Aditya Birla Real Estate shares down 32% from peak. Can the stock reclaim Rs 2,400 post Q1 results?

Shares of Aditya Birla Real Estate (ABREL), down 32% from their October 2024 peak, head into a closely watched earnings announcement on Wednesday that could set the tone for the stock’s next move. With technical signals mixed and management preparing to unveil both June-quarter results and a funding plan tied to its ongoing business transformation, investors are eyeing whether the stock can regain momentum and move back toward the Rs 2,400 mark.

In a regulatory filing, ABREL announced that its Board will meet on July 23, 2025 to consider the unaudited standalone and consolidated financial results for the quarter ended June 30, 2025. The agenda also includes a proposal to raise funds via term loans or debt securities to refinance borrowings taken for the capex of its Century Pulp and Paper (CPP) division.

As per the filing, this refinancing move comes “in view of the proposed sale of CPP division of the Company to ITC Limited.” The Rs 3,498 crore divestment, approved in March this year, is seen as a pivotal move to unlock capital and streamline focus on the real estate business.

Technical indicators at a crossroads

Kunal V Parar, Vice President of Technical Research and Algo at Choice Broking, flagged a potential bullish reversal. “On the daily chart, the stock has formed a Bullish Harami candlestick pattern — a classic bullish reversal signal — indicating the potential for an upward move.”

“The stock is currently trading above its 100-Day Moving Average, reinforcing the prevailing positive short-to-medium-term trend. On the weekly timeframe as well, it remains above the 100-Week Moving Average, highlighting continued strength in the long-term trend,” said Parar.

Parar also highlighted a key momentum shift: “The daily RSI is hovering near the 35 level and has recently taken support around the crucial 30 mark, indicating a possible shift in momentum towards the upside.”

“If the stock sustains above the Rs 2,181 level, we anticipate a move towards the Rs 2,245–2,345 zone in the near term. Traders are advised to maintain a strict stop loss at Rs 2,100 to manage risk effectively,” he said.

In contrast, Kunal Kamble, Senior Technical Research Analyst at Bonanza, struck a cautious tone. “The stock is forming a Lower High–Lower Low structure, indicating that bears are currently in control. Price action has slipped below key SMAs, which confirms a shift in trend to the downside.”

Kamble sees immediate support at Rs 2,066 and resistance at Rs 2,300, with a higher hurdle at Rs 2,450. “It is advisable to wait at the current level before initiating any fresh positions. The technical setup remains weak, and no immediate rebound is expected in the near term,” he said. “The stock is likely to remain range-bound in the near term, with no significant momentum expected. It is anticipated to trade between Rs 1,800 and Rs 2,440 until a decisive breakout occurs on either side.”

Q4 loss weighs, but long-term growth bets build

ABREL reported a consolidated net loss of Rs 126.99 crore for the March quarter, compared to a net profit of Rs 143.67 crore a year earlier. Revenue fell sharply by 51.5%, dragging the full-year loss to Rs 148.74 crore.

Khushi Mistry, Research Analyst at Bonanza, said, “The company posted a consolidated net loss of approximately Rs 127 crore for Q4 FY25, primarily due to a sharp 51.5% revenue decline and operational pressures, resulting in a full-year net loss of roughly Rs 148.7 crore. The market reacted swiftly and negatively, with the stock coming under pressure after results.”

However, Mistry sees the paper division divestment as a turning point. “ABREL has executed the sale of its pulp and paper business, a move expected to be completed by Q2 FY26. This is strategic — management aims to redeploy capital toward its real estate business, focus on core operations, and strengthen the balance sheet.”

“While weak near-term earnings have dragged sentiment, the divestment and strong project pipeline do provide a counterweight. If execution continues, these factors could drive a turnaround in earnings and sentiment as early as late FY26,” Mistry said.

Still, risks remain. “ABREL’s FY25 loss is notable — the swing from profit to a Rs 148.7 crore net loss is a concern for value-focused investors. The decline in operating profit margins (with OPM dropping to just 1% in Mar 2025) and low ROE highlight ongoing efficiency challenges,” she said. “In the very short term, valuation pressure could persist if execution stumbles or sentiment in the broader real estate sector weakens.”

Brokerage bullish on project pipeline, long-term rerating

Brokerage Emkay Global initiated coverage on ABREL in June with a 'buy' rating and a price target of Rs 3,300. It cited strong booking momentum, robust financials, and a launch pipeline exceeding Rs 45,000 crore. Emkay expects pre-sales to grow at a 25% CAGR through FY27, reaching Rs 12,600 crore, with collections rising 32% to Rs 4,700 crore.

The brokerage sees the pulp and paper divestment as a key liquidity booster, projecting a decline in net debt to Rs 2,000 crore by FY27 even with ongoing project additions.

Stock performance and near-term watchpoints

ABREL shares are down 15.6% year-to-date and 12% over the past month, underperforming broader market indices. The stock is currently 30% above its February low of Rs 1,638 but still far below its 52-week high of Rs 3,141.95 hit in October 2024.

With the RSI at 36.8 and MACD still in bearish territory at -42.1, near-term momentum remains muted. The next directional trigger will likely emerge from Wednesday’s board meeting, with investors watching closely for earnings recovery signals and clarity on the company’s post-divestment capital strategy.

Whether that’s enough to reclaim Rs 2,400 remains to be seen.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)