DLF Limited
Q2 FY26
Call date · October 31, 2025
1 · Management Commentary
Key Positives
- New sales bookings for the quarter exceeded Rs. 4,300 crores, led by the successful maiden launch in Mumbai, "The Westpark".
- Cumulative sales for H1 FY26 reached over Rs. 15,750 crores, in line with annual guidance.
- Collection efficiency remains high, with collections at Rs. 2,672 crores (excluding Rs. 240 crores from The Westpark JV).
- Gross cash balance stood at over Rs. 9,200 crores; outstanding debt reduced to Rs. 1,487 crores.
- Dividend payout of Rs. 1,485 crores (Rs. 6/share), up 20% YoY.
- CRISIL upgraded DLF’s credit rating to AA+ (Stable Outlook).
- DCCDL rental income grew 15% YoY to Rs. 1,362 crores; PAT up 23%.
- High occupancy in rental portfolio: 96% by value, 94% by area.
Key Negatives
- One-time impact of ~Rs. 600 crores due to Tulsiwadi project settlement.
- DCCDL net debt remains elevated at Rs. 17,335 crores (net debt/EBITDA: 3.1x).
- Some project launches and revenue recognition (e.g., Kolkata IT SEZ) delayed due to regulatory approvals.
Forward Guidance
- Capex plans: Construction ramp-up continues; focus on strengthening execution capabilities.
- New products/segments: Upcoming launches include Goa, Arbor 2 (senior living), Privana, Hamilton 2, Panchkula, and next phase of The Westpark over the next 18 months.
- Expected client wins/losses: High pre-leasing in new assets (e.g., Atrium Gurgaon at 93%, Midtown Plaza at 85%).
- Revenue/margin outlook: Pre-sales guidance of Rs. 20,000–21,000 crores for FY26 maintained; focus remains on margins and surplus cash generation.
- Other strategic initiatives: Exploring new business development in Noida and further expansion in Mumbai; no immediate plans for DCCDL REIT listing.
2 · Q&A Highlights
Q 1 (Launch Pipeline & Approvals): What is the status and sequencing of upcoming launches (Goa, Arbor, Privana, etc.) and their expected GDV?
A (Management):
• Goa launch expected in Q3/Q4; Arbor 2 and Panchkula also lined up; next 18 months have clear visibility with multiple launches subject to approvals and demand.
• Total launch pipeline of Rs. 1,15,000 crores over 4–5 years; Rs. 48,000 crores already launched.
Q 2 (Demand & Sales Velocity): Is strong demand and rapid sell-out in new launches sustainable? Any slowdown observed?
A (Management):
• Demand remains robust across geographies; DLF’s brand and curated approach continue to drive strong sales velocity, especially in super luxury segment.
• No slowdown observed; each launch will be approached individually.
Q 3 (Dahlias Project): What is the phasing, pricing, and sales status for Dahlias?
A (Management):
• Over 55% of Dahlias sold; 18 units sold this quarter, 221 cumulatively.
• Pricing now over Rs. 1 lakh/sq.ft. (carpet: Rs. 1.25–1.50 lakh/sq.ft.); not a mass product, sales continue on invitation basis.
Q 4 (Collections & Cash Flows): How should collections be expected to trend given strong pre-sales?
A (Management):
• Collections are milestone-linked; H1 run-rate Rs. 2,700–3,000 crores/quarter.
• H2 collections expected to rise; annualized run-rate of Rs. 13,000–14,000 crores projected for next year.
Q 5 (Rental Assets & New Malls): When will new retail assets start contributing to P&L and cash flows?
A (Management):
• Rental income from Midtown Plaza, Summit Plaza, and Promenade Goa to start from Q4 FY26, ramping up through FY27.
• Combined rental income from these three malls expected at Rs. 450–460 crores at full run-rate.
Q 6 (Business Development in Noida & Mumbai): Plans for expansion in Noida and further launches in Mumbai?
A (Management):
• Actively seeking clean land parcels in Noida; ready to enter when opportunity arises.
• Mumbai phase-II launch planned; exploring further opportunities.
Q 7 (Debt & Capital Structure): Is there a plan to reduce gross debt to zero at DLF level?
A (Management):
• Targeting zero gross debt at DLF Limited; currently at Rs. 1,487 crores.
• DCCDL and JV entities will maintain long-term debt for operational efficiency.
Q 8 (REIT & Monetization): Any plans for DCCDL REIT listing or monetization?
A (Management):
• No immediate plans; decision will depend on partner preference and market conditions, likely not before three years.
3 · Other Key Numbers
- New sales booking for Q2 FY26: over Rs. 4,300 crores
- H1 FY26 cumulative sales: over Rs. 15,750 crores
- Collections (Q2): Rs. 2,672 crores (excluding Rs. 240 crores from The Westpark JV)
- Construction outflow: Rs. 925 crores
- Gross cash balance: over Rs. 9,200 crores (Rs. 8,350 crores in RERA accounts)
- Debt repaid in Q2: Rs. 963 crores; outstanding debt as of Sep 30: Rs. 1,487 crores
- Dividend paid: Rs. 1,485 crores (Rs. 6/share; 20% YoY growth)
- Consolidated revenues: Rs. 2,262 crores; EBITDA: Rs. 902 crores; PAT: Rs. 1,171 crores
- One-time impact: ~Rs. 600 crores (Tulsiwadi project settlement)
- Gross margin potential: over Rs. 40,000 crores; surplus cash potential: over Rs. 44,000 crores
- Operational rental portfolio: 49 million sq.ft.; occupancy: 96% (value), 94% (area)
- DCCDL rental income: Rs. 1,362 crores (15% YoY growth); PAT up 23%
- DCCDL net debt: Rs. 17,335 crores; net debt/EBITDA: 3.1x
- Atrium Gurgaon pre-leasing: 93% (3.1 million sq.ft.); Midtown Plaza pre-leasing: 85%
- Dahlias: 18 units sold in Q2; 221 units cumulative; pricing over Rs. 1 lakh/sq.ft. (carpet: Rs. 1.25–1.50 lakh/sq.ft.)
- Atrium Place construction cost: Rs. 6,000/sq.ft. (total cost incl. land: Rs. 17,000/sq.ft.)
- Atrium Place gross rental income (full run-rate): Rs. 600–650 crores
- Three new malls (Midtown Plaza, Summit Plaza, Promenade Goa) rental income: Rs. 450–460 crores (full run-rate)
- Downtown Gurgaon construction completion: mid-2028 (7.5 million sq.ft.)
- Downtown Chennai construction completion: early 2028 (Towers 4 & 5)
- Kolkata IT SEZ: Monetization expected in ~3.5 months; Rs. 2.5 crores/month delay benefit accruing
- Total launch pipeline (next 4–5 years): Rs. 1,15,000 crores; Rs. 48,000 crores already launched