Buy Prestige Estates Projects Ltd For Target Rs.1,800 by Prabhudas Liladhar Capital Ltd
Pre-sales to accelerate
Prestige Estate Projects Ltd (PEPL) reported pre-sales de-growth of 46% YoY to INR65.8bn, along with healthy collections of INR48bn; improved 6% YoY in Q1FY27. PEPL has delivered healthy pre-sales CAGR of 32% over FY23–26, led by new launches, entry into new markets, and premiumization. Supported by a healthy launch pipeline (~40msf with potential GDV of INR450bn) across key market including Bengaluru, Chennai, Mumbai, NCR and Hyderabad and unsold inventory of INR 367bn+, we expect pre-sales to clock 15-20% CAGR over FY26–28E. Further, given the strong OCF generation and comfortable balance sheet position, PEPL should be able to comfortably fund BD and capex. Maintain ‘BUY’ rating and DCF-derived NAV with SOTP-based TP of Rs1,800/share.
In line quarter:
Operationally, PEPL reported EBITDA of INR8.6bn vs. INR8.9bn in Q1FY26, with OPM moderating by ~661bps YoY to 32.1%. Consolidated revenues grew by ~16% YoY to INR26.8bn as the quarter saw limited project completions, constraining revenue recognition. PAT decreased to INR 2.4bn vs INR 2.9bn in Q1FY26. Net debt increased by INR 10.1bn QoQ to INR 119.2bn due to three land acquisition (Versova +Borivali +Thane) in Mumbai (combined ~29 acres) with potential GDV of INR 178bn.
Moderate pre-sales in Q1; ~46% contributed by newly launched Golden groove:
PEPL pre-sales declined 46% YoY (15% QoQ) to INR 65.8bn (6 msf sold where PEPL share at 5.6 msf) due to higher base in Q1FY26 from Indirapuram bookings. In Q1, the top presales contributors were newly launched Golden Grove (Hyderabad) contributing ~46% (INR 30bn) to total pre-sales, followed by Evergreen Raintree Park (~INR 7.5bn), TPC Indirapuram (~INR 4.4bn), TPC Mulund (~INR 4.2bn) and Gardenia Estates Phase II (~INR 3.3bn). The new launches contributed INR 35bn (~53%) to the presales in Q1. Average price realization stood at INR10,893psf (down by 14% YoY) in Q1FY27. Office portfolio’s gross leasing stood at 1.5 msf with FY27’s exit rental at INR 8.65bn in Q1. While retail portfolio’s gross turnover grew 18% YoY to INR 7.4bn with FY27’s exit rentals at INR 3.7n in Q1. The collections increased by 6% YoY to INR 48.1bn. PEPL’s unrecognised revenue stood at INR 703bn, with Bengaluru accounting for the largest share (43.5%). On the cost side, construction costs stood at INR 10.3bn, while the upcoming commercial capex (PEPL share) stood at INR 52.8bn.
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SEBI Registration number is INH000000933
