The shares of a Real Estate major that is primarily engaged in real estate development, from the identification and acquisition of land to the planning, execution, construction, and marketing of projects, are in focus as the company is targeting a zero-debt position in its development business and aiming to double its profit after tax and cash flow over the next five years.
Price Action
The shares of DLF Ltd, with a total market capitalization of Rs 1.61 Lakh Crore on Friday, were trading at Rs 654 per share, which was 3.8 percent lower than the previous closing price of Rs 680. The shares have generated a return of 68 percent in the past three years and a strong 377 percent return in the past five years.
Management Guidance
The company has outlined an ambitious financial strategy, aiming to reach a zero-debt position in its development business, and also actively working towards making the entire group net debt-free. The company is also focused on enhancing its dividend payout strategy by committing to distribute 50 percent of its PAT, possibly boosting shareholder returns by 15 to 20 percent over the next five to six years.
It also projected a Rs 25,000 Crore cash surplus from its existing launched projects. The company’s top management in a recent investors meet highlighted that the company is not pursuing an aggressive expansion but will instead focus on strategic implementation and financial discipline.
The company is looking to double its PAT and cash flow over the next five years, supported by a robust land bank, and a well diversified business model. The company anticipates its rental business to generate Rs 10,000 crore in annual revenue by FY30, which will be supported through investing Rs 20,000 crore in expanding its rental assets.
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Recent Developments
On March 25, 2025, the company informed that it had acquired a 50 percent stake in its subsidiary, DLF Urban Pvt Ltd, from Singapore-based GIC for Rs 497 crore through its arm, DLF Home Developers. As a result of this transaction, DLF now holds a 100 percent stake in DLF Urban Pvt Ltd, which has already completed a luxury housing project in the national capital.
Finacials
The company reported a slight increase of 0.5 percent in revenue from operations from Rs 1,521 Crore in Q3FY24 to Rs 1,529 Crore in Q3FY25. Their Net Profit increased by 23 percent YoY from Rs 656 Crore to Rs 1,059 Crore over the same period.
Price Target
Recently, JM Financial has given a “buy” rating on DLF with a target price of Rs 1,000 per share, which implies a potential upside of 47 percent from current levels. As per the brokerage, the stable growth in annuity business will be complemented by high margin residential segment with a strong land bank, which is sufficient for growth over a long term.
About DLF Ltd
The company is primarily engaged in the business of real estate development. Its operations include all aspects of real estate development, from the identification and acquisition of land to planning, execution, construction, and marketing of projects. The company is also in the business of leasing, power generation, provision of maintenance services, hospitality, etc.
Written By Adhvaitha Nayani
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