DLF shares: Dahlias' strong pre-sales trigger bullish calls by analysts

DLF's robust pipeline, including unsold inventory at Dahlias worth Rs 23,000 crore, along with upcoming launches in Goa and Gurugram, analysts believe, is expected to continue supporting strong sales

Analysts remain optimistic about real estate major DLF, with the company's strong pre-sales performance in the December quarter of FY25 (Q3FY25) driven by the launch of Dahlia. 

 

Kotak Institutional Equities highlighted that DLF recorded strong pre-sales of Rs 12,100 crore for Q3FY25, reflecting a 34 per cent year-on-year (Y-o-Y) growth. A major portion of this growth, Rs 11,800 crore, analysts highlighted, came from the Dahlia launch.

 

With a total of Rs 19,200 crore in pre-sales for the first nine months of FY25, DLF has already surpassed its full-year guidance of Rs 17,000 crore, they noted. 

 

The company’s robust pipeline, including unsold inventory at Dahlias worth Rs 23,000 crore, along with upcoming launches in Goa and Gurugram, analysts believe, is expected to continue supporting strong sales. 

 

Furthermore, DLF Cyber City Developers Limited (DCCDL) reported a healthy 10 per cent Ebitda growth and is progressing with construction on an additional 9 million square feet of space within its existing 45.7 million square feet asset base. 

 

Given this, analysts have raised their target price for DLF to Rs 1,000, up from Rs 960, maintaining a ‘Buy’ recommendation.

 

On the bourses, DLF shares remained in demand on Tuesday, January 28, 2025, as the scrip rallied as much as 3.61 per cent to hit an intraday high of Rs 728.50 per share. Notably, the share has climbed about 5 per cent in the last two trading sessions. 

 

Mirroring Kotak Institutional Equities, JM Financial analysts stressed upon DLF's exceptional Q3 performance, with pre-sales of Rs 12,090 crore, surpassing their expectations of Rs 7,500 crore, driven by the strong performance of the Dahlias project. 

 

The company also saw strong collections of Rs 3,120 crore, reflecting a 24 per cent Y-o-Y increase and a 31 per cent quarter-on-quarter (Q-o-Q) rise. This led to operating cash flows of Rs 1,850 crore, strengthening its net cash position to Rs 4,530 crore. 

 

With presales for the first nine months of FY25 already at Rs 19,190 crore, exceeding the annual target of Rs 17,000 crore, DLF has also revised its launch pipeline for FY25 upwards to Rs 70,400 crore, up from Rs 63,500 crore, including a 3.0 million square feet area expansion. Meanwhile, DCCDL's stable occupancy rate of 93 per cent and a 10 per cent year-on-year growth in rental income and Ebitda further underscore DLF's strong position. Therefore, analysts at JM Financial maintained their ‘Buy’ rating with a target price of Rs 1,000, indicating a 42 per cent upside from the current market price.

 

Motilal Oswal, on the other hand, acknowledged DLF's enhanced growth visibility as the company continues to develop its substantial land reserves. They revised their pre-sales estimates upwards by Rs 5,100 crore to Rs 23,800 crore for FY25, reflecting the strong bookings from the Dahlias project. 

 

Therefore, analysts at Motilal Oswal value DLF’s development and commercial businesses at Rs 1,73,100 crore, with land contributing Rs 1,30,400 crore, and DCCDL is valued at Rs  70,800 crore. After factoring in the net debt of Rs 7,800 crore, the company’s gross NAV stands at Rs 2,43,900 crore, resulting in a revised target price of Rs 954, up from Rs 925, with a ‘Buy’ recommendation.

 

Moreover, reports suggested Jefferies has maintained its ‘Buy’ rating with a target price Rs 1,000.

 

Q3 results

 

DLF’s profit rose 61.2 per cent Y-o-Y to Rs 1,058.7 crore in Q3FY25, from Rs 656.6 crore in Q3FY24.

 

Revenue remained flat (up 0.5 per cent) at Rs 1,528.7 crore in Q3FY25, from Rs 1,521.3 crore a year ago.

 

At the operating level, Ebitda dropped 21.7 per cent annually to Rs 400 crore in Q3FY25, from Rs 511 crore in Q3FY24. Subsequently, Ebitda margin squeezed to 26.2 per cent in Q3FY25, from 33.6 per cent in Q3FY24.