Bank of America
Merrill Lynch (BofA-ML) has maintained its Buy rating on DLF Ltd with a
target price of Rs.300.
BofA-ML reiterate Buy
on DLF with a revised price objective of.300 based on 15 % discount to net NAV
of Rs. 353, upside of 20 %.
Key reasons are sales
value increases from Rs..5,200 crore in FY12 to Rs. 7,900 crore in FY14 with
launches in prime Gurgaon; key overhang of high leverage eases; DLF turns
operationally cash-positive in FY14 compared to cash-negative in FY12; and
better FY15 P & L visibility as
execution improves led by third-party outsourcing strategy playing out, the
brokerage house said in a report.
DLF will be the key
beneficiary of strong trends in Gurgaon given 40 % of its NAV is derived from
Gurgaon. Recent launches in New Gurgaon have been at significant premium to our
estimate and competition.If this trend sustains for future launches, BofA-ML
expect a 6 to 8 % upside risk to our NAV estimate.
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