Founded in 1946 by Chaudhary Raghvendra Singh, DLF (NSE:DLF) started with the creation of 22 urban colonies in Delhi. In 1985, the company expanded into the then-unknown region of Gurugram, creating exceptional living and working spaces for the new Indian global professionals. Today, DLF is the largest publicly listed real estate company in India, with residential, commercial, and retail properties in 15 states and 24 cities.1

The company's diverse verticals reflect its dedication to developing ecosystems for India’s changing needs. But its foundation has always been its employees, its customers, its stakeholders, and its shareholders. The company invest in spearheading innovation through empowerment and optimism, in order to build the foundation of India’s future on the legacy of its past.

Some of Ready To Move Properties

  • DLF One Midtown Moti Nagar
  • DLF Moulsari Enclave Sector 24
  • DLF City Floors Sector 26
  • DLF Ultima Sector 81
  • DLF The Sky Court Sector 86
  • DLF Regal Gardens Sector 90


Industry Overview

The real estate sector continues to face headwinds with the current pandemic appearing to have further impacted the consumer sentiments and spending appetite in the short-term. The residential sector was already reeling under pressure from various issues like liquidity, over-supply, negative sentiments and various other regulatory initiatives. Given this situation arisen from the COVID-19 pandemic, demand is expected to remain muted in the near-term.2

The industry might face delays with the timelines of existing construction getting shifted due to the lockdown and pandemic related concerns. The company believe that it is too early to gauge the full impact of this event on the industry, however, given the uncertainties, the sector will tread with caution.

Although, the Central bank stepped in to bring in increased liquidity and accelerated rate cuts, it is imperative that these benefits are transmitted efficiently to stimulate further demand and revival of the industry.

The Government approved the establishment of a “Special Window for Affordable and Mid-Income Housing (SWAMIH) to provide last mile financing for completion of stalled housing projects in these segments. The fund will be set-up as a Category-II Alternative Investment fund in which the Government has committed to act as a Sponsor and to infuse an amount up to ` 10,000 crore. SBICAP Ventures was appointed as the investment manager and has already achieved its first closure by raising amounts in excess of Rs 10,000 crore. The establishment of this fund will help in completing projects that were stuck due to liquidity constraints and consequently bolster more confidence in the sector.

The sector was undergoing a structural transformation, wherein it was becoming more institutionalized and transparent which had resulted in good amount of interest flowing from the investors. The real estate sector witnessed approx. US$ 6.4 billion of investments during the calendar year 2019. However, it is anticipated that there will be a partial slowdown in the near-term, as significant resources will be diverted for damage control and maintaining sufficient liquidity.

Office Segment

The office segment witnessed robust demand running over the last couple of years. Whilst, this was to continue in general but given the COVID-19 pandemic, it is expected that growth in this segment will slow down for a short time.

According to reports, the gross absorption in office space, across the top seven cities in the country, for calendar year 2019 was approximately 5.44 million square meter (msm) [58.6 million square feet (msf)]. Absorption is expected to go down in the short-term. . The primary reasons attributed are

  • Delays in delivery of office spaces due to the lockdown
  • Most businesses would review their respective business continuity plans and most of the technology related firms expect that a substantial portion of the workforce will continue to work from home, at least for the short-term.
  • Businesses across the globe would probably defer decision making in leasing out additional space, given the fact that the operation and revenues will be impacted.

The office segment will see new concepts emerging. Work from Home, as a concept is expected to become a positive supplement rather than a substitute. New trends like de-densification, health and wellness may gain prominence as a consequence to the pandemic.

Retail Segment

The retail sector is most impacted due to this pandemic. All the retail malls across the nation were forced to shut during the period of the lock-down to ensure health and safety of the people. This shutting has impacted the retailers in terms of revenue loss as well as inventory overhang. The near-term outlook also remains cautious as the malls and the retailers would have to maintain strict measures to ensure health and safety of the people

A few trends that may emerge out of this pandemic in the short-term could be:

  • Slowdown in expansion by retailers.
  • Reduced footfalls and subdued rental growth.
  • Retailers and mall owners coming together and offering digital solutions to the customers to boost demand.

The company expect these trends to continue for a short-term before normalcy returns. To make-up the lost time and revenues, it is expected that mall owners and retailers will have to prepone the sale season and would have to organize a lot of events and increase marketing efforts.

Well located and high-quality organized retail will continue to do well. However, marginal locations with low offerings might witness some impact in the near-term.

Residential Segment

The residential sector was already grappling owing to various factors such as over-supply, liquidity crisis, subdued demand and certain regulatory initiatives by the government. Whilst, the industry had started to witness some early green shoots of recovery, but this pandemic is expected to further push back this segment. The primary reasons for this expectation are:

  • Delay in deliveries of residential units.
  • Lending institutions are expected to be risk-averse thereby increasing challenges for stressed developers.
  • Uncertainty regarding future job growth and prospects leading to delay in decision making.
  • Small businesses getting impacted resulting in lower demand

Based on certain reports, it is notable that the private equity players have also shifted their attention from this segment and the share of such investments in calendar year 2019 reduced to a mere 8% from 53% in 2015.

In the medium to long-term, this trend may however result in healthy absorption of the unsold inventory levels as there will most certainly be a significant drop in new launches. This current situation can be viewed through the famous saying by Albert Einstein – “In the middle of difficulty lies opportunity”. With interest rates coming down and high-quality products being available at attractive levels, this would be an interesting opportunity for the customers to buy. Housing in the low to midincome segment is witnessing some green shoots of recovery

Outlook and Strategy

The company's business exhibited strong performance during the last fiscal. The Company demonstrated resilience and remains committed to its vision. The Company retains a positive outlook for the long-term on account of its healthy Balance sheet, strong brand image and unwavering commitment to quality.

The Company believes that its completed inventory, a fortified balance sheet, strong brand image along with new product initiatives enable it to withstand these challenging times, however it remains vigilant and agile to tackle any other unforeseen challenges.


Business Overview

Development Business

The Company recorded Gross Sales booking of Rs 3,450 crore, an increase of approximately 10% from previous year. Net Sales booking stood at Rs 2,485 crore, which was marginally short of the guidance. This marginal shortfall was primarily due to lock-down impact in the last fortnight of March owing to the pandemic.

The Company successfully launched and sold substantial portion of the Phase-II of the Ultima Project in Gurugram region.

The Company continued to follow its strategy of completing all its projects to create finished inventory. The Company is gearing-up for handing over these ready units to the customers.

The Company has decided to convert some of its existing plotted inventory into low-rise independent floors. The company expect that this product is better suited for the current market and is expected to show better traction in this market. The locations identified for this product are Gurugram and Panchkula/ Mullanpur region. The total realization from these products is expected to be in excess of Rs 5,000 crore.

Although, the Company was aggressively pushing to initiate works on product development, however, due to the pandemic, DLF is analyzing the current and future market dynamics and will deploy cash according to the market dynamics.

The Company continues to build-out residential inventory in Delhi through its joint venture entity. The project is under construction, however the construction had to be suspended during the period of lockdown. The company remain focused on building-out this inventory as credit lines are already in place. The Company is also evaluating launching the project ahead of its completion and may initiate sales by the end of the year.

Annuity Business

The leasing business continued to witness good momentum. The company's annuity business is primarily carried out through DCCDL, a subsidiary company. As on 31 March 2020, DCCDL and its subsidiaries, together, had an operational portfolio of 2.81 msm (30.3 msf) with further potential of more than 2.79 msm (30 msf).

The company maintain a positive outlook for its rental business. The newest addition in the office portfolio is Cyber Park - a 0.23 msm (2.5 msf) project. The office space in the project is approximately 100% pre-leased and is expected to start rent generation in Fiscal 2021.

The COVID-19 pandemic has impacted this part of the business also, primarily in the retail segment. All its retail properties were completely shut during the lockdown period. The company continued to maintain extensive connect with its partners and will jointly decide the way forward.

DLF partners and DLF jointly decide the way forward. During the year, its retail mall in Saket was re-branded and re-launched as DLF Avenue. The soft launch had been done in Q4 FY’20, however due to the lock-down, the property had to remain closed.

DCCDL has also initiated 2 new developments for further growth. Gurugram: Total project size of 1.02 msm (11 msf) and n, Chennai: Total project size of approximately 0.63 msm (6.8 msf).

Other Businesses

The company owns two hotel properties viz. The Lodhi, which is an iconic hotel property located in New Delhi managed by the company and Hilton Garden Inn, Saket, managed by Hilton. The operations in this business were also impacted due to the challenges brought by COVID-19 pandemic.

Financial Highlights

On a consolidated basis, the company recorded a revenue (including other income) of Rs 6,888 crore, which was lower by 24% as compared to the previous year. This was largely on account of change in the product mix of the completed properties delivered by the Company during the financial year.

This led to profit before tax and exceptional items at Rs 313 crore as compared to Rs 518 crore in the previous year. In view of COVID-19, after a thorough analysis and following a prudent approach, the company undertook certain provisions to reflect changes in carrying value of some of its assets and investments. This led to a one-time, exceptional provision of Rs 331 crore in the last quarter of FY’20.

During the year, the company recorded exceptional gain on transfer of certain investments which netted off with exceptional provision made on certain assets, resulted into net exceptional income of Rs 340 crore. Further, the Company recorded a one-time reversal in Deferred Tax Assets (DTA) of Rs 1,916 crore upon adoption of lower tax rate pursuant to the Finance Act, 2019. This led to the company recording a net loss after taxes, but before Minority Interest and share of Profit in jointly controlled entities of Rs 1,479 crore as against net profit of Rs 368 crore in the previous financial year.

After accounting for share of profit in DLF Cyber City Developers Limited and other jointly controlled entities of Rs 890 crore, the company recorded a net loss of Rs 590 crore during the year as against net profit of Rs 1,314 crore in the previous financial year. However, Net Profit for the year excluding impact of DTA reversal on account of adoption of new tax rate for FY’20 would have been Rs 1,326 crore against Rs 1,314 crore of FY’19.

The Ministry of Corporate Affairs had notified Ind AS 116 ‘Leases’, which supersedes Ind AS 17 ‘Leases’. Ind AS 116 is effective for an annual period beginning on or after 1 April 2019 and sets out principles for recognition, measurement, presentation and disclosure of leases to account for all leases under a single on balance sheet model. The Company has adopted a modified retrospective approach in terms of Ind AS 116. Under this approach, the lessee records the lease liability at the present value of the remaining lease payments (over the non-cancellable term of the lease), discounted at the incremental borrowing rate and the right to use assets. In case where the Company is a lessor, lease rentals are straight line over the non-cancellable period and accordingly, the period of security deposit is also aligned in accordance with the lease terms determined as per Ind AS 116.

Consequently, the right to use assets of Rs 344.67 crore with corresponding lease liability of Rs 239.72 crore has been recognised in consolidated financial statements. The net impact of the same on the consolidated profit before tax for the year is due to adoption of Ind AS 116, the Profit before tax for the year ended is down by Rs 30.73 crore along with corresponding gain of Rs 12.66 crore adjusted in retained earnings.

DLF Q2 FY21 results

Oct 30, 2020; Net Sales at Rs 1,609.82 crore in September 2020 down 6.16% from Rs. 1,715.51 crore in September 2019.3

Quarterly Net Profit at Rs. 232.14 crore in September 2020 down 47.93% from Rs. 445.85 crore in September 2019.

EBITDA stands at Rs. 576.39 crore in September 2020 up 0.26% from Rs. 574.88 crore in September 2019.

DLF EPS has decreased to Rs. 0.94 in September 2020 from Rs. 1.80 in September 2019.

DLF shares closed at 164.80 on November 02, 2020 (NSE) and has given 23.86% returns over the last 6 months and -10.58% over the last 12 months.

Recent developments

DLF rental arm to buy Hines stake in premium commercial project in Gurugram for Rs 780 crore 4

26 Dec 2020; Realty major DLF's rental arm DCCDL has entered into an agreement to acquire the stake of US-based Hines in a premium commercial project in Gurugram for Rs 780 crore, the company said in a regulatory filing.

DLF Cyber City Developers Ltd (DCCDL), the joint venture firm of DLF and Singapore's sovereign wealth fund GIC, has entered into a securities purchase agreement with funds managed by Hines for acquisition of their stake in Fairleaf Real Estate, which owns and operates 'One Horizon Center'. "The purchase consideration for this acquisition is approximately Rs 780 crore, subject to customary closing adjustments," the company said in a late night filing on Friday.

Hines has around nearly 52 percent stake in the One Horizon Centre while the rest is with DCCDL. DCCDL has the first right of refusal with respect to acquiring Hines' stake. The commercial tower One Horizon Center has leaseable area of about 8,13,000 square feet offering high-end Grade A office spaces along with complementary retail space.

The acquisition is subject to customary conditions to closure and is expected to be consummated in the next quarter. Sriram Khattar, MD-Rental Business, DLF, said the company has acquired complete ownership of this asset.

"This acquisition adds another trophy asset to its strong rental platform. The company believe that this acquisition will be highly value accretive for it and will add approximately Rs 150-160 crore of rental revenues annually," Khattar said. Post acquisition, the DCCDL platform will have about 34 million sq ft of operational rental portfolio.

In December 2017, DLF entered into this joint venture with GIC when DLF promoters sold their entire 40 percent stake in DCCDL for nearlyRs 12,000 crore. This deal included sale of 33.34 percent stake in the DCCDL to GIC for aboutRs 9,000 crore and buyback of remaining shares worth aboutRs 3,000 crore by DCCDL.

DLF holds 66.66 percent stake in DCCDL while GIC has the rest. DCCDL had reported a 15 percent rise in its rental income last fiscal at Rs 3,006 crore on strong demand for quality office and retail spaces.

DLF to invest about Rs 130 crore to develop data centre in Noida 

07 Dec 2020;  Realty major DLF will invest around Rs 130 crore over the next 18 months to develop a data centre in Noida as it seeks to encash rising demand for data storage capacity.5

The data centre project will have 3.7 lakh sq ft space with proper infrastructure, including high power capacity, according to sources.

The data centre will be part of a 25-acre commercial project that has total development potential of 35-40 lakh sq ft.

DLF has leased built-to-suit data centre project to Singapore-based ST Telemedia Global Data Centres, the sources said.

The total investment to build this data centre is estimated at around Rs 130 crore, they said, adding that the centre would get completed in the next 18 months.

When contacted, DLF''s Managing Director (Rental Business) Sriram Khattar declined to comment on individual leasing deals, citing clients confidentiality.

DLF spokesperson also refused to comment.

Of late, real estate developers are entering into development of data centres to diversify their portfolio.

Data centres are gradually becoming a separate real estate asset class like co-working, co-living and warehousing segments.

Recently, Hiranandani Group firm Yotta Infrastructure laid the foundation of a 20-acre data centre park in Greater Noida. It plans to invest Rs 6,000-Rs 7,000 crore in this facility.

Indian data centre industry has attracted investment worth nearly USD 400 million during January-September this year, according to a report by property consultant Anarock and Mace.

The data centre industry has attracted close to USD 977 million in private equity and strategic investments since 2008, the report added.

India currently has around 126 third-party data centres (colocation or hyperscale) spanning 7.5+ million sq ft and a cumulative IT power capacity of 590+ MW.

While 53 players own/operate these 126 third-party data centres, the capacity is highly concentrated among the top 12 players who operate around 95 per cent of the total IT power capacity in the country, the report highlighted.


  1. ^ https://www.dlf.in/about-us.php
  2. ^ https://www.dlf.in/annual_docket/Annual_Report_2020.pdf
  3. ^ https://www.moneycontrol.com/news/business/earnings/dlf-consolidated-september-2020-net-sales-at-rs-1609-82-crore-down-6-16-y-o-y-6056981.html
  4. ^ https://www.moneycontrol.com/news/business/skyways-ties-up-with-spicejet-for-covid-19-vaccine-transportation-across-india-6279281.html
  5. ^ https://www.moneycontrol.com/news/business/dlf-to-invest-about-rs-130-crore-to-develop-data-centre-in-noida-6197301.html
Tags: IN:DLF
Created by Asif Farooqui on 2020/12/28 16:10
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