DLF Shares Gain After Q2 Results, Analysts Remain Upbeat
Workers cycle past the site of a project proposed by DLF Universal Ltd., in Gurugram, India. (Photographer: Amit Bhargava/Bloomberg)

DLF Shares Gain After Q2 Results, Analysts Remain Upbeat

Shares of DLF Ltd. gained the most in more than two months as brokerages remained bullish on the real estate developer despite a fall in its profit and revenue in the quarter ended September.

The company reported a 6% year-on-year decline in revenue to Rs 1,609.8 crore in the July-September period. But that’s more than double than what was reported in the preceding three months.

Net profit, too, fell 48% in the reported quarter to Rs 232.1 crore, impacted by an exceptional loss of Rs 96 crore and an exceptional gain of Rs 143.6 crore in the same period last year. The developer had suffered a loss of Rs 72 crore in the April-June period.

DLF’s earnings before interest, tax, depreciation and amortisation rose 32.2% over the year ago to Rs 463.1 crore. Ebitda margin expanded to 28.8% from 20.4% a year earlier, aided by lower other expenses.

“Consistent quality supply in conjunction with affordability will lead to an overall recovery in demand,” the company said in its post-earnings statement.

Highlights From Management Commentary

  • New sales booking for the quarter rose to Rs 853 crore from Rs 152 crore in last three months.
  • Identified a strong pipeline to be launched across various segments and geographies over the next few years.
  • Office business exhibited strong collections of more than 98% levels.
  • Retail witnessing gradual recovery and luxury segment exhibiting better trends.
  • Festive season might provide the required fillip for the retail properties.

DLF is also taking steps to start the process of readying the rental business REIT.

Brokerages On DLF

  • Macquarie: Maintains outperform with a price target of Rs 195 apiece.
  • Kotak Securities: Maintains buy with a price target of Rs 200 apiece.
  • Morgan Stanley: Maintains overweight with a price target of Rs 211.
  • JPMorgan: Maintains overweight with a price target of Rs 225.
  • Jefferies: Maintains buy; raises price target to Rs 217 from Rs 203.

Of the 18 analysts tracking DLF, 15 have a 'buy' rating, while the rest suggests a 'sell'. The average of Bloomberg consensus 12-month target price implies an upside of 18.1%. Shares of DLF ended 3.8% higher at Rs 164.25 after gaining as much as 8% to Rs 170.9 in afternoon trade on Monday.

Also read: DLF Aims For Rs 2,500-Crore Sales Booking In FY21 Despite Covid-19

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