Target: ₹530

CMP: ₹402.7

Q3 key highlights: Presales at ₹2,000 crore increased 33 per cent q-o-q and 97 per cent y-o-y aided by an all-round performance across product categories and new launches; surplus cash generation of ₹760 crore (₹1,700 crore in 9M-FY22) resulted in net debt declining to ₹3,200 crore (down 20 per cent q-o-q); RentCo revenue/EBITDA/PAT registered a growth of 5 per cent/2 per cent/13 per cent y-o-y respectively while up 5 per cent/6 per cent/22 per cent q-o-q respectively; investee company (housing the Mumbai land parcel at Tulsiwadi) related provision amounting to ₹220 crore marred consol earnings during the quarter.

Guidance: FY22 presales guidance revised to ₹6,500 crore as the developer sees the Q3 sales momentum sustaining in Q4. Notably the company aims to sustain a similar quarterly run-rate of ₹2,000-2,500 crore ahead owing to the strong launch pipeline and majority land reserves monetisation ready; quarterly surplus cash generation pegged at ₹500 crore is conservative given the fast churning ready inventory and strong traction in new launches; pricing environment remains buoyant and the developer plans to raise subsequent launch pricing in Midtown Delhi project by ₹2-3k/sf. Notably, nearly all of the value increase in the med-term launch pipeline is attributable to higher pricing; .Vacancy trends in the office portfolio to trend down to single digits by Q1-FY23 vs. 13 per cent in Q3-FY22.

We retain DLF as our top real estate play: dentified launch pipeline of over 35msf having a diversified product mix is set to drive record sales over the next 12-18 months.

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