Buy Prestige Estates Projects Ltd For Target Rs.625 - Yes Securities Ltd
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
https://t.me/InvestmentGuruIndiacom
Download Telegram App before Joining the Channel
Business development & launches a focus area
Our view
Prestige Estates Projects (PEPL) continued strong pre-sales by achieving over Rs35bn in Q2FY23 and collected Rs26bn while launched 7.39msf across segments and geographies. Also delivered 2.58msf of projects in Bangalore. PEPL is geared up to launch 10-15msf of residential projects across geographies in the remainder of FY23 which will aid to achieve Rs120bn presales guidance. PEPL is evaluating potential projects/land parcels in NCR/Pune to expand geographically and plans to enter Gurgaon soon. Forum Falcon City Mall, Bangalore (1.34msf) is completely leased out and expected to start contributing to annuity from FY24. Company has ~5msf of near completion office assets along with a retail asset which will guide annuity to Rs31.5bn in next 4-5years and need to do capex of Rs70bn for commissioning ongoing commercial assets while another Rs75bn capex is required for upcoming projects.
Taking the cognizance of PEPL’s current sales run rate we have accelerated our estimates for residential segment while with rising interest rate we increased WACC to 12.1% (earlier 11.4%). For Q2FY23 Net D/E was at 0.41x while management reiterated Net D/E to remain below 0.5x in long run although most of capex is yet to be spend which reaffirms our confidence on PEPL. We remain confident on PEPL’s performance with sustained demand in residential, diversifying to newer markets, increased traction in leasing and recovery in retail & hospitality. We valued PEPL on SoTP based target 1xNAV of Rs625/share at WACC 12.1%, Cap rate 9% and 15x EV/EBITDA Avg. FY23-24E.We retain our ‘BUY’ rating.
Result Highlights:
* PEPL achieved best ever quarterly pre-sales of Rs35.1bn (16.6% q/q & 66.2% y/y) with the volume of 4.55msf (25.3% q/q & 27.8% y/y) predominantly guided by the strong sales from Bangalore, Mumbai & Hyderabad. And collected Rs26bn (21.3% q/q & 67.8% y/y) in Q2FY23.
* PEPL launched projects across segments with total developable area (TDA) of 7.39msf while delivered projects with TDA of 2.58msf.
* For Q2FY23, PEPL reported revenues of Rs14.2bn (-26.4% q/q & 6.2% y/y) guided strong collection.
*EBITDA at Rs3.7bn (-20.2% q/q & -5.9% y/y) and EBITDA margin came in at 25.8% (200bps q/q & -332bps y/y). And recorded adj. PAT of Rs1.4bn (-31.3% q/q & 85.4% y/y) aided by one-off exceptional items.
* Office/Retail/Hospitality/service/residential reported revenues of Rs526mn/ 118mn/1575mn/1875mn/9171mn with EBITDA margin of 74%/58%/34%/12%/ 17% and reported PAT of Rs100mn/(142mn)/(93mn)/125mn/393mn for Q2FY23.
To Read Complete Report & Disclaimer Click Here
Please refer disclaimer at https://yesinvest.in/privacy_policy_disclaimers
SEBI Registration number is INZ000185632
Above views are of the author and not of the website kindly read disclaimer
