Market raises a toast to DLF after record year, strong prospects for FY24

In FY24, DLF aims to launch new projects of around 11.2 million sq ft, with a sales potential of approx 19,710 crores. Also, the company has a launch inventory of approx. 7,400 crores. Management has guided for booking new sales 11,000-12,000 crores for FY24.

“DLF has taken full advantage of improving demand trends in Gurgaon by offering a wide range of products at various price points and at regular intervals,” said analysts at Kotak Institutional Equities. , helped reduce its net debt, which fell to a record low 721 crore in FY23. DLF aims to have zero net debt by FY24.

In this backdrop, timely launches are important to maintain the pre-sales momentum. Besides, quick monetization of the remaining land bank is another important trigger for the stock. DLF has large plots of land in Sector 69 and Southern Peripheral Road (Gurugram), suitable for residential and commercial projects; The management plans to drive growth here in FY24. HDFC Securities analyst Parikshit Kandpal said, “The Gurugram market is witnessing a recovery in housing prices and at the same time consolidation is on.” “Given its track record, DLF is set to benefit from this.” This essentially means that the much-awaited monetization of the company’s land parcels in the National Capital Region (NCR) market could happen faster and at a better price than the market, he said.

While DLF’s residential business is in a strong position, the outlook for commercial projects is mixed. Leasing activity in non-SEZ office spaces is healthy, but the management expects SEZ leasing to improve in three to four quarters, following the implementation of the Development of Enterprises and Service Hubs Bill. Meanwhile, in the last one year, DLF stock has gained up to 47%, outperforming the Nifty Realty index. Relatively larger exposure to the high-end residential segment has helped as buyers in this category tend to be resistant to interest rate hikes.