Motilal Oswal Sees 65% Upside in DLF Ltd. Shares

Shares of real estate firm DLF Ltd. gained up to 1% on Tuesday, January 27, as brokerage firm Motilal Oswal Financial Services has projected a 65% upside on the stock. The brokerage has a 'buy' rating on DLF with a price target of ₹974 per share.

Motilal Oswal has revised its estimates for DLF based on the absence of new launches in the third quarter of the financial year 2026 and no incremental sales from the Dahlias project. However, DLF has guided that it will meet its annual pre-sales guidance between ₹20,000 crore to ₹22,000 crore, according to the firm.

During the company's analyst call post-earnings, DLF's management reported that over 55% to 60% of the inventory of the super-luxury residential project 'The Dahlias' has already been sold, even ahead of its formal launch. Bookings at Dahlias were temporarily paused in the third quarter due to design changes aligned with updated safety and building codes. Approvals were received in early January, following which sales resumed, and margins remain intact despite marginal cost increases.

Motilal Oswal assumes a 12 to 13-year monetisation timeline for DLF's remaining 150 million square feet of land bank, which adequately incorporates its growth visibility. In the third quarter, DLF reported bookings of ₹400 crore, down 97% annually and 90% sequentially. This was 90% below the analyst's estimates due to sales being halted for Dahlias for redesign.

However, the real estate firm's collections increased 52% from the previous year and 78% sequentially to ₹4,800 crore, which was 15% above the brokerage's estimates. Consequently, operating cash flow increased 2.2 times annually and 2.9 times sequentially to ₹4,020 crore. This resulted in zero gross debt achievement, with DLF's net cash standing at ₹11,660 crore in the third quarter compared to ₹7,720 crore in the previous one.

The brokerage values DLF's business at ₹1.68 lakh crore, where land contributes ₹1.22 lakh crore. Meanwhile, DLF Cyber City Developers Ltd (DCCDL) is valued at ₹70,800 crore. The gross annual value is at 2.39 lakh crore. After taking the estimated net cash of ₹2,000 crore for FY26 into consideration, the revised net asset value (NAV) stands at ₹2.41 lakh crore, Motilal Oswal added.

Of the 25 analysts that have coverage on the stock, 23 have a 'buy' rating and two have a 'hold' rating. DLF shares ended the previous session 4.1% up at ₹588 apiece. The stock has declined 14.6% in the past month and 25.3% in the last six months.