DLF's Q1 launches to set the tone for FY26 pre-sales trajectory

Mint

21-05-2025

Realty company DLF Ltd is bracing for an action-packed June quarter (Q1FY26) after nil new launches in the March quarter (Q4FY25). DLF is confident of unveiling phase 3 of Privana North in Gurugram and phase 1 of Mumbai in Andheri, which faced a delay due to multiple approvals since it is a rehabilitation project.
The super-luxury project in Goa is slated for launch in second half of FY26. All these projects are critical for DLF to meet or beat its FY26 pre-sales guidance of ₹20,000-22,000 crore.
DLF exited FY25 with record pre-sales of ₹21,223 crore, up 44% year-on-year. Note that this jump was largely backed by healthy sales from uber-luxury project 'The Dahlias', launched in Q3FY25 in key Gurugram micro market. The project contributed a whopping ₹13,744 crore pre-sales in FY25, helping DLF exceed the FY25 pre-sales target.
DLF has more inventory in this project, which aids realisations outlook, although sales from existing projects' inventory is not enough for an incremental pre-sales boost.
DLF's pre-sales growth for FY26 is flat compared to other larger real estate firms. For instance, Macrotech Developers Ltd (Lodha) and Godrej Properties Ltd have guided for year-on-year pre-sales growth of 20% and 10% in FY26, respectively.
So, a lot would depend on how DLF fares on the launch timeline and response to new projects. 'We currently factor in pre-sales of ₹22,800 crore in FY2026E that will likely be supported by new project launches (Privana, Mumbai and Goa)," said Kotak Institutional Equities report dated 20 May.
DLF has a medium-term launch pipeline of ₹73,900 crore, out of which around ₹17,000 crore is planned for FY26.
Also Read: DLF's second going: Can the real estate giant succeed beyond its comfort zone?
Quality matters
Meanwhile, the demand outlook in the National Capital Region (NCR), where DLF has a significant exposure, is robust. DLF is seeing strong housing demand for quality products, both for purchase and rental, particularly in Gurugram.
Kotak's analysts note that even after launching 7.5 msf of projects in FY25 at The Dahlias and Privana West, DLF has another 20 msf (land) of development potential at the Phase V locality in Gurugram, which will likely allow the company to capitalize on the premium positioning of the Gurugram micro market.
In this backdrop, DLF's business development is currently largely focused on NCR, Tri-City, Mumbai Metropolitan Region, and Goa, with limited new acquisitions expected in the near term.
Even so, a comforting factor is that DLF's solid balance sheet provides ample scope for future expansion into new geographies. A steep jump in surplus cash flow generation pushed DLF's net cash position to ₹6,848 crore in FY25 from ₹1,547 crore in FY24.
But stock revival depends on timely launches, mainly in the residential portfolio. In the last one year, the DLF stock has declined by 9% vis-à-vis the 6% fall in the Nifty Realty index.
'While we like DLF for robust margins/strong cash generation, we remain neutral, as our current valuation at around 20% premium to NAV prices in about 8% pre-sales CAGR over next 15 years which we believe is adequate (versus company guidance of flattish pre-sales growth in FY26)," said Nomura Global Markets Research report dated 20 May.
On the commercial side, DLF's office portfolio posted an annual rental income of ₹4,754 crore, up around 10% year-on-year with occupancy of operational assets at 94%.
The management said that Downtown 4 in Gurugram and Downtown 3 in Chennai have received occupancy certificates. Both are pre-leased, and fit-outs are going on, and rental income will start in three to four months. DLF eyes exit rental of ₹6,700 crore in FY26.
Also Read: Realtors eye new addresses in tier-2 cities