Buy Prestige Estates; target of Rs 288: Motilal Oswal

Motilal Oswal's report on Prestige Estates Projects

"Prestige Estates’ (PEPL) 2QFY15 standalone revenue grew 13.7% YoY to INR5.4b (v/s est. of INR5.1b). Key revenue contributing projects are Bella Vista, Golfshire, Tranquility, White Meadows etc. EBITDA stood at INR1.5b, +28% YoY (v/s est. of INR1.3b), translating into margin of 28.2% (v/s 24.3% QoQ). Better revenue mix and lower other expenses led to QoQ improvement in margins. PAT stood at INR969m, +2% YoY v/s estimate of INR839m."

"Healthy traction in launches in strategic segments and controlled ticket sizes resulted in robust operational momentum delivered by PEPL, compared to the contrary by regional peers with YoY flat/de-growth momentum. It justifies a valuation premium of 15-25% (in various parameters) enjoyed by the company. PEPL trades at 2.2x FY16E BV and 18.4x FY16E EPS, and 12x FY16E cash EBITDA. Maintain Buy with a TP of INR288", says Motilal Oswal research report.

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