Neutral DLF; target of Rs 415: Motilal Oswal

Motilal Oswal's research report on DLF

DLFU reported sales bookings of INR25b in 3QFY23, up 24% YoY/22% QoQ and in line with our estimate of INR24b. For 9MFY23, pre-sales stood at INR66b, up 45% YoY and well on track to exceed FY23 guidance of INR80b. - The strong sales performance was driven by a INR16b contribution from the luxury floors project, The Grove, in DLF Phase V, which was fully sold out within two weeks of the launch in Sep’22. DLFU also launched the second phase of the independent floors project in Panchkula and clocked bookings of INR5b. Its ultra-luxury project, The Camellias, contributed INR2b to sales. - With 2.8msf of residential launches worth ~INR50b lined up for 4Q, including a high rise in Sector 63 (2msf), we expect DLFU to sustain its 3Q run rate and clock full-year bookings of INR90b. - Collections improved by 9% YoY/14% QoQ to INR14b, leading to 53% growth in OCF (post interest and taxes) to INR7b. DLFU utilized the surplus cash to repay INR6b to DCCDL for advances related to capex for Hyderbad SEZ. As a result, net debt remained flat at INR20b. - Revenue declined 4% YoY but rose 15% QoQ to INR15b (in line). EBITDA came in at INR4.8b (in line), down 8% YoY as margins declined 170bps to 32%. PAT, however, grew 37% YoY to INR5.2b but was 15% lower than our estimate due to a lower contribution from DCCDL and other income.

Outlook

Our revised (due to higher net debt) TP of INR415 (v/s INR425 earlier) values DLF/DCCDL’s 151msf/25msf land at INR540b vs the current implied value of INR390b, indicating 17% upside potential. Reiterate Neutral.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

DLF - 30 -01-2023 - moti