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Puravankara (PL)’s pre-sales in FY25 were weak, as expected, as approvals were delayed (sector-wide impact). However, despite only 3.6msf new launches, sustenance sales remained strong (up 14% YoY) which was a respite. Collections were healthy, growing 9% YoY in FY25. Key launches, including Mumbai-based, lined up in FY26 are likely to drive strong pre-sales growth in FY26E/27E. We largely maintain pre-sales CAGR at 36% for FY25-27E (share of West to increase). Collections at Rs46bn/Rs63bn in FY26E/27E would keep leverage at comfortable levels. We retain BUY on PL with TP of Rs400 (6x residential embedded EV/EBITDA on FY26E). At CMP, the stock trades at 28% discount to the NAV.

Sustenance sales support pre-sales amid weak launches in FY25

PL’s pre-sales fell 15% YoY to Rs50bn in FY25 (Q4FY25 pre-sales: Rs13bn), as expected, as approvals for several projects were delayed (sector-wide hit). PL launched a saleable inventory of 3.6msf in FY25, much lower than earlier guidance of 15msf (miss expected). Nonetheless, in the absence of higher launches, 14% YoY growth in sustenance sales to Rs42bn in FY25 was a respite (comprise 84% of overall pre-sales in the year).

Well placed for growth; West to drive pre-sales CAGR of 36% post-FY25

The company has planned 13.5msf of launches in FY26 (PL’s share: 12.2msf) which would comprise 9.2msf new project launches and 4.3msf of subsequent phases of projects already launched. Of these, 9.3msf would be open for sale and are well spread through the year. The much awaited launches in Mumbai are planned for H2FY26. The projects planned for H1FY26 are at the advanced stage of approvals which lends confidence on better pre-sales in FY26. We expect pre-sales CAGR of 36%, to Rs93bn during FY25-27E.

Increase in quantum of collections to keep debt at comfortable levels

Collections grew at a healthy 9% YoY to Rs39bn in FY25, on the back of progression in construction activity as well as inflows from new pre-sales during the year. Bolstered by continuity in execution as well as strong pre-sales growth, we expect collections at Rs46bn/Rs63bn in FY26E/27E (26% CAGR in FY25-27E; high base). Net debt has increased to Rs36bn in FY25 (vs Rs24bn in FY24) as PL invested Rs13bn in land amid a slower pre-sales scenario. We expect net debt to be largely stable at Rs35bn (strong collections vis-à-vis continued project additions).

Valuations undemanding; maintain BUY

We value the residential business at 6x embedded EV/EBITDA (EV of Rs 106bn) and commercial business on 8.5% cap-rate (EV of Rs22bn). At a net debt of Rs35bn (on Mar26E), we keep our SoTP-based target price unchanged at Rs400 and maintain BUY. At CMP, the stock is trading at 28% discount to the residential business NAV.

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