DLF Q3 Results Review - Value Inch North As Land Comes Under Execution: Yes Securities

Yes Securities Report

DLF Ltd.'s achieved strong presales of Rs 90.47 billion in Q3 FY24 backed by the sales for new launches DLF Privana South, New Gurugram (Rs 72 billion); The Valley Orchard (Rs 10 billion); Central 67 (Rs 7.1 billion) with steady sales of other projects and achieved presales guidance of plus Rs 130 billion for full year in 9M FY24. Company collected Rs 25.15 billion for Q3 FY24.

DLF plans to launch Privana’s next phases, super luxury project in DLF5, luxury project in Chennai and first phase of Mumbai project in next 12-15 months which will have higher sales potential.

Company has identified new launch pipeline of 32 marginal standing facility which is expected to launch over three-four years. Non special economic zone office assets are recovering fast with incremental leasing traction and now SEZ portfolio also started showing traction with occupancy of 84% (82% in Q1 FY24) and DLF is under process to de-notify 1.1msf of SEZ portfolio.

We have aligned our average price realization assumption for land to the recent booking trend witnessed. We valued residential business now at Rs.183.6 billion and believe DLF Cyber City Developers Ltd.'s with its 39.6msf operational portfolio and ~5.3 msf under-construction projects, is on track to achieve Rs 48 billion net operating income by FY25 hence valued DCCDL at Rs 249.2 billion (DLF’s share and net of debt).

DLF has shown capability of monetizing its land efficiently (in last 36 months, launched ~25 msf and achieved ~25 msf presales) thereby we expect DLF to monetise land bank with good pace too; valued at Rs 621/share while we believe there is upside risk to it.

DLF has surplus net cash of Rs 12.46 billion and is expected to maintain it. Sustained demand in residential and pick up in the leasing (including SEZ), net cash balance sheet along with DLF’s long standing track record gives us confidence.

We recommend ‘Neutral’ rating with target price of Rs 816/share (weighted average cost of capital 11.5%, office cap rate 8.5%, retail cap rate 7.25%).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.