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Sizeable project acquisitions on the cards Business development to regain momentum

According to media reports, Aditya Birla Real Estate (ABREL) is in advanced discussions to acquire a 10-acre plot in Noida from Shipra Group for INR10b. In our conservative estimates, the project could add ~INR60b to ABREL’s GDV. Following strong business development (BD) worth ~INR400b during FY24-25, project additions slowed considerably, with only INR42b of GDV added over the last two years (INR26b at Vashi in Mar’26 and INR16b at Khar in Aug’26). However, we expect BD activity to pick up meaningfully following the signing of the Noida project. Further, our channel checks indicate that multiple projects are at the discussion stage across ABREL’s core markets of Pune, Bengaluru, NCR, and MMR. These opportunities could enable the company to fulfill its FY27 BD target of INR100-150b in GDV additions.

Project additions in new markets to improve growth visibility

ABREL plans to launch projects offering a GDV of INR96b in FY27, which should drive pre-sales growth given limited sustenance inventory. Beyond FY27, the company has a launch pipeline worth ~INR325b GDV. However, 73% of its total pipeline (worth INR421b) is concentrated in Worli and Thane, with projects expected to be launched in multiple phases. Given limited inventory in other micro-markets, BD in new regions will be crucial to sustaining growth over the medium term. Based on news reports and channel checks, new project additions in Noida, Pune, Bengaluru, and other markets over the coming months could enable ABREL to undertake multiple launches simultaneously, driving diversified growth over the medium term. We maintain our pre-sales CAGR of 10%, reaching INR99b over FY26-28E.

Sturdy balance sheet positions ABREL well for new acquisitions

Net debt stood at ~INR34b as of 1QFY27. However, following the sale of the paper division in Aug’26, the balance sheet is expected to turn almost net cash. Further, supported by pre-sales growth and project execution, we expect a 30% CAGR in collections, reaching INR56b over FY26-28. Consequently, strong cash flows and ample headroom to take on additional leverage should position ABREL well to undertake BD activity through both outright and asset-light models.

Valuation and view

* ABREL’s BD activity, which slowed over the past two years, is expected to accelerate, with sizeable project additions anticipated in the coming months. This would enable the company to meet its annual BD target of INR100-150b GDV in FY27. The sale of the paper division was also concluded in 2QFY27, which should help deleverage the balance sheet, free up management bandwidth, and increase the focus on real estate development. We value the residential business at its NAV, with any premium assigned to NAV contingent on a sustained revival in BD.

* The focus on ramping up the annuity portfolio is encouraging, as it is expected to provide cash flow stability post-FY30.

* We reiterate a BUY rating with a TP of INR1,960, implying a 76% upside potential

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