DLF climbs over 3% after strong Q2 numbers; Morgan Stanley maintains 'overweight'

DLF share price: Shares of the Gurugram-based realty major DLF in early trade on Tuesday (October 31) gained around 3 per cent hitting the day's high price of Rs 570.25 after the company posted strong performance across all parameters during the July-September period. On Monday, ahead of the result announcement, shares of the realty player ended with decent gains of over 3 per cent at Rs 553.85.

The consolidated PAT at the company during the review period jumped 30.3 per cent year-on-year (YoY) to Rs 622 crore in comparison to Rs 477 crore posted during the same period last year. Revenue at the company came in at Rs 1348 crore while it was Rs 1302 crore in the year-ago period.

Consolidated EBITDA at the realty major came in at Rs 462.3 crore versus Rs 436.7 crore reported in the year-ago period. Further, for the period under review, EBITDA margins improved to 34.3 per cent in comparison to 33.5 per cent in the corresponding period last year.       

New sales bookings at the company for the quarter stood at Rs 2,228 crore. Collections at the realty player stood strong resulting in record cash flow generation during the quarter. Consequently, post dividend payout of Rs 990 crore, the company realised a net cash position of Rs 142 crore as of the quarter ended September 2023. Furthermore, the company delivered on its commitment to achieve a net debt zero position.

The property developer’s super luxury project- The Camellias in DLF 5, Gurugram, saw healthy demand during the quarter and continues to set new benchmarks suggesting strong demand for high-quality residential products backed by a strong brand.

We continue to see sustained demand momentum across all segments and hence keep a positive outlook on the housing cycle. Our new product launches that have been planned for the second half of the fiscal remain on track and we remain committed to bringing calibrated supply across our key markets and leveraging this growth cycle, said the company in its release.

In the last 1-year, the stock of DLF Ltd. has zoomed 46 per cent and is currently trading just 3% away from its 52-week high price of Rs 576.55.

What do brokerages say?

Global brokerage Morgan Stanley maintains an overweight rating on the stock with a target price of Rs 549, implying a potential downside of around 1 per cent from the last closing price. The brokerage noted that the company’s Q2 net profit jumped 31 per cent YoY on the back of lower interest expense and higher rental income. Higher net collection at the company pushed it into a net cash-positive status during the Q2 period. The brokerage noted that the stock's current valuation at 50x trailing price to earnings (P/E) suggests that a lot of growth is already priced in.