Prestige Estates Projects Ltd. share price target

PEPL has a diverse portfolio with a presence in residential, office, retail, and hospitality segments. The company’s 9MFY25 incremental BD of 15msf and the launch pipeline of INR800b would result in a presales CAGR of 14% over FY24-27E to reach INR315b by FY27E.

With a 34% upside from the CMP, we maintain our long-term BUY rating on the stock.

Prestige Estates Projects (PEPL) clocked tepid Q2FY25 gross sales bookings worth INR 40.3bn (43% YoY dip) owing to just three new launches across 8.2msf in Bengaluru and Mumbai during the quarter.

With a 33% upside from the CMP, we maintain our long-term BUY rating on the stock.

We initiate coverage on Prestige Estates (PEPL) with a BUY recommendation at a Target Price of Rs 2,195 share, implying an upside of 35% from the current levels.

Prestige Estates Projects (PEPL) reported bookings of INR30b, which was down 23% YoY and 36% QoQ (13% below estimate) on account of muted launches and lower inventory.

Prestige Estates Projects (PEPL) clocked strong Q2FY24 sales bookings worth INR70.9bn (up 102% YoY) driven by new launches of 13msf including Park Grove, Bengaluru (9.3msf). While company has achieved H1FY24 sales bookings of INR110bn (up 69% YoY), the company’s H2FY24 launch pipeline is robust with launches lined up across South India, Mumbai and NCR having GDV of ~INR300bn.

Prestige Estates Projects’ (Prestige) residential sales bookings remain strong and we model for gross sales bookings of INR150bn in FY24E and INR165bn in FY25E vs. INR129bn in FY23 led by high-value Mumbai launches. At the same time, the company’s consolidated net debt levels have risen by INR25.6bn over the last 12 months as it continues to incur annual land/stake buyout spend of INR40-50bn and annual annuity capex of INR30-40bn.

Prestige Estates Projects (PEPL) clocked strong Q1FY24 sales bookings worth INR39.1bn (up 30% YoY) driven by new launches of 3.1msf and ongoing project inventory sales. For the remainder of FY24, the company has project launches lined up across South India, Mumbai and NCR having GDV of ~INR400bn.

Prestige Estates Projects (PEPL) clocked record FY23 gross sales bookings of Rs129bn (up 25% YoY) and gross collections of Rs98bn (up 31% YoY) led by new residential launches of 16.5msf with the Mumbai market contributing Rs27bn or 21% of FY23 gross sales bookings.

We attended Prestige Estates Projects (PEPL)’s analyst meet held on 21st Feb’23 where the management highlighted its aggressive growth plans across segments: 1) the company aspires to double its annual residential sales bookings to Rs250bn by FY26E from ~Rs120bn in FY23E led by expansion in Mumbai, NCR and Pune markets, 2) incremental rental income of Rs25.5bn from offices/malls by FY28E which would require Rs159bn of capex.

Prestige Estates Projects (PEPL) reported Q3FY23 gross sales bookings of Rs25.2bn and was primarily led by strong response to new phase launch in Prestige City, Mulund along with ongoing projects.