Despite an over 40 percent decline in DLF share price since February 2020, most brokerages have retained a positive stance on the stock. Brokerages believe DLF is well placed to ride the COVID-19 headwinds as its balance sheet and cash reserves remain strong.

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The stock has fallen as much as 42.6 percent since hitting its 52-week high of Rs 266.65 on February 1, 2020. It currently trades around Rs 152 per share.

In a recent move, the realty major decided to switch back to its old strategy of commencing sales during the construction period as cash flows remain under pressure due to the impact of COVID-19. Five years ago, the company had decided to sell only completed inventory, however weak sales due to COVID-19 have forced it to get into the pre-sales model.

The brokerages also feel that the new affordable launches may also drive the pre-sales.

As per Jefferies, the company's plan to shift back to residential launches during construction is a welcome step. It expects residential sales to rise to 20 percent CAGR over FY20-22, two times the prior pace. The brokerage maintains a 'buy' on the stock and has raised the target for the stock to Rs 202 per share from Rs 186 earlier.

Meanwhile, Edelweiss also believes that with near-term demand outlook hazy due to the fallout of COVID-19, DLF's decision to renew its focus on mid-income projects in FY21 would aid sales and cash flow. The brokerage also raised it target price for the stock to Rs 202 from Rs 194.

In the March quarter, DLF’s revenue and operating earnings fell 32-40 percent from the year-ago. DLF further projects a weaker financial performance in Q1FY21 due to strict lockdown restrictions during April and much of May.

The realty major reported a consolidated net loss of Rs 1,857.76 crore in the fourth quarter of the last fiscal year, mainly due to the reversal of deferred tax assets (DTA) as it adopted a lower tax rate. It had posted a net profit of Rs 436.56 crore in the year-ago period, the company had said in a regulatory filing.

DLF’s Q4FY20 performance was a mixed bag across segments. While DLF’s net debt increased by Rs 4 billion in Q4FY20 to Rs 52.7bn on account of interim dividend payment of Rs 3 billion, the company is comfortably positioned with Rs 25 billion of cash reserves, said ICICI Securities in a note.