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Informist, Monday, Oct. 27, 2025

 

By Rajesh Gajra

 

NEW DELHI - Real estate major DLF Ltd. will likely report muted top line and bottom line growth for the September quarter amid moderate revenue recognition and higher cost of sales. The company's pre-sales are seen growing strongly on a year-on-year basis on the back of a residential project launch in Mumbai during the quarter. The sequential growth in pre-sales is seen negative, mainly due to seasonality.

 

DLF is expected to report a consolidated net profit of INR 9.5 billion for the September quarter, down 31% on year and up 24% on quarter, according to an average of estimates by five brokerages. These estimates range from a low of INR 8.4 billion by Nuvama Wealth Management to a high of INR 10.9 billion by Motilal Oswal Financial Services.

 

The on-year net profit performance changes significantly when adjusted for exceptional items. In the year-ago quarter, the company had reported a reversal of a deferred tax liability of INR 5.1 billion due to a reassessment following a change in the tax rate on long-term capital gains. Excluding this exceptional item, the year-ago consolidated net profit was INR 8.8 billion and the estimated on-year growth in the average net profit for the reporting quarter is 8.2%.

 

The average estimate for the consolidated revenue from operations of the company is INR 22.7 billion, but excluding an outlier revenue estimate of INR 29.9 billion by JM Financial Institutional Securities, the average estimate is lower at INR 21 billion, which is up 6.1% on year and down 23% on quarter. Excluding the outlier, the highest revenue estimate is INR 24.5 billion by brokerage Motilal Oswal, while the lowest revenue estimate is INR 18.9 billion by Nuvama.

 

In the September quarter, Kotak Securities expects DLF to report pre-sales of INR 28 billion on the back of the launch of its Mumbai project. The pre-sales from the Mumbai project will likely be INR 23 billion, according to the brokerage. DLF's total pre-sales will likely be INR 32 billion for the reporting quarter, according to HDFC Securities. The company will report its September quarter earnings on Thursday.

 

DLF had announced on Jul. 25 that its 100% subsidiary DLF Home Developers Ltd., through a subsidiary in partnership with Trident Realty, had completely sold out phase 1 of 'The Westpark' residential project located at Andheri (West) in Mumbai within a few days of launch. Brokerage Motilal Oswal expects this to lead to a four times jump on year in DLF's pre-sales to INR 28 billion for the September quarter, the highest on-year growth in pre-sales among 12 real estate companies the brokerage tracks. Sequentially, however, the expected pre-sales will be down substantially by 75%, also the worst growth among 12 real estate companies, the brokerage said.

 

DLF's top line performance in a quarter is not linked to the new sales booking performance of that quarter. Real estate firms follow the Indian Accounting Standards for their real estate development business. These accounting standards specify that a real estate developer cannot recognise income till it has created a sort of binding interest in it and till the project has delivered.

 

Several states define binding interest differently, with some equating it with the completion of a project while others linking it to receipt of the occupation certificate. "In places like Gurgaon…, till you get an OC (occupation certificate), you can't start recognising revenue," DLF Chairman Rajiv Singh said in a meeting with analysts and investors earlier this year. No state in the country allows revenue recognition at the stage of booking pre-sales.

 

In terms of sales volume recognised for the quarter, DLF will likely report a fall of 56% on year and 75% on quarter, according to brokerage Motilal Oswal. The company's earnings before interest, tax, depreciation, and amortisation are expected to be INR 6.1 billion.

 

In its rental business, DLF's subsidiary DLF Cyber City Developers Ltd. is likely to report 14% on-year growth in rentals to INR 13.5 billion "owing to the recent commissioning in Chennai/Gurgaon and healthy overall occupancy of 94%," Kotak Securities said. The global macro-economic volatility may have impacted multinational companies-driven leasing in the commercial segment for the real estate sector, HDFC Securities said.

 

On Monday, shares of DLF closed at INR 779.50 on the National Stock Exchange. The stock is down 1.7% from the announcement of the company's June quarter earnings. Of the 13 brokerage reports on the company available with Informist, 11 have a 'buy' call at an average target price of INR 977, and two have a 'hold' recommendation.

 

In the trailing quarter, DLF had reported an on-year rise of 18% in its consolidated net profit to INR 7.6 billion, and its consolidated revenue had doubled on year to INR 27.2 billion.

 

Following are the September quarter earnings estimates for DLF from five broking firms in the descending order of estimate of net profit:

 

Brokerage	Net sales	Net profit	EBITDA
	(In INR million)
Motilal Oswal Financial Services Ltd.	24,451	10,931	7,347
JM Financial Institutional Securities Pvt. Ltd.	29,884	10,597	6,635
Kotak Securities Ltd.	20,217	8,850	5,658
HDFC Securities Ltd.	20,212	8,650	5,301
Nuvama Wealth Management Ltd.	18,942	8,422	5,514
Average	22,741	9,490	6,091

 

End

 

Edited by Deepshikha Bhardwaj

 

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