Actual property developer DLF Ltd expects its residential gross sales to see double-digit development in FY23. This was one of many key takeaways from its analyst meet held on 27 Could. New launches of seven.6 million sq. ft (msf) slated within the present fiscal 12 months would drive gross sales bookings. In FY22, DLF’s pre-sales at ₹7,273 crore greater than doubled on a year-on-year (y-o-y) foundation, reaching a multi-year excessive. With that, the corporate surpassed its gross sales steering of ₹6,000-6,500 crore.
Analysts say that whereas DLF has not shared a concrete pre-sales steering for FY23, double-digit development of greater than 10% on the bottom of FY22 is directionally optimistic. In response to the administration’s commentary, the DLF inventory ended Monday’s buying and selling session up 7% on the NSE.
Even so, the inventory is 23% away from its 52-week excessive of ₹449.70 seen in October 2021. DLF’s gross sales outlook is strong, however there are dangers from rising residence mortgage rates of interest and inflation-led worth hikes. So, a big upside within the inventory would occur step by step, mentioned analysts.
The DLF administration foresees a cloth influence on gross sales if rates of interest on residence loans had been to rise past 8%. Within the case of actual property builders, a borrowing charge above 10% may have a cloth influence on the return profile, the administration mentioned. Development value had risen by 10-15% y-o-y, however since DLF’s product combine is high-margin, a 5% portfolio worth improve must be sufficient to offset the influence, the administration mentioned. The DLF administration has mentioned would proceed to give attention to the luxurious and mid-income phase, which get pleasure from greater margins than the inexpensive housing sector.
“These dangers are usually not notably for DLF solely, however the inventory’s re-rating to a big extent depends upon land financial institution developments. DLF enjoys the benefit of getting a big chunk of land financial institution in the important thing Nationwide Capital Area. Nonetheless, if these dangers play out, they could influence the anticipated gross sales trajectory, which is a dampener for the inventory,” mentioned an analyst with a home brokerage home requesting anonymity.
Considering DLF’s potential to hike costs within the ONE Midtown, Delhi undertaking, analysts at Motilal Oswal Monetary Companies have upped their FY23/24 pre-sales estimates by 6-9%. “Whereas near-term development outlook throughout the segments stays intact, the uncertainty round rising the rate of interest cycle will result in restricted land re-rating,” the home brokerage home mentioned in a report on 29 Could.
Supply: Live Mint