Following the release of their Q4 earnings, DLF shares hit a 52-week high; should investors buy, sell, or hold?

In early trading today, shares of big real estate company DLF were up more than 4%. This was because DLF reported that its consolidated net profit rose by 41% in the March 2023 quarter, from Rs 405 crore to Rs 570 crore, compared to Rs 405 crore during the same time last year. By going up 5.45% on BSE, DLF stock hit a new 52-week high of Rs 459.65. On BSE, the company’s market value went up to Rs 1.13 lakh crore. The real estate stock opened at Rs 442 on BSE, which was higher than the last close of Rs 435.90. In one year, the share has gone up by 44%, and since the beginning of this year, it has gone up by 22.27%. The real estate share has gone up 11% in a month.

In terms of technicals, the stock’s relative strength index (RSI) is at 69.5, which means that it is neither overbought nor oversold. With a beta of 1.4, DLF shares are very volatile over the course of a year. The 5 day, 20 day, 50 day, 100 day, and 200 day moving averages are all above the price of DLF shares.

For FY23, the DLF board also suggested a payment of Rs 4 per equity share, which is 200% of each share’s face value of Rs 2.

In the March 2023 quarter, however, income from operations was Rs 1,456 crore, which was 6% less than the same quarter last year, when it was Rs 1,547 crore.

From the December quarter before, when the net profit was Rs 517 crore, it jumped 10% in the March quarter. For the fourth quarter, operating profit or EBITDA (earnings before interest, tax, depreciation, and amortisation) increased by 8% to Rs 397 crore. During the time range of the report, the margins were 27.4%.

The company said that the date of the annual general meeting and more details about the payout payment would be given at the right time.

After Q4 results, Motilal Oswal has no opinion on the stock.

“We incorporate the financial flows from the revised project pipeline and advance our estimates, resulting in a revised TP of Rs 440 (previously Rs 415). The brokerage said, “Our monetization-based land valuation method values DLF/DCCDL’s 147msf/25msf land at Rs 490b compared to the present implied value of Rs 485b, which shows a fair valuation with no room for growth.”

Nuvama Institutional Equities told investors to buy the stock and set a price goal of Rs 550.

The rise in housing demand is positive for DLF, and we think that the company’s launches, pre-sales trajectory, and collections would be major catalysts for the stock. We still have a “BUY/SN” rating with a target price of Ts 550 per share, which is the same as a rollover to Q4FY25E NAV of Rs 550 per share, Nuvama said.

“DLF recorded Rs 84.6 bn in pre-sales (up 110% YoY) in Q4FY23, aided by Rs 80 bn in commitments for ‘The Arbour’. It ended FY23 with Rs 151 billion in sales, up 107% from the previous year. The company has a strong launch plan of 11msf in FY24, which is worth Rs 197bn. It also aims to make pre-sales of Rs 110–120 bn in FY24 (our estimate is Rs 150 bn),” Nuvama said.



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