Neutral DLF; target of Rs 740: Motilal Oswal

Motilal Oswal's research report on DLF

DLF reported its highest-ever pre-sales of INR90.5b in 3QFY4, up 4x YoY/QoQ and 21% above our estimate. The strong performance was driven by three new launches during the quarter, which contributed over INR86b to overall bookings. For 9MFY24, bookings stood at INR133b, doubled YoY, and exceeded the company’s full-year guidance of INR130b. The company launched the first phase of DLF Privana, Gurugram, which was sold out within 72 hours of launch and clocked bookings of over INR72b. Other launches in Gurugram and Panchkula contributed INR14b of pre-sales. In the absence of any new launches, we expect DLF to end FY24 with flat pre-sales of INR154b. However, with projects worth over INR700b slated for launch over the next two-three years, we expect DLF to report a 27% CAGR in pre-sales over FY24-26E to INR250b.

Outlook

We incorporate higher realization for its New Gurugram land and tweak our monetization assumption to incorporate its aggressive launch pipeline as indicated by the company. We revise our TP to INR740, indicating 2% downside potential. Reiterate our Neutral rating.