DLF - DLF LIMITED Share Price

In the earnings call conducted on May 20, 2025, management provided a positive outlook for DLF Limited, citing a strong performance across various financial metrics. Key highlights included sales reaching a record high of INR 21,000 crores and collections amounting to nearly INR 11,750 crores. The company reported an operating cash surplus of INR 2,300 crores for the quarter and a total of INR 6,200 crores for the year. The profit after tax (PAT) was noted at INR 4,350 crores, marking the highest PAT in recent years, and the company achieved a return on equity (ROE) of 10.2%, entering the double-digit realm that management aims to improve upon annually.

The management indicated a planned launch pipeline worth INR 17,000 crores for the next fiscal year, highlighting several projects: the third phase of Privana, along with developments in Mumbai and Goa. They also underlined ongoing construction efforts, with significant milestones such as obtaining occupancy certificates for key projects like Downtown 4 in Gurgaon and Downtown 3 in Taramani.

In terms of rental business, vacancy levels were reported to be down to 6%, with an occupancy by value of about 4%. Upcoming projects are set to enhance rental income, with exit rentals projected to rise to approximately INR 6,700 crores by FY '26. The management's focus on sustainability was evidenced by recent certifications for digital connectivity and health standards.

The outlook for operating cash flow remains strong, with a projected free cash flow running quarterly at around INR 1,500 crores. The capital expenditure (CAPEX) is anticipated to be approximately INR 5,000 crores over FY '26 and FY '27 due to rapid execution plans for major projects.

Management also emphasized their strategy to build stability, combining their rental business with development activities, while not overly extending into new geographical markets beyond their core areas.

Question 1: "So, INR 17,000-odd crores of launches planned for next year. Can you share, apart from these three, what are the other launches planned?"

Answer: We have three major launches planned, including Privana North, the third phase in Mumbai, and one in Goa. We are also exploring launches in DLF City and IREO Land. However, those discussions are still in preliminary stages, and we cannot confirm any specifics yet.

Question 2: "Can you guide us about your operating cash flow outlook for FY '26 and FY '27 as well as CAPEX?"

Answer: We typically refrain from giving specific future financial guidance. However, for FY '25, our total free cash flow was around INR 6,200 crores, running at approximately INR 1,500 crores per quarter. Our CAPEX for the RentCo segment is estimated at INR 5,000 crores for both FY '26 and FY '27 due to project completions.

Question 3: "What are your thoughts on housing demand in Gurgaon? How do we see launches and pricing outlook?"

Answer: Housing demand in Gurgaon remains robust for quality homes. The area's appeal as an investment option has grown due to the strong workforce in Cyber City. We anticipate that this demand will support our future launches and pricing, as we cater to both homeowners and investors.

Question 4: "Any guidance for presales for next year?"

Answer: Our expectation for presales is in the range of INR 20,000 to 22,000 crores for next year. Consistent performance has led us to believe we can meet this target, though we will aim to exceed it, like we've done in the past.

Question 5: "What are the expected exit rentals by FY '26?"

Answer: We anticipate exit rentals by FY '26 to be around INR 6,700 crores. Although new assets will be delivered, they won't contribute fully to the rental income for the entire year as they come online sequentially.

Question 6: "When do you expect the next phase of Dahlias to launch and at what price points?"

Answer: Currently, Dahlias is priced above INR 1 lakh per square foot. With the upcoming relaunch, we expect it to align more closely with our premium product, Camellias, which is priced around INR 2 lakhs, reflecting potential appreciation in value.

Question 7: "When will the Goa and IREO launches happen?"

Answer: We expect to launch the Goa project in the second half of this fiscal year. For IREO, we hope to secure approvals and have the launch sometime in the next fiscal year.

Question 8: "Looking at your tax rate outlook over the next 2 to 3 years?"

Answer: The tax rate should stabilize to normal levels as the deferred tax component in this fiscal has been minimal. There are no significant deferred tax assets expected in the near future, so it will be business as usual.