DLF Ltd

NSE:DLF

Earnings Call Analysis

Strong Quarter with Significant Revenue and Cash Flow Growth

DLF Limited reported a robust quarter, achieving presales of INR 6,400 crores, primarily driven by the successful launch of Privana West. The company recorded a net profit (PAT) of INR 646 crores. Notably, DLF generated free operating cash flow exceeding INR 2,500 crores, indicating strong financial health. The company plans to continue capital expenditure on rental businesses, anticipating increased rental income from new projects. DLF reiterated confidence in its ongoing projects and forecasted robust future cash flow and margins. Overall, their strategy involves sensible launches and maintaining a strong cash flow trajectory.

Strong Performance and Robust Cash Flows

In the recent earnings call, DLF Limited highlighted a strong performance for the quarter, driven significantly by presales of INR 6,400 crores, primarily from the highly successful launch of Privana West. The company reported a profit after tax (PAT) of INR 646 crores. More importantly, the free operating cash flow exceeded INR 2,500 crores, demonstrating robust financial health and positive future cash flow expectations. This healthy cash flow is attributed to strong collection performance and consistent sales.

Confidence in Rental Business

The rental business remains a vital component of DLF’s success. The company has substantial CapEx investments in both the DLF Cyber City and non-Cyber City properties, underscoring their belief in the rental market's potential for consistent revenue. DLF’s portfolio of office spaces and malls continues to perform robustly, further solidifying their revenue base from rentals.

Outlook on Margins and Revenue

While there was a temporary dip in margins after excluding higher other income, management remains optimistic. The embedded margins for new product launches are in the late 30s, with expectations to rise to the mid-40s later in the year. The company is projecting rental revenue to hit around INR 5,800 crores to INR 6,000 crores next year, with significant contributions expected from the new Downtown projects in Gurgaon and Chennai.

Pipeline and Future Projects

DLF has an ambitious pipeline lined up, including multiple mall projects and high-rise construction projects in the next few quarters. Midtown Plaza, a smaller project, will be completed by the end of this year with rentals commencing in April next. Other projects like Summit Plaza and the Promenade in Goa are set to be completed in FY'26. Collectively, these projects will substantially augment rental income upon their completion.

Management’s Vision

Management's strategy focuses on maintaining a balance between growth and shareholder returns, while also being open to strategic acquisitions that align with their core market areas. Despite short-term fluctuations in collections or margins, DLF is on a clear path towards sustainable long-term growth. The consistent demand seen for their projects, even in high-value segments, supports their positive market outlook.

Conclusion

DLF Limited showcased a solid quarter with strong sales figures, significant cash flows, and a promising outlook due to the consistent performance of their rental and development businesses. Their strategic focus on launching new high-potential projects and maintaining robust collection and cash flow metrics positions them well for continued growth in the coming years.

Earnings Call Transcript 2025-Q1

[Operator]

Ladies and gentlemen, good day, and welcome to DLF Limited's Q1 FY '25 Earnings Conference Call. We have with us today on the call Mr. Ashok Tyagi, Managing Director and CFO, DLF Limited; Mr. Sriram Khattar, Vice Chairman and MD, Rental Business; Mr. Aakash Ohri, Joint Managing Director and Chief Business Officer. [Operator Instructions]

I now hand the conference over to Mr. Ashok Tyagi. Thank you, and over to you, Mr. Tyagi.

[Ashok Tyagi, executive]

Thank you, and good afternoon, everybody. I hope that all of you have had a good opportunity to go through our analyst presentation and our result details. In all fairness, it was a good quarter. Our presales number was in the range of INR 6,400 crores, predominantly headlined by the extremely successful launch of Privana West. Our PAT numbers, obviously, given that they are on the completed contract method and are driven by the possession letters issued, but again, good at INR 646 crores.

And I think the most heartening number that really everybody should draw a lot of enthusiasm from is the entire cash flow number, where really, if you see between our DLF and Cyber City numbers, together, we did in excess of INR 2,500 crores of free operating cash flow during the quarter. And that actually does -- that does paint itself to an extremely formidable run rate of free cash flow going forward.

I mean, the DevCo business continues to run very strongly because of the strong presales. And I mean, a, there are these big RentCo launches that happen and which Aakash and his team do a phenomenal job of taking to the market, and there are those maintenance sales which continue. Our collections performance has continued to go from strength to strength, which has resulted in the cash flows being strong as well. And all of this has been supported extremely strongly by a continued robustness in the rental business, both on offices and malls. And frankly, our faith in the rental business is even more reinforced by the quantum of CapEx that we are doing on the rental side, both in DLF Cyber City as well on the non-DLF Cyber City CapEx.

So frankly, with that, really, I would -- I think I rest myself and then let's go to questions. I mean the budget obviously was a very interesting budget. There has been a lot of noise around indexation. But really, once the noise is sort of filtered out, I don't think it has too much of a bearing on the way the sales behavior will be. So I think with that, I'll hand you over for the question queue.

[Operator]

[Operator Instructions] The first question is from Puneet Gulati from HSBC.

[Puneet Gulati, analyst]

Congratulations on great numbers, all round improvements. Very happy to see that. My first question is on the margin side. If I were to take out the other income, which was higher, if you can comment on that as well. And excluding the other income, the margins were a little weak. What all products have gone into that margin recognition? If you can give some color, it will be very useful.

[Ashok Tyagi, executive]

So in all fairness, Puneet, as you are aware that the reported numbers and the reported margins are based on the possessions issued for a product mix that was sold between 3 to 5 years back. As the proportion of Camellia -- say Camellia's possessions starts reducing, and I think now they are just about, I think, 30, 35 Camellias left for giving possession now, you will see at times some of this slight softening. And then, obviously, a little bit buoyed at times by luxury floors coming in for completion, et cetera. So I wouldn't sort of put too much attention on the historical reported margins.

Our embedded margins for new products launch continue in the late 30s and hopefully, with the Flux 5 during the later part of this year, we should be back to the mid-40s that we have charted ourselves for. As far as the other revenue is concerned, a, I think, clearly, with now with us carrying a cash balance of about INR 5,000 crores in RERA accounts alone and about INR 2,000-odd crores in addition to that, our quarterly interest earnings on fixed deposits, both mandatory and otherwise, is now running at -- in excess of INR 125 crores a quarter. Then, in this particular quarter, there were some other interest incomes, including one from an income tax refund that was ordered in the case of DLF Limited, the tax department. And...

[Puneet Gulati, analyst]

What was that number, sorry?

[Ashok Tyagi, executive]

The number of the income tax refund?

[Puneet Gulati, analyst]

Yes.

[Ashok Tyagi, executive]

I think that the total income tax refund order is about INR 600 crores or INR 550 crores. And I think the interest component of it is in the range of INR 80 crores to INR 90 crores. And the third point was that there was a provision that we had made for an advance that we had issued -- that we had given for a collaboration about 15 years back, and there was a fallout between the land owner and us, and it was all in arbitration because of which at one stage about 5 or 6 years back, we had made a provision of about INR 75 crores. We have got finally an arbitral award in our favor. And though the arbitral award is in all fairness at a number far higher than the provision reversed, but since it's open for further adjudication, we have -- all we have done is we have reversed the provision that was made about 5 years back of about 75-odd.

So I think those are the 3 points that are there on the other income side. And of course, there's a standard recurring other income because some of the other -- some of the incomes of our clubs and all also frankly get classified as other income. So that's the ongoing piece. But yes, this quarter, the other income is a slightly higher number than what it normally is.

[Puneet Gulati, analyst]

Understood. That's very helpful. And secondly, if you can talk a bit about the construction cost, right, while your collections have moved up, construction costs on a quarter-on-quarter basis is actually a little low. Should we assume that this is how it will trend? Or is there room for it to meaningfully go up from current levels in the current fiscal year itself?

[Ashok Tyagi, executive]

No, no, this will go up for sure. And the reason right now is that if you see the launches, I mean, the high-rise launches that we have done in the last 15 months, so Arbour was launched in March of '23, Privana South was launched in December of '24 and Privana West in April of -- December of '23 and Privana West in April of '24. Only Arbour has acquired serious construction phase right now. Privana South contracts all have been awarded. The contractors have mobilized, execution has commenced. Privana West also should begin in the next couple of months. So really, what you'd see is that maybe in about a couple of quarters, you would actually see construction hitting full throttle.

[Puneet Gulati, analyst]

Okay. And what would that number look like?

[Ashok Tyagi, executive]

I think our construction on an ongoing basis -- yes, we believe that the -- on a full throttle basis from Q3, the construction outflow on the DevCo side should be a number north of INR 800 crores.

[Puneet Gulati, analyst]

Okay. That's very helpful. And lastly, you also increased the launch guidance in some sense. What are the new projects that you've added there?

[Ashok Tyagi, executive]

So at least for this quarter, Puneet, there are no new projects. What's happened is that, I think, clearly, we were understating the pricing expectations from Lux 5, and I think we have rationalized them now. So I think by and large this INR 5,000 crore or INR 6,000 crores that's been the increase from last quarter to this quarter is predominantly driven by a more realistic price expectation on Lux 5. The pricing expectations on the Privana family on Mumbai, on Goa broadly remain the same that they were in the last quarter.

[Puneet Gulati, analyst]

And also the 11.6 million square feet has also gone to 12.8 million, so some bit of new project seems to be happening there. Yes.

[Ashok Tyagi, executive]

That, I think, is a true-up as the final plans of some of these projects have frozen.

[Operator]

We'll take the next question from the line of Parvez -- I'm sorry, Parvez has left the queue. We'll take the next question from the line of Pritesh Sheth from Motilal Oswal.

[Pritesh Sheth, analyst]

So just first question on a little bit of noise of late, which was created in Gurgaon about a little slower sales in INR 7 crore-plus or a little higher ticket size category, obviously, not for you guys, but for some other competitors. So just wanted your thoughts on -- are you seeing at least some exhaustion in terms of price increase at certain price point? There would be certain section of customers who are right now probably moving away from the absorption. So just your thoughts on that.

[Ashok Tyagi, executive]

So obviously, we haven't seen that slowdown in our case, but I'll really hand over to Aakash, who knows this market inside out.

[Aakash Ohri, executive]

Okay. So see, we've done in about 15 months -- as you all know, we've done about close to INR 22,000 crores of sales and which includes Arbour, which includes both the Privanas that you saw, they hovered around $1 million each, each unit. So right now, as I see it, the demand is further consolidating, also towards a better and a good product. I say this extremely humbled with the fact that the kind of response that DLF gets today is I strongly believe it's because of all the work that we have done on the ground, which includes not only of the product, but working on the geography and on the infra that we are known to do.

So I think the endorsement, Pritesh, is of what we see and the kind of response that we are seeing. Very important for you all to know that our bookings are around -- we don't do the INR 5 lakh, INR 10 lakh booking, as you know. We charge an INR 50 lakh booking amount for -- so these -- first of all, most of the people who come in with this kind of a money are very serious.

Second, also happy to report to you, to your point, that the -- even after we sell out, within 1 month, there is the process of these agreements that are signed. That further solidifies the sale because then you are practically -- the customer is signing on the 10% agreement. Happy to report to all of you that even after that, should there be any discomfort in customers, and there have been like 20-odd in the most recent Privana West, I can report to you, have all been reinstated with an additional increased cost.

So the process right now as we go along is, of course, how we are going about the whole business and the demand -- the latent demand that a DLF product still has and our delivery schedule and our commitment. So I feel based on all of that, our price points stay where they are. Also, Mr. Tyagi had made a mention yesterday also that, if you have seen, our collections have been on an all-time high. There have been record collections this quarter as well. And you please track us down to the last 6 quarters, you will see what I mean.

So, therefore, this is a strong endorsement of a DLF brand and a DLF product. I don't see any slowdown at this point in time. I'm being very honest with you, and I don't see anything right now because right now, as we play, we play the whole world together. Any launch is a global launch for us, whether it's the NRIs, domestic or other cities in the country. We are seeing very robust demand. We are seeing extremely good customers with good paying capacity and a very, very good eclectic mix of people coming and buying these products. So that's it from me.

[Ashok Tyagi, executive]

Another thing, Pritesh, because this is normally a noise level of investor versus real so-called residents. Actually, in the sales that Aakash and his team have done in the last 2.5, 3 years, the proportion of re-trades that have come in the market is miniscule. So it's not that people who are buying are exiting in a hurry by making that -- the INR 50 lakh profit or something. They're all here to stay for at least the medium term, if not in 100% case the long term, so that's us while speculator market continues to be away from all of these launches.

[Aakash Ohri, executive]

And also to add to you, Mr. Tyagi, in 9 months of time after every launch, we are almost taking about 35%, 40% of the cost of the thing. So we are not -- we don't promote speculators to that point.

[Ashok Tyagi, executive]

Yes.

[Pritesh Sheth, analyst]

Sure. That's helpful. Just a follow-up on that. I mean, while we remain confident on demand, would you be equally confident on price increases as well if at all we want to take, let's say, in Privana, where we have, like we have had a very couple of successful phases? So are you seeing some kind of exertion there? Or still there is scope of prices going up, depending upon the quality of the product that we are going to launch?

[Aakash Ohri, executive]

No, exhaustion, if you're saying -- again, I don't work in one geography, Pritesh. So for me, as I said to you again, I repeat, the whole world is one playing field for me. When I launch, I do a global launch. So it is not restricting me to one NCR geography. My customers today are coming from all over. I have a very strong NRI pipeline as we reported in our closure of last year. We have a 25% topline. So please understand, for us, when we launch a product, for us, we -- our outreach is all over.

So -- plus, again, I reiterate the fact that people are today endorsing a DLF brand, and they're endorsing a good DLF product. So -- and I see -- and let me put it another way to you that these are only what, how many? The next launch will have another maybe 800 to 1,000 people. That's all. You are looking at it from the overall number of INR 8,000 crores, INR 10,000 crores, I look at it from the point of view units. So for me an 800-unit is to source say about maybe 1.5, 2x the people all over the world. So I'm sure somebody is doing well at that point in time who's going to be affording this particular thing and that support our principles, that's how we've been operating.

[Pritesh Sheth, analyst]

Absolutely. That's pretty helpful. Second, on the cash allocation from here on. So last year, we have had like a couple of big transactions, one in Mumbai, one in Gurgaon, will we have a plan of at least signing up like a couple of projects in a year considering the kind of cash flows that we are generating or we would just be opportunistic in terms of investing into these newer projects if it makes sense from a margin profitability perspective?

[Ashok Tyagi, executive]

So I mean, while we have broadly always indicated that we would like on a medium-term basis to allocate our free cash flow to growth and shareholder returns on broadly a half-half basis, but I think it will depend year-to-year. There is no set, I'd say, target that we have to acquire 10 million square feet of GAV or something because, frankly, we have enough GAV of our own. But clearly, like we did in Sector 61 or Mumbai, if there's an interesting opportunity that crops by, which has -- which is available at the right cost and in a market which is either underserved or contiguous the market we are, we'll always be open to it. But frankly, it's not that we are aggressively pursuing any inorganic opportunity as of now.

[Pritesh Sheth, analyst]

Sure. Just one last for Sriram, sir. On the SEZ leasing, I mean, it has almost remained flattish in last probably couple of quarters, I would say, 85%, 86%. How do you see the trajectory going ahead, let's say, by end of the year? What kind of leasing targets you have internally for the SEZ's portfolio specifically?

[Sriram Khattar, executive]

Yes. So our SEZ portfolio at the -- before the de-notification started was in the DLF system, including DCCDL, 16.5 million. Out of which we de-notified about 15% -- about 10%, about 1.6 million. This has been now, I think, 70%, 80% leased out. And I think as we go forward in the next 3, 4 quarters, the leasing momentum will pick up further because of 2 reasons; one, the Ministry of Commerce and the development commissioners of the SEZs in the various states are now getting to the process of de-notification, which in the first 1 or 2 rounds was a little tedious as people did not know, as the officials did not know what stance to take and how to go about it. Now that process is settling down. That is number one.

Number two, if you take Gurgaon, the vacancy in Cyber City, non-SEZ, which is about 13 million square feet is only 2%, 3% now. So any new inquiry that comes in is shown the likely vacancies to be coming up in SEZs or the existing vacancies for them to take up. So I am cautiously optimistic that in the next 3, 4 quarters, this will show a lot of traction. I mean, to share that the -- we have sort of the rental rates for the non-SEZ or the non-processing declared areas are slightly better than the rates that we get on SEZs.

[Pritesh Sheth, analyst]

Got it. But no specific targets on leasing as of now, right? I mean it would be as and when it comes.

[Ashok Tyagi, executive]

We have year-end targets. Our vacancy today in offices is about 8-point-odd percent. We plan to take it down to overall to between 6% and 7%.

[Operator]

We'll take the next text question from Parvez Qazi from Nuvama Group. And the question is, what are the completion timelines for DT Gurgaon Block 4 of 2 msf and DT Chennai Block 3 of 1.7 msf?

[Ashok Tyagi, executive]

Okay. I'll take that question, Downtown 4 Gurgaon, the OC is expected by the end of this year. However, after the OC comes, if there is a fair amount of other development, landscaping and other work to be done, we think this building will complete in all its ramifications by February, March next year.

Downtown 3 in Chennai, we expect the OC to come in end August, early September, most likely September. And by the time the landscaping and the other things are completed, it should be by the end of this year. However, our handover to tenants will start in -- once the OCs come, and for both the projects, we expect the rental incomes to start flowing in from May next year.

[Operator]

We'll take the next question from the line of Praveen Choudhary from Morgan Stanley.

[Praveen Choudhary, analyst]

I have 2 simple questions. One is the launch timelines for some of the projects that you are expecting in the second half festive season, especially Mumbai project. Also in the Mumbai project, we saw last quarter in your presentation, it was in the premium segment. And now I find it in the either super luxury segment or luxury segment. So was there any change in expectation of ASP there?

And my final question is related to a question that you might have got earlier about Gurgaon market. The ASP increase is quoted very high in different media and different reports by JLL, et cetera. I just wanted to understand if such kind of ASP increase is visible, would it attract speculators, even though I agree that last 2 years, you may not have seen, but are you seeing in the last 3 to 6 months?

[Ashok Tyagi, executive]

Okay. I will address the launch sales pipeline piece and then defer to Aakash for the average selling price increase question. So our launch base -- launch pipeline remains what we had indicated earlier, which is that hopefully, if all approvals come in time, we shall have the Goa launch in this quarter, before September end. And we should have the Lux 5 launch in the next quarter.

Mumbai, right now, the approval process is on along with the requisite clearance, et cetera. The first slum rehab building of about 35-odd stories is ready now. And I think the shifting of the erstwhile tenement dwellers will begin. So we are expecting that again to hopefully get launched by December, maybe overflow till January, but I think December is the target right now.

And Q4 should see one more launch of the Privana family, whether it's in the Privana landscape or adjoining one, I think, is open to discussion. But clearly, one more Privana-light product should hit the market in Q4. In addition to this, there will be small launches of Chandigarh and a couple of commercial launches.

[Aakash Ohri, executive]

So with regard to your ASF (sic) [ ASP ] and in attracting the investors, I think we mentioned in the previous conversation also that for us, our intent has been to look at retail customers. Our intent has to -- has been over the last 2 years, we have deduced our list. Even if somebody is asking for 2 units, mostly we say no. Our intent is to spread our base to as far as we can so that we can seek that end customer, and that is how we have been going about our business.

So as far as investors are concerned and speculators are concerned, there are 2 things; one, that our price point entry barrier itself is very high, so that is the first level. Second, should we see somebody repeatedly trading or not retaining their properties, we generally put them last in our priority. So the allocation process also as it goes, should we find any amiss. And our checks and balances are on a monthly basis because these are linked to our collections.

So, therefore, any time collections flags off a name or an occurrence, which is other than what it should be, the systems then kick in and identify those problems and then get it. So that is how we are -- we have put our checks and balances. So, therefore, speculators to a large extent, I don't think would -- we would attract them or even for them, it's not going to be easy. So I think for us, we want to play it absolutely safe and low down. I feel that for us, it takes a lot of effort to reach to that end customer, and we are happy to do that. Our systems are geared up to do that, and that is what we do on a daily basis.

So we mine irrespective of the launch or a product. We continue to mine every day for a new customer, and our various categories and various price points are open. And, therefore, we keep putting them in various buckets. As and when we launch and we know what category they are and what level of investments they want to make and as and when we launch post our RERA approvals, then we reach out to these sets of people who we have continued to mine, as I said earlier, and then that's how we operate. So I hope, Praveen, if that has answered your question.

[Praveen Choudhary, analyst]

Yes, that's very, very clear. And congratulations for good collection, good operating cash flow as well as strong presales.

[Operator]

The next question is from Kunal Lakhan from CLSA.

[Kunal Lakhan, analyst]

Firstly, you have rationalized the pricing in your new launches. Does that make any changes to your full-year guidance for your presales of INR 17,000 crores?

[Ashok Tyagi, executive]

So right now, we are not officially re-guiding you to a higher number, but I think it's a logical conclusion that there should, hopefully, be some upward bias to that. Maybe wait one more quarter. By the end of next quarter, we should be far closer to our actual launches. And hopefully -- I mean, again, as we had mentioned last time, the INR 17,000 crore number basically still budgets in about a 90% plus sale level on all other launches and a small introductory sale level on Lux 5. And hopefully, that's where possibly the upside could come in. I think, hopefully, by the time we are again talking to each other in October, we'll really have a completely prudent number of this. Aakash.

[Aakash Ohri, executive]

Yes. I'm just adding to what Mr. Tyagi just mentioned, Kunal, about there's also a very strong second market that we monitor. And happy to report 2 transactions in the second market in the last 1 week, one of growth, which is in the DLF 5 geography, which has crossed INR 30,000 a square foot. And recently, just today, in our back, we closed a crest 4,000 square feet unit at INR 49,500. It's touch INR 50,000 a square foot, crest. So -- again, no matter what we say, obviously, you can take with a pinch of salt, but please, if you monitor the kind of work that is happening on ground in terms of the second and third sales, you will understand where these price points and where these customers. These are all -- they're not speculators. They are people who are buying for themselves or their family. So, therefore, the valuations that you will see, obviously, will have to reflect the facts on the ground.

[Kunal Lakhan, analyst]

Understood. Understood. And the fact that you said that -- excluding Lux 5, the rest of the launches you're expecting at least 90% to be sold out. I mean that clearly puts you northwards of that INR 17,000 crore numbers.

[Aakash Ohri, executive]

We also...

[Kunal Lakhan, analyst]

Yes. On the collection side, right, your collections, say, excluding Privana launch, right, should be around, say, about INR 2,500 crores now. Would that be an accurate number?

[Ashok Tyagi, executive]

Excluding Privana, how much was it, excluding Privana West? Yes. So you're right, it will be about INR 2,500 crores, INR 2,600 crores excluding the Privana West. You are right. And I think, Kuldeep, can give you the details offline. So I don't have these numbers currently available.

[Aakash Ohri, executive]

It will be about INR 2,700 crores, INR 2,800 crores because -- yes. So you take out the Privana -- recent Privana West, about INR 800-odd crores -- so, yes.

[Kunal Lakhan, analyst]

Sure, sure. So this number should also inch up considering our last year's sales number and then Privana also contributing from, like say, next quarter onwards, right? This number should see a significant jump.

[Ashok Tyagi, executive]

No. I think now frankly, the numbers are -- they are reflecting the regular installments of both Arbour and Privana South. The Privana West installments will start coming in now from maybe Q3 onwards. So -- but the fact is that in the first 6 months, you collect about 35% so that there's a significant upward collection. That also then eventually aligns itself with the construction milestones, et cetera. So I think the number will stay in the INR 3,000-odd crores range. Again, the new launches could occasionally provide a bubble, but ballpark, this INR 2,900 crores to INR 3,000 crores is, I think, quarterly collections for the next 2 quarters at least should stay at.

[Kunal Lakhan, analyst]

Sure, sure. Just a follow-up on that. Arbour would have been now like, it's been -- it must have been at least 1.5 years since Arbour's launch...

[Ashok Tyagi, executive]

15 months. Yes.

[Kunal Lakhan, analyst]

15 months, yes. So how much would you have collected in that project by now?

[Ashok Tyagi, executive]

45%.

[Kunal Lakhan, analyst]

45%. Okay. So like 15 months 45%.

[Ashok Tyagi, executive]

Yes.

[Kunal Lakhan, analyst]

Okay. Understood. My last one is on -- is a bookkeeping question, actually. We used to have this surplus cash potential slide until last quarter, which is not there in this quarter. If you can give some details from that slide in terms of balance cost of construction...

[Ashok Tyagi, executive]

Okay, okay. Yes, yes. In all fairness, I will give you. I mean, so we had the data, Kuldeep. We will give you. We just thought that data in all fairness, Kunal, was a legacy of the cash crunch time when you wanted to convince analysts and more importantly convince yourself that you will have the money to complete the projects. I think really, with the RERA now being at scale, that risk no longer exists. But you are right, we have that number. I mean, I'll give you off of the cuff.

Ballpark our receivables of the projects that we have launched till 30th June is about INR 21,000 crores have to be collected. We have about -- INR 10,500 crores, INR 11,000 crores is our total cost to complete. Of that INR 11,000 crores, INR 5,000 crores is already residing in the RERA account today. So basically, of the INR 21,000 crores collection that is to come, about INR 6,000-odd crores will need to be spent more on construction and the balance really would be margin. And in addition to all of this, we have about INR 3,000 crores of ready inventory, including a few Camellias, which obviously will also be 100% sales realization. So we had that slide, we just didn't put here. We'll restore it if -- on popular demand, if you want from next quarter.

[Kunal Lakhan, analyst]

Yes. That will help. And also the CapEx on DLF as well as DCCDL balance?

[Ashok Tyagi, executive]

Okay. So, Sriram?

[Sriram Khattar, executive]

So on DCCDL, this year's CapEx will be INR 1,800 crores to [ INR 2,000 crores ]. And going forward, in the next 2, 3 years, this will go up by about 18%, 20% from this ballpark figure of INR 2,000 crores.

[Kunal Lakhan, analyst]

Okay. And on stand-alone, that number was about INR 700 crores balance CapEx, that would be slightly lower now, I am assuming.

[Ashok Tyagi, executive]

On the standalone [Foreign Language].

[Sriram Khattar, executive]

DLF side.

[Ashok Tyagi, executive]

On the DLF, yes, yes, so the residual CapEx on the 3 malls that DLF is constructing is about INR 600 crores ballpark -- INR 700 crores, INR 700 crores, and the residual CapEx on the Atrium Place, which is a JV with Hines, is again about INR 700-odd crores.

[Operator]

The next question is from Abhinav Sinha from Jefferies.

[Abhinav Sinha, analyst]

Khattar, sir, on DCCDL, maybe I missed this, but, a, what is the driver of the jump in rentals this quarter? And what is the exit run rate we are looking at?

[Sriram Khattar, executive]

The jump in rental is a combination of 2 things; one, the accrual that comes on an annual basis, and the other is the start of the rentals in Downtown 1 and 2 in Chennai. The exit for this, which we had given the guidance earlier, is INR 5,000 crores. But next year, the jump up will be rather significant because Downtown 4 and 3 -- Downtown 4 in Gurgaon, Downtown 3 in Chennai and the full rentals of Downtown 1 and 2 will come into play. And, therefore, this will go up significantly in FY '26.

[Abhinav Sinha, analyst]

Okay. So north of INR 60 billion -- INR 6,000 crores next year?

[Sriram Khattar, executive]

So my sense is it will be -- whilst I cannot officially say it, it will be about INR 5,800 crores to INR 6,000 crores.

[Abhinav Sinha, analyst]

Okay. Very helpful. Sir, on the DLF Mall plus Atrium that we are constructing, can you give us some similar guidance because some of these are nearing completion also?

[Sriram Khattar, executive]

Yes. Sure. so Atrium Place is, as you know, a joint venture with Hines where DLF owns 2/3 equity. We -- the total, which we are building there, is 2.9 million. The OC of -- there are 3 blocks of about 650,000 each and one block of 850,000. The first 3 blocks, the OCs will come between January, February and April next year. And Block 4, which is a bigger block, it will come in October next year.

The rentals next year will be in the ballpark of INR 240 crores, INR 250 crores though when all the 4 blocks are completed, on a steady state, the rental will be about INR 580 crores to INR 600 crores. I may also share that we've started leasing that, and we've already leased about 400,000 square feet. And that is one area of focus in the current year to ensure that we continue to lease the buildings at least 80%, 90% before we get the OCs.

[Abhinav Sinha, analyst]

And sir, similarly, for the malls also.

[Sriram Khattar, executive]

So the -- there are 3 malls that are coming up. I will give you the details one by one. One is what we call the Midtown Plaza, which is the baby mall out of the 3. It's about 200-odd square feet. That gets completed end of this year, and the rental should start by April next year. The next one coming up will be Summit Plaza, where the rentals will start, say, in Q1, early Q2 of FY '26 and the DLF Promenade in Goa, which is 700,000, that will get completed end of next year, and the rental of it will come in April '27 -- April '26, my apologies.

[Abhinav Sinha, analyst]

April '26. Okay. And this will total up to another -- stressing roughly INR 250 crores, INR 300 crores. So roughly...

[Sriram Khattar, executive]

Yes, this is upward -- this is INR 300 crores, yes.

[Abhinav Sinha, analyst]

When all these 3 are done. Okay.

[Sriram Khattar, executive]

Yes. And this is about 1.3 million.

[Abhinav Sinha, analyst]

And any plans to sort of retain them or transfer to DCCDL, any thought process there?

[Ashok Tyagi, executive]

Yes. [Foreign Language] once they are in a final rent-yielding mode, at that time, we'll talk to Mr. Khattar and GIC, and depending on how the 2 of them decide, we'll discuss.

[Sriram Khattar, executive]

Yes. But having said that, at the excellence in maintaining the excellence of tenancies, the excellence of operations is seamless between whether the asset is owned in the books of DLF or in DCCDL.

[Abhinav Sinha, analyst]

Right, sir. We know that pretty well, I mean. Tyagi, sir, one last question from my side. On the IREO piece, we are expecting a launch next year, right? I mean, is there anything outstanding legally or payment wise? Or is it just the process of planning, et cetera?

[Ashok Tyagi, executive]

There are basically 2 major parcels, one in the 19.5 or 20 acres, one is 7 acres. The 20 acres was already a group housing license so that [Foreign Language] the transfer of license process is going on. I think that should really be completed in the next -- in the very short time. The balance 7 acres was a part of a plotted license, and there's a migration of license exercise. There is a certain protocol -- process in the government. That's going on to convert it into a [ blue costing ] license, and the 2 of them will be combined. So I think by the time both of them are done, we expect it will be -- I mean, end of this calendar definitely for sure if not end of this fiscal. And hence, the plan to launch it in the early part of next year.

Yes, there will be some governmental charges, et cetera, that I think are due. But -- I mean if you recall the total cost that we had paid and committed for the entire 28 acres to the sellers was about INR 1250-odd crores. And I think the all-told, the approval, et cetera, for getting it to the requisite 3.5 FAR is I think another INR 400 crores to INR 500 crores, some of it which has been expanded, some of it will be expanded across the next 2 to 4 quarters.

[Operator]

The next question is from Puneet Gulati from HSBC.

[Puneet Gulati, analyst]

So the land acquisition payment of INR 413 crores this quarter, does that relate to the same IREO thing or for some other land parcel?

[Ashok Tyagi, executive]

Actually, it does not. So about INR 225 crores or INR 230 crores of it actually -- I mean it was a question of how do we classify it, is actually the TDR payments for the Privana TDR. So what happens in TDR is that basically either you have surplus land, which right now we don't have, or we acquire those sort of licensable or those TDR'ble lands in the market and then send it to the government, the government gives you the TDR certificates. So this INR 230-odd crores is the land cost of those TDR certificates.

And the balance, INR 170-odd crores, is some partner payments to our collaborators and some smaller land acquisitions for contiguity. But the big chunk here is TDR. I mean that's to sort of bring everybody up to speed. The total cost of TDR, land plus approval [Foreign Language] runs to about INR 1,800 to INR 1,900 a square foot, which frankly, given the sale price of INR 20,000-plus is a fraction. And the residential -- cost of residential TOD is actually under INR 1,000 square foot. So obviously, we do want to maximize the TOD and TDR entitlements, not blindly, but in the places that we are launching.

[Puneet Gulati, analyst]

Understood. And the government charges of INR 330-odd crores, that excludes this TDR payment then?

[Ashok Tyagi, executive]

[Foreign Language] land payment, that is in the land charges and the approval charge, which is normal license fee, TOD approval charges, TDR approval charges, those will get classified in the government recharges.

[Puneet Gulati, analyst]

Okay. Understood. And lastly, you also talked about potentially maybe buying some land parcel, which is interesting. Would you ever be looking at Dwarka Expressway market or you would largely focus on your side of Gurgaon?

[Ashok Tyagi, executive]

I don't think Mr. Ohri is interested in Dwarka Expressway right now, so I mean currently, no, yes.

[Aakash Ohri, executive]

Puneet, we've got so much happening on our side of the place, so I think we'd like to stick there.

[Operator]

Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to Mr. Ashok Tyagi for closing comments. Over to you, sir.

[Ashok Tyagi, executive]

Thank you so much. I mean it was a very engaging discussion. And obviously, coming off a decent quarter, I think -- I mean, you guys asked everything that there was to ask, especially about the launch pipeline, about the rental business, CapEx, sales, run rates. And I think we'll continue trying to do the -- carry on the good work on both the RentCo and the DevCo side. I mean, currently, frankly, it's one of those virtuous cycles where the markets for both residential, retail malls and offices, all the 3 segments, where we operate in, are all witnessing an upcycle. So without getting reckless in terms of launches or presales, we will continue to sensibly keep on launching and monetizing the stuff that we have, and hopefully, continuing on our journey towards cash flow and margins. And I think really hope to see you all of you again in October. Thank you.

[Operator]

Thank you, members of the management. Ladies and gentlemen, on behalf of DLF Limited, that concludes this conference. We thank you for joining us, and you may now exit the meeting. Thank you very much, sir.