Buy Prestige Estates Projects Ltd For Target Rs. 1,623 By Geojit Financial Services Ltd
Healthy Pipeline and Record Pre-sales Drive Optimism
Prestige Estates Projects Ltd. (PEPL) is one of the leading real estate developers in India in terms of booking value. Its expansion is driven by a diverse portfolio, covering residential, office, retail, and hospitality segments.
* In 9MFY26, pre-sales surged 122% YoY, surpassing the previous full-year peak, driven primarily by a strong 40% contribution from the NCR region.
* Quarterly sales volumes stood at 2.9 msf, with over 8,500 units sold year-todate, alongside a 6% increase in average realizations.
* Leasing during Q3 stood at 0.56 msf, while portfolio occupancy remained robust at over 95%.
* Revenue for Q3 grew 128% YoY, driven by strong project completions. However, EBITDA margin for the quarter stood at 22.5% (vs. 34.3% for 9M), with Q3 compression attributable to product mix.
* Management has raised its FY26 pre-sales guidance to over Rs.30,000cr, having already achieved Rs.22,327cr in the first nine months.
Outlook & Valuation
PEPL reported a robust 9M performance, with pre-sales of Rs.22,327cr already exceeding its previous full-year achievement, keeping it firmly on track to meet its FY26 guidance of Rs.30,000cr. A strong Q4 launch pipeline across key markets such as Bengaluru, Hyderabad, and Chennai, coupled with unrecognized revenue of Rs.61,922 crore, provides healthy visibility on future bookings and revenue realization. However, margins continue to face pressure due to an adverse product mix and elevated business development spending. Despite these near-term challenges, current valuations appear reasonable. Hence, we upgrade our rating to Buy, with a revised target price of Rs.1,623, based on FY28E NAV.
Key Highlights
* Collections for the 9-month period stood at Rs. 13,283 cr, the highest recorded by the company and higher than full year totals in the past.
* During Q3, Prestige launched 5.02msf, taking total launches for the 9 months to 23.83msf with a residential GDV of over Rs. 19,600cr.
* Three new premium Bangalore office developments totalling 3.7msf were recently completed and will shortly begin contributing to annuity income.
* Business development spend for 9M FY26 stood at Rs. 4,700cr, with FY26 total guidance at Rs. 5,500–6,000cr.
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SEBI Registration Number: INH200000345
