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DLF net up 35 percent at Rs513 crore on residential demand traction

Jan 27, 2023

By: BlinkX Research Team

Gurugram based real estate developer, DLF Ltd, announced earnings for Q3YF23 with guidance for the full fiscal. Net profits were up 35% yoy at Rs513.46 crores, despite a 34% spike in financial costs at Rs95.43 crores. The positive news for DLF was 5% lower total expenses at Rs1,152 crore. The trigger came from residential business clocking 24% higher sales bookings of Rs2,507 crore. 

Cumulative sales for the period between March 2022 and December 2022 grew by 45% yoy to Rs6,599 crore. The company saw smart traction in demand for home units at its luxury project, The Grove at Gurugram as well as strong tailwinds in the bookings of The Valley Gardens in Panchkula.

EBITDA margins for the Q3FY23 quarter fell 200 bps yoy while the EBITDA number fell by 8.4% at Rs477.20 crores. This was largely on account of higher interest costs due to spike in bond yields. This could improve as the company mitigated its debt further, with the net debt now at just Rs2,091 crores. 

In conclusion, DLF enjoyed a solid top line growth even as the profits came under some pressure due to higher interest costs. Global economic headwinds led to deteriorating macro environments. However, the housing industry in India is expected to be buoyant in 2023. Demand for property investments, especially from millennials as a low-risk return instrument is expected to drive demand. Also, the gradual return to pre-COVID levels of economic activity will put forward demand for quality office assets at key locations. This will ensure that office demand also stays robust, along with residential demand.