Buy DLF, target price Rs 434: ICICI Securities

ICICI Securities has buy call on DLF with a target price of Rs 434. The current market price of DLF Ltd. is Rs 344.65.
Time period given by analyst is one year when DLF Ltd. price can reach defined target.

DLF Ltd., incorporated in the year 1963, is a Large Cap company (having a market cap of Rs 86400.76 Crore) operating in Real Estate sector.

DLF Ltd. key Products/Revenue Segments include Property Development, Rental Income, Other Operating Revenue and Royalty Income for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 1686.92 Crore, up 8.38 % from last quarter Total Income of Rs 1556.53 Crore and up 1.12 % from last year same quarter Total Income of Rs 1668.22 Crore. Company reported net profit after tax of Rs 191.21 Crore in latest quarter.

Investment Rationale
DLF has seen strong traction in its residential business with 9MFY22 sales bookings of Rs45.4bn driven by the Dec’21 launch of the One Midtown Delhi project. Accordingly, the company has revised its FY22E devco sales guidance to Rs60-65bn (earlier Rs40bn). With the recent plotted development launch in Chennai, the brokerage models for Rs66.4bn of FY22E devco sales and over Rs70bn each in FY23-24E. Further, with office re-openings and mall consumption picking up, the brokerage expects DCCDL’s rental EBITDA to grow from Rs34.0bn in FY22E to Rs40.5bn in FY23E. It upgrades rating to BUY from ADD with an unchanged Mar’22 SoTP based target price of Rs434/share post the 13% stock price correction in the last one month. Key risks are weakness in office leasing and residential demand.

Promoter/FII Holdings
Promoters held 74.95 per cent stake in the company as of 31-Dec-2021, while FIIs owned 17.21 per cent, DIIs 2.67 per cent.