On May 15, DLF, India’s largest realty firm, saw its shares decline by over 2 percent despite positive market sentiments and brokerages raising target prices following strong results for the quarter ended March 2024. Analysts maintain a positive outlook on DLF, citing factors such as its vast land reserves offering growth visibility, lean balance sheet, and improving cash flow generation trajectory. Additionally, the relative lack of competition in the NCR market has prompted brokerages to increase target prices.
DLF reported a 61.5 percent increase in its net profit for Q4FY24, reaching Rs 921 crore, and a 33 percent year-on-year growth in net profit for the full fiscal, totaling Rs 2,733 crore. The company’s revenue for the March quarter surged nearly 47 percent year-on-year to Rs 2,135 crore, while consolidated revenue for FY24 stood at Rs 6,958 crore.
During FY24, DLF launched approximately 6 million square feet (msf) of new products, witnessing strong absorption and nearly monetizing its entire inventory during the launch period. Plans for the current fiscal (FY25) include launching over 11 msf of new products targeting various markets, with an estimated sales potential of approximately Rs 36,000 crore.
Despite positive indicators, some analysts maintain a cautious stance, noting a potential long monetization timeline for DLF’s remaining land bank and concentration of around 60 percent of its total land bank in the National Capital Region (NCR). Additionally, limited presence outside high-end/premium residential space may pose a risk.
DLF’s management aims to launch projects worth Rs 36,000 crore across super luxury/premium segments in FY25 and has identified a pipeline of over Rs 95,000 crore for the next three to four years. Analysts expect DLF to report a 25 percent compounded annual growth rate (CAGR) in pre-sales over FY24-26, reaching Rs 23,000 crore.
Despite varied opinions, DLF remains a top pick in the realty space for many analysts, with target prices being raised and bullish outlooks driven by robust housing demand, a hefty launch pipeline, and the company’s robust rental portfolio.
Disclaimer: We advises users to check with certified experts before taking any investment decisions.
