Strong outlook: Jefferies, Morgan Stanley remain upbeat on DLF after Q3 numbers

DLF share price, DLF Q3 result: Shares of DLF in Thursday’s trade (January 25) rallied over 4 per cent to the day’s high of Rs 778.85 after the realty major posted a good set of numbers for the December quarter after market hours on Wednesday.

For the December-ended quarter, the company’s consolidated net profit increased 26 per cent on-year to Rs 649 crore on lower expenses and higher income. The company’s net profit in the year-ago period stood at Rs 517.94 crore.

Ahead of its earnings yesterday, the stock closed at Rs 747.45, up over 1 per cent from the previous session.

The consolidated revenue during the period stood at Rs 1,644 crore, while it was at Rs 1,560 crore in the same period last year. The largest real estate player in terms of m-cap, DLF, recorded its highest quarterly sales booking of Rs 9,047 crore, backed by multiple launches during the quarter. The company also reported strong cash flow with healthy surplus cash generation from operations at Rs 1,108 crore.

“We remain committed to our goals of delivering consistent and profitable growth, which is well supported by the strong performance in our residential business, a healthy pipeline of new products, quality assets in the growing rental portfolio backed by a healthy balance sheet, and supportive market dynamics,” noted the real estate major in its press release.

Global brokerages upbeat on DLF

Morgan Stanley remains overweight on DLF, with a target of Rs 770. The brokerage believes that the pre-sale of Rs 133 billion during the first nine months of FY24 was impressive. Further, the brokerage highlighted that trends for collections and operating cash flow are equally strong, resulting in net cash of Rs 1,250 crore (excluding rental business).

On the other hand, Jefferies has maintained its ‘buy’ on the counter with a target of Rs 875. This implies a potential upside of over 17 per cent from the last close. DLF saw a 15-year high quarterly profit, an all-time high pre-sales, and Rs 1000 crore+ FCF generation in Q3, the brokerage said in a note.

Further, as per the brokerage, DLF’s updated project pipeline shows launches for FY24 are completed, while the pipeline for FY25/26 has been increasing significantly. The lease performance stayed steady, with 8 per cent YoY rental growth, noted the brokerage.