DLF Achieves Zero Gross Debt in 2026; Analysts See Stock Crossing ₹1,000

Introduction

DLF Ltd. is in the spotlight after announcing a significant financial milestone alongside its third-quarter results for the financial year 2026. The real estate giant has become gross debt-free for the first time since its Initial Public Offering (IPO) in 2007, a development that has captured the attention of investors and analysts alike. Despite a sharp, temporary decline in new sales bookings, the company posted a healthy increase in net profit, driven by strong collections and a robust performance from its annuity business. This achievement strengthens the company's financial position and has led to a bullish outlook from market experts.

Q3 Financial Performance

For the quarter ending December 31, 2025, DLF reported a 14% year-on-year increase in its consolidated net profit, which stood at ₹1,203.36 crore compared to ₹1,058.73 crore in the same period last year. The company's total income also saw a substantial rise, growing to ₹2,479.54 crore from ₹1,737.47 crore a year earlier. This growth in profitability underscores the company's operational efficiency and the strong performance of its core business segments, even as it navigated challenges in its new project launch pipeline.

Sales Bookings and Full-Year Guidance

A key point from the quarterly report was the sharp decline in new sales bookings, which came in at ₹419 crore. This figure represents a 97% drop from the record pre-sales of the previous year and a 90% sequential decline. However, the management clarified that this was a temporary situation caused by the suspension of its super-luxury project, 'The Dahlias,' for a redesign. The company has since resumed sales for this project in the ongoing fourth quarter. Despite the Q3 dip, DLF's management expressed confidence in achieving its full-year sales bookings guidance of ₹22,000 crore for FY26. For the first nine months of the financial year, bookings stood strong at ₹16,176 crore.

The Debt-Free Milestone

The most significant announcement was DLF achieving a zero gross debt position at the residential business level. This is a landmark achievement, marking the first time the company has been debt-free since its high-profile IPO nearly two decades ago. This deleveraging strengthens the company's balance sheet considerably, providing greater financial flexibility for future growth and investments. As of the end of the quarter, DLF's cash on the books was ₹11,660 crore, which includes the RERA amount of ₹10,433 crore, highlighting a very healthy liquidity position.

Strong Collections and Annuity Business

While new sales were muted, DLF's gross collections reached a record level of ₹5,100 crore in the December quarter. The collections for the first nine months of FY26 have already surpassed the total collections for the entire previous financial year, FY25. Furthermore, the company's rental arm, DLF Cyber City Developers Ltd. (DCCDL), continued its steady performance. Office rental income increased by 19% year-on-year to ₹1,150 crore, and mall rentals grew by 14% year-on-year to ₹260 crore. This consistent income from the annuity portfolio provides a stable revenue base and complements the cyclical nature of the development business.

Analyst Commentary and Market Outlook

The market's reaction has been largely positive, with analysts maintaining a bullish stance on DLF's stock. Brokerage firm Jefferies reiterated its 'buy' rating, setting a price target of ₹1,000 per share, which implies a potential upside of 62.7% from its previous closing price of ₹614.65. Jefferies is one of eight brokerage houses that anticipate the stock will surpass the ₹1,000 mark within the next 12 months. Overall, out of 25 analysts covering the stock, 23 have a 'buy' rating, and two have a 'hold' rating, reflecting strong confidence in the company's long-term prospects.

Stock Performance and Conclusion

Despite the positive developments, DLF's stock has seen a decline of 27% over the last six months, closing the previous session at ₹614.65. However, the recent announcements are expected to provide a positive trigger. By becoming gross debt-free, DLF has significantly de-risked its business model. The temporary dip in sales bookings is well-explained and is not seen as a long-term concern, especially with the company reaffirming its annual guidance. The strong performance of its rental business and record collections further solidify its financial standing. With a strong project pipeline and a robust balance sheet, DLF appears well-positioned to capitalize on the demand in the Indian real estate market.