DLF shares surge on JPMorgan's target upgrade, sees 17% stock upside

So far this year, the stock of this realty major surged over 18 percent

Shares of DLF jumped over 4 percent to Rs 856 apiece on August 16 after JPMorgan analysts reiterated an 'overweight' rating and raised their target price to Rs 1,000 from Rs 925, indicating a potential 17 percent upside. The revision comes as analysts forecast that the company will exceed $1 billion in operating cash flow at the group level in FY25.

JPMorgan highlighted DLF's robust sales cycle and the compounding of free cash flow in its rental business, which enhances the company's strategic flexibility for acquisitions at the group level.

ALSO READ: DLF to enter Goa market in August, to launch luxury villas costing around Rs 50 crore

Additionally, the brokerage firm considers DLF a more conservative and low-risk company compared to its competitors. Factors that distinguish DLF from its peers include its solid margins, free cash trajectory, and rental income growth. JPMorgan added that DLF's lower risk profile is likely to attract a higher valuation multiple, bolstered by a lower imputed cost of equity.

So far this year, the stock of this realty major surged over 18 percent, outperforming benchmark Nifty 50's 11 percent rise. Earlier, DLF had hit 52-week high of Rs 967 apiece on March 1, 2024.

In Q1FY25, DLF reported a 23 percent year-on-year increase in net profit, totaling Rs 646 crore, driven by new sales bookings of Rs 6,404 crore. The company's consolidated revenue also grew nearly 14 percent year-on-year to Rs 1,729.82 crore for the same period.

Looking ahead, DLF announced a strong pipeline with plans to launch an additional 9 million square feet of new projects during the fiscal year across various locations, including Gurugram, Mumbai, Goa, and the Chandigarh Tri-city. The company is also set to launch a luxury villa project in Goa in Q2 FY25.

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