DLF clocked its best-ever quarterly pre-sales in Q3FY25 led by the launch of the ultra luxury ‘Dahlias’ project. Responding to the earnings performance and strong launch pipeline, Nuvama has maintained a Buy with a revised target of Rs 1,040.
Though Nuvama has revised the price target slightly lower from previous target of Rs 1,081, they maintained the Buy rating on “robust housing demand and strong launch pipeline should boost pre-sales. We believe launches would be a key trigger.”
Nuvama bets on strong pre-sales
The DLF 9MFY25 pre-sales at Rs 19,200 crore are up 44% YoY, exceeding FY25E guidance. Pre-sales soared as the ultra-luxury ‘Dahlias’ launched this quarter beat all expectations. The company launched 420 units in the project spanning 4.5msf and sold 173 units spanning 1.85msf area (41% of the inventory) worth Rs 11,800 crore.
Launch plans so far
Nuvama added that the “launches in Gurugram, Mumbai and Goa are lined up” and the company still has another 2.7msf worth Rs 23,000 crore yet to be sold in the Dahlias project. They expect to monetise the project fully in three years. Further positive triggers as per Nuvama includes:
- DLF striving to launch the Mumbai project spanning 0.9msf in Q4FY25
- Launch of a new phase in DLF Privana
- Super-luxury project in Goa in Q1FY26.
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According to Nuvama, “DLF is emerging as a key beneficiary of the ongoing sector consolidation It boasts an attractive rental portfolio that has grown steadily despite the pandemic. Besides, the company has a revamped balance sheet, which is likely to generate better cash flows.”
They believe new launch trajectory will be a key trigger for DLF, “With limited inventory levels, the company needs a steady stream of launches in order to maintain a healthy sales trajectory. We recommend ‘Buy’ with a target price of Rs 1,040, derived by ascribing a 25% premium to the Q3FY27E NAV of Rs 832.”
DLF Q3 results highlight
Some of the highlights of DLF’s Q3 performance, its Q3 profit improved YoY while Q3FY25 revenue came in at Rs 1,530 cr0re (flat YoY, but down 23% QoQ). EBITDA margin fell 740 bps YoY (up 75bp QoQ) to 26.2% in Q3FY25.
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