REDUCE (Maintained) 

CMP: INR 1,636 Target Price: INR 1,485 (INR 1,596)  -9% ICICI Securities Limited is the author and distributor of this report

04 November 2024 India | Equity Research | Q2FY25 results review

Prestige Estate Projects

Real Estate

Stronger FY25 under construction

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. Although H1FY25 sales bookings were weak overall,
at INR 70.5bn, PEPL maintains its FY25 guidance of launching 53.4msf of residential projects with a total GDV of INR 521bn.
Accordingly, it aspires to clock INR 250–300bn of gross sales bookings in FY25 with high-value Mumbai projects (INR 100bn of
launch GDV) and Indirapuram, NCR (INR 100bn launch GDV) being key projects beyond south India. While incorporating recent
QIP of INR 50bn and land bank additions, we retain REDUCE with a revised TP of INR 1,485 (earlier INR 1,596) at a 50% premium
to FY25E NAV of INR 990/share. Key upside risks: Strong residential price uptick and pick up in office leasing.

H1FY25 – tepid start; FY25 – healthy launch pipeline in queue Adhidev Chattopadhyay
After a stellar FY23, where PEPL achieved FY23 gross sales bookings of INR [email protected]
129bn with 16.5msf of new residential launches, FY24 gross sales bookings +91 22 6807 7451
have been impressive at INR 210.4bn (up 63% YoY) driven by new launches of Saishwar Ravekar
31.67msf and ongoing project inventory sales. For FY25, it plans to launch [email protected]
53.4msf of residential projects with total GDV of INR 521bn. Accordingly, PEPL
aspires to clock INR 250–300bn of gross sales bookings in FY25 – high-value
Mumbai projects (INR 100bn of launch GDV) and Indirapuram, NCR (INR
100bn launch GDV) being key projects beyond south India. H1FY25 has been
a relatively tepid period, with gross sales bookings of INR 70.5bn (36% YoY
dip), owing to just five new launches across 10.1msf (80% in Bengaluru) on Market Data
account of delays in approvals. However, with a strong launch pipeline for the Market Cap (INR) 705bn
rest of FY25, PEPL maintains its initial guidance for FY25 sales bookings. Market Cap (USD) 8,383mn
Bloomberg Code PEPL IN
Debt levels a key monitorable Reuters Code PREG.BO
While PEPL’s residential sales bookings remain strong, consol. net debt levels 52-week Range (INR) 2,075 /737
as of Jun’24 are at INR 81.8bn (net debt/equity of 0.68x). However, with the Free Float (%) 35.0
recent INR 50bn QIP issuance and PEPL continuing to incur an annual ADTV-3M (mn) (USD) 31.2
land/stake buyout spend of INR 40–50bn and annual annuity capex of INR30–
40bn, the company’s ability to keep debt levels in check while chasing growth Price Performance (%) 3m 6m 12m
is a key monitorable. We expect PEPL’s net debt levels to rise to INR 84.4bn Absolute (9.9) 18.6 113.7
by Mar’25E owing to land spend and stake buyouts. Further, with gross Relative to Sensex (7.0) 12.0 89.4
incremental pending capex of over INR 150bnbn for annuity/hotel assets, its
ability to achieve significant pre-leasing in ongoing/upcoming annuity assets ESG Score 2022 2023 Change
along with strata sales shall be an essential metric to monitor ahead. ESG score 52.9 62.9 10.0
Environment 31.2 38.0 6.8
Financial Summary Social 38.0 73.3 35.3
Governance 76.3 75.4 -0.9
Y/E March (INR mn) FY23A FY24A FY25E FY26E
Note - Score ranges from 0 - 100 with a higher
Net Revenue 83,150 78,771 1,26,031 1,57,555 number indicating a higher ESG score.
EBITDA 20,863 24,984 41,068 54,084
Source: SES ESG, I-sec research
EBITDA Margin (%) 25.1 31.7 32.6 34.3
Net Profit 9,418 13,741 16,381 23,702
EPS (INR) 23.5 34.3 38.0 55.0 Previous Reports
P/B (x) 6.6 5.8 4.0 3.5 01-08-2024: Q1FY25 results review
P/E (x) 69.6 47.7 43.0 29.7 30-05-2024: Q4FY24 results review
EV/EBITDA (x) 34.5 29.8 18.7 14.6
RoCE (%) 11.6 16.8 14.5 15.4
RoE (%) 9.9 12.9 11.2 12.5

Please refer to important disclosures at the end of this report

 Prestige Estate Projects | Q2FY25 results review | 04 November 2024

Q2FY25 consolidated results snapshot

INR mn Q2FY25 Q2FY24 Q1FY25 YoY (%) QoQ (%)
Total Operating income 23,044 22,364 18,621 3.0 23.8

Raw Materials 8,618 10,338 3,018 (16.6) 185.6

Personnel Cost 2,042 1,693 2,090 20.6 (2.3)
Other Expenses 6,071 4,408 5,550 37.7 9.4
Total Expenses 16,731 16,439 10,658 1.8 57.0

EBITDA 6,313 5,925 7,963 6.5 (20.7)

EBITDA margin (%) 27.4 26.5 42.8 90.2 (1,536.8)

Interest (Net) 3,565 2,639 3,461 35.1 3.0

Depreciation 2,004 1,741 1,905 15.1 5.2
Other Income 1,194 10,196 1,624 (88.3) (26.5)
Extraordinary items 0 0 0 NM NM
Profit Before Tax 1,938 11,741 4,221 (83.5) (54.1)
Taxation (519) 2,564 1,023 (120.2) (150.7)
Profit After Tax before 2,457 9,177 3,198 (73.2) (23.2)
MI/Associate
MI/Associate share (535) (668) (872)
Reported PAT 1,922 8,509 2,326 (77.4) (17.4)
Net margin (%) 8.3 38.0 12.5 (2,970.7) (415.1)
Source: I-Sec research, Company data

Quarterly sales volume trends

INR mn Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q1FY25 Q2FY25
Sales Summary – PEPL share
PEPL sales volume (msf) 3.74 3.41 6.01 5.29 3.86 2.54 2.91
PEPL sales value (INR mn) 36,990 35,579 62,691 51,677 44,330 27,214 39,319

Collections (INR mn) 24,501 24,843 23,923 28,757 32,967 26,974 25,541

Consolidated net debt (INR mn) 55,657 64,804 69,610 69,808 77,880 81,799 35,921
Source: I-Sec research, Company data

PEPL FY25 residential launch pipeline

Source: I-Sec research, Company data, *TDA includes car parking

India | Equity Research 2

 Prestige Estate Projects | Q2FY25 results review | 04 November 2024

Key assumptions
Development Properties FY21 FY22 FY23 FY24 FY25E FY26E
PEPL share - Area sold (msf) (Total) 6.4 13.4 13.6 17.1 16.2 15.0
Average rate (INR/psf) 6,674 6,626 8,723 8,908 9,948 10,939
PEPL share - Sales Value (INR mn) 42,846 88,588 1,18,375 1,52,452* 1,61,517* 1,63,841*

PEPL Rental income (INR mn) 7,169 4,371 3,893 4,327 4,705 7,495
Source: I-Sec research, Company data, *FY24-26E estimates are I-sec calculated proportionate share for company

SoTP valuation
FY25E GAV Value
Project % of GAV
(INR mn) (INR/share)
Residential - for sale 1,57,187 365 31.6
Commercial - lease 30,827 72 6.2
Retail - lease 24,362 57 4.9
Hospitality 70,591 164 14.2
Project management 9,673 22 1.9
Capital WIP across projects 90,000 209 18.1
Land bank/new JVs 1,15,187 267 23.1
Total GAV 4,97,828 1,156 100.0
Less: FY25E Net Debt (PEPL share) 71,233 165
FY25E NAV 4,26,595 990
Add: 50% premium to NAV 2,13,297 495
Target Price 6,39,892 1,485
Source: Company data, I-Sec research

Shareholding pattern Price chart

% Mar‘24 Jun‘24 Sep‘24 2500
Promoters 65.5 65.5 60.9 2000
Institutional investors 31.0 30.3 34.8
1500
MFs and others 13.5 13.0 13.2
(INR)

FIs/Banks - - 0.9 1000

Insurance 0.5 0.5 1.7
500
FIIs 17.0 16.8 19.1
Others 3.5 4.2 4.3 0
Dec-21

Dec-22

Dec-23
Oct-21

Aug-22
Oct-22

Feb-23

Oct-23

Oct-24
Aug-23

Aug-24
Feb-22

Feb-24
Apr-22

Apr-23

Apr-24
Jun-22

Jun-23

Jun-24
Source: Bloomberg Source: Bloomberg

India | Equity Research 3

Prestige Estate Projects | Q2FY25 results review | 04 November 2024

Financial Summary
Profit & Loss Cashflow statement
(INR mn, year ending March) (INR mn, year ending March)

FY23A FY24A FY25E FY26E FY23A FY24A FY25E FY26E

Net Sales 83,150 78,771 1,26,031 1,57,555 Operating Cashflow 16,971 23,339 25,381 33,647
Operating Expenses 62,287 53,787 84,963 1,03,472 Working Capital Changes (2,418) (8,383) (12,606) (13,531)
EBITDA 20,863 24,984 41,068 54,084 Capital Commitments (16,006) (28,790) (41,500) (41,500)
EBITDA Margin (%) 25.1 31.7 32.6 34.3 Free Cashflow (1,453) (13,834) (28,725) 61,616
Depreciation & Amortization 6,471 7,165 7,380 7,601 Other investing cashflow (12,958) 717 - -
Interest expenditure 8,066 12,191 14,332 16,632 Cashflow from Investing
(28,964) (28,073) (41,500) (41,500)
Other Non-operating Activities
4,570 15,482 4,645 4,877
Income Issue of Share Capital - - 50,000 -
Recurring PBT 3,079 - - - Inc (Dec) in Borrowings 13,468 32,454 20,000 20,000
Profit / (Loss) from 13,975 21,110 24,001 34,728 Dividend paid (601) (601) (938) (1,008)
Associates Others - - - -
Less: Taxes 3,475 4,936 6,000 8,682 Cash flow from Financing
12,867 31,853 69,062 18,992
PAT 10,500 16,174 18,001 26,046 Activities
Less: Minority Interest (1,082) (2,433) (1,620) (2,344) Chg. in Cash & Bank
(1,544) 18,736 40,336 (2,392)
Extraordinaries (Net) - - - - balance
Net Income (Reported) 9,418 13,741 16,381 23,702 Closing cash & balance 18,146 25,582 70,472 68,341
Net Income (Adjusted) 9,418 13,741 16,381 23,702
Source Company data, I-Sec research
Source Company data, I-Sec research
Key ratios
Balance sheet (Year ending March)
(INR mn, year ending March)
FY23A FY24A FY25E FY26E
FY23A FY24A FY25E FY26E Per Share Data (INR)
Total Current Assets 2,58,227 3,58,049 4,23,476 4,43,095 Reported EPS 23.5 34.3 38.0 55.0
of which cash & cash eqv. 18,146 25,582 70,472 68,341 Cash EPS 39.6 52.1 55.2 72.7
Total Current Liabilities & 1,73,335 2,47,107 2,55,037 2,63,257 Dividend per share (DPS) 2.3 2.3 2.3 2.5
Provisions Book Value per share (BV) 248.8 281.6 414.0 466.7
Net Current Assets 84,892 1,10,942 1,68,439 1,79,838
Investments 5,179 13,320 8,946 8,946 Growth (%)
Net Fixed Assets 91,258 1,07,530 1,41,651 1,75,548 Net Sales 30.1 (5.3) 60.0 25.0
Total Assets 1,81,329 2,31,792 3,19,036 3,64,332 EBITDA 36.0 19.8 64.4 31.7
Liabilities EPS (INR) (20.8) 45.9 19.2 44.7
Borrowings 81,208 1,14,622 1,34,623 1,54,622
Deferred Tax Liability (2,464) (841) (841) (841) Valuation Ratios (x)
Equity Share Capital 4,009 4,009 4,308 4,308 P/E 69.6 47.7 43.0 29.7
Reserves & Surplus 95,744 1,08,879 1,74,023 1,96,716 P/BV 6.6 5.8 4.0 3.5
Total Net Worth 99,753 1,12,888 1,78,331 2,01,024 EV / EBITDA 34.5 29.8 18.7 14.6
Minority Interest 2,832 5,122 6,922 9,527 Dividend Yield (%) 0.1 0.1 0.1 0.2
Total Liabilities 1,81,329 2,31,792 3,19,036 3,64,332
Source Company data, I-Sec research Operating Ratios
EBITDA Margins (%) 25.1 31.7 32.6 34.3
Net Profit Margins (%) 11.3 17.4 13.0 15.0
Net Debt / Equity (x) 0.6 0.8 0.4 0.4
Debt / EBITDA (x) 3.9 4.6 3.3 2.9

Profitability Ratios
RoCE (%) 11.6 16.8 16.0 18.1
RoE (%) 9.9 12.9 13.6 17.0
Source Company data, I-Sec research

India | Equity Research 4

Prestige Estate Projects | Q2FY25 results review | 04 November 2024

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BUY: >15% return; ADD: 5% to 15% return; HOLD: Negative 5% to Positive 5% return; REDUCE: Negative 5% to Negative 15% return; SELL: < negative 15% return

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Prestige Estate Projects | Q2FY25 results review | 04 November 2024

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