The brokerage house Nuvama retained a positive outlook on the real estate major DLF following its March quarter earnings and business update.
The brokerage has maintained a ‘Buy’ rating on the stock and assigned a target price of Rs 722. This indicates an upside potential of nearly 24% from the current market price.
According to the brokerage report, cash generation, improving rental income and a rise in net cash position remain some of the key reasons behind its positive outlook on the company.
Let’s take a look at the major factors driving the brokerage view on DLF.
Q4 sales jump, but yearly bookings remain soft
The brokerage house Nuvama in its report noted that DLF’s pre-sales during the Q4FY26 surged 95% year-on-year to nearly Rs 3,970 crore.
However, despite the strong quarterly performance, the company’s total bookings for the full FY26 declined around 5% year-on-year to nearly Rs 20,100 crore.
The report stated, “DLF’s Q4FY26 pre-sales surged 95% YoY to Rs 3,970 crore; however, FY26 bookings declined 5% YoY to Rs 20,100 crore.”
The brokerage highlighted that much of the company’s bookings during the year came from key residential projects including Privana, Dahlias and its Mumbai project Westpark.
According to the management commentary shared in the report, the company is now targeting nearly Rs 20,000 crore worth of launches and pre-sales during FY27.
Nuvama noted, “Management expects Rs 20,000 crore pre-sales in FY27E.”
Cash flows improve sharply as net cash crosses Rs 14,000 crore
One of the biggest highlights in the report was DLF’s improving balance sheet and cash position.
According to the brokerage report, collections during FY26 rose around 15% year-on-year to nearly Rs 13,500 crore.
This strong cash generation helped DLF’s net cash position rise sharply to around Rs 14,200 crore compared to nearly Rs 11,700 crore in the previous quarter.
The brokerage report stated, “DLF’s net cash rose to Rs 14,200 crore.”
The company also continues to hold a large surplus cash potential from both sold and unsold inventory.
As per the brokerage report, DLF has an estimated surplus cash potential of nearly Rs 43,800 crore from launched inventory.
According to the report, “Management indicated that it will focus on generating operating surplus of Rs 9,000 crore and free cash flows of Rs 7,000 crore to Rs 8,000 crore annually rather than chasing pre-sales growth at the cost of margins.”
Launch dependence may reduce in FY27
The brokerage report highlighted that new launches planned for FY27 may include the second phase of the Arbour project, a large housing project in DLF City, expansion of the Mumbai project and a Goa project.
The report added that launches contributed almost 90% of bookings during FY25, but dependence on new launches may reduce going forward.
Rental business remains a major strength
Apart from residential sales, the brokerage also remains positive on DLF’s rental business.
According to the report, the overall rental portfolio of DLF and DLF Cyber City Developers Limited spans nearly 4.96 crore square feet with occupancy levels of around 95% in office spaces and 97% in retail assets.
The brokerage stated, “The overall rental portfolio of ~49.6msf has occupancy levels of 95% by area.”
What investors should watch now
Nuvama continues to maintain its ‘Buy’ rating on DLF. The brokerage also highlighted that the Gurugram housing market is facing growth-related challenges amid changing risk perception linked to geopolitical concerns.
Disclaimer: Investment views and target prices mentioned above are those of the brokerage house Nuvama and do not reflect the editorial stance of this publication. Please note that stock market investments are subject to market risks; we recommend consulting a SEBI-registered investment advisor before making any buy, sell, or hold decisions based on this analysis. This report is for informational purposes only and does not constitute a financial offer or solicitation.
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