DLF - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.0

📊 Core Financials

Earnings & Profitability: EPS of ₹6.53 and PAT of ₹40.3 Cr this quarter show a sharp drop from ₹1,550 Cr in the previous quarter, likely due to one-off adjustments. However, annual net profit for FY25 was ₹2,694 Cr, up from ₹1,630 Cr in FY24

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Return Metrics: ROCE at 8.34% and ROE at 6.30% are modest, though above industry averages in some periods

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Debt Profile: Debt-to-equity of 0.11 — very low, which is impressive for a real estate developer.

Cash Flow: Operating cash flow for FY25 was ₹5,235 Cr, showing strong internal generation

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💰 Valuation Indicators

Metric Value Insight

P/E Ratio 120 Extremely overvalued vs. industry PE (40.7)

P/B Ratio ~6.58 High premium over book value

PEG Ratio 17.8 Suggests valuation far exceeds growth

Dividend Yield 0.77% Modest, not a major income play

Valuation is stretched, and the PEG ratio flags caution despite strong historical growth.

🏢 Business Model & Competitive Advantage

DLF Ltd. is India’s largest publicly listed real estate company, with strengths in

Premium residential and commercial developments

Strategic land bank and pan-India presence

Strong brand equity and execution capabilities

Low leverage and consistent cash generation

DLF has delivered 43% net income growth over the past five years, outperforming the industry average of 28%

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. Its ROE of 11% (TTM) is above the sector average of 7.8%, indicating efficient capital deployment

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📈 Technical & Sentiment Indicators

RSI: 57.0 – Neutral zone, no strong momentum.

MACD: -0.02 – Flat, suggesting consolidation.

Volume Dip – Below weekly average, indicating reduced interest.

DMA 50 & 200: Price is hovering around both — technically stable.

Recent price action shows the stock has declined 6.4% over the past three months

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, presenting a potential accumulation opportunity.

💡 Investment Strategy

🔽 Entry Zone

Ideal Buy Range: ₹740–₹770, near DMA support and below current price.

Current Price ₹783: Slightly above ideal entry, but still reasonable for long-term investors.

🕰️ Long-Term Holding

Hold or Accumulate on Dips: Strong brand, low debt, and robust cash flows make DLF a solid long-term play.

Watch Valuation & Earnings Volatility: Elevated P/E and PEG ratios suggest caution. Monitor quarterly results for consistency.

You can explore DLF’s ROE and earnings growth analysis and Moneycontrol’s financial snapshot for deeper insights. Let me know if you'd like a peer comparison with Godrej Properties or Oberoi Realty.

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www.moneycontrol.com

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simplywall.st

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