon, Noida, Chandigarh, Kolkata, Bangalore, Hyderabad, Chennai, Bhubaneswar and Nagpur.

Currently two SEZ works under progress

Manesar SEZ &

Ambala SEZ

Special Economic Zones

Current rate of infrastructure investment in India, at 3.5% of GDP, is well below the target rate of 8.0% proposed by the Expert Group on Commercialization of Infrastructure Projects

Started with South Square multi-level car parking, Sarojini Nagar Market, Capitol Point – Baba Kharag Singh Marg, DLF – Huda Expressway, Gurgaon

Partner with several multinationals like Laing O’Rourke to gain expertise and participate in the construction of infrastructure projects including roads, bridges, tunnels, pipelines, harbors, runways and power projects

MoU signed with Fraport AG for development and management of airport projects in India.

Infrastructure

Laing O’Rourke

50:50 JV with LOR, a leading UK based construction company with expertise in construction of infrastructure projects including roads, bridges, tunnels, pipelines, harbors, runways and power projects

Created an opportunity to exploit new sources of revenue

JV has commenced development of 16 projects covering a total area of 40 msf

DLF-LOR has submitted tenders for construction of various infrastructure projects including roads, laying of railway tracks, airport terminals and a port

WSP

50:50 JV with WSP for engineering and design consultancy and project management services

WSP’s experiences include world class projects such as Freedom Tower at Ground Zero, New York; the Mall of the Emirates, Dubai; and major developments at Heathrow and Stansted Airports in London

WSP to bring specialist staff and expertise from their global operations to support local professionals

Enablers

Laing O'Rourke is a UK-based construction company will construct all DLF's landmark projects

Nakheel of Dubai are partnering with DLF for developing townships in India.

WSP Group Plc is partnering DLF, providing management and consultancy to the built and natural environment

Feedback Ventures is providing consultancy for faster project execution.

Hilton Hotels are partnering DLF to jointly develop hotels in India

Partners of DLF

Business Model of DLF

DLF's primary business is development of residential, commercial and retail properties. The company has a unique business model with earnings arising from development and rentals. Its exposure across businesses, segments and geographies. DLF has also forayed into infrastructure, SEZ and hotel businesses.

The DLF real estate management has got a business model which enables seamless integration of real estate business model owing to its business operation spanning across land, design, construction, facilities and marketing.

These bouquet of services are managed by a team of professionals with expertise spanning across these functions

Business Model

DLF’s Business model mainly consist of two models:

Development Business

Annuity Business

Development Business:The development business of DLF includes Homes and Commercial Complexes. The Homes business caters to 3 segments of the residential market - Super Luxury, Luxury and Mid-Income. The product offering involves a wide range of products including condominiums, duplexes, row houses and apartments of varying sizes. DLF has 216 msf of developed area under homes and residential plots.

Annuity Business:The annuity business consists of the rental businesses of offices and retail. With over six decades of excellence, DLF is a name synonymous with global standards, new generation workspaces and lifestyles. It has the distinction of developing commercial projects and IT parks that are at par with the best in the world. DLF has become a preferred name with many IT & ITES majors and leading Indian and International corporate giants, including GE, IBM, Microsoft, Canon, Citibank, Vertex, Hewitt, Fidelity Investments, WNS, Bank of America, Cognizant, Infosys, CSC, Symantec and Sapient, among others.

In 2006, the company adopted a new business model to cover all the aspects of the realty sector in detail

The old business model was completely changed

The new business model is divided into four important components:

The ‘New’ Business Model Approach

Design & Development Management

Retail Management &

Operational Leasing

Strategic Marketing & Promotions

Property management

DLF Realty project team collaborates with world class architectural firms to create un paralleled home, retail spaces which include shopping malls and integrated developments.

One of the distinctive in house services consists of tenancy design and coordination functions.

The designs of the apartments undergo serious scrutiny and checks within the company in various divisions like quality, strength et al.

The development phase is carried on once the design is approved from the approving department

DLF not only develops projects but creates unique propositions to anchor its developments such as:

DLF Emporio

DT Cinemas

Design & Development Management

This is the first of its kind in India. People will be having an opportunity to witness the creations of 185 of the finest luxury brands in the world.

Over 74 international labels and over 100 Indian designers participate in this

Cafe E in the atrium offers world gourmet cuisine and Set'z, is a spectacular 5 cuisine restaurant designed by the famous Super Potato of Hong Kong which adds to the attraction to the mall.

The beautiful architecture and lavish interiors of DLF Fmpono are designed to make shopping a pleasure.

Generous spaces, Italian marble, soaring atria and dazzling chandeliers are some of the features of this style

DLF Emporio:

DLF considers the retailers and its end user customers in the apartments as not only as customers but also as partners in all the developments.

When it comes to Retailers segment, DLF Retail has built an extensive network with national and international retailers and leverages on this established network to create an optimal tenancy mix in all its projects.

With innovative and consumer friendly shopping, food and entertainment combinations, DLF enhances the retail experience along with maximizing growth and sales for tenant partners.

The tenancy and leasing concepts are also followed in the retail apartment segment but the company pushes for full sale of the property.

Management & Operational Leasing

The marketing and promotions experts continually develop exciting plans regarding the marketing of the apartments and commercial spaces.

Several fun activities are designed to increase the shopper traffic and facilitate tenant sales at the malls.

The marketing team also conducts extensive activities to promote the apartments by targeting the target segment according to the income, and other parameters.

Promotions in the form of putting up stalls in the property expo, tie ups with agencies are some of the commonly followed techniques in this area..

All this is backed by well etched out advertising and PR initiatives for the efficacy of the marketing plans.

Strategic Marketing & Promotions

Property management is one of the biggest issues in the realty sector.

The properties are vey huge and due to non availability of the required documents and also the duplication and fraudulent activities concerning the title deeds have become the major issues in the company’s property management model.

A specialized department with tie ups with the municipal authority and also other concerned authorities is set up in the company to check on such fraudulent activities.

All the proposed properties must pass through a strict ‘New Property Acquisition Process’ in which the proposal passes through various legal checks, municipality checks et al.

The property is finally managed by the DLF’s property management division where the division over sees the entire operations on a day to day basis.

Property Management

Current Track of Business

DLF’s development business primarily focuses on the development and sale ofresidential real estate which include plotted developments, houses, villas andapartments of varying sizes and integrated townships, with a focus on the high end,luxury residential developments.

The development business also consists of certain commercial and shoppingcomplexes, including those that are integral to the residential developments they areattached to.

DLF further splits the development business into three geographical segments –Gurgaon, Super Metros and Rest of India.

Each of these three geographical segments are independently responsible andaccountable for all activities across the product value chain from acquisition of land,obtaining approvals, project planning and execution, to launch, sales & marketing andfinal delivery of the developed property to the customers.

Development Business

Projects Under Construction

DLF, as of 2013, had 27 Projects under Construction in its residential business withexpected Saleable Area of approximately 36.7 msf.

Residential Segment

Residential Segment – A Snapshot

DLF has four commercial and shopping complexes under construction with expectedSaleable Area of approximately 3.96 msf.

Commercial and Shopping Complexes

The Company’s lease business involves leasing of its developed commercial and retailproperties.

One of the key objectives of its lease business is to achieve returns from investments inits portfolio properties within a targeted timeframe.

Another key objective is to achieve high occupancy rates for the leased portfolioproperties.

The utilities and facility management business supports and complements the leasebusiness.

DLF’s lease business comprised completed commercial and retail properties withLeasable Area of 23.8 msf, which yielded incomes of approximately 1,635 crore.

Lease Business

Offices Segment

As of 2013, the occupancy rate for DLF’s leased commercial portfolio properties wasapproximately 88.0%.

It had four commercial projects under construction with expected leasable area ofapproximately 3.8 msf.

Retail Segment

As of 2013, the occupancy rate for Company’s leased retail portfolio properties wasapproximately 96%.

DLF has two projects under construction with expected leasable area of approximately2.0 msf, both of which are malls catering to middle and higher income groups.

Lease Business – A Snapshot

DLF completed 12 msf of commercial and residentialprojects in FY’13 while adding approximately 19 msf to newconstruction.

As a result, the total area under construction is 57 msf till2013. This includes approx 10.5 msf of saleable areapursuant to certain joint venture arrangements. Handover of12 msf were commenced across the cities comprising plots,commercial complexes and commercial offices.

The development business comprising primarily theresidential segment, followed by commercial complexes hasa combined area of 50.8 msf under construction.

The Rental business has approximately 6 msf of area underconstruction.

Company’s Project Execution Status and Development Potential

DLF in the recent times is trying to exit non-core assets and non-strategic businesses,

Hence it has divested a significant portion of its interests in the hospitality businessincluding its shareholding in Adone Hotels and Hospitality Limited which held varioushospitality related land parcels.

Entered into a share purchase agreement to sell its entire 100% shareholding inSilverlink which operates various properties under the “Aman Resorts” brand.

However, The Lodhi, which is a hotel property located in New Delhi, was not included inthis sale and continued to be owned and operated by DLF.

Hotels

DLF currently holds 74% equity stake in the joint venture company with U.S. Based Prudential International Insurance Holdings to develop, promote, market and sell life insurance products in India.

The joint venture has completed about four and half years of operations and had 55 branches in India and a team of 5,487 individual agents.

The loss in FY’13 was ` 132.4 crore as against ` 128.3 crore in FY’12.

Insurance

DLF’s wholly- owned subsidiary DLF Home Developers Ltd. (DHDL) and Violet GreenPower Private Limited (Violet) entered into a business transfer agreement fortransferring of DHDL’s undertaking comprising of 33 MW capacity wind turbinessituated at Rajasthan

DHDL has transferred its undertaking comprising of 34.5 MW capacity wind turbinessituated at Tamil Nadu to Tulip Renewable Powertech Private Limited (Tulip).

Wind Assets

DLF’s Presence in India

Current Strategies of DLF

With the economic policies of the country directed towards modern infrastructural development spanning- express highways, roadways, airports and mega projects, the focus is also increasingly expanding to the development of modern Special Economic Zones (SEZs).

In line with this, DLF is aggressively pursuing the developments of SEZs across the country with over half a dozen projects secured/identified in northern India including Punjab and Haryana, and many more in the pipeline.

Further, DLF Retail in association with DT Cinemas, an integral part of its multiplexes, is well on its way to enlarging its national leadership presence with firm outlays to develop over 100 malls across some 60 cities nationally in the medium term

Expansion

India’s largest real estate firm DLF reported a 38% fall in net profit to Rs.181.19 crore for the June quarter, while net sales rose 5.29% from a year ago to Rs. 2,314.08 crore.

DLF’s 2012-13 annual report highlighted various operational and regulatory challenges that would create hurdles for the immediate fruition of its recently adopted business strategies.

To reduce debt and focus on core realty business, DLF has been selling its non-core businesses and assets such as plots, hotels, wind mills and insurance venture. It has raised about Rs 10,000 crore in last three years through divestment of its non-core assets

consolidation of its core operations

cash flow maximization

long-term growth

Recently adopted strategies

DLF has wind projects in Gujarat , Tamilnadu , Rajasthan and Karnataka with a capacity of 227MW.

Since DLF has been suffering huge debt of 20,184 Cr (As on March 2013) .By selling wind mill, it has raised 1084Cr.

The transaction is a part of DLF’s objective of divesting its non-core business.

Wind-turbines

Gujarat

• DLF also sold its 150MW in Gujarat to Bharat Light and Power private Ltd for 282.3Cr

Tamilnadu

• It has also signed an agreement with Tulip Renewable Powertech Ltd to sell 34.5MW Tamilnadu plant with related liabilities, assets and long term loans for 188.7 Cr

Rajasthan

• DLF completed the sale of its 33MW wind turbine project to violet green power for Rs 67.44 Cr.

Divestures

Lixil corporation , largest housing and building materials company has made a foray in the Indian market by acquiring 70% stake in a DLF group company Star Aluibuild for Rs 79.8 Cr.

Star Aluibuild is a leading Indian curtain wall company which specializes in designing , engineering and fabrication and installation of curtain walls for commercial walls , retail malls

The company gives top priority to Indian market due to company’s fast and enormous potential for growth.

This deal is a part of DLF’s strategy of divesting its non-core business.

Exit from fabrication business

As part of this, DLF in July said it will sell its 74% stake in a life insurance joint venture with Prudential International Insurance Holdings Ltd—DLF Pramerica Life Insurance Co. Ltd—to Dewan Housing Finance Corp. Ltd, and its group entities for an undisclosed amount.

DLF had announced exit from the life insurance business by selling its entire 74% stake in the JV with US insurance giant Prudential Financial. The JV was announced in 2007 and started operation in September 2008.

Name of the JV shall change from DLF Pramerica Life Insurance Company to DHFL Pramerica Life Insurance Company

Analysts have pegged the deal value at Rs.90-200 crore.

Exit from life insurance business

DLF had bought the luxury hotel chain for $400 million few years ago but the depreciation of Indian currency would allow it to exit the venture with an appreciation in value

DLF, India’s largest realty company, has announced the sale of Aman Resorts to Adrian Zecha, the luxury hotel chain’s founder and chairman, for $300 million (about Rs 1,600 crore).

The transaction, which will see DLF Global Hospitality selling its full stake in Silverlink, the controlling entity of Aman Resorts, to Indonesian hotelier Zecha

Exit from Hospitality business

DLF has raised 1863Cr through the issue of over 81 million fresh shares to institutional investors , enabling it to dilute promoters stake to 75% in line with SEBI.

The fund will be utilized primarily to reduce its debt.

The price of the share was Rs 230/share.

DLF’s institutional placement program was oversubscribed 1.82 times with the company receiving bids for over 1.48 billion shares.

IPP

DLF recently sold its plot in Mumbai to Lodha developer as apart of its divesting strategy.

It is also planning to sell its unused plots in National Capital Region and other parts of the country to raise money.

Sale of plots

Strategies adopted by DLF at Different Phases

Business organized on vertical basis

Hotels ,Homes , Office and retails independent of each other.

Same structure is followed not only at corporate level but also at national level.

With core business reaching stable operating performance , focus is to aggressively ramp up new businesses

Key focus on execution of projects

DLF will look into making small pure investment in non-real business, with target ROI of 20%.

The compensation structure within the mid/senior level employees allows for participation in the success of various projects/businesses.

Corporate Strategy

Seek Dominance

Grow

Maximize investment

Defend their position

Identify weaknesses

Build Strengths

DLF as it was established in 1946 , it played a major role in developing residential colonies inDelhi.

Delhi Land & Finance, or DLF, had developed no fewer than 21 colonies in Delhi between1947 and 1961.

With the passage of Delhi Development Act in 1957, government banned the control ofprivate players in Delhi.

That forced DLF to diversify into batteries, cables and so on.

Also result DLF started acquiring land outside the Delhi at relatively low cost in the district ofGurgaon. In the mid-1970s, the company started developing their DLF City project atGurgaon.

Similarly Haryana government didn’t allow private players to develop the land but laterwhen prime minister Rajiv Gandhi changed the law and Gurgaon underwent private realestate boom.

Strategy adopted in the introductory stage

Real Estate sector is mired in government red tape and Babudom. Due to these redtapes and bureaucracy the real estate sector had to create ways and strategy to accessgrowth and sustainability. The following a small glimpse of government red tape,

Strategy In Growth Phase

Environmental clearance Procedure is another roadblock in the life a Real estate firm

Real estate has so far beengoverned by a patchwork ofregulations that promotearbitrariness in doing business andleave plenty of wriggle room foroffenders

But builders are known not to wastepolitical patronage for speedyapprovals; bribing officials does thetrick. Political benefaction becomesparamount when there areopportunities to be exploited anddeals to be struck (see the exhibiton the right). A popular practiceinvolves buying land around a futureairport before the project is cleared.

In the light of the above rules and regulations, DLF has adopted the

following strategies in its Growth Phase:

Increase Land Reserves in Strategic Locations

Expand core business verticals nationally

Diversification into SEZ development

Diversification in Hotel Development

Undertake infrastructure development: DLF is involved in the Metro

development project in Gurgaon.

Hybrid Business Model: Sales and Lease business model.

DLF has adopted a focus strategy by creating high entry barriers andunique construction marvels in the regions where it operates.

Enhance Execution Capabilities

Brand Loyalty Creation: DLF has been associated with unique buildingsand this has helped DLF to create a brand loyalty that is not common inReal estate sector firms.

Brand building exercises : DLF has been associated with IPL and othersuch ventures and hence created a nationwide brand recognition whichonly a few of its competitors has. Real estate is fragmented sector andDLF has created a brand image that differentiates it from the clutter.

DLF has adopted a smart pricing strategy to optimize sales in recent projects. We

see (a) 20-40% premium pricing at home markets (NCR and northern tier-II cities),

and (b) very competitive pricing in new markets (Bangalore and Hyderabad).

Strong sales in New Gurgaon group housing projects is a huge positive surprise,

specially given the significant 30-40% pricing premium (launched at INR5,800/sf+)

over prevailing market price of INR3,500-4,000/sf.

Strong product proposition and smart pricing strategy with cost escalations clause

Their channel checks indicate two major qualitative aspects of DLF’s projects –

(1) superior product design (e.g. Alameda)

(2) best brand recall in Gurgaon

which makes its projects a preferred choice for buyers.

In its recent group housing launches in new Gurgaon (Regal and Primas), DLF has

introduced a new clause of passing on any cost escalations (based on commodity

index) to buyers during the project life cycle. Surprisingly, this has had no visible

impact on demand

DLF prefers owning land instead of developing a leased out plot.

Most of their revenue comes from leasing its own developed property.

Companies like Unitech which can be a competitor of DLF prefers developing leased out plot.

Whenever DLF enters a particular region it applies a focus strategy and becomes a dominant player.

This strategy has paid rich dividends to DLF in some areas like Haryana but not so handsomely in Lucknow.

Owning Vs Leasing

Financial Analysis of DLF

Date of Incorporation : September 18, 1946 as Delhi Land & Finance Pvt. Ltd.

Date of Listing: July 5 2007, with 1706 million shares of Rs 2 each

Exchanges on which it is listed: BSE (532868), NSE (DLF)

Inclusion in stock indices:

MSCI Emerging Market Index – Nov 30, 2007

MSCI India Index – Nov 30, 2007

BSE Realty Index – July 9, 2007 (has 38% Weightage in the index)

CNX 100 – March 14, 2008

S&P CNX Nifty – March 14, 2008

BSE SENSEX – Nov 19, 2007

Dow Jones BRIC 50 Index – Sep 22, 2008

Credit Rating: A –ve by CRISIL and A by ICRA

Fact Sheet

Present Shareholding pattern of DLF

The total Market Cap as of 07 Feb 2013 (EOD Price Rest. 137.95 – BSE Sensex) was Rs 30199.10

Market Capitalization

The graph shows the performance of DLF Share price vs. S&P CNX Nifty index performance.

Through the graph, we can see that the share prices are moving in an independent way.

However the share price when analyzed separately, we can see that the prices are performing in a relatively flat way without much volatility in it.

DLF Share price vs. S&P CNX Nifty Performance

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The graph shows the performance of DLF Share price vs. Sensex index performance.

Through the graph, we can see that the share prices are moving relatively according to the index movement.

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Financial Statement & Balance Sheet

Company Profitability Trends

2008-09 2009-10 2010-11 2011-12 2012-13

Turnover 2827.9 2307.8 2916.08 3491.32 2150.04

Profit 1547.77 765.06 1269.58 1041.73 501.56

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Net Profit Margin 40.36% 23.87% 31.37% 22.73% 15.17%

Op Profit Margin 62.33% 45.29% 61.03% 60.43% 64.62%

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40.00%

60.00%

80.00%

100.00%

120.00%

% a

geThe main reason for fall in turnover and profit margin is due to Land reforms and other regulatory changes

2008-09 2009-10 2010-11 2011-12 2012-13

IT Ratio 0.43 0.42 0.43 0.24

DT Ratio 0.14 0.1 0.11 0.13 0.08

AT Ratio 4.95 5.62 6.64 8.84 8.28

0

2

4

6

8

10

0

2

Company Profitability Trend

2008-09 2009-10 2010-11 2011-12 2012-13

ROA 72.91% 75.59% 81.35% 85.35% 86.03%

RONW 12.50% 5.96% 9.19% 7.18% 3.43%

ROCE 11.90% 6.96% 9.45% 11.56% 9.34%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

% a

ge

Returns have shown the same trends as for the turnover. The increase in AT ratio can be explained as, the company has been selling its assets from last two years so as to clear its debts.

Legal Issues concerned to DLF

The Chandigarh HC has stayed the country's largest developer from selling, marketing and constructing its latest luxury residential project - the crest - at Gurgaon

This, after the resident welfare association of one of DLF’s projects, park place, filed a writ petition alleging the company was encroaching on its condominium property.

In a case filed by BelaireOwners Association against DLF , the CCI pronounced DLF guilty for grossly for abusing its dominant position and imposing unfair conditions in the sale of flats.

The CCI imposed penalty of Rs 6300 million ; issued ‘Cease and detist’ order against DLF

Mr. Robert Vadra along with DLF falsified documents and executed a series of sham transactions for 3.53 acres of land in Shikopur village of Gurgaon.

IAS officer Mr. Ashok Khmka cancelled the land deal between Robert Vadra and DLF.

The Ups and Downs of DLFover the years

2007

DLF launched Initial public offering at Rs 525 a share to raise 9000 crore in 2007. DLF would use the proceeds of the issue for reducing the debt and for working capital requirement.

27 November 2007, Zecha the owner of Aman resorts had an agreement with DLF Ltd, to form a partnership to acquire a controlling interest in Amanresorts.

The entire transaction, when completed, is estimated to be valued at US$400 million with an assumed debt of approximately US$150 million

2009

DLF bagged the country’s largest land deal for Rs 1750 crore.

DLF plans to enter the low priced home segments.

2010

DLF eyeing Haryana Punjab and Himachal Pradesh for expansion. Announces its project Panchkula Valley, in Haryana with an investment of Rs 2200 crore.

2011

2011 DLF Brands a subsidy of DLF ltd decides to launch multi brand retail store of across 10,000 to 15,000 sq. ft that required an investment approximately up to Rs 15 crore. Also decides to enter into beauty and wellness category.

2012

DLF expects an annual growth of 20 percent in office rental income that would reach Rs 2500 by 2014-15.

DLF sells Aman resorts worth $300 million back to the owner and is set to launch a new project of luxury homes in Gurgaon with sales realization of Rs 900 crore.

2013

DLF sold its wind turbine business in Gujarat to Bharat Light and Power for 282.30 crore.

DLF signed an agreement to sell its wind power assets in Tamil Nadu and Rajasthan for around Rs 241 crore. This was a strategy of selling non-core assets was to trim debts. The agreement was between DLF Home and Developers (DHDL) and Tulip renewable Powertech.

India's largest realty firm DLF today said it has given a Rs 1,337 crore contract to L&T for construction of its luxury residential project in Gurgaon. The company is developing a high-end housing project 'The Crest' in Gurgaon, comprising 765 units, of which about 250 flats have already been launched and sold.

2014

IBM has today announced that it will deploy with real estate company DLF Limited an innovative mobile-phone based solution that channels data insights from customers visiting DLF Promenade, a high end shopping mall serving the metropolitan New Delhi area.

Competition Profiling

Major Competitors of DLF can be listed as follows:

Oberoi Realty

Prestige Group

Godrej Properties

Sobha Developers

Omaxe Ltd

Parsvanath

K Raheja Group

Ambuja Realty

Industry P/E is 16.54

Major Competitors of DLF

Headed by: Rohtas Goel, CMD

About: Over the past 22 years, Omaxe has established itself through diverse range ofresidential and commercial projects. The company at present has 53 projects underexecution and planning. Omaxe Ltd was the first Construction Company of northernIndia to receive an ISO 9001:2000 Certification.

Project Spectrum: Integrated townships, Group housing, SEZs, Shopping malls &commercial complexes and hotels.

Latest: Has entered into infrastructure sector through Omaxe Infrastructure &Construction Ltd (OICL), a wholly owned subsidiary. OICL has bagged the first contractto construct Highway and three high level bridges in Punjab. The contract is awardedby Greater Mohali Area Development Authority and its value is pegged at Rs704million.

Omaxe Ltd

Headed by: Ramesh Chandra, Executive Chairman

About: Established in 1972, Unitech is today India’s leading real estate developer inIndia. It is the first developer to have been certified ISO 9001:2000 in North India.

Project Spectrum: Unitech offers diversified projects across residential, commercial/ITparks, retail, hotels, amusement parks and SEZs segments. Unitech was the first realestate company to be part of the National Stock Exchange’s NIFTY 50 Index. Thecompany has over 600,000 shareholders.

Unitech and Norway based Telenor Group came together to build Uninor - Atelecommunication services company providing GSM services across India.

Latest: Has ventured into the infrastructure business by launching Unitech Infra.

Unitech

Headed by: Sushil Ansal, Chairman

About: Established in 1967 as a family business, Ansal API today is clearly amongst the realestate leaders of India. Having established itself very strongly in the NCR region, Ansal API isnow focusing on ventures in cities like Bhatinda, Mohali, Amritsar, Ludhiana, Jalandhar,Jaipur, Jodhpur, Ajmer, Sonepat, Panipat, Karnal, Kurukshetra, Faridabad, Gurgaon, GreaterNoida, and Ghaziabad, Meerut, Agra, Lucknow, to name a few.

Ansal API has till date, developed and delivered more than 190 million sq ft. The companycurrently has a land reserve of about 9,335 acres.

Project Spectrum: Integrated Townships, Condominiums, Group Housing, Malls, ShoppingComplex, Hotels, SEZs, IT Parks and Infrastructure and Utility Services

Latest: Raised Rs231.4 crore through private placement of shares with institutional investorsfor reducing its debt and execute ongoing projects.

Ansal API

Headed by: Pradeep Jain, Chairman

About: Incorporated in July 1990 by Mr Jain in New Delhi, Parsvnath today has asubstantial pan India presence in over 45 cities across 16 states. The company hasemerged as one of the most progressive and multi-faceted real estate and constructionentities in India.

Project spectrum: Housing (premium, mid-market as well as affordable), officecomplexes, shopping malls & hypermarkets, hotels, multiplexes, IT Parks and SEZs.

Quick fact: First real estate company to have integrated with ISO 9001, 14001 andOHSAS 18001.

Latest update: Has partnered with Red Fort Capital to execute a Concession Agreementwith DMRC for development of a prime Grade A office project in New Delhi’sConnaught Place.

Parsvnath Developers Ltd

Headed by: Milind Korde, MD

About: Established in 1990, Godrej Properties Ltd (GPL) brings the Godrej Groupphilosophy of innovation and excellence to the real estate industry. GPL aspires to beamong India’s top three real estate companies while continuing to be the most trustedname in the industry. GPL has completed several landmark projects and is currentlydeveloping significant projects in 11 cities across India.

Godrej Properties Ltd is listed on the Bombay Stock Exchange (BSE) and The NationalStock Exchange (NSE).

Latest: Sold over 200 apartments within 2 days of launch of its project Godrej Frontierin Gurgaon. This is the company’s first residential project in northern India.

Godrej Properties Ltd

Headed by: Chandru L Raheja, Chairman

About: Incorporated in 1956, this Mumbai based real estate giant has been engaged inreal estate development for more than four decades. K Raheja Corp has builtresidences, commercial buildings and hotels throughout India. The Group alsodiversified in the hospitality sector in 1981and in the retail sector in 1991. The companyhas several landmark projects to its credits across cities.

Quick fact: K Raheja Corp has given a firm commitment to have all of its future projectsundertaken anywhere in India to be Leed Certified Green Building Projects.

K Raheja Corp

Headed by: Mofatraj P Munot, Promoter

About: Established in 1969, Kalpataru is one of the leading real estate developmentgroups in India. The Group has been active primarily in the Mumbai MetropolitanRegion (MMR) & Pune. It is also undertaking projects in other key cities such asHyderabad, Surat, Nagpur, Jaipur and Udaipur.

The Kalpataru Group has interests in real estate development, property and projectmanagement, engineering, procurement and construction (EPC) contracting for powertransmission and infrastructure projects including road projects, warehousing andlogistics.

Project Spectrum: The focus has been on the development of premium residential,commercial, retail, integrated townships, lifestyle gated communities andredevelopment projects.

Kalpataru Group

Headed by: Vinod Goenka and Shahid Balwa

About: It is one of India’s fastest growing real estate companies headquartered inMumbai. The Company currently has more than 30 ultra premium projects undervarious stages of planning and also completion in both Mumbai and Pune. It has 20.5million sq ft of saleable area of ongoing projects with a projected area of

40.5 million sq ft in forthcoming and upcoming projects. DB Realty is publicly listedcompany both on BSE and NSE with a market capitalisation of more than Rs10000crore.

Latest: Few months ago, it bagged the right to redevelop a large chunk of the 100-acrePWD government colony in Mumbai’s Bandra suburb. This will be one of the biggestredevelopment projects in the city

DB Realty

Headed by: PNC Menon, Chairman

About: The Company was founded in 1995 by PNC Menon after he returned home fromthe Middle East where he was acclaimed for quality interiors and construction since1977. Today, this Rs10 billion plus company is one of the largest and only backwardintegrated company in the construction arena. Its IPO in 2006 was oversubscribed by126 times that created history, being the first event of its kind in Indian capital markets.

Till date, Sobha has completed 47 residential projects, 13 commercial projects and 166contractual projects covering about 36 million sq ft area in 18 cities across India (as of31 March 2010). The company currently has 21 ongoing residential projects aggregatingto 8.5 million sq ft, while 4.24 million sq ft of contractual projects are under variousstages of construction.

Sobha Developers Ltd

Headed by: MR Jaishankar, CMD

About: Established in 1986, Brigade is one of South India’s leading property developers.It is headquartered in Bangalore with projects extending across several major cities inSouth India like Chennai, Chikmagalur, Hyderabad, Kochi, Mangalore and Mysore.

Project Spectrum: Brigade has a multi-domain portfolio that covers propertydevelopment, property management services, hospitality and education.

Latest: Brigade recently obtained the license from the World Trade Centers Associationto classify and manage its one million sq ft office tower in its mixed use project BrigadeGateway as ‘World Trade Centre Bangalore.

Brigade Group

Headed by: Ravi Puravankara, Founder and CMD

About: Established in 1975, the Group has grown to be one of the leading real estatedevelopers of the country, primarily in the premium housing segment. It has projectsacross cities like Bangalore, Chennai, Kochi, Coimbatore, Hyderabad, Mysore, Kolkataand Colombo. The Group also has a presence in Dubai, UAE. With a land bank of over125 million sq ft, the Group has above 20 million sq ft of residential and commercialspace currently under construction.

Latest: Recently launched Purva Venezia that recreates the beauty of Venice atYelhanka in Bangalore.

Puravankara Group

Headed by: Nitesh Shetty, MD

About: Founded in 2004, Nitesh Estates is an integrated property developmentcompany headquartered in Bangalore.

Project Spectrum: In just six years, the Company has brought more than nine million sqft of space under development across housing, hotels, office buildings and shoppingmalls. The company is growing even faster with plans to expand its operations in othercities like Goa, Chennai, Hyderabad and Kochi. Nitesh Estates has to its credit a series offirsts: the first to win India’s largest corporate housing project (ITC Limited), one amongthe first few to attract FDI in real estate (Och Ziff and Citigroup) and has the distinctionof bringing to India it’s very first Ritz Carlton. It has 27 ongoing and forthcomingprojects in and around Bangalore and Goa. It has land bank of 19 million sq ft, whichwill be developed in the next 4-5 years.

Nitesh Estates

Headed by: Irfan Razack, CMD

About: Founded in 1986, Prestige has completed more than 142 projects and has 59ongoing projects. The company has presence in Bangalore, Chennai, Hyderabad, Kochi,Mysore as well as Goa.

Project Spectrum: Develops projects across segments like residential, commercial,integrated township, retail, leisure & hospitality and mixed-use.

Facts: Prestige raised Rs12 billion rupees through its IPO.

Prestige Estates Projects Ltd

Headed by: Harshavardhan Neotia, CMD

About: Ambuja Realty has been providing housing in West Bengal, in a pioneering jointventure with West Bengal Housing Board for the past 15 years under the name BengalAmbuja. The first real estate company in Eastern India to get ISO: 9002 Certification, in 1999,Bengal Ambuja has also earned them the highest developer rating in India - DRI from ICRA,in 2003.

Project Spectrum: The Group has a diversified presence across segments like residential,retail, commercial and hospitality. The company is also planning an aggressive pan-Indiagrowth strategy to deliver an unprecedented number of high-quality projects. Currently, it isbuilding more malls, hospitals, IT Parks, luxury resorts, business hotels and are even aspiringto build a University.

Latest: To invest around Rs500 crore in developing three shopping malls under the ‘CityCentre’ brand in Raipur, Haldia and Patna.

Ambuja Realty

Headed by: Sushil Mohta, MD

About: Merlin Group is a recognized name in the realty business of India’s easternparts. The Group has grown over past three decades with over 50 residential andcommercial complexes as well as several standalone projects.

Project Spectrum: Merlin Group has innovated with various formats and core projectsincluding premium housing, essential housing, country homes and bungalows, specialtymalls, office towers, IT buildings, hotels new generation clubs, and resorts, servicedapartment’s stadium and townships. It also has presence in other parts of India with itsvarious residential and commercial projects at Chennai, Chhattisgarh and Ahmedabad.

Merlin Group

Founded by: Pradip Kumar Chopra & Surendra Kumar Dugar

About: Today, the original pair of founders has grown into a group of seven players,with the second generation joining the business in right earnest.

Project Spectrum: PS Group is involved in the development of premium residentialcomplexes, integrated townships, commercial buildings, hotels, IT parks and a widerange of shopping malls.

The company already has completed 100 projects with Trinity Plush and intends tocomplete another 50 projects in the next two years.

PS Group

Headed by: Nayan Basu, CEO

Credited with more than 50 multi-storeyed landmark developments adorning theskyline of Kolkata, the Hiland Group has today emerged as one of the most prominentdevelopers in Kolkata.

Latest: The Group has also entered into a 50:50 joint venture with West Bengal HousingBoard to form Bengal United Credit Belani Housing Ltd. Hiland Woods is the key projectof this joint venture. It is a residential development catering to a mix of demographicprofiles across LIG, MIG and HIG.

Hiland Group

Headed by: Nandu Belani

About: The Company commenced operations in Kolkata in 1967 and has pioneered thebusiness of building, promoting and developing high-rise apartments and commercialbuildings in the city over the last four decades.

Some of the key projects done by this Group are Metro Towers, IDBI Building, BritishDeputy High Commission, Belmont Apartments, East End Gardens, Neelkamal ,Shakespeare Court, Greenwoods and Palacio.

The Group has presence across segments like integrated townships, residential,commercial, retail and hospitality.

Belani Group

Headed by: Brotin Banerjee, MD & CEO

About: Tata Housing is a closely held Public Limited Company and a subsidiary of TataSons Ltd. Since it’s revival in 2006, Tata Housing has been focused on developing andtransforming real estate development in India. With the primary business being thedevelopment of properties in residential, commercial and retail sectors, the company’soperations span across various aspects of real estate development. With existingpresence in Mumbai, Goa, Chandigarh, Bengaluru, Gurgaon, Pune, Lonavala, Talegaonand Kolkatta, the Company is in the process of expanding its projects to other parts ofIndia across tier I and II cities.

Latest: Has announced aggressive growth plans to invest over Rs2500 crore in theaffordable and value homes segment by 2013.

Tata Housing Development Company

Headed by: Abhisheck Lodha, MD

About: Founded in 1980, Lodha Developers are primarily Mumbai based with somepresence in Pune and Hyderabad. Lodha Developers provides comprehensiveresidential and office space solutions across real estate categories and diverseconsumer segments - from luxury garden residences in South Mumbai to largeintegrated townships in the suburbs, from thoughtfully designed office environments toprivate villa retreats.

The group has extended this philosophy to office spaces as well, where it was one ofthe first in India to introduce the concept of branded office spaces.

Latest: Announcement of World One, a landmark development on a 17 acre site, slatedto be the tallest residential development in the world.

Lodha Developers

Headed by: T Chitty Babu, Chairman & CEO

About: Headquartered in Chennai, Akshaya has successfully completed over 148 landmarkprojects in a short period of 15 years. Akshaya is one of the few CRISIL rated organizations inChennai’s real estate space. Akshaya’s excellence in its endeavours has also resulted in theIntegrated ISO 9001:2008, ISO 14001:2004, OHSAS 18001:2007 Management System. TheIntegrated Management System Certification, ncidentally, has been conferred on only 11companies in India.

Akshaya also achieved the feat of being one of the two companies in our country to win theSA 8000:2008 Certification (the global social accountability standard for creating employee-friendly workplace). Akshaya is now foraying into commercial and IT space while envisioningstate-of-the-art shopping malls and diversified operations in other parts of South India.

Latest: Recently launched its luxury project, 36-Carat, which became the only project inChennai to get the coveted ‘Chennai-5 Star’ rating.

Akshaya Private Ltd

Headed by: Three directors including renowned architect Vidur Bharadwaj

About: Founded in: 2007, The 3C Company has presence in the Delhi NCR. TheCompany stands apart due to focus on designing and developing green projects with onschedule delivery. Its USP of developing environment friendly designs has helped itcarve a niche in the real estate segment. The Company is currently developing projectsworth over Rs15000 crore.

Project Spectrum: The 3C Company has presence across segments such as residential,commercial, IT Parks and SEZs.

Latest: After the success of three green projects, it announced the launch of anothergreen residential project called Lotus Zing. It has tied up with Kotak Real Estate Fund forthis project, which has a total capital outlay of Rs 850 crore.

The 3C Company

Competitive Analysis

Not much penetration in South India.

Change in the rules and regulations effected adversely. Example Delhi Development Act in 1957 effected the development in Delhi.

Macroeconomic risks

No parallel products to support during times of bad economy.

Real risk of decline of property prices and concentration in gurgoan.

WEAKNESS

DLF has a market share of about 54% and a strong base in north India.

High brand value and advantages of being a pioneer

Huge supplier base ensure a fixed raw material cost

DLF huge land bank

effective and innovative promotional deals (eg: IPL)

STRENGTH

SWOT analysis of DLF

Profitability decreases due to increase in the number of new entrants like Shoba developers ,Tata etc.

Easy methods for new players to raise huge capital

High competition from other major player such as Unitech, Ansals.

Brand name effected due to debt burden, timely delivery, corruption charges.

New FDI policies by FIPB

Corrupt practices in legal proceeding.

THREAT

Investment in raw materials- Backward integration.

Government has allowed ECB for integrated township

Can cater to the needs of MNC’s who are looking to establish in south India especially in the outskirts of metros especially in tier I and tier II cities.

OPPORTUNITIES

SWOT analysis of DLF

Decline in operational performance and Low returns are a concern

Global presence and international tie-ups are very less

LOSS of talent pool.

WEAKNESS

India’s second largest real estate investment company and largest real estate builder

Offers a diversified product mix

Has decades of real estate experience and expertise

Strong national presence

Wide customer and partner base

STRENGTH

SWOT analysis of Unitech

Profitability decreases due to increase in the number of new entrants like Shoba developers ,Tata etc.

Easy methods for new players to raise huge capital

High competition from other major player such as Unitech, Ansals.

Brand name effected due to debt burden, timely delivery, corruption charges.

New FDI policies by FIPB

Corrupt practices in legal proceeding.

THREAT

Investment in raw materials- Backward integration.

Government has allowed ECB for integrated township

Can cater to the needs of MNC’s who are looking to establish in south India especially in the outskirts of metros especially in tier I and tier II cities.

OPPORTUNITIES.

SWOT analysis of Unitech

2G spectrum scam connection with Etisalat

Restriction to foreign FDI may hamper its capital growth

Limited business experience for conducting business activity outside Mumbai

WEAKNESS

Strategic location in Mumbai and Pune

Highly lucrative market in Mumbai

Strong CSR activities in and around Mumbai

Ability to response to consumer requirements

It is one of India's largest real estate developer based in Mumbai

STRENGTH

SWOT analysis of DB Realty

Rules and regulation on FSI and time consuming legal proceeding.

Slowdown in Indian Economic growth

Varying interest rate and exchange rates in India

Immense competition

Corrupt practices in legal proceeding.

THREATS

Ability of expansion in other metro cities in India

Joint venture and acquisition for development.

Global tie-ups and diversification can be possible

OPPORTUNITIES

SWOT analysis of DB Realty

Approvals from the relevant local authority for the development of the lands is a long and tardy process.

Approximately 2.02% of the land held by Shobha is declared by government as “green belt” where no further development can be undertaken.

Inability to acquire contiguous parcels of land may affect the future developmental activities.

Significant portion of the revenues from contractual projects is attributed to one client. Example: Of the revenues from contractual projects Rs. 1.073.84 million, Rs. 2,780.15 million and Rs. 1,678.73 million relate to revenues generated from Infosys Technologies Limited, in fiscal 2004, 2005 and 2006.

WEAKNESS

Backward integration: in-house resources to deliver a project. Eg: architectural and design studio, concrete block making plants, metal and glazing factory, interiors and wood working factory.

Access to skilled labor: an academy to train tradesmen in specialised fields of the construction business

Ability to identify emerging trends in customer requirements by CRM team and a Customer Care Cell.

STRENGTH

SWOT analysis of Sobha Developers Limited

Limited supply of land, increasing competition and applicable regulations are likely to result in land price escalation and a further shortage of developable land.

The company recognise revenue based on ‘Percentage Completion Method’ of accounting on the basis of our management’s estimates of the project cost. However this is effecting the price of equity shares.

Shortage of building materials can effect operations and financial conditions.

The Government may exercise rights of compulsory purchase or eminent domain in respect of the company’s lands.

THREATS

A business model of construction in city model development. Eg: Shobha city

State government approvals for SEZs.

Increase in the number of MNC’s setting up in India in the past decade and the need for quality services.

Rising population and the increase migration to cities.

OPPORTUNITIES

SWOT analysis of Sobha Developers Limited

Volatility in prices of, or shortages of, key building materials;

Largely depend on third parties, Joint ventures, Contractors on whom they have limited control

WEAKNESS

Strong presence in Mumbai

Established brand and reputation

Strong base of client in commercial

Financial stability of tenants

Strong workforce

STRENGTH

SWOT analysis for Oberoi Realty

Extensive regulation include various Environmental laws regulation , which may be more stringent in near future

Constraint of fund

Changes to the FSI/TDR regime in Mumbai

Terrorist attacks which may affect the steady business development.

Changing and downturn in Economic condition of the country

THREATS

Continuous focus on large development in Mumbai

Acquisition and Joint venture for sustainable development

For more growth in other metro cities in India

OPPORTUNITY

SWOT analysis of Sobha Developers Limited

Strategy Adopted by Competitors

Skill Shortage.

Non Availability of Statistics.

Overvaluation of Property.

Highly Fragmented.

Lack of Transparency.

Barriers In Growth Of Real Estate

CONSTRUCTION

COST

Labor Rates Escalated to

5-10 %

Bricks Prices Increase by

30-35 %High

Interest Rates

Rising Prices

Decreasing Demand

Fall Of Sensex & Real Estate Stocks

DLF

UNITECH

PARSAVNATH

Key Issues

Measures taken by DLF

Launched affordable

housing project.

Payment of short term

debt by raising long term debt.

Terminated projects with

long gestation

period.

Sale of properties

for liquidity preservation.

Cost reduction

through tight cash flow.

Measures taken by Unitech

QIP issuance to reduce

debt.

Reduced promoter’s stake from 64% to 51%.

Increased confidence with customers on project delivery.

Major Strategic restructuring.

Strategic Restructuring

Competitors Strategy

Demand projected in the affordable housing segment

Through a combination of reduction in costs, decrease in unit sizes and reduction inmargins, Unitech has been able to offer housing at prices affordable to a wider crosssection of customers

Unitech offering product in the sub Rs. 20 lakhs range under the ‘Unihomes’ Brand

Unitech Business Model – Post Restructuring

Godrej Properties – Business Strategy

Oberoi Realty is a debt-free real estate firm (a laudable achievement for an industry drowning in debt).

Diversified portfolio across commercial and residential, the predominant focus has been on the residential side and the aim is to target the upper end of the market segment.

The company’s business model is based on five strategies — low capital employed, land is raw material, in-house construction capabilities, direct sales team and facilities management.

The company extensively out-sources work to leading international and domestic consultants in the areas of architecture, design, engineering and construction to achieve international quality and styling as well as to attain the scalability required to undertake large developments. Yet, it is able to clock a high margin due to the target segment and premium branding.

Oberoi Reality

Strategic Land Parcels: The Company has established a first mover advantage in Tier II and Tier III towns in the country. Its strategy to acquire large land parcels at strategically located areas in close proximity to the proposed network of national highways has kept it in good stead. Such land parcels are usually cheaper to acquire ahead of the start of development. The same offers the Company with the leverage of developing full scale townships, with residential facilities by offering plots and built up areas in apartments/ villas and floors.

Customer-centricity: A key strategy that has worked wonders for Company’s growing preference and swelling brand equity has been its steadfast focus on customer satisfaction and delight

Non-metro intensity: The Company has aligned its project development plans in line with the changing demography of the country towards rapid urbanization. The same has helped the Company deepen its engagement in many Tier II/III towns in the country

Omaxe – Key Strategies

Strategic Land Parcels: The Company has established a first mover advantage in Tier II and Tier III towns in the country. Its strategy to acquire large land parcels at strategically located areas in close proximity to the proposed network of national highways has kept it in good stead. Such land parcels are usually cheaper to acquire ahead of the start of development. The same offers the Company with the leverage of developing full scale townships, with residential facilities by offering plots and built up areas in apartments/ villas and floors.

Customer-centricity: A key strategy that has worked wonders for Company’s growing preference and swelling brand equity has been its steadfast focus on customer satisfaction and delight

Non-metro intensity: The Company has aligned its project development plans in line with the changing demography of the country towards rapid urbanization. The same has helped the Company deepen its engagement in many Tier II/III towns in the country

Omaxe – Key Strategies

Affordable Housing: The Company is aligned to encash upon the rapid shift towards nuclear families even in smaller towns. We are witnessing a consistent drop in the maiden age of buyer at the time of purchase of the first house. The Company's range of affordable housing is positioned well within the reach of such nuclear families from middle income group.

Phased Development: The Company believes in not taking up too many projects simultaneously. It follows the strategy to complete them in a phased manner with focus on timely delivery. The Company launches fresh projects across other options available in regions where it has already got land parcel, and finds visible signs of healthy absorption.

Omaxe – Key Strategies

Competitors Shift in Business Strategy

Competitors are forced to change their strategy in this highly fragmented market.

Focus on core competency.

No more purchase of land bank unless strategically highly opportunistic.

Focus on increasing brand loyalty.

Price war in affordable housing segment.

Critical Impact

Enhancing Execution Capabilities

Financial Analysis of Competitors

2150.04

1803.02

1345.64

980.53

849.56

815.26

DLF

Sobha Developers

Omaxe

HDIL

SRS Real Infra

Puravankara

Rs. Cr

Top Companies on Basis of Turnover

30199.1

6054.26

4821.25

3166.82

2691.85

2253.33

DLF

Oberoi Realty

Prestige Group

Godrej Properties

Sobha Developers

Omaxe Infra

Rs. Cr

Top Companies on Basis of Market Cap

Even if DLF has the highest market cap, which is far more than any other companies, the turnover does not show the same trend. Hence relatively DLF has to struggle hard to grow.

Top Companies on Basis of Total Asset

Top Companies on Basis of Net Profits

501.66

327.47

268.56

196.57

145.38

129.07

DLF

Oberoi Realty

Indiabulls real

Sobha Developers

HDIL

Prestige Estate

Rs. Cr

19012.4

12445.1

5877.75

4408.25

3616.72

3240.05

DLF

HDIL

Indiabulls Real

Anant Raj

DB Realty

Prestige Estate

Rs Cr

Top Companies on Basis of Investments

Top Companies on Basis of Tax

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

0

40

80

120

160

200

DLF Oberoi Realty SobhaDevelopers

Indiabulls Real Parsvanath Purvankara

Rs Cr

% age of PBT

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

0

1200

2400

3600

4800

6000

7200

8400

DLF Oberoi Realty SobhaDevelopers

Indiabulls Real Parsvanath Purvankara

Rs Cr

%age of Total Asset

Top Companies on Basis of Cash/Bank

Top Companies on Basis of Debt

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

0

100

200

300

400

500

600

700

800

900

1000

Oberoi realty DLF Puravankara Omaxe HDIL Anant Raj

Rs Cr %age of Liability

0.00%

8.00%

16.00%

24.00%

32.00%

40.00%

48.00%

0

2000

4000

6000

8000

10000

12000

DLF Oberoi Realty SobhaDevelopers

Indiabulls Real Parsvanath Purvankara

Rs Cr %age of Liability

Road Ahead

Investment in raw materials- Backward integration.

Can cater to the needs of MNC’s who are looking to establish in south India especially in the outskirts of metros especially in tier I and tier II cities.

Robust strategy against increasing competition from big players like Shoba developers, Tata etc.

Focus on reducing the burden of debt

Increase market diversification by penetrating through housing and retail segments across Tier – II and Tier – III cities by acquisitions and JVs

Need for organisation of real estate sector in the country

Increase in brand loyalty to gain sustainable competitive advantage

Thank You