IT SEZ slowdown may impact DLF revenues: CLSA

MUMBAI: The slowdown in IT special economic zones (SEZs) is likely to affect realty major DLF's revenues in 2009-10, according to investment bank CLSA. This is because sale of IT SEZ assets to DLF Assets (DAL), the main buyer of DLF's properties, constitute roughly 50 per cent of DLF's earnings.

���We believe that a slowdown in the leasing ability will adversely effect revenues booked through DAL's contract as DLF slows down pace of construction on unleased properties,��� CLSA said in a report.

India's software sector is witnessing a slowdown, as the US recession has reduced the technology spending across industries, thereby delaying investments by software companies.

���IT sector slowdown is visible with Unitech Corporate Parks' reporting a c.90% YoY decline in IT-SEZ leasing activities during FY09 so far,��� CLSA said.

The investment bank has cut its earnings estimates for DLF in 2009-10 by 20%, but attributes it to the likelihood of "reduced non DAL IT SEZ volumes in FY10 by 65%".