Release Date: October 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- DLF Ltd (BOM:532868, Financial) reported strong free cash flow generation, with INR 2,000 crores plus per quarter.
- The company has a robust sales pipeline for the second half, including significant projects like The Dahlias.
- DLF Ltd (BOM:532868) is experiencing strong demand for its super luxury projects, particularly The Dahlias, which has received overwhelming interest.
- The rental business is expanding, with accelerated CapEx programs and new developments in Gurgaon, Chennai, and Goa.
- DLF Ltd (BOM:532868) maintains a strong financial position, with net debt already at zero and plans to achieve gross debt zero in the near future.
Negative Points
- The quarterly new sales slipped to INR 690 crores due to delays in approval cycles, impacting short-term sales figures.
- There is a concentration risk with a heavy reliance on the NCR market, which could pose challenges if market conditions change.
- The reported margins are affected by older sales and current cost structures, leading to a mismatch that may take 18 to 24 months to align.
- Approval processes for new projects, especially outside Gurgaon, are unpredictable and can cause delays in launches.
- The company's growth strategy is heavily focused on NCR, with limited expansion plans in other regions like MMR and Chandigarh.
Q & A Highlights
Q: Can you update us on the approval stage for various launches, including Dahlias and other projects like Privana?
A: The Dahlias' formal approvals came in the first week of October. We are confident of launching Mumbai in Q4, with Privana and Goa also on track. We remain strong in meeting our full-year sales guidance.
Q: What are your thoughts on peers raising equity and buying land aggressively in the NCR region? Are you accelerating your launches for FY26?
A: Competition is healthy, but we focus on our strengths. We have a robust three-year plan for Gurgaon and are not pressured by peers. Our existing customer base is strong, and we continue to expand our NRI business.
Q: Can you provide an update on the rental business EBITDA expectations for FY25 and FY26?
A: For FY25, we expect rental revenue of INR5,300 crores, including DLF's share. For FY26, this will increase to INR6,800 crores, with new assets contributing significantly.
Q: What is the status of the Dahlias project, and how does it compare to Camellias in terms of pricing and demand?
A: Dahlias is positioned as a super luxury product with strong initial interest. The RERA filing indicates a total revenue of INR26,000 crores with a margin of 70%. The pricing strategy is aggressive, and we expect it to surpass Camellias over time.
Q: What are your plans for business development outside the NCR region, and are you prepared to invest in large land parcels?
A: While NCR remains our focus, we are exploring opportunities in MMR and Chandigarh. We are cautious with investments and will not write large checks recklessly. Our strategy is to maintain a balance between growth and shareholder returns.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
