Prestige Estates Projects: Strong Sales Bookings, Rising Debt
Prestige Estates Projects (Prestige) reported strong residential sales bookings of ₹129 billion in FY23, led by high-value Mumbai launches. The company expects gross sales bookings to reach ₹150 billion in FY24E and ₹165 billion in FY25E.
However, Prestige’s consolidated net debt levels have risen by ₹25.6 billion over the last 12 months. This is due to the company’s continued investment in land and annuity projects. Prestige expects its net debt levels to rise further to ₹84.4 billion by March 2024.
The company has gross incremental pending capex of over ₹150 billion for annuity assets. The key monitorable going forward will be Prestige’s ability to achieve significant pre-leasing in ongoing and upcoming annuity assets.
Outlook
We retain our target price of ₹611 per share based on 1x FY24E NAV. However, we have cut our rating to HOLD from ADD post the 8% run-up in the stock price in the last 3 months.
The key upside risk is strong leasing in under-construction annuity projects. The key downside risk is a slowdown in residential demand.
Key Takeaways
- Prestige’s residential sales bookings remain strong.
- The company’s net debt levels have risen but are expected to stabilize in the next few years.
- The key monitorable going forward will be Prestige’s ability to achieve significant pre-leasing in ongoing and upcoming annuity assets.
- We have cut our rating to HOLD from ADD but retain our target price of ₹611 per share.
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