Brokerages decode DLF Q1FY26 results; check what's in store for the stock

Nomura, HSBC, Nuvama, JM Financial dissect realty major DLF's June quarter results and revise their target price on the counter.

DLF Ltd reported an 18 per cent increase in consolidated net profit for the June 2025 quarter fiscal year 2025-26 (Q1-FY26)at ₹762.67 crore, as compared to ₹644.67 crore in the previous corresponding quarter. Revenue from operations nearly doubled to ₹2,716.70 crore, up 99 per cent from ₹1,362.35 crore in the same quarter last year. 

 

Here's how leading brokerages have interpreted DLF's Q1FY26 results.

 

HSBC

 

Pre-sales were strong but on expected lines, driven by the launch of Privana. Phase 1 of the recently launched project in Mumbai is sold out. DLF is seeing demand for Dahlias and is keen to restart sales before the start of experience centre. 

 

However, what we didn’t like in the results was the reported gross margin, which was very weak at 28 per cent on recognition of projects like One Mid Town (OMT) and Garden City. Collections lagged pre-sales during Q1FY26 but we expect that to pick up in the coming quarter. The company attributed it to weather-related construction disruptions, which resulted in delayed demand. There seemed to be some cancellations in OMT, but the company attributed it to upgrades. 

 

Using a WACC of 11.5 per cent (earlier 11.9 per cent) in line with our strategists’ latest cost of equity assumptions, we compute a March 2026 NAV per share of Rs 829 (earlier Rs 795) and discount it back by six months (earlier nine months) to Rs 785 (earlier Rs731). We then apply a 26 per cent premium at 2 standard deviations (unchanged) above the mean to the NAV estimate to arrive at our target price of Rs 990 (earlier Rs 920). We maintain our Buy rating. 

DLF projections; Source: HSBC report

 

Nomura

 

We fine-tune target price to Rs 740 (Rs 730 earlier), driven by net debt adjustments on the back of the company’s stronger-than-expected net cash position. While DLF generates robust margins/strong cash, we maintain Neutral rating as we believe the company’s long-term growth potential is already priced into its valuation. 

 

Our current valuation at ~20 per cent premium to NAV prices in an ~8 per cent pre-sales CAGR over the next 13 years, which we believe is adequate (vs FY26E flat growth guidance). 

 

For us to turn positive on DLF stock, we would like to see management be more aggressive toward pre-sales growth on existing land bank or execute stronger-than-expected business development, driven by its strong cash position. 

 

Peers such as Macrotech (LODHA IN, Buy, FY26E pre-sales growth guidance of 20 per cent y-y on a slightly lower base) continue to be relatively more aggressive with +90 per cent of FY26F BD (business development) done in 1QFY26F itself.

 

JM Financial

 

Aided by the ramp-up in new assets and a strong development pipeline, we expect rental income to grow at 11 per cent CAGR over FY25-28E. DLF with its steady annuity cash flows and fully paid-up land banks remains extremely well placed to scale up across segments and newer geographies. We maintain a BUY rating with an SoTP-based target price of Rs 1,000. 

 

Nuvama

 

DLF is emerging as a key beneficiary of the ongoing sector consolidation. It boasts an attractive rental portfolio that has grown steadily despite the pandemic. Besides, the company has a revamped balance sheet, which is likely to generate better cash flows. Thus, it is likely to be a key beneficiary of ongoing sector consolidation. We believe new launch trajectory will be a key trigger for the stock.

 

With limited inventory levels, the company needs a steady stream of launches in order to maintain a healthy sales trajectory. We recommend ‘BUY/SN’ with a target price of Rs 1,005 derived by ascribing a 35 per cent premium to our Q1FY28E NAV of Rs 744. 

ICICI Securities

 

The company expects to generate ~Rs 500 billion of total operating cash flow (OCF) surplus from the residential segment in medium-term and along with its rental income stream, the management aspires to achieve group net debt zero position by FY30. Additionally, the company strives to have a dividend payout ratio of ~50% of PAT over time. 

 

We retain BUY on DLF with an unchanged target price of Rs 954, based on Mar’26E NAV and retain our 20% premium to NAV of Rs 795/share. Key risks include a slowdown in residential demand in NCR region and impact of work from home on leasing business resulting in higher-than-expected vacancies and decline in rentals.