This real estate firm booked robust presales of Rs 20.5 billion, buy shares for 22% gains: HDFC Securities

Outlook and stock returns

The latest trading price for shares of DLF Limited on the NSE is Rs 369.75 per share. The stock in one week gave positive returns of 1.12%, while in the last 3 months it gave positive returns of 3.47%. Shares have fallen 7.83% over the past year. Long-term investments in the stock have produced multiple returns. He gave 104.28% in three years and 103.38% in five years, respectively.

Its ROE is 4.12%. Its 52-week recorded low is Rs 294.70 per share on June 20, 2022, and its 52-week recorded high is Rs 444 on November 09, 2021, respectively.

Financial Highlights

Financial Highlights

Revenue was INR 13 billion (-12%/-10% YoY/TQ, a shortfall of 7%). EBITDA was INR 4.4 billion (-5%/+5.6% YoY/Q/Q, up 9%). EBITDA margin was 33.5% (+258/+484 bps YoY/QR vs. 28.6% est.). Share of profit and associates and JV: INR 2.17 billion (+43%/+3% YoY/QoQ). RPAT/APAT stood at INR 4.8 billion (+26%/+2% YoY/T/T, up 4%). DCCDL’s revenue was INR 13.7 billion (+22%/+9% YoY/T/T). EBITDA was INR 10.5 billion (+21%/+9% YoY/QT) and PAT was INR 3.6 billion (+54%/+10% YoY/QT). EBITDA margin at group level is expected at 35-36% for FY23E.

Robust presales;  skyscraper launches in the coming quarters

Robust presales; skyscraper launches in the coming quarters

Presales for Q2FY23 at INR 20.5 billion (+36%/+1% YoY/T/T) were robust, with camellia bookings at INR 4.7 billion (INR 3.5 billion in Q1FY23) and new product bookings at INR 15.3 billion in Q2FY23 (INR 9.5 billion in Q1FY23). DLF maintained its residential presales forecast of INR 80 billion for FY23. Within DCCDL’s operating rental portfolio, occupancy increased slightly to 90% from 89% in Q1FY23. Downtown Gurugram Ph-1 was commissioned and contributed (4% YoY) to office rentals (+14%/+5% YoY/QT). DLF is focusing on launches in Panchkula and Golf course extension area. It also offers high-rise launches at H2FY23. One-Midtown’s final tower is expected to launch by Q1FY24.

Solid balance sheet

Solid balance sheet

DLF generated a cash surplus of INR 4.1 billion, which helped reduce net debt to INR 21.4 billion, September 22, from INR 22.6 billion, June 22; net D/E at 0.06x (vs. 0.06x at the end of June 22). Net debt at DCCDL increased to INR 193 billion from INR 188 billion, as of June 22. Inflow during the quarter amounted to INR 12.5 billion (-18%/+16% YoY/T/T). Collection from One-Midtown (JV) is not included and was INR 4 billion in Q2FY23 and INR 4.5 billion is expected in Q3FY23.

Buy for a target price of Rs 450 per share

Buy for a target price of Rs 450 per share

During Q2FY23, DLF recorded robust presales of INR 20.5 billion (+36%/+1% YoY/QoQ) and maintained its FY23 presales forecast of INR 80 billion. For H1FY23, pre-sales amount to INR 41 billion (compared to INR 25 billion in H1FY22 and INR 73 billion in FY22). During the quarter, it launched 3.8 msf, including 3.1 msf planned for H2FY23 (6 msf launched during FY22). In terms of value, launches worth INR 35 billion are slated for H2FY23 across Gurugram and Panchkula. Additionally, DLF has INR 88 billion of available inventory. With start of operation at Downtown, Gurugram (ph-1), DCCDL, rental income improved to INR 9.9 billion (+20%/+7% YoY/T/T), with an improvement in the occupancy rate to 90%. “Given (1) strong pre-sale momentum supported by price increases; (2) robust launch plans; and (3) an expected increase in office occupancy levels, we maintain the buy on DLF, with an unchanged target price of INR 450/share,” the brokerage said.

Disclaimer

Disclaimer

The security was selected in the brokerage report of HDFC Securities. Greynium Information Technologies, the author and the respective brokerage are not responsible for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before making any investment decision.


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