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Brokerages decode DLF Q1FY26 results; check what's in store for the stock
Here's how leading brokerages have interpreted DLF's Q1FY26 results.
HSBC
Pre-sales were strong but on expected lines, driven by the launch of Privana. Phase 1 of the recently launched project in Mumbai is sold out. DLF is seeing demand for Dahlias and is keen to restart sales before the start of experience centre.
Using a WACC of 11.5 per cent (earlier 11.9 per cent) in line with our strategists' latest cost of equity assumptions, we compute a March 2026 NAV per share of Rs 829 (earlier Rs 795) and discount it back by six months (earlier nine months) to Rs 785 (earlier Rs731). We then apply a 26 per cent premium at 2 standard deviations (unchanged) above the mean to the NAV estimate to arrive at our target price of Rs 990 (earlier Rs 920). We maintain our Buy rating.
Nomura
We fine-tune target price to Rs 740 (Rs 730 earlier), driven by net debt adjustments on the back of the company's stronger-than-expected net cash position. While DLF generates robust margins/strong cash, we maintain Neutral rating as we believe the company's long-term growth potential is already priced into its valuation.
Our current valuation at ~20 per cent premium to NAV prices in an ~8 per cent pre-sales CAGR over the next 13 years, which we believe is adequate (vs FY26E flat growth guidance).
For us to turn positive on DLF stock, we would like to see management be more aggressive toward pre-sales growth on existing land bank or execute stronger-than-expected business development, driven by its strong cash position.
Peers such as Macrotech (LODHA IN, Buy, FY26E pre-sales growth guidance of 20 per cent y-y on a slightly lower base) continue to be relatively more aggressive with +90 per cent of FY26F BD (business development) done in 1QFY26F itself.
JM Financial
Aided by the ramp-up in new assets and a strong development pipeline, we expect rental income to grow at 11 per cent CAGR over FY25-28E. DLF with its steady annuity cash flows and fully paid-up land banks remains extremely well placed to scale up across segments and newer geographies. We maintain a BUY rating with an SoTP-based target price of Rs 1,000.
Nuvama
DLF is emerging as a key beneficiary of the ongoing sector consolidation. It boasts an attractive rental portfolio that has grown steadily despite the pandemic. Besides, the company has a revamped balance sheet, which is likely to generate better cash flows. Thus, it is likely to be a key beneficiary of ongoing sector consolidation. We believe new launch trajectory will be a key trigger for the stock.
With limited inventory levels, the company needs a steady stream of launches in order to maintain a healthy sales trajectory. We recommend 'BUY/SN' with a target price of Rs 1,005 derived by ascribing a 35 per cent premium to our Q1FY28E NAV of Rs 744.
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