Buy Puravankara Ltd For Target Rs. 400 By Emkay Global Financial Services Ltd
Slow start, though likely to catch up
Puravankara’s pre-sales grew 6% YoY to Rs11.2bn in Q1FY26 which is better than expected (Emkay estimate: Rs10bn). The sluggish growth rate is due to lack of any meaningful launch during the quarter. Hence, ability to manage growth from sustenance sales is comforting. The company has lined up a healthy set of launches for FY26, with higher focus on the West which would drive strong pre-sales growth. We expect 36% pre-sales CAGR during FY25- 27E. Progress on new business development (Rs64bn in YTDFY26) is encouraging and asset-light in nature, which keeps leverage under check vis-àvis improving the launch pipeline. More deals are expected ahead which would lead to growth continuity over the medium term. We maintain BUY on the stock with TP of Rs400.
Q1FY26 a sluggish quarter, albeit better than expected
Puravankara’s Q1FY26 pre-sales at Rs11.2bn (up 6% YoY) are better than expected (Emkay: Rs10bn). While YoY growth looks sluggish, it has largely come from sustenance sales – which is comforting. Collections declined 11% YoY to Rs8.6bn in Q1FY26. The company remains on track to complete 2.2msf of commercial projects in FY26.
Two new BD deals signed recently; focus on West intensifies
During Q1FY26, Puravankara announced new project addition in North Bengaluru (via a JV), offering potential GDV of over Rs33bn. Further, in Jul-25, it secured two new projects (asset-light) with GDV potential of Rs31bn. It was selected the preferred developer for redeveloping 8 residential societies in Chembur; these combined have GDV potential of ~Rs21bn. Also, the company entered a joint development of a 5.5-acre land parcel in East Bengaluru which has GDV potential of ~Rs10bn. The West now has portfolio contribution of Rs180bn to the GDV potential (Rs77bn is from redevelopment). All this highlights the company’s continued focus on diversifying its portfolio to the western region.
Launch pipeline remains healthy
On the back of the strong launch pipeline for FY26, including the much-awaited launches in Mumbai (planned during H2FY26), we currently maintain our pre-sales CAGR of 36% during FY25-27E, to Rs93bn. Further, on the back of progression in construction activity as well as inflows from new pre-sales during the year, we expect collections at Rs46bn/Rs63bn in FY26E/27E (26% CAGR in FY25-27E; high base).
We maintain BUY
The new projects added so far in YTDFY26 have increased the residential business NAV by 7%. 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 net debt of Rs35bn (on Mar-26E), we keep our SoTP-based target price unchanged at Rs400 and maintain BUY. At CMP, the stock is trading at 27% discount to the residential business NAV.
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