Bank of America Merrill Lynch: Retains Buy on DLF Ltd..!


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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