Company Update : Prestige Estates Projects Ltd by Motilal Oswal Financial Services Ltd
Strong 1H launches push presales past FY25 benchmark
Aggressive business development in 1H of INR331b
* Presales: PEPL reported a 50% YoY growth and 50% QoQ decline in presales to INR60.2b (52% beat to our estimates) due to the stellar launches in NCR and Bengaluru. In 1HFY26, the company reported INR181b in presales surpassing total FY25 presales in 1HFY26 itself thus growing at 157% YoY.
* Area sold: Total area sold in the quarter was at 4.4msf, up 47% YoY while it was down 54% QoQ (42% beat to our estimates). In 1HFY26, total area sold was at 14msf, up 138% YoY and higher than total area sold in the full year FY25.
* Geographical contribution of presales: In 2QFY26, BGLR / NCR / MMR / HYD / CHEN / Others contributed 40% / 18% / 22% / 11% / 7% / 2% to presales while in 1HFY26 these regions contributed 27% / 45% / 16% / 7% / 4% / 1% respectively.
* Realization: The realizations stood at INR13,614psf, up 2%/7% YoY/QoQ (7% higher than our estimates). In 1HFY26, they were at INR12,988psf, up 8% YoY.
* Launches: Prestige launched four residential projects totaling 3.87msf with GDV of INR39.6b during the quarter. With this, HY26 launches stood at 18.81msf with GDV of INR175.9b.
* Collections: PEPL's collections rose 14% YoY to INR38.9b (14% above our estimates) for 2QFY26. In 1HFY26, it stood at INR81b, up 55% YoY.
* Net debt: In 2QFY26, the company had net debt of INR73.2b, with a net debt/equity ratio of 0.45x (vs net debt of INR68b, with a net debt/equity ratio of 0.42x as of 1QFY26). The average borrowing cost stands at 9.61%.
* Business development: In 1HFY26, the company acquired 266 acres of land with a GDV of INR331b across Hyderabad, Bengaluru, Chennai, Mysore and Mumbai.
* Completions: The company successfully completed two residential projects in 2QFY26 spanning a total of 2.53msf. Overall, in 1HFY26, the company completed 7.99msf of projects.
* Pipeline: GDV of upcoming launches planned stands at INR272b. For under-construction and upcoming office projects, pending capex amounts to INR104b, while retail projects have INR43b in pending capex.
* Office: Total area leased in 2QFY26 was at 2.3msf. Occupancy levels remained robust at 93.4%. Exit rentals for the quarter amounted to INR8.2b.
* Retail: Gross Turnover (GTO) across malls was recorded at INR6.2b, up 9% YoY. Occupancy levels remained strong at 99%. Exit rentals for FY26 stood at INR2.7b.
Financial performance
* PEPL reported an 6% YoY / 5% QoQ increase in revenue to INR24.3b (13% below estimates) for 2QFY26. In 1HFY26, it stood at INR47.4b, up 14% YoY.
* EBITDA came in at INR9.1b, up 44% YoY / 2% QoQ (21% above our estimates) with EBITDA margin of 37%. In 1HFY26, it stood at INR18b, up 26% YoY with margin of 38%.
* PEPL reported adjusted PAT of INR4.3b up 124%/47% YoY/QoQ, (42% above estimates) with margin of 18%. In 1HFY26, it stood at INR7.2b, up 70% YoY with margin of 15%.
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