CLSA has upgraded DLF to a 'High Conviction Outperform' rating, and has set a target price of Rs 975 per share in its latest note, which is nearly 28% higher than the last closing price.
The brokerage note said CLSA sees a compelling valuation along with a strong growth outlook for the real estate company. DLF's stock has shifted from trading at a 15% premium to a consensus NAV to a 20% discount, despite its trailing twelve-month (TTM) presales continuing to rise.
CLSA expects the company’s growth momentum to continue, supported by new launches over the next 8-9 quarters.
DLF posted a consolidated net profit of Rs 1,058.73 crore for the December quarter, which is 61% higher on year. The significant rise in profit is attributed to robust sales, especially in the luxury housing segment, along with cost management.
The leading real estate company has clocked record bookings for its 'super luxury' project 'The Dahlias', in Gurugram, near New Delhi, selling 173 units for about Rs 11,816 crore ($1.4 billion) over nine weeks, the company had said on January 24. This was the first time that sales value of a single project crossed Rs 10,000 crore ($1.16 billion) in a quarter, data from analytics firm CRE Matrix showed.
The Dahlias, which is touted to be the most expensive residential project in India, is located near its already established luxury venture ‘The Camellias’ on Golf Course Road at DLF Phase-5 in Gurugram. The Dahlias is coming up on a 17-acre land parcel and has a development potential of 7.5 million square feet. The Dahlias has a revenue potential of around Rs 35,000 crore, according to DLF.
Additionally, DLF benefits from unsold inventory, a healthy balance sheet, robust rental income, and solid cash flows, said CLSA.
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