Nuvama has retained a 'Buy' rating on DLF with a target price of ₹722, indicating an upside potential of nearly 24% from current market levels. According to the brokerage report, the positive outlook is driven by strong cash generation, improving rental income, and a rise in net cash position. The brokerage highlighted that DLF's Q4FY26 pre-sales surged 95% year-on-year to nearly ₹3,970 crore, though total bookings for FY26 declined around 5% year-on-year to nearly ₹20,100 crore.
Collections during FY26 rose around 15% year-on-year to nearly ₹13,500 crore, significantly boosting DLF's financial position. The company's net cash position rose sharply to around ₹14,200 crore compared to nearly ₹11,700 crore in the previous quarter. As per the brokerage report, DLF has an estimated surplus cash potential of nearly ₹43,800 crore from launched inventory. The management indicated it will focus on generating operating surplus of ₹9,000 crore and free cash flows of ₹7,000 crore to ₹8,000 crore annually rather than chasing pre-sales growth at the cost of margins.
According to the management commentary, the company is now targeting nearly ₹20,000 crore worth of launches and pre-sales during FY27. New launches planned for FY27 may include the second phase of the Arbour project, a large housing project in DLF City, expansion of the Mumbai project and a Goa project. The report noted that launches contributed almost 90% of bookings during FY25, but dependence on new launches may reduce going forward. The brokerage highlighted that the Gurugram housing market is facing growth-related challenges amid changing risk perception linked to geopolitical concerns.
Apart from residential sales, the brokerage remains positive on DLF's rental business. According to the report, the overall rental portfolio of DLF and DLF Cyber City Developers Limited spans nearly 4.96 crore square feet with occupancy levels of around 95% in office spaces and 97% in retail assets. The rental business remains a major strength for the company's diversified revenue streams.
