Real estate major Prestige Estates Projects shares declined 2 percent on Friday. The stock has declined 10 percent over the last one month but the company is having ambitious plans across many high-demand real estate markets. Despite facing delays, Prestige Estates Limited is gearing up to launch housing projects worth Rs 30,000 crore this quarter across major Indian cities, including Bengaluru, Delhi-NCR, Mumbai, and Chennai. The company’s leadership remains optimistic despite a sales booking slump earlier in the fiscal year, attributing the decline to regulatory delays. With regulatory approvals expected soon, Prestige aims to meet its annual sales guidance of Rs 24,000 crore, signaling renewed confidence in the real estate market’s recovery and strong consumer demand.

Ambitious Launch Plan for Rs 30,000 Crore Inventory

Strategic launches in key cities
Zayd Noaman, Executive Director of Prestige Estates, confirmed that housing projects worth Rs 30,000 crore are lined up for this quarter. He emphasized that most of these projects have already been filed under RERA (Real Estate Regulatory Authority) and will soon be introduced to the market.

Target markets
The upcoming projects will primarily focus on Bengaluru, Delhi-NCR, Chennai, and Mumbai, which are expected to drive substantial demand.

Sales Projections: Regulatory Approvals Hold the Key

Sales guidance of Rs 24,000 crore for FY25
Despite the challenges faced in the first nine months of this fiscal year, Prestige Group CMD Irfan Razack expressed confidence in achieving Rs 24,000 crore in sales bookings. However, this target hinges on the timely receipt of RERA approvals.

Existing inventory as a buffer
Razack noted that around 40% of newly launched inventory typically sells quickly after hitting the market. The company expects to generate Rs 12,000 crore from new launches alone, supplemented by its existing inventory.

Decline in Sales Bookings During First Nine Months

Sales bookings fall 38% YoY
During the April to December period of FY25, Prestige Estates reported a 38% decline in sales bookings to Rs 10,065.7 crore. Delays in project approvals limited the number of new launches, contributing to this shortfall.

Operational performance overview
The company sold 8.09 million sq ft of area during the first nine months at an average realization of Rs 13,128 per sq ft, with 3,618 units sold. Customer collections stood at Rs 8,910.9 crore.

Historical Performance and Recent Setbacks

Record sales in FY24
In FY24, Prestige Estates achieved record sales bookings of Rs 21,040 crore, marking a 63% YoY increase. This robust performance demonstrated the group’s capacity to scale operations and capitalize on favorable market conditions.

Profit and income decline in Q3 FY25
For the December quarter, Prestige reported an 85% drop in net profit, falling to Rs 17.7 crore from Rs 116.3 crore in the year-ago period. Total income also contracted to Rs 1,697.9 crore from Rs 1,970.5 crore.

Growth Strategy: High-Velocity Projects in Focus

Final stages of project approvals
Razack mentioned that several high-profile projects are nearing the final stages of regulatory clearance and are expected to launch in the coming weeks. These launches are positioned across prime geographies, promising rapid sales momentum upon introduction to the market.

Driving future growth
These projects are designed to cater to high demand, reinforcing Prestige's reputation for quality developments. The company anticipates regaining its lost momentum and significantly boosting sales through these strategically located ventures.

Prestige’s Diversified Business Model

Segments and geographic presence
Prestige Estates operates across multiple segments, including residential, commercial, retail, hospitality, property management, and warehousing. With operations in over 13 major cities, the group has a comprehensive portfolio that mitigates risks associated with sector-specific fluctuations.

Project pipeline
The company has completed 302 projects spanning a developable area of 193 million sq ft. It currently has 59 ongoing projects across 101 million sq ft and 65 planned projects covering 96 million sq ft.

Market Outlook and Competitive Position

Consumer demand recovery
The real estate sector has witnessed a rebound in consumer sentiment, driven by urbanization, infrastructure development, and low mortgage rates. Prestige's ability to capitalize on this trend hinges on its timely project launches and marketing efforts.

Key competitors
Prestige faces competition from developers like DLF and Brigade Enterprises, both of which have strong presences in similar markets. Maintaining a competitive edge will require Prestige to continue delivering innovative projects with high value for customers.

Investment Recommendation

Given its ambitious project pipeline, diversified business model, and historical track record of strong performance, Prestige Estates presents a compelling investment opportunity. However, investors should remain cautious about regulatory risks and monitor project approval timelines closely. Long-term prospects remain favorable, with growth expected from both residential and commercial segments.