Target: ₹434
CMP: ₹339.05
DLF has seen strong traction in its residential business with 9MFY22 sales bookings of ₹4,540 crore driven by the Dec’21 launch of the One Midtown Delhi project. Accordingly, the company has revised its FY22 devco sales guidance to ₹6,000-6,500 crore (earlier ₹4,000 crore).
With the recent plotted development launch in Chennai, we model for ₹6,640 crore of FY22 devco sales and over ₹7,000 crore each in FY23-24. In the first phase, the company plans to launch 50 per cent of the area or 750 plots having ticket sizes ranging between ₹25-125 lakh.
Further, with office re-openings and mall consumption picking up, we expect DCCDL’s rental EBITDA to grow from ₹3,400 crore in FY22 to ₹4,050 crore in FY23. While the Omicron wave led to a slight delay in return-to-office plans, the company remains confident of a strong leasing pickup from FY23 with office portfolio occupancy levels to rise to over 90 per cent in H1-FY23.
The company’s plans to ready itself for a possible REIT listing of DCCDL remain on track.
We upgrade our rating to Buy from Add with an unchanged Mar’22 SoTP based target price of ₹434/share post the 13 per cent stock price correction in the last one month.
Key risks to our investment thesis are a slowdown in residential demand in NCR region and impact of Work-from-Home on leasing business resulting in higher-than-expected vacancies and decline in rentals.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.