DLF Gets 'Buy' Upgrade From Jefferies On Strong Cash Flow, Project Success

Jefferies has upgraded DLF to a 'buy' rating, highlighting the company’s strong cash flow and successful project launches as key drivers of its recent performance.

Over the past year, DLF’s stock has outperformed the realty index by 16%, driven by robust cash generation and positive market response to its Dahlias project in Gurugram, the brokerage noted.

DLF has seen a significant increase in pre-sales since the market cycle turned in 2020, leading to a corresponding rise in customer collections and operational cash flows. With Rs 5,700 crore in operational cash flow and Rs 3,900 crore in free cash flow for the first nine months of FY25, DLF is on track to exceed Rs 5,000 crore in net cash by March 2025.

Jefferies expects pre-sales to surpass Rs 20,000 crore in FY25, up from Rs 14,000 crore in FY24, which could accelerate free cash flow generation to over Rs 5,000 crore annually in the next two years, potentially driving higher shareholder payouts.

The successful launch of the Dahlias Golf Course Road project, with Rs 12,000 crore in pre-sales and achieving price points of Rs 60,000 per square foot, underscores the strength of DLF’s core market in Gurgaon, Jefferies said.

Shares of DLF rose as much as 2.10% to Rs 679.30 apiece. It pared gains to trade 1.49% higher at Rs 675.20 apiece, as of 10:04 a.m. This compares to a flat NSE Nifty 50.

The stock has fallen 26.63% in the last 12 months. The relative strength index was at 44.

Out of 23 analysts tracking the company, 21 maintain a 'buy' rating and two recommend a 'hold', according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 42.2%.