Morgan Stanley has retained its ‘Overweight’ rating on DLF with a target price of ₹910, citing record pre-sales, robust cash generation, and sustained rental income growth in Q4FY25. The brokerage said DLF is well positioned to outperform peers in FY26, supported by high visibility in launches and a healthy balance sheet.
DLF’s Q4 net profit jumped 36.3% YoY to ₹1,282.2 crore, while revenue surged 46.5% to ₹3,127.6 crore. EBITDA rose 29.7% YoY to ₹978.1 crore, and the company recommended a ₹6/share dividend, marking a 20% increase YoY.
Pre-sales hit ₹20 bn in Q4, full-year tops ₹212 bn
Morgan Stanley highlighted that DLF’s Q4FY25 pre-sales of ₹20 billion exceeded estimates and brought FY25 pre-sales to ₹212 billion, a 44% YoY growth — the highest in the sector. Even assuming flat pre-sales in FY26, DLF’s implied forward P/E at 18.5x remains attractive relative to peers, the brokerage said.
Collections for the year stood at ₹118 billion, up 36% YoY, while operating cash flow surged 52% to ₹68 billion, driven by timely project execution and rising buyer confidence. This helped DLF close the year with a net cash position of ₹6,800 crore, up from ₹4,500 crore in Q3.
Rental business gaining traction
Morgan Stanley also pointed to a steady performance in the rental segment, where QoQ rental income grew 3% and YoY growth came in at 9%. This was supported by the completion of 2.7 million sq. ft. in leasing projects during the quarter. Management expects 6.2 million sq. ft. more to be delivered in FY26, further boosting annuity income.
The dividend payout ratio for FY25 stood at 34%, slightly lower than FY24’s 45%, but consistent with the company’s long-term capital return strategy of targeting 50% payout.
“DLF remains a high-quality play in the residential and commercial real estate cycle, with superior execution and a clean balance sheet,” Morgan Stanley noted.
Disclaimer: This article is based on the brokerage report by Morgan Stanley. It does not constitute investment advice. Investors are advised to consult their financial advisors before making any investment decisions.
