DLF's High Quality Land Bank, Strong Project Pipeline Have Analysts Upbeat

DLF Ltd.'s valuable land bank with more than 20 years of sales potential, strong balance sheet and good pipeline of growth in rental income and overall cash generation has analysts upbeat on the realtor.

After attending the company's analyst day, Morgan Stanley said the chairman’s tone was conservative on the development business.

"He considers cash inflow to be the real metric and not GDV (gross development value) or pre-sales. He is more comfortable with significant upcoming growth in intellectual property business. The constraint is manpower, in terms of execution and maintaining the service quality and brand," it said.

The brokerage found management incrementally cautious on pre-sales guidance and capital allocation. DLF projects FY26 pre-sales of Rs 20,000 crore and a medium-term launch pipeline target of Rs 74,000 crore.

Nomura said investors may have been slightly disappointed by the management's conservative pre-sales guidance for FY26. "While we acknowledge DLF’s robust cash generation and strong annuity income profile, we believe its current valuation already prices in the long-term growth potential," a note said.

Motilal Oswal said a projected 20% annual compounded growth over three years, coupled with healthy collections visibility, a large land bank to support long-term growth, a cash-positive balance sheet, steadily growing rental income, and reducing debt, has kept its confidence in DLF.