Prestige Estates: FY13 sales booking to beat guidance by ~20%, buy

Prestige Estates: FY13 sales booking to beat guidance by ~20%

Motilal Oswal met Prestige Estates Projects’ (PEPL) management and visited key sites to get updates on the business and outlook of Bangalore real estate market.

The key takeaways are:

- Despite moderation in the launch plan over 2HFY13, PEPL is comfortably poised to beat FY13 sales guidance of ~Rs25b by almost 20%. 8MFY13 sales stood at ~Rs22.5b.

- Execution progress steady in most annuity assets. Motilal Oswal estimates the annualized rental income to post ~35% CAGR over FY12-15E to ~Rs4.6b.

-  Progress in development projects are on track to meet guidance of 2-2.5x scale-up in quarterly revenue run-rate. Motilal Oswal expects an uptick in collections run-rate to Rs6b/Q. 

-  NAV-based target price is upgraded by ~9% to Rs195 and FY13E/14E EPS estimates by 4-8%. While the stock has already been re-rated in line with expectation, further upside hinges on strengthening of P&L and cash flow hereon. Maintain Buy.

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