DLF Q3 Results: Real Estate Developer Reports 14% Profit Growth Amid Margin Shrinkage
DLF Q3 FY26 Results: Gurugram-headquartered real estate developer DLF has staged an operationally weak set of results for the December quarter. Despite a 13.7% year-on-year increase in net profit to Rs 1,203 crore, the company's margin contracted by 6.7 percentage points, reflecting a challenging operational environment.
The property developer's December-quarter sales stood at Rs 2,020 crore, up from Rs 1,528 crore a year ago. However, this 32% surge in top-line revenue fell short of analysts' expectations, which had projected sales of Rs 2,500 crore for the quarter.
DLF's earnings before interest, taxes, depreciation, and amortisation (EBITDA) declined by 2.5% to Rs 389 crore compared to Rs 400 crore in the same period last year. Analysts had anticipated an EBITDA of Rs 751 crore, indicating a significant shortfall in operational performance.
The company's margin, a critical measure of profitability, shrank to 19.3% for Q3 FY26 from 26% in Q3 FY25. Analysts had estimated a quarterly margin of 30%, further highlighting the operational challenges faced by DLF during the quarter.
Despite the operational weaknesses, DLF reported strong cash generation and successful debt management. The company generated a surplus cash flow of Rs 3,876 crore during the quarter, enabling it to achieve a Zero Gross Debt level. The net cash position stood at Rs 11,660 crore, showcasing the firm's financial resilience.
New sales bookings for the quarter amounted to Rs 419 crore, driven by healthy monetization of its launched inventory (excluding The Dahlias). DLF remains confident in achieving its annual guidance and plans to introduce new product offerings in line with its medium-term strategy.
The real estate developer also emphasized its commitment to building a robust annuity portfolio. With an operational portfolio of approximately 49 million square feet (msf) and a strong identified future pipeline, DLF aims to deliver consistent growth in its annuity business.
On the stock market front, DLF shares declined by half a percent to close at Rs 614.7 apiece on BSE, following a three-day recovery in benchmarks. The stock has declined 11% year-to-date, outperforming the Nifty50's 13.9% rise. Over the past year, DLF shares have dropped 3.3%, underperforming the headline index's 9.2% gain.
In summary, while DLF reported a modest profit growth, the company's operational performance and margin contraction highlight the ongoing challenges in the real estate sector. However, the company's strong cash position and strategic focus on new product offerings and annuity growth provide a foundation for future success.
