DLF plans to be debt free by end of FY23

The country’s largest real estate player, DLF, is planning to be debt-free by the end of this fiscal or, at the latest, by mid-FY24. The company, which had an annual sales guidance of ₹8,000 crore for FY23, is expected to end the year at around ₹15,000 crore, almost double, as record bookings of ₹8,000 crore for the super-luxury housing project, ‘The Arbour’, drive up numbers.

According to Aakash Ohri, Group Executive Director and Chief Business Officer at DLF, the net debt of the company stands at around ₹2,000 crore. The company, banking on strong bookings across its existing residential offerings, has been generating free cash to the tune of ₹500 crore every quarter.

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“So by the end of this fiscal or mid of next (fiscal) we will be completely debt free. Our free cash flow is at ₹500 crore every quarter, and our net debt is at ₹2,000 crore. So anytime now we will be debt-free,” he told businessline.

The Arbour Sold Out

The company’s super-luxury offerings, The Arbour’s pre-formal bookings, have been to the tune of ₹8,000 crore, and all 1,137 luxury apartments, priced at ₹7 crore and above, have been sold out within three days, even before the official launch.

“The success of The Arbour only reiterates the quality of our offerings and the brand’s strength. Bookings for Arbour and our other projects have been driven by individuals and not speculators,” Ohri said, adding that the company had gone global in promoting the project.

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“We are expecting this uptrend to continue as we scale up our new launches”, Ohri said.

Nearly 14 per cent of The Arbour’s bookings are from the NRI segment, while 86 per cent are from Indians, and these include top-level management, CEOs and CXOs, lawyers, and doctors, among others.

Strong Booking

“Booking trends have been strong throughout the year,” he said. Luxury offerings launched earlier this year, including The Grove DLF 5, Gurugram, have been completely sold out.

DLF’s consolidated revenue stood at ₹1,560 crore in Oct–Dec (Q3 FY23), while gross margins improved to 59 per cent, supported by the higher contribution of Camellias, one of its luxury projects. The Q3 EBITDA stood at ₹542 crore with margins at 35 per cent, and the net profit during the period was ₹515 crore.

In Q3, its residential business delivered a “strong performance” and clocked one of the highest quarterly new sales bookings of ₹2,507 crore, up 24 per cent YoY.

Cumulative new sales for the first nine months of FY23 were ₹6,599 crore, up 45 per cent. Nearly 89 per cent of its quarterly sales were contributed by new products.

Resilient Economy

“We remain enthusiastic about the housing industry’s intrinsic growth potential, which continues to be supported by a resilient economy,” he said.

According to Ohri, the luxury segment is growing “upwards of 25 percent,” while the super-luxury segment is “relatively price inelastic.”

Mortgage rate hikes have been factored in by users, many of whom are reducing their exposure to capital markets and “reinvesting in real estate”. The trend has been visible throughout the fiscal.

For DLF, new launch plans in FY24 include offerings in the Delhi – NCR region, Panchkula, Mohali, Mumbai and Chennai.