DLF Shares Slip After BofA Cuts Rating and Target Price

Shares of DLF Ltd. came under pressure in early trade on Thursday after Bank of America downgraded the real estate developer and reduced its target price, citing concerns over slower residential booking growth. The brokerage lowered its rating on the stock to “Underperform” from “Buy,” marking a significant revision in its outlook for the company.

Bank of America also reduced its target price for DLF shares to ₹695 from ₹800. The revised target indicates limited potential gains from the prevailing market price and reflects the brokerage’s more cautious assessment of the company’s near-term growth prospects, particularly as DLF focuses on securing higher prices rather than accelerating sales volumes.

DLF shares were trading approximately 1.25% lower at ₹641 during early trading on Thursday. The stock had closed the previous session at ₹649.10 after declining following the release of the company’s June-quarter financial results. The latest brokerage downgrade added to the selling pressure already surrounding the real estate company’s shares.

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According to Bank of America, DLF’s strategy of maximising value from its residential portfolio instead of pursuing higher sales volumes could weaken booking growth over the coming quarters. While the approach may support pricing and profitability per transaction, it could limit the pace at which the company records new property sales and expands its overall bookings.

The brokerage also noted that DLF is becoming increasingly dependent on the timely introduction of new residential developments. As a result, project launches and their execution are expected to remain crucial factors in sustaining future growth. Any delays in planned launches could affect booking momentum and make it more difficult for the company to meet market expectations.

The downgrade followed DLF’s mixed financial performance for the June quarter. Revenue and profitability fell short of expectations, while pre-sales weakened due to a smaller number of project launches during the period. However, the company continued to report healthy cash generation, providing some support to its financial position despite concerns surrounding slower booking growth and launch-dependent performance.

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