DLF - Poised For A Healthy Performance In The Near Term: Motilal Oswal

Motilal Oswal Report

DLF Ltd.’s vast land reserves continue to offer growth visibility. However, our assumption of a 12-13 year monetisation timeline for its remaining 160 million square feet of land bank (including transit oriented development potential) adequately incorporates this growth.

We estimate an 8-10% compound annual growth rate in prices across its key markets of Gurugram, New Gurugram, Delhi, and Chandigarh. Based on the above assumptions, we value the land at Rs 940 billion. The current valuation already implies Rs 1137 billion of value for its land, indicating limited upside potential.

We incorporate the higher realization of DLF 5 land bank and tweak our monetization assumption to factor in its aggressive launch pipeline as indicated by the company.

We revise our target price to Rs 850, indicating a 7% potential downside. Reiterate 'Neutral'.

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