DLF shares rise post-March quarter result; should you buy the stock?

DLF share price: Shares of Delhi Land and Finance (DLF) climbed over 2 per cent on NSE on May 15 after the real estate company reported a strong set of numbers for the quarter ended March 2023 (Q4FY23). At the time of filing this report, DLF scrip stood at Rs 447.8 on the NSE, up 2.72 per cent.

The earnings release showed that the company registered a consolidated net profit of Rs 569.60 crore for Q4FY23 as compared to Rs 405.54 crore logged in the year-ago quarter. The company’s revenue from operations stood at Rs 1,260.18 crore as against Rs 1,069.11 crore a year ago.

The company's margin — a key measure of profitability for a business, grew to 27.4 per cent as against 23.72 per cent registered in the corresponding quarter of the previous fiscal. DLF’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) stood at Rs 399 crore as against Rs 370 crore in March 2022 quarter. The board also approved a dividend of Rs 4 each per equity share of face value of Rs 2 each for the 2022-23 fiscal, subject to approval of the shareholders.

In a statement, DLF said that its residential business delivered a record performance by clocking new sales bookings of Rs 8,458 crore in the March quarter, reflecting a year-on-year (Y-o-Y) growth of 210 per cent. "Cumulative new sales for the last fiscal stood at Rs 15,058 crore, record annual sales bookings," it said.

DLF is Zee Business Managing Editor, Anil Singhvi’s long-term pick. Singhvi is of the view that DLF is the market leader with a strong growth outlook. He said that the company is in the business for a decade and can have an “ITC moment” soon, with its cash flow growing strongly and debt reducing consistently. He added that just like Reliance, HUL, and ITC stock did not see much movement in the initial 5-7 years but these companies focused on strengthening their leadership position, and balance sheet, DLF is doing the same.

The market expert recommends buying DLF shares for small target of Rs 500, and larger targets of Rs 600 and Rs 800, for a duration of 1-3 years.

“Though DLF is looking lucrative at current levels, one needs to consider that for the last 2 months, it has given a 26 per cent return already. Moreover, moving average convergence/divergence on the weekly scale is slightly overstretched which hints towards some profit booking in the counter. So, one needs to avoid fresh longs and book profits in the zone of 455-465 levels if already holding positions,” said Jigar S Patel - Senior Manager - Technical Research Analyst, Anand Rathi Shares and Stock Brokers.

DLF share price history

On a year-to-date (YTD) basis, DLF stock has risen over 20 per cent as compared to Nifty50’s rise of 1 per cent. On a six-month basis, the stock rose over 12 per cent against Nifty50’s decline of over 0.11 per cent.

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