DLF shares climbed 3 per cent in Wednesday’s trade after the realtor said its arm has approved allotment of Rs 1,150 crore by allotting NCDs on private placement basis. The scrip rose 2.87 per cent to hit an intraday high of Rs 403.70 on the BSE. At this price, the stock is 6.5 per cent away from its 52-week high of Rs 429.80 hit in January earlier this year. Like many other real estate stocks, 2022 has been a muted year after strong returns in 2021.
Nuwama Institutional Equities said DLF continues to have the highest operating surplus among developers in the first half of FY23. It said that DLF is the only developer that has managed to monetize its assets (dividends from DCCDL and transfer of rental properties) in a significant manner. Further, it is said that DLF’s balance sheet has undergone drastic changes, owing to its aggressive debt reduction. DLF has the lowest net debt to equity in the realty sector.
“DLF has the balance sheet/cash flow strength to spend the money for development. Given that it sits on a large land bank, it can use its cash to launch more projects and grow its rental portfolio.” There is a possibility of using flow generation.” Note dated 29 November.
DLF has consistently generated growth in launch, pre-sales, rental income and cash flows over the years. DLF management is targeting double-digit pre-sales growth at Devco and 15 per cent rental income CAGR at DCCDL.
In a separate note, Nuwama said the management is going to focus on free cash flow, estimating the adequacy of internal resources to meet working capital needs, adding that the company has a strong presence across cities and regions. The launch is pipeline and will enter the Noida market. Future.
It said on November 29, “Strong growth prospects for its residential as well as rental businesses make DLF our top pick in the realty sector. We maintain ‘Buy’ with a target price of Rs 483.”
However, Motilal Oswal is neutral on DLF. “Despite a strong response to recent launches, DLF reiterates its pre-sales guidance of Rs 8000 crore in FY23 citing uncertain economic environment. Q3FY23 will see another launch in Panchkula and a high rise project in Q4 The new tower launch is scheduled for Q1FY24 at Launch One Midtown, but the management may bring it forward to Q4FY23,” it said.
In an October note, Sharekhan said that DLF continues to show strong sales bookings and a healthy launch pipeline over the next two years, expecting a healthy growth in sales bookings. Though the collections have lagged in relation to the sales bookings received, it is expected to pick up from Q3 FY2023 onwards.
The company continues to reduce debt, which is expected to continue to be led by healthy cash surplus generation.
“DLF’s strong leadership position in Delhi-NCR, strong residential project pipeline, growing rental portfolio, large land stock at low carrying cost, and strong housing market tailwind provide opportunity for higher growth. We maintain our positive outlook on the stock.” are,” it said.
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