Motilal Oswal has reiterated its bullish stance on Prestige Estates Projects Ltd, reaffirming a 'BUY' recommendation with a revised target price of Rs 1,820, implying a substantial upside from current levels. The research highlights the robust performance of the real estate firm in FY24, particularly driven by record-breaking pre-sales and strategic monetization of commercial assets. With new launches, stronger execution, and positive investor sentiment toward premium realty brands, Prestige is poised to deliver further shareholder value. Notably, the company continues to be a standout performer in India’s real estate growth narrative, especially in South India and emerging metro corridors.

Record Pre-Sales Anchor Growth in FY24

Prestige Estates reported all-time high gross pre-sales of Rs 18,000 crore in FY24, exceeding its own upwardly revised guidance of Rs 17,000 crore. This remarkable performance was driven by:

High-value launches in Mumbai, Bengaluru, and Hyderabad.

Elevated buyer confidence in branded residential projects.

Strong sales velocity in both premium and mid-income segments.

This sets the stage for a further improved pre-sales trajectory, with management guidance for FY25 pre-sales set at Rs 20,000 crore.

Expansion of Saleable Area Boosts Forward Visibility

In FY24, Prestige launched approximately 23.5 million sq. ft. of new projects. More than 38 million sq. ft. of launches are in the pipeline for FY25. This includes large residential townships and marquee developments in top-tier cities.

Key geographies include:

Mumbai: Continued traction in ultra-luxury and redevelopment zones.

Hyderabad: Positive absorption trends in mixed-use developments.

Bengaluru: Core market strength through volume-driven launches.

Commercial Portfolio Monetization Enhances Balance Sheet Strength

Prestige is actively monetizing its commercial real estate to unlock capital and reduce leverage. The company is in advanced stages of concluding deals for its Office Assets Portfolio, which could fetch approximately Rs 4,500–5,000 crore. This will:

Strengthen its cash flow position.

Reduce net debt, which stood at Rs 3,244 crore as of Q3FY24.

Offer reinvestment options in high-IRR residential projects.

Robust Financial Metrics and Operational Execution

Motilal Oswal forecasts FY25 revenue at Rs 9,100 crore, marking a strong recovery and YoY growth. EBITDA margins are expected to stay resilient at 28–30%, and earnings visibility is improving with better execution cycles.

Valuation Outlook and Target Price

Motilal Oswal uses a SOTP (Sum-of-the-Parts) valuation to value Prestige Estates, factoring in both its development business and commercial assets:

Residential and development portfolio: Rs 1,450/share.

Commercial monetization and rental yield assets: Rs 370/share.

Revised target: Rs 1,820 (vs earlier Rs 1,640), representing a healthy 25% upside from current levels.

Technical Levels to Watch

On the technical charts, Prestige Estates is exhibiting signs of strength with healthy volumes and higher lows on weekly charts.

Immediate resistance: Rs 1,480

Breakout confirmation zone: Rs 1,525

Support level: Rs 1,360

Medium-term target: Rs 1,820

Stop-loss for traders: Rs 1,325

Trend indicators like RSI and MACD are aligned in bullish territory, confirming the positive outlook.

Competitive Landscape: Key Peers in Focus

Prestige Estates continues to outperform many of its listed peers in the premium real estate segment. Notable competitors include:

Godrej Properties: Nationwide pipeline, but slower monetization pace.

Oberoi Realty: Strong in Mumbai, but less diversified geographically.

DLF: Dominant in NCR but slower residential ramp-up.

Prestige’s edge lies in its execution track record and balanced portfolio across price points and geographies.

Strategic Roadmap: FY25 and Beyond

Key growth enablers include:

Land acquisitions in NCR and South India.

JV collaborations with institutional investors.

Expansion of annuity income portfolio in the retail and office verticals.

Management aims to double the annuity portfolio by FY27, diversifying cash flows further and reducing dependency on residential launches.

Final Take: Prestige Estates Well-Positioned for Sustainable Upside

With a combination of robust pre-sales, consistent execution, ongoing monetization of commercial assets, and sector-wide tailwinds, Prestige Estates stands out as one of the best-positioned real estate bets in India’s urban growth story.

Motilal Oswal’s confidence in maintaining a ‘BUY’ stance with a target of Rs 1,820 reflects not just earnings visibility but also the company's strategic agility in navigating macroeconomic and regulatory shifts. Long-term investors may consider accumulating the stock at current levels with a 12–15 month horizon for potential outsized returns.