DLF Ltd - Q1 FY22 Result Report - YES Securities

(Rating: BUY, TP: Rs405, Upside: 20.2%)

- DLF has delivered strong pre-sales of Rs10.04bn amid covid-19 restrictions (Pre-sales upwards of Rs10bn for consecutive 4qtrs) additionally had taken price hikes in most of projects/subsequent phases clearly indicates pent up demand in market and DLF's brand acceptability. Higher prices realization drives increase of land prices in the micro-market of DLF presence, hence we revalued land upwards considering 15-20% price increase in NCR and arrived Rs184/share.

- On the back of consolidation in sector we believe DLF is predominant player with decades of track record in NCR market which will allow it to monetise inventory faster at better price point. For ongoing/under-construction projects we have accommodated price hikes and shorten life cycle of projects (independent floor & Camellias) resulting in faster, higher net cashflow, hence valued residential business at Rs168bn translating in Rs68/share.

- Rental arm DCCDL, has 39.1msf portfolio which is expected to cross rentals of Rs40bn by FY23 and can generate NOI of Rs52bn by FY24 with Downtown Gurgaon, & Downtown Chennai getting operational. We valued DCCDL (DLF's share) at Rs360.3bn (net of DCCDL debt) translating in Rs146/share. (WACC 10%, Office Cap rate 7.5% and retail Cap rate 6.25%). We arrived SoTP based NAV of Rs405/share hence maintain 'BUY' on stock.

Shares of DLF LTD. was last trading in BSE at Rs. 332.3 as compared to the previous close of Rs. 336.95. The total number of shares traded during the day was 618305 in over 6984 trades.

The stock hit an intraday high of Rs. 339.5 and intraday low of 326.45. The net turnover during the day was Rs. 205267575.

Source : Equity Bulls

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