DLF Ltd Management Discussions.


a) Global Economy

The economic prospects remained uncertain due to the COVID-19 pandemic and resurgence of different variants. The recovery varied across geographies and industries, reflecting different pandemic-induced disruptions as also the fiscal support provided by the respective Governments and Central banks.

According to International Monetary Funds reports, global growth was projected at 6% in 2021. This was moderated to 4.4% for 2022. These estimates may be revised upwards as a result of the strong fiscal support announced by certain major economies. The global economic recovery also seems to be gaining momentum on account of rapid and massive vaccination rollout by developed economies and similar attempts by developing economies.

b) Indian Economy

Despite the resurgence of the pandemic and expectations around its consequent impact, the Indian Economy has exhibited resiliency during these uncertain times and remains on the recovery path led by the efforts of the Government and policy support from the Central Bank.

As per provisional estimates released by the National Statistical Office, Indias real GDP contraction was estimated at 7.3% for the fiscal. The Central Bank, in its recent policy, has revised the economic growth estimates. The real GDP growth for Fiscal 22 is now pegged at 9.5%.

The inflation trajectory and rise in international commodity prices pose risks. However, a good monsoon backed by Government support should spur recovery. The Government is scaling up the vaccination rollout programme to support broad-based economic recovery.


The year gone by has been a period of unprecedented challenges and uncertainties caused by the pandemic. This was compounded by its cascading effect in every facet of the economy and the industry.

The real estate industry too, witnessed changes. This was as a result of systemic structural reforms and policy changes. The residential segment in particular has exhibited a surge with the fundamental growth drivers falling into place. The industry remains cognizant of the evolving market conditions with developers exhibiting adaptability along with agility to respond to the current situation.

The Central and some State Governments have been proactive in taking steps to boost the housing industry. Various fiscal incentives announced by certain states, including stamp duty waiver and reduced charges, have aided growth. The establishment of a Special Window for Affordable and Mid-Income Housing (SWAMIH), to provide last mile financing for completion of stalled housing projects, is also aiding in completion of projects which had been held up and instilling further confidence in the consumers. Housing for All under the Pradhan Mantri Awas Yojana and continued tax incentives for affordable segment provided by the Government will further boost sector dynamics.

Consolidation in favour of the large, credible and organised players is clearly evident in the residential segment. As per ICRAs estimates, the demand consolidation in respect of large developers has doubled to approximately 22% in the 9MFY2021 period.

a) Office Segment

The office segment continued to exhibit resiliency amidst these challenging times. The segment was adversely impacted due to the pandemic and the consequent lockdown restrictions. Employers had to adapt to safeguard the health of their workforce by adopting more flexible working patterns. A significant portion continued with the Work-from-Home policy.

As per reports, the gross office absorption in top six regions for calendar year 2020 was approximately 3.17 million square meters (msm) [34.1 million square feet (msf)], while the new supply was approximately 3.54 msm (38.1 msf). Around 45% of the net absorption was led by the technology sector. The expectation seems to be that occupiers will continue to optimise their portfolios while according priority to the safety and well-being of their workforce. The overall scenario also pointed out to stable rents with rationalisation at few places.

New concepts like Work-from-Home, flexible workplace strategies and de-densification will continue to influence the traditional physical occupancy strategies.

The priority for the developers in the short-term, would be to prioritise enforcement of health and safety as also strengthen the workplace in terms of sustainability. Concepts such as wellness, energy savings, better air quality and touchless navigation will gain traction. These trends should ultimately be positive for the sector, resulting in portfolio upgradations to make assets more agile and eco-friendly thus leading to a trend for quality and investment grade spaces.

An additional segment of the office space, which is generating excitement, is the development of data centres. Amidst an era of virtualisation and cloud computing, as also Government policies, this segment is poised to grow. The demand for data centres is expected to increase by approximately 1.39-1.67 msm (15-18 msf) across the major cities in the next four to five years.

b) Retail Segment

The retail sector witnessed one of the most challenging periods in recent history. The pandemic and the consequent lockdown restrictions led to the retail malls being shut for the initial half of the fiscal. The segment exhibited gradual recovery in the second half and the later period of the fiscal saw strong rebound in the segment with increased footfalls and better sales. The luxury segment exhibited the good recovery with sales at similar or higher levels as compared to pre-Covid levels. The second wave however, was a dampener.

The overall expectation remains that consumption will recover steadily and that retail segment will witness a gradual comeback. However, the retailers have to calibrate their operations and strategies to align with the changing demand dynamics and re-evaluate their value propositions.

The key drivers of the consumption growth are expected to be:

• Urbanisation growth.

• Nuclearisation trend.

• Population increase of millennials with a greater appetite to spend.

• Expanding base of the affluent and elite households.

Few of the trends that are expected to gain traction are:

• Adaptation of store network for safety and omni-channel presence.

• Innovating purchasing experience.

• Supply chain agility.

• Optimisation of customer acquisition by enhancing digital experience.

• Adaptation of price and promotions to match the revised needs and expectations.

• Provision of new facilities providing for sanitized leisure and entertainment.

c) Residential Segment

As mentioned earlier, the year gone by was one of unforeseen challenges and the industry was impacted adversely. While these were unprecedented times, the crisis though has led to reigniting growth in the housing demand and has re-emphasised the necessity of owning a home and in some cases, larger homes.

The second half of the fiscal depicted a surge in housing demands which was further aided by historic high levels of affordability. The period provided opportunities for the housing segment with a majority of the fence sitters accelerating their decisions to make that purchase and developers offering quality new products at established locations.

The trend of new sales exceeded the number of launches during the year, which resulted in decline of the unsold inventory levels. As per Anarocks research reports, the unsold inventory declined by 19% from the previous peak in 2016. Pricing trends exhibited stable prices during the year as a result of the pandemic.

The few emerging trends post the pandemic in the residential segment appear to be:

• Preference for ready-to-move-in units to avoid execution risk;

• Need for larger spaces to enable work-from-home and online schooling;

• Consolidation amongst larger developers;

• Readiness to pay premium for quality products; and

• Moderate and gradual price increase for select products at established locations.

The key demand drivers viz. affordability, consumer sentiments and desire to own a home, are in place and expected to fuel the growth of housing segment in the near future.

One of the emerging trends in the residential segment that was evident was the preference of the home buyers to favour large and established developers. As per ICRAs estimates, the demand consolidation in favour of large developers has doubled to approximately 22% in the 9MFY2021 period.

Developers are expected to leverage this opportunity to gain more market share by bringing newer products, catering to the demand dynamics whilst offering quality, a sustainable environment and better propositions.


The residential segment witnessed a structurally positive shift in housing demand. The pandemic and its resurgence had created temporary dislocations; however, the long-term growth prospects appear to be strong, as fundamental demand drivers remain in place. Consolidation with increase in market share for large and credible developers continues to gather momentum.

Our business continues to exhibit a resilient performance amidst these challenging times, with residential segment seeing an increase aided by demand revival. We are enthused with the housing demand recovery and continue to embark on this upcycle by scaling up our new product launches.

The rental business has been witnessing some short-term temporary dislocations due to the pandemic and the lockdown restrictions with tepid new leasing activity. We continue to maintain a positive outlook on this segment for the long term and expect normalcy to return in due course.

The key elements of the strategy of the Company are the following:

• Land monetisation through scaling up New Product launches:

The housing segment is exhibiting strong signs of recovery and consequently the Company has identified a strong pipeline of 3.25 msm (35 msf) of New Products to leverage this upcycle. The pipeline comprises a diversified offerings across geographies and segments. The initial phase of these developments comprises low-rise developments, enabling a faster execution cycle, resulting in quicker cash conversion. We expect these New Products to create significant cash flows to fuel the next growth cycle. The New Product pipeline will enable monetisation of approximately 20% of our existing land bank over the course of next few years.

• Monetisation of completed inventory:

The demand, recovery and renewed interest of customers towards completed inventory, especially in the post pandemic phase has led to successful monetisation of our completed inventory. Our completed inventory provides a unique and distinct advantage and enables the Company to offer a distinctive lifestyle to customers for immediate habitation, without any kind of execution risks. We continue to offer best-in-class amenities and quality assets and believe that this renewed demand will lead to timely monetisation of our completed inventory.

• Focused approach to enhance the Rental Business:

Office growth of 10% Year-on-Year was achieved during the fiscal. The growth was primarily on account of addition of new products namely Cyber Park and an additional block at DLF Cyber City, Chennai. During the fiscal, DCCDL acquired One Horizon Center, a marquee asset in DLF5, Gurugram.

The underlying attractiveness of the Indian market in terms of skilled manpower and cost competitiveness is expected to continue in the near and long term. Whilst the pandemic has generated certain challenges for the business, we believe that the growth in IT industry and adoption of better strategies for asset upgradations will continue to benefit the rental business in the long run.

The Company remains focused on upgrading its assets to ensure tenant safety and providing a safe and sustainable ecosystem for all stakeholders. It has taken several initiatives in terms of enhancing the air quality and ventilation, supplemented by improvement in existing operational practices like offering touchless navigation to enhance the experience.

The Company continues to build new assets in expectation of this recovery and its New Products viz. DLF Downtown in Gurugram and Chennai, remain on track. We currently have approximately 0.41 msm (4.5 msf) of new space under construction under DCCDL, which is approximately 28% pre-leased. Additionally, the Company has 0.32 msm (3.5 msf) of commercial assets under development.

The Company initiated the process to make DCCDL REIT ready. It is currently evaluating various parameters including corporate structure, capital structure and asset perimeters and hopes to complete this exercise by the end of Fiscal 2022. DCCDL has also engaged advisors to help in evaluating and executing the requisite steps.

• Optimising Organisation Structure:

The Company leveraged the opportunity during these difficult times to create a more robust and efficient structure across the organisation and continues working on further optimising this structure. Its priority continues to be transforming itself into a lean and agile organisation. It has a strong and dynamic leadership team to help future growth of the organisation. The Company has significantly increased its execution capabilities in anticipation of the new and changing cycles of growth.

• Cost Optimisation and Cash Management:

The Company strives towards creating efficient cost structures in line with the scale of the business. It has successfully reset its cost base by significantly reducing cash overheads and the finance costs by tight controls and rate negotiations. It expects to sustain these cost structures into this next growth cycle.

It continues to focus on ramping up collections. With the reduced cost base and increasing collections, it expects to generate healthy cash flows to further deleverage its balance sheet and increased shareholders value.


a) Material Developments

• DCCDL, a material subsidiary, acquired complete stake in Fairleaf Real Estate Private Limited, which owns and manages One Horizon Center for approximately Rs 780 crore. This is a marquee asset having leasable area of approximately 0.07 msm (0.8 msf) offering high end Grade A office spaces along with complementary retail.

• The Company has been included in the Dow Jones Sustainability Index in the Emerging Markets category for its sustainability initiatives and ESG practices. The Company was the only real estate company from India and was amongst 11 companies from India to be included in this Index.

• The Company launched new products of Independent Floors during the fiscal, which garnered new sales bookings of Rs 908 crore.

b) Revenue and Profitability (Consolidated)

Consolidated revenues (including other income) stood at Rs 5,945 crore during the financial year. EBITDA stood at Rs 1,949 crore, reflecting a marginal Year-on-Year increase with improved margins of 33% as compared to 28% during last year. The margin improvement was primarily on account of better product mix. Profit before tax (before exceptional items) was Rs 936 crore, implying growth of three times as compared to last year. Total Comprehensive Income attributable to equity shareholders stood at Rs 1,097 crore as compared to a loss of Rs 594 crore in the corresponding period.

c) Balance Sheet

The Companys consolidated Net Worth (including capital reserves) was recorded at Rs 35,364 crore. The increase was primarily on account of retained profits.

The Company has successfully managed to de-leverage its balance sheet and believes that it is well poised to withstand any short-term dislocations.

The key ratios arising out of the performance in the last fiscal are summarised below:

Ratio 2020-21 2019-20 Explanation
Net Debt/ Equity 0.14 0.16 Decrease on account of reduction in Net Debt and increase in Equity.
EBITDA Margins 33% 28% Improvement in margins on account of better product mix.
Net Profit Margin 18% Reported loss in Fiscal 2020 on account of one-time reversal of tax assets.
Return on Equity 3.1% Reported loss in Fiscal 2020 on account of one-time reversal of tax assets.


a) Development Business

The Company recorded new sales bookings of Rs 3,084 crore for the fiscal, despite the first quarter being muted on account of the pandemic. The sales performance for the full year and fourth quarter is presented below:

The Company has embarked on the new growth cycle by scaling launch of New Products. The Company successfully launched independent floors across DLF City and New Gurgaon. These new launches were well received by the market vindicating demand for quality products in established locations. The new sales bookings from these New products were Rs 908 crore during the fiscal.

The completed inventory witnessed healthy absorption with total sales bookings at Rs 2,176 crore. The demand was seen across geographies and segments including luxury and premium.

b) Rental Business

The rental business is primarily carried out by DCCDL, a material subsidiary. DCCDL, along with its subsidiaries, has approximately 3.18 msm (34.2 msf) of operational portfolio with 0.19 msm (2 msf) of assets housed under DLF.

As on 31 March 2021, DCCDL along with its subsidiaries, had an operational office portfolio of 2.81 msm (30.3 msf) and retail portfolio of approximately 0.37 msm (4 msf). The future development potential of DCCDL is approximately 2.79 msm (30 msf), out of which 0.42 msm (4.5 msf) is currently under development.

The rental business continued its sustained performance with office rentals witnessing Year-on-Year growth of 10% aided by additions of Cyber Park, Gurugram and an additional block in Chennai. The retail business was significantly impacted during the first half, on account of the pandemic and consequent lockdown restrictions, but exhibited steady recovery during the second half. The collections in the rental business remained strong at 100% against the billing done during the fiscal.

The rental business witnessed some temporary dislocations on account of the pandemic and its consequent impacts due to which the vacancy levels increased to approximately 11%. A pick up is expected in new leasing by the end of this fiscal aided by a successful rollout of the vaccination drive across the country. The Company also took a leadership position in terms of offering support to its retail tenant partners by offering a graded rental waiver programme during the fiscal which helped them overcome the challenging times.

New assets started contributing towards the rental revenues during the year. These assets were Cyber Park, additional block in DLF Cyber City, Chennai and recently acquired One Horizon Center.

Brief details of the projects that are under development, are given below:

• DLF Downtown, Gurugram: Total project size of 1.02 msm (11 msf). Phase-I admeasuring approximately 0.14 msm (1.5 msf) has been initiated. Pre-leasing of approximately 0.04 msm (0.5 msf) has been achieved.

• DLF Downtown, Chennai: Total project size of approximately 0.63 msm (6.8 msf). Phase-I admeasuring approximately 0.28 msm (3 msf) has been initiated. The project is strategically located in Taramani gateway to the IT corridor in the region. Pre-leasing of approx. 0.07 msm (0.77 msf) has been achieved.

c) Other Businesses

The Company also operates a hospitality division consisting of recreational clubs in and around its residential developments and two hotel properties. The Lodhi, an iconic hotel property located in New Delhi, is managed by your Company and Hilton Garden Inn, Saket is managed by Hilton. Operations in this sector were impacted due to the challenges brought by COVID-19 pandemic.


The Companys internal controls are commensurate with nature, size and complexities of operations. These internal control systems ensure compliance with all applicable laws and regulations and facilitate optimum utilisation of available resources as also protect the interests of all stakeholders. The Company has clearly defined policies, standard operating procedures (SOPs), financial and operational delegation of authority (DOA) and organisational structure for its business functions to ensure a smooth conduct of its business.


The Companys core focus areas are building organisational capability and capacity, leveraging and nurturing key talent, encouraging meritocracy and enhancing people utilisation in alignment with its business strategy. The Company is undertaking the following steps:

• Strengthening and diversifying the leadership: Leadership teams have been ramped up by bringing specialists from real estate and other industries who will enhance all domains. Key hirings have been implemented across functions including Finance, Business Development, Project Management and execution, Marketing, IT and Hospitality.

• Revitalising the organisation by hiring young and talented professionals in all key areas.

• Strengthening the development and execution team to gear-up for the future.

As on 31 March 2021, the Group has 1,939 employees, including employees engaged in the hospitality division.

DLF offers a continuously evolving learning environment for its talent pool. Various training and coaching programmes are being implemented to refresh and enrich its existing talent pool.

The Company leverages diversity of knowledge, qualification, skill, professional experience, culture, geography and sectoral understanding to enhance its competitiveness. The Company believes in creating an inclusive environment, where diverse perspectives can enrich strategic perspectives. To enhance inclusiveness at work, our gender sensitivity workshops sensitise the environment in strengthening our conduct towards women colleagues.

The Companys holistic wellness programme sensitised employees around work-life balance and importance of a healthy lifestyle, emotional, physical well-being and prevention of diseases. Annual medical checks, structured monthly health programmes, health bulletins, health talks and awareness campaigns were periodically conducted. The Company instituted attractive comprehensive group Mediclaim and Accident Insurance policies including emergency response facilitation, alliances with hospitals and diagnostic centers as well as consultation facilities with an in-house doctor and counsellor. The Company also rolled out a structured program to vaccinate all its employees and their families along with contractors/ partners staff & their families.


As a responsible corporate citizen, the Company has incorporated sustainability as an integral part of its business and operations. It provides a safe and sustainable ecosystems for all stakeholders.

It continues to make dedicated efforts to promote efficient use of the available resources, protecting and nurturing the environment and caring for the society.

A substantial portion of our existing operational rental portfolio is LEED certified and it strives towards creating our new products with a similar philosophy. DLF bagged the WELL Health and Safety certification for Facility Operations and Management from Worlds best Wellness certification organisation: International Well Building Institution (IWBI) through DELOS. The rating was across the Group comprising of office, retail, hospitality and residential spaces.

DLF has been recognized as an Index component of the Dow Jones Sustainability Indices in Emerging Markets Category. It is the only real estate company from the country to be included in the index.


The Company is exposed to a number of risks such as economic, regulatory, taxation and environmental risks as well as sectoral investment outlook. Some risks that may arise in the normal course of business and could impact its ability to address future developments comprise credit risk, liquidity risk, counterparty risk, regulatory risk, commodity inflation risk and market risk. A new challenge emanating from the COVID-19 pandemic has also emerged which could affect business. The Companys strategy of focusing on key products and geographical segments is exposed to economic and market conditions.

The Company has implemented robust risk management policies that set-out the tolerance for risk and your Companys general risk management.

Cautionary Statement

The above Management Discussion and Analysis contains certain forward-looking statements within the meaning of applicable security laws and regulations. These pertain to the Companys future business prospects and business profitability, which are subject to several risks and uncertainties and the actual results could materially differ from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties, regarding fluctuations in earnings, our ability to manage growth, competition, economic growth in India, ability to attract and retain highly skilled professionals, time and cost over-runs on contracts, Government policies and actions with respect to investments, fiscal deficits, regulation, etc. In accordance with the Regulations on Corporate Governance as approved by the Securities and Exchange Board of India, shareholders and readers are cautioned that in the case of data and information external to the Company, no representation is made on its accuracy or comprehensiveness though the same are based on sources thought to be reliable. The Company does not undertake to make any announcement in case any of these forward-looking statements become materially incorrect in future or update on any forward-looking statements made from time to time on behalf of the Company.