DLF hits highest level since September 2008; zooms 40% thus far in FY24

The Group's strong operating performance in FY2023, which is expected to sustain in FY2024, is supported by continued end-user demand and good affordability

Shares of DLF hit a multi-year high of Rs 500.90, rising 2 per cent on the BSE in Tuesday's intra-day trade. The stock of the real estate developer claimed the Rs 500-mark first time since September 2008.

Thus far in the financial year 2023-24 (FY24), DLF has outperformed the market by surging 40 per cent on healthy business outlook. In comparison, the S&P BSE Sensex was up 7 per cent, while the S&P BSE Realty index has rallied 33 per cent during the same period.

During the January to March quarter, DLF's residential business delivered a record performance by clocking new sales booking of Rs 8,458 crore, reflecting a year-on-year growth of 210 per cent. Cumulative new launches for the fiscal 2022-23 (FY23) were around 10 million square feet, and new sales stood at Rs 15,058 crore, which was again a record number for annual sales booking.
 

DLF is planning to launch around 11 million square feet with the sales potential of almost Rs 19,700 crore this fiscal and in addition, have an launch inventory of around Rs 7,400 crore. This gives the company a potential of almost Rs 27,000 crore worth of products, DLF said in Q4 earnings call.

The management continues to remain positive for both businesses, residential and retail; and said it remains committed to delivering consistent and profitable growth by bringing quality new offerings across multiple markets. The business, backed by a strong balance sheet and healthy cash flows, remains well poised to deliver across all parameters, the management said.

"The Group’s strong operating performance in FY2023, which is expected to sustain in FY24, is supported by continued end-user demand and good affordability. The Group has a low cost and fully paid-up land bank, with well-located parcels across multiple cities and having diverse land usages, which provides strong visibility of launches with healthy profitability," according to rating agency Icra.

Significant revenue diversification from different segments and geographies, along with continued momentum in sales and collections, resulting in significant improvement in cash flows, leverage and liquidity position may trigger a rating upgrade, the rating agency said in its rationale.

That said, the ratings may be downgraded if sales velocity and collections are slower-than-expected in the ongoing and new projects and/or significant debt-funded investments in new projects weakens the leverage or coverage metrics. Specific credit metrics include gross debt to CFO higher than 2 times, on a sustained basis, may trigger a rating downgrade, ICRA cautioned.