DLF eyes improved cash flows, higher margins, with focus on super-luxury projects

May 15, 2024

Real estate major, DLF, which has guided for nearly 20 per cent year-on-year (y-o-y) increase in sales bookings to ₹17,000 crore for FY25, will focus on super-luxury projects with one out of every five homes sold being in that category.

Super-luxury projects are priced upwards of ₹50 crore, while the luxury and premium luxury units are priced upwards of ₹7 crore.

According to Aakash Ohri, Joint MD, DLF, the management has guided for 11 million sq ft of launches, with the pipeline being ₹36,000 crore with projects coming up in markets like Delhi-NCR, Mumbai and Goa.

The launch pipeline includes the second phase of Privana (already launched in Q1-FY25), Goa (Q2), a super luxury project in DLF 5 (Q3) and the third phase of Privana, along with the Mumbai project in Q4 of FY25.

“Our focus continues to be on margins, while there will be a focus on super-luxury projects. Some 25-30 per cent of the revenues will be from the super-luxury segment, while one out of every five homes sold will be in that category,” Ohri told businessline.

The current embedded margins stand at about 40-45 per cent, which can increase to over 45 per cent after the launch of a luxury project, analyst firm Motilal Oswal said in a report.

The company aims to be gross debt-free soon, he said, and focus on super-luxury is expected to improve cash-flows.

Motilal Oswal in its report said the company aims to grow collections by 15 per cent in FY25. It has surplus cash of ₹2,000 crore (excluding ₹4,000 crore locked in RERA escrow), of which ₹1,000 crore will be utilised for debt repayment.

NRI interest

In addition to its domestic market focus, DLF is also witnessing increased interest from non-resident Indians (NRIs). Share of NRI buying into a DLF project has increased to 25 per cent from 20 per cent. This means, out of every four homes sold by DLF, one is brought by an NRI.

Of this, nearly 30-40 per cent of sales come from NRIs in the US, while 25 per cent comes from those based out of South-East Asian region. The remaining 35 per cent is from the rest of the world.

“Our outreach programmes targeting the global diaspora has been well received. And, over the next few quarters, S-E Asia will be neck-to-neck with the US in terms of NRI sales,” Ohri said.

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