Neutral DLF; target of Rs 425: Motilal Oswal

Motilal Oswal recommended Neutral rating on DLF with a target price of Rs 425 in its research report dated December 06, 2022.

Broker Research

December 07, 2022 / 01:43 PM IST

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Motilal Oswal's research report on DLF

In FY21, DLF identified a project pipeline of 35msf across different segments to be launched in New Delhi, Gurugram, Chennai, Panchkula and Goa where it continued to hold legacy land parcels. Except ONE Midtown, Delhi, the new launches for DLF since FY21 have largely comprised low-rise floors/plotted developments across its value homes/luxury segments in Gurgram, Chennai and Panchkula. Over the last 24 months, DLF has launched ~9msf of low-rise products with sales potential of ~INR100b of which it has already sold INR76b, including sales done but yet to be booked as of Sep'22. The company has largely exhausted its launch pipeline in the luxury floors segment and would bank upon the success of ONE Midtown, to launch high-rise luxury projects in key markets.

Outlook

At current valuations, the surplus land in DLF and DCCDL is valued at INR522b, which is closer to our estimated value of INR545b assuming 19 years of development timeline for DLF's 151msf land and 13 years for DCCDL's 25msf land, which is fair in our view. We reiterate our Neutral rating on the stock.