Prestige Estates drops 5% after Morgan Stanley downgrades rating to 'underweight'

Shares of Prestige Estates have surged close to 8 percent in the past week

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26 Aug, 2025 12:21

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International brokerage Morgan Stanley has downgraded its rating for Prestige Estates to 'underweight' from the earlier 'overweight' call on the back of the company's slower pre-sales growth. Alongside that, the brokerage also slashed its price target for the stock by 15 percent to Rs 1,510, which implies a potential downside of 11.5 percent from Tuesday's closing level.

The ratings downgrade triggered a 5 percent fall in the shares of Prestige Estates on November 27. At 09.23 am, the stock was trading at Rs 1,627.85 on the NSE.

Morgan Stanley was disappointed by Prestige Estates' pre-sales performance so far, highlighting that the company has achieved only 29 percent of its FY25 target in the first half of the fiscal year. Consequently, the brokerage now estimates a mere 9 percent on year pre-sales growth for Prestige Estates as against its earlier projection of 29 percent growth in FY25.

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The brokerage further justified its rating downgrade, attributing the 'underweight' call to Prestige Estates' high capital expenditure in its IP business and its weaker pre-sales momentum relative to peers.

Shares of Prestige Estates have surged close to 8 percent in the past week, buoyed by expectations of a pick-up in bottlenecked infra projects in Maharashtra after the BJP's landslide victory in the state.

The company's gross sales bookings recorded a 43 percent on year drop in Q2 attributed to only three new launches during the quarter. Despite this, the company remains confident in achieving Rs 25,000-30,000 crore in gross sales bookings for FY25, driven by high-value projects in Mumbai and Indirapuram, Delhi NCR, as it expands its presence beyond South India.

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