Buy Prestige Estates; target of Rs 630: HDFC Securities

HDFC Securities' research report on Prestige Estates

Prestige Estates (PEPL) registered Q3FY23 presales of INR 25.2bn (-41%/-28% YoY/QoQ), below our estimate of INR 31bn. With this, 9MFY23 presales and collections are the highest ever at INR 90bn (+27% YoY) and INR 70bn (+41% YoY) resp. In Q3FY23, Mumbai contributed INR 5bn, i.e. 19%, to overall sales, while Bengaluru contributed INR 14bn, i.e. 55%, to total presales. PEPL is confident of surpassing its FY23 presales guidance of INR 120bn, of which MMR contribution is expected at INR 27bn (INR 16.6 in 9MY23). PEPL’s commercial project in BKC, Prestige 101, is expected to move to ongoing projects in Q4FY23 with all approvals in place and all premiums paid. During the quarter, PEPL launched seven projects with an area of 4.06msf of projects, including its first project in Calicut generating INR 2bn in presales and the Forum City Mall in Bengaluru attracting 1mn footfalls in the first month with 50% of active tenants. To maintain the growth momentum, PEPL is targeting residential BD of INR 200bn annually and may add a new macro market in NCR and Pune.

Outlook

We have tweaked our estimates to factor in higher interest and depreciation. We maintain BUY, with an unchanged SOTP-based TP of INR 630/sh.