Target: ₹385

CMP: ₹393.90

DLF FY22 annual report highlights a) Target to deliver double digit growth in residential bookings in FY23 b) Aggressive expansion in office segment and aim to double retail portfolio in 4-5 years and c) Sustained improvement in cash flows.

While we remain confident about the growth trajectory in both its Residential as well as Commercial business, a large part of it already seems priced into valuation. Thus, the implied value of land remains the only key metric for a further upside in the stock.

Topline grew by 6 per cent y-o-y to ₹5,400 crore driven by higher possessions in Camellias project. MDL’s EBITDA stood at ₹2,050 crore, up 44 per cent y-o-y on account of 10ppts expansion in margins to 36 per cent.

Gross debt of ₹4,100 crore include: LT borrowings amounting to ₹2,400 crore and ST borrowings of ₹1,700 crore. In addition to cash and bank balance of ₹900 crore, MDL also has liquid investments amounting to ₹300 crore. Thus resulting in a net debt of ₹2,700 crore.

At current valuations, the surplus land in DLF and DCCDL is valued at INR 48,000 crore, which is in line with our estimated value, assuming a development timeline of 20 years for DLF’s 151msf and 11 years for DCCDL’s 25msf, which is fair in our view.