What made DLF share price touch 52-week highs?

Sentiments around real estate major DLF have been positive in recent times. This can be gauged from its share price movement. Notably, the DLF share price has increased by more than 11% in the last one year to hover near its 52-week highs.

Moreover, the DLF share price performance in the last month has been even better. Over the past one month, the DLF share price has appreciated by more than 13%.

So, what are the main triggers that have driven the DLF share price to touch 52-week highs? Let’s try and decode!

DLF share price: Reasons for rise

Strong Results: One of the primary reasons that has been the trigger for the DLF share price in recent times has been its solid latest results for the Oct - Dec ‘22 period. In the Oct - Dec ‘22 period, the company reported its highest ever quarterly sales of Rs 2,507 crores which denotes a growth of 24% from the previous year. Meanwhile, profits also soared by 37% yearly to Rs 519.21 crores.

Rapid Sellout in Luxury Project: The DLF share price’s rise can also be attributed to the blistering sale witnessed in its luxury project, “The Arbour”. The project, which comprised 1,137 4 BHK apartments, each spanning an area of 3,950 square feet, generated a revenue of roughly Rs 8,000 crores for the real estate major.

This also reflects a rising demand for luxury real estate in India and DLF remains well positioned with its inventory to serve this demand.

Interest Rate Hike Pause: Finally, a macroeconomic trigger for not just DLF but the entire real estate market is the pause in interest rate hike by the Reserve Bank of India (RBI) in its latest monetary policy meeting.

In its latest meeting, the RBI put a pause in its continuous rate hikes which started from May 2022 and kept the policy rate unchanged at 6.5%.As a result, many experts believe that the interest rates have peaked and it can only go down from here barring any other major developments.

This has come as a relief for the real estate sector as a rise in interest rates results in an increase in home loan rates for borrowers which in turn hurts demand.

DLF share price: Analyst view

Yes Securities: The renowned domestic brokerage has a “Buy” rating on the stock with a price target of Rs 415. The firm cited the company’s robust results, strong demand and huge inventory as triggers that can drive the share price higher in the near term.

JPMorgan: The top global brokerage has an “Overweight” rating on the stock with a price target of Rs 490. The firm cited the solid demand scenario and eventual easing of interest rates would lead to a gradual recovery of sales for the company and that would drive the DLF share price in the future.

Kotak Institutional Equities: The top domestic brokerage has a “Buy” rating on the stock with a price target of Rs 430. The firm highlighted the company’s new product launches and steady reduction of debt levels as drivers of the DLF share price growth in the near term.

This is not investment advice. Investments in the securities market are subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future returns.