Nomura has reiterated its 'Buy' rating on DLF and maintained its sum-of-the-parts (SOTP)-based target price of Rs 740 after the real estate developer reported pre-sales of Rs 38 billion in the second quarter of FY27, against the brokerage's estimate of Rs 25 billion.
"2QFY27 pre-sales at Rs 38 billion (-12% y-y) was driven by Aureva launch (Rs 19 billion) and sustenance sales in Dahlias (INR18bn, ahead of our estimate of INR5bn)," Nomura said. Residential collections stood at Rs 26 billion, up 3% year-on-year.
The brokerage said DLF was on track to meet its FY27 pre-sales target of Rs 200 billion. Its estimates factor in key launches such as Westpark in Mumbai, with a gross development value (GDV) of around Rs 30 billion, in the third quarter of FY27, and Hamilton Court in Golf Course, NCR, with a GDV of around Rs 80 billion, in the fourth quarter.
Nomura expects free cash flow (FCF) generation of Rs 70-80 billion annually. "Given the company already has a materially large land bank, we believe cash accumulation from FY28F onwards due to project completions should allow the company to materially increase shareholder returns," it said.
DLF's second-quarter FY27 revenue, EBITDA and profit after tax came in at Rs 12.6 billion, Rs 0.2 billion and Rs 13 billion, respectively, down 23% and 92% year-on-year for revenue and EBITDA, while PAT rose 10%. Revenue and EBITDA were 36% and 94% below consensus expectations, while PAT was 30% above consensus.