Our target of Rs845 for DLF is at our Mar-26E NAV. Our NAV is based on: (a) cap rate of 8% for commercial space and retail malls; and (b) avg post tax cost of capital of 10.5%.

Key upside risks that could sustain the shares above our target price include: 1) higher-than-expected valuations and a faster pace of future asset sales; 2) a significant pickup in sales, execution, and margins; and 3) a substantial decline in interest rates. Key downside risks are: (1) FSI changes and other regulatory risks; (2) Pricing risks; (3) Deceleration in premium housing demand and prices.