Hold DLF, says Tulsian

Investment Advisor SP Tulsian is of the view that one can hold DLF.

Tulsian told CNBC-TV18, "All the reality stocks have taken a beating. DLF is the largest player and in fact the kind of land bank they have been holding with the price having paid for and if you see their report for FY08 they have said that the 98% of land bank is paid. The current market cap is translating into the market cap of below Rs 40,000 crore and even if you take the worst case scenario and in the current situation I don’t think that they should have any problem for the company to post a bottom line of about Rs 5,000 crore though they have been posting about Rs 7,000 to Rs 8,000 on an annual basis. Even if it falls to about Rs 4,000, things overall have come to a very realistic level."

He further added, "All the properties under development, you can always get accelerated if you change your model or if you shrink your margin maybe by 10% or so and there are tough times ahead for the reality sector because of the liquidity crunch. But once the interest falls, which again is all expected and right now its about 13%, but if it falls to a single digit maybe about to 9%, things can start improving here on. As we have been seeing the price of Rs 230 definitely not the realistic price at least with the company going buy back or promoter stake of 88% or close to that, taking all that into consideration one can take a hold call. One can remain invested with a 12 month view on the stock and no advice to exit at the current level."

Disclosure: Analyst holds the above stock.

Source: Moneycontrol