DLF Q3 2024-2025 Call Highlights: Dahlias Drive, Expansion Plans, and Profit Surge!

DLF Ltd., the largest publicly listed real estate company in India that develops residential, commercial, and retail properties, in its Q3 earnings call highlighted that the Dahlias project emerged as a standout performer with strong sales distribution and significant margins, while construction costs varied from INR8,000-8,500 per sq. ft. for Privana to INR15,000-20,000 per sq. ft. for Dahlias. The company also mentioned that it has expansion plans in Mumbai and Goa pending approvals, manages 40-50 million sq. ft. under construction, and has 20 million sq. ft. development area available in DLF 5. For FY26, DCCDL (DLF Cyber City Developers Limited) expects rental income of INR6,300-6,315 crore while DLF’s rental business projects INR800 crore, with no immediate plans for DCCDL monetization. On the financial front, the company will see a INR900 crore cash outflow in Q4 for tax settlements and emphasized its focus on margins and cash flows over pre-sales metrics.

DLF reported significant contrasts, with net profit surging 61% year-on-year to INR1,059 crore. The company’s performance was notably driven by exceptional sales bookings of INR12,093 crore, with its luxury project The Dahlias in DLF 5, Gurugram, contributing INR11,816 crore. While EBITDA declined 22% to INR400 crore with margins narrowing to 26.2% from 33.6%, the company maintained robust financials with a net cash position of INR4,534 crore and an operating cash surplus of INR1,850 crore. The rental division DCCDL demonstrated strong growth with a 9% increase in consolidated revenue and a 117% rise in quarterly profit. Total pre-sales for the first nine months of FY25 grew impressively by 44.09% to INR19,187 crore, exceeding the annual guidance of INR17,000 crore, while the company also settled INR662.3 crore in past tax litigations under the Vivad se Vishwas Scheme.

Continue Reading: Discover the Vital Insights from DLF Ltd.’s Earnings Call!

Financial/Operational Metrics:

• Total Revenue: INR1,737 crore, up 5.7% YoY.
• Net Profit: INR1,059 crore, up 61.4% YoY.
• Diluted EPS: INR4.28, up 61.5% YoY.
• Total Expense: INR1,261 crore, up 11.4% YoY.
• Finance Cost: INR94 crore, up 12% YoY.

Outlook:

• Expansion & Sustainability Focus: Continued reduction in vacancy levels and Execution of planned projects for revenue growth.

 

Analyst Crossfire:

• Gurgaon Real Estate Demand & Investment Property Strategy (Praveen Choudhary – Morgan Stanley): The Gurgaon market is maturing, attracting global investments, and no longer driven solely by local factors. Strong infrastructure, corporate presence, and high rental yields make it a preferred residential market. DLF remains committed to both development (DevCo) and rental (RentCo) businesses, with no immediate plans for monetization. The company is in a significant capex cycle that will last 4-5 years before any such decisions are reconsidered (Aakash Ohri – Joint MD & Chief Business Officer, Ashok Tyagi – MD).

 

• Dahlias Pricing & Future Sales Strategy, Mumbai & Goa Project Launches (Pritesh Sheth – Axis Capital, Praveen Choudhary – Morgan Stanley): Initial sales averaged INR 65,000 per sq. ft., but recent transactions are in the mid-70s range. Future inventory is priced at INR 85,000 per sq. ft. The company is taking a short pause before resuming sales, with an experience center planned mid-year. There are no delays; approvals are in progress. Mumbai is expected to launch first, followed by Goa. Demand remains strong for both, with Mumbai seeing reasonable price expectations and Goa being positioned as a super-luxury project (Ashok Tyagi – MD, Aakash Ohri – Joint MD & Chief Business Officer).

 

• DCCDL Debt & Expansion Strategy, Revenue Recognition & Cash Flow (Amit Goela): Debt-to-EBITDA has fallen from 5.6x to 3.2x, and DLF is evaluating whether to further reduce debt or allocate cash toward expansion. A decision will be made in the coming months. INR 30,000 crore in revenues (excluding Dahlias) will be booked over time, but cash flow will remain escrowed under RERA regulations until project completions, expected from FY27 onwards (Sriram Khattar – MD Rental Business, Ashok Tyagi – MD).

 

• Tax Settlement & Cash Impact, FY26 Launch Pipeline (Abhinav Sinha – Jefferies, Parvez Qazi – Nuvama): The INR 900 crore tax settlement under ‘Vivad Se Vishwas’ will result in a Q4 cash outflow. This fully settles DCCDL’s SEZ tax liabilities. DLF will disclose its FY26 project pipeline in the annual accounts call in May. Expected launches include projects in Sector 61, IREO land, DLF City, Privana Phase 3, Chandigarh, and Mumbai (Ashok Tyagi – MD).

 

• Future Land Acquisitions & FY26 Rental Income Estimate (Parvez Qazi – Nuvama): While DLF has strong cash flows, much of it remains escrowed. The company is open to acquiring high-value land parcels but remains cautious due to rising seller expectations. Existing land banks in Gurgaon, Delhi, Chandigarh, and Mumbai provide ample opportunities. Rental income is projected at INR 6,300-6,315 crores for DCCDL and INR 1,200 crores for DLF (Ashok Tyagi – MD, Sriram Khattar – MD Rental Business).

 

• Commercial Construction Costs (Samir Jasuja – PropEquity): Office construction costs are INR 6,200-6,300 per sq. ft., rising to INR 8,000-8,200 with inflation and code changes. Retail construction costs are INR 10,000-10,200 per sq. ft. due to higher finishing requirements (Sriram Khattar – MD, Rental Business).

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