Buy DLF; target of Rs 504: HDFC Securities

HDFC Securities is bullish on DLF has recommended buy rating on the stock with a target price of Rs 504 in its research report dated July 24, 2023.

Broker Research

July 26, 2023 / 12:06 IST

Buy

HDFC Securities' research report on DLF

DLF recorded decent presales of INR 20.4bn (+0/-76% YoY/QoQ), given there were no new launches during the quarter. It announced its re-entry into the MMR market with a slum rehabilitation project in Andheri. The total project size is expected to be around 3.5msf with DLF executing the first phase with a saleable area of 0.9msf and GDV of around INR 20bn+. This project is getting executed under a JV with the DLF share at 51%. DLF has already invested INR 4bn for the entire project in a convertible instrument which eventually will get converted to equity. The project is expected to be a normal high-rise premium project. For FY24, it reiterated guidance of INR 120-130bn in total presales, backed by 11.2msf of launches with a sales potential of INR 197bn. Of this, 5msf will be in the luxury segment, with 3.5msf in DLF Phase V and 1.5msf in Chennai. Net debt reduced significantly to INR 570mn (vs INR 7.2bn in Q4FY23) on the back of a strong collection of INR 15.7bn (+47%/-18% YoY/QoQ). The cash position is strong at INR 30bn, earmarked for growth, dividend payout and debt reduction.

Outlook

Given (1) the strong presales momentum supported by price hikes; (2) robust launch plans; and (3) an expected increase in office occupancy levels, we maintain BUY on DLF, with a TP of INR 504/share.

For all recommendations report, click here