Realty developer DLF is bracing for yet another year of range-bound pre-sales. Instead of aggressively chasing bookings, the company is prioritizing margins and free cash flows.
Pre-sales or bookings in the March quarter (Q4FY26) rose sharply, both sequentially and year-on-year, to ₹3,980 crore.
The uptick was driven by sales at The Dahlias, Privana and Westpark projects. Sales resumed at The Dahlias after being kept on hold in Q3FY26 due to design changes, with 32 units sold during the quarter.
Earnings miss
Despite stronger bookings, revenue and Ebitda at ₹1,810 crore and ₹410 crore, respectively, the company missed Bloomberg consensus estimates by 29% and 43%.
“The company recorded revenues largely from low-margin projects, while it had already recognized largely the entire revenue from the high-margin “Camellias” by Q4FY25, said Nomura Global Markets Research report on 14 May. Nomura expects this trend to continue until DLF Arbour begins revenue recognition from FY28. Revenue recognition in real estate companies usually happens when the developer receives occupancy certificate and the unit is handed over to the buyer.
Jefferies India analysts have also cautioned about weak profitability in FY27, though improvement is expected from FY28. They have cut DLF’s earnings estimates by 5%/2% for FY27/FY28 due to project completion and recognition timelines.
Flat trajectory
For FY26, pre-sales fell 5% year-on-year to ₹20,143 crore, in line with guidance. FY27 pre-sales are expected in the ₹20,000–22,000 crore range — broadly similar to the last two years. This guidance is backed by a launch pipeline of around ₹20,000 crore.
The key planned launches for this year include the second phase of Arbour project (senior living), a housing project in DLF City, second phase of the Mumbai project and foray into Goa.
Management expects The Dahlias to contribute ₹5,000–6,000 crore in FY27 bookings, with ₹14,000–15,000 crore coming from projects launched during the year.
While DLF has a sizeable land bank to accelerate launches, management emphasised its focus on generating significant margins and annual free cash flows of around ₹8,000 crore rather than pursuing pre-sales growth at the cost of profitability. Jefferies estimates FY27 pre-sales to remain flat at around ₹20,000 crore, with large launches likely in mid-FY27.
Annual collections rose 15% year-on-year to ₹13,517 crore, supported by strong execution. DLF ended FY26 with a net cash position of ₹14,155 crore.
On the commercial and retail side, Atrium Place (a JV with Hines) is fully leased with occupancy certificate in place. Three malls are expected to become operational or fully leased soon. Ramp-up of new assets helped the annuity portfolio deliver double-digit rental growth in FY26.
Stock under pressure
Still, these positives have not translated into stock gains. So far in 2026, DLF shares are down 17%, steeper than the 13% fall in the Nifty Realty index.
Macro pressures are building. Inflation is expected to rise, potentially weighing on consumption of high-ticket items such as housing. The government’s recent work-from-home appeal to conserve fuel amid the West Asia war could also dampen demand for commercial real estate.
Affordability concerns in the National Capital Region, particularly Gurugram, add another layer of risk. Nuvama Research cautioned: “Given limited inventory levels, the company needs a steady stream of launches in order to maintain a healthy sales trajectory,” said the report dated 14 May.