What led Nuvama to increase Prestige Estates' target price? Find out here

Prestige Estates overall volumes rose to ~9.6msf, up 234% Y-o-Y and 113% Q-o-Q, signaling robust demand across its offerings, which include plotted developments and integrated townships.

Nuvama on Prestige Estates: Domestic brokerage firm Nuvama Institutional Equities (Nuvma) has raised its target price on Prestige Estates Projects Ltd (PEPL) to ₹2,009 (from ₹1,780 earlier), reaffirming its ‘Buy’ rating on the back of highest-ever quarterly pre-sales in Q1FY26.

 

The upgrade by Nuvama followed a sharp 300 per cent year-on-year (Y-o-Y) surge in pre-sales to ₹12,130 crore, its highest-ever quarterly figure, driven by a healthy launch pipeline of ~14.9msf and a well-diversified project mix across key geographies.

 

The Prestige City, Indirapuram – PEPL’s debut in the National Capital Region (NCR), emerged as a major growth driver, contributing ~59 per cent to overall bookings in the quarter, analysts said. Bengaluru, Mumbai, and Hyderabad also featured in the launch mix, though NCR dominated sales, underlining the company’s growing geographical footprint. 

 

 

Prestige Estates overall volumes rose to ~9.6msf, up 234 per cent Y-o-Y and 113 per cent Q-o-Q, signaling robust demand across its offerings, which include plotted developments and integrated townships.  ALSO READ | Prestige Estates Q1 pre-sales surges on robust demand for Ghaziabad project 

Collections, too, hit a record high of ₹4,520 crore, reflecting a 55 per cent Y-o-Y and 43 per cent Q-o-Q jump. The company also delivered ~5.45msf of projects in Q1 – against nil completions in the preceding two quarters – including its maiden deliveries in Mumbai, all of which were completed within 3.5 years.  

The average price realisation of Prestige Estates improved 20 per cent Y-o-Y to ₹12,698 per square feet, supported by healthy demand and a strong sales mix, though there was an 18 per cent sequential dip.

 

Prestige Estates’ annuity business continued to perform steadily, the brokerage highlighted. Office portfolio occupancy stood at ~93.7 per cent with gross leasing of 1.2msf and exit rentals of ₹520 crore. On the retail side, mall occupancy remained best-in-class at 98.9 per cent with exit rentals of ₹220 crore. Consumption in malls during Q1 stood at ₹590 crore, supporting the view that footfalls and tenant performance remain resilient.

 

Citing these strong operational metrics, Nuvama noted an improvement in launch trajectory, growing presence in new geographies, and the company’s execution track record as key reasons for increasing its NAV premium assumption to 30 per cent from 20 per cent.   ALSO READ | Prestige Group to build flyover in Bengaluru connecting ORR and Bellandur

  With visibility on growth improving and the real estate cycle remaining favourable, the brokerage has rolled forward its valuation base to Q1FY28E and reiterated its positive stance on the stock.

 

“Improving launch trajectory and geographical diversification impel us to increase the NAV premium to 30 per cent from 20 per cent earlier. Retain ‘Buy’ with a revised target price (TP) of ₹2,009 (earlier ₹1,780) as we roll forward the valuation to Q1FY28E,” analysts at Nuvama said, in a note dated July 9.