If DLF has a NAV of Rs. 600 in July 2007, and if land prices have appreciated by 30% in one year, then buy DLF if the stock price is below Rs. 780. Does it sound logical enough?
__________________________________________________________

Personally I prefer none. But companies supplying predominently to single customers could be dangerous. Also what stops DLF from buying ACC cement? Is there any agreement and if so that agreement would not be at market price but at a discount. Between the two DLF is better.

Edited by basant - 18/Jul/2007 at 6:40pm

DLF BAGS RS 6,000CR DDA CONTRACT

MUMBAI, JULY 18: Real estate developer DLF Ltd on Wednesday said it has secured a Rs 6,000 crore contract from Delhi Development Authority (DDA) for constructing an international convention centre in Dwarka.

Located close to Indira Gandhi International Airport in one of the fastest growing sub-cities of the national capital, the centre would be designed, developed and operated by DLF, the company said in a communique to the Bombay Stock Exchange (BSE).

The centre would be designed as per international norms, and would be comparable to Singapore's Suntec Convention Centre, it said.

The main convention hall of the centre, proposed to be set up on nearly two million sq ft area of Rs 900 crore value, would be able to accommodate 12,000 delegates with telescopic seating arrangements. The hall would be capable of partitioned in multiple smaller halls.

The convention centre would consist of 25 meeting rooms with total seating capacity of over 2,000 delegates and two exhibition halls of 5,000 sq mt.

However, the hotel complex would comprise of 835 rooms of different categories. The complex would be constructed in an area of 6.5 lakh sq ft area.

There would also be a commercial complex in the centre, which would have food and beverages facilities, shopping malls, multiplexes, offices and ancillary support units.

The socio-cultural and community facilities would accommodate premium boarding and lodging complex for international students and diplomats, indoor and outdoor sports facilities, and global art and craft village.

SOURCE: FE

Edited by CHINKI - 18/Jul/2007 at 7:04pm

Originally posted by basant  If DLF has a NAV of Rs. 600 in July 2007, and if land prices have appreciated by 30% in one year, then buy DLF if the stock price is below Rs. 780. Does it sound logical enough? __________________________________________________________   Absolutely, But the problem is that appreciation in land prices will always be below the returns that businesses can generate. That is because people pay EMI etc from the cash that they generate by working for business. If land prices rise faster then busineses will theoratically all bsuinesses should be closed and money invested in buying land. - Just a perspective!

Very good perspective Basant ji !

For all general purposes it applies when one thinks between investment in land against investment in a good company.