DLF - Luxury Offerings Gaining Steam: HDFC Securities

HDFC Securities Institutional Equities

In FY24, DLF Ltd. recorded its annual presales of Rs 148 billion (-2% YoY), beating its annual guidance of Rs 130 billion. This was mainly due to sustained demand in underlying markets and a diversified pipeline of new products. DLF had a major new launch – Privana South—which recorded more than 50% of annual presales at Rs 72 billion.

For FY25, it expects to achieve Rs 170-180 billion in presales, with 12.8 million square feet of planned launches with a sale potential of Rs 420 billion.

We believe that DLF would surpass its annual guidance with a launch-heavy H2 FY25 ahead and entry into the MMR market.

With a net cash position of Rs 15 billion (versus Rs 12 billion as of December 2023) on the back of a strong collection of Rs 86 billion (+34%YoY) during FY24, DLF is well-poised for expansion outside the Gurgaon market; moreover, the company expects to grow residential collections by 20-25% in FY25 with free cash earmarked for growth and dividend payout.

Hence, we remain constructive on DLF, given-

1. the strong presales momentum supported by price hikes;

2. robust launch plans; and

3. an expected increase in office occupancy levels.

We maintain Buy with an unchanged target price of Rs 988/share.

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