Buy Prestige Estates, target price Rs 2,060: HDFC Securities

HDFC Securities has a buy call on Prestige Estates Projects with a target price of Rs 2,060. The current market price of Prestige Estates is Rs 1,635.7. Prestige Estates Projects, incorporated in 1997, is a mid cap company with a market cap of Rs 70,486.85 crore, operating in the real estate sector.

Prestige Estates Projects' key products/revenue segments include Income from Sale of Commercial Flats, Shops & Plots, Property Development, Other Services, Sale of services, Project Management Fees and Other Operating Revenue for the year ending 31-Mar-2024.

Financials

For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 2423.80 crore, up 19.72 % from last quarter Total Income of Rs 2024.50 crore and down -25.56 % from last year same quarter Total Income of Rs 3256.00 crore. The company has reported net profit after tax of Rs 245.70 crore in latest quarter.

Investment Rationale
Prestige Estates Projects is ready to press the pedal on new launches in Mumbai, Chennai, Bengaluru, Hyderabad and NCR during H2FY25. Due to the delay in RERA approvals, many projects have been shifted to the Q3FY25 launch. Moreover, Prestige Estates has guided that it shall launch Rs 520 billion worth of GDV in H2FY25 (Rs 250/260 billion in Q3FY25/Q4FY25), which will eventually aid in achieving its targeted guidance of Rs 240 billion plus.

The company has strengthened its financial position with an Rs 50 billion QIP and is planning a potential hospitality IPO by FY26. HDFC Securities believes PEPL has superior growth prospects for the residential portfolio and multi-fold annuity growth; hence, the brokerage maintains a BUY call, with an unchanged SOTP-based target price of Rs 2,060/share, which factors in better-than expected realisation, the addition of new land parcels and improving visibility on office/retail assets leasing.

Promoter/FII Holdings
Promoters held 60.94 per cent stake in the company as of 30-Sep-2024, while FIIs owned 19.12 per cent, DIIs 16.69 per cent.