DLF Limited: A Q2 FY26 Review of Robust Sales and Steady Annuity Growth

DLF Limited, a titan in the Indian real estate sector, has delivered a compelling performance in the second quarter of fiscal year 2026, showcasing strong sales momentum and consistent growth in its annuity business. The company reported a consolidated revenue of Rs. 2,262 crore for Q2 FY26. While this marked a sequential decline, the Profit After Tax (PAT) saw a remarkable surge, reaching Rs. 1,171 crore, a 101% increase quarter-on-quarter. This impressive PAT figure includes a one-time impact of approximately Rs. 600 crore from a settlement related to the Tulsiwadi project, partially accounted for in other income and exceptional items. The results underscore DLF's strategic focus on high-value projects and disciplined financial management.

The development business emerged as a significant growth engine, primarily propelled by the successful maiden launch of 'The Westpark' project in Mumbai. This new offering alone contributed substantially to the Rs. 4,332 crore in new sales bookings for the quarter, reflecting robust market demand and DLF's ability to penetrate new, high-potential geographies. Cumulatively, the company's sales for the first half of FY26 stand at over Rs. 15,750 crore, aligning perfectly with its annual guidance. Collections for the quarter were strong at Rs. 2,672 crore, demonstrating high efficiency in line with construction and payment milestones. The company's construction activities are also ramping up, with an outflow of Rs. 925 crore in Q2 FY26, indicating progress on project execution.

Annuity Business: A Pillar of Stability

DLF's annuity business, primarily managed by DLF Cyber City Developers Limited (DCCDL), continues to be a bedrock of stability and growth. The operational rental portfolio spans approximately 49 million square feet, maintaining high occupancy levels of 94% by area and 96% by value. This consistent performance ensures a steady stream of recurring revenue. DCCDL's rental income grew by a healthy 15% year-on-year to Rs. 1,362 crore, with its PAT increasing by 23% for the same period. This growth is further bolstered by strong pre-leasing activities for new commercial developments, such as Atrium Place in Gurugram (93% pre-leased) and Midtown Plaza in Delhi (85% pre-leased), both of which received their Occupancy Certificates (OCs) in Q2 FY26. These new assets are poised to contribute significantly to future rental income.

Financial Strength and Strategic Outlook

DLF's financial position remains robust, characterized by a gross cash balance of Rs. 9,204 crore, with Rs. 8,358 crore held in RERA accounts. The company's net cash position stands at Rs. 7,717 crore after a dividend payout of Rs. 1,485 crore and debt repayment of Rs. 963 crore. This strong liquidity and disciplined debt management were recognized by CRISIL, which upgraded DLF Limited's credit rating to AA+/Stable outlook. DCCDL also maintains healthy debt metrics, with a net debt of Rs. 17,355 crore and a net debt-to-EBITDA (annualized) ratio of 3.1x.

Looking ahead, DLF has a substantial launch pipeline for its development business, with 24 million square feet planned for launch in the medium term, carrying a sales potential of Rs. 60,215 crore. This includes projects in Goa, Arbour 2, Privana, Hamilton 2, and Panchkula. The company also continues to invest in its annuity portfolio, with significant projects like DLF Downtown in Gurgaon and Chennai expected to be completed by mid-2028 and early 2028, respectively. DLF's commitment to sustainability is evident through DCCDL's 5-Star GRESB rating and recognition as a Global Sector Leader for ESG initiatives.

Conclusion: Sustained Momentum and Future Growth

DLF Limited's Q2 FY26 performance reflects a company in strong command of its market and strategy. The blend of robust new sales, consistent annuity income, and a healthy balance sheet positions DLF for sustained growth. Management's focus on quality, customer satisfaction, and disciplined capital allocation, coupled with a significant project pipeline, instills confidence in its future trajectory. The company is not just building properties; it is building long-term value for its stakeholders while adhering to high standards of governance and sustainability.