DLF's inventory sales key to gains, firm to breach FY20 sales guidance

Sales momentum should help the company double its quarterly cash flows from the residential business over the next two quarters, as compared to the run rate it was achieving in the past

DLF has been on an uptrend over the past two months (up by 51 per cent since October), on expectations that monetisation of its inventory, steady gains from the rental business, and new projects will lead to higher cash flows and improve growth visibility. Strong September quarter results and the inclusion in the MSCI India Domestic Index also helped boost its stock returns.

Among key triggers has been the improvement in operational performance. On a sequential basis, sales in the residential segment were up 3 per cent, while rental income was up by 12 per cent. Brokerages believe the company is