Earnings Outlook
DLF seen struggling to clock record high new sales booking
This story was originally published at 13:48 IST on 22 January 2025
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By Rajesh Gajra
NEW DELHI – For the quarter ended December, real estate major DLF Ltd. is seen failing to match the record new sales bookings of INR 90.5 billion achieved in the same quarter a year ago. Analysts expect the largest real estate company in the Delhi-National Capital Region to report new sales bookings of INR 50 billion-INR 70 billion in Oct-Dec, largely on the back of bookings at the recently-launched ultra-luxury project, 'The Dahlias' in Gurugram.
DLF's on-year revenue growth in the reporting quarter will likely continue to be jerky, similar to the previous three quarters. The company's consolidated revenue is seen increasing 17.4% on year to INR 17.86 billion, according to an average of estimates from six brokerage firms. These estimates range from INR 17.07 billion by Motilal Oswal Financial Services to INR 18.96 billion by HDFC Securities.
The real estate behemoth's bottom line is seen weak due to subdued revenue and higher operating costs. In the December quarter, the consolidated net profit of DLF will likely be INR 8.06 billion, as per average of estimates from the six brokerages. The earnings before interest, tax, depreciation, and amortisation, or EBITDA, is expected to be INR 5.28 billion for Oct-Dec, according to an average of estimates from five brokerages.
The net profit estimate is 23% higher than INR 6.57 billion in the year-ago quarter. The largest net profit estimate is INR 8.67 billion by JM Financial Institutional Securities and the lowest projection is INR 7.46 billion by Kotak Securities' institutional equities team. If the average net profit estimate comes true Friday, when the company reports its financial results for the December quarter, the annual growth rate of 23% will be the second-lowest growth in the last 11 quarters.
In the September quarter, DLF's consolidated net profit had jumped 122% on year to INR 13.81 billion, and revenue from operations had risen 47% to INR 19.75 billion. The new sales bookings had, however, dipped in Jul-Sept to INR 6.92 billion from INR 14.76 billion in the year-ago quarter. Despite strong financial results in the September quarter, shares of DLF have been down nearly 8% from Oct. 24, the day prior to the disclosure of the results.
Kotak Securities expects the company to have registered "strong pre-sales" of around INR 70 billion in the December quarter. DLF's big launch of its Dahlias project "could contribute" INR 50 billion-INR 60 billion to the pre-sales during the quarter. On the other hand, Motilal Oswal estimates the total new sales bookings to be INR 50 billion, including bookings from its new projects.
New sales bookings by DLF have no correlation with revenue since it recognises revenue from booking and instalment collections as per the progress of the project under construction.
The company also has a rental business, primarily under its subsidiary DLF Cyber City Developers Ltd. Kotak expects this subsidiary to report an 11% on-year growth in rentals of INR 12 billion "on the back of recently added asset (Downtown Phase 2) and healthy overall occupancy of 93%."
Due to lower revenue growth and higher operating costs, the EBITDA margin of DLF is seen declining in the December quarter. Motilal Oswal expects the company's EBITDA margin to contract substantially to 20.8% from 33.6% a year ago, while Kotak sees it contracting to 26.9%. In between the estimates by these two brokerage firms is brokerage Sharekhan Ltd.'s EBITDA margin estimate of 23.8%.
Post its earnings announcement on Friday, the market will keenly watch out for the management's commentary on the trajectory of new sales booking, execution updates of projects under construction, and the rental demand in the commercial property market.
At 1345 IST, shares of DLF traded 5% lower at INR 701.30 on the National Stock Exchange.
Following are the Oct-Dec consolidated earnings estimates for DLF based on reports from six brokerage firms in descending order of the estimate of net profit:
| Brokerage firm | Net Sales | Net Profit | EBITDA |
| (In INR million) | |||
| JM Financial Institutional Securities Pvt Ltd | 18,255 | 8,666 | 6,405 |
| Nuvama Wealth Management Ltd | 18,705 | 8,582 | 6,920 |
| Motilal Oswal Financial Services Ltd | 17,071 | 8,034 | 3,546 |
| HDFC Securities Ltd | 18,960 | 7,885 | 4,936 |
| Sharekhan Ltd | 17,080 | 7,740 | ---- |
| Kotak Institutional Equities | 17,091 | 7,462 | 4,595 |
| Average | 17,860 | 8,062 | 5,280 |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
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