DLF has seen strong traction in its residential business with 9MFY22 sales bookings of Rs 45.4 bn driven by the Dec’21 launch of the One Midtown Delhi project. Accordingly, the company has revised its FY22E devco sales guidance to Rs 60-65 bn (earlier Rs 40 bn). With the recent plotted development launch in Chennai, we model for Rs 66.4 bn of FY22E devco sales and over Rs 70 bn each in FY23-24E.
Further, with office re-openings and mall consumption picking up, we expect DCCDL’s rental Ebitda to grow from Rs 34.0 bn in FY22e to Rs 40.5 bn in FY23e. We upgrade our rating to Buy from ADD with an unchanged Mar’22 SoTP based TP of Rs 434/share post the 13% stock price correction in the last one month. Key risks are weakness in office leasing and residential demand.
Chennai plotted development launch to drive sales bookings further: The company has recently launched a residential plotted development project in Feb’22 christened “Parc Estate” in Chennai spread over 85 acres. In the first phase, the company plans to launch 50% of the area or 750 plots having ticket sizes ranging between Rs 2.5-12.5 mn.
Residential sales estimated to be over Rs 70 bn each in FY23-24e: The company clocked residential bookings of Rs 20.2 bn in Q3FY22 as the company booked Rs 7.0 bn of sales from the One Midtown, New Delhi (50% JV with GIC) launched in Dec’21. The company plans to launch the third tower in the project in Q4FY22 having total potential sale value of ~Rs 11 bn.
