On Tuesday, Prestige Estates Projects Ltd (PEPL:IN) saw a revision in its price target from ICICI Securities, now set at INR 1,485.00, down from the previous INR 1,596.00. The firm has maintained a Reduce (4) rating on the stock.
The adjustment follows Prestige Estates' report of subdued gross sales bookings in the second quarter of FY25, which amounted to INR 40.3 billion, marking a significant 43% year-over-year decrease. This decline was attributed to the company's introduction of only three new projects, totaling 8.2 million square feet, in Bengaluru and Mumbai during the quarter.
Despite the weaker sales bookings in the first half of FY25, totaling INR 70.5 billion, Prestige Estates remains committed to its full-year guidance. The company plans to launch 53.4 million square feet of residential projects with an estimated gross development value (GDV) of INR 521 billion. The firm's aspirations include achieving INR 250-300 billion in gross sales bookings for FY25.
These projections are underpinned by high-value projects in Mumbai, with a launch GDV of INR 100 billion, and Indirapuram in the National Capital Region (NCR (NYSE:VYX)), also with a launch GDV of INR 100 billion, which are expected to be key contributors to growth outside of South India.
The revised price target by ICICI Securities takes into account the recent Qualified Institutional Placement (QIP) that raised INR 50 billion and the addition of new land banks. The target price of INR 1,485 is set at a 50% premium to the estimated net asset value (NAV) of INR 990 per share for FY25.
The analyst's report also identifies potential upside risks for Prestige Estates, which include a strong uptick in residential prices and an improvement in office leasing activities. These factors could positively impact the company's performance and counter the current downward pressure on its stock valuation.
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