The Punjab and Haryana High Court on Wednesday set aside the Haryana Government's decision to allot 350 acres of land in Wazirabad, Gurgaon, to the country's largest real estate developer DLF in Aug-2009. A division bench of the High Court  directed the Haryana Government to conduct an auction of the land in question by inviting international bids within a month. However, DLF would be able to participate in the auction process.

Commenting on the same, Karvy Stock Broking said, ''It's difficult to forecast the outcome of the case as the matter is Subjudice and DLF may contest the same in the Supreme Court. Purely on the financial basis we have valued the land at Rs 30 billion in our DCF model and assuming that the State Government refunds Rs 10 billion amount with interest (8.5% interest for 5 yrs DLF would receive Rs 15 billion) the valuation hit could be to the extent of Rs 15 billion or Rs 8.2/share.

We currently have Buy stance on DLF with a SOTP-based target price of Rs 240/share on DLF. Our valuation is based on 0.77x our end-FY15E NAV.''

The stock broker has recommended 'Buy' on DLF with target price of Rs 240 as against current market price (CMP) of Rs 174.

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