Company Update : Prestige Estates Projects Ltd By Motilal Oswal Financial Services Ltd
Zero launch for residential segment dents performance
Significant guidance miss possible due to lack of launch visibility
Operational performance
* PEPL reported a 43% YoY decline in pre-sales to INR30.1b (54% below our estimates) due to the absence of launches in 3QFY25. For 9MFY25, presales declined 38% YoY to INR100.6b.
* Bengaluru contributed 58%, Mumbai 22%, and Hyderabad 17% to presales in 3QFY25.
* Post 3QFY25, PEPL has ongoing inventory of INR137b across Hyderabad, Bengaluru and Mumbai.
* The company launched one project each for retail, office and hospitality with total area of 2.15msf. For 9MFY25, the company launched 12.25msf, of which 10.05msf was residential projects.
* PEPL delivered two residential projects in Bengaluru with total potential area of 3.03msf in 9MFY25.
Ongoing and future pipeline
* GDV of upcoming launches has increased from INR521b to INR568b.
*For under-construction and upcoming office capex pending is INR95b, while retail pending capex is INR33b.
* For Hospitality, PEPL added the new Aloft Hyderabad Prestige City asset under the upcoming projects with 200 keys (38% PEPL share), which takes total Keys to 2146 under the upcoming projects.
Cash flow
* PEPL's collections grew 6% YoY to INR31b (19% below our estimates) for 3QFY25 and 7% YoY to INR83b for 9MFY25.
* The company has net debt of INR59.6b with a debt-to-equity ratio of 0.37x as of Dec’24. The average borrowing cost is 10.65%
Financial performance
* PEPL reported an 8% YoY decline in revenue to INR16.5b (41% below our estimate) for 3QFY25, while revenue was up 2% YoY at INR58b for 9MFY25. ? In 3Q, about 59% of revenue was contributed by the residential segment, followed by hospitality 16%, office 11%, retail 7%, and the remaining by others.
* EBITDA came in at INR5.9b up 7% YoY (22% below our estimates) with EBITDA margin of 35.7%, up 496bp YoY. For 9MFY25, PEPL reported EBITDA of INR20.2b, up 21% YoY, with margin of 34.7%, up 542bp YoY.
* PEPL reported adjusted PAT of INR177m, down 85% YoY, with margin of 1%. For 9MFY25, the company reported adj. PAT of INR4.4b, down 22% YoY.
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