DLF Q3 Results Review - Record Quarter; Launch Pipeline Provides Further Growth Visibility: Motilal Oswal

Motilal Oswal Report

We raise DLF Ltd.'s FY25E pre-sales by 46% to Rs 200 billion and expect FY26E pre-sales to be Rs 250 billion as we incorporate the upcoming launch pipeline. However, we reduce our FY24E/FY25E profit after tax by 29%/25% to account for lower recognition.

Its vast land reserves continue to provide growth visibility. However, our assumption of 12-13 years of monetisation timeline for its balance 160 msf of land bank (including TOD potential) sufficiently incorporates this growth.

We estimate a 8-10% compound annual growth rate in prices across its key markets of Gurugram, New Gurugram, Delhi, and Chandigarh. Based on above assumptions we value the land at Rs 790 billion. The current valuation already implies Rs 835 billion of value for its land indicating limited upside potential.

We incorporate higher realisation for its New Gurugram land and tweak our monetization assumption to incorporate its aggressive launch pipeline as indicated by the company.

We revise our target price to Rs 740, indicating 2% downside potential. Reiterate our 'Neutral' rating.

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