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Laying a Foundation for FY26; Maintain BUY

Recommendation Rationale

Strongest ever Quarterly Performance: Prestige reported pre-sales of Rs 12,126 Cr for the quarter, marking a 300% YoY growth. Collections stood at Rs 4,523 Cr, in line with expectations and management guidance. The company launched 14.94 Mn sq. ft. across four projects in Q1FY26, including its maiden NCR launch with ~Rs 9,500 Cr in GDV. The total GDV of launched projects stood at ~Rs 13,600 Cr. NCR contributed ~Rs 7,162 Cr or 59% of pre-sales, primarily driven by The Prestige City Indirapuram, while Bengaluru and Mumbai contributed ~20% and 12%, respectively. The company has guided for a launch pipeline of GDV Rs 43,000 Cr and pre-sales of Rs 27,000 Cr for FY26. Q2FY26 is expected to see launches with a GDV of ~Rs 12,000 Cr, driven by Evergreen at Raintree Park, Phase 3 of The Prestige City Indirapuram, Prestige Highland Park, and plotted developments from Greenbrooks, Crystal, and Autumn Leaves. This indicates that Prestige is back on track with its growth trajectory and has largely resolved the earlier issues affecting its launch timelines.

Annuity Gains Positive Traction: The company reported a healthy occupancy level of ~94% for its office segment across 1.21 Mn sq. ft. and a strong 99% for its retail portfolio, generating GTO of Rs 590 Cr. EBITDA margins stood at 76%, resulting in an EBITDA of Rs 1,769 Cr from the annuity segment for Q1FY26. Exit rentals for the commercial and retail portfolios stood at Rs 523 Cr and Rs 271 Cr, respectively. The upcoming pipeline comprises 14 Mn sq. ft. of commercial and 10 Mn sq. ft. of retail space. Annuity capex rose to ~Rs 15,000 Cr, up from ~Rs 13,500 Cr earlier. Prestige expects exit rentals to increase from the current Rs 1,091 Cr to ~Rs 4,900 Cr by FY30E.

Resilient Cashflows leading to Healthy BD: The company added projects worth ~Rs 20,400 Cr in GDV across 7 projects during the quarter, predominantly in southern India, with one commercial project in the MMR region. It has budgeted Rs 7,500–8,000 Cr of operating cashflows for FY26, of which ~Rs 4,000 Cr is earmarked for BD and the remaining for capex. Free cash flows from residential (ongoing and upcoming) projects, net of spends, stand at ~Rs 50,000 Cr, while the balance capex required for annuity assets is ~Rs 15,000 Cr. This implies significant headroom for further BD and acquisitions. The company aims to replenish the year’s sales through BD. Net debt stands at Rs 6,830 Cr, with a net debt-to-equity ratio of 0.42x. Debt is expected to rise by Rs 1,200 Cr going forward.

Sector Outlook: Positive     

Company Outlook & Guidance: Prestige has delivered its strongest quarterly performance, with robust pre-sales driven by a successful NCR debut and a strong launch pipeline. The annuity segment continues to gain momentum, supported by high occupancy levels and rising rental income. Healthy cash flows and a solid balance sheet are enabling aggressive business development and capex initiatives. Management’s guidance on launches and pre-sales for FY26 appears achievable, with potential for outperformance. The outlook remains structurally strong, supported by operational excellence and execution capabilities.

Current Valuation: DCF-based valuation

Current TP: Rs 2,000/share; ( Earlier TP: Rs 1,850 /share).

Recommendation: With a 25% upside from the CMP, we maintain our long-term BUY rating on the stock.

Financial Performance

The company reported revenue of Rs 2,307 Cr for the quarter, up 24% YoY. EBITDA and PAT stood at Rs 894 Cr and Rs 311 Cr, respectively, reflecting growth of 12%/1.5% YoY. EBITDA margin was at 39%, witnessing a 9% YoY decline. Bookings for the quarter stood at Rs 12,126 Cr, broadly in line with estimates and the company’s guidance.

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SEBI Registration number is INZ000161633