Stock of this realty firm has zoomed 100% since April; hits record high

Thus far in the month of October, the stock price of Prestige Estates Projects has rallied 34% after the company reported strong business performance for September quarter (Q2FY24).

Shares of Prestige Estates Projects hit a record high of Rs 808.70, as they rallied 9 per cent on the BSE in Wednesday’s intra-day trade on the healthy business outlook. The stock of real estate company surpassed its previous high of Rs 796 touched on October 10, 2023.

At 12:25 PM; Prestige Estates was quoting 3 per cent higher at Rs 765.95, as compared to 0.32 per cent decline in the S&P BSE Sensex. Thus far in the financial year 2023-24 (FY24), the stock price of the company has doubled or zoomed 101 per cent.

Thus far in the month of October, the stock has rallied 34 per cent after the company reported strong business performance in July to September quarter (Q2FY24). During Q2FY24, Prestige Estates registered presales of Rs 7092.6 crore, up by 102 per cent year-on-year (YoY) and quarterly collections of Rs 2,639.8 crore driven by 6.84 mn sft (up by 50 per cent YoY) sales volume.

With a promising pipeline of projects like Prestige Ocean Towers at Marine Lines, Mumbai; Prestige City Hyderabad- Apartments; Prestige Pallava Gardens in Chennai, etc, the company is poised for continued growth throughout the rest of the year, the management said.

Prestige Group, one of the leading real estate developers in the country, has diversified business model across various segments, viz Residential, Office, Retail, Hospitality, Property Management and Warehouses with operations in more than 12 major locations in India.

In the Union Budget FY24, the Government of India introduced several measures that are expected to have a positive impact on the country’s real estate sector.

The allocation of Rs 79,000 crore for the Pradhan Mantri Awas Yojana (PMAY), amounting to an increase of 66 per cent, was welcomed by the real estate sector. This will contribute to the government’s goal to provide housing for the urban poor.

The 33 per cent increase in capital spending that was announced is poised to strengthen the country’s infrastructure apparatus and urban town planning. This budget would improve real estate prospects in tier 2 cities by allocating Rs 10 trillion in capital investment and intending to establish an urban infrastructure development fund with an annual allocation of Rs 10,000 crore, Prestige Estates said in its FY23 annual report.

Demand in housing market might be dampened by the inflation coupled with potential rate hikes. However, housing demand is expected to maintain its momentum over the long term, as these repercussions are primarily short-term in nature, according to analysts at HDFC Securities.

As regards to commercial sector, the developers have added steady office space supplies. This increase in supply has also been driven by the relative outperformance of the Indian office market compared to other global markets. The supply pipeline remains robust, and a more positive outlook is emerging due to decreasing recession probabilities in Western economies, the brokerage firm said in FY23 annual report analysis. The stock however, is trading above brokerage firm’s target price of Rs 786 per share.