DLF shares gained more than 2 percent on October 31, a day after the company's fiscal second quarter earnings beat the Street estimates. Its net profit jumped 31 percent on-year to Rs 622 crore and revenue from operations edged up marginally to Rs 1,476 crore, beating expectations. According to analysts, DLF's valuations imply that a lot of growth, going forward, has been priced in.
At 10:02am, shares of DLF were trading at Rs 560.15 on the National Stock Exchange (NSE).
For the quarter ended September 2023, DLF's sales bookings touched Rs 2,228 crore with gross margins coming in at 57 percent. It also said that it achieved net cash-positive status during the quarter. "We have delivered on our commitment to achieving a net debt zero position. We will continue to further strengthen our balance sheet through consistent cash generation," the company said.
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Analysts at Morgan Stanley attributed the robust net profit growth in Q2 FY24 to lower interest expense. Higher rental income on account of a rise in occupancy also boosted net profit growth. "Higher collection drove the company into a net cash position," they said.
DLF's EBITDA in the quarter under review stood at Rs 591 crore, while the surplus cash generation from operations touched Rs 1,147 crore.
Morgan Stanley is bullish on the stock. It put an 'overweight' rating on the stock with a target price of Rs 549 per share. "Valuation at 50x trailing P/E implies that lots of growth is priced in," the international brokerage said.
The DLF share price has soared over 47 percent so far in 2023, outperforming the benchmark Nifty. In the last five years, the stock has logged a gain of nearly 230 percent.
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