Brokers' call: BofA-ML retains 'Buy' on DLF

Bank of America Merrill Lynch has maintained its 'Buy' rating on DLF with a target price of Rs 300.

"We reiterate 'Buy’ on DLF with a revised price objective of Rs 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, we expect a 6-8% upside risk to our NAV estimate," it said.