Neutral DLF; target of Rs 850: Motilal Oswal

Motilal Oswal's research report on DLF

During 9MFY24, DLF achieved bookings of INR133b, surpassing the company’s full-year guidance of INR130b. The company has largely exhausted the new project pipeline for the current year, and the performance in the fourth quarter will be driven by INR44b worth of inventory at the existing projects. Hence, we expect bookings to remain flat in FY24 at INR155b. However, the company has scaled up its launch pipeline and expects to launch 26msf of residential projects worth INR700b over the next 2-3 years. The key projects slated for launch in FY25 include luxury apartments in DLF 5, a premium high-rise project in Chennai, the first phase of a recently acquired project in Andheri (Mumbai), the subsequent phase at Privana (Gurugram), along with a small luxury development in Goa. The pipeline is equally strong for FY26, which will also witness the launch of the second phase at its JV project, One Midtown. With the majority of these launches in Gurugram, we anticipate a healthy sales traction and expect pre-sales to reach INR230b by FY26, achieving a 22% CAGR over FY24-26.

Outlook

We incorporate the higher realization of DLF 5 land bank and tweak our monetization assumption to factor in its aggressive launch pipeline as indicated by the company. We revise our TP to INR850, indicating a 7% potential downside. Reiterate Neutral.