DLF shares declined 3% to ₹658 in Tuesday trading following the company's mixed first-quarter results for FY27, with the stock hitting an intraday low of ₹647.50. Despite the market reaction, leading brokerages maintained their constructive stance on the real estate major. Nomura retained its 'Buy' rating with a target price of ₹740, representing an 11% upside from the previous close, noting that the stock trades at a 3% discount to its residential NAV. Jefferies also maintained its Buy rating with a target price of ₹815, while Morgan Stanley and Motilal Oswal also maintained their 'Buy' ratings. Nomura termed the quarter a 'non-event quarter' and said the earnings were a miss from both P&L and pre-sales perspective, but expects launch momentum to 'significantly improve into the year' beginning with Arbour 2 in Q2FY27F.
DLF delivered mixed results for Q1FY27, with consolidated net profit rising 4% year-on-year to ₹794 crore for the April-June quarter, while consolidated revenue declined 46% year-on-year to ₹1,605.56 crore. EBITDA stood at ₹476 crore with gross margins at 51%, though the company's EBITDA was 70% below Bloomberg consensus estimates. Collections declined 15% year-on-year to ₹2,300 crore, while operating cash flow fell 38.7% to ₹933 crore. The company's net cash position remained strong at ₹15,200 crore with zero gross debt, providing substantial financial flexibility for future growth initiatives. Nomura noted that DLF's Q1FY27 revenue, EBITDA and PAT were 42%, 70% and 28% below Bloomberg consensus estimates, respectively, but expects a 'strong revenue recognition cycle from 2QFY28F' with ₹571 billion of revenue and ₹270 billion of gross margin pending recognition from sold inventory.
DLF's new sales bookings crashed dramatically to ₹657 crore in Q1FY27, representing a 94.25% decline from ₹11,425 crore in the corresponding year-ago quarter, driven mainly by major luxury projects such as DLF Privana North in Gurugram. The company's residential presales stood at ₹660 crore, down 94% year-on-year and below Nomura's estimate of ₹2,000 crore, as there were no launches during the quarter. The company attributed this sharp decline to the timing impact of deferred launches, with the Gurugram-based developer explaining that the lack of fresh project launches typically boosts sales momentum. Despite the challenging quarter, DLF remains confident of achieving its ₹20,000 crore sales target for FY27, unchanged from last year, as it prioritizes margins and cash flows over aggressive sales growth. The company has lined up launches worth around ₹60,200 crore this year across Gurugram, Mumbai and Goa.
DLF's financial position strengthened significantly during the quarter, with net cash position reaching ₹15,200 crore at the end of Q1FY27 and zero gross debt. The company generated operating cash flow of ₹933 crore during the quarter, though this represented a 38.7% decline from the previous year. This performance reflects the challenging operating environment in the real estate sector during the quarter, though the company maintained strong cash generation capabilities. The company's Basic EPS has shown a steady increase from ₹6.06 in March 2022 to ₹17.83 in March 2026, while the Debt to Equity ratio has decreased significantly, reaching 0.00 in March 2026, indicating a stronger financial position compared to 0.11 in March 2022. According to the company's investor presentation, the strengthened balance sheet and consistent cash flow on the back of a significant land bank help it be better positioned for potential upcycles.
Addressing the market, Chairman Rajiv Singh acknowledged the challenging quarter but expressed confidence in the company's future prospects. The company expects launch momentum to begin from the ongoing Q2 onwards, with Nomura expecting launch momentum to 'significantly improve into the year' beginning with Arbour 2 in Q2FY27F, which has a gross development value (GDV) of ₹2,000 crore. Major launches including Westpark, with a GDV of around ₹3,000 crore, and Hamilton Court, with a GDV of around ₹8,000 crore, are expected in the second half of FY27. Singh said the company was in a position to capitalise on the business opportunities to be unlocked from the government's focus on infrastructure projects. The company expects the requisite approvals to be received soon for planned launches, with the medium-term launch pipeline remaining unchanged at around ₹60,200 crore. In the longer term, DLF shares have delivered 37% returns over three years and 91% returns over five years, with the company maintaining a market capitalisation of more than ₹42,749 crore. Nomura highlighted that from the company's unsold (but launched) inventory, DLF has ₹167 billion worth of inventory with a gross margin of ₹120 billion (72% gross margin) pending recognition, implying the company could recognise a blended gross margin of ₹390 billion (53% gross margin) when it recognises sales from its entire launched inventory over the next 4-5 years.
