Shares of Prestige Estates Projects surged over 6 percent to an all-time high of Rs 1,997 per share on June 14 after global brokerage firm CLSA reiterated its 'buy' rating and raised the target price to Rs 2,320, suggesting a potential upside of over 16 percent from current levels.
Just days ago, CNBC-TV18 had reported quoting unnamed sources that the real estate player has appointed bankers for the IPO of its hospitality business. Prestige is reported to be looking to raise Rs 2,000-3,000 crore through the public issue though Moneycontrol is yet to verify the news development independently. However, the market sentiment appears to have been supported by this possibility.
CLSA pointed out that Prestige Estates' valuations remain discounted compared to peers and expects a continued re-rating, noting that debt concerns were overblown. "Operational cash flow will significantly support its capex and project pipeline growth," the firm stated.
So far this year, the stock of this realty player soared over 66 percent, as against 7 percent rise in the benchmark Nifty 50 index.
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Earlier, Elara Securities also recommended a 'buy' for Prestige Estates, setting a target price of Rs 2,300 per share. They praised the company for its unique combination of scale, diversity, and market dominance.
"Prestige Estates Projects is guiding a presales growth of 25 percent YoY in FY25, led by planned launches of Rs 60,000 crore. This is supported by its dominant position in the home market of Bengaluru, consistently commanding ~10 percent volume market share. We view the company's proven ability to access land via joint development agreements (JDAs) and industry-leading execution pace as key catalysts for accelerating new business development in the residential business," they noted.
In the March-ended quarter, Prestige Estates posted 70 percent on-year decline in consolidated net profit at Rs 140 crore, while total income fell by 31 percent YoY to Rs 2,232 crore.
Prestige Estates is one of the leading real estate developers in the country. It has a significant presence in South India.
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