Global brokerage firm CLSA has upgraded real estate player DLF to its ‘High Conviction Outperform’ rating, setting a target price of Rs 975 per share, following which the stock surged by 3.75% to Rs 792.15 on the BSE.
The shares of DLF witnessed a surge, while the rate-sensitive realty stocks were trading weak ahead of the Reserve Bank of India’s (RBI) policy announcements.
CLSA cites compelling valuation and a strong growth outlook as one of the key reasons for the upgrade.
The brokerage firm notes that DLF’s stock has transitioned from trading at a 15% premium to net asset value (NAV) to a 20% discount currently. Additionally, DLF’s presales (trailing twelve months) have continued to demonstrate growth, indicating sustained demand for its properties.
The brokerage expects DLF’s growth momentum to persist, supported by adequate new launches planned over the next eight to nine quarters. CLSA also highlights DLF’s unsold inventory and strong business moats as positive factors contributing to its robust position in the real estate market.
Furthermore, CLSA points out that DLF possesses a healthy balance sheet, strong rental income, and healthy cash flow, which offer a downside cushion for the stock.
These factors provide financial stability and resilience, reducing potential risks for investors. The upgrade to “High Conviction Outperform” reflects CLSA’s strong confidence in DLF’s future performance and its potential for delivering strong returns to investors.
DLF share price historyOver the past year, DLF stock has declined by 3.01%, while in the last six months, the price dropped by 5.74%. Over the most recent three months, the price saw a sharper decline of 6.56%.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
