ICICI Securities Is Bullish On This Real Estate Stock, Sees Gains 33% Upside

ICICI Securities has placed a BUY rating on the stock of DLF with a revised SoTP based target price of Rs 458 per share (earlier Rs450) based on 1x Mar23E NAV as we raise our FY23E and FY24E residential sales estimates by 17% each to Rs103.0bn and Rs106.8bn, respectively, owing to higher-than-expected sales bookings from Sector 63, Gurugram launch, and retain our FY23-25E rental income estimates for DCCDL.

According to ICICI Securities, DLF has launched its Sector 63, Gurugram project christened "The Arbour" in Feb'23 across 4.4msf having a total potential sale value of Rs80-90bn (company guidance was for 3.1msf of launches in Q4FY23). "Our channel checks indicate significant buyer interest from customers for the project. Depending on customer interest for specific inventory, the company may look to sell the entire inventory on launch or hold back inventory with an intent to achieve higher pricing. The company has already clocked 9MFY23 sales bookings worth Rs66.0bn, and assuming Rs30bn of sales bookings from Sector 63 project in Q4FY23 and balance Rs50-60bn in FY24E, we raise our FY23E and FY24E residential sales estimates by 17% each to Rs103.0bn and Rs106.8bn, respectively," the brokerage has said.

"With the company having already clocked 9MFY23 sales bookings worth Rs66.0bn and the Sector 63, Gurugram and Sector 93 independent floors (sale value of ~6bn) being launched in Q4FY23, we raise our FY23E and FY24E residential sales estimates by 17% each to Rs103.0bn and Rs106.8bn, respectively as we assume Rs30bn of sales bookings from Sector 63 project in Q4FY23 and balance Rs50-60bn from the same project in FY24E. Depending on company's strategy to sell off or hold inventory in this project, actual sales bookings may differ from our estimates," the brokerage has said.

The stock of DLF was last seen trading at Rs 346 on the NSE.

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